New Geography

Category: Urban Issues

  • No More Urban Hype

    Just months ago, urban revivalists could see the rosy dawn of a new era for America’s cities. With rising gas prices and soaring foreclosures hitting the long-despised hinterland, urban boosters and their media claque were proclaiming suburbia home to, as the Atlantic put it, “the next slums.” Time magazine, the Financial Times, CNN and, of course, The New York Times all embraced the notion of a new urban epoch.

    Yet in one of those ironies that markets play on hypesters, the mortgage crisis is now puncturing the urbanists’ bubble. The mortgage meltdown that first singed the suburbs and exurbs, after all, was largely financed by Wall Street, the hedge funds, the investment banks, insurers and the rest of the highly city-centric top of the paper food chain.

    So, now we can expect some of the biggest layoffs and drops in income next to be found in the once high-flying urban cores. In New York alone, Wall Street has shed over 25,000 jobs – and the region could shed a total of 165,000 over the next two years.

    Not surprisingly, the property crisis once seen as the problem of the silly, aspiring working class and the McMansion nouveaus has now spread deep into the bailiwick of the urban sophisticates. For the first time in years, many Manhattan apartments are selling for well below purchase price, something unheard of during the boom. In Brooklyn, a 24% drop in sales over the last three months even has boosters talking of an imminent “Brownstone bust.”

    Even San Francisco – arguably the most recession-resistant big city due to its large concentration of nonprofits and “trustifarians” – is seeing prices drop for the first time in years. Far more vulnerable are fledgling neo-urban markets like Los Angeles, Atlanta, Oakland, Calif., San Diego, Memphis, Tenn., Miami and Dallas. Sales are down in most of these markets, as are prices.

    Signs of the times: desperate developers offering goodies to buyers. One downtown Los Angeles property owner has even offered to buy a Mini Cooper for anyone bold enough to buy a loft. Others, in Oakland, Boston and Atlanta, are resorting to auctions to offload their product. Foreclosures have taken place in several other markets, including Charlotte, N.C., and Philadelphia.

    Not surprisingly, many new projects conceived at the height of the bubble are being canceled, and some newly minted condominiums converted into rentals. The rental option makes immediate sense but does not help create the ambiance of luxury so coveted by wannabe cool cities. High-end buyers generally do not covet the idea of having a bunch of college-student renters enjoying a similarly granite-counter-topped unit next door. This is not necessarily good news for expensive restaurants or boutiques either.

    In addition, just if anyone is checking, even at the peak of gas prices, there remains virtually no evidence of any massive movement of the bourgeoisie back into the burghs. One assumes that the now plunging oil prices will not hurt suburban commuters.

    In reality, what we have is a market that is stuck in almost all geographies. Rather than shift people into the urban cores, or vice-versa, the mortgage crisis is simply stopping everyone in their tracks. Even if people wanted to move into the core cities, they could not sell their suburban houses to make the down payments.

    Nor is there ample reason to believe the urban migration will pick up in the near future. Crime has soared in some cities such as Oakland and Chicago. (“Obamastan” has suffered more murders this year than much larger New York and Los Angeles.) Overall, urban crime remains three times that of suburbs; a suddenly rising instance of mayhem threatens many urban recoveries.

    And in the end, it’s really all about the economy. The looming massive layoffs in many key urban markets – notably New York, Chicago and San Francisco – cannot possibly help. Finance has remained one industry that has continued to cluster in core cities, even as most others moved to the suburbs and smaller towns.

    Moreover, it is not just New York. Now, as the butcher’s bill for mortgage mania comes due, Chicago, Boston and San Francisco are all facing large-scale layoffs. The office market in the Windy City, for example, is being decimated by cutbacks at JPMorgan Chase, Merrill Lynch, Lehman Brothers and Wachovia, as well as at the commodity exchanges. So far, the less finance-dependent suburban market appears less impacted.

    A recent visit to Chicago confirmed these trends. The once ballyhooed Trump Tower, once seen as the nation’s tallest luxury condominium, remains incomplete, with a massive crane still perched at its top and troubled by persistent rumors of failing financial support. Another hyped project, Santiago Calatrava’s 2000-foot, 150-story Chicago Spire, is stuck in the ground because the developer has stopped paying his “starchitect’s” bill. All this is not too surprising, given a reported 73% drop in downtown home sales for the first half of the year.

    For a decade or more, city leaders have kept thinking that something from outside – demographic changes, high fuel prices or changing consumer tastes – would create a revival for them. This allowed them to avoid doing hard, nasty things like cutting often-outrageous public employee pensions, streamlining regulations, cutting taxes levied on businesses or improving often-dismal schools and basic infrastructure.

    Maybe the current downturn can be a wake-up call for city boosters. Overall, since 2000, the average job growth in cities has averaged less than one-sixth that of suburbs, according to research by my colleagues at the Praxis Strategy Group. This has been particularly notable in higher-paying blue collar positions in manufacturing and warehousing, but increasingly applies also to higher-end business services.

    Cities should start realizing that their biggest problem is not a shortage of cultural venues and performance artists but a chronic lack of decent, middle class jobs. And to be sure, older cities do possess critical advantages such as already existing, if often tattered, transportation systems and the best strategic locations. Their old industrial districts possess an existing infrastructure and, in some cases, a residual pool of skilled labor and some decent job-training facilities. If properly prodded, local universities could also become part of the solution by seeding new entrepreneurial ventures.

    But such a return to basics may be nullified by the prospect of an urban Democrat coming into the White House and a Congress dominated by the likes of Speaker Nancy Pelosi, Charles Rangel and Barney Frank. This will revive hope that largely suburban middle-class taxpayers will now bail out bloated city budgets and often-absurd projects (convention centers, stadia and associated nonsense).

    City leaders and land speculators may also play the Al Gore card of combating “global warming” to block new roads, single-family housing estates and even the transfer of jobs to the supposedly energy-inefficient suburbs. However, over time, the suburban-exurban majority is unlikely to support this approach. To experience a real renaissance, cities need to learn how to make themselves more congenial again to those – industry, entrepreneurs and the middle class – who have found themselves forced to head to the fringes for almost a half century.

    This article originally appeared at Forbes.

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

  • New Urbanism’s Economic Achilles Heel

    By Richard Reep

    Whether one believes that form follows function or that function can follow form, a town or a city needs three key elements to be healthy. Firstly, a sense of place that includes the sacred is important to people to provide a basis for spiritual involvement. The city must then be able to reliably deliver safety and security to its inhabitants in order to grow and mature. And lastly, a city must provide the means of employment for its inhabitants.

    New Urbanism, in its quest to dictate the physical form of an urban development, has ignored the last key element. An examination of New Urbanism in developments in Central Florida shows a glaring lack of employment, raising questions about their sustainability and long-term viability.

    As we enter the second decade of Celebration, it is useful to look at this city and its influence on the surrounding region. Opened in 1996, Celebration incorporated much of the design philosophy that was formulated around the idea that a city should have a certain “look.” This design philosophy was promulgated to the general public in Suburban Nation, a book that lashed out at the current suburban form and proposed a new form based on a nostalgic notion about a golden age of American town-making, generally in the first decades of the last century.

    By regulating the specific architectural form of a new development, the New Urbanists proposed to improve the blandness, placelessness, and lack of character that is the lot of most contemporary suburbs. Celebration, sponsored by Disney, opened to white-hot press acclaim nationwide. Phase 2 was opened ahead of schedule due to demand for new homes. Market values of homes rose quickly beyond the norm for Central Florida. Developers took notice.

    Soon, other spawn of Celebration began to show up in Central Florida, and today we have several New Urbanist communities that aspire to the same level of success. Baldwin Park, funded by Chicago’s Pritzker family, is a smaller scale version of Celebration located in the City of Orlando and convenient to downtown. Avalon Park, in the southeast corner of Orange County, is accessed from the perimeter highway that is turning Orlando into a mini-Atlanta. Horizon West, the youngest of these, is due west of Downtown Orlando, and offers another New Urbanist antidote to subdivisions, adhering to the same formula of “live, work, and play.” All of these, including Celebration, are coping with the housing crisis, foreclosure crisis, and various other current market conditions just like the rest of us.

    Sadly the “live, work, and play” slogan, which comes from New Urbanist literature, does not bear out in reality. The notion is fine enough: that people can reduce commutes by living and working in the same community. During the supposedly halcyon days of pre-auto, early 20th century America, this was the reality for many Americans. One’s life could occur within a small, walkable radius, reinforcing itself and reinforcing the social bonds of a community.

    But the early 21st Century is very different than the early 20th and New Urbanist attempts to travel backwards in time have met with limited success. To work near where you live, there needs to be employment down the street. None of these communities have employment opportunities – jobs – down the street from the residences. The dwellers of all these communities get in their cars and drive to their jobs off-campus. New Urbanism thus becomes an after-6pm-and-weekend lifestyle choice, not a new way of life.

    In Celebration, many of the early residents were Disney executives; only 4 or 5 years after opening did Disney develop office space in Celebration for some of their offices. Baldwin Park, approximately 2 miles from Downtown Orlando, never pretended to capture the employment aspect, instead selling itself (to many Celebration residents who rushed to this newer, hipper version of their town) as a downtown commute. And neither Avalon Park nor Horizon West have employment opportunities within their town centers. What they do have is easy access to the area’s ring road – ensuring vehicular congestion outside of their New Urbanist communities.

    What is in their Town Centers? Ironically, you find only a small shopping district and the ubiquitous Publix, Florida’s home-grown grocery store chain. The formula of “live-work-play” must stick in the craw of those who are employed in these stores, because the Publix employees, Starbucks baristas, dry cleaner cashiers, and others who do work in these Town Centers can not possibly afford the New Urbanist real estate. Rather than a social continuum (as was more common in the idealized version of America), there is a new social schism, with the New Urbanist underclass forced to commute to the New Urbanist communities from more affordable but less trendy housing nearby.

    In contrast, the region’s native communities have been thriving throughout the same growth period. Communities like College Park, adjacent to Orlando’s downtown, offer something that New Urbanist communities do not: diverse housing, from garage apartments and rental communities up to stately mansions, all within walking distance of each other. They offer an idiosyncratic mix of sacred places, playgrounds, schools, and shops in what the Philadelphia architect and theorist Robert Venturi calls “messy vitality.” No overarching body dictated the form, developed transects, or rigidly controlled the distance between the front porch to the street to achieve these vibrant, socially cohesive, and proud neighborhoods.

    New Urbanists claim to reduce the need for cars, but Orlando’s New Urbanist communities make the car more necessary than ever. Built on the periphery of the metropolitan area, they require a vehicle to complete the circle of functions necessary for a healthy society. Orange County planners have been submissive to the New Urbanists – especially after Celebration – but increasingly recognize that they do not solve the problems they claim to solve and instead invent more: higher traffic, less affordable housing near city centers, and lumpy development sprawl.

    The lesson for Orlando is to refrain from being seduced by the beauty contest that New Urbanists proclaim, and instead integrate all the key deeper social values such as safety, security, sacred places, and employment together. This is basic stuff recognized by greater minds – think of George Mitchell at the Woodlands or Victor Gruen in Valencia – who understand that employment constitutes a critical component to building a successful new community. Until New Urbanists learn this basic economic lesson, their contribution to our communities will remain sharply limited.

    Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

  • Root Causes of the Financial Crisis: A Primer

    It is not yet clear whether we stand at the start of a long fiscal crisis or one that will pass relatively quickly, like most other post-World War II recessions. The full extent will only become obvious in the years to come. But if we want to avoid future deep financial meltdowns of this or even greater magnitude, we must address the root causes.

    In my estimation two critical and related factors created the current crisis. First, profligate lending which allowed many people to buy overpriced properties that they could not, in reality, afford. Second, the existence of excessive land use regulation which helped drive prices up in many of the most impacted markets.

    Profligate lending all by itself would not likely have produced the financial crisis. It took a toxic connection with excessive land-use regulation. In some metropolitan markets, land use restrictions, such as urban growth boundaries, building moratoria and large areas made off-limits to development propelled house prices to unprecedented levels, leading to severely higher mortgage exposures. On the other hand, where land regulation was not so severe, in the traditionally regulated markets, such as in Texas, Georgia and much of the US Midwest and South there were only modest increases in relative house prices. If the increase in mortgage exposures around the country had been on the order of those sustained in traditionally regulated markets, the financial losses would have been far less. Here is a primer on the process:

    1. The International Financial Crisis Started with Losses in the US Housing Market: There is general agreement that the US housing bubble was the proximate cause for the most severe financial crisis (in the US) since the Great Depression. This crisis has spread to other parts of the world, if for no other reason than the huge size of the American economy.
    2. Root Cause #1 (Macro-Economic): Profligate Lending Led to Losses: Profligate lending, a macro-economic factor, occurred throughout all markets in the United States. The greater availability of mortgage funding predictably led to greater demand for housing, as people who could not have previously qualified for credit received loans (“subprime” borrowers) and others qualified for loans far larger than they could have secured in the past (“prime” borrowers). When over-stretched, subprime and prime borrowers were unable to make their mortgage payments, the delinquency and foreclosure rates could not be absorbed by the lenders (and those which held or bought the “toxic” paper). This undermined the mortgage market, leading to the failures of firms like Bear Stearns and Lehman Brothers and the virtual failures of Fannie Mae and Freddie Mac. In this era of interconnected markets, this unprecedented reversal reverberated around the world.
    3. Root Cause #2 (Micro-Economic): Excessive Land Use Regulation Exacerbated Losses: Profligate lending increased the demand for housing. This demand, however, produced far different results in different metropolitan areas, depending in large part upon the micro-economic factor of land use regulation. In some metropolitan markets, land use restrictions propelled prices and led to severely higher mortgage exposures. On the other hand, where land regulation was not so severe, in the traditionally regulated markets, there were only modest increases in relative house prices. If the increase in mortgage exposures around the country had been on the order of those sustained in traditionally regulated markets, the financial losses would have been far less. This “two-Americas” nature of the housing bubble was noted by Nobel Laureate Paul Krugman more than three years ago. Krugman noted that the US housing bubble was concentrated in areas with stronger land use regulation. Indeed, the housing bubble is by no means pervasive. Krugman and others have identified the single identifiable difference. The bubble – the largest relative housing price increases – occurred in metropolitan markets that have strong restrictions on land use (called “smart growth,” “urban consolidation,” or “compact city” policy). Metropolitan markets that have the more liberal and traditional land use regulation experienced little relative increase in housing prices. Unlike the more strongly regulated markets, the traditionally regulated markets permitted a normal supply response to the higher market demand created by the profligate lending. This disparate price performance is evidence of a well established principle of economics in operation – that shortages and rationing lead to higher prices.

      Among the 50 metropolitan areas with more than 1,000,000 population, 25 have significant land use restrictions and 25 are more liberally regulated. The markets with liberal land use regulation were generally able to absorb from the excess of profligate lending at historic price norms (Median Multiple, or median house price divided by median household income, of 3.0 or less), while those with restrictive land use regulation were not.

      Moreover, the demand was greater in the more liberal markets, not the restrictive markets. Since 2000, population growth has been at least four times as high in the traditional metropolitan markets as in the more regulated markets. The ultimate examples are liberally regulated Atlanta, Dallas-Fort Worth and Houston, the fastest growing metropolitan areas in the developed world with more than 5,000,000 population, where prices have remained within historic norms. Indeed, the more restrictive markets have seen a huge outflow of residents to the markets with traditional land use regulation (see: http://www.demographia.com/db-haffmigra.pdf).

    4. Toxic Mortgages are Concentrated Where there is Excessive Land Use Regulation: The overwhelming share of the excess increase in US house prices and mortgage exposures relative to incomes has occurred in the restrictive land use markets. Our analysis of Federal Reserve and US Bureau of the Census data shows that these over-regulated markets accounted for upwards of 80% of “overhang” of an estimated $5.3 billion in overinflated mortgages.
    5. Without Smart Growth, World Financial Losses Would Have Been Far Less: If supply markets had not been constrained by excessive land use regulation, the financial crisis would have been far less severe. Instead of a more than $5 Trillion housing bubble, a more likely scenario would have been at most a $0.5 Trillion housing bubble. Mortgage losses would have been at least that much less, something now defunct investors and the market probably could have handled.

      While the current financial crisis would not have occurred without the profligate lending that became pervasive in the United States, land use rationing policies of smart growth clearly intensified the problem and turned what may have been a relatively minor downturn into a global financial meltdown.

    Never Again: All of the analyst talk about whether we are “slipping into a recession” misses the point. For those whose retirement accounts have been wiped out, or stock in financial companies has been made worthless, those who have lost their jobs and homes, this might as well be another Great Depression. These people now have little prospect of restoring their former standard of living. Then there is the much larger number of people whose lives are more indirectly impacted – the many households and people toward the lower end of the economic ladder who have far less hope of achieving upward mobility.

    All of this leads to the bottom line. It is crucial that smart growth’s toxic land rationing policies be dismantled as quickly as possible. Otherwise, there could be further smart growth economic crises ahead, or, perhaps even worse, a further freezing of economic opportunity for future generations.

    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”

  • The Opportunity City weathers all storms

    In the dark early-morning hours of September 13th, Hurricane Ike scored a direct hit on the Houston region with 110mph winds, a 13ft storm surge, and a gigantic eye 80 miles across. While Texas gets its fair share of Gulf hurricanes, this was the first direct hit on Houston since Alicia in 1983, 25 years ago.

    Before the strike, nearly a million people along the coastal areas were ordered to evacuate (out of six million in the metro). The evacuation went far smoother than the infamous Rita evacuation three years earlier, which gridlocked roads, left thousands of vehicles stranded without fuel, and ultimately directly or indirectly killed about 100 people. This time, only coastal areas at risk from storm surge were evacuated, while the vast bulk of the urban area more than 50 miles inland was encouraged to “shelter in place.” It made all the difference. Those who stayed were able to evaluate and react to any damage overnight, then choose to stay or leave as they awaited power to return, comfortably knowing the state of their home. Those who left before the storm were, of course, restless to know their home’s condition, but faced challenges returning due to a regional gas shortage as well as the outage of most traffic signals.

    Coastal areas around Galveston, Bolivar, and Clear Lake suffered substantial surge damage, flooding buildings and tossing boats up on land, but the primary problems in Houston revolved around down trees and the power outages they caused. Nearly 2 million homes were without power in the storm’s aftermath, and most stayed without power for one to two weeks, even with thousands of repair crews coming in from all over the country. It’s hard to really understand how fundamental electricity is to modern living until you go a while without air conditioning, cooking, hot water, refrigeration, lights, TV, or the internet (followed by horrendous rush hours without traffic signals the following week as people returned to work).

    Houston was greatly blessed to get our first cool front of autumn just two days after the storm – several weeks earlier than usual – bringing relief to millions without air conditioning across the region. The trauma of that experience has sparked a regional debate on the merits of burying our power lines, which increases reliability and has better aesthetics, but can cost an order of magnitude more while being harder to diagnose for repair and susceptible to flooding, a common problem in tropical Houston.

    The mayor’s repeated theme both before and after the storm was “Neighbors helping neighbors,” and Houston rose to the challenge. Immediately after the storm passed, people checked on each other and assisted with debris cleanup, piling it in neat mounds in front of each house (estimates are the city is hauling off enough tree debris to fill four Astrodomes – the mayor is even holding a contest for creative uses for the debris). Many people fired up BBQ grills and cooked meat from thawing freezers, feeding all comers. People lacking lights and TV instead chatted in their yards with their neighbors and looked up at a star-filled sky made brilliant by the lack of city lights. Many mentioned that camaraderie as one of the silver linings from the storm. Despite looting fears, crime actually dropped dramatically after the storm (helped by a temporary night curfew). Even the venerable New York Times ran a story on Houston’s strong spirit after the storm. Here’s just one example of a touching story I heard about one of the many local churches that stepped up to help:

    …one church’s senior pastor who received a phone call from someone he didn’t know living back east. The caller said they could not find their elderly parents and were desperate to find out if they were ok. So this pastor got in his car late that night, with a load of food, water and ice and drove across town to find the parents. He drove up to the house and knocked on the door. They were fine, but without electricity or phone, so he called their kids on his cell phone and said, “Here, someone wants to talk to you.” After the call the parents said they didn’t need anything but across the street there was someone who really looked like he did. So the pastor gave all of his food, water and ice to the neighbor. The next day he came back with more food and water only to find that the neighbor had distributed what he received the night before to his neighbors. The church volunteers returned each day until the electricity came back.

    Area leaders also stepped up, with The Economist saying, “Credit should go to city officials like Mr. White (city mayor) and Mr. Emmett (county leader), who exuded competence and calm.” Harris County Commissioner Ed Emmett received widespread plaudits for pulling an all-nighter to untangle complex recovery logistics directing hundreds of supply trucks. Mayor White admitted to using “harsh language inappropriate for Sunday school” to cut through bureaucracy and get emergency supplies moving, raising his already-high local approval ratings.

    City and county leaders can also be credited with some good “lessons learned” from previous disasters. In addition to better evacuations since Rita, aggressive drainage infrastructure investments since Tropical Storm Allison’s massive floods in 2001 resulted in greatly reduced street flooding across the city even with 10 to 20 inches of rain over two mornings. During Alicia in 1983, blown gravel from downtown skyscraper roofs blew out thousands of windows. Since then, gravel roofs have been banned, and less than half of one-percent of downtown’s windows blew out during Ike.

    Today, in the city (not the coast), the main remaining signs of Ike are shredded commercial signs and plywood replacements for some office tower windows. Damage estimates are about $8.5 billion for the four million people of Harris County, substantially more than either Alicia or Allison, but manageable vs. the $125 billion value of residential structures in the county. The total for Texas may exceed $50 billion. Surprisingly, energy infrastructure held up very well, with minimal damage to refineries and offshore oil rigs. The combined downtime from Gustav and Ike created fuel shortages in the southeastern U.S. fed by pipelines from Houston, but they were alleviated relatively quickly as capacity came back on line.

    As Houston recovers from Ike, it continues to face three additional “storms,” with the housing and credit crunch as well as oil prices dropping from $140 to less than $70 per barrel. Despite these strong storms – in many ways stronger than Ike – Houston continues to hold up well. Conservative oil companies still require new projects to break even at prices substantially below $70, so they are still growing and hiring. Houston’s port, space, and health care industries (the Texas Medical Center is the world’s largest medical complex) are also somewhat insulated from the nation’s economic woes. In part because Houston lacks the restrictive controls on home building found in many cities, the city never really had a housing bubble. Overall homes continue to appreciate modestly as opposed to sharp drops in much of the rest of the country.

    Of course, we are still part of the Union and the world economy, so we’re slowing down too. But Houston and Texas continue to outpace the national economy; Texas is unlikely to join the lengthening line asking for a federal bailout. Every day I see a steady stream of out-of-state license plates as people overcome any fear of hurricanes (are they really any worse than earthquakes in the West or blizzards in the North?) and continue to migrate to our resilient Opportunity City.

    Tory Gattis is a Social Systems Architect, consultant and entrepreneur with a genuine love of his hometown Houston and its people. He covers a wide range of Houston topics at Houston Strategies – including transportation, transit, quality-of-life, city identity, and development and land-use regulations – and have published numerous Houston Chronicle op-eds on these topics.

  • Regulating People or Regulating Greenhouse Gases?

    It seems very likely that a national greenhouse gas (GHG) emission reduction standard will be established by legislation in the next year. Interest groups are lining up with various proposals, some fairly benign and others potentially devastating.

    One of the most frequently mentioned strategies – mandatory vehicle miles reductions – is also among the most destructive. It is predictably supported by the same interests that have pushed the anti-automobile (and anti-suburban) agenda for years, often under the moniker of “smart growth.”

    Regrettably, these interests have never understood the economic importance of rapid travel – mobility – throughout the nation’s urban areas. Indeed, one of the factors that makes American metropolitan areas so competitive is that, judging by work trips, travel times are the best in the world for their population. The secret to that success is the ubiquitous mobility of the automobile, which allows people to travel from virtually any point to any other in an urban area in a relatively short period of time. It also helps that automobile travel has become so inexpensive that it is available to more than 90 percent of the nation’s households. Restrictions on driving would change that.

    At this point, it is unclear exactly how any attempt to restrict driving might be implemented. It is clear, however, that the consequences will weigh most heavily on the nation’s lower-income, disproportionately-minority households. Any price mechanism would put limits first on the low income households who cannot afford the higher prices. At the same time, attempts to reduce the demand for automobile use by forcing more new development into existing urban footprints (urban areas) would make traffic congestion more severe, increase travel times and intensify air pollution. This approach would fall more harshly on low income households simply because housing prices (and rents) would rise disproportionately in urban areas as the option of opening new suburban developments on inexpensive land is removed or severely restricted.

    Mobility is crucial to the economic viability of urban areas and to their citizens, rich and poor. It does no good to claim that alternative transit services will be provided, because they generally cannot compete. According to data from the 2007 American Community Survey, the average transit work trip takes twice as long as the average single-occupant automobile work trip. This means that the average commuter would spend at least an additional eight hours traveling to and from work in a week.

    For low income households, this could mean the difference between employment and unemployment. How will a low-income single parent, for example, drop children off at day care centers and continue to work by transit? It might be considered a fortunate case if this could be accomplished in triple the time of the automobile commute.

    These dynamics were further demonstrated when University of California Berkeley researchers concluded that African-American unemployment could be substantially reduced if cars were available to non-car households. Brookings researchers put it more directly: “Given the strong connection between cars and employment outcomes, auto ownership programs may be one of the more promising options.” Or, as a Progressive Policy Institute report suggested, “In most cases, the shortest distance between a poor person and a job is along a line driven in a car.”

    There is good reason to believe that technological solutions will make it possible for us – including low income households – to continue to live our lives as we do now while substantially reducing GHG emissions. People are already driving less and shifting to more fuel-efficient cars. Volkswagen plans to market 1,000 prototype 235 mile per gallon cars in 2010. They are only two-seaters but could be used for a large share of travel. If, in 2030, one-quarter of US car travel was by such cars, the average fuel economy would be about 75 miles per gallon and concern about cars as a source of GHG emissions would be a thing of the past. And this does not even consider the alternative fuel advances – electric cars, natural gas, hydrogen – that are on the horizon.

    There is a broader problem with the idea of restricting driving. This strategy is less about the environment and more about regulating people’s behavior. It is not people that require regulation, it is GHG emissions. There is a subtle but important difference.

    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.”

  • The biggest issue remains undecided

    Unless something completely unexpected occurs, the presidential election has been settled, with Barack Obama the clear winner. Yet, except for the Republican Party’s demise, the most important issue of this era — the future of the middle class — remains largely unaddressed.

    Indeed, even as social polarization has diminished — a change that is reflected in Obama’s electoral success — economic polarization has intensified. Globalization and the securitization of almost everything have created arguably the greatest concentration of wealth since before the Great Depression.

    During much of the 20th century, the middle class was on a roll, with strong income gains and increasing rates of homeownership. But in the past few decades, while returns to capital and to certain elite occupations grew rapidly, wages for lower-income and middle-class workers have stagnated.

    To date, neither Obama nor John McCain has articulated a clear message of how to restore the path to upward mobility. Recent proposals from both candidates have been distinctly ad hoc and have had a short-term orientation — not surprising, given the severity of the crisis and the brief period left before the election.

    Yet over time, how the next president, presumably Obama, addresses the problems of middle-class Americans will determine the future of American politics. The party that captures the loyalty of that class — as Republicans did in the early 20th century; Democrats, from the 1930s to the 1960s; and Republicans, again after that — will dominate the nation’s politics in the coming decade.

    The political future may lie with a party that embraces a growth-oriented economic strategy that focuses on the creation of higher-income productive jobs for both younger and older workers. But it’s far from clear that the Democrats under Obama are ready to play that role.

    Clearly, these are not the Democrats of Franklin D. Roosevelt’s New Deal, Harry Truman’s Fair Deal or even Lyndon Johnson’s Great Society. Working- and middle-class Americans, including small farmers, low-level proprietors and ethnic businessmen, constituted the primary base for those Democrats. Although some leading Democrats, notably Roosevelt himself, came from the aristocracy, the upper classes and most of the corporate hierarchy remained fiercely Republican.

    But now the old class lines have changed. The once-impregnable visual barriers of the past — which separated the ultrarich from the rest of us — have largely dissolved. As Irving Kristol once noted, “Who doesn’t wear blue jeans these days?” Today, you can walk into a film studio, software corporation or high-tech firm and have trouble distinguishing the upper tiers from at least the middle ranks.

    Many of these moguls today tend to be socially and environmentally liberal and strong supporters of the Democratic Party. Yet despite their attire and attendance at U2 concerts, their economic concerns will remain radically different from the rest of society. Having secured their support, a President Obama may be forced to take great pains to secure the fortunes of the likes of George Soros, Robert Rubin, the Google decabillionaires and other big party funders.

    We may have witnessed the birth of this new class in the bizarre alliance of Nancy Pelosi, Harry Reid and Barney Frank with Wall Street’s viceroy, Treasury Secretary Henry Paulson. Once fully in power, these Democrats likely will begin by propping up the financial elites — much as Bush has done — but will also have to make a “grand bargain” to satisfy key party constituencies outside of the financial elite.

    There are already hints of this in Obama’s recent statements. His program to send cash to the poor through tax credits and other largesse can be seen as a political payout to his large, heavily minority, urban constituency. Massive bailouts for failing city, state and county governments — another part of the senator’s program — would also bolster public employee unions and their pension funds, both of which have emerged as key Democratic backers. New handouts for the U.S.-based auto industry, as Obama has recently suggested, would, not coincidentally, help one of the last large, unionized private sectors.

    Sadly, none of this will do more to create upward mobility, particularly for the next generation. The working poor may get a few hundred desperately needed dollars to spend, but this is no substitute for a policy that would stimulate production of jobs. Unions and their pension funds would get an extended holiday from addressing their often outrageously generous retirement and medical benefits, but that comes at the expense of the larger, private work force. The financial elites could secure government support for stabilized markets but would have little incentive to invest in domestic production industries and middle-class employment.

    Finally, Obama’s base of highly educated, socially liberal, professional Democrats — largely insulated in universities and nonprofits from economic distress — would be rewarded with the political validation of their worldviews on everything from gay marriage and diversity to environmentalism. More federal support for education, another likely Obama initiative, could also allow them to keep comfortably feathering their nests.

    Over time, however, such an approach could threaten the unity of the Democratic Party. This prospect emerged in the first House vote on the initial Wall Street bailout package. In addition to economic fundamentalist Republicans, many suburban, exurban and rural Democrats also found the plan objectionable. Hostility was particularly marked in the Great Plains, Appalachia, South Texas and other areas strongly oriented toward energy production, manufacturing and logistics.

    This growing wing of populist Democrats, often more socially conservative than their coastal and urban counterparts, tend to favor steering capital toward sectors such as domestic energy production, agriculture, manufactured goods and domestically sourced specialized services. All these, they believe, could drive up incomes and salaries for a wide spectrum of Americans far better than boosting transfer payments or shoring up investment banks.

    This political approach does not appeal to the urban liberals now dominant in both the Democratic Congress and the Obama camp. These represent places, such as New York, San Francisco and Chicago, that are increasingly more dependent on speculative real estate and financial assets than producing goods. Their primary interest in the next few years will be to find out how to create yet another bubble, perhaps tied to designated “green” industries, which could send local land values and stocks soaring again to unsustainable heights.

    All this, however, leaves the Democrats and Obama in a quandary. They could favor programs to expand industry, energy production and basic infrastructure, but they would risk of a wrathful Gore and his allies. It will take all Obama’s considerable political skill to balance his commitments to the greens, the hedge fund industry and venture capitalists with creating a program that will increase the incomes and prospects for middle-class Americans.

    Republicans could take advantage of this schism — if they have the intelligence and foresight to do so. The GOP could embrace the old Hamiltonian policy of internal improvements and incentives for the country’s industrial, energy and logistics companies that still employ millions of working- and middle-class Americans.

    After all, the legacy of corporate socialism bequeathed by President Bush makes it almost impossible for Republicans to sell themselves as economic libertarians. They will need to offer something to the middle class besides the well-worn politics of social resentment and military belligerence.

    But such a GOP rebirth likely lies in the future, if ever. In the next few years, the Democrats will have to address the nation’s growing class chasm on their own. How they do this may well determine not only the future success of the Obama presidency, but the survival of the American aspirational model, as well.

    This article originally appeared at Politico.

    Joel Kotkin is a presidential fellow at Chapman University and executive editor of www.newgeography.com. He is finishing a book on the American future.

  • The middle class is key to any city’s future

    What are your favorite cities in the US and abroad? Chances are you like cities for their vibrancy, diversity, people, foods, smells, sights, sounds, and opportunities for work, learning, play and life.

    These cities can only exist with vibrant middle classes to do the work, pay the taxes, and sustain life (including birthing the kids that are the city’s future).

    I have had the opportunity to live, work in and visit cities around the world. I have noticed that cities dependent on one industry or activity (such as resort tourism, for example), are not interesting, exciting, vibrant, dynamic, or sustainable. They are missing a middle
    class. There is nothing more depressing and dispiriting than to visit a resort where you are surrounded by the wealthy attendees and minimum-wage attendants. It is laughable when such wealthy patrons then try to ameliorate the situation with low-cost housing and other half-baked solutions. Raising wages for the largely itinerant labor force does not work. You need a middle class.

    Some of our “normal” and “regular” cities are heading down this path. They are losing their middle classes.

    The Decline of Middle-Class Neighborhoods

    Several studies document the trend. According to a Brookings Institution study released last year, as a share of all urban and suburban neighborhoods, middle-income neighborhoods in the nation’s 100 largest metro areas have declined from 58% in 1970 to 41% in 2000. In their place, poor and rich neighborhoods are both on the rise, as cities and suburbs have become increasingly segregated by income.
    Middle-income neighborhoods – where families earn 80 to 120 percent of the local median income – have plunged by more than 20 percent as a share of all neighborhoods in Baltimore, Chicago, Los Angeles and Philadelphia. They are down 10 percent in the Washington area. Only 23 percent of central city neighborhoods in 12 large metropolitan areas were middle income in 2000, down from 45 percent in 1970, according to Brookings.

    In Los Angeles – the most hollowed-out metropolitan area in the country over the past three decades – the share of poor neighborhoods is up 10 percent, rich neighborhoods are up 14 percent and middle-income areas are down by 24 percent.

    There are non-economic consequences for cities that lose a lot of middle-income residents. The disappearance of middle-income neighborhoods can limit opportunities for upward mobility, the authors of the Brookings study say. It becomes harder for lower-income homeowners to move up the property ladder, buy into safer neighborhoods, send their children to better schools and even make the kinds of personal contacts that can be a route to better jobs.

    The Exit of the Middle-Class

    In New York, according to “New York’s Delicate Migration Balance,” a report released by the city’s controller last year, 300,000 residents a year are moving out of the city to other parts of the US, twice the number who relocate to NYC from elsewhere in the country – and that was before this year’s financial meltdown.

    Middle-class families – notably households with annual incomes between $40,000 and $60,000 along with households earning more than $140,000 – make up a disproportionate segment of the army heading for the exits. “Those who leave appear to be younger, better educated and slightly more affluent,” the report says. More than 40% of the adults making up the exodus have at least a bachelor’s degree; 20% have a master’s degree or higher.

    That is devastating news, writes Errol Louis (“Call an ambulance – our middle class is bleeding,” New York Daily News, 9/16/07): “It means the backbone of the city is weakening as hundreds of thousands of teachers, cops, firefighters, bus drivers, security guards, transit workers, barbers and administrators – a big slice of the people who make the city go – give up on New York every year.”

    The report also suggests that a lot of what people think they know about the supposed link between gentrification, housing prices and neighborhood change is wrong: “contrary to the tone of public discussion, New York City is not experiencing an influx of educated, affluent, working age residents.” Louis concludes:

    “Communities, and the city as a whole, thrive when we have many different income groups living side-by-side – civil servants near retirees, welfare moms next door to teachers and carpenters.
    “All are equally valuable, and all need to stay in New York. Inner-city areas especially need a critical mass of adults who can put in the enormous amount of casual time and volunteer effort it takes to raise a neighborhood’s children. The kids need to see – and learn from – all kinds of working people in the streets, parks and libraries. Schools that don’t get time, attention and pressure from middle-class parents are more likely to fail.”

    A Natural or Man-Made Trend?

    In a way this trend is natural, a tale of upward mobility: those who can move to a better neighborhood do. But why do middle-income neighborhoods “tip” towards rich or poor? Why this “big sort?”
    Public policy analysts scratch their heads. Some blame the loss of middle-income neighborhoods on the loss of the middle class itself, but that can’t be it: incomes for all types and in all income quintiles of households have gone up (except for single-female-headed households with kids), although they have gone up faster for higher income households. But there are natural reasons for that too: higher income households have more income earners, with higher skills, working more hours.

    Others blame the bifurcation of housing costs, that is, the lack of affordable middle-class housing. According to a New York University study, the likeliest households to exit in New York were those earning between $40,000 and $60,000 (the solidly middle-class in a city where the median household income is $40,000). Though these made up only 17 percent of non-elderly households in 2005, they accounted for 22 percent of those households that left.

    Any middle-class – or even upper-middle-class – flight is understandable given the chunks of income that New Yorkers pay on housing.

    Of the 110,663 Manhattan homes with a mortgage, nearly one fourth spend at least 35 percent of the household’s monthly income on housing costs, according to Census estimates. Of the 562,469 occupied rental apartments in Manhattan, over 34 percent spend at least 35 percent of the household’s monthly income on rent. Another 8.4 percent spend 30 to 34.9 percent.

    Of the 182,226 Brooklyn homes with a mortgage, over 46 percent spend at least 35 percent of the household’s monthly income on housing costs. Of the estimated 590,843 rental apartments in Brooklyn, nearly 42 percent pay at least 35 percent of the household’s monthly income on rent.

    Others blame sprawl, complaining that exurbs are bleeding cities of the middle class. But it is hard to argue that people’s freedom of choice about where to live is the problem, and that they should be forced to live in expensive, deteriorating cities.
    It’s middle-income jobs, stupid

    In a recent article in City Journal (Summer 2008), “Houston, New York Has a Problem,” Edward Glaeser compares Houston to New York and comes to the conclusion that Houston is preferable because it welcomes the middle class, while a heavily regulated and expensive New York drives it away. It is a devastating comparison:

    “Houston’s great advantage, it turns out, is its ability to provide affordable living for middle-income Americans, something that is increasingly hard to achieve in the Big Apple. That Houston is a middle-class city is mirrored in the nature of its economy. Both greater Houston and Manhattan have about 2 million employees.

    “In Manhattan, almost 600,000 of them work in the idea-intensive sectors of finance, insurance, and professional services; only 2% are in manufacturing, and fewer than that in construction. Finance increasingly drives New York City’s economy as a whole. By contrast, Houston is a manufacturing powerhouse that makes machinery, food products, and electronics, with a retail sector twice the size of Manhattan’s and lots of middle-class jobs.”

    New York used to be a place where a lot of middle-income jobs were created. That’s not happening anymore: from 1975 to 2005, New York City shrank as a regional job hub relative to 12 surrounding counties in Long Island, southern New York and northern New Jersey, according to the Center for an Urban Future.

    Back in 1975, New York City accounted for 53.1 percent of the 5,022,801 jobs in the New York region. By 1980, the city’s share of regional jobs had diminished to 50.5 percent. In 2005 – the last year the figures were tallied – the 12 surrounding counties accounted for 52.8 percent of the 6,171,642 jobs in the New York region.

    No middle-income jobs, no middle class.

    What the Middle Class Needs

    The real obstacle to a thriving middle class in New York is too much government involvement in people’s lives, writes Nicole Gelinas in The New York Sun.

    In housing, for example, constricting the supply of apartments through regulation makes rents, on average, more expensive, not less. As for schools, Medicaid, and other government programs, all of the $58 billion New York spends annually must come from somewhere, and it comes from high taxes. As the city’s independent budget office has noted, state and local taxes within the five boroughs are the highest in the nation, nearly 50% higher than in the average city. Due in large part to these high taxes, big corporations and small businesses alike have a hard time locating middle-class jobs here.

    Living cities must be growing cities that go through constant cycles of renewal of people, economies, and industries. Creative destruction is a necessary city dynamic. This means private-sector job creation. That requires healthy business growth, which adds to the tax base, not public sector job growth, which drains funds from the system.
    There is in fact a “Virtuous Circle” of metropolitan wealth creation: it starts with business growth, leading to job growth, leading to tax revenue growth, making more government services and infrastructure possible, enhancing quality of life for all inhabitants. We all draw from and contribute to this economic food chain. Without it, cities cannot have real life.

    The key to maintaining and growing a middle class is not the government provision of services, benefits and subsidies. It is government provision of the few things government is supposed to provide: protection of persons and property and a social and legal environment which promotes the pursuit of happiness and the general welfare – most fundamentally and importantly, the freedom to start and operate a business without onerous taxation and regulation.

    Dr. Roger Selbert is a business futurist and trend guy. He publishes Growth Strategies, a newsletter on economic, social and demographic trends, and is a professional public speaker [www.rogerselbert.com]. Roger is US economic analyst for the Institute for Business Cycle Analysis in Copenhagen, and North American representative for its US Consumer Demand Index.

  • Turns Out There’s Good News on Main St.

    As the financial crisis takes down Wall Street, the regular folks on Main Street are biting their nails, watching the toxic tsunami head their way. But for all our nightmares of drowning in a sea of bad mortgages, foreclosed homes and shrunken retirement plans, the truth is that the effects of this meltdown won’t be all bad in the long run. In one regard, it could offer our society a net positive: Forced into belt-tightening, Americans are likely to strengthen our family and community ties and to center our lives more closely on the places where we live.

    This trend toward what I call “the new localism” has been underway for some years, driven by changing demographics, new technologies and rising energy prices. But the economic downturn will probably accelerate it as individuals and corporations look not to the global stage but closer to home, concentrating and congregating on the Main Streets where we choose to live – in the suburbs, in urban neighborhoods or in small towns.

    In his 1972 bestseller, “A Nation of Strangers,” social critic Vance Packard depicted the United States as “a society coming apart at the seams.” He was only one in a long cavalcade of futurists who have envisioned an America of ever-increasing “spatial mobility” that would give rise to weaker families, childlessness and anonymous communities.

    Packard and others may not have been far off for their time: In 1970, nearly 20 percent of Americans changed their place of residence every year. But by 2004, that figure had dropped to 14 percent, the lowest level since 1950. Americans born today are actually more likely to reside near their place of birth than those who lived in the 19th century. Part of this is due to our aging population, because older people are far less likely to move than those under 30. But more limited economic options may intensify this phenomenon while bringing a host of social, economic and environmental benefits in their wake.

    For one thing, they may strengthen those long-weakening family ties. We’re already seeing signs of that. American family life today may not look like “Ozzie and Harriet,” with its two-parent nuclear family, but it reflects a pattern of earlier generations, when extended networks helped families withstand the dislocations of the westward expansion or of immigration.

    With a majority of married women now working, parents are frequently sharing child-rearing duties, and other family members are getting into the act. Grandparents and other relatives help provide care for roughly half of all preschoolers in the country. As the cost of living rises, this trend could accelerate.

    At the same time, difficulty in getting reasonable mortgages and the realities of diminished IRAs will force baby boomers and Generation Xers both to prolong their parental responsibilities and to delay their retirements. This, too, is already happening: According to one study, one-fourth of Gen-Xers still receive help from their parents. And as many as 40 percent of Americans between 20 and 34, according to another survey, live at least part-time with their parents.

    This clustering of families, after decades of dispersion, will spur more localism, which has a simple premise: The longer people stay in their homes and communities, the more they identify with and care for those places.

    This is evident in everything from the mushrooming of farmers markets in communities nationwide to burgeoning suburban cultural institutions. Since the 1980s, suburbs outside such cities as Chicago, Atlanta, Washington and Los Angeles have been building or contemplating new town centers – their own Main Streets, if you will, village squares intended to foster a unique local identity and community focus. Scores of suburban towns have established local orchestras and built playhouses and symphony halls – Strathmore Hall in Bethesda is one example. All this activity has dispelled some of the view of suburbs as strongholds of middle-class torpor.

    “This used to be a place where people went to sleep,” says Patricia Jones, president of the Arts Alliance, a group that helps raise funds for the sprawling, $63 million Civic Arts Plaza in the Los Angeles suburb of Thousand Oaks. “Now it’s a place where people live, work and find their entertainment. It’s a totally different environment. It’s not boring anymore.”

    Not only that, it’s probably more interconnected than ever before. In suburbs and cities from Los Angeles to New York, Web-based community newsletters have sprung up to keep residents informed of goings-on in their neighborhoods and to provide a sense of connectedness. “There’s an attempt in this neighborhood to break down the city feel and to see this more as a kind of a small town,” says Ellen Moncure, who edits the Flatbush Family Network Web site in New York. “It may be in the city, but it’s a community unto itself, a place where you can stay and raise your children.”

    Bolstering the trend are today’s higher energy prices, which make Americans’ old nomadic patterns less economically viable in more ways than one. Take recreation. More and more, says Tim Schneider, publisher of a magazine specializing in sports travel, people are sticking close to home instead of trekking far and wide in search of fun things to do. “Stay cations,” or vacations near home, are taking the place of trips to exotic distant locales. This means tougher times for such traditional tourist hot spots as Las Vegas and Hawaii, both of which have seen a drop-off in flight arrivals due to airline cutbacks. But there’s a moral for cities, says Schneider: Instead of counting on convention centers and arts and cultural facilities to attract outside tourists, most would do better to promote local “place-branding” events such as festivals, rodeos, sports tournaments and the like.

    Higher energy prices may also refocus local economies in unexpected ways. For generations, most Americans have been buying their food from distant corporate providers. But with shipping costs – and food-safety concerns – on the rise, the trend to buy local is moving into the mainstream. In Maryland, the number of farmers markets has grown from 20 in 1991 to 84 today. In 1977, California had four such markets; today it has more than 500. Higher energy costs could also benefit local manufacturers, bringing, say, clothing manufacture back to the Los Angeles garment district from China.

    The final factor driving the localist trend is technology, which has led to a rapid expansion of home-based work and to companies’ setting up work locations closer to where their employees live. The number of home-based workers has doubled twice as quickly in this decade as in the last and is now about 9 million. Nationwide, 13 million people telecommuted at least one day a week in 2007, a 16 percent leap from 2004. And more than 22 million people run home-based businesses.

    A recent study suggests that more than one-quarter of the U.S. workforce could eventually participate full- or part-time in this new work pattern. And over time, it will accelerate localism. Commuting – which became common only over the past century – has cut workers off from the places where they live. Home-based work, by contrast, gives people more choice about where they work and more time to spend with their families and communities.

    Telecommunication allows people who want privacy, low-density neighborhoods and good schools to live in small towns in a way never before possible. It also allows a firm such as Renaissance Learning, a leading educational software company, to set up headquarters in Wisconsin Rapids, Wis., a city of 17,500 whose small-town feeling, broad river and wooded countryside appeal to many workers. “We don’t have any trouble recruiting people here,” says Mark Swanson, the firm’s technical director.

    Yet the desire to stay in the local community isn’t limited to small towns or suburbs. I see it where I live, in California’s San Fernando Valley, or in parts of my mother’s native Brooklyn, where lots of people employed in fields such as the arts, consulting and design work at home or nearby and crowd the coffee shops, restaurants and stores of streets such as Ventura Boulevard in Studio City or once-decayed but now bustling Cortelyou Road in Flatbush.

    In the end, localism is neither urban nor anti-urban. At its heart, it represents something larger: a historic American tradition that sees society’s smaller units as vital and the proper focus of most people’s lives. This made the United States different from Europe, which, as Alexis de Tocqueville noted, has long tended toward centralization of power and decision-making.

    The expansion of the European welfare state has further fostered this trend. But it’s also true that Europeans tend to move less than Americans. And the powerful resistance to the most intrusive forms of European Union integration, such as a continent-wide constitution, suggest that strong localist elements remain imbedded in European communities.

    But if Europe is joining the trend, the United States is likely to be the leader in pushing decentralization. What most impressed Tocqueville wasn’t our large cities but the vitality of our many smaller towns and communities. “The intelligence and the power are dispersed abroad,” he wrote, “and instead of radiating from a point, they cross each other in every direction.”

    Today’s localist revival reflects this tradition, but with the benefit of the great access to the larger world that technology provides. It offers the prospect of an America that, rather than being “a nation of strangers,” can aspire again to be a nation of neighbors . . . in places that we choose for ourselves.

    This article originally appeared in the Washington Post.

    Joel Kotkin is a presidential fellow at Chapman University and executive editor of www.newgeography.com. He is finishing a book on the American future.

  • A Twice-Told Tale of Black, Brown & LAPD Blue

    This is a story of heartbreak and hope – and neither end of the tale made the news.

    A curious combination of factors recently led me to these events on a street in South Los Angeles, where worn houses and skinny palm trees can sometimes trick you into seeing nothing much.

    Then a crumpled baby bottle near a truck’s tire caught my eye and kicked me in the gut.

    The bottle belonged to a toddler who had just been crushed to death.

    The mother lost track of the baby. The baby crawled behind the wheel of a neighbor’s truck. The neighbor didn’t notice the child there.

    That’s how death came to this street, a place where African Americans and Latino Americans live side-by-side in a “Black-Brown” slice of the city – the sort of streetscape where so much of the potential and tension of our famed diversity resides.

    The scene leaned toward tension for several reasons.

    The mother of the baby was African-American.

    The neighbor was Latino-American.

    The mother was still in her teen years, and preliminary reports indicated that she had been having some trouble with the responsibilities that come with a baby.

    It appeared that the neighbor – an immigrant – didn’t have a driver’s license.

    It was hot and Santa Ana winds were blowing, sucking all the moisture out of the atmosphere, working the nerves.

    African-American folks gathered on front walks, whispering among themselves. They peered toward the yellow tape that marked off the house down the block, where a distraught woman occasionally appeared on the porch.

    There wasn’t a Latino-American neighbor in sight.

    The tension hung there, deciding whether to shrink or grow.

    The drone of the Harbor Freeway provided a monotonous soundtrack, seemingly ready to drive its tempo crazy or cool.

    Hope didn’t follow on to the scene naturally, but it did arrive to stake a claim. The first foothold came with uniformed cops and plainclothes investigators of the Los Angeles Police Department (LAPD), who went about their grim duty quietly, efficiently, respectfully.

    Authorities had transported the baby from the scene in hopes of some life-saving treatment. The mother of the child had gone along. Social service agencies had been notified. The sorry details of an autopsy and funeral arrangements would be handled from the hospital. The driver of the vehicle was in custody, also away from the scene.

    Curiosity continued up the street, with neighbors now forming clusters, their whispers growing into not-quite-hushed tones. One group of youngsters started getting a bit louder.

    That’s when hope went on the offensive, able to do so because word of this incident had already gone from the streets of South Los Angeles to the highest levels of LAPD.

    A member of the agency’s command staff got there quickly. He received his briefing, took a measure of the situation, and headed back to his car. He stopped short of the vehicle, though, turning toward a group of five or six neighbors as they looked toward the scene. He approached them, ramrod straight, and asked if they knew what had just happened down the block on the street where they live.

    No, they didn’t, they replied.

    The high-ranking officer told them in clear, calm tones.

    A collective gasp came from the neighbors. What a shame, they said, wondering aloud how such a thing could happen.

    The gasp soon yielded to shaking heads. The tension eased toward sympathy.

    I can tell you that the neighborhood could have gone either way until then. I know that LAPD’s work at this scene will go largely unnoticed in our workaday world. I can report that the beat cops and investigators presented themselves with a professionalism that held tension at bay. I saw the high-ranking officer make sure that clear, courteous communication on the street trumped skepticism.

    The neighborhood stayed right-side-up in the face of the heartbreak at the end of the block. A baby died and folks felt the loss, leaving the Black-Brown dynamic out of the equation.

    The whole thing was awful—but it could have been worse.

    Things didn’t get worse, so none of this made the news.

    I just happened to be there, and I thought you all should know.

    Jerry Sullivan is the Editor & Publisher of the Los Angeles Garment & Citizen, a weekly community newspaper that covers Downtown Los Angeles and surrounding districts.

  • “The Not So Big House” Ten Years Later

    It has been ten years since The Not So Big House became a surprise best seller, elevating a successful but unknown Minneapolis-based architect, Sarah Susanka, to the couch of Oprah Winfrey. Shortly after its release, the book became number one on Amazon.com, the force of which wasn’t fully understood or appreciated back in 1998. Since then she’s published five more books in the Not So Big series, but none have benefited as much from pitch-perfect timing. Not only was technology reaching people in new ways, it was reaching the very people for whom Susanka was writing, even if she didn’t know it at the time.

    In the introduction to the 10th Anniversary Edition, she admits to being perplexed by the overwhelming response to her “not so big” message, but then she read an article on “Cultural Creatives” by sociologist Dr. Paul Ray, who identified a previously undiscovered segment of the population that was looking for ways to live “responsibly, sustainably, and meaningfully.” While the term “Cultural Creatives” is essentially the New Age version of Richard Florida’s “Creative Class” (and equally ill-defined), clearly her book was at the forefront of something – be it a new culture, a new class or a new generation. Most likely a combination of all three, let’s call it the Dwell magazine demographic.

    In the pre-Dwell magazine world of 1998, however, Susanka’s book – if not cutting edge architecturally (her aesthetic draws heavily on Frank Lloyd Wright) – was in sync with this emerging demographic’s tastes. Of course, urban Dwellers have always dealt with smaller spaces and lived “sustainably” whether they meant to or not. But Susanka’s book focused exclusively on the non-urban single-family house, which is where the vast majority of people were and still are living in the United States. Reviewers took note that her message bucked the “starter castle” trend, (a term that has since been dropped in favor of “McMansion”). For those Dwellers not inclined to move to urban areas or fix up older housing in declining inner-ring suburbs, there was little to choose from that emphasized quality over quantity. As the success of her book clearly demonstrates, not all Dwellers were rejecting the suburbs – with its low-density, car-dependent development pattern. For some, it was the housing stock itself that was the problem. It simply no longer fit the way many people actually live.

    “Today’s houses still wear the architectural equivalent of a hoopskirt, even if the accessories seem more contemporary,” wrote Susanka. “While we’ve been busy evolving over the past century, most of our houses have not. Their evolution has been constricted by outdated notions of what we think we need and what the real estate industry says we need for resale. At the turn of the new century, most houses are designed for the turn of the last.”

    How did that happen? The real estate industry is notoriously slow to respond to change, which was well underway in 1998. Globalization and technology were (and still are) changing the way people live and work, but the housing stock was stuck in the industrial era with its emphasis on a division of labor both inside and outside the home. In his 1991 book, The Conscience of the Eye: The Design and Social Life of Cities, Richard Sennett, a professor of sociology at the London School of Economics, noted that in the industrial era, cities had become all but unlivable and people retreated into their homes. “The public world of the street was harsh, crime ridden, cold, and above all, confused in its very complexity.”

    To counteract the chaos, he noted, “[t]he private realm sought order and clarity through applying the division of labor to the emotional realm of the family, partitioning its experience into rooms.” Communal areas of the home gave way to activity-specific, divided rooms, with the man in the study, the woman in the kitchen, the children in their own separate bedrooms or play areas: “Separation created isolation in the family as much as it did on the street. . . . The hearth was supposed to give warmth, yet the division of labor [inside the house] gradually cast its own chill.”

    Today’s suburban McMansion is essentially the same isolating nineteenth century home on steroids (although far from urban chaos), and the housing bubble in the first half of the decade only made matters worse. Like a supernova that burns brightest just before collapsing in on itself, McMansion developers went on their final building spree despite the trend that Susanka had identified. One executive in the homebuilding industry told The New York Times in 2006: “We haven’t been as quick to adapt to the market as we should have been.” Why? “Most home builders are reluctant to change the formula that made them so profitable over the past 10 years,” explained James Chung, president of Reach Advisors, a Boston-based marketing firm.

    According to Reach Advisors, among the Dwell demographic who prefer single-family houses, they want smaller homes built closer together with amenities that foster interaction with their neighbors, such as dog parks and walking trails. They would also prefer their private space cultivate family interaction rather than be divided into separate activity rooms. For decades, progressive urban planners have advocated for mixed-use buildings and blocks, but the same could be said for a suburban house. Multi-use spaces are where families interact, and that interaction makes the difference between a house that is merely occupied and a home that is truly lived in.

    But rather than scale down to a more efficient design, McMansion builders just kept adding on to the already bloated floor plans, with the industrial era house at the core and all the new economy rooms tacked on. Media rooms, home offices, and hearth rooms – a poor imitation of a loft-like space, where the kitchen flows into eating and sitting areas anchored by a fireplace – grossly expanded square footage. According to Census data, median square feet of floor area for new privately owned, single-family homes jumped from 1,560 in 1974 to 2,248 in 2006. The typical McMansion is 3,000 square feet or larger. The numbers are not yet all in, but anecdotal evidence indicates that it is these energy-inefficient behemoths built far from job centers that have experienced the most drastic price declines in the current housing market crisis, possibly the worst in American history.

    With prices already down almost 20 percent, home values are on track to decline as much as they did during the Great Depression. According to Robert Schiller, professor of economics at Yale University and an early predictor of the housing market decline, currently there are about 10 million homeowners who owe more on their home than it is worth. And even if the market has hit bottom, after adjusting for inflation, most homeowners will continue to lose money.

    Of course, this is not solely the fault of McMansion builders and buyers. Old neighborhoods in rust-belt cities with small, densely packed houses have been devastated as well. But clearly, the market is not in turmoil because working class people fell victim to subprime loan sharking but in part because developers built and middle class and wealthy people bought way more house than they could ever need or even want. The New York Times recently featured a 26,000 square foot home in Greenwich, CT that has been put up for auction. “We kind of knew even before the house was finished that it was too much house for us,” said the homeowner, Stan Cheslock, a Baby Boomer-aged financial investor. While this is a gross example, would the housing market be in better shape if “not so big” were the predominant building philosophy, and not just a countervailing trend among the Dwell demographic? One could make a case.

    Like the American auto industry rediscovering demand for fuel-efficient cars, in the current housing crisis The Not So Big House still feels highly relevant if no longer revelatory. Susanka took inspiration from the sailboat, where efficiency and multi-purpose space is essential. “Because of this careful, thoughtful use of space, it’s no great exaggeration to suggest that six people can live more comfortably on a 40-ft. boat than they can in a big, badly designed house.” To that end, she emphasized cozy spaces over cathedral-like great rooms; socializing areas that flow together but utilize ceiling height variation and lighting design to delineate spaces; and “away rooms” for private time. She noted that some of her clients discovered the appeal of the “not so big house” when it came to building a second home for summers or weekends. When her clients realized they preferred their second home – with its emphasis on informal comfort and efficiency – they began to rethink their primary residences.

    But for most people, the fact that large formal living and dining rooms go unused for all but a few days of the year, ditto that oversized jacuzzi in the master bath and formerly screened-in porch – which was much loved in the summertime but after being converted to a year-round room became just another underutilized sitting area – is not enough to convince them to choose smaller spaces. So the McMansion explosion happened at the same time the “not so big house” message came to define the tastes of an emerging demographic of homeowners. But 10th Anniversary edition, Susanka doesn’t do much to explain why.

    One clue might be found in a new twist on the theory of conspicuous consumption, as noted in a recent issue of the Atlantic Monthly. Kerwin Kofi Charles and Erik Hurst, two economists at the University of Chicago, show that a relatively poor group in close proximity to a relatively well-off group will spend more on “bling” at the expense of their own needs and private comforts. While they were studying differences in spending habits of blacks and whites, the same could be applied to the growing gap between the upper middle class and the super wealthy, a relatively new phenomenon. Between 1949 and 1979, income at all levels grew relatively equally, but since then income growth has occurred disproportionately at the upper echelons. The richest 1 percent increased their portion of the national income from 8.2 percent in 1980 to 17.4 percent in 2005. The Economic Policy Institute calculated that in 2004 only the top 5 percent of households increased their incomes, while the remaining 95 percent had flat or falling incomes. It’s not too much of a stretch to apply the “bling” theory to the upper middle class and their McMansion home-buying habits. If your income is stagnant or even dropping, keeping up appearances becomes paramount.

    For the Dwell demographic – which never expected to be super rich – the point is not smaller for its own sake but a shift of emphasis to quality materials, customization and detailing with a technological update. This preference doesn’t necessarily lead to one aesthetic. Dwell readers will not find much in the way of cutting edge design in the Not So Big House, either in the original book or the 10th Anniversary edition. Susanka’s tastes are “Minnesota nice” – a house should compliment, not detract from its neighbors (Susanka now lives in Raleigh, NC). Photos emphasize suburban bliss in warm hues, with lots of woodwork and overstuffed couches. It is the “not so big” philosophy that defines the Dwell demographic with its more traditional middle class emphasis on private luxury in the service of comfort, practicality over bling. Just a sampling of a few Dwell articles over the years: “Affordable Luxury: 10 Homes that Do More with Less,” “Bathrooms 101: Innovative Materials, Cool Products,” “Collapsible Furniture for Cozy Spaces.”

    Despite having defined this emerging demographic’s housing preference, not only does Susanka fail to reconcile the popularity of her book with the McMansion explosion of the past ten years, she claims a little more credit than is probably due. She notes in the preface to the 10th Anniversary edition that the average size of a new home in the U.S. finally leveled off at just under 2,500 sq. feet (an accurate statement) and that over 40 percent of new homes are now built without a formal living room (a dubious statistic). “I think the Not So Big House series has helped to turn this tide,” wrote Susanka. Clearly, that tide was turned by much larger forces.

    Lisa Chamberlain is the author of Slackonomics: Generation X in the Age of Creative Destruction and covers real estate for The New York Times.