New Geography

Category: Urban Issues

  • Sustaining the Suburbs

    The proposition is simple, if not overwhelming.  If we want sustainable cities – however you define “sustainable” – we had better put some effort into the quality of suburban life.  We need to get over denigrating suburbs and sprawl.  That simply ducks the issue of where and how most people spend most of their time.  We need to moderate a preoccupation with promoting CBD and big centre lifestyles.  Those are places that people want visit, but not necessarily where they want to live.

    Come back Jane, our suburbs need you
    It’s fifty years now since Jane Jacobs’ landmark book about saving North American cities from themselves.  She argued against the prevailing push for urban renewal as displacing communities and destroying street life with motorways, car parks, and bland commercial development.  Jacobs’ writing and her activism inspired a resistance credited with saving inner city villages, helping retain the human character of large cities, and inspiring a generation of urban designers and planners. 

    There is no doubt that the Jacobs message took hold in New Zealand.  It’s become compelling since the crash of ‘87 slowed down the razing of inner city blocks and marked the beginning of the end of the white collar CBD.  Hanging on to what we’ve got is one way to stop the hollowing out.

    Unfortunately, today’s call for central city mega projects on which to stake a claim to an international presence and the push for large scale CBD residential development on which to stake a claim to environmental stewardship run the risk of reversing the gains to inner city life.  High rise apartments, tracts of high density housing, and grandiose civic plans risk undermining the essence of the central city in the same way as urban renewal and freeways once did.

    But that’s not what this posting is about.  The reality is that the bulk of our populations live in the suburbs; the suburbs that are growing the most; and that’s where we need to promote the capacity for people to live fulfilling lives.  That’s where today we need to promote street life and be wary of the threats posed by the new urbanists and their grand plans for intensification.

    Most people still live in the suburbs
    Its obvious that most people still live a suburban life.  But that doesn’t seem to be appreciated by the people who plan our cities today, even as the number of suburban residents keeps growing.

    Look at the three metropolitan areas in New Zealand, not big by international standards, but nevertheless reflecting an entrenched trend in the developed world – a move to decentralise.  The numbers say it all. 

    Over the last 14 years population growth has been totally dominated by the suburbs.  In Auckland, the inner city accounted for only 6% of a 326,000 person increase.  In other words, 305,000 opted to live in the suburbs and beyond, compared with 21,000 in the central city.  In Christchurch, the CBD accounted for just 1% of population growth and the rest of the inner city 2%.  Wellington, the capital city with a distinctively constrained setting did much better, but a revitalised CBD still accounted for just 10% of population growth. [1]

    Population Growth in the Central City: Auckland, Wellington, Christchurch, 1996-2010
    Source: Statistics New Zealand

    And they still favour the outer suburbs

    Let’s break this down a little further.  Greater Christchurch Urban Development Strategy Partners (http://www.greaterchristchurch.org.nz/) came up with a plan for consolidating the city.  This includes policies promoting central city living or living around established commercial centres and development contained largely within metropolitan limits.  Well, we can see the warning signs for this sort of thinking from the very small share of recent growth in the inner city.  It seems that the new plan is set to fly in the face of recent experience.   

    And if we divide Christchurch’s suburbs into three groups (inner, outer, and periphery) we find the decentralising tendency that it is set against is even stronger . [2]

    Population Growth in Christchurch Suburbs, 1996-2010

    The peripheral suburbs on the city fringes have led growth rates, while the outer suburbs have led absolute growth.  (That’s if we overlook the fact that the small towns in Christchurch’s hinterland left out of this analysis have grown at even faster rates, with the adjoining districts two of the fastest three growth areas in New Zealand).

    Does it make sense to stem this pressure?  Not if we want the cities to continue to grow, because the majority of people clearly favour suburban living, and that’s where the greatest capacity for accommodating them lies. 

    So while it’s exciting to record rapid growth rates of population gain in our inner cities, policy makers really need to make sure we are doing the right thing by our suburbs. 

    Places to live …
    This may mean, for example, ensuring that we don’t sacrifice too many of the green spaces to high density housing: our suburbs also need to breathe.  If we want to lift densities, then terraced units and the occasional low rise apartment may be all we need.  They are probably the most easily achieved forms of intensification in areas where consolidating sites is notoriously difficult and where existing residents will fight to preserve existing character. 

    Better still may be judicious development of greenfield sites, where we can boost densities by applying the principles of Smart Growth without destroying what people value about what went before, without overloading existing facilities and infrastructure, creating attractive public and private realms, and potentially enhancing rather than trashing biodiversity, water and air quality.

    Places to work …

    >We will also need to promote neighbourhood centres to ensure that they can accommodate diverse activities and services, that they are easy to get to and get around, well appointed and vibrant.  They may even become the focus of modest park and ride facilities, the framework around which flexible public transport within and beyond the neighbourhood can best be delivered.

    It may be timely to review what in our planning provisions force people to make regular cross-city journeys to work, and whether this can be changed through more decentralised employment. 

    Places to play …
    While local centres are becoming the focus of community and neighbourhood commerce and culture, suburban parks and gardens will also have a role to play.  We need good spaces close to the majority of homes for sport and recreation, and safe local places for families and children to gather.   

    We might more actively protect some of the informal spaces in our suburbs, and take a broad view of what constitutes heritage in doing so.  We may have to protect landscapes and structures because they are iconic in local areas, not because we believe they may have national or international significance.  Where they don’t exist, we may even have to create the landmarks, the parks and town belts, and the structures that reinforce local identity and culture.

    Strong suburbs for a strong CBD
    By allowing more things to happen in the suburbs without overloading them with bland residential development or tracts of mixed use that fall between urban design stools, we have an opportunity to advance the planners’ live-work-play mantra, and to enhance the sustainability of our cities. 

    Ultimately, it is the quality of day-to-day life in a city and its capacity to attract and hold skilled and motivated people that will determine its prosperity.  And it is those people and that prosperity that will underwrite the health of the CBD.  Without strong suburbs, we cannot sustain a strong CBD.

    [1]            For this exercise, the following council areas were counted, Kapiti, Porirua, Upper and Lower Hutt, and Wellington City.

    [2]           This classification omits the largely rural Banks Peninsula which is quite separate from the metropolitan area.

    Phil McDermott is a Director of CityScope Consultants in Auckland, New Zealand, and Adjunct Professor of Regional and Urban Development at Auckland University of Technology.  He works in urban, economic and transport development throughout New Zealand and in Australia, Asia, and the Pacific.  He was formerly Head of the School of Resource and Environmental Planning at Massey University and General Manager of the Centre for Asia Pacific Aviation in Sydney. This piece originally appeared at is blog: Cities Matter.

    Photo by New Zealand Defence Force.

  • How Los Angeles Lost Its Mojo

    Los Angeles today is a city in secular decline. Its current political leadership seems determined to turn the sprawling capitalist dynamo into a faux New York. But they are more likely to leave behind a dense, government-dominated, bankrupt, dysfunctional, Athens by the Pacific.

    The greatness of Los Angeles stemmed from its willingness to be different. Unlike Chicago or Denver or New York, the Los Angeles metro area was designed not around a central core but on a series of centers, connected first by railcars and later by the freeways. The result was a dispersed metropolis where most people occupied single-family houses in middle-class neighborhoods.

    Lured by the pleasant climate and a business-dominated political economy, industries and entrepreneurs flocked to the region. Initially, the growth came largely from oil and agriculture, followed by the movie industry. Defense and aerospace during World War II and the postwar era fostered a vast industrial base, and by the 1980s Los Angeles had surpassed New York as the nation’s largest port, and Chicago as the nation’s leading industrial center.

    The region hit a rough spot as the end of the Cold War led to massive federal cutbacks in aerospace. Los Angeles County lost nearly 500,000 jobs between 1990 and 1993. But it bounced back, adding nearly 400,000 jobs between 1993 and 1999. Aerospace never fully recovered, but other parts of the industrial belt—including the port and the apparel and entertainment industries—grew. An entrepreneurial class of immigrants—Middle Eastern, Korean, Chinese, Latino—launched new businesses in everything from textiles and ethnic food to computers. The pro-business mayoralty of Richard Riordan and the governorship of Pete Wilson restored confidence among the city’s beleaguered companies.

    Then progress stalled. Employment stayed relatively flat from 2001 until 2005, when Mayor Antonio Villaraigosa was elected, and then started to drop. As of this March, over the entire L.A. metropolitan area, which includes adjacent Orange County, unemployment was 11.4%—the third-highest unemployment rate of the nation’s 20 largest metro areas.

    Why has Los Angeles lost its mojo? A big reason is a decline in the power and mettle of the city’s once-vibrant business community. Between the late 1980s and the end of the millennium, many of L.A.’s largest and most influential firms—ARCO, Security Pacific, First Interstate, Union Oil, Sun America—disappeared in a host of mergers that saw their management shift to cities like London, New York and San Francisco. Meanwhile, says David Abel, a Democratic Party activist and publisher of the influential Planning Report, once-powerful groups like the Los Angeles Chamber of Commerce and the Los Angeles County Economic Development Corporation lost influence.

    The machine that now controls Los Angeles by default consists of an alliance between labor and the political leadership of the Latino community, the area’s largest ethnic population. But since politicians serve at the whim of labor interests, they seldom speak up for homeowners and small businesses.

    Mayor Villaraigosa, a former labor organizer, has little understanding of private-sector economic development beyond well-connected real-estate interests whom he has courted and which have supported him. He has been a strong backer of L.A. Live, a downtown ports and entertainment complex, and other projects that have benefited from favorable tax treatment and major public infrastructure investments. He’s currently supporting a push to build a new downtown football stadium, though L.A. has no professional football team. His biggest priority is to build the so-called subway to the sea, a $40 billion train line to connect downtown with the Pacific.

    But L.A.’s downtown employs a mere 2.5% of the region’s work force; New York’s central business districts, by contrast, employ roughly 20%. “To put the entire focus of development on downtown L.A.,” says Ali Modarres, chairman of the geography department at Cal State Los Angeles, “is to ignore the historical, cultural, economic [and] social forces that have shaped the larger geography of this metropolitan area.”

    Moreover, the mayor’s accent downtown is on housing, not manufacturing. And as Cecilia Estolano, former head of the Community Redevelopment Agency, points out, “downtown housing simply doesn’t create the jobs that small manufacturers do.”

    Meantime, business-strangling regulations proliferate, often with support from a powerful and well-heeled environmental movement, which Mr. Villaraigosa counts on for political support and media validation. There are draconian moves to control emissions at the port from ships and trucks. Also harmful are the city’s efforts to expand the unions’ presence from the docks to the entire network of trucks serving the port—essentially forcing out independent carriers, many of them Latino entrepreneurs, in favor of larger firms using Teamster drivers.

    Such policies could backfire, says economist John Husing, leading shippers to transfer their business to cheaper and less heavily regulated ports such as Charleston, Houston, Savannah and other growth-oriented southern cities. This is particularly dangerous given the planned 2014 widening of the Panama Canal, which will make Southeastern ports far more competitive for Asia-based trade. Mr. Husing notes that L.A.’s port is the largest generator of blue-collar employment in the region.

    Even some liberal Democrats are beginning to realize that the current system isn’t sustainable. Writing recently in the Los Angeles Business Journal, Roderick Wright, a Democratic state senator from south Los Angeles, compared the state and local governments with the Mafia. The “vig” that government takes from local businesses, Mr. Wright argued—both in taxes and in the cost of regulation—has undermined job creation, particularly in working-class districts like his. He also warned that renewable-energy mandates recently imposed by the state would boost the cost of energy in the region, already 53% above the national average, by an additional 20% to 25%.

    Who will challenge the machine and its ruinous economic policy? It’s not likely to be the city’s enervated business sector. But the city’s working and middle classes might, says Ron Kaye, former editor of the San Fernando Valley–based Daily News. He points to the city’s remaining middle-class homeowners, who are concentrated in the San Fernando Valley but also occupy a number of diverse neighborhoods. “These are the places that reflect the whole idea of L.A., as opposed to the Villaraigosa vision of a city of apartment dwellers,” Mr. Kaye says.

    It is uncertain if Los Angeles will experience the Sunshine Revolution it so desperately needs. What is certain is that only when the machine and its masters no longer dictate L.A.’s fate can this diverse and dynamic region resume its ascent toward greatness.

    This piece originally appeared in the Wall Street Journal and is adapted from the Summer 2011 edition of The City Journal.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. 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 by pinchof

  • Moving from the Coast

    For years both government and media have been advancing the notion that   America’s coastal counties are obtaining most of the population growth at the expense of interior counties. For example, the National Oceanic and Atmospheric Administration reported in the 1990s: Coastal areas are crowded and becoming more so every day. More than 139 million people–about 53% of the national total–reside along the narrow coastal fringes.

    NOAA went on to say that the population of the coastal counties is expected to increase by an average of 3600 people per day and noted further that the coastal counties were growing faster than the nation as a whole. NOAA has designated 673 counties on four coasts (Atlantic, Gulf, Pacific and Great Lakes) in the contiguous United States, Hawaii and Alaska as coastal counties.

    Population Growth: In fact, coastal counties are not growing faster than the nation as a whole and were not when NOOA issued the 1990s report. For most of the last 40 years, the nation’s interior counties have been adding more population. From 1970 to 2010, interior counties added 55.7 million new residents, compared to 49.7 million new residents in coastal counties. This is a reversal from 1940 to 1970, when two thirds of the nation’s population growth was in the coastal counties.

    The trends today actually have become more favorable for the interior than at any time in a century. From 2000 to 2010, the interior counties captured more of the nation’s growth than in any decade since 1900 (Table). From 2000 to 2010, the interior counties added 16.0 million residents, 59.6 percent of the nation’s growth compared to 11.4 million new residents in the coastal counties.

    Coastal and Interior Population: Counties
    1900-2010
    Coastal Counties Interior Counties United States
    Year Population Share Change Population Share Change Population Change
    1900         30.2 39.7%         46.0 60.3%         76.2
    1910         38.2 41.4%           8.0         54.0 58.6%           8.0         92.2         16.0
    1920         46.2 43.6%           8.0         59.8 56.4%           5.8       106.0         13.8
    1930         57.4 46.6%         11.2         65.8 53.4%           6.0       123.2         17.2
    1940         62.3 47.1%           4.9         69.8 52.9%           4.0       132.2           9.0
    1950         75.2 49.9%         12.9         75.5 50.1%           5.7       150.7         18.5
    1960         94.4 52.6%         19.2         85.0 47.4%           9.5       179.3         28.6
    1970       109.9 54.0%         15.6         93.5 46.0%           8.5       203.4         24.1
    1980       119.8 52.9%           9.9       106.7 47.1%         13.2       226.5         23.2
    1990       133.4 53.6%         13.6       115.3 46.4%           8.6       248.7         22.2
    2000       148.2 52.7%         14.9       133.2 47.3%         17.9       281.4         32.7
    2010       159.6 51.7%         11.4       149.1 48.3%         16.0       308.7         27.3
    Population in Millions
    Calculated from US Census Bureau Data
    Coastal counties designated by NOAA (673 counties)
    Totals may vary due to rounding

     

    As of 2010, the coastal counties have 51.7 percent of the nation’s population, having dropped from 52.7 percent in 2000 and a peak of 54.0 percent in 1970 (Figure 1). Rather than adding 3600 new people every day, coastal counties added 3100 people per day, while interior counties added 4400 per day during the 2000s. A smaller sample of 559 counties that was examined by economists Jordan Rapaport and Jeffrey Sachs in the early 2000s experienced an even more pronounced movement away from the coasts between 2000 and 2010, with more than 60 percent of the nation’s growth taking place in the interior counties.

    There may also be some concern about density in coastal counties.   Yet Malthusian fears need not grip coastal residents. With a population density of approximately 315 per square mile (120 per square kilometer), the coastal counties of the contiguous United States have only a slightly higher density than the post-enlargement 27-nation European Union. The coastal counties have a density one-half that of Germany. In contrast, the interior counties are far less dense, at 60 persons per square mile.

    There has also been significant change in coastal population trends since the middle 1990s. The largest Pacific Coast metropolitan areas, such as Los Angeles, San Francisco, San Diego, San Jose and Seattle have seen their growth slow considerably. In the 1990s, NOAA was projecting huge population increases for Los Angeles and San Diego counties. It appears likely that these 2015 projections will fall at least 600,000 short in both counties. Even Seattle, arguably the healthiest economically among the west coast metropolitan areas, is now growing more slowly than former laggards Oklahoma City, Indianapolis and Columbus in the interior.

    Regional Population Growth: There was significant variation in growth among the varied regions of the country. In the Northeast, there was much stronger growth on the coast, which added 1.6 million people, compared to a gain of less than 150,000 in the interior. In the Midwest, the coastal counties (along the Great Lakes) lost 120,000 people, while the interior counties gained 2.7 million. In the South, the interior grew more, at 8.1 million, slightly more than 6.3 million in coastal counties.  In the West, interior counties gained 5.1 million people, while the coastal counties gained 3.7 million (Figure 2). This drop in coastal growth was a principal reason why the West grew less quickly than the South, which experienced the most robust coastal growth. For this reason, the West failed to be the nation’s fastest growing region for the first time since 1900.

    Personal Income: Rappaport and Sachs noted in their early 2000s work that the density of economic activity was far greater in the coastal counties. Of course this is to be expected, due to their greater population density. However the data with respect to the distribution of personal income is less clear. Since 1969, coastal and interior counties have been alternating leadership in personal income growth per capita. During the 2000s, interior counties experienced average personal income growth slightly less than that of the coastal counties (Figure 3). However, average per capita income since 1970 has risen 81 percent, compared to a lower 75 percent in the coastal counties (adjusted for inflation).  Overall, the share of income in the interior counties has been growing modestly (Figure 4).

    Domestic Migration: The most important factor in the growth of the interior counties in the 2000s lies with net domestic migration, with more residents moving from the coastal counties to the interior counties. Between 2000 and 2009, 4.5 million people moved to the interior counties, while 4.5 million people moved away from the coastal counties, according to Census Bureau estimates (Figure 5).

    Rappaport and Sachs had theorized that the greater concentration of population and economic activity in the coastal counties could be reflective of a more attractive quality of life. The domestic migration data would suggest that, at least over the last decade, people are opting for the interior, perhaps sensing that the coastal quality of life may not be as affordable and accessible as in the past.  

    Cost of Living: The key here lies with the cost of living, which has become far higher on the coasts then in the interior. The most significant cost of living differences for households are in the cost of housing.   

    From 2000 to 2009, housing affordability deteriorated markedly in the coastal counties. Census Bureau data indicates that the Median Multiple (median house founded divided by median household income) rose from 3.6 to 5.4 in the coastal counties (population weighted). By contrast, housing affordability worsened far less in the interior counties, where the Median Multiple rose from 2.5 to 3.1. Thus, the median household saw owned housing increase 22 months worth of income in value in coastal counties, compared to seven months worth of income in interior counties (Figure 6). At the same time, these higher coastal house prices developed as demand for housing was dropping substantially, with 4.5 million people moving away from coastal counties (above).

    Many of the coastal counties have strong land use regulation (smart growth or urban containment regulation), especially in California, Oregon, Washington, Florida and the metropolitan areas of Boston, New York and Washington. A considerable body of research, both econometric and descriptive, has associated more restrictive land use regulation (called smart growth, urban consolidation or urban containment) with higher house price increases, reaching back at least to the seminal 1970s work by Sir Peter Hall and his associates in the United Kingdom. It thus seems likely that the deterioration of housing affordability in coastal counties is materially associated with their less robust growth. The quality of life on the coasts may simply have become too expensive.

    The Future? It is unclear whether the recent higher population growth rates, stronger migration trends and improved economic performance of the interior will continue into the future. The 1940 to 1970 dominance of the coastal counties surged as coastal metropolitan areas, especially in Florida and California, grew much more quickly. Now that pattern has been reversed.  More favorable trends over the past 40 years in the interior counties seem likely continue, unless coastal house prices and the cost of living begin to swing back toward the national norm.

    —-

    Note: Complete county data is at County Coastal Population (also attached to this article)

    Photograph: San Diego, which experienced greater domestic outmigration than Pittsburgh in the 2000s.

  • Zipcars: The Car Sharing Market Gets Zapped

    A growing sector of the urban populace is turning to “car sharing” — sharing vehicles through membership in nonprofit or for-profit organizations — for cost and convenience. Since 2006, membership in car sharing organizations has grown from about 100,000 to more than 500,000 people.

    Although the car sharing market is still tiny compared to the demand for privately owned vehicles, there is much to like about it, particularly when it is available in residential neighborhoods. Research by Susan Shaheen, professor at the University of California-Berkeley, shows that people who turn to car sharing drive less, use more fuel-efficient vehicles, and increase their use of “non motorized” transportation (walking and biking). Data is mixed about whether car sharing adds or subtracts from use of public transportation, but the overall impact appears to be negligible.

    The way car sharing works is simple: Members join an organization to gain access to a fleet of vehicles for use on a pay-as-you-go basis. The vehicle is picked-up and dropped-off at unattended location called a “pod”; the sites are generally located throughout a service area, rather than at a centralized location.

    Members typically pay annual or monthly fees on top of variable fees based on the number of hours, and sometimes the mileage, of each trip. The reservation and check in process is fully automated, as bookings are made online or via a smartphone, and vehicles are accessed using a smartcard.

    Car sharing often fills a missing link in a package of transportation options that can substitute for private vehicle ownership. Members often use transit service (or walk or bike) for daily commutes, use taxis for one-way trips or those that are short in distance but long in duration; rental cars, airlines or trains for long-distance trips; and car share vehicles for trips that might, for example, involve shopping, transporting heavy items, or visiting a suburb or nearby city.

    Zipcar, the nation’s largest car sharing provider, now offers its services in 11 major metropolitan areas and on over 150 college campuses. The Boston-based company issued its first publically traded stock in April 2011. Among nonprofits, City CarShare in the San Francisco Bay Area, I-GO in metropolitan Chicago, and PhillyCarShare in the Philadelphia area are the largest.

    Traditional car-rental companies are also getting in on the act. Enterprise Rent-A-Car operates WeCar, while Hertz Corporation has created Hertz on Demand, which has a foothold on 44 college campuses in 26 states and commands a significant presence in metropolitan New York. U-Haul’s U Car Share, primarily serves Salt Lake City, Utah, and ten college/corporate campuses in nine states.

    Of course, car sharing will likely account for only a small share of the travel market for the foreseeable future. The opportunity costs of time spent finding an available car, booking a reservation, and traveling to a pod can potentially be high, and prospective members accustomed to vehicle ownership may be hesitant to try a new transportation lifestyle. Car sharing is still rare in low-density areas. In addition, it’s been slow to show it can be profitable, although the sector’s rapid expansion may mask the profitability of mature markets.

    Also standing in the way are high taxes imposed by municipal governments. Many such taxes were created with the idea of extracting revenue from airport travelers visiting from out-of-town for business or tourism. As our research shows, however, these taxes increasingly fall on neighborhood folks who simply want to make do without owning a car.

    Scott Griffith, CEO of Zipcar, the nation’s largest car sharing provider, points to the “tax-related headwinds” slowing the growth of this sector.

    In many cities, consumers pay taxes of more than 40 percent for a one-hour trip to the grocery store. Three cities — Boston, Chicago, and Portland, Oregon — have re-defined car sharing to provide waivers from certain taxes. But most cities still levy the full spectrum of fees that apply to car rentals. Our study shows that these taxes average almost 18 percent on one-hour reservations, and about 16 percent on the average reservation, rates that are more than twice the prevailing sales tax, which averages only about 8 percent.

    The situation is at its worst where consumers must pay flat amounts per transaction, regardless of the duration of the trip. Car sharers in New Jersey pay a $5 per-transaction fee, plus sales taxes, each time they use a vehicle. When coupled with other fees, this generally results in a tax rate of around 60 per cent on one-hour car sharing reservations. Passionate appeals have laid the groundwork for a bill presently under consideration to exempt car sharing organizations from this tax, but the prospects for passage remain uncertain.

    Maricopa County (Phoenix), Arizona imposes surcharges of $2.50 or more, while Colorado, Connecticut, Florida, New Mexico, Pennsylvania, and Allegheny County (Pittsburgh), Pennsylvania, each levy $2 surcharges. Cities without such fees tax car sharing heavily, as well. Car share users in New York City and in Seattle pay a combined tax of more than 19 percent, a levy that’s akin to the “sin taxes” on alcoholic beverages.

    Most of these fees were created before car sharing became a popular alternative. When establishing fees, it seems unlikely that legislative bodies contemplated that large numbers of local residents would have “virtual” access to cars in their neighborhood and seek to use them for less than a day.

    So, if the high taxes are the product of misguided government policy that can and should be corrected, why isn’t it fixed? Predictably, efforts to lower the burden have been complicated by the severe budgetary shortfalls facing governments. Some policymakers are nervous that technological innovations will blur the distinction between car sharing and the traditional rental car business, creating a slippery slope. As the car-rental business shifts away from airports, it faces similar problems.

    Investment in car rental models which give customers access to cars in a few keystrokes, and which offer hourly rentals at neighborhood pick-up locations, suggest that more changes in how people use cars are on the horizon.

    Municipal government espousing to be green need to take a hard look at their fees. Market-based innovations such as car sharing can’t reach their potential with today’s punitive tax structure. Reducing taxes for neighborhood car sharing organizations to levels comparable to the general sales tax is a necessary step to ending the penalty for life without a private car.

    Joseph P. Schwieterman is director and Alice Bieszczat a research associate at the Chaddick Institute for Metropolitan Development at DePaul University in Chicago. They are the co-authors of a new study, Are Taxes on Car Sharing Too High: A Review of a Tax Burden Facing an Expanding Transportation Mode?.

    Photo by Romana Klee, #113 zipcar

  • California Wages War On Single-Family Homes

    In recent years, homeowners have been made to feel a bit like villains rather than the victims of hard times, Wall Street shenanigans and inept regulators. Instead of being praised for braving the elements, suburban homeowners have been made to feel responsible for everything from the Great Recession to obesity to global warming.

    In California, the assault on the house has gained official sanction. Once the heartland of the American dream, the Golden State has begun implementing new planning laws designed to combat global warming. These draconian measures could lead to a ban on the construction of private residences, particularly on the suburban fringe. The new legislation’s goal is to cram future generations of Californians into multi-family apartment buildings, turning them from car-driving suburbanites into strap-hanging urbanistas.

    That’s not what Californians want: Some 71% of adults in the state cite a preference for single-family houses. Furthermore, the vast majority of growth over the past decade has taken place not in high-density urban centers but in lower-density peripheral areas such as Riverside-San Bernardino. Yet popular preferences mean little in a state where environmental zealotry increasingly dictates how people should live their lives.

    Some advocates do cite market forces to justify their policies. Economists on the left and right have cited the recent housing bust as proof that homes are not great investments, suggesting people would be better off leaving their money to the tender mercies of Wall Street speculators. Some demographers also suggest that young people will choose to live in high-density regions throughout their lives and that as boomers age they too will opt out of suburbs for urban apartment living.

    These “facts” may be more grounded in academic mythology than reality. Some widely quoted experts, like the Anderson Forecast at UCLA, cite Census information to say that demographics are shifting demand from single-family homes to condos and apartments, although the Census asked no such question. These experts also fail to address why condo prices have dropped even more in the major California markets than single-family home prices; the percentage of starts that come from single-family houses shifts from year to year, but last year’s number tracks around the same level as seen in the 1980s.

    Perhaps the biggest weakness in the analysis lies with long-term demographic factors. As I wrote last week, many of the “young and restless” folks whom city planners try to court tend to move into suburbs and affordable low-density regions as they grow older and begin starting families. Similarly, the vast majority of boomers, according to AARP, want to remain in their old homes as long as possible. Most of those homes are located in suburban, low- to medium-density neighborhoods.

    But who needs facts when you have religion? Take the Association of Bay Area Governments (ABAG) and Metropolitan Transit Commission’s (MTC) new “sustainable communities strategy,” a document designed to meet the requirements of the state’s draconian anti-greenhouse gas legislation.

    This “strategy” seeks to all but reduce growth in the region’s lower-density outer fringe – eastern Contra Costa County as well as the Napa, Vallejo and Santa Rosa metropolitan areas — which grew more than twice as fast as the core and inner suburbs. Instead the ABAG-MTC projects a soaring increase in demand for high-density housing and its latest “vision” report calls for 97% of all the region’s future housing be built in urban areas, virtually all of it multi-family apartments, to accommodate an estimated 2 million residents

    The projections underpinning ABAG’s strategy are absurd. Over the past decade the population of the region’s historic core cites San Francisco and Oakland — where much of the dense growth would be expected to take place — increased by 1.7%, compared with 6.5% for the suburbs. Overall regional growth stood at a modest 5.1%, roughly half that of the previous decade and just about half of the national and state averages.

    Given this record, a more reasonable assumption would be population growth at something closer to 1 million, half the projected amount. Assumptions about the economy to support even this growth are also dubious. The ABAG report, for example, fantasizes that by 2030 the Bay Area will increase its employment by 900,000 — a neat trick for an area that overall lost 300,000 positions over the past decade.

    So, why wage war on the house? Some greens seem to regard the single-family house as an assault on eco-consciousness. Yet in many cases, these objections are overstated. Research supporting higher-density housing , for example, has routinely excluded the greater emissions from construction material extraction and production, building construction itself and& greenhouse gas emissions from common areas like parking levels, entrances and elevators.

    Further, higher densities are associated with greater congestion, which retards fuel efficiency and increases greenhouse gas emissions, a factor not sufficiently considered. Given that less than 10% of Bay Area residents take transit — and barely 3% in its economic engine Silicon Valley — higher density likely would create greater, not fewer, emissions.

    The ABAG report also studiously avoids mentioning the potential greenhouse gas reductions to be had by expanding telecommuting, which is growing six times faster than the fervently pushed transit commuting in the region. The Silicon Valley already has 25% more telecommuters than transit users. Clearly, by pushing telecommuting, you could get big reductions in GHG without a “cramming” agenda.

    Ultimately the density agenda reflects less a credible strategy to reduce GHG than a push among planners to “force” Californians, as one explained to me, out of their homes and into apartments. In pursuit of their “cramming” agenda planners have also enlisted powerful allies – or perhaps better understood as ”useful idiots” — developers and speculators who see profit in the eradication of the single family by forcibly boosting the value of urban core properties.

    In the end, however, substituting religion for markets and people’s preferences is counterproductive. For one thing, people “forced” to live densely will find other places to live the way they like — even if it means leaving California. This is already happening to middle class families in places like San Francisco and may soon be true of California’s traditionally middle-class-friendly interior as well.

    In the end, two markets are likely to grow in the Bay Area. One is low-end rental housing for students and an expanding servant class — after all Google millionaires need people to walk their dogs and paint their toenails. The other is luxury retirement facilities for the region’s growing population of aging affluents. Once a self-consciously “cool” youth magnet, Marin County, for example, is now one of the country’s oldest urban counties, with a median age of 44.5; San Francisco is headed in the same direction.

    Developers can drool over the prospects of building high-end assisted living joints for all those aging hippies who made their bundle during the state’s glory days and settled into places like Mill Valley. After all, unlike young families, these affluent oldsters will be able to afford indulging in the state’s mild climate, natural food restaurants and brilliant scenery. And with easily accessible medical marijuana and a good sound system for playing Grateful Dead recordings, the gray-ponytail set could be in for a hell of a good time, at least as long as it lasts.

    This piece 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, and an adjunct fellow of the Legatum Institute in London. 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 by Mike Behnken

  • Permeable Pavement: Looking Below The Surface

    How can we prevent situations where environmental ‘solutions’ end up in failure? The tale of problems encountered with the misuse of pervious pavers (also known as porous or permeable pavers), used as an eco- friendly option, provides some answers.

    Low impact sidewalk and street installations can become economic problems. Why? Because failed environmental solutions placed on public property are then replaced with conventional construction, using tax dollars. The EPA Section 438 mandating all owned and leased Federal Facilities be converted into low impact development promotes permeable pavement, that is, paving that allows rainwater to pour through it, instead of running off at high speed to an inlet and overloading the storm sewer system, taking pollutants downstream with the water, and eventually infecting our streams and oceans. To understand more about it, read reporter Dave Peterson’s exposés in the Minneapolis Star Tribune.

    On the surface, permeable pavers seems logical: pavement that allows rain to fall through. But what happens after the rain falls through the pavement – where does the floodwater go? A sub-base is needed to support the pavement. The rainfall must fall not only through the pavers, but also through the ground below. If you were to place permeable pavers on your back yard patio, supporting the weight of people and furniture would require very little sub-structure. If your lot was made of sandy soil that allows rain to quickly filter through, better yet. But if the ground underneath is clay or rock, the water must be retained or piped off with a sub-drainage system. If this is starting to sound expensive, as we say in Minnesota, you betcha!

    This sub-surface material must be sponge-like, and allow a conduit for water to either pass through to a piped system to be transported elsewhere, or have enough small void areas to retain the water until it can slowly be filtered through its lowest layer seeping back to the earth. To create a ‘base’ with properties that has ‘void spaces’, plenty of rock and large stone is used.

    Of course this means digging a very deep channel under the proposed pavement, moving (removing) the old soil and hauling in this sub-base material. A 100 foot long 30 foot wide road would require a five foot deep excavation with 555 cubic yards of soil to be removed, and almost the same in sub-base to be hauled in. Since a large dump truck holds up to 20 cubic yards (typically less), that small section of street would require at least 27 trips to and from the destination with 27 truckloads of rock, no doubt consuming massive amounts of petroleum.

    Anybody who has been in Minnesota in the winter knows that during, those seven months of freezing weather, cold is redefined. Water expands about nine percent as it freezes, so 555 cubic yards of water would increase about 50 cubic yards. Where does the water go? Up! Water pressure can lift pavers and cause havoc in the winter, so before cold weather sets in it is recommended that the liquid be vacuumed out of the sub-surface and hauled away. Now how much energy does that take?

    People and patio furniture are not that heavy, certainly not as heavy as a bus, which weighs somewhere between 26 and 40 thousand pounds transferred to the tires, depending upon the size and how many it is carrying. This weight is then transferred to the pavement, which is on top of rocks and stone that are intentionally ‘loose,’ to hold water.

    There is another problem with permeable pavement in some applications: water settles to a level surface. A few years ago we designed a low-impact, clustered neighborhood in Minnesota. At the ‘consultants’ meeting with the developer, the young engineer pushed the permeable paver idea. We had designed the neighborhood by harnessing the natural grade, embracing the heavily wooded site’s natural drainage to save most of the existing trees on the steep slopes. In other words, we planned to use what nature provided, eliminating much of the grading, costs and environmental impacts. On this site there were some fairly steep grades, in many cases exceeding a five foot drop in its length along private drives.

    The engineer aggressively insisted on permeable pavers. His idea was to create a five foot deep sub-base under the private drives (26’ wide) and run the gutters of the roofs underground to the sub-surface drainage system. In such meetings it is not polite to scream, “Are you out of your mind?” Instead, after the meeting I told the developer to kill the idea for being far too expensive. The developer did not heed my advice, and when the economics of the engineering was done, the cost escalated out of control. Several months of the engineer trying to (unsuccessfully) convince the city that the permeable pavers was a great solution caused the project to be delayed. By the time it was approved (with the natural drainage solution), the recession was in full swing and the development went dormant.

    From a personal experience, when I built my Green Certified home in 2008, MNGreenstar provided points for permeable pavement but only if the underlying base held the storm water underneath. The soil of my lot is sandy, and could have quickly absorbed the rainwater, allowing a fairly cheap sub-base, but the ‘green’ certification did not allow for compromise. The green certification ‘all or nothing’ approach meant that my sub-surface would have added $5,000 to the construction to get a few green ‘points’ encouraging the ‘nothing’ side of the equation. So, instead of designing the driveway with permeable pavement, we used sculpted landscaped strips (like the driveways of yesterday) to reduce the paved surface area and the overall costs. It is not unusual to see people taking pictures of my ‘low impact’ driveway, which adds curb appeal and value, however, we gained no green points for this logical solution.

    Why the motivation to push permeable pavement? In many cases it might indeed make sense. One reason is profitability, not by those selling the pavement alternatives, but by the consulting industry that specifies materials charging fees based upon a percentage of the construction cost. Permeable pavers and other ‘green’ alternatives can add a considerable amount to costs, and to the profitability of a consulting firm. If all bids were based upon rewarding solutions that cost less, with a penalty for solutions that cost more, consultants would truly deliver on the promise of sustainability; development costs and future maintenance burdens would plummet, while the environment would benefit. If we rewarded engineers employed by government agencies by allowing them to share a percentage of the money they saved by introducing green solutions that are cost effective, it would bring about change overnight.

    Can this be done? Absolutely. The technology and educational materials have been developed for this overhaul, but it would take effort and investment, since we’re currently in an economy where up to 65% of the architectural and land consultants are unemployed, and those remaining are not exactly overloaded with work.

    The EPA Section 438 is the Federal agenda to rebuild existing facilities and have all new construction (including all military bases) comply with low impact standards. On some new construction and redevelopment, permeable pavement could be effective, but it is unlikely to be cost effective where heavy loads, bad soils, and/or frigid weather occur.

    The decreased pavement width of New Urbanism is a start in the right direction, as long as safety and functionality are maintained. Combined with the reduced ‘length’ of infrastructure in plans like Prefurbia, it is entirely possible to reduce the environmental impact of newly paved development by about 30%, and of re-developed areas (i.e. EPA Section 438) by more than 50%, while increasing function and value. Now that we have the knowledge to do so, isn’t it time to start reaping the benefits of design techniques that reduce pavement without harming function?

    Photo by Mockney Rebel; “Pavement Archeology”

    Rick Harrison is President of Rick Harrison Site Design Studio and Neighborhood Innovations, LLC. He is author of Prefurbia: Reinventing The Suburbs From Disdainable To Sustainable and creator of Performance Planning System. His websites are rhsdplanning.com and performanceplanningsystem.com.

  • Citizen Bloomberg – How Our New York Mayor has Given Us the Business

    This piece originally appeared in the Village Voice.

    After a charmed first decade in politics, Mayor Mike Bloomberg is mired in his first sustained losing streak.

    His third term has been shaky, marked by the Snowpocalypse, the snowballing CityTime scandal, the backlash to Cathie Black and “government by cocktail party,” and the rejection by Governor Andrew Cuomo of his plan to change how public-school teachers are hired and fired. With just a couple more years left in office, Bloomberg is starting to look every one of his 70 years.

    Soon, he’ll be just another billionaire.

    The mayor’s legacy is remarkably uncertain—largely because he’s done his best to keep New Yorkers in the dark about what it is he’s really set out to do in office.

    In part, this is because the mayor has been far more effective at selling his Bloomberg brand than in getting things done. But it’s also because what he has done—remaking and marketing New York as a “luxury city” and Manhattan as a big-business monoculture—he prefers to discuss with business groups rather than the voting public.

    Withholding information while preaching transparency is a Bloomberg trademark. He aggressively keeps his private life private—meaning not just his weekends outside the city at “undisclosed” locations, but also his spending, his charitable giving, and his privately held business.

    New Yorkers who have received city, campaign, or Bloomberg bucks in one form or another and who expect to do business again in the future agreed to speak anonymously with the Voice about the mayor’s personality, the intersection of his political and private interests, and the goals he aims to achieve.

    Several sources agreed to speak only after hearing what others had said. “It’s Julius Caesar time,” said one source. “There’s lots of knives, but no one wants to be first.” Others refused to be quoted, but encouraged me to give voice to their complaints—which sometimes diverged but often built into a sort of Greek chorus, an indictment of Bloomberg’s mayoralty from those who have seen it in practice, and are vested in it.

    “Hanging out with a billionaire does bad things to your brain,” a source said. “It makes you think you’re right.”

    The candidate who first ran in 2001 on his private-sector résumé and a deluge of advertising never did bother telling voters much about his agenda.

    He pledged in that first run not to raise taxes and to step away from the daily running of his private company if elected to public office, but he brushed aside both vows after the election. In the case of his business, he claimed to have kept his word until his own testimony in a lawsuit unsealed in 2007 showed that he’d been far more active than he’d previously acknowledged.

    The vast redevelopment schemes he unveiled in office were never mentioned on the stump.

    New Yorkers have no trouble picturing Giuliani’s New York, or Dinkins’s “gorgeous mosaic,” or Koch’s “How’m-I-doing?” New York, or Beame’s bankruptcy, or Lindsay’s “Fun City.”

    After two full terms and change, what do you call Bloomberg’s New York? In many ways, the mayor has been merely a caretaker.

    While Bloomberg has called himself the “education mayor,” his claimed success with the public schools has been exposed as largely accounting tricks.

    When asked to describe the boss’s vision for the city, aides and allies tack post-partisanship on to a checklist of Bloomberg LP buzzwords: transparency, data-driven results, and a CEO fixed on the bottom line. Pressed for actual accomplishments, the city’s post-9/11 resurgence usually is mentioned first.

    The attack and its economic fallout played key roles in all three of Bloomberg’s runs, though the story has less to do with strong leadership than with good timing and salesmanship.

    The attack itself, along with his opponent Mark Green’s fumbled response to it, helped put Bloomberg over the top in 2001. The ensuing Fed-sponsored low-interest-rate bubble inflated New York’s markets just in time to help rescue the mayor from record-low approval ratings and ensure his re-election in 2005. When that bubble finally burst in 2008, the Wall Street meltdown became the public rationale for the “emergency” third term.

    “Post-partisanship” has always meant the party of Bloomberg, a convenient handle for a lifelong Democrat who left the party to avoid a contested primary in New York. After the presidential plotting that occupied most of his second term fell short (the big hit that began his losing streak), Bloomberg aimed for a soft landing with a nakedly undemocratic “emergency” bill to allow himself a third term. Instead, it alienated New Yorkers and wrecked his expensively built reputation as a “post-political” leader in the process.

    Transparency has always been something Bloomberg has preferred to pitch rather than practice. In his 1997 business memoir, Bloomberg on Bloomberg—a sometimes valuable guide to the mayor’s approach—he notes that “if public companies change what they’re doing midstream, everyone panics. In a private company like Bloomberg, the analysts don’t ask, and as to the fact that we don’t know where we’re going—so what? Neither did Columbus.” It’s a philosophy Bloomberg brought with him to City Hall.

    “Data-driven”? It’s hard to credit that when crime numbers are artificially deflated by re-classifying rapes as misdemeanors, NYC-reported public school gains disappear when compared to outside measures, and when the city’s 65 percent graduation rate is undercut by state tests showing only 21.4 percent of city students are ready for college.

    “Bloomberg’s data-driven shtick,” said one source voicing a sentiment repeated by several others, “means no one will tell him anything’s failed.”

    As the city’s “CEO,” Bloomberg has managed only to track the ups and downs of Wall Street and the national economy. It’s a strictly replacement-level performance.

    New York went through its rainy-day reserves this year and, with the federal stimulus money spent, now faces $5 billion budget holes in each of the next three fiscal years. The coming budget crunch, says Manhattan Institute fellow Sol Stern, stems in large part from the mayor’s penchant for awarding generous contracts to teachers and other public-sector workers that also add to the pension bills the mayor has at times written off as “fixed costs.”

    Pushing the idea that the city, like a corporation, has a bottom line, Bloomberg diverts attention from the fundamental issue every mayor faces: what the city ought to be doing.

    So what kind of New York has Bloomberg tried to produce?

    The “buck-a-year mayor” offered his business success and vast wealth as his main credentials for running New York. In office, he has envisioned a big-business-friendly city supporting a New Deal welfare state.

    To make that work, he’s promoted “knowledge workers” as New York’s distinguishing resource, the way that waterways, rail lines, and manufacturing facilities were for industrial cities.

    The mayor has often described that group (which, not coincidentally, matches the profile of Bloomberg terminal subscribers) as “the best and brightest,” with no irony intended. The city now acts as its own advertisement to draw in members of the so-called “creative class” who are as likely to work in ICE (Ideas, Culture, Entertainment) as in the city’s traditional FIRE (Finance, Real Estate, Insurance) base. In his typical salesman’s formulation, Bloomberg often suggests that the only alternative to courting that crowd and their wealthy employers would be a cost-cutting race to the bottom.

    How else to pay for the array of services the city provides if not by building a safe and beckoning environment for elites and their Ivy-educated service class to live and work in, unmolested by an untidy big city?

    That promised environment is the vastly expanded and uninterrupted Midtown Central Business District, a coveted goal of the business and real estate communities for nearly a century—if one viewed with suspicion farther south on Wall Street, where Bloomberg effectively ceded control of Ground Zero to a succession of bumbling governors, a major reason that it’s taken a decade for the Trade Center site to even begin rising back up.

    Bloomberg has used a series of mega-plans including his Olympics bid, historic citywide rezoning changes, and pushing the sale of Stuyvesant Town to cut down what remained of working- and middle-class Manhattan. Gone, going, or forcibly shrinking are the Flower District, the Fur District, the Garment District, the Meatpacking District, and the Fulton Fish Market. Even the Diamond District is being nudged out of its 47th Street storefronts and into a city-subsidized new office tower.

    “If New York is a business,” the mayor said in 2003, “it isn’t Walmart—it isn’t trying to be the lowest-priced product in the market. It’s a high-end product, maybe even a luxury product. New York offers tremendous value, but only for those companies able to capitalize on it.”

    (Perhaps oddly, the mayor is a big booster of Walmart’s push to open stores in the city. Earlier this month, he defended the big-box store’s $4 million donation to a city summer job program, snapping at a Times reporter, “You’re telling me that your company’s philanthropy doesn’t look to see what is good for your company?” Asked how Walmart fits into the mayor’s vision, Deputy Mayor Howard Wolfson told me on Twitter that it “fits into the strategy of creating jobs and capturing tax $$ here that are currently going to NJ and LI.”)

    But even as Wall Street has revived, ordinary New Yorkers haven’t benefited from the promised trickle-down.

    Middle-class incomes in New York have been stagnant for a decade, while prices have soared, with purchasing power dropping dramatically. Never mind Manhattan—Queens taken as its own city would be the fifth most expensive one in America. While unemployment in the city has dropped below 9 percent, through June the city had replaced only about half of the 146,000 jobs lost during the recession—and the new jobs have mostly been in low-paying retail, hospitality, and food services positions, according to the Drum Major Institute for Public Policy. Poorly paid health care and social-service jobs, often subsidized by the city, make up 17.4 percent of all private-sector jobs as of 2007, a nearly one-third increase since 1990. Only 3 percent of the private-sector jobs in New York are in relatively high-paying manufacturing positions as of 2007, a figure that’s in the low double digits in Los Angeles, Chicago, and Houston. And the jobs expected to appear over the next decade are also clustered at the bottom of the pay scale.

    A Marist Poll this year showed a striking 36 percent of New Yorkers under 35 intending to leave in the next five years, with 61 percent of that group citing the high cost of living. New York State already leads the nation in domestic out-migration—and New York City has had more than twice the exit rate of struggling upstate locations like Buffalo and Ithaca. More New Yorkers left the city in every year between 2002 and 2006 than in 1993, when the city was in far worse shape, with sky-high crime rates and an economy on the verge of collapse.

    Despite the mayor’s recruiting efforts, people with bachelor’s degrees continue to leave the city in greater numbers than they arrive here, with Brooklyn alone declining by 12,933 such citizens in 2006, according to the Center for an Urban Future, with many of those leaving discouraged by New York’s high costs, and the low quality of the public education available to their children.

    Mike Bloomberg thinks everyone’s dream is to come to the city with an MBA and find an inefficiency to exploit and become a billionaire, or at least get a good job with one, argued three unrelated sources who have worked with the mayor, all of whom asked not to be quoted directly on the mayor’s view of himself. His idea that everyone’s dream is to be on Park Avenue, say those sources, has alienated and insulted outer-borough “Koch Democrats.” Their dream is a house, and Mike Bloomberg diminishes that dream because he thinks everyone wants to be him.

    As Bloomberg memorably put it while floating his candidacy in early 2001: “What’s a billionaire got to do with it? I mean, would you rather elect a poor person who didn’t succeed? Look, I’m a great American dream.”

    Without an impressive public-school system, Bloomberg’s vision for New York falls apart. But the public-school “miracle” the mayor touted for years has proven all pitch and no payoff.

    Despite a massive 40 percent hike in per-pupil spending during Bloomberg’s first two terms, along with a 43 percent boost in teacher pay, the “historic” gains the mayor trumpets failed to register at all on the gold-standard national tests taken by the same students. When new state leaders put an end to the state’s easily gamed tests, what was left of the city’s years of paper gains disappeared.

    The ever-rising test scores Bloomberg had relentlessly promoted fell almost all the way back to the mundane levels that had prevailed when the mayor took control of the system in 2002. The incredible success he’s claimed in closing the achievement gap between black and Hispanic students and their white and Asian peers that’s vexed generations of educators disappeared entirely by some measures.

    Without high-quality schools to produce a cadre of well-educated citizens attractive to employers, Bloomberg’s implicit social contract with New Yorkers—that courting big businesses will help the little guy—breaks down, and the city’s appeal to those businesses is seriously tarnished, along with its long-term appeal to employees with children.

    “Bloomberg yoked his education agenda to his ambitions for higher office,” said Stern, who had initially backed both mayoral control of the schools and Bloomberg’s education agenda. “He recognized that the way he was going to prove [to voters nationwide] that he’d given more bang for the buck was through test scores, while at the same time he was also introducing cash incentives to principals and teachers for getting the scores up.” (That program was quietly shuttered this month after a city-commissioned study found the payments had no impact on student performance.)

    “So he invited the corruption,” Stern said, adding that he expects a numbers-juicing scandal to hit before Bloomberg leaves office. New Chancellor Dennis Walcott, responding to reports of grade-tampering in the city and a nationwide wave of such scandals, announced his own investigation this month, but it remains to be seen if the school system can fairly probe itself, and with the mayor’s reputation hanging in the balance.

    Asked in 2007 how New Yorkers could register their discontent with the schools now that he was presumably term-limited out of office, Bloomberg cracked, “Boo me at parades.”

    Some New Yorkers have taken him up on that, but more significantly they’ve also stopped caring enough to vote.

    The mayor has indeed governed as the city CEO he promised to be in 2001, redefining public life so that businesses are “clients,” citizens “customers,” and Bloomberg the boss entrusted with the city’s well-being, with no need to consult with the board before acting.

    After 1.9 million New Yorkers took to the polls in the 1989 and 1993 contests between Dinkins and Giuliani, less than 1.5 million voted in 2001’s nail-biter, and just 1.3 million turned out in 2005, when the outcome was never in doubt. Bloomberg nonetheless spent $84.6 million running up the score in a 19-point win intended to make him look “presidential.” In 2009, the mayor, responding to internal polls showing most New Yorkers wanted him out, broke the $100 million mark to project inevitability and discourage voters from showing up at all. Despite perfect weather on election day, three out of every four voters didn’t bother to participate. Just 1.2 million New Yorkers voted in an election that Bloomberg won by only 50,000 votes—collecting the fewest winning votes of any mayor since 1919, when there were 3 million fewer New Yorkers and women didn’t have the franchise. For the first time, Bloomberg’s spending failed to translate into popular support.

    As the city’s electorate shrank around him—even as its population grew by more than a million people between 1990 and 2010, Bloomberg’s political stature swelled. The voters who just stayed home allowed the mayor to hold on to power despite an outnumbered base of the city’s social and financial elites and the technocratic planners they often bankroll, a political and governing coalition last seen 40 years ago under fellow party-switcher John Lindsay.

    “My neighbors [in Manhattan] don’t vote in city primaries,” said a source. “They vote in presidential elections where their vote is useless. They’ve privatized their lives. Private schools, country houses, Kindles instead of libraries, cars instead of trains.”

    In exchange for Citizen Bloomberg’s benighted leadership, we’ve accepted a staggering array of conflicts of interest. The mayor’s fortune renders obsolete the “traditional” model of interest groups buying off politicians. He not only does the reverse, buying off interest groups to advance his political agenda but also uses his fortune to staff and support his business. At the same time, he builds the Bloomberg brand that supports it all: Bloomberg LP, the Bloomberg Family Foundation, Bloomberg Terminals, Bloomberg News, Bloomberg View, Bloomberg Government, Bloomberg Law, Bloomberg Markets—not to mention Mayor Bloomberg.

    The mayor wrote his own rules in a remarkably deferential 2002 agreement with the city’s toothless Conflict of Interest Board, and then ignored them when it was convenient, continuing to be regularly involved in his company’s affairs and acting in city matters where Bloomberg LP or Merrill Lynch (which until recently owned 20 percent of Bloomberg LP) had a stake.

    Top-level City Hall workers, favored legislators, and others have moved freely between City Hall and the mayor’s private interests, keeping it in the “Bloomberg Family.” Bloomberg LP is now run by former Deputy Mayor Dan Doctoroff, while the Bloomberg Family Foundation’s approximately $2 billion endowment is controlled, on a “volunteer” basis, by Deputy Mayor Patti Harris. The prospect of a private Bloomberg jackpot job is on a lot of minds around City Hall and throughout New York.

    Craig Johnson, the former state senator who lost a re-election bid after bucking his party to back the mayor in supporting charter schools, was hired this month by Bloomberg Law. “I wasn’t about to let him go to some other company,” Bloomberg said, all but winking. “I was thrilled to see my company hired him. I didn’t have anything to do with that.”

    Beyond the $267 million he spent in three mayoral runs, he documented nearly $200 million more in “anonymous” charitable contributions. And that cool half-billion is just the spending Bloomberg has chosen to disclose.

    Harris, now City Hall’s highest-paid official, came to the administration from Bloomberg LP. Through her control of Bloomberg’s ostensibly anonymous donations passed through the Carnegie Foundation to local institutions, she’s served as the Medici Mayor’s chief courtier—working for the city while using his private fortune to rent the silence, and occasionally the active assent, of its cultural groups on his behalf. That city giving dropped precipitously when Carnegie was replaced by the new Bloomberg Family Foundation, also run by Harris, which is now spreading cash to potential Bloomberg constituencies nationwide.

    As Bloomberg explained in 1997, when Harris worked for Bloomberg LP:  “Her sole job is to decide which philanthropic activities are appropriate for our company and to ensure we get our money’s worth when we donate time, money, and jobs. One of Patti’s questions is, ‘When does helping others help us?’… Not only does Patti commit our dollars, she also follows, influences, and directs how our gifts are used, ensuring our objectives are met.”

    Elsewhere in his memoir, he adds: “Peer pressure: Its impact in the philanthropic world is hard to overstate.”

    Meanwhile, Bloomberg News, supported by income from his sophisticated “Bloomberg terminals,” has grown to employ about 2,500 journalists, and at some of the best rates in the industry.

    After offering up vague statements about avoiding conflicts of interests—no easy task when the boss is a potential presidential candidate, mayor of the nation’s biggest city, and one of that city’s wealthiest men—Bloomberg View debuted in May with a remarkable opening editorial. The editors conceded that they didn’t know yet what their principles would be—”We hope that over time a general philosophy will emerge”—but they were confident they would end up aligned with the “values embodied by Mike Bloomberg, the founder of Bloomberg LP.”

    In June, brand-name Bloomberg pundit Jonathan Alter launched into an exceptionally vitriolic attack on charter school detractor and former Bloomberg education adviser-turned-foe Diane Ravitch. The piece ran with no acknowledgment of the evident conflict of interest in taking shots at perhaps the most prominent critic of Citizen Bloomberg’s education policies, under the Bloomberg View banner.

    Bloomberg seems to view himself as congenitally above such conflicts, explaining in Bloomberg on Bloomberg, “Our reporters periodically go before our sales force and justify their journalistic coverage to the people getting feedback from the news story readers…. In return, the reporters get the opportunity to press the salespeople to provide more access, get news stories better distribution and credibility, bring in more businesspeople, politicians, sports figures and entertainers to be interviewed…. Most news organizations never connect reporters and commerce. At Bloomberg, they’re as close to seamless as it can get.”

    Speaking of seamless, in 2000 Bloomberg rolled out a new city section, just in time for the boss’s run. Jonathan Capehart, brought in from Newsday, ended up doing double duty as candidate Bloomberg’s policy tutor and his host in different corners of the city, according to former Times reporter Joyce Purnick’s biography of the mayor, Mike Bloomberg: Money, Power, Politics. When the mayor-elect reached out to Al Sharpton on election night to tell him “things will be different with me as mayor,” it was Bloomberg News employee Capehart who placed the call.

    Much as City Hall staffers dream of a Bloomberg job as the big payoff for their loyal labors, few reporters will go out of their way to tweak a potential employer, let alone one who frequently lunches with their current boss. And especially one whose long-rumored ambition is to buy the Times one of these days—a buzz that the mayor’s camp hasn’t discouraged, Berlusconi comparisons be damned. (The Italian prime minister and Ross Perot are two of Bloomberg’s neighbors when he weekends in Bermuda).

    Along with Berlusconi, other comparisons heard in various conversations about Bloomberg included his Trump-like leveraging of his name (“It would be me and my name at risk. I would become the Colonel Sanders of financial information services…. I was Bloomberg—Bloomberg was money—and money talked”), his Hearst-like seduction of legislators with private jet rides and self-serving party-jumping, and his Rockefeller-like use of his private fortune on behalf of the state GOP, though for very different reasons.

    The lifelong Democrat who became a Republican to dodge the mayoral primary has also given millions to the state GOP (as well as $250,000 to the Republican National Committee in 2002, and $7 million in support of the 2004 Republican convention in Manhattan). The cash shipments continued even after the mayor left the party in 2007 to hitch his star to the misleadingly named “Independence Party”—run in the city by crackpot cultist Lenora Fulani.

    While Bloomberg’s support for the GOP dwarfed the money he channeled to the Independence Party, both received just a drop from his enormous bucket of cash—which still made Bloomberg easily the state Republicans’ biggest patron, his table scraps their feast. The party repaid that support in part with their ballot line in 2009, two years after he’d left the party, to go along with his “Independence” line, which proved crucial to his 2001 and 2009 wins, and would have been key had his presidential plans moved forward.

    His Albany cash, though, has often failed to pay off. Perhaps that’s because Bloomberg hasn’t been willing or able to salt the state’s interest groups and leadership class as thoroughly as he has the city’s—his political persuasiveness and popularity have always been coterminous with his cash. In each of his terms, major aims—Far West Side development, congestion pricing, and teacher hiring—have been simply abandoned in the capitol without so much as a vote. Those losses came despite dealing with three weak governors before Cuomo, whose dramatic ascent has left the mayor further diminished. (One of Bloomberg’s rare wins in the state capitol, mayoral control of the city schools, was actually given to him by Assembly Speaker Sheldon Silver, the mayor’s most frequent Albany foil—who had withheld the same gift from Mayor Giuliani.)

    Given Citizen Bloomberg’s success in buying off the city’s opinion makers, cultural institutions, community groups, and organized protesters, it’s no wonder the mayoralty began to feel too small for him, and he spent the bulk of his second term trying to leverage it into the presidency. While his signature congestion-pricing plan failed in the city, it succeeded in landing him on the cover of Time. He followed up by a nationwide victory tour with then-Chancellor Joel Klein and well-compensated occasional sidekick Sharpton to tout the school system’s “amazing results.”

    The master salesman, who talked of transparency while keeping his own cards down, used his fortune to establish at City Hall the “benevolent dictatorship” he saw at Salomon and then employed in his private business: “Nor did so-called corporate democracy get in the way. ‘Empowerment’ wasn’t a concept back then, nor was ‘self-improvement’ or ‘consensus,’ ” Bloomberg writes in his business memoir. “The managing partner in those days made all the important decisions. I suspect that many times, he didn’t even tell the executive committee after he’d decided something, much less consult them before. I’d bet they never had a committee vote. I know they never polled the rest of us on anything. This was a dictatorship, pure and simple. But a benevolent one.”

    But dictatorships never last. “Once Bloomberg leaves a room, it doesn’t exist to him,” said one source, skeptical that the mayor would care about maintaining his influence after he exits office. But given the value of his name, he is taking care to be sure that it isn’t damaged in the exit process.

    Campaign filings released last Friday show the lame duck nonetheless spent $5.6 million on TV and direct mail spots promoting himself in March and April. And after failing to groom a successor, the mayor has belatedly been trying to institutionalize parts of the Bloomberg way.

    “The administration is finally trying to do systematic reform, that’s what [Stephen] Goldsmith is here for,” a source said, referring to the former Indianapolis mayor who emerged as a star of the 1990s “reinventing government” movement, and signed on for Bloomberg’s third term as a deputy mayor. “I think he’s really frustrated. He complains a lot about lawyers.”

    While Police Commissioner Ray Kelly reportedly mulls a Republican run, buzz has been building that Bloomberg will support City Council Speaker Christine Quinn, his Democratic partner in changing the term-limits law, as his successor. A slush-fund scandal left her damaged, but a third term she and the mayor pushed through bought her time to recover, along with a chip to cash with him. Mayor Koch last month outright said that Bloomberg had told him he was backing Quinn, before Koch dialed back his words later the same day.
    But some of the Bloomberg-for-Quinn hype has come from operatives with reason to find a new patron once the billionaire exits office. The mayor, meanwhile, has reason to want a pliant speaker in his final years.
    “Even if he does back her,” a source noted, “he’s not giving her $100 million for a campaign, or to wield as mayor. Once he’s gone, it’s done.”

    Contact Harry Siegel at hsiegel@villagevoice.com

    Photo courtesy of Be the Change, Inc. :: Photo credit Jim Gillooly/PEI

  • Why America’s Young And Restless Will Abandon Cities For Suburbs

    For well over a decade urban boosters have heralded the shift among young Americans from suburban living and toward dense cities. As one Wall Street Journal report suggests, young people will abandon their parents’ McMansions for urban settings, bringing about the high-density city revival so fervently prayed for by urban developers, architects and planners.

    Some demographers claim that “white flight” from the city is declining, replaced by a “bright flight” to the urban core from the suburbs. “Suburbs lose young whites to cities,” crowed one Associated Press headline last year.

    Yet evidence from the last Census show the opposite: a marked acceleration of movement not into cities but toward suburban and exurban locations. The simple, usually inexorable effects of maturation may be one reason for this surprising result. Simply put, when 20-somethings get older, they do things like marry, start businesses, settle down and maybe start having kids.

    An analysis of the past decade’s Census data by demographer Wendell Cox shows this. Cox looked at where 25- to 34-year-olds were living in 2000 and compared this to where they were living by 2010, now aged 35 to 44. The results were surprising: In the past 10 years, this cohort’s presence grew 12% in suburban areas while dropping 22.7% in the core cities. Overall, this demographic expanded by roughly 1.8 million in the suburbs while losing 1.3 million in the core cities.

    In many ways this group may be more influential than the much ballyhooed 20-something. Unlike younger adults, who are often footloose and unattached, people between the ages of 35 and 44 tend to be putting down roots. As a result, they constitute the essential social ballast for any community, city or suburb.

    Losing this population represents a great, if rarely perceived, threat to many regions, particular older core cities. Rust Belt centers such as Cleveland and Detroit have lost over 30% of this age group over the decade.

    More intriguing, and perhaps counter-intuitive, “hip and cool” core cities like San Francisco, New York and Boston have also suffered double-digit percent losses among this generation. New York City, for example, saw its 25 to 34 population of 2000 drop by over 15% — a net loss of over 200,000 people — a decade later. San Francisco and Oakland, the core cities of the Bay Area, lost more than 20% of this cohort over the decade, and the city of Boston lost nearly 40%.

    In contrast, the largest growth among this peer group took place in metropolitan areas largely suburban in form, with a strong domination by automobiles and single-family houses. The most popular cities among this group — with increases of over 10% — were Las Vegas; Raleigh, N.C.; Riverside-San Bernardino, Calif.; Charlotte, N.C.; Orlando, Fla.; San Antonio, Houston and Dallas-Fort Worth, in Texas; and Sacramento, Calif..

    Furthermore, most of the growth took place not in the urban centers of these regions but in the outlying suburbs. This cohort expanded by more than 40% Raleigh’s suburbs — 37,000 people — over the decade. Houston’s suburbs gained the most of any region of the country, adding 174,000 members of this particular generation.

    These findings should inform the actions of those who run cities. Cities may still appeal to the “young and restless,” but they can’t hold millennials captive forever. Even relatively successful cities have turned into giant college towns and “post-graduate” havens — temporary way stations before people migrate somewhere else. This process redefines cities from enduring places to temporary resorts.

    Rather than place all their bets on attracting 20-somethings cities must focus on why early middle-age couples are leaving. Some good candidates include weak job creation, poor schools, high taxes and suffocating regulatory environments. Addressing these issues won’t keep all young adults in urban settings, but it might improve the chances of keeping a larger number.

    Our findings may also give pause to those developers who often buy at face value the urbanist narrative about an city-centric real estate future. In the last decade, many developers have anticipated  a continuing tsunami of wealthy young professionals, as well as legions of “empty-nesters,” flowing into the urban cores. This led to a rash of high-end condominium developments. Yet in the end, the condo market turned out far less appealing than advertised, crashing virtually everywhere from Chicago and Las Vegas to Atlanta, Portland and Kansas City. This has left many investors with empty units, distress auctions or far less profitable rentals.

    One hopes the development community might still learn something from that failure. But the Urban Land Institute among others increasingly maintain that vast new frontiers for new high-density growth will develop in the inner-ring suburbs. Yet in many areas with strong central cores, such as New York, Seattle and Chicago, inner suburbs usually grew slowly, particularly in comparison with the further out peripheral expanses.

    Critically, the notion of mass suburban densification is likely to meet strong resistance from local residents. This will be particularly marked in attractive, affluent “progressive” areas like the Bay Area’s Marin County, Chicago’s North Shore suburbs and New York’s Hudson Valley. People who move to these places are attracted by their leafy, single-family-home-dominated neighborhoods and village-like shopping streets. Nothing short of economic catastrophe or government diktat would make them accept any intense program of densification.

    Of course, some urbanists claim that the new millennial generation, born after 1983,  will prove “different” from all their predecessors. Yet research to date finds older millennials may prove more attracted to suburban living than many density advocates suggest. According to a survey  by Frank Magid and Associates, more millennials consider suburbs as their “ideal place” to settle than do  older groups.

    As generational chroniclers Morley Winograd and Mike Hais have noted, the fact that most millennials plan to get married and have children only reinforces this trend over time. Another problem may prove that millennials may be running out of ideal urban options.  Back in the 1990s it was far easier to buy a home in one of the nation’s handful of really attractive cosmopolitan urban settings — for example,  brownstone Brooklyn, Northside Chicago, LA’s beach communities or San Francisco. Today these areas suffer some of the highest housing prices relative to incomes of any places in the country.

    Rather than blindly accept the vision of a mass movement back to the urban centers, developers might focus instead on what kind of housing, and community, addresses the needs and affordability concerns of millennials as they move into full adulthood. Over the next ten years, the number of millennials entering their mid-30s will expand by over 40 million   – a population larger than those of elderly residents who will be old enough to give up their homes.

    This large group is also most likely to continue moving to the lower-density, more affordable South and  West. These areas already boast disproportionate percentages of millennials, Hais and Winograd report.

    It’s time for developers and planners to look more closely at how young adults as they enter their 30s vote with their feet. Unless there has been a mind-numbing change in attitude or an unexpected return to good governance in cities, young adults entering middle age will continue their shift toward suburban and lower-density areas in the decade ahead, upending the predictions of most pundits, planners and development experts.

    This piece 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, and an adjunct fellow of the Legatum Institute in London. 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 by mamamusings, Liz Lawley, Upstairs Window – Encroaching fog

  • The Evolving Urban Form: Chicago

    Looks can be deceiving. No downtown area in the western world outside Manhattan is more visually impressive than Chicago. Both the historic Loop and the newer development north of the Chicago River, especially along North Michigan Avenue have some of the most iconic structures outside of emerging Asia. Yet these vertical monuments mask a less celebrated reality: that of dispersing, low density urban area.

    Chicago Combined Statistical Area: Let’s take a close look at the 2010 census data. Overall, the combined statistical area, which includes the metropolitan area (Note 1) and two exurban counties added nearly 365,000 people, for a growth rate of 3.9 percent. This is well below the national growth rate of approximately 10 percent (Map, Figure 1). Chicago followed the general trend of with growth being greatest in the outer suburbs while declines took place both in the inner suburbs and the historical core municipality (Figure 2).

    Massive Core City Loss: The historical core city of Chicago lost but 200,000 people, and fell to a population of 2.7 million, the lowest count since the 1910 census. The population is down 925,000 from 1950 and at the current rate would drop at least 1 million from the 1950 peak by the 2020 census.  Chicago is at risk of joining London and Detroit as the only two historical core municipalities in modern times that have lost more than 1 million people.

    Inner Suburbs: As in New York and Seattle, Chicago’s inner suburbs grew slowly. The inner suburbs include the part of Cook County that is outside the city of Chicago as well as Lake County, Indiana (home of Gary), which shares the city of Chicago’s eastern border. The inner suburbs added fewer than 30,000 residents and grew only one percent.

    This suggests some limitations to the newly developing mantra that has inner suburbs will be the locus of future growth although there are scattered inner suburbs in other cities (such as Hoboken, New Jersey) that did see growth. Perhaps the old mantra, about people returning to the city from which they had never come was finally quashed by the realities of the 2010 census.   

    Outer Suburbs: The outer suburbs, which include the remaining counties of the metropolitan area, grew at a rate of 16.5 percent, actually grew faster than the national average of approximately 10 percent. The outer suburbs added more than 500,000 people. The largest growth, 175,000 was in Will County, to the south, one of the five “collar counties” that used to define the boundaries of the metropolitan area. McHenry County, the most distant of the collar counties added 100,000. The fastest growth was in far suburban and also southern Kendall County, which more than doubled in population.

    Chicago Metropolitan Area: Overall, the Chicago metropolitan area added approximately 360,000 people and grew 4.0 percent from 2000. This is well below the national average population growth rate, however was above that of the Los Angeles metropolitan area, once among the  nation’s of leading growth areas until the last decade.

    Historical Trends: The city of Chicago, like other historical core cities, had previously been dominant in its metropolitan area. The earliest Census Bureau metropolitan area (“metropolitan district”) estimates from 1900 indicated that more than 90 percent of the region’s population was contained in the city of Chicago. By 1950, the city of Chicago had fallen to 66 percent of the metropolitan area as defined in that year.  The city of Chicago now has only 28 percent of the combined statistical area population of 9.7 million (Figure 3, Table and Note 2).

    CHICAGO METROPOLITAN AREA
    POPULATION TREND BY COUNTY: 2000 TO 2010
    1900 1950 2000 2010 Change: 2000-2010 % Change: 2000-2010
    HISTORIC CORE MUNICIPALITY
    Chicago   1,698,575   3,620,962   2,895,671 2,695,598 -200,073 -6.9%
    INNER SUBURBAN      178,052   1,255,982   2,965,634 2,995,082 29,448 1.0%
    Cook County, IL      140,160      887,830   2,481,070 2,499,077 18,007 0.7%
    Lake County, IN        37,892      368,152      484,564 496,005 11,441 2.4%
    OUTER SUBURBAN      378,896      884,980   3,237,011 3,770,425 533,414 16.5%
    DeKalb County, IL        31,756        40,781        88,969 105,160 16,191 18.2%
    DuPage County, IL        28,196      154,999      904,161 916,924 12,763 1.4%
    Grundy County, IL        24,136        19,217        37,535 50,063 12,528 33.4%
    Jasper County, IN        14,292        17,031        30,043 33,478 3,435 11.4%
    Kane County, IL        78,792      150,388      404,119 515,269 111,150 27.5%
    Kendall County, IL        11,467        12,155        54,544 114,736 60,192 110.4%
    Kenosha County, WI        21,707        75,238      149,577 166,426 16,849 11.3%
    Lake County, IL        34,504      179,097      644,356 703,462 59,106 9.2%
    McHenry County, IL        29,659        50,656      260,077 308,760 48,683 18.7%
    Newton County, IN        10,448        11,006        14,566 14,244 -322 -2.2%
    Porter County, IN        19,175        40,076      146,798 164,343 17,545 12.0%
    Will County, IL        74,764      134,336      502,266 677,560 175,294 34.9%
    CHICAGO METROPOLITAN AREA   2,255,523   5,761,924   9,098,316 9,461,105 362,789 4.0%
    EXURBAN METROPOLITAN COUNTIES        75,540      150,332      213,939 224,916 10,977 5.1%
    Kankakee Coiunty, IL        37,154        73,524      103,833 113,449 9,616 9.3%
    La Porte County, IN        38,386        76,808      110,106 111,467 1,361 1.2%
    CHICAGO COMBINED STATISTICAL AREA 2,331,063 5,912,256 9,312,255 9,686,021 364,150 3.9%
    Data from the US Census Bureau

     

    Since 1950 (Note 3), all of the growth in the Chicago area has been in the suburbs. By 2000, both inner suburbs and the outer suburbs each had more people than the city of Chicago. Today the outer suburbs, with forty percent of the region’s population, represent the largest demographic force in Chicago (Figure 4).

    We do not usually associate Chicago with the dreaded term “sprawl” but Chicago now stands as the third largest urban agglomeration in the world in land area, trailing only New York and Tokyo. The Chicago urban area covers more land than Los Angeles, which has a far higher urban density.

    Dispersing Employment: Chicago’s dispersion extends to employment. Despite having the second strongest central business district in the nation (after Manhattan), jobs are rapidly decentralizing. Last year the Downtown Loop Alliance reported that private sector employment in the Loop fell 20 percent during the last decade. Overall, the downtown area of Chicago now represents approximately 10 percent of regional employment, barely half the percentage of Manhattan or Washington, DC.

    American community survey data from 2009 indicates the total employment in the North West corridor along Interstate 90 has at least as much employment as downtown Chicago. This corridor, anchored by the edge city (Note 4) of Schaumburg, is typical of emerging suburban centers around the nation. Only two percent of workers in this corridor use transit for commuting.

    Another corridor, along Interstate 88 (anchored by Lisle and Aurora) has at least two thirds the employment of downtown, with only one percent commuting by transit. The North Shore corridor encompassing parts of northern Cook County and Lake County is of similar size to the Interstate 88 corridor and has a larger transit work trip market share of five percent.

    Downtown, on the other hand, has the third largest transit work trip market share in the nation, following Manhattan and Brooklyn. In 2000, 55 percent of people working downtown (the larger downtown including the Loop, north of the River and adjacent areas to the west and south) commuted by transit. This illustrates the strength of transit for providing access to the largest, most dense downtown areas in contrast to dispersed suburban areas.

    Perhaps more telling, the number of jobs and resident workers (the “jobs-housing” balance) in the city of Chicago are converging toward equality. According to American community survey data, there are 1.1 jobs in the city of Chicago for each working resident. This is substantially less, for example, than Washington (2.6), Atlanta (2.0), Boston (1.7), San Francisco (1.4) and Baltimore (1.4).

    On the other hand, two of the three large suburban corridors have higher ratios of jobs to workers than the city of Chicago. The Interstate 88 corridor has 1.3 jobs per worker, while the North Shore has approximately 1.5 jobs per worker. The Interstate 90 corridor has slightly more jobs than workers. These data indicate that Chicago is well on the way to a more evenly distributed employment pattern that has become more common around the nation.

    Middle America’s Leviathan: The Chicago area has been very resilient through the years. After nearly a century as the nation’s “second city,” Aaron Renn points out the area could fall from its much cherished “global city” status. Still, Chicago remains the dominant urban area between the coasts. Virtually all of its Midwestern competition has fallen away (such as Detroit, St. Louis and Cleveland). However, in the longer run Chicago could be displaced by Dallas-Fort Worth and Houston. Nonetheless, the urban area’s visually arresting business district will retain its iconic status even if, overall, the region looks more and more like the rest of highly dispersed Middle America.

    ——

    Note 1: This article uses metropolitan area and combined statistical areas as defined by the authoritative US Office of Management and the Budget.

    Note 2: The 1950 references provided because the closest to the Post-War democratization of homeownership and car ownership and expansion of car oriented suburbanization. Before World War II, most US historical core cities were comparatively dense, while a far smaller share of the population lived in the suburbs.

    Note 3: Figure 3 and the Table show data for the 2010 geographical definition of the combined statistical area. Earlier metropolitan area definitions are also referred to in the text.

    Note 4: An “edge city” is a major employment center outside the central business district (downtown).  “Edge city” became a part of the language as a result of Joel Garreau’s 1991 book, Edge City: Life on the Urban Frontier.

    Photograph: Downtown Chicago from the Air (by author)

  • Are Millennials the Solution to the Nation’s Housing Crisis?

    During his Twitter-fed Town Hall, President Obama admitted that the housing market has proven one of the “most stubborn” pieces of the economic recovery puzzle to try and fix.  The President — as well the Congress and the building industry — should  consider a new path to a solution for housing by tapping the potential of the very generation whose votes brought Barack Obama into the White House in the first place.   

    The Millennial Generation (born 1982-2003) represents not just the largest generation in American history but the largest potential market for both existing and new housing in the United States. There are over 95 million Millennials and over the next five years the first quarter of this cohort will enter their thirties, an age when people are most likely to buy their first home.

    Contrary to what is often written about this generation it is very much interested in owning a home, preferably in the suburbs. Sixty-four percent of Millennials say it is very important for them to have an opportunity to own their own home; twenty percent named it as one of their most important priorities in life, right behind being a good parent and having a successful marriage.

     And, contrary to the usual claims of “new urbanists” (themselves largely members of the older X and Boomer Generations) most Millennials want to live in the suburbs where the current housing crisis is most acute. According to a study by Frank N. Magid Associates, 43 percent of Millennials describe suburbs as their “ideal place to live,” compared to just 31 percent of older generations, most of whom still yearn for the smaller towns and rural settings of an earlier America.  

    Most Millennials already live in suburbs and enjoyed growing up in suburban settings surrounded by family and friends that supported them.  A certain portion, of course, enjoy living an urban life while young, but most tell researchers that they want to raise the families many are about to start in the same suburban settings they grew up in.

    Furthermore, Americans between the ages of  25 and 34, both Millennials and those on the “cusp” of the generational change from X to Millennial,  represent a greater proportion of the overall population in the South and West than elsewhere. These are the very regions that suffered the most from the collapse of housing prices that stemmed from the mortgage financing scandals of the last few years. Unleashing this potential demand for suburban housing in these hard-hit areas would bring two huge benefits. It would stabilize prices for existing homes while at the same time boosting the prospects for new housing construction.  

    The challenge is how to enable the Millennial Generation to achieve its desire to own homes without reigniting the speculation and unsustainable financial leverage that   triggered the Great Recession. Clearly, in the immediate future at least, the current excess of supply in the housing market should mitigate the risk of too much demand chasing too few houses.  As much as they are criticized by the financial industry and its Republican allies, the recently enacted financial regulatory reforms might also provide an additional bulwark against allowing the market to misbehave a second time.

    But the biggest factor may be the lessons learned from experience.  Millennials have borne much of the brunt of the Great Recession and tend to be keenly aware about the importance of living within your means.  Wanting a suburban home does not mean, as many urbanists assert, that Millennials want McMansions. Like earlier generations, especially their GI Generation great grandparents, they are likely to be cautious and frugal home-buyers. However, this frugality and caution does not translate into a meek acceptance or desire for a future as apartment renters, as some suggest will be the case.    

    In the short run, Millennials will not be able to engineer a turnaround all by themselves; most Millennials can’t afford much beyond the next month’s rent, let alone the down payment on a mortgage. Many are still living with their parents to avoid having to pay rent and the cost of a college education at the same time.

    To address this part of the challenge, the federal government needs to do what it did to revive the moribund housing market in the 1930s. The New Deal created today’s commonly accepted 30 year mortgages with a 20 percent down payment by making them a financial instrument that the newly formed Federal Housing Administration would insure. Before that landmark legislation, home mortgages were rarely offered for more than half of the home’s value and normally had to be repaid in no more than five years.

    As a result that era’s civic generation (the GI or Greatest Generation) was able to afford single family homes with a surrounding tract of land, an offer returning World War II veterans seized with alacrity. These houses now make up much of the country’s inner suburb housing stock.    Today’s housing crisis requires a similarly radical reinvention of the basic home mortgage to be offered to those buying their first home. Under this proposal the length of the mortgage could be extended up to as many as 50 years, reflecting the increased life expectancies — and longer working careers — that most Millennials can expect to enjoy. Since no market for such debt instruments currently exists, it would be up to the federal government to create one through the process of reinsurance, just as it did in 1934.

    To further encourage home buying by Millennials, the federal government should also provide incentives to financial institutions to swap out the principle of the Millennials’ student loans in exchange for a new loan, whose principal would be collateralized by the value of the real estate the former student would be acquiring. The student loan would be paid off as part of the mortgage, making Millennials better able to afford a home and freeing up additional discretionary spending that current worries over student debt curtail. Today’s lower housing prices today might make this package both attractive to investors and financially viable.

    Many economists today argue against the whole notion of encouraging home ownership by anyone, let alone young Millennials. Some point out that when looked upon strictly as an investment choice, the value of a home rarely appreciates faster than the overall stock market.

    This type of analysis, which forms the basis for arguing against any federal policy that would further encourage home ownership, ignores the proven benefits to the nation that derive from home owners committed to the success of their local community.  Voting participation rates among home owners, for instance, traditionally run higher than rates among renters, and neighborhoods of owners tend to be more stable places to raise children. 

    More important still is what homeownership means to the nature of a property-owning republic. Survey after survey shows that home ownership remains a central part of the American Dream and a central aspiration, particularly for immigrants and young people. A policy that works against this ideal presents a political risk that any politician should be wary of taking.

    To restore this part of the American Dream, and to lift the worry of millions of Americans whose house is worth less than what they owe on their mortgage, the Obama administration must take bold steps to restore a vibrant residential housing market.    President Obama, who built his winning margin in 2008 through an unprecedented mobilization of Millennial voters, is the ideal person to combine a plan for economic recovery efforts with meeting the aspirational goals of most Millennials to own their own home.

    To save the housing market, and extend the recovery beyond the financial elites, America will need a new wave of home buyers.  If the President works to tap this resource, he can begin to turn around the “stubborn problem” of the housing market and restore the middle class economy. If he does so, the whole country will soon be tweeting his success.

    Morley Winograd and Michael D. Hais are fellows of NDN and the New Policy Institute and co-authors of Millennial Momentum: How a New Generation Is Remaking America to be published in September and Millennial Makeover: MySpace, YouTube, and the Future of American Politics.

    Photo by 3Ammo