New Geography

Category: Policy

  • Whatever Happened to “The Vision Thing?”

    When I was in elementary school, I remember reading about the remarkable transformations that the future would bring: Flying cars, manned colonies on the moon, humanoid robotic servants. Almost half a century later, none of these promises of the future – and many, many more – have come to pass. Yet, in many respects, these visions from the future served their purpose in allowing us to imagine a world far more wondrous than the one we were in at the time, to aspire to something greater.

    I am reminded of these early childhood memories not because I lament the loss of my flying car (although it would come in handy every now-and-again in fighting the Washington, D.C. rush hour gridlock) but because, with all of the rhetoric about change and hope, the Obama Administration has failed to articulate a strong, singular vision for what the future of America and the world can and should be. While some would argue that now is not the time for grand visions for the future but, rather, for hunkering down and muddling through these desperate economic travails, the fact of the matter is that at least part of the cause of continuing economic decline in this country, and in many other developed nations as well, is a lack of confidence in the future.

    I was somewhat hopeful during his address to the joint session of Congress in early February – shortly after the passage of the economic stimulus bill – that President Obama was indeed starting down the path of articulating a new vision for America. He recalled in that speech great innovations that had been spurred by prior economic and other exigencies. In that speech he stated:

    “The weight of this crisis will not determine the destiny of this nation. The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.”

    And again, later in his address:

    “History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas. In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry. From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age. In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history. And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.”

    Bold action and big ideas: Yet the focus of all of the Administration’s efforts have been on specific “solutions” to the problem set with which our economy is now faced. Some are well-intentioned but arguably poorly executed by Congress while are others rolled out for public consumption with less than full baking time—without any suggestion about what our “brighter future” might look like and how these various solutions might be woven together to help realize a brighter and different future.

    We may indeed be on the cusp of something big: It may be tragic or triumphant depending upon how and how quickly we find our way out of the country’s current predicament.

    After Hurricane Katrina ravaged New Orleans and the Gulf Coast, some urban planners, architects, emergency management experts, and others were bold enough to suggest that maybe the Ninth Ward shouldn’t be rebuilt; perhaps nature never intended us to put so many homes and so many people below sea level, in harm’s way. Regrettably, that conversation was preempted as soon as it was started by the hundreds of displaced residents who, having been treated with what appeared to be utter disregard by their local, state, and federal government in the face of that tragedy as it unfolded, insisted that at least they deserved to be returned to their homes. Politics and pragmatics trumped bold and broad thinking that could have conjured a different outcome.

    There is so is so little new and dynamic mainstream discourse about where and how we live as individuals and in communities. There is no modern proxy for flying cars and colonies on the moon. And funding billions of dollars in support of “shovel-ready projects” will certainly do nothing to advance the cause of innovative thought about how we would like to see our current communities – urban, suburban, and exurban, and rural – evolve over the next twenty-five or fifty years. What could life be like in America in 2034 or 2059? We should not have to rely upon science fiction writers, futurists, and block-buster sci-fi movie producers to craft all of our visions of the future.

    So here’s an idea for our new President. Now that everyone is relatively comfortable with the notion of spending billions (and even trillions) of dollars, let’s spend a very small portion of that on our future, rather than focusing exclusively on our near-term economic salvation. Make $10 billion available to fund five pilot projects with $2 billion each. Think of is as the “X Prize” for Innovations in Livability. Invite communities throughout the country, without restriction as to size or location, without constraints on the marketplace of ideas, to bring together their best and brightest to craft implementable proposals for how they plan to evolve their community into an exemplar for the future: Then fund the five best proposals. Take the funding decisions out of the hands of elected officials and policy makers, and place it unfettered in the hands of a blue-ribbon panel of experts from a broad range of disciplines.

    Let all Americans and the world marvel at what will replace the flying cars of the 60s.

    Peter Smirniotopoulos, Vice President – Development of UniDev, LLC, is based in the company’s headquarters in Bethesda, Maryland, and works throughout the U.S. He is on the faculty of the Masters in Science in Real Estate program at Johns Hopkins University. The views expressed herein are solely his own.

  • While Fixing Housing, Fix the Regulations

    Everyone knows that subprime mortgages lie at the root of our current financial crisis. Lenders originated too many of them, they were securitized amidst an increasingly complex credit market, and the bubble popped. The rest is painful history.

    Most commentators have explained the source of the problem by pointing either to faulty federal housing policies – such as Fannie Mae’s affordable housing goals, the Fed’s easy money practices, and the Community Reinvestment Act – or to the imprudent zest for gain among investors who miscalculated risk and kept up the demand for bad mortgages. Both views are correct to varying degrees. These perceptions will shape the ongoing policy debate about needed reforms.

    But as this debate advances, we should not lose sight of another consequential, yet mundane, factor in the crisis: the way that regulations raised house prices and created conditions ripe for subprime loans. Regulations may be one of the least debated contributors to the current crisis, and yet their effect on the middle class’s ability to buy homes may arguably have been a key reason why subprime loans flourished in the first place.

    In the heated housing market before 2007, a median income family in the U.S. could only afford 40 percent of homes for sale across the country, compared to more than two-thirds of homes in 1997. Banks got creative and helped ordinary families buy overly expensive homes with risky mortgages. In a hot market, the risks seemed low. People never should have purchased homes they could not afford, but at the same time, rising prices were putting homeownership out of the reach of ordinary families such that unconventional loans seemed a convenient solution.

    Why were housing prices rising so rapidly? Observers have traditionally held that land scarcity drives up prices by preventing supply from meeting demand. But the more likely answer is that regulations on housing overly constricted supply in many parts of the U.S. Through the groundbreaking work of Wendell Cox at Demographia and scholars such as Ed Glaeser at Harvard and Joe Gyourko at the University of Pennsylvania, we have come to see that rules and regulations drive up housing prices much more than we had originally thought. Blaming supply problems on land scarcity has been a convenient excuse for too long for those who see hyper-regulation of housing as a good thing.

    Regulations often limit the number of housing units that can be built on a given lot, or they restrict the number of new home permits that can be issued in a given municipality, making supply a function of rules, not land scarcity. Restrictions to the property itself, such as environmental or design requirements, also raise the cost of construction (see Andres Duany’s thoughtful article on this issue here.).

    Increased regulation on housing has been a quiet, but disquieting, trend. For example, Glaeser has shown that only 50 percent of communities in greater Boston had restrictions on subdivisions in 1975, compared to nearly 100 percent today. Housing prices in the Boston area would have been between 23 and 36 percent lower on the eve of the crisis were it not for burdensome restrictions on housing. While the Boston area’s regulatory impulse may be excessive, it is nonetheless emblematic of a national trend. A recent U.S. Department of Housing and Urban Development has found that more than 90 percent of the subdivisions in a recent national study now have excessive restrictions.

    According to Harvard’s housing research center, the growing cost of regulations has edged smaller builders out of the construction market and increased the market share of the nation’s ten largest builders from 10 to 25 percent since the early 1990s. This doesn’t mean that the larger builders are happy about restrictions. Bob Toll, president of one of the nation’s largest builders, has said that his company quit building “starter homes” for young families years ago because the margins on small homes grew too narrow due to excessive regulations.

    How big is the problem? Most observers have typically agreed that housing regulations account for 15 to 35 percent of a median-priced home in the U.S. These percentages come from a 1991 federal housing commission, and they are likely to have increased considerably since then. If we conservatively use them to calculate the scope of regulations by the time the housing crisis began in earnest in 2007, they suggest that regulations accounted for between $35,850 and $83,650 of a median-priced home. Using the National Association of Homebuilders’ methodology for determining the impact of price increases on home affordability, we can say that regulatory restrictions priced at least 7 million – and as many as 18 million – families out of their local housing markets in 2007. As we have learned, families priced out of their markets still purchased homes – usually with unconventional, risky mortgages.

    Of course, not all housing regulations are bad, and zero regulation would introduce unnecessary risks to homeowners. But the increasing rate of regulation in the U.S. represents one of the nation’s larger assaults on the middle class that defenders of “working families” rarely talk about. Conservatives avoid the issue for federalism reasons, since any effective restraint on land-use planners will likely require the federal government’s involvement. And liberals hide from an honest debate about the effects of regulations for fear that it will derail their environmental agenda that relies up on regulations to limit the kind of housing most people want – such as single family homes.

    Now that there is an over-supply of housing in the U.S., the problem of housing regulations may seem moot. But if we do nothing about this issue, it will trip us up again in the future. While I served in the George W. Bush White House between 2005 and 2007, economists inside and outside the administration offered mixed – and sometimes completely contradictory – assessments of what was happening in the housing sector. We continued to work on our proposed reforms of Fannie and Freddie and the Federal Housing Administration in an effort to reduce the “systemic risk” but approached it more as a theoretical matter than as a perceived, impending crisis. We even had a HUD-based initiative on reducing regulatory barriers that quietly lumbered along but which we never elevated as a major policy issue. We now know that what we were grossly underestimating the scope of a potential crisis. We should have made housing sector reform a front burner issue.

    That is all behind us now, and we can see much more clearly what led to the crisis. We need to look at how rule-makers have for too long been making housing unnecessarily expensive for ordinary families. There is a limit to what the federal government can and should do about local housing regulations, but options exist for President Obama and Congress to consider.

    First of all, just as federal agencies are legally required to analyze the environmental impact of new regulations, Congress could require federal agencies to demonstrate the impact of new federal regulations on the cost of home construction. Federal agencies already have the personnel required for the task, and such a requirement would cost the taxpayer nothing extra. Second, Congress should consider new incentives in existing federal law, from highway construction to affordable housing, that would prompt states and municipalities to reduce burdensome regulations in exchange for federal resources. Third, President Obama could issue an executive order requiring federal agencies to amend regulations that have a negative effect on home construction costs. He could also use the same order to establish a task force whose job would be to identify the chief price-increasing regulations in use around the country to inform the legislative process.

    If we ignore the problem, as the housing market recovers, regulations will once again make housing more expensive than it should be. Unconventional mortgages will no longer be available due to the current crisis, and we will be back in a familiar debate about “affordable housing” in which the federal government is called upon to subsidize housing that others have made too expensive. In other words we return to the status quo in which we once again increase the role of a government that – under both Republican and Democratic administrations – has gotten ever bigger, more expensive and increasingly intrusive.

    Ryan Streeter is Senior Fellow at the London-based Legatum Institute and former special assistant to President George W. Bush for domestic policy.

  • Why We Need A New Works Progress Administration

    As the financial bailout fiasco worsens, President Obama may want to consider a do-over of his whole approach towards economic stimulus. Instead of lurching haphazardly in search of a “new” New Deal symphony, perhaps he should adapt parts of the original score.

    Nothing makes more sense, for example, than reviving programs like the Works Progress Administration (WPA), started in the 1935, as well as the Civilian Conservation Corps (CCC), begun in 1933. These programs, focused on employing young people whose families were on relief, completed many important projects – many still in use today – while providing practical training to and instilling discipline in an entire generation.

    Unemployment today may not be as extreme as in the 1930s, but for whole segments of the population – notably young workers under 25 – it is on the rise. Already young workers with college educations suffer a 7.7% jobless rate, while employment is nearly twice that among young workers overall. Hardest hit, in fact, are young people without college educations, whose real earnings already have dropped by almost 30% over the past 30 years, according to one study.

    Tapping the energies of this new “millennial” generation – those now entering their teens and early 20s – would make enormous sense both for economic and social reasons.

    Not only do they need work, but also, as their chroniclers, authors Morley Winograd and Mike Hais have demonstrated, many share an interest in community-building in ways reminiscent of the last “civic generation” in the 1930s.

    In contrast, the current stimulus, rather than inspiring a new generation, has focused on bailing out failed corporations, few of which will generate much employment. Many of the “new” jobs will be going to the already entitled: highly paid, big-pension-collecting, unionized government workers and well-educated people working in federal and university laboratories.

    Also getting short shrift has been the kind of construction projects that drive fundamental economic growth and competitive advantage. These include roads, freight rail, electrical transmission lines and water services that boost productivity in agriculture, manufacturing, high-end business services and technology. The Chinese are currently targeting their spending on precisely the steps that would aid these sectors.

    This is where a New Deal revival would help. The WPA and the CCC were all about building useful, tangible things that made the country stronger and more competitive. Overall, these and other New Deal programs amassed an amazing record – finishing over 22,000 roads, 7,488 educational buildings and over 7,000 sewer, water and other projects.

    These efforts put to work over 3 million workers. (Compare that to the mere 250,000 slated to work in the expanded AmeriCorps program.) Their earnings helped support 10 million dependents. The WPA also employed 125,000 engineers, social workers, accountants, superintendents, supervisors and timekeepers scattered in every state and community. Ultimately, notes political economy professor Jason Scott Smith, the New Deal intimately touched the lives of more than 50 million people – out of a total U.S. population, in 1933, of 125 million. Now that’s stimulus!

    Critically, the WPA and CCC also left behind useful things for the next generation. As historian Gary Breichin has pointed out, we unknowingly walk, drive and ride through many structures built by these agencies.

    These projects did not act as “lures” for the elites, cognitive and otherwise – as so many of our current efforts do – but rather served a broader purpose for the public. The University of Washington’s Richard Morrill notes that the WPA bequeathed “an enduring legacy” around Seattle: bridges and retaining walls and drainage systems, parks and playgrounds, roads and trails, sewers, recreational facilities, airports, streetcars, low-income housing, as well as programs for musicians, artists and writers.

    The WPA and CCC left a similar mark even on the most remote parts of rural “red” America. In places such as Wishek, N.D., notes native Delore Zimmerman, few people recognize that it was the New Deal-sponsored WPA that built the still-used local pool and the community center. Nor do farmers, many of them rock-ribbed Republicans, readily acknowledge that the windbreaks and other conservation projects started by the CCC helped preserve the land from devastating erosion.

    A public works agenda today, of course, would include different things, like expansion of broadband Internet access and a greater emphasis on private financing and skills training. Yet a neo-WPA would still focus on upgrading and expanding our basic infrastructure, which, by all estimates, is generally in sad shape.

    If this is such a good idea, why is no one else promoting it? Among Republicans and conservatives, of course, nothing done by Franklin Roosevelt – except, perhaps, winning the Second World War – could ever hold much merit. They certainly can argue, with some justification, that it was the war, and not the New Deal, that finally got us out of the Great Depression.

    But this is narrow thinking. America’s post-war boom owed much to the work of WPA, CCC and other New Deal programs. Our late 20th-century expansion required travel along their roads and bridges; their energy plants and transmission lines powered our industrial growth, extending it to formerly poor regions like the South. Water and conservation projects undertaken in the agricultural heartland precipitated a revolution in productivity that has fed much of the world.

    More troubling may be why Democrats – often professed admirers of FDR and his work – have not been eager to revive these programs. One factor may be the enormous power of unions representing public employees. The power of organized public-sector workers, notes historian Fred Siegel, was a non-issue in the 1930s and 1940s.

    Today, though, these groups are powerful enough to boost the cost of any government initiative – because often they require high salaries, costly work rules and, most important, pension benefits. The last thing these unions would sanction would be the mass employment of young workers on a temporary basis at living, but not union-scale, wages and benefits.

    Secondly, there are political obstacles. This administration often appears, as one Democratic mayor from central California put it, like “moveon.org run by the Chicago machine.” Its first priority seems to be to reward allies in organizations – whether in “grassroots” groups like ACORN or in the academy – who also share their political agenda.

    Take, for example, the federal government’s proposed expenditure of $500 million to $600 million for “climate change research.” These funds are almost certain to end up in the pockets of high-end government workers and university-based zealots; as a scientific enterprise, it is likely to be as valid as asking the College of Cardinals in Rome to determine the existence of God. The ultimate result will be to provide new grist for Al Gore’s – and the administration’s – friends in the “green” investment banking world and Silicon Valley.

    This green agenda itself may also constitute a third cause itself for WPA avoidance. Much of the environmental movement – committed largely to reducing the carbon footprint of 300 million Americans – doesn’t want new bridges, roads, ports or much of anything that uses greenhouse gas-spewing concrete. They’d prefer to scale back agriculture and grow just enough organic produce to keep Alice Waters clucking happily in her kitchen.

    A similar disconnect can be seen in energy policy. A new WPA could help build transmission lines to connect the energy-rich parts of the country to the major metropolitan areas. This would spur both industrial development in places like the Great Plains – rich in everything from fossil fuels to wind power – while keeping energy prices down for U.S. consumers and firms.

    Yet so far, the energy program seems focused almost exclusively on providing rich contracts to Silicon Valley firms that are close to the administration. So don’t expect a massive expansion of new transmission lines or any expansion of new, “clean” hydropower. The administration’s green agenda seems to revolve not predominately around better or even cleaner energy, but less.

    And, sadly, conservation is one place a new WPA would be most effective. One possible function for a modern WPA would be to go to neighborhoods – particularly poor and working class ones – and insulate houses. This would certainly save money over having government workers or contractors do the same work.

    All this suggests a profound disconnect between the new administration and the real world.

    The post-industrial educated class that now dominates Washington appears, if not scornful, profoundly detached from the problems facing productive industry. These officials also seem blissfully unaware that the public – as opposed to the academy and the elite media – cares more about jobs than about being green; by nearly three to one, according to the most recent Pew poll, they are more worried about the economy than climate change.

    In many ways, this disconnect is inevitable. Products of the “information age,” Obama’s academically oriented backers seem to have trouble distinguishing between words and actual things. Virtually no one in the upper reaches of this administration has been tested by running a private company, manufacturing a product or bringing in a crop. This administration of “experts” from academia and government service appears to possess little tactile knowledge of the real world.

    In this way, Obama’s great strengths – he is a brilliant communicator and image-builder – are also proving to be a source of profound weakness. Right now, he is selling a post-racial kumbaya and a vague confection of ‘hope.” Financing for these good intentions is likely to ebb, however, as a result of a stunning redistribution of wealth from taxpayers to an expanded class of tax-takers.

    Indeed, for all his communication skills, the president has failed to create an attainable vision of a stronger, wealthier America with better jobs, more wealth and improved infrastructure. Roosevelt and even Truman provided inspiration, too, but they backed it up with practical changes that promised improvements in the day-to-day lives of most Americans.

    These hard times require tangible solutions to basic economic problems. Rather than worry about the generally clueless Republicans, the administration should focus on building a legacy as real and long-lasting as the one left behind by the WPA and CCC.

    More than a mere matter of building roads and bridges and increasing access to cheap energy, the WPA was about restoring a collective spirit, a shared stake, in constructing the sinews of a more competitive, prosperous country. Unfortunately, amidst the confused priorities of this administration, such bold initiatives remain but distant possibilities.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • Are Farms the Suburban Future?

    More than fifty years ago, Frances Montgomery and Philip O’Bryan Williams bought a 500-acre stretch of prairie north of Dallas as a horse farm. It was designed to be a place for their children to run wild on weekends, ride horses, a family escape light years from the Frette-linen, Viking-kitchen and fully staffed second and third home palaces enjoyed by today’s junior high net worth set. The main residence was a recycled World War II barracks; the one bathroom was the only luxury.

    In those days Dallas was an upstart city just taking control of the Trinity River that flooded neighborhoods to the south, one reason why everyone moved north. As the post World War II building boom spread the population further north, the Montgomery family knew it would only be a matter of time before the family farm was surrounded by development, if not swallowed.

    Yet now what is left of places like Montgomery Farms could become a major testing ground in the future of suburban development. In the urban development world, there are two camps, says Williams’ son, Philip Jr., a former CPA who spends his days nurturing the changes that have come to his family’s land. If development had to come, Williams sought intellectual control and the lightest load. One group wants to re-populate the cities with higher density condos and more urban living – the Congress of New Urbanism (CNU). The other camp looks towards the Conservation Subdivision Development (CSD), integrating farming and urbanism to add vitality to a community. A recent New Urban News story quoted Miami architect Andres Duany as saying that agriculture is looming large for new urbanism:

    “Agriculture,” he said, “is the new golf.”

    In fact, studies show that property viewing or abutting agricultural lands is as valuable as those overlooking the golf-course, maybe more so if residents can grow fresh, pesticide-free foods and reduce long-distance trucking. (Fresh cow’s milk, children feeding baby goats not on field trips but recess.) Organic farms, says Missouri developer Greg Whittaker, could also be a revenue-generating business with sales of bedding plants, pumpkins and Christmas trees. Unless, of course, you live in Connecticut, where state Representative Rosa DeLauro wants to make growing your own food against the law and punishable by a fine of up to $1,000,000.

    At Montgomery Farm, CNU and CSD have met in the middle, says Williams, blending agriculture with sub urbanism – with an added artistic touch.

    As Philip, his sister, and the Montgomery farm team were masterminding their agricultural suburban development, they laid out firm ground rules. Art and conservation would trump development profits. Builders would not erect cookie cutter, “they-all-look-alike” homes or McMansions. The city was to put a road through the farm from Highway 75, slicing one of the more heavily wooded cross-sections of the acreage. A road is not a road in the Williams’ world. Seeking a highway that would be as unique as the lifestyle they were offering, the team gathered a group of Connemara Conservancy artists who, along with civil engineers, sponsored a road design contest in 1996.

    “It was a road with no intersections, which meant no idling cars and pollution,” says Williams. Signage was kept to a minimum and international Dark Sky requirements reduced light pollution. This was a farm, where you wanted to find stars at night, not spotlights. Berms were added along the side to mask the homes and muffle noise, and the street was curved, not a straight-arrow shot with stoplights. The City of Allen provided a variance and footed thirty percent of the cost for Bethany Road.

    What’s wrong with suburbia, asks Williams? Driving. Look at the new Honda Minivans: every seat has a TV, 3 plugs for a microwave, more than one giant cup-holder and even eating trays. It’s as if automakers were trying to put a kitchen and laundry room in the car – why not get a Winnebago? Montgomery Farm was designed for walking and biking: the 52 acre mixed-use Watters Creek development – a creek really runs through it – is within walking distance of the home developments. Kids can walk to school, and everyone can walk to the subway station that can whisk them to the heart of downtown Dallas.

    Further up Highway 75, the Southern Land Company is building a development some Texans might consider sac-religious. Southern aims to bypass 25 years of traditional suburbia and build the way communities were designed and built one hundred years ago: porch and street-centered neighborhood, not just sprawl. Streets are old-fashioned boulevards lined with huge trees sporting medians and open spaces.

    About the time developers were drooling to slice and dice Montgomery Farm’s Allen terrain, Tim Downey, founder and CEO of Southern, had a vision in Chattanooga, Tennessee. In 1988 he saw that few developers were looking into the future and considering lifestyle and design components, the way residents might be faring ten years after the developers finished their job. Entire neighborhoods were cropping up without conscious design, architectural or horticultural input. Production building was everywhere, it seemed, a mass of rooflines that all looked the same.

    “If we are going to design and build neighborhoods, let’s look at what they did 100 years ago,” says Jim Cheney, Vice President of Communications, Southern Land Company. “Not what they did 25 years ago.”

    In 1996, Southern flew its architecture department from Franklin, Tennessee to one of Dallas’s old, historic neighborhoods with cameras and notebooks, challenged them to find the most charming and enduring architectural styles and re-create them for Tucker Hill, an 800-acre master-planned community about 20 miles north of those homes. The architects were told to design the way their grandparents might have lived, not re-create McMansions.

    They banned repeated elevations and offered expensive landscape packages with each home. And if builders didn’t want to spend $10,000 on trees, they could build elsewhere. It was almost a foreign process to both builders and buyers. Southern had developed three Tennessee communities before Westhaven, outside Nashville, and the Texas property called Tucker Hill.

    “People just have this mindset,” says Cheney. “6000 square feet, large back-yards so I can hide – not be a part of the neighborhood.”

    But if half the Nashville population thought Downey was insane for Westhaven, Tucker Hill was an even gutsier move to pull off in ranch-mentality Texas. Southern puts a tremendous emphasis on the front of the home and its relation to the street. No front-loading garages; backyards are small and made up for by numerous parks and water features designed to get people out and together – think Hank Hill shooting the breeze with his buddies by the lake, not over the barbecue.

    The concept is similar to the Park Cities, home of Southern Methodist University and one of the most solid communities in the country. Property values in Highland Park and University Park have held strong – even risen – through repeated recessions, thanks in part to the community’s strong school system, low crime, walkability, and perception as a family community with numerous parks and fountains.

    For those who find the lots too small, the houses too congested, Southern’s projects may not be a good fit. But for those who truly want to commune, it’s home. In Nashville, the Westhaven community was barely a year old but 700 people turned out for a block party. The diverse age mix ranges from young families to empty-nest baby boomers to retirees who want to live near their children, but not under the same roof.

    Retirees in the suburbs? Urbanites may cringe, but many Baby Boomers grew up in the suburbs and, when given a choice, do not want to live in the gritty city, says Cheney. Now they can enjoy the ‘burbs and live green. Developers such as Phillip Williams and Tim Downey are offering innovative lifestyles that may help re-define suburban development as living light on the land.

    “America’s land is less than six percent developed,” says Philip Williams. “We are developing without regard for what we left behind, constructing 40 year life homes from trees that take 80 years to grow.”

    Almost like a financial world living on credit, and we’ve now seen where that has led us. But perhaps we can also change our suburbs, and our lives, for the better.

    Candace Evans is the Editor of DallasDirt, a Dallas-based real estate blog for D Magazine Media Partners.

  • Is Germany the Planners’ Valhalla?

    Urban planners and anti-sprawl advocates point to Germany as a wonderland of appropriate land use. It is true that Germany has been better at preserving open space between former villages; the non-stop development that seems continuous throughout most of the United States cannot be found here.

    However, this triumph of planning has also come at a cost, in terms of affordability, and has kept a large percentage of the population from being able to own their own home. Germany is expensive because of forced scarcity of land and an extremely unproductive building industry, with certain peculiarities of German culture creating additional costs.

    The reasons for the lack of productivity in the German housing industry stretch back to land holding patterns in the Middle Ages, when the southern and western provinces of Germany were divided into countless small duchies and bishoprics. These small holdings stayed in the families for generations and prevented the consolidation of plots. The large plots common in America are all but impossible to find, depriving the building industry of the economies of scale possible in most of America. This in turns negatively affects the cost of housing, pushing home prices higher than they need be.

    There are also the vested interests of those who have bought into the German Dream and do not want to see their homes lose value. The German Statistics Agency issued a report stating that the average home in Germany is worth 6.1 times the average income. According to demographia.com anything above 3.0 is expensive.

    Blame can be placed on two factors. The first is that the productivity of German builders is far lower than that of American builders. KB homes can produce a house for about $400 per square meter and the cheapest German builders charge $1,300 per square meter (both prices do not include the price of land). A recent New York Times article stated that a passive house filled with expensive high-tech gadgetry only costs about 9% more than a standard German house. No wonder, when a standard German house costs 300% more than an average American house. Not all European countries have such high building costs; the Dutch are actually able to build housing stock at American prices; the problem in the Netherlands is the enormous costs associated with clawing a country from the North Sea. Nevertheless, Dutch builders are able to more easily assemble large plots of land on the reclaimed islands.

    Choices in building materials also play a role. Germans tend to prefer heavy and expensive concrete and brick construction over wood and steel-framed houses. A lot of Germans travelling to the US invariably will express their shock at how flimsy many American houses seem. Many Germans want to have a basement as well, even though the winters are more than mild enough here to allow for simple concrete slabs. The preference for basements and solid construction have a lot to do with owning a building that will not burn down in an incendiary bomb attack and a basement for the family to hide out in should the apocalypse come again.

    The collective trauma of the twentieth century lives on in the contemporary German psyche. Germans have learned their lesson from history and many of them are genuinely ashamed of it. The threat of imminent destruction was only recently lifted: up until 1989 the allied defense plans put the first line of real resistance on the Rhine, meaning that the entire country would have probably been flattened before the Allies could stop the forward thrust of the Red Army.

    Another factor is the huge mobility tax that the German government slaps on its citizens. The German government charges a punitively high tax for each liter of gasoline sold, equal to 80% of the price paid for fuel. Germans still drive a lot: the country invented the freeway and the ease and opportunity that an automobile offers still trumps the government billions spent on public transit. The German Sueddeutsche Zeitung, (the German equivalent of the New York Times) wrote a lengthy article, stating essentially that the automobile has survived every dire threat that it has faced over the last hundred years and will probably remain the king of the road. At least, they added, until a transit approaches the convenience and flexibility offered by the car. As it is, most new construction still takes place in the outer suburbs.

    Germans love the woods. German identity since the time of Tacitus is closely linked with the woods. Herman the German was able to use the cover of the forest to wipe out the Roman legions in the Teutoburger Forest. The folklore costumes that one occasionally sees here are almost always hunter green. Many Germans do not necessarily see nature as the unscathed landscape made to order by God. The forest is not wild here; it is an almost entirely man-made affair. German forests are essentially tree farms but Germans love them. They use these forest preserves as well. They are a ritualized part of the landscape, every Sunday they fill with locals walking off their Sauerbraten.

    In Germany, the natural world is something already conquered; it is viewed as something useful, a garden that the Germans themselves are stewards to. It is not the vast pristine wilderness of America. It is more like a vast public garden. German farmers and foresters have to allow pedestrians the right to walk on their land. Open space is also public space. The positive side is that the livability in many of these communities is much higher for those who can afford it. There is always a forest or a bike path/jogging path somewhere nearby.

    Germany is still rather affordable compared to other European countries, especially those that were caught up in the real estate bubble of the last decade. France, The Netherlands, Switzerland and Ireland have all experienced housing booms that have pushed the median multiple for housing affordability well above 6 to 7 or 8 and in places like Ireland and the greater London area to well above 10. Prices are also shrinking in the East, which is losing people every year.

    The East is actually one of the more interesting markets due to its loss of people and resulting housing price slumps. Government infrastructure investments could turn the Leipzig and Jena areas as well as Dresden into potential growth markets. Certain areas like the east and the Ruhr Valley, where cities like Bochum and Monchengladbach are worse off than some parts of the East.

    Germany, along with most of Europe, cannot be transposed to the US. The sundry factors contributing to its present-day appearance are not replicable in the US. Germany is a place of small plots and inefficient builders with prices severely limiting home ownership. It is not all bad, especially for those already in place. However, it limits Germans ability to improve their quality of life. Germans, like the vast majority of citizens in industrialized countries, prefer the speed, convenience and comfort of the automobile. Germans, for better or worse, saw how the conquerors from the US lived and tried to emulate it in their own lifestyles. Many still see America as a role model, even though that will not stop the cognoscenti here from writing sanctimonious articles condemning America and trying to stop cities from “sprawling”.

    Kirk Rogers resides in Bubenreuth on the outer edges of Nuremberg and teaches languages and Amercan culture at the University of Erlangen-Nuremberg’s Institut für Fremdsprachen und Auslandskunde. He has been living in Germany for about ten years now due to an inexplicable fascination with German culture.

  • Anger Could Make Us Stronger

    The notion of a populist outburst raises an archaic vision of soot-covered industrial workers waving placards. Yet populism is far from dead, and represents a force that could shape our political future in unpredictable ways.

    People have reasons to be mad, from declining real incomes to mythic levels of greed and excess among the financial elite. Confidence in political and economic institutions remains at low levels, as does belief in the future.

    The critical issue facing the new administration is finding useful ways to channel this disenchantment. We know popular anger can also be channeled in unproductive ways. It can serve to further a narrow political agenda – for example, Karl Rove’s cynical exploitation of the “culture wars” – or stir up a witch hunt against both real and perceived “threats,” as occurred during the McCarthy era. If this were Russia, there would be show trials and executions. We do not and should not do that – but we can still use populist anger to reshape our nation and make it stronger.

    In this respect, the Obama administration, criticized justifiably as too radical on some issues, has been far too timid. It has squandered much of the stimulus effort on maintaining fundamentally corrupt, even sociopathic, institutions like AIG or Citigroup. By taking direction from establishmentarians like Treasury Secretary Timothy Geithner, one of the original architects of the Bush financial bailouts, the current administration has seemed as complicit in condoning and even rewarding Wall Street’s transgressions as the last one.

    Populist rage creates the political support for taking far bolder steps against Wall Street. A good first step would be to allow the TARP-backed giant banks to come under some sort of federal control, or bankruptcy process, effectively wiping out the holdings of the financial malefactors and decimating any hopes for future bonuses. The public could then sell the remaining assets to the many well-run community and regional banks that invest in local businesses as opposed to the arcane paper favored by the Masters of the Universe.

    Radical financial reforms represent only part of the opportunity. China is using its stimulus to increase its competitiveness globally. So far, the Obama administration’s economic strategy, if it has one, has been selling the public on the chimera that highly subsidized “green jobs” and good intentions will save the economy. It has also rewarded what my old teacher Michael Harrington called “the social-industrial complex,” the massively growing education, health and social-service bureaucracy. President Obama needs to spend less time in photo ops at “green” factories and figure out how to drive the transformation of whole industries, like autos, steel, electronics and aerospace.

    In this sense, of course, the New Deal – particularly the Works Progress Administration and the Civilian Conservation Corps – provides some models. These programs used the unemployed to create new dams, electrical-transmission systems and bridges that boosted the nation’s productive power. Critically, such a program would target blue-collar workers – mostly male and heavily minority – hardest hit in the recession. As conservatives rightly note, the New Deal construction projects did not end the Depression, but they did give people purpose and skills as well as hope, while leaving us with a remarkable legacy of productive structures that inspire us with their affirmation of our national destiny.

    Sadly, the political operatives running the White House today may prefer to use the popular mood primarily to service their key political constituencies and boost their poll ratings. If they do so, they will have squandered a unique opportunity to implement changes that would benefit both the country and the middle class for decades to come. Public outrage is a terrible thing to waste.

    This article originally appeared at Newsweek.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • Enough “Cowboy” Greenhouse Gas Reduction Policies

    The world has embarked upon a campaign to reduce greenhouse gas (GHG) emissions. This is a serious challenge that will require focused policies rooted in reality. Regrettably, the political process sometimes falls far short of that objective. This is particularly so in the states of California and Washington, where ideology has crowded out rational analysis and the adoption of what can only be seen as reckless “cowboy” policies.

    Last year, California enacted Senate Bill 375, which seeks to reduce future GHG emissions by encouraging higher urban population densities and forcing more development to be near transit stations. Yet there is no objective analysis to suggest that such an approach will work. Of course, there are the usual slogans about people giving up their cars for transit and walking to work, but this occurs only in the minds of the ideologues. The forecasting models have been unable to predict any substantial reduction in automobile use, and, more importantly, such policies have never produced such a result.

    In fact, higher densities are likely to worsen the quality of life in California, while doing little, if anything to reduce GHG emissions. California already has the densest urban areas (which includes core cities and surrounding suburbs) in the United States. The Los Angeles urban area is 30 percent more dense than the New York urban area. The San Francisco and San Jose urban areas are also denser than the New York urban area. Sacramento stands as the 10th most dense among the 38 urban areas over 1,000,000 population, while Riverside-San Bernardino ranks 12th and San Diego ranks 13th.

    This high density creates the worst traffic congestion in the nation. The slower stop and go operation of cars in traffic congestion materially intensifies local air pollution and increases health hazards. It also consumes more gasoline, which increases GHG emissions. Finally, California’s prescriptive land use regulations have destroyed housing affordability. By the early 1990s, land use regulation had driven prices up well beyond national levels relative to incomes, according to Dartmouth’s William Fischell. Over the next decade the rationing effect of California’s excessive land use restrictions tripled house prices relative to incomes, setting up the mortgage meltdown and all that has followed in its wake.

    The implementation of Senate Bill 375’s provisions seems likely to make things worse. California’s urban areas already have plenty of dense “luxury” housing, much of which is now empty or is now converted from condos to rentals. Wherever they are clustered, particularly outside traditional urban centers like San Francisco, such areas experience intense traffic congestion, with all the resultant negative impact on both people and the environment.

    Yet despite the problems seen in California, the ideological plague has spread to Washington state. Last year the Washington legislature enacted a measure (House Bill 2815) that requires reductions in driving per capita, for the purpose of GHG emission reduction. By 2050, driving per capita is supposed to be halved. This year there was a legislative proposal, House Bill 1490, that would have mandated planning for 50 housing units to the acre within one-half mile of light rail stations. This would have amounted to a density of nearly 50,000 per square mile, 3 times the city of San Francisco, 7 times the density of the city of Seattle and more than that of any of more than 700 census tracts (small districts) in the three-county Seattle area. Areas around stations would be two-thirds as dense as Hong Kong, the world’s most dense urban area.
    The density requirement has since been amended out of the bill, but the fact that it made it so far in the legislature indicates how far the density mania has gone. The bill appears unlikely to pass this year.

    Extending the density planning regime is not likely to help the people on the ground, much less reduce GHGs. Seattle already has a housing affordability problem, which is not surprising given its prescriptive planning policies (called growth management or smart growth). Theo Eicher of the University of Washington has documented the close connection between Seattle’s regulatory structures and its house price increases.

    As in California, Seattle house prices rose dramatically during the housing bubble, nearly doubling relative to incomes. At the same time, much of the debate on House Bill 1490 has been over affordable housing. Yet there has been virtually no recognition of connection between Seattle’s low level of housing affordability and its destructive land use regulations. House Bill 1490 would have only made things worse, and still could. Proponents have indicated that they have not given up.

    The theory behind House Bill 1490 parallels that of California’s SB 375. It assumes high densities would significantly reduce driving and attract people to transit. As in California, however, this is based upon wishful thinking, and has no basis in reality. No urban area in the developed world has produced a material decline in automobile use through such policies.

    Regrettably, the special interest groups behind the California and Washington initiatives appear more interested in forcing people to change their lifestyles than in reducing GHG emissions. This is demonstrated by the Washington driving reduction requirement.

    A good faith attempt to reduce GHG emissions from cars would have targeted GHG emissions from cars, not the use of cars. The issue is GHG emission reduction, not behavior modification, and the more the special interests target people’s behavior, the clearer it becomes how facetious they are about reducing GHG emissions.

    Technology offers the most promise. Already the technology is available to substantially reduce GHG emissions by cars, without requiring people to change their lifestyles. Hybrids currently being sold obtain nearly three times the miles per gallon of the average personal vehicle (cars, personal trucks and sport utility vehicles) fleet. And that is before the promising developments in decades to come in alternative fuels and improved vehicle technology. In addition, the rapid increase in people working at home – a number on track to pass that of transit users by 2015 – would also represent a clear way to reduce GHG emissions.

    Finally it is not certain that suburban housing produces higher GHG emissions per capita than high rise urban development. The only comprehensive research on the subject was conducted in Australia and found that, generally, when all GHG emissions are considered, suburban areas emitted less per capita than higher density areas. This is partially because dense urbanites tend to live a high consumption lifestyle, by eating out at restaurants serving exotic foods, having summer homes and extensive travel. It is also because high density living requires energy consumption that does not occur in lower density suburbs, such as electricity for elevators, common area lighting, and highly consumptive central air conditioning, heating, water heating and ventilation, as Energy Australia research indicates.

    Further, tomorrow’s housing will be more carbon friendly than today’s. Japan has already developed a prototype 2,150 square foot, single story suburban carbon neutral house.

    Much of the anti-suburban and anti-car sloganeering ignores these developments and generally assumes a static world. If the world were static, we would still be living in caves.

    The California and Washington initiatives were not based upon any comprehensive research. There were no reports estimating the tons of GHG emissions that were to be reduced. There was no cost analysis of how much each ton removed would cost. United Nations Intergovernmental Panel on Climate Change (IPCC) has said that the maximum amount necessary to accomplish deep reversal of GHG concentrations is between $20 and $50 per ton. Responsible policy making would have evaluated these issues. (It seems highly improbable that Seattle’s currently under-construction University light rail extension remotely matches this standard, with is capital and operating costs per annual patron of more than $10,000.)

    The price that society can afford to pay for GHG emission reduction is considerably less today than it was just six months ago. The history of the now departed communist world demonstrates that poorer societies simply do not place a high priority on environmental protection. That is not surprising, since people address their basic human needs before broader objectives, such as a better environment. That may not comport with the doctrines of political correctness, but it is reality.

    In such times, communities should be careful not to undertake policies based on assumptions or the preferences of those planners, architects and ideologues who seem to hold suburbs and personal mobility in such contempt that they would not be satisfied even if they emitted no GHGs. These radical motives are inappropriate. “Cowboy” policies enacted ad hoc at the bequest of ideologues openly disdainful of our basic lifestyles threaten not only the future prosperity of a society but our most reasonable path to long-term environmental improvement including reducing GHG emissions.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

  • Story of the Financial Crisis: Burnin’ Down the House with Good Intentions and Lots of Greed

    Last week, the Chairman of the Federal Reserve, Ben Bernanke, told Congress that he didn’t know what to do about the economy and the repeated need for bailouts. This week, the Oracle of Omaha Warren Buffett, Chairman of Berkshire-Hathaway told the press that he couldn’t understand the financial statements of the banks getting the bailout money.

    This made it a daunting challenge the other day, when the Program Director for the Bellevue (Nebraska) Kiwanis Club asked me to talk to his group about the current state of the economy. Despite the many often outrageous examples of excessive greed and even criminality, the current debacle began with good intentions: provide opportunities for homeownership to a segment of the population that was historically left out.

    New credit rating systems had to be developed to take into consideration the fact that some immigrant groups prefer to live in extended families (multiple generations in one household). The individual income of any one may not qualify for a loan, but they would all be paying the mortgage. Yet, their family patterns meant assets are only held by the male head of household. That’s just one example, and there are many more. It’s just that banks and others came to realize that the existing systems were excluding people who would actually be very good borrowers. The original “subprime” borrowers were like the original “junk bond” companies – they didn’t fit the mold of a model credit customer. But among them were MCI and Turner Broadcasting – plus Enron and Worldcom, of course.

    Like junk bonds, the new mortgage product came to be abused by borrowers and lenders alike. This was made worse by developments that blurred the line between banks and brokers. Both parties participated in actions that allowed banks to have their in-house brokers sell off their mortgage loans to Wall Street in the form of bonds. This is called “originate and distribute”. The same bank wrote the mortgages, packaged the loans for sale and distributed the bonds to their clients – collecting fees at every stage.

    And here’s where greed entered the picture. The demand for these bonds completely outstripped the supply: senior management put pressure on the troops to write more mortgages and sell more bonds. The fees were pouring in from everywhere. The demand was so great that an average of 40% of the trades failed for lack of delivery – broker-dealers were selling more bonds than were issued. Each bond trade, whether or not there was a failure to deliver, resulted in a commission for the buying and selling broker-dealers. They didn’t have to tell the buyers that there was no delivery – the broker-dealers figured they could fix it later. This was the initial breakdown in regulatory oversight.

    The next one came when no one was watching over the credit rating agencies. According to a story on PBS (originally aired November 21, 2008), managers at Standard & Poor’s credit rating agency were pressured to give the bonds triple-A ratings in the pursuit of ever higher fees. (We’ve yet to learn all the details of the potential collusion between banks, brokers, rating agencies, etc., but more news is coming out all the time – stay tuned!)

    Along the way, it became clear that these investments in mortgage bonds were, in fact, risky – despite their triple-A credit ratings. That’s where the credit default swaps came in – credit default swaps (or CDS) are simply contracts akin to insurance policies. The bond holder pays a small premium up-front and they get all their money back if the bond goes into default which could happen, for example, if the homeowner owing the mortgage in the mortgage bond ends up in foreclosure. This was another idea with good intentions – it made the bonds more popular and sent more money back to the bank for more mortgages.

    The way the theory on structured securities was developed, if a bank can sell the mortgages they can use that cash to write more mortgages and so support local communities that need to expand housing opportunities. It should also disperse the risk, spread it around, so that some economic problem in one town, like a factory closing, won’t cause the local bank to go out of business. Losses on local mortgages would be spread out geographically, spread out over a large number of investors and over different types of investors (individuals, companies, pension plans, etc.) so that no one of them should suffer all the damage.

    Greed enters the picture again: instead of the CDS derivatives being sold only to the people who owned the bonds and only in a quantity equal to the value of the bonds that were issued, an unlimited number of swaps were sold. This is as if you have a $1 million home and someone sold you $20 million worth of insurance. The temptation to burn down the house was just too much. What you see now is arson. They are burning down “the house” to collect on the insurance. Except if it were your typical insurance it would be regulated and you would have to have “an insurable interest” in hand to buy the policy at all. This insures that there would be no more derivatives issued than there are assets. No, these CDS derivative contracts are completely unregulated and unmonitored.

    Sadly there were no video surveillance cameras in place when Wall Street was spreading around the gasoline and striking the match. Yet now we are stuck watching the house – and the economy – burn down.

    Susanne Trimbath, Ph.D. is CEO and Chief Economist of STP Advisory Services. Her training in finance and economics began with editing briefing documents for the Economic Research Department of the Federal Reserve Bank of San Francisco. She worked in operations at depository trust and clearing corporations in San Francisco and New York, including Depository Trust Company, a subsidiary of DTCC; formerly, she was a Senior Research Economist studying capital markets at the Milken Institute. Her PhD in economics is from New York University. In addition to teaching economics and finance at New York University and University of Southern California (Marshall School of Business), Trimbath is co-author of Beyond Junk Bonds: Expanding High Yield Markets.

  • Restoring the Real New Orleans

    Like so many others, I have long been a visitor to New Orleans. In my case, the first visit was 1979, when we studied the city to influence the design of the new town of Seaside. I have been back often – for New Orleans is one of the best places to learn architecture and urbanism in the United States. My emphasis on design might seem unusual, but it shouldn’t be, for the design of New Orleans possesses a unique quality and character comparable to the music and the cuisine that receives most of the attention.

    During those visits, sadly, I did not get to know the people – not really. The New Orleanians I met were doing their jobs but not necessarily being themselves. Such is the experience of the tourist.

    This all changed when Katrina brought me back in the role of planner. Engaging the planning process brought me face to face with the reality.

    Apart from the misconceptions of the tourist, I had also been predisposed by the media to think of New Orleans in a certain way: as a charming, but lackadaisical and fundamentally misgoverned place long subjected to unwarranted devastation, with a great deal of anger and resentment as a result. That is indeed what I found at first; but as I engaged in the planning process I came to realize that this anger was relative. It was much less, for example, than the bitterness that one encounters in the typical California city with nothing more than traffic gripes. The people of New Orleans have an underlying sweetness, a sense of humor, and irony, and graciousness that is never far below the surface. These were not hard people.

    Pondering this one day, I had an additional insight. I remember specifically when on a street in the Marigny I came upon a colorful little house framed by banana trees. I thought, “This is Cuba,” (I am Cuban). I realized in that instant that New Orleans is not really an American city, but rather a Caribbean one.

    Looking through the lens of the Caribbean, New Orleans is not among the most haphazard, poorest or misgoverned American cities, but rather the most organized, wealthiest, cleanest, and competently governed of the Caribbean cities. This insight was fundamental because from that moment I understood New Orleans and began to truly sympathize. Like everyone, I found government in this city to be a bit random; but if New Orleans were to be governed as efficiently as, say, Minneapolis, it would be a different place – and not one that I could care for. Let me work with the government the way it is.

    It is the human flaw that makes New Orleans the most humane of American cities. (New Orleans came to feel so much like Cuba that I was driven to buy a house in the Marigny as a surrogate for my inaccessible Santiago de Cuba.)

    When understood as Caribbean, New Orleans’ culture seems ever more precious – and more vulnerable to the effects of Katrina. Anxiety about cultural loss is not new. There has been a great deal of anguish regarding the diminishment of the black population, and how without it New Orleans could not regain itself.

    But I fear that the city’s situation is far more dire and less controllable. Even if the majority of the population does return to reinhabit its neighborhoods, it will not mean that New Orleans – or at least the culture of New Orleans – will be back. The reason is not political, but technical. You see, the lost housing of New Orleans is quite special. Entering the damaged and abandoned houses you can still see what they were like before the hurricane. These houses were exceedingly inexpensive to live in. They were houses that were hand built by people’s parents and grandparents, or by small builders paid in cash or by barter.

    Most of these simple, and surprisingly pleasant, houses were paid off. They had to be, because they do not meet any sort of code, and are therefore not mortgageable by current standards.

    I think that it was possible to sustain the culture unique to New Orleans because housing costs were minimal. These houses liberated people from debt. One did not have to work a great deal to get by. There was the possibility of leisure.

    There was time to create the fabulously complex Creole dishes that simmer forever; there was time to rehearse music, to play it live rather than from recordings, and time to listen to it. There was time to make costumes and to parade; there was time to party and to tell stories; there was time to spend all day marking the passing of friends. One way to leisure time lies in a light financial burden. With a little work, a little help from the government, and a little help from family and friends – life could be good! This is a typically Caribbean social contract: not one to be dismissed as laziness or poverty, but as a way of life.

    This ease, so misunderstood in the national scrutiny following the hurricane, is the Caribbean way. It is a lifestyle choice and there is nothing intrinsically wrong with it. In fact, it is the envy of some of us who work all our lives to attain the condition of leisure only after retirement.

    This is the way of living that may now disappear. Even with the Federal funds for new housing, there is little chance that new or renovated houses will be owned without debt. It is too expensive to build now.

    If nothing else, the higher standards of the new International Building Code are superb, but also very expensive. There must be an alternative or there will be very few “paid off” houses. Everyone will have a mortgage, which will need to be sustained by hard work – and this will undermine the culture of New Orleans.

    What can be done? Somehow the building culture that created the original New Orleans must be reinstated. The hurdle of drawings, permitting, contractors, inspections – the professionalism of it all – eliminates grassroots ‘bottom up’ rebuilding.

    Somehow there must be a process whereupon people can build simple, functional houses for themselves, either by themselves, or by barter with professionals.

    There must be free house designs that can be built in small stages, and that do not require an architect, complicated permits, or inspections. There must be common sense technical standards. Without this, there will be the pall of debt for everyone. And debt in the Caribbean doesn’t mean owing money, it means destroying a culture that arises from lower costs and leisure.

    To start, I would recommend an experimental “opt-out zone.” Create areas where one “contracts out” of the current American system, which consists of the nanny-state raising standards so expensive and complicated that only the nanny-state can provide affordable housing. The state thus creates a problem and then offers the only solution.

    However it may sound, this proposal is not so odd. Until recently, this was the way that built America from the Atlantic to the Pacific.
    For three centuries Americans built for themselves. They built well enough – so long as it was theirs. Individual responsibility could be trusted.

    We must return to this as an option.

    Of course, this is not for everybody. There are plenty of people in New Orleans who work in conventional ways at conventional times. But the culture of this city does not flow from them; they may provide the backbone of New Orleans, but not its heart.

    See the attached file for a polemical draft for legislation that activates the thesis of the above essay.

    Andrés Duany is a principal at Duany Plater-Zyberk & Company (DPZ). DPZ is recognized as a leader of the New Urbanism, a movement that seeks to end suburban sprawl and urban disinvestment. In the years since the firm designed Seaside, Florida, in 1980, DPZ has completed plans for close to 300 new towns, regional plans, codes, and community revitalization projects.

    Duany is the author of The New Civic Art and Suburban Nation. He is a founder of the Congress for the New Urbanism. Established in 1993 with the mission of reforming urban growth patterns, the Congress has been characterized by The New York Times as “the most important collective architectural movement in the United States in the past fifty years.”

  • How Elite Environmentalists Impoverish Blue-Collar Americans

    The great Central Valley of California has never been an easy place. Dry and almost uninhabitable by nature, the state’s engineering marvels brought water down from the north and the high Sierra, turning semi-desert into some of the richest farmland in the world.

    Yet today, amid drought conditions, large parcels of the valley – particularly on its west side – are returning to desert; and in the process, an entire economy based on large-scale, high-tech agriculture is being brought to its knees. You can see this reality in the increasingly impoverished rural towns scattered along this region, places like Mendota and Avenal, Coalinga and Lost Hills.

    In some towns, unemployment is now running close to 40%. Overall, the water-related farming cutbacks could affect up to 300,000 acres and could cost up to 80,000 jobs.

    However, the depression conditions in the great valley reflect more than a mere water shortage. They are the direct result of conscious actions by environmental activists to usher in a new era of scarcity.

    To some extent, such efforts reflect some real limits imposed by the growth of population. Constructive long-term changes in the conservation and utilization of all basic resources – energy, water and land – are not only necessary, but also inevitable.

    Yet the new scarcity does not simply advocate humane ways to deal with shortages, but seeks to exacerbate them intentionally. This reflects a doomsday streak in the contemporary environmental ethos – greatly enhanced by the concern over climate change – that believes greater scarcity of all basic commodities, from land and water to energy, might help reduce the much detested “footprint” of our species.

    One key element of this agenda has to do with reducing access to critical resources like water beyond those required to support existing uses. To be sure, two years of below-average precipitation helped create central California’s current water shortage. Planting crops such as cotton, which needs lots of water, may also have contributed to the problem.

    However, this only explains part of the problem, which increasingly has to do not with vicissitudes of nature but conscious political action. In prior dry periods, the state has managed its water resources to supply farmers and other users as effectively as possible. Today, in response to seemingly endless litigation to protect certain fish in the Delta region west of Sacramento or to “revitalize” valley streams, enormous amounts of water have been allowed to flow untapped into San Francisco Bay.

    This distinction was entirely missing in national coverage of the drought. A recent New York Times article, for example, barely acknowledged the role played by environmentalists whose move to block additional water supplies from the Delta have turned a below-average year – moisture content in the Sierra is about 90% of normal – into something of an epochal agricultural and human disaster.

    “This is still a pretty decent drought but nothing unusual,” suggests Tim Quinn, executive director of the Association of California Water Agencies, which represents both urban and agricultural interests. “We were prepared, as usual, for the drought, but they have taken all the tools away from us.”

    Many environmentalists justify their efforts to curtail water availability for California’s farmers and towns by citing various doomsday global warming projections. Energy Secretary Steven Chu, for example, recently opined that as the state’s climate inevitably shifts to a hot-weather, low-precipitation pattern, water scarcity will create “a scenario where there is no more agriculture in California.” If agriculture is doomed anyway, why not kill the industry now and use the water for fish or other pet “green” projects?

    This represents a remarkable reversal in the spirit that only a few decades ago drove the development of California. Anyone who has lived for any period in the state knows that aridity represents our greatest natural challenge. California seems always either at the edge of drought, coming out of one, or about to enter a dry spell. Since 1920, the state has experienced crippling six-year droughts during 1929 to 1934 and 1987 to 1994, as well as severe shortfalls of a lesser span on several occasions.

    Recognizing the need for a reliable water supply despite the certainty of significant dry years, Californians responded by building one of the most highly advanced water delivery systems in the world. The result was a network of federal and state dams, pumps and aqueducts emblematic of the “can-do” spirit motivating old Progressives, like Edmund Brown in Sacramento and New Dealers in the nation’s capitol.

    The state’s water conveyance facilities opened vast new tracts of land to agriculture. Some of the world’s largest expanses of almonds, pistachios, pomegranates, grapes and cotton covered once-arid land. This expansion created steady demand for advanced farming technologies as well as low-paid labor, much of it undocumented. Reflecting this dichotomy, wealth and poverty grew hand in hand throughout the Central Valley.

    Today, environmentalists cite – as yet another reason to dehydrate California farmlands – the prevalence of immigrant labor in the Central Valley. Lloyd Carter, a major state environmental activist, recently suggested that cutting farm production would actually be beneficial since most farm workers are “not even American citizens for starters” and raise children that “turn to lives of crime,” “go on welfare” and “get into drug trafficking and … join gangs.” These comments cost Carter his association with certain environmental groups, but not his day job – deputy attorney general under former governor and supreme green jihadi Jerry Brown.

    Unfortunately, Carter’s comments reflect what many environmentalists will tell you in private. As a Valley resident himself, Carter may have great empathy for his region’s poor and working class, but it’s hardly a priority among the core of the green movement, which is based in places like San Francisco or Santa Monica. This reflects not so much racism as a disconnect with the productive industries – agriculture, energy and manufacturing – that tend to cluster on the other side of the coastal range.

    The growing economic problems in Central Valley cities like Fresno, where unemployment is near 15%, represents little more than an abstraction to a new cadre of wealthy “progressives” who merely pass through the area on their way to Yosemite and other Sierra resorts.

    “We are getting the sense some people want us to die,” notes native son Tim Stearns, a professor of entrepreneurship at California State University at Fresno. “It’s kind of like they like the status quo and what happens in the Central Valley doesn’t matter. These are just a bunch of crummy towns to them.”

    This split has engendered what is likely a quixotic secession campaign led by farmers in the interior counties, but such drives to divide the Golden State have risen and failed many times before. Yet clearly, there exists a growing divide between producer and consumer economies, and this is coming to the fore not only in California, and on issues well beyond water.

    It is critical to understand that anti-growth politics diverges from the old conservationist ethos in radical ways. No longer is it enough to talk about growing intelligently or using technology to meet long-term problems. Instead, scarcity politics seeks to slow and even reverse material progress through what President Obama’s science adviser, John Holdren, calls “de-development.”

    “De-development” – that is, the retreat from economic growth – includes some sensible notions about conservation but takes them to unreasonable, socially devastating and politically unpalatable extremes. The agenda, for example, includes an opposition to population growth, limits on material consumption and a radical redistribution of wealth both nationally and to the developing world.

    In much the same way as seen in California’s water crisis, many of the administration’s “green” energy policies pose a direct threat to blue-collar workers employed in extracting and processing fossil fuels. The resultant high energy prices caused by the proposed “cap and trade” system – essentially a system for creating scarcity – also will cost middle-class consumers, blue-collar workers, truckers and manufacturers. These constituencies could well face the kind of water policy-related decline that is destroying farming communities throughout central California.

    Yet at the same time, such policies make the well-to-do and trustafarians in San Francisco and Malibu – for whom higher energy prices are barely a concern – feel better about themselves. In what passes for progressive politics today, narcissism usually takes priority over reality.

    In the new scarcity politics, access to land also may be sharply limited. New land regulation, ostensibly for climate-change reasons – already in place in California and being discussed as well in Washington state – could force almost all new development to follow a high-density, multi-family pattern. Over time, single-family homes – the preference of a vast majority of Americans – will become once again, as they were in the past, the privilege only of the upper classes in some metropolitan regions.

    By embracing the politics of scarcity, the Obama administration seems committed to imposing a regime that could slow any sustained recovery from the current recession. Although these ideas might appear plausible at a Harvard Law Review bull session, their real consequences for millions of Americans could prove very ugly indeed.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.