New Geography

Category: Urban Issues

  • The Urban Energy Efficiency Retrofit Challenge

    I was welcomed home to Chicago from visiting family on Christmas Day by a cold house and a gas furnace that wasn’t working. The next day a repair tech gave me the bad news about a blown circuit board that would cost over $500 to replace. But I heard that were was a $1500 tax credit for energy efficient upgrades that was expiring at year end. With $2000 in “free money” to spend, I thought maybe furnace replacement might be a better option. At eight years old, the furnace might have more years of life. But it was a “developer special” – that is, a basic workhorse model that was not particularly energy efficient – only 80% Annual Fuel Utilization Efficiency (AFUE) rated – or with other features I might like. My hot water heater dated to the same time and was probably closer to needing to be replaced, so why not do them both at the same time? Maybe I would even go super-enviro friendly with a tankless model water heater.

    This is exactly what the stimulus was supposed to be stimulating. Unfortunately, the reality didn’t work out like I thought it would, and in a way that shows the challenge of doing energy efficiency retrofits in urban areas.

    I had my heating company come out to give me an estimate on replacement for my furnace and hot water heater. Immediately, I learned that there were problems. Chief among them is that newer, energy efficient systems recycle heat that previously went up the chimney. This makes their exhaust much cooler, and requires special chimney pipes that are plastic, not metal. My old chimney wouldn’t work, nor could a new pipe be inserted through it, since my water heater and furnace shared a chimney and there wasn’t room to install all the piping needed. They’d have to punch new holes in my roof. I’m on the top floor of my 14 unit building, which means this is actually doable, but it would cost money and require getting permission from my association. It’s also not something I’d want to take on in the winter unless absolutely required. And, as it turns out, I might not have a big enough gas line required to feed regardless tankless water heater. Tankless units consume less energy overall, but they do burst at higher output, requiring heftier gas supplies.

    I decided to just fix the circuit board.

    According to the heating company, if I lived in a single family home, this would probably have all been a non-issue. First, no permission would be needed from anyone, and generally furnaces and such are located where you can just punch an exhaust line directly out the side of the house. This makes upgrading a snap. But since I’m in an urban multi-unit building, things aren’t so easy. What’s more, even though I and the other person who live on the top floor might be able to make an upgrade happen, the other 12 units below us will never be able to upgrade to energy efficient heating because it is impossible for them to run new chimney pipes to the roof. That is, unless a new generation of technology vents through older metal chimney pipes. In essence, then, my building is permanently precluded from installing high efficiency heating – although the structure is less than a decade old.

    Gas forced air is the standard heating solution for new construction in Chicago and much of the Midwest. This may not apply to the largest buildings, but certainly to single family homes and most of the new construction condos in Chicago. Being able to upgrade building systems is key to energy efficiency, because buildings are the number one source of carbon emissions. In the city of Chicago, about 70% of all carbon emissions come from buildings. And while multi-unit buildings may be inherently more efficient in some regards, they create huge challenges for upgrades because of all the shared infrastructure and lack of access to the roof, exterior walls, and utility feeds. This might not apply in some cases where there is, for example, a shared boiler where one upgrade takes care of all units. But for most new construction condos outside of high rises, I strongly suspect they were built without energy efficient furnaces and in a way that effectively precludes upgrading to current technology.

    This shows the need for infrastructure and buildings that are designed to physically evolve over time. With rapidly changing technology, a “build once for the ages” approach is no longer appropriate. Even if codes were changed to require energy efficient heating at the time of construction or the installation of provisions for gas supply and venting, it would only deal with the here and now. We’d be fools to believe we are never going to want to upgrade things again in the future.

    The things we buy become obsolete more rapidly than ever. Consumer electronics companies have solved this with a short product cycles and rapidly declining costs that assumes the things you buy will be disposable. We should think about this principle as applied to buildings, but we’re probably a long way off from that.

    This is a difficult challenge and one that requires significant thought and trial and error as technology doesn’t always evolve like we think it will. I was very proud of myself for being forward looking enough to run network cabling to every room when I renovated an 1898 house back in the 1990s. A few years later wireless rendered that investment in wires itself obsolete.

    But it’s worth the effort to try to find a solution. From our highways and transit systems, to water and sewer lines, to our buildings, we are facing a huge overhang of required replacements and upgrades, much of the cost driven by a need to bring designs up to new, modern design requirements and the state of the art. We could spend an enormous amount of money doing this only to find ourselves right back in the same boat a few decades down the road when things are old again, and society’s desires and technology have moved on to the next generation. In an era of ever greater technology change, finding a way to ride the upgrade curve effectively is an imperative.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

    Photo by Ron Zack

  • The Dispersing of Urbanism

    For more than a century, people have been moving by the millions to larger urban areas from smaller urban areas and rural areas. Within the last five years, the share of the world population living in rural areas has dropped below one-half for the first time. The migration to the larger urban areas has spread to lower income nations as the countryside seemingly empties into places like Chongqing, Jakarta and Delhi. In the United States, the rural population has declined from slightly more than 60% in 1900 to approximately 18% in 2010. In Australia, the rural population is expected to decline to below 10% later in this decade.

    Of course, the driving factor in this urban migration is the quest for opportunity. People have flocked to urban areas because opportunities are greater.

    Yet if the opportunities are in metropolitan areas, indications are that this is taking place over a wider area than in the past. A review of income growth between 2001 and 2006 in four nations shows that incomes rose more in some surrounding regions than within the metropolitan areas, at least during the first half of the decade. It will be interesting to see if these patterns have changed in the second half of the decade, something we will be able to discern once the 2010/2011 round of census data is available.

    Australia

    This dispersion of opportunity is particularly evident in Australia, where data from the last two national censuses indicates that incomes overall have risen more quickly outside some major metropolitan areas. In three of five cases (the three largest) incomes rose higher outside rather than inside the major metropolitan areas (Figure 1).

    • In Sydney, the largest metropolitan area in Australia, median household incomes declined 6.6% relative to those of the state of New South Wales.
    • Melbourne median household incomes declined 3.5% relative to those of the state of Victoria.
    • Brisbane median household incomes declined 4.4% relative to those of the state of Queensland.
    • Median household incomes in Perth rose marginally more than those in the state of Western Australia (0.2%), while Adelaide incomes rose the strongest against state (South Australia) incomes at 4.4%.

    New Zealand

    Mimicking the largest metropolitan areas in Australia, Auckland, New Zealand’s largest metropolitan area, experienced a median personal income loss of 4.4% relative to that of the nation between 2001 and 2006 (Figure 1).

    Canada

    A similar story has unfolded in Canada. Major metropolitan area median household incomes declined relative to provincial incomes in one half of the cases (Figure 2). The largest relative losses occurred in arguably two most dynamic metropolitan areas :

    • Toronto, which accounts for nearly one fifth of Canada’s population experienced a median household income decrease of 4.4% relative to that of the province of Ontario. Steve LeFluer’s recent article shows that within the Greater Toronto area, the core city, with its amalgamated inner suburbs, has the lowest median household income.
    • Calgary, Canada’s energy capital, also experienced a median household income decrease of 4.4% relative to its province, Alberta.

    Vancouver’s median household income also fell, 3.3% relative to that of British Columbia’s.

    Three metropolitan areas experienced faster economic growth:

    • By far the strongest growth income growth occurred in Montréal, where median household incomes increased 8.4% relative to incomes in Québec.
    • The nation’s capital, Ottawa (a metropolitan area that straddles the borders of Ontario and Québec) experienced a median household income increase of 2.6% relative to the weighted median of the two provinces.
    • Edmonton, Alberta’s capital, experienced income growth marginally above that of the province (0.2%).

    United States

    A review of data in the United States indicates similar results. The same time span (2001 to 2006) was analyzed for the 34 metropolitan areas with more than 1 million population that are in a single state. State personal incomes per capita rose at a greater rate than the metropolitan area rates in 18 of the 34 cases (Figure 3).

    Two California metropolitan areas performed the best. In Los Angeles personal income per capita rose 3.6% relative to that of California in San Diego, per capita income rose at 6% relative to that of the state.

    Other metropolitan areas, including Las Vegas, Salt Lake City, Seattle, Oklahoma City, Cleveland, Pittsburgh and Jacksonville experienced income per capita increases of between 1% and 2% relative to those of their respective states.

    The largest loss occurred in information technology intensive San Jose, where incomes dropped 7.4% relative to those of California. Austin, capital of the nation’s second-largest state, experienced the second largest drop at 5.7% relative to incomes in the state of Texas, which as one of the leading information technology centers in the nation, generally mirrors the San Jose performance.

    Other losses between 2% and 5% relative to their states occurred in Rochester, Dallas-Fort Worth, Atlanta, Tampa-St. Petersburg, Riverside-San Bernardino, Orlando and Buffalo.

    Among the 15 multi-state metropolitan areas, eight experienced income increases relative to the states in the largest share of the population lives (this state with the historical core municipality) and seven declined. Perhaps the most surprising finding is that two metropolitan areas (New York and Washington), which have been among the most consistent in providing economic opportunities experienced only modestly greater income growth than their states.

    • New York, one of the two or three principal financial centers of the world, experienced income growth only 0.6% relative the weighted average of the states of New York and New Jersey, where nearly all of the area is located (Pike County, Pennsylvania is also in the metropolitan area).
    • Washington, where federal government and related in one can be counted upon to produce income growth, experienced only a modest rise of 0.3% relative to the weighted average of the two states (Virginia and Maryland) that comprise nearly all of the metropolitan area (Jefferson County, West Virginia is also in the metropolitan area).

    Metropolitanizing the World?

    These trends suggest a shift in metropolitan fortunes, at least in advanced countries. Historically incomes have grown much more strongly in metropolitan areas than in other areas. Now incomes are rising more quickly or at least nearly as quickly outside some major metropolitan areas as they are inside. It can no longer be blithely assumed that large metropolitan areas experience greater economic growth than their less urban hinterlands. The differences may be fading away, shaped not so much by proximity to the core but by other regional factors.

    We currently can only speculate as to the reasons for this development. The expansion of personal mobility and the ability of people to commute from outside major metropolitan areas may be one reason. Perhaps the most important factor is the rise of the information economy, which has freed some people from more intense urban living by permitting working at home part or all of the time. The proliferation of shopping opportunities, through franchised chains, the outward movement of immigrants, and online ordering may have made formerly remote areas more able to fulfill the needs and desires of people who previously would have inclined to live in more urban surroundings.

    These developments are consistent with the net migration of more than 2 million people away from metropolitan areas of more than 1 million population between 2000 and 2009 in the United States. Further, the phenomenon may be spreading beyond the high income world. As recently noted, in China, economic opportunities may be expanding in rural areas.

    ——

    Note

    This analysis compares metropolitan incomes to incomes in larger political jurisdictions (such as the metropolitan area of San Diego and California). An analysis that compared the area within the larger jurisdiction, but outside the metropolitan area, would yield a somewhat a difference (whether higher or lower), because the larger jurisdiction data available includes the metropolitan areas.

    Photo: “Outback” New South Wales: Faster Income Growth than Sydney (by author)

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

  • Is China About to Decentralize?

    More than a car, plane or train tick, the “Hukou” (the residential permit system) is the key to mobility in China.

    I can still remember what my junior high English teacher said to my classmates and I, “I really worry about you guys; if you don’t study hard, not only will you not be able to get a job, you will probably have nowhere to stay, while the kids from the countryside; at least they will have some land to grow plants on and a house to live in!” (In my junior high school, all of my classmates had an urban hukou.) Looking back, I can’t help but admire my teacher’s far-reaching vision.

    I remember about two decades ago, my relatives from the countryside spent a fortune to get their kids an urban hukou. At that time, the “value” of one’s hukou was measured by the rank and scale of that city/town. As one can imagine, hukou for major cities such as Beijing, Shanghai, or Guangzhou are more “expensive” than my hometown Yangzhou.

    However, in the past couple years the trend has reversed, especially in the suburban areas of some cities. With the massive real estate development here in China, many lucky “farmers” with rural hukou have received enormous relocation compensation packages, which translate into millions of yuan and several brand new apartments.

    Yet despite these changes, the hukou system creates enormous boundaries for us.

    For someone like me, having a Yangzhou hukou and living in Nanjing, I have to go back to my hometown when I apply for a visa or any documentation related to my hukou. My future offspring will have to pay special fees and higher tuition to be admitted by the local schools. Even when I go to pay my internet bill, I have to pay a year in advance instead of monthly payments just because I do not have a local hukou. Still, I am fairly lucky because Yangzhou and Nanjing are in the same province. People holding a hukou belonging to another province have to overcome even greater difficulties and inconveniences, to say at the least.

    However, do not take it for granted that citizens who have a hukou for the big cities have it made. In Shanghai for example, the local government requires private car owners to pay 40,000 yuan for their license in order to limit the number of automobiles on the roads. Recently, one of my friends who has a Shanghai hukou bought a car in Nanjing, and he could not get a license for his car because the Nanjing authorities worried that he would secure a Nanjing license and actually drive his car in Shanghai in order to avoid paying the 40,000 yuan that the Shanghai municipality requires. He did eventually get his license by proving he is currently working and living in Nanjing and, of course, by pulling some important strings. This is rather ironic when looking back at how people valued a hukou several decades ago.

    The shifts in the value of a hokou parallels another interesting shift: many migrant workers are returning to their hometowns much earlier. In the previous years, migrant workers would usually return home right before Lunar Chinese New Year, which typically falls in February, but a large number of them have started to return home in December this year.

    The driving factor behind this change is that the cost of living in the cities has risen so dramatically over the past few years, and the money migrant workers earn barely covers their living costs. So rather than struggle through the holiday season, more and more are deciding to go home early and enjoy the time with their families. If these workers can secure work in the countryside, then the big cities could suddenly be facing a significant shortage of cheap labor as the Chinese New Year approaches.

    Although China’s urbanization will likely continue, the patterns might increasingly be to smaller cities and towns. In this sense, China’s development may, sooner than any expected, begin to take on the dispersion pattern that has occurred in the Western countries for more than a half century.

    Lisa Gu is a 26-year old Chinese national. She grew up in Yangzhou (Jiangsu) and lives and works in Nanjing (Jiangsu).

    Photo: South Gate, Nanjing

  • Coalition of the Unwilling

    This week the UK government announced an ”end to anti-car policies” reversing the guidance to local authorities to dissuade citizens from using their cars in favour of public transport. Charges for parking will be reined in, they promise.

    It should be good news. The comically-named ”traffic calming” schemes put in place by the outgoing government were deeply unpopular. Still, we are getting used to taking our announcements from the new coalition government with a pinch of salt.

    Before the election Housing Minister Grant Shapps backed demands from the Housebuilders’ Federation for a ‘right to build’. That might seem unnecessary, but in Britain the planning laws are so prohibitive that owning land extends no right to build upon it. Instead planning authorities extend permission to build where it meets the terms of the local plan.

    The impact of Britain’s planning laws has always been a problem, but for the last thirteen years the ‘local plan’ has been hi-jacked by anti-growth campaigners from the Campaign to Protect Rural England, the Urban Taskforce and the massed ‘NIMBY’ campaigners of the Tory Shires.

    The new local government minister Eric Pickles explained that the net effect of the planning system’s strangle hold on house building was that ”we’re at rock bottom”: ”1924 was the last time we built this little number of houses”. His Labour predecessor Nick Raynsford had ”done more damage than the Luftwaffe”, said Pickles, exaggerating a little, but making his point (Sunday Times, 12 September 2010).

    So what about the changes? Grant Shapps’s published policy does include the words ”right to build” – but they are heavily hedged about:

    ”provided that [the new homes and buildings] conform to national environmental, architectural, economic and social standards, conform with the local plan, and pay a tariff that compensates the community for loss of amenity and costs of additional infrastructure’ (Open Source Planning, Page 3).

    All of which sounds pretty much as bad as it was before. What right to build, you might ask? Indeed the words ‘right to build’ feature just once in the document, as quoted above, in the executive summary. There is a question mark, too, over who it is that has the right to build. ”Communities”, according to Shapps, and the government have the right, but just how these ”communities” are defined is not clear. More likely they will be the same planning authorities as before. In that case the only developers that get a look in will be the powerful and well-connected like Tesco or Barratt Homes – those who are in a position to meet the municipal fathers’ demands for baksheesh… or ”planning gain” as it is known in the UK.

    Coalitions are new to Britain (apart from one shaky Liberal-Labour government in the seventies). But with neither David Cameron’s Conservative Party, nor the deeply demoralised Labour Party of Gordon Brown winning enough votes to command a majority in the House of Commons, Cameron had to turn to Nick Clegg’s minority Liberal Democrats.

    This arrangement seems to suit Cameron. Cameron became leader on a pledge to lose the ”nasty party” image the Conservatives had after years of office in the 1980s. His method is a mirror image of Tony Blair’s repositioning of the Labour Party as a centre party by distancing it from its socialist roots. First we had a Labour government that was against socialism. Now we have a Conservative-led government that is shy about capitalism.

    Sidelining the old-school Thatcherite, free market Tories in favour of his friends in the public relations, media and volunteer sector, Cameron seems obsessed with changing the party brand.Although this did not work in the election, the advantage of an alliance with the Liberal Democrats means that he can ditch whatever fundamentalist free market doctrines whenever convenient on the grounds that ”coalition government is compromise”.

    The net effect is a government that keeps sounding as if it is going to do something decisive, but then doesn’t.

    The greatest challenge has been the state of the public finances. Britain’s government debts are astonishing: one trillion pounds sterling, or 68.2 per cent of GDP. Since most of the debt was contracted under Labour’s watch, the coalition government has the moral high ground. The Labour coalition says that the cuts announced in the public sector put the recovery in danger because they are too far, too fast. They stand by ”counter-cyclical” spending, but Labour has little mainstream credibility in terms of the country’s finances.

    For the left, though, balancing the capitalists’ books is hardly the issue. They are looking forward to a re-run of the campaign against the Thatcher public spending cuts of the 1980s. The protests and banners all seem to reinforce the idea that the government is indeed planning to rein in public spending, but it is not. As former Tory Minister John Redwood has pointed out, the planned cuts are not even cuts at all, but a limit on spending growth.

    Cameron’s government had to sound tough on public spending, because the bond traders were in fear of Britain’s debt rating being marked down, and the wider impact of a loss of confidence. With both Greece and Ireland’s finances in trouble, the British government needed to promise stability.

    But the same city traders are just as determined that the spending party should carry on, even if the volume is turned down to avoid scaring the neighbours. For years Britain’s ”private sector” has been dependent on extraordinary boosts of government cash. Under the outgoing government’s Private Finance Initiative, public institutions like hospitals and schools were allowed to raise funds by issuing their own bonds, debt that was not reckoned in the official accounts. Then Gordon Brown’s banking bailout found government buying up failing banks like Royal Bank of Scotland.

    Despite their fawning support for austerity Britain’s City traders still expect to be looked after. The Bank of England’s emergency policy to meet the shortage of credit in the economy is called ”quantitative easing”. In practice it means that the government trades government bonds for the banks’ own toxic debts, while bond traders make money on the commission.

    Even the one controversial cut in public spending turns out to be something more like a gift to the banks. The government says that they will let universities charge fees approaching the market rate, and that students will no longer be subsidised. Since those who made the decision all got to go to university for free, the backlash was understandable – the kind of rioting Saturnalia that Britons indulge in from time to time (“off with their heads!“ shouted student rioters when they chanced upon the Prince of Wales’s limousine and mobbed it, while running from the police).

    To moderate the impact of the fees, though, the government has promised to expand the student loans scheme, where the State lends the money, and then recovers it later, through the tax system. For the banks, what could be more perfect? Here is a tranche of debt created overnight, guaranteed by a government that undertakes to recover it on their behalf: More of a subsidy to the City of London than a cut in government spending.

    Though the Conservatives are thought of as ”Thatcher’s Children”, they behave much more like their ”New Labour” predecessors. The tough talk is for show.

    Nowhere is this proto-New Labour approach clearer than on energy policy. Although Energy Minister Chris Huhne has acknowledged that Britain faces severe electricity shortages – he fails to ascribe the problem to its proximate cause, the failure to build enough coal-powered power stations.

    Huhne’s solution, though, will make things worse. Not more coal-powered stations, but a government imposed increase on tariffs for fossil-fuel generated power, and a special allowance for renewable energy. Of course, renewable energy on any normal pricing system would be uneconomic. Britain’s latest windmills even had to be heated up to stop them freezing solid this winter. The net effect of Huhne’s proposal: no fix for the energy shortage, and more expensive electricity.

    These policies have had disastrous, even lethal, results. According to the latest figures, excess winter deaths in the UK are in the region of 25 000, most of them the elderly, often hastened along by fuel poverty. With Huhne’s proposals, those numbers are set to increase, as electricity becomes something of a luxury to the poor.

    At least in this area, the Tories are “conservative”. The tradition of the poor freezing to death in wintertime is being restored, and so too may be the old class system that allows the City to enrich itself as the expense of everyone else, including the taxpayers.

    James Heartfield is the author of Let’s Build: Why we need five million new homes, a director of Audacity.org, and a member of the 250 New Towns Club.

    Photo by Chris Devers

  • Yes, We Do Need to Build More Roads

    Road are clearly out of fashion in urban planning circles. Conventional wisdom now decries roads in favor of public transit, walking or biking in developments designed to mimic traditional 19th century urbanism. Common refrains are “we can’t build our way out of congestion” or “widening roads to cure congestion is like loosening your belt to cure obesity.” Also frequently noted is the vehicle miles traveled has – at least until recently – outpaced population growth.

    But this piece of conventional wisdom is also deeply flawed. It obscures the bigger point that in a growing country we need to expand infrastructure to keep pace. The recent 2010 Census results put this in stark relief. The rate of growth from 2000 to 2010 slowed considerably from the previous decade, but still at a robust 9.7%, or 27.3 million new Americans. It would have been physically impossible to house all those people in traditional urban communities well-served by transit. The 27.3 million number is more than the combined 2009 population of the cities of New York, Los Angeles, Chicago, Philadelphia, Washington, Boston, San Francisco, Portland, and Seattle.

    In fact, this national growth is greater than the combined population of the 12 largest municipalities in the country.

    That’s just one decade’s worth of growth. America’s traditional urban areas couldn’t contain this, even if they were emptied of all their current residents. And the United States is projected to add an additional 90 million people by 2050. Where are all those people going to go? And how would they get to work even if they could live in these cities, given that much of America’s job growth has been suburban?

    Keep in mind also that much of this urban and transit infrastructure must be seen as more legacy than a reflection of modern choices. It was largely compete 50 or more years ago. Only Portland and Washington, DC have really managed to build new transit friendly urban core cities in the modern era. And despite their growing populations, these two places can only absorb a relatively small amount of new population every year. In Washington, it’s less population growth than gentrification – the replacement of largely poor African Americans with more affluent whites – that is the most outstanding demographic trend.

    That’s not to say America can’t invest more in transit or build more transit friendly cities. It can and it should. In particular, large, already dense urban areas like New York, Chicago, and Washington with large core area employment require major investment to upgrade their systems.

    Even smaller cities need better transit options and more urban neighborhoods. They are simply not well positioned to compete head on with newer suburban areas built from the ground up to support an auto-oriented lifestyle. But this will be difficult since they will have to build transit largely from scratch, and given anticipated cutbacks in new federal transit funding. this suggests they would be well-advised to avoid costly boondoggle mega-projects in favor of unglamorous but basic activities like running a quality urban bus system.

    But even if we achieve our potential in transit, America still needs to build more roads. We’ve got an interstate system originally designed for a 1960 population of 180 million and we are now well over 300 million and going up. By 2050 we’ll have more than double the 1960 population. This will require a major expansion of infrastructure, and that includes highway infrastructure.

    Just as one example, consider a moderate growth area like the Indianapolis-Carmel MSA. Its interstate system was mostly designed and completed circa 1970. The region had a population of a bit over 1.1 million then. Today it is over 1.7 million, an increase of 52%, or 596,000 people. A county the size of that increase would be the second largest county in the state of Indiana, well exceeding that of today’s #2, Lake County, a heavily urbanized county in Northwest Indiana.

    Yet until recently there had been almost no expansion of the Indianapolis freeway system. Fortunately, it was over-designed when built, but that is no longer the case. Thanks to a fortuitous lease of the Indiana Toll Road however, over 50 miles of freeway in the region are now being widened. Without this, the region would have faced decades of commuting misery.

    Unfortunately, that’s the bind where most cities now find themselves: managing growth with funding for roadway expansion and even maintenance running dry nationally.

    Keep in mind that tomorrow’s roads need not resemble yesterday’s monstrosities. The days of simplistically adding lanes while neglecting basics like enclosed drainage, sidewalks and paths, bus shelters, and aesthetics are likely over in many parts of the country. We need to provide room for the traffic we need to accommodate without excessive over-designs for a 15 minute peak of the peak, or dehumanizing roadway design approaches. Reform of our civil engineering educational system is eminently doable as plenty of great examples of suburban roadway design already exist. Federal standards need a revamp as well. We need to build not just more, but also better roads.

    With a botched stimulus, huge deficits at the federal and state level, and a public that has decisively turned against those deficits, a major construction program seems unlikely at this time. But in a couple years the economy should be back and a plan for fiscal recovery put in place and under execution. If not, we’ll have much bigger problems than roads.

    But assuming we get past this moment, we need to be laying the groundwork for a major continuation of the long history of American investment in infrastructure, from the Erie Canal to the interstate highway system. This includes not only a significant boost in urban transit spending where appropriate, but also a major program of both roadway repair and quality expansion, particularly in our growing metro regions. And as the Indiana example of a Toll Road lease shows, this doesn’t all have to come from tax dollars. Without this investment, our critical transport networks will ultimately seize up and America cannot hope to be competitive globally over the long haul.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

    Photo of a suburban road in Carmel, IN by author.

  • Overselling Transit

    A recent op-ed in the Los Angeles Times eloquently illustrated the limits of mass transit in modern societies. This is not to imply that that transit does not have its place, nor that it does not provide a most useful service where it can. The problem has been the overselling of a mode that has very serious limitations. This has led to misallocations of financial resources that could be more efficiently used for the roadway expansions that would relieve traffic congestion and reduce both air pollution and greenhouse gas emissions while encouraging greater job creation and economic growth.

    The op-ed in question was by Karen Leonard, a professor at the University of California, Irvine and Sarah Hays, a Los Angeles architect. The article noted the neighborhood opposition to the “Expo” Line (Exposition Boulevard line) and efforts by the authors to gain support for the line. The neighborhood in question is Cheviot Hills, a tony neighborhood with a median house price of $850,000 in the city of Los Angeles and located between Beverly Hills and Culver City.

    What is significant about the op-ed, however, is not so much the neighborhood as the concluding line and the author credits.

    “So we continue to walk our neighborhoods talking with our neighbors, hoping that this time the quiet majority will finally prevail and we will all gain the choice of leaving our cars at home.

    Karen Leonard is an anthropology professor at UC Irvine. Sarah Hays is a Los Angeles architect. They are co-chairs of Light Rail for Cheviot Hills (lightrailforcheviot.org).“

    UC Irvine? It is doubtful that the Expo line will make it possible for anyone in the foreseeable future who lives in Cheviot Hills to “leave their car at home.” The University of California, Irvine is located in the middle of Orange County, approximately 50 miles from Cheviot Hills.

    It is useful to consider what leaving the car at home in Cheviot Hills would mean for a mythical professor at the University of California, Irvine once the Expo line is fully operational.

    On Monday*, the professor needs to be in class at 8:00 am, which requires arrival on campus by 7:45 a.m. On the assumption that the mythical professor lives in the middle of Cheviot Hills, the trip would involve leaving the house at 3:45 a.m. and walking 20 minutes to the transit stop. The favored Expo light rail line would likely not be available that early, so the first leg of the trip would be on a bus. (If the Expo line is operating early enough for the trip, the professor could leave home approximately 25 minutes later).

    Three transfers later, the mythical professor arrives at the campus, at 7:20 a.m., in plenty of time to have coffee and get to the classroom before 8:00. While the professor requires four hours from leaving his or her car at home to the necessary arrival time at campus, a neighbor could have driven nearly all the way to Las Vegas for breakfast.

    If it is assumed that the mythical professor is able to get out of a staff meeting at 3:00 pm, the return trip would take more than 3 hours, part of it on the Expo line.

    Tuesday would be little better, assuming a 10:00 a.m. class start and that the professor gets away by 5:15 p.m. The trip to Irvine would have the advantage of starting on the Expo line, but would still take more than 3 hours, door to door. The return trip, including bus rides, a Green Line ride, a Harbor Freeway Busway ride and an Expo light rail ride would be about 4 hours and 30 minutes, with little wait in Irvine for service.

    These transit commutes would hardly be comfortable or productive, though they would include all conventional forms of transit available in Los Angeles (there are no trolley buses, inclined planes or ferries in Los Angeles). The total door-to-door time would be up to 7.5 hours for a work day of 7 hours. Needless to say, it is unlikely that with this schedule, any professor would ever leave his or her car at home.

    Finally, there is a myth people cannot leave their cars at home and walk or take transit to work. In fact, there are probably no work locations in urban America where people cannot choose to live close enough to work to walk or take transit. But choosing to leave the car at home is not as important as other choices, even for advocates for transit improvements. Otherwise they would live close enough to leave their cars at home. Of course, most people value other things more than leaving the car at home, such as a nice neighborhood, a nice car, a low crime rate and a host of other considerations. Otherwise no professor would live in Cheviot Hills and work at UC Irvine. Indeed, they would probably live in the faculty housing made available by UC Irvine.

    All of this illustrates what transit cannot do; provide automobile competitive service for most of the trips that are taken in the modern American (and even European) urban area.

    It is also worth recognizing that transit has been substantially improved in Los Angeles over the past 20 years (whether it has grown cost effectively is dealt with in another article). Spending aside, these improvements have made it possible to make any one-way trip in the Los Angeles urban area in less than four hours, at least during the middle of the day. This is to the credit of the Metrolink commuter rail system, the subway, rapid busways and the more rapid of the light rail lines. But this is hardly tempting to Angelenos whose median commute time by car is 24 minutes. As elsewhere in the nation (and as in Western Europe, Canada and Australia), transit can sometimes compete with the automobile to core (principally downtown) locations. The suburban to suburban trips, however, largely are simply beyond transit’s capability.

    Of course, some drivers commute much longer, as in the case of the mythical professor at UC Irvine, whose trip would be between one and one and one-half hours each way. In Los Angeles, 8 percent of people in cars have commutes that are more than one hour. And virtually all of them find this commute, however maddening, is far shorter and more comfortable than a similar trip taken by transit.

    —-

    *Correction: The Monday trip from Cheviot Hills to UC-Irvine has been corrected to reflect a subsequently identified better itinerary. The article has been revised to assume this trip.

    —-

    Photograph: Interstate 5 (on the way to Irvine) in Orange County

    Wendell Cox trained on the Exposition corridor between the University of Southern California (USC) and Culver City (near Cheviot Hills) as a member of the USC cross country team. He was appointed to three terms on the Los Angeles County Transportation Commission (one of two agencies merged later to form the MTA) and participated in decisions to authorize the Green Line light rail line, the Harbor Freeway Busway, the Red Line Subway and Interstate 105, all used by the mythical professor commuting to UC Irvine.

  • The NFL: Running the Numbers in the Football Business

    Why does America — and I include myself — invest so much psychic energy, not to mention hard dollars, in professional football, a sport that on many levels combines the worst aspects of roller derby and professional wrestling?

    Sometimes when I am watching Dan, Boomer, Phil, Chris, Rod, Coach Cowher, Prime, Jamie, Mike, Shannon, and the rest, wearing those pink ties and crisp suits and seated on the high alters of cable television, I feel as if I am watching the Supreme Court deliberate on taunting, end-zone celebrations, the Raider Nation, clock management, Ochocinco, booth reviews, Cover Two, the wildcat, and Brett Favre’s shoulder, if not the ‘junk’ in his text messages.

    Sadly, most Americans are clearer on what happens in the red zone than they are about the decisions of the Supreme Court. The business of America is football, much more than it is Main Street stores, the national budget, or the small print of the Patriot Act.

    Maybe when the Decatur Staleys were playing the Chicago Cardinals, or when teams like the Massillon Tigers, the Shelby Blues, and the Ironton Tanks were on the field, football was a sport. It was played in local stadiums by players who worked in nearby steel mills and earned $25 a game.

    The forward pass, national television, and the deification of Vince Lombardi turned the sport into an $8 billion bonanza that, to cover expenses, relies upon subsidized stadiums, sky boxes full of corporate bonus babies, enough violence on the field to render many ex-players vegetables, and a relationship with television that has reduced the airing of the games to violent You Tube clips spliced around ads that blur the attractions of Cialis and McDonald’s (“I’m lovin’ it!”)

    What is the reality of football “franchises,” the right to own a team in a select market? Because football is absurdly given an antitrust exemption (as if the play of the Cincinnati Bengals is in the interest of national security), franchises are best understood as local protection rackets.

    Except for the Green Bay Packers, which is owned by its fans, most NFL teams are owned by corporate hierarchs who have paid millions to buy a team. Fair enough; free enterprise is in the playbook of capitalism.

    But instead of a sporting club that enjoys competition and fair play, what owners buy is a cooperative share of the national football monopoly. Its purpose is to browbeat cities and states for subsidized stadiums. Players are expected to perform under barbaric working conditions, and advertisers and television networks join a never-ending race for the rights to broadcast the spectacles on the Circus Maximus.

    If you are doubtful of football’s influence–peddling in smoke-free political rooms, consider this: President Obama appointed Pittsburgh Steelers owner Dan Rooney to be the U.S. Ambassador to Ireland, no doubt for his go-routes to the Democratic Party. Or that the insolvent state of New Jersey encouraged the Jets and the Giants to build a new $1.6 billion stadium in the Meadowlands, even though the state still owes $110 million on the stadium it replaced, which has since been torn down.

    Keep in mind that most NFL sweetheart deals are hidden as carefully as Jimmy Hoffa would have been spiked into the end zone at Giants Stadium. Revenue-sharing, sales tax increases, municipal bonds to buy stadium land, and parking-lot concessions are among the many ways local political establishments pay obeisance to team owners, who did not get their, on average, $1 billion in net worth by reaching into their own pockets.

    New Jersey loves to boast that the Jets and Giants paid privately for New Meadowlands Stadium. Actually, the fans paid, via PSLs (that’s personal seat licenses), and by paying $200 a pop for many seats. But the NFL owners chipped in $300 million, and the state has poured some $2 billion into the nearby Xanadu project (shops, offices, malls, etc.) that has little to show for the spent money except upgraded swampland, and a train line to the new stadium.

    To pay for their subprime stadium debts, NFL owners are now threatening to “lockout” the players from the 2011 season, unless the players’ union agrees to lower the league’s salary cap, which sets how much each team can spend on its players.

    The fans are told that the salary cap (59% of league revenue) is in place so that teams can compete as equals, and that “on any given Sunday,” every team has a chance of winning. Actually, the cap is just another example of the extent to which the NFL is a closed shop and exists to limit owners’ expenses.

    To be sure, football players are not like you and me, and are paid hundreds of thousands of dollars for relatively short careers. (Running backs last less than four years in the league.) But for all the stars that you read about getting $7 million in signing bonuses, most players earn the league minimum (about $400,000) and are cut, usually after suffering a career-ending injury.

    More life–threatening is the extent to which a career in football renders players prone to dementia: 6.2% of NFL players are affected, as opposed to 1.2% in the general population. In dealing with this issue, what most interests the owners isn’t player safety, but rather juking class-action liability, were it to be proven in court that NFL play causes dementia.

    The bling for NFL owners, along with those subsidized stadiums, is its $20 billion in television contracts from the various networks, including CBS, NBC, Fox, and ESPN. The owners divide this swag, and the networks parse the schedule: there are games on Sunday afternoon, Sunday night, Monday night, and often on Thursdays — roughly the slots of Gregorian rituals in the middle ages.

    Football’s thirty-two teams are a closed shop that enjoys antitrust exemption (hence, no competition), and the games are not “news”, and thus available to anyone to broadcast. Football is studio entertainment, played before a “live stadium audience.”

    Why do we need billion-dollar stadiums in each market, when a handful at Universal Studios would suffice? And they could be “themed” to simulate snow bowls, mud games, or even the Black Hole, Oakland’s biker digs.

    Ratings of televised football games continue to go up and up, dominating national life not just on Sundays, but increasingly on holidays, too. Strangers could easily get the impression that Mayflower pilgrims got together with local Indians to watch the Lions get stuffed yet again on Thanksgiving. Can an indebted nation really give up so many hours to the Bills and the Buccaneers?

    The biggest risk to football as we now know it is if new technology (will today’s mainstream networks really survive?) diminishes advertising from the NFL games and waters down the $20 billion in television contracts. And, although I have no proof or evidence, I wonder if another risk to the sport could be a gambling scandal.

    Developments that range from the NFL’s Red Zone broadcast to Fantasy Football have the feel of gimmicks that appeal to gamblers, who, like derivative traders, seek ways to bet on the fractional aspects of the games. One revelation of the Tiger Woods humiliations was the amount of time pro athletes spend in Vegas, rubbing shoulders with high rollers, if not cocktail waitresses. Didn’t the golfer Phil Mickelson once bet $20,000 on the 28-1 Ravens to win the Super Bowl?

    For the fans, the game is about their teams winning and getting to the Super Bowl. For the owners, it’s about maintaining membership in the football oligopoly (worth about $250 million a year for each team, including the woeful Cleveland Browns). For the hot money, the games are a variation on off-track betting.

    As a fan of the New York Jets, now in the forty-first year of their rebuilding program, I might take a bleak view of the NFL, as part of my denial over Mark Sanchez’s wobbly arm and his “happy feet.” Maybe I am remorseful for all the time I spend listening to Mike Mayock explain zone blocking schemes or the A gap.

    At the same time, I share the views of former French president Georges Clemenceau, about an earlier League, that “of Nations.” At the Peace of Paris in 1919, he said: “I like the League. I just don’t believe in it.”

    Photo of NY Jets v Eagles game by Ed Yourdon

    Matthew Stevenson is the author of Remembering the Twentieth Century Limited, a collection of historical essays. He is also editor of Rules of the Game: The Best Sports Writing from Harper’s Magazine. He lives in Switzerland.

  • The Poverty Of Ambition: Why The West Is Losing To China And India – The New World Order

    The last 10 years have been the worst for Western civilization since the 1930s. At the onset of the new millennium North America, Europe and Oceania stood at the cutting edge of the future, with new technologies and a lion’s share of the world’s GDP.  At its end, most of these economies limped, while economic power – and all the influence it can buy politically – had shifted to China, India and other developing countries.

    This past decade China’s economic growth rate, at 10% per annum, grew to five times that U.S.; the gap was even more disparate between China and the slower-growing  E.U.,  Yet periods of slow economic growth occur throughout history — recall the 1970s — and economies recover. The bigger problem facing Western countries, then, is a metaphysical one — a malady that the British writer Austin Williams has dubbed “the poverty of ambition.”

    This lack of ambition plagues virtually every Western country. The ability to act has become shackled by a profound pessimism that according to a recent Gallup survey contrasts with the optimism found not only in rising states like China, India and Brazil, but also deeply impoverished places like Bangladesh.

    Attitudes have consequences. The rising stars of the non-Western world — from the United Arab Emirates to Singapore and China — are building cities with startling new architecture and bold infrastructure. Their entrepreneurs are expanding their operations across the planet.

    Of course, you can chortle at the outrageous overbuilding in places like Dubai, but the Western world might do better to appreciate the scope of their ambition. Indeed, for years New York’s Empire State building, erected  during the Depression, was derided as  ”the empty state building.” Today it’s visionary developers like Iraqi-born Istabraq Janabi who are planning unlikely  new structures even  in  troubled places like Ramadi, Iraq.

    The difference in ambition can be seen clearly at airports, which now serve as the entry halls of the global economy. A traveler to John F. Kennedy Airport, Heathrow, Charles De Gualle LAX or Dulles passes through decayed remnants of fading late 20th century buildings and technology. In contrast, airports in Dubai, Hong Kong and Singapore offer clean, ultra-modern facilities with often impressive design.

    The West’s retreat from space exploration further underscores its metaphysical poverty. Today, Europe and the U.S., the world’s historic leader in the field, are cutting back on plans to explore the cosmos, which has included a manned operation to the moon. President Obama wants NASA to focus more on issues regarding climate change instead. In contrast, the rising countries of Asia, notably China and India, have begun plans for manned flights to the moon and beyond.

    This divergence is not about resources; it is about the growing conviction in the West that moving forward is an illusion or, as the British academic John Gray’s puts it, “progress is a myth.”  Victorian empire-makers and intellectuals, like their republican American successors, believed perhaps naively in the potential of humanity, economic and technological progress. Today our intellectual and political classes have gone to the other extreme.

    The West’s politics are in the grips of two profoundly retrograde mentalities. One, a small-minded conservatism, harks back to the “golden” age of the 1950s when Western power faced only a flawed Soviet challenge. The idealistic but flawed commitment to imposing democracy by force of the Bush years has faded; it has been replaced by an obsession with taming a bloated public sector. While this focus may be justified, it is fundamentally more reactive than proscriptive.

    The Left, which once portrayed itself as the bastion of scientific rationalism, increasingly embraces neo-druidism, a secular form of nature worship. This tendency’s roots can be traced back to the “Limits to Growth” ideology of the early 1970s which projected, mostly mistakenly, that the planet was about to run out of everything from food to oil. Concerns over climate change have transformed this dismal sentiment into a theology, with carbon emissions treated as a form of original sin.

    The anti-progress nature of the new Left is unmistakable. Rather than seek ways to control climate change, suggests The Guardian’s George Monbiot, environmentalism is engaged in “a battle to redefine humanity.” Monbiot believes the era of economic growth needs to come to an inevitable denouement; that “the age of heroism” will be followed by the decline of the “expanders” and the rise of the “restrainers.”

    Europe, particularly the U.K., suffers acutely from metaphysical angst.  Once touted as the new great power by its leaders and their American claque, the E.U. is quickly dissolving along cultural and historical lines; this is especially evident in the division between the  resilient countries of the north (something like the Hansa trading states of the late Middle Ages) and the weaker countries along the periphery. For the most part, Europe no longer seems capable of doing much more than finding ways to control an unaffordable welfare state without tearing about its social net. The once cherished notion of a multi-racial “new” Europe largely has dissolved as immigration has devolved from a source of demographic and cultural salvation to a widely perceived threat to the E.U.’s economic and social health as well as security.

    Such defeatism usually has less success in the United States. But America’s “progressive” left increasingly resembles its European cousins.  Obama’s science advisor, John Holdren, has been a long-time advocate of the idea of “de-development,” the purposeful slowing of growth in advanced countries in order to protect the environment. The critical infrastructure needed to accommodate upward of another  100 million Americans — new dams in the west, intelligent development of our vast natural gas reserves and building new cities, airports and ports  – are not at the center of either party’s platforms. These could be financed largely with private sources, given the right incentives.

    Fortunately the West’s decline is not at inevitable. China, India, Vietnam, Brazil, South Africa all deserve their day in the sun, but this does not mean that Americans or Europeans should cower in the shadows. Western countries still possess much of the world’s cutting-edge technology and leading companies; the combined GDP for the E.U., North America and Oceania stands at over $33 trillion, almost five times that of India and China together.

    More important still, the political and cultural institutions of the West — with their liberal values — represent the best hope for a stable world of self-governing peoples. Does anyone in the West, particularly the progressives in the media and academia, really want a world run by Chinese despotism?

    The current financial crisis should serve as both a warning and a spur for a new focus on economic expansion. But this can only occur if the West can restore its belief in its future. This does not necessitate a return to the colonial attitudes of the past, but rather a keener appreciation of our unique human, physical and political advantages.

    Only the United States – by far the richest, largest and most populous Western nation — can lead such a revival. For one thing, the U.S. remains the world’s leading immigrant magnet and most diverse large country, all of which makes it the natural center of an evolving global society. Although immigrants pose some serious issues, University of Chicago scholar Tito Sananji notes that the U.S., along with Canada and Australia, seems to be doing a better job educating their newcomers than the continental European states.

    The U.S., Canada and Australia also possess resources, most critically food, that could benefit from growing demand in developing countries. Both North America and some European nations — notably the new Hansa of the Netherlands, Germany and Scandinavia – remain world leaders in scores of industrial endeavors, as well as technology- and culture-based industries.

    Together these Western countries can do much more to shape the global future than is commonly understood. But to do so this century they will need how to recover the animal spirits that drove their remarkable rise in the last.

    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 Wally Gobetz

  • Toronto: Three Cities in More than One Way

    The issue of income disparity in Toronto has once again been brought into the public eye by a December 15th report by University of Toronto Professor David Hulchanski. The report, “The Three Cities Within Toronto,” points to a growing disparity in incomes between Downtown Toronto, the inner suburbs, and the outer suburbs of the city. The report demonstrates that between 1970 and 2005 the residents of the once prosperous outer suburbs have been losing ground compared to the now wealthy downtown core. The results for the inner suburbs have been mixed.

    In 1970, 66% of city neighbourhoods were considered middle income. Only 15% were considered high or very high, and 19% were low or very low. In 2005, only 29% of neighbourhoods were considered middle income. The number of high or very high income neighbourhoods rose to 19%, while low and very low income neighbourhoods made up a staggering 54% of neighbourhoods.



    The news isn’t all bad. After all, the downtown core is now one of the most desirable places to live in North America, and many of the formerly low income neighbourhoods have gentrified, or are in the process of doing so. However, many of the city’s traditional suburbs have been decimated. The former cities of Etobicoke and Scarborough used to be middle class. Not so much anymore.

    In real dollar terms, even the majority of the very low income areas have become wealthier. The trouble with poverty statistics is that they focus on relative poverty, rather than absolute poverty. This means that if Etobicoke’s average income doubled tomorrow, the downtown core would all of a sudden be considered poor. This is a major limitation. Toronto isn’t exactly turning into a Canadian Detroit.

    The report rightly points to the need for greater mobility in the outer suburbs. Given that the most lucrative jobs are typically downtown, many young professionals and recent graduates living outside of the core need to be able to get downtown cheaply and quickly in order to build their careers. Where the report goes wrong is that it recommends stricter land use regulations, stronger rent controls, and the revival of the flawed Transit City plan that Mayor Ford vigorously campaigned against in the recent election.

    It is easy for academics to blame a lack of social welfare spending, or suburbanization for the problem. The real problem is the loss of local policy making power resulting from amalgamation. For the most part, the areas losing ground the fastest are the formerly middle class suburbs amalgamated into the city. In contrast the “exurbs” just outside of city boundaries have thrived. This is no coincidence. The real takeaway from this study is that the suburbs have different needs than the central core. By attempting to accommodate the needs of both, the megacity has benefitted neither. Short of de-amalgamation, the only hope for the city is to substantially decentralize policy making. No amount of spending can make up for the loss of local autonomy.

    Policies have different effects in different types of cities. Take the treatment of automobiles. It might make sense to discourage automobile usage in downtown Toronto, but the benefits of doing so in Vaughan or Pickering would be questionable at best. Similarly, mandating that every commercial establishment have a public washroom probably makes sense as a public health measure in downtown, where public urination is an issue, but not so much in suburban Markham, or Richmond Hill.

    Making sensible regulations for a small, relatively homogenous area isn’t all that difficult. Applying these regulations to a large, demographically diverse area can help some areas and hurt others. It’s not that regulations need to be a zero sum game. People in Etobicoke wouldn’t be affected if, say, maximum parking allotments were tightened in the downtown core. They would be affected if they were tightened throughout the entire megacity. Similarly, increasing maximum parking allotments might hurt the core and help the suburbs. The current one size fits all approach sometimes benefits the core and sometimes benefits the suburbs, but ever both.

    Perhaps more important than city wide regulations is the centralization of taxing power. Since the merger, the city now sets tax rates across the entire megacity. This also allows the city to control the ratio of residential to non-residential taxes. The city of Toronto has the highest ratio of non-residential to residential taxes in Ontario. This means that businesses carry a higher share of the tax load in the city than anywhere else in the province. The combination of tax and regulatory policies in the city have lead the Canadian Federation of Independent Businesses to rank Toronto as the second least business friendly city in Canada. On a scale of 1-100, Toronto came in at 33, slightly ahead of Vancouver’s 31. Meanwhile, the rest of the (Greater Toronto Area) GTA is near the top, at 61. Neighbouring Oshawa took the top spot in Ontario with 69.

    GTA Area Cities by CFIB Entrepreneurial Cities Policy Score

    Rank (Ontario)

    City

    Score

    Driving Distance to Yonge and Bloor

    1

    Oshawa

    69

    0:45

    6

    GTA (Excluding Toronto)

    61

    		  
     

        Mississauga

    61

    0:27
     

        Brampton

    61

    0:41
     

        Richmond Hill

    61

    0:32
     

        Markham

    61

    0:32
     

        Vaughan

    61

    0:32

    16

    Hamilton

    55

    0:58

    19

    Guelph

    54

    1:15

    24

    Barrie

    52

    1:16

    27

    Brantford

    51

    1:20

    30

    Kitchener

    48

    1:23

    33

    Toronto

    33

    		  
     

        Etobicoke

    33

    0:20
     

        Scarborough

    33

    0:21

    Now the share of non-residential to residential taxes in Toronto may actually make sense downtown. The core is home to the third biggest financial sector in North America. These jobs are heavily concentrated in the downtown core.

    Downtown Toronto isn’t competing with low tax Vaughan or Barrie for these jobs. They are competing with high tax cities like New York and Chicago. This means that employment in the core is not as easily chased off by taxes and regulations than in the suburbs. But in industries like wholesale and manufacturing, which are far more important outside of the core, employment can easily relocate to Barrie, Mississauga, Oshawa, and so forth. Indeed, jobs have been leaving the city since before the recession hit.

    Since 2004 Downtown and North York have prospered but the rest of the city has lost jobs. This should make the results of the Professor Hulchanski’s report unsurprising. The financial sector isn’t enough to keep the entire city employed or lift wages in the city-controlled suburban rings. As a a result despite the thriving financial sector, Toronto was dead last in the GTA in terms of median incomes.

    To turn this around, the city must decentralize decision making power so the suburban communities can come up with their own economic development strategies. No matter how much the city improves transit to the outer suburbs, they will not be able to significantly increase median incomes without creating more jobs. The financial sector will continue to grow, but many of jobs created in this sector require specialized training, and thus go to people from outside of the city. This doesn’t do much for former manufacturing workers in Scarborough and Etobicoke. Growth of the financial sector combined with the dispearance of blue collar jobs together guarantee continuing income disparities in the city.

    Below is previously published data from Professor Hulchanski that highlights how badly blue collar sections of the city have been hit.



    Fundamentally, a strong focus on financial and other so-called “creative class” jobs will do little for these areas. The above map was created by Richard Florida’s Martin Prosperity Institute. It shows that most creative class jobs are clustered around the subway, but this doesn’t mean that expanding rail transit will expand creative class employment. Building a light rail line through a neighbourhood doesn’t suddenly transform the residents into artists and physicians. It may attract more artists and physicians, but this could actually hurt local residents by driving up rent and property values without creating jobs for them. Below is a map of educational attainment by ward. The darker the colour, the higher the number of residents with a bachelor’s degree or higher.

    The real problem is that a focus on elite jobs creates exactly the kind of bifurcation that progressive complain about. Given that city wide business policies are tailored towards creative class type occupations, it is unlikely that price sensitive manufacturers will find any reason to locate within city boundaries, rather than setting up shop in Mississauga or Barrie.

    Indeed, for all the temptation by urbanists to point to Toronto’s suburban ring as an example of the decline of suburbia, the peripheral suburban areas outside of city limits have been booming. Here is a map of growth in the GTA between 2001-2006. While Toronto grew modestly, suburban cities Milton, Brampton, Vaughan, Richmond Hill, Markham, Ajax, and Whitby all grew by at least 20%. Even Oshawa, which was hit hard by the decline of the auto sector, has managed to survive, and indeed maintained a higher median income than Toronto during this period. Regional rival Mississauga eclipsed Toronto’s growth rate, and emerging regional player Barrie grew by over 20%.

    In short, despite its strong financial core, Toronto is losing its standing as the go-to destination in the GTA. And it could get worse. Mississauga is working hard to lure financial services and advanced manufacturing jobs from Toronto. Several other cities, such as Guelph and Waterloo are actually competing for the very creative types that Toronto’s policies are tailored to attract. Other cities, such as Barrie are working hard to cannibalize what is left of Toronto’s manufacturing and distribution sectors. Were it not for amalgamation, Etobicoke or Scarborough could just as easily have undertaken a similar strategy to attract blue collar jobs.

    The Three Cities report identifies serious regional disparities in Toronto. Unfortunately, it doesn’t provide much insight into how to fix the problem. Expanding transit options will only go so far towards this. Building more light rail may raise median incomes by attracting wealthier people to these neighbourhoods. Ironically, this will only widen the income gap. The real challenge is finding out how to create opportunities for blue collar jobs in suburban Toronto. Unfortunately, amalgamation has imposed one size fits all policies that may work downtown, but utterly fail in the suburbs and continue to drive people to the periphery outside the city limits. Ironically, the very policies that seek to halt “sprawl” may well end up exacerbating it.

    Toronto Skyline photo by Smaku

    Steve Lafleur is a public policy analyst and political consultant based out of Calgary, Alberta. For more detail, see his blog.

  • Washington Opens The Virtual Office Door

    On December 9, President Obama signed into law the Telework Enhancement Act, a bill designed to increase telework among federal employees. Sponsored by Representatives John Sarbanes (D-MD), Frank Wolf (R-VA) and Gerry Connolly (D-VA), the legislation gives federal agencies six months to establish a telework policy, determine which employees are eligible to telework, and notify employees of their eligibility. Agency managers and employees are required to enter written telework agreements detailing their work arrangements and to receive telework training. Under the Act, teleworkers and non-teleworkers must be treated equally when it comes to performance appraisals, work requirements, promotions and other management issues. Each agency must designate a Telework Managing Officer, and must incorporate telework into its continuity of operations plan.

    Supporters of the measure, including the National Treasury Employees Union and the Telecommunications Industry Association, rightly tout its potential to improve the productivity of federal employees, reduce the government’s overhead expenses, decrease energy consumption and cut carbon emissions. Indeed, the Telework Research Network estimates that if the eligible federal workers who wanted to telecommute did so once a week, agencies would increase productivity “by over $4.6 billion each year” and save “$850 million in annual real estate, electricity, and related costs.” The country would save nearly six million barrels of foreign oil and reduce greenhouse gas emissions by one million tons per year. The bill would enable agencies to continue functioning during emergencies (federal telecommuters saved the government an estimated $30 million per day when D.C.-area snow storms shut down offices last winter), and it would decrease traffic congestion.

    Increasing the number of federal telecommuters is a good first step towards empowering the nation to tap telework’s many benefits. However, a diverse group of advocates would like to see telework become widely available for all workers. The Obama Administration endorses this goal. Proponents of broad access to telework include champions for small businesses and for energy independence, transportation alternatives, work/life balance, homeowners, environmental protection, disabled Americans, and rural economic development. To maximize telework’s promise — including its potential to open employment opportunities for 17.5 million people — Congress must enact comprehensive legislation offering employers, workers and other stakeholders in both the public and private sectors a wide array of cogent reasons to expand the practice.

    Comprehensive legislation would need to offer either carrots or sticks to constituencies that may resist telework’s growth: organizations with telework-shy managers; commercial landlords worried about telework-induced vacancies; and cities and states afraid that reducing the number of commuters will decrease their revenue. A few key elements:

    Remove Regulatory Barriers
    Perhaps the single greatest regulatory barrier to telework is the threat interstate, part-time telecommuters face of being taxed twice at the state level on the wages they earn at home: once by their home state and then again by their employer’s state. New York has been especially aggressive in taxing nonresidents on the wages they earn at home even though their home states can tax those wages, too. The double tax risk makes telework unaffordable for many Americans.

    Proposed federal legislation called the Telecommuter Tax Fairness Act would eliminate this roadblock to telework, prohibiting states from taxing the income nonresidents earn in their home states. This bill, introduced in the 111th Congress by Representatives Jim Himes (D-CT) and Frank Wolf, enjoys bi-partisan support from lawmakers representing states across the country. It must be included in any package intended to accelerate telework’s adoption.

    Simplify the Home Office Deduction
    The complexity of the current home office deduction discourages home-based workers from taking advantage of it. Potent telework legislation would give both home-based business owners and telecommuting employees the option to take a standard home office deduction.

    Offer Incentives To Employers
    Employers should be allowed to treat as nontaxable income the dollar savings they realize as a result of telework. Alternatively, they should receive a tax credit based either on the cost they incur for equipping employees to telecommute or on the percentage of workers who telecommute. They should receive a payroll tax break when they hire new teleworkers

    Because managerial resistance is a significant obstacle to telework’s growth, and because managers who telecommute themselves may have a more positive view of telework than their office-based colleagues, businesses should receive added incentives to allow managers to telecommute.

    Offer Incentives To Workers
    Workers should be allowed a tax credit based on the amount of time they spend telecommuting or on the cost they incur to purchase equipment and services necessary for telecommuting. They should have the option to treat the value of all equipment and services the employer provides to facilitate telework as a fringe benefit excludable from their taxable income, even when personal use of the tools is also permitted.

    Officer Incentives To Insurers
    Insurers covering losses that telework can minimize should be recruited to promote telework with tax advantages. Because experienced teleworkers enable their companies to continue operating even when emergencies render the main office unusable, business continuity insurers can limit their exposure by increasing the number of their policyholders that maintain strong, well-designed telework programs. They should receive incentives to do so.

    Automobile insurers should also be enlisted. The less frequently people drive, the fewer accidents occur and the less liability car insurers face. To motivate these insurers, Congress should offer them tax advantages based on 1) the proportion of their corporate policyholders that have both significant telework programs and aggressive policies to replace work-related driving with Web-based or telephone conferencing; and 2) the proportion of their individual policyholders who telecommute regularly.

    Offer Incentives To Commercial Property Owners
    Because businesses with dispersed workers need less office space, commercial landlords may wince at decentralization. However, the landlords able to fill their buildings with a greater number of tenants requiring less space – rather than fewer tenants requiring more – can thrive. In addition to operating greener and more cost-efficient sites, these landlords can reduce their risk of loss: Because each tenant represents a smaller proportion of a landlord’s total revenues, a single tenant’s default or decision to relocate is less likely to deal the landlord an insurmountable blow.

    To entice commercial property owners to encourage their tenants to adopt telework, Congress should offer the owners tax incentives based on the proportion of their tenants that have either vigorous telework programs or well-enforced policies requiring employees to replace business travel with remote conferencing.

    Make State and Local Efforts To Promote Telework A Condition Of Federal Transportation Funding
    By reducing the demand for roads and mass transit, telecommuting minimizes the cost of repair, maintenance and expansion of such infrastructure. Before the federal government subsidizes state and local transportation investments, the funding recipients should be compelled to mitigate costs by promoting telework.

    One step that states receiving federal aid should be required to take is to eliminate tax barriers to interstate telework. For example, they should be prohibited from subjecting a nonresident company to business activity taxes when the company’s sole connection to the state is its employment of a few in-state telecommuters. States could also allow car insurers to offer pay-as-you-drive policies.

    States and municipalities could require their agencies to develop telework programs for their own workers and to engage only those contractors that make the maximum possible use of telework. They could require agencies seeking funds to increase their car fleets or facilities to submit an assessment of whether telework could eliminate or reduce the need. They could compel their employees who seek approval for business travel to demonstrate that remote conferencing would not be an adequate substitute. They could authorize agencies to retain the funds the agencies save as a result of telework.

    States could create offices that promote telework and provide technical/legal support for both public and private employers developing telework programs; designate high traffic and pollution days as telework days and publicize them; and conduct public awareness campaigns to encourage telework, including campaigns specifically targeting businesses. Municipalities could eliminate telework-hostile zoning rules.

    All of these proposals would go a long way towards minimizing needless travel. Some would cost the federal government nothing or save it money. Others require a federal investment, but the investment would be made via business and individual tax breaks — welcome incentives for many members of the incoming Congress. Together, these suggestions would create jobs and strengthen the nation’s energy security. They would reduce traffic, carbon emissions and transportation costs; enable workers to meet conflicting job and family responsibilities; help businesses lower expenses, and drive profits. These are fundamentally important goals with bi-partisan support. Congress should act quickly and forcefully to unleash telework’s potential to meet them.

    Photo by By Rae Allen, “My portable home office on the back deck”

    Nicole Belson Goluboff is a lawyer in New York who writes extensively on the legal consequences of telework. She is the author of The Law of Telecommuting (ALI-ABA 2001 with 2004 Supplement), Telecommuting for Lawyers (ABA 1998) and numerous articles on telework. She is also an Advisory Board member of the Telework Coalition.