Category: Urban Issues

The Toronto Megacity: Destroying Community at Great Cost

Regional governance is all the rage in some circles in America. But the Canadian experience demonstrates it might not have all the benefits advertised. More than a decade ago, the Ontario government forced six municipalities to amalgamate into the megacity of Toronto. This was not done by the residents of the six jurisdictions. Separate referenda in each of the municipalities (North York, East York, York, Etobicote, Scarborough and the former city of Toronto) all indicated strong disapproval.

The government claimed that an amalgamated Toronto would be more efficient and that the city would be more competitive. More than $300 million was to be saved, according to the accounting firm hired by the government to study the issue. Early on it was clear that the efficiency claims were bogus. University of Western Ontario urban policy expert Dr. Andrew Sancton quickly raised questions about the analysis, pointing out that the harmonization of labor contracts and services among the six jurisdictions could only lead to higher costs and higher taxes.

The government was wrong and Professor Sancton was right. By 2003, the Toronto City Summit Alliance reported the amalgamation of the City of Toronto has not produced the overall cost savings that were projected. The Alliance went on to blame “harmonization of wages and service levels.”

Things have only gotten worse. The city of Toronto budget increased in constant dollar terms and the $300 million in savings have long since evaporated.

Meanwhile, there is no point in arguing that amalgamation made Toronto more competitive. Despite the impressive residential development in the core, Toronto’s growth rate has become anemic — little more than one-half that of population growth whipping boy, Italy. Between 2001 and 2006, the first full census period after amalgamation, the city accounted for only five percent of the metropolitan area’s population growth. In the period immediately preceding amalgamation (1991-1996), the city-to-be accounted for 30 percent of the growth — six times that of the more recent period.

None of this is to deny that municipal amalgamations can produce economies of scale. They do — for special interests, not the people. Large corporate interests find larger governments more susceptible to their influence. So too do public employee unions and other well-organized interest groups.

As city hall is moved farther away, voters have less control over what goes on. There is not only a loss of income for taxpayers, but there is also a loss of community. Indeed, if larger local governments are more efficient, why not abolish municipalities altogether, or even provinces. Surely if all garbage collection were administered out of Ottawa, things would be better, to take the logic of the consolidationists to its extreme.

Maintaining a sense of local community remains an important virtue. Equally critical, local governments have been proven to be far more cost effective and responsive. This is not just true in Toronto, it is true almost anywhere. There is good reason why municipal consolidation is unpopular — it costs more and it makes city hall more inaccessible. This is the principal reason cities forced into Montreal fled when given the chance. It is why municipal consolidation has led to demonstrations this year in the Australian state of Queensland. Where the scale of government is bigger, people are smaller — something the centralizers never seem to understand.

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.”

October 8, 2008

Canada’s High Tech Leaders

If you ask most Americans, or Canadians, for that matter, where Canadian high tech is concentrated, they will point you to the great metropolitan centers of Toronto and Montreal. But in reality the real centers of tech growth in Canada are concentrated elsewhere.

One particular standout is Ottawa, the nation’s capital. Over the past decade, Ottawa’s image has evolved from a drab and even stern city to that of a conurbation displaying major demographic, social, cultural and economic diversification (Culturally and socially, Ottawa is now on par with other North American cities of equivalent size).

Although the public service sector remains prominent, the economy of the national capital has undergone major changes. Since 1990, the high-tech sector has grown at such a pace that in 2000, according to Mallet (2002), 80,000 individuals were on the payroll of knowledge-economy businesses, almost as many as in government offices. And Despite the sector downturn in 2001, Ottawa still ranks in the top ten North American cities where a high percentage of people holding university (bachelor and Ph.D.) degrees. This same pattern can be observed in the capital region of the United States as well.

Table 1. Percentage (%) of the workforce in professional, scientific and technical services in the United States and in Canada (top 20).

Rank

Cities

% of workforce

Washington-Baltimore

11.54

San Francisco

10.95

Calgary

10.91

Ottawa

10.47

Toronto

9.78

Raleigh

9.74

Denver

9.14

Boston

8.98

Albuquerque

8.76

Vancouver

8.74

San Diego

8.72

Austin

8.55

New York

8.20

Atlanta

8.19

Montréal

7.95

Colorado Springs

7.92

Minneapolis

7.74

Chicago

7.70

Houston

7.44

Philadelphia

7.40

Source: Statistics Canada (2001) and US Census (2000).

Indeed in the search for Silicon Valley North, Ottawa ranks close to the top by almost every measurement — jobs per capita, skilled workers, and high-tech growth. Ottawa may seem less than ‘hip and cool’ to most outsiders, but it outperforms its more vaunted Canadian counterparts in terms of tech growth. Overall if any area is to be considered the ‘Silicon Valley North’ it would be the Ottawa region.

Table 5. Science and engineering employment shares for the top 30 North American cities, 2000 and 2001.

Share (%)

Rank

San José, CA

15.7

Ottawa–Gatineau

11.6

Huntsville, AL

11.1

Nashua, NH

11.1

Washington, DC/MD/VA

10.9

Raleigh-Durham, NC

Rochester, MN

9.6

Ann Arbor, MI

9.2

Austin, TX

Santa Fe, NM

8.9

Seattle-Everett, WA

8.6

Boston, MA

8.3

Yolo, CA

Fort Collins-Loveland, CO

San Francisco-Oakland-Vallejo, CA

Trenton, NJ

Dutchess County, NY

7.9

Santa Cruz, Calif.

7.8

Melbourne-Titusville-Cocoa-Palm Bay, FL

7.8

Denver-Boulder-Longmont, CO

7.8

Colorado Springs, CO

7.8

Calgary

7.6

Madison, WI

7.5

Richland-Kennewick-Pasco, WA

7.4

State College, PA

7.1

Bloomington-Normal, IL

Baltimore, MD

6.9

Wilmington, DE/NJ/MD

6.9

Champaign-Urbana-Rantoul, Ill.

6.7

Toronto

6.7

Source: Canadian Census (2001) and U.S. Census (2000).

The other major high-tech centers in Canada are Calgary and Toronto. But even here some of the results are surprising. If you look in detail at Toronto region you find that most of the high-tech growth has been clustered not in the city, but in the sprawling suburban regions around the area, particularly in places such as Kitchener. Similarly in the greater Montreal area, much of the high-tech growth is clustered around the City of Laval, an independent municipality north of the Isle de Montreal.

What does this tell us about high-tech in Canada? For one thing it shows that places that have low crime rates, a family friendly atmosphere tend to be the best places for technology companies — very much like the pattern in the United States. Although Canada is a very different country, the fertile ground for tech companies remains very much the same both sides of the border.

Rémy Tremblay is Canada Research Chair on Knowledge Cities, Université du Québec à Montréal

October 7, 2008

Canada’s Immigration Dilemma

The subject of immigration in Canada presents a great dilemma for many Canadians. Like other countries of the western world, Canadians do not have enough children of their own to maintain the population at its present level. At the same time, the overall population, which is around 33 million, is getting older. Baby boomers are looking at retirement. Many calculate the amount of income they will need in order to maintain a decent standard of living. Their calculations include government pensions. The absence of a sufficient younger, active, working population to continue paying for the system of pensions presently in place and on which our retirees depend is well known and understood in the country.

Since the problem is staring us in the face, the evident solution is to turn to immigrants from other countries to make up for our shortfall. But Canada’s ethnic situation was already complex enough as, in addition to the original inhabitants known as the First Nations, the founding populations of Canada, the French and the English, have in the past been referred to as “The Two Solitudes”. The descendants of the original French settlers are concentrated mainly in the province of Quebec. There are French-Canadians in other provinces as well, though, generally, not in large numbers.

Over the last few decades, many French Quebecers started worrying about their diminishing numbers in other provinces as former French speakers began primarily using English in their daily transactions and sending their children to English schools, either due to a lack of French schools in the area they lived in or to facilitate their own integration or that of their children. The net result was a steady decrease of that population declaring French as their mother tongue in Canadian censuses.

Inside Quebec, after the English conquest in 1759, in order not to lose the French language and their religion (Catholicism), the French population of 60,000 people coalesced around the Church. The Church was seen as the unflinching defender of that population’s language and culture. Moreover, again under the influence of the Church, French-Canadian families were having many children, so much so that in the 1960s, Canada was home to approximately six million French-speaking people.

This is when modernity set in. French-Canadians decided that the place of religion was to remain in the church and, parallel to what was taking place elsewhere in the democratic world, the birth rate plummeted. From 1956 to 1961, the birth rate was 4.2 children per 1,000 married women. In the 1990s, Quebec’s birthrate was the lowest of all Canadian provinces. From 1986 to 1991, the Quebec fertility rate was only 1.5, therefore very much less than the 2.2 children needed for a population to replenish itself.

In the short term, recent government measures such as a generous parental-leave program have contributed to an increase in the birth rate. While in 2004, Quebec had 74,200 births, the birth rate rose in 2006 to 10.6 per 1,000 population, compared to the national rate of 10.5. According to government statistics, there was a further increase in 2007, albeit a small one. However, these small increases in the young population do not come close to remedy the wide gap with the need for replenishment of the work force.

Consequently, for both Canada as a whole and Quebec in particular, the issue of immigration has become a crucial one. The question of who will support pensioners comes to mind immediately, according to a 2008 survey by the respected CROP polling firm 38% of Quebec workers say they plan to retire before age 60 and 61% plan to retire between the ages of 55 and 64. The implications are food for thought. European immigrants are now outnumbered by immigrants from the rest of the world.

Strong arguments against discrimination have led to a system of points awarded in considering whether one qualifies as an immigrant. The philosophy behind that point system is that an immigrant should have the prerequisites likely to make for harmonious integration. Having skills needed for employment, a support system in terms of already established family or friends, and knowing one of the two official languages of Canada, either French or English, are a help in determining if one should be accepted as an immigrant.

Many people arriving as immigrants came from countries that were once British colonies, such as Sri Lanka, India, Pakistan, Jamaica and Nigeria.

There is also a large percentage of immigrants coming from China. If continued unabated, these substantial numbers would have drowned the diminishing numbers of French-speaking Canadians. Also worrisome to concerned defenders of the French language was the fact that most of these immigrants in Quebec could function effectively in English and never had to learn any French.

The federal government has taken some measures to promote the language. For example, food packages must contain French as well as English. Although sometimes difficult to implement, federal government offices across the land must be able to offer their services also in French.

In Quebec, restrictive laws on the English language have promoted the use of French, particularly in Montreal. The ultimate problem, however, remains the small French population within a surrounding sea of speakers of English in North America.

Eager to maintain its predominately French speaking status, the province of Quebec came to an agreement with the federal government in 1978 and was given a measure of authority to select their immigrants. The Quebec government could select a percentage of immigrants based on the proportion of the population in Quebec versus that of Canada. The Quebec government decided to increase the number of French-speaking immigrants which it found mostly in Haiti and French-speaking Arabs from the Maghreb, mainly Algeria and Morocco. Quebec also looked for immigrants from Latin-American countries with the premise that they could adapt easily to the French language and culture.

Canada and Australia are the two leading countries with the highest proportion of their total population born in other countries. In 2004, Canada received over 230,000 immigrants. Being a democratic society, Canada does not restrict immigrants to any one part of the country. People arriving in Quebec or any other province are free to move elsewhere if they choose to. It is not rare to find that immigrants arriving in Quebec who have an easier time with English than French will not stay long in that province, thereby causing havoc with all the calculations of the Quebec government.

In the past, Canada prided itself on being different from the U.S. in its philosophy regarding the integration of its different ethnic populations.

Where the U.S. favoured the “melting pot” approach, Canada favoured the “multi-cultural” approach, encouraging immigrant societies to perpetuate their own culture in this country. Supposedly this approach would contribute to harmonious relations with other ethnic groups, with the general population as a whole, and result in happy integration within Canadian society.

Of late, the multi-cultural approach has been called into question. The issue under debate has been whether that concept of integration does, in fact, facilitate integration or whether, instead of contributing to unity, it tends to keep people apart and is contrary to Canadian unity, accentuating differences within the Canadian population. The question has not yet been resolved.

There are many problems that come as no surprise as they exist in all western countries. Immigrants have always known that the first few years in a new country could be difficult years. I, myself, did not have an easy time when I came to Canada many years ago and neither did my friends also young European immigrants. Even the many well-educated immigrants struggle because their academic credentials are often not recognized as equal to similar credentials awarded by Canadian institutions. Unfortunately for them, their expectations of recognition of those credentials are disappointed more often than not.

Stories abound of medical doctors, some with much previous experience, not granted the license needed to practice as doctors in Canada. There is much need for more medical practitioners in Canada, but both the medical lobby and the government budgets set strict restrictions on who can practice as a doctor. There is talk, of relaxing some of those restrictions, but one should not hold one’s breath. We’ve been there before.

Of course, the example of doctors is often given prominence. But similar obstacles apply to many other professionals who also are told that they lack Canadian experience. However, they are supposed to have been informed before their departure that they will not be able to practice medicine, law and some other professions. Many believe that there is an element of subtle discrimination as many of them are members of what is termed visible — meaning non-white — minorities. Be that as it may, immigrants always faced difficulties in a new country. Yet, they keep coming, and in great numbers. The backlog of waiting, hopeful, would-be immigrants is estimated at somewhat below but close to one million.

There are other problems. As in other occidental countries, many would-be immigrants use the back door to come in. They arrive, legally or not, and then claim refugee status. The traffic of would-be refugees ranges in the billions of dollars. As a result of a ruling by the Supreme Court of Canada, anyone in Canada applying for refugee status has the right to have his claim being heard in person. Many of those applying have had a story of persecution concocted for them before they arrive here. Some purchase their story once in Canada or have their history of persecution “improved” by newly-found friends in their community. That way, many applicants for refugee status are able to obtain the immigrant status that would otherwise be denied to them under normal conditions.

In summary, Canada faces many of the same problems faced by several other western countries: a population growing older that needs to be replenished and the need to facilitate the integration of newcomers which are of a background different from the descendants of the earlier European population that used to constitute the backbone of the country.

Leon Graub is a former member of the Immigration and Refugee Board recently retired. He came from France to Canada in 1951 and resides in Laval, Quebec.

October 6, 2008
Old Manhattan Had a Farm

Old Manhattan had a farm
Ee-yi ee-yi O

As a child of the early Sixties, I fondly remember the days when colossal albeit stupid technological projects were fashionable. I remember in particular a cartoon that showed a subway running from the U.S. to China right through the center of the earth. Of course, this brings to mind Thoreau’s quip that, while the telegraph might connect Maine to Texas, would Maine and Texas have anything to say to each other? But the very point of the trans-core subway was its pointlessness. If titanic, useless engineering projects like the Hoover Dam are impressive, then how much more impressive are titanic, useless engineering projects!

In the Seventies, thanks to environmentalism, grand engineering projects fell out of favor. E. F. Schumacher and J. R. Tolkein were the new gods. Skyscrapers and dams were passe. Utopia was a sod-roofed hobbit hole designed by Amory Lovins. But human fascination with large-scale projects could not be satisfied by designing high-tech composting bins in the backyard. So now we have the arrival of something new: It’s the gee-whiz engineering boondoggle of yesteryear resurrected with a thin veneer of greenwash turning it into… Call it a greendoggle.

Inside a high-rise was that farm
Ee-yi ee-yi O

Scientific American, a once-sober magazine that seems to be going down-market along with National Geographic, has just published its own flashy Earth 3.0 issue, with stories like “MisLEEDING? When Green Architecture isn’t Green” and “China’s Eco-City.” On page 74 you will find “GROWING VERTICAL”: Cultivating crops in downtown skyscrapers might save bushels of energy and provide city dwellers with distinctively fresh food.” The hero of the article is Dickson Despommier, a microbiologist at Columbia University, who proposes growing food downtown in glass-walled buildings.

Scientific American, of course, gushes over the idea as a way to plan “more sustainable cities,“ sustainability being the ultimate planning buzzword of the moment. A brief internet search reveals widespread discussion of vertical farming—not only Professor Despommier’s vertical farms and feedlots, but proposals for raising produce on green roofs downtown.

At first sight, the idea seems plausible. True, vertical farming would be a non-starter if urban rents were higher than rural rents. But we all know that land is just as cheap in downtown Manhattan as it is in rural Nebraska, right? One wonders, though, why farming moved off the island a more than a century ago.

Professor Despommier claims that food grown indoors would be pesticide-free, unlike that dirty outdoor produce. Once again, totally plausible. Big American cities are as free of rats and roaches as Ireland is of snakes. The Museum of Natural History has a glass case containing the last rat found in New York City, way back before World War I. (Just don’t look down at the tracks when you are waiting for a subway).

But then if we admit there are millions of rats and billions of roaches, then the crops growing in vertical farms would have to be protected by enough rat and roach poison to kill Xerxes’ army. Fortunately, in rat- and roach-free urban America, that is not a consideration. And even if it were, we would not need to worry that health inspectors would be bribed to overlook the rodent droppings and roach eggs in our tenth-story grown arugula. The civil servants in New York City, Chicago and Philadelphia are known worldwide for their incorruptibility.

With some algae here
And some chickens there

Still, I do worry about the urban politicians. It’s bad enough that a mayor can pressure landlords to provide a girlfriend with an apartment for a discount. What will happen when members of the City Council start twisting the arms of realtors to give them discounts on eight-storey vertical ranchettes on Central Park West? Who needs to go to the Hamptons, when you can have your own rent-control winery on the penthouse floor?

And then there’s the matter of competition for housing downtown. For a decade, would-be homeowners in big cities have seen prices driven up by speculators, who buy condos and then keep them empty until they can flip them. Will would-be condo owners now have to compete for airy downtown lofts with Archer Daniels Midland?

Here a cell
There a cell
Everywhere a solar cell

Don’t get me wrong. I’m for the industrialization of agriculture. I don’t doubt that, a century or two from now, much of the human diet will come from in vitro meat and fruit and vegetables, grown indoors in clean laboratory conditions and laced with the appropriate vitamins and amino acids. Back in the 1920s, before they led their nations, Winston Churchill and Franklin Roosevelt both predicted laboratory-grown food in their popular writings, and it’s coming. But, for the most part, the food labs of the twenty-second century like the robot factories will be located where land is cheap, in distant rural areas or in the outer exurban expanses of the metropolis.

Oops, I forgot, acreage is cheap in downtown Manhattan. Never mind.

Old Manhattan had a farm
Ee-yi ee-yi O

Professor Despommier’s skyscraper farms, and the community gardens on top of the Sears Tower, solve two worrisome non-problems which together create an urgent un-crisis. The first non-problem is the alleged lack of fresh produce in present-day supermarkets, a problem that doesn’t exist in any grocery store I’ve patronized anywhere in this country. The second non-problem is the alleged loss of wilderness to agriculture. In fact, thanks to the increasing efficiency of American agriculture, more food is grown on less land all the time. Some retired farmland goes to suburbs and exurbs, but the majority of it is being reforested. The wilderness is devouring farmland in North America, not vice versa.

But that’s the nature of a boondoggle, and the coming thing, the greendoggle. It’s an overly-elaborate technological answer to a nonexistent problem.

Why do such ideas get such attention in the prestige press? I think the answer lies in the psychology of America’s urban overclass. Deep down the urban trust-funders and professionals want the “urban archipelago” to secede from the rest of the United States. The sooner they become self-sufficient in terms of food, the sooner they can build walls around their post-American city-states. Then, when peak oil leads to the apocalyptic crash of automobile civilization, the urbanites can pull up the draw-bridges. From the safety of their hydroponic penthouses they can look through telescopes at the besieging mob of working-class hinterlanders with potbellies and bad hairdos. Who in that day of reckoning would not rather be downtown? After all, the hinterlanders will control only the farms, factories, mines and working population, but the urbanites will have…will have…worthless pieces of paper….

Hmmm. Back to the drawing board.

Old Manhattan had a farm
Ee-yi ee-yi O
Inside a high-rise was that farm
Ee-yi ee-yi O
With some algae here
And a koi pond there
Here a cell
There a cell
Everywhere a solar cell
Old Manhattan had a farm
Ee-yi ee-yi O

Michael Lind is the Whitehead Senior Fellow at the New America Foundation. He is the author, with Ted Halstead, of “The Radical Center: The Future of American Politics” (Doubleday, 2001). He is also the author of “Made in Texas: George W. Bush and the Southern Takeover of American Politics” (New America Books/Basic, 2003) and “What Lincoln Believed” (Doubleday, 2005). Mr. Lind has been an editor or staff writer for The New Yorker, Harper’s Magazine, and The New Republic. From 1991 to 1994, he was executive editor of The National Interest.

October 5, 2008
Villaraigosa’s Housing Proposal: Billions of Dollars and Too Little Sense

The matter of whether private companies should be required to include so-called affordable housing units in residential developments is worthy of debate. Perhaps any developer who takes public funding ought to be subject to such requirements. A developer who doesn’t take public money is a different story.

There is room to debate a number of points between those two notions, and we hope that interested parties will do just that as Los Angeles considers its future.

That’s why we regret that Los Angeles Mayor Antonio Villaraigosa has confused the debate with a proposal that offers precious little clarity as it aims to spend $5 billion on affordable housing.

The proposal counts an initial commitment of $700 million to be invested by a Columbia, Maryland-based non-profit organization called Enterprise Community Partners, along with $300 million that apparently would come from the city, although no specifics were offered there.

The next $4 billion would be raised through borrowings, grants, and “tax-credit equity”—whatever that turns out to be. In any case, Villaraigosa claims that the city will “leverage $1 billion in public funds into a $5 billion investment in affordable housing throughout local neighborhoods.”

The Garment & Citizen appreciates Villaraigosa’s willingness to step up to a challenge. We like politicians who want the spotlight when the going gets tough. We also appreciate Villaraigosa’s political instincts, which are usually well-honed.

We must, however, respectfully inform the mayor that he has gone tone deaf on this one.

Our nation is currently amid a crisis wrought by a lot of folks who talked in vague terms about the financial aspects of housing, and a bunch more who didn’t listen closely enough. We have a bunch of elected officials trying to figure out what to do about our problems, and it’s a safe bet that many of them still can’t explain how Wall Street’s exotic financial instruments figure into the misery. We have a big chunk of our corporate class that used to revel in the sharp edges of the free market but now await government rescue.

Now is not the time to launch a $5 billion proposal that relies on “tax-credit equity” for even a single bit of its funding. Not unless you are willing and able to explain the meaning of tax-credit equity, and how it benefits taxpayers. Nor is this the proper climate for putting 20% down on a $5 billion proposal and “leveraging” the rest of the funding.

There are many other problems with Villaraigosa’s proposal, which talks about the $1 billion in public money for starters. But that total appears to count the $700 million from Enterprise Community Partners, which is not an agency of government.

The proposal mentions 20,000 new housing units, but then says that some of the money would go toward “addressing the foreclosure crisis” and “preserving the affordability of 14,000 rental units.”

We wonder if those 14,000 rental units to be “preserved” are part of the overall goal of 20,000. Are we adding 20,000 units of housing? Or will we preserve those 14,000 and see only 6,000 new units? Is this a bailout for over-extended landlords whose tenants are having a tough time making the rent as the economy dips?

Then there are the hints of a taxpayer-financed smorgasbord. Villaraigosa says he also wants to build the housing units along heavily used transit corridors. There’s a call to shift the “city’s strategy from managing homelessness to moving people out of it.” He says he wants to “transform L.A.’s public housing sites into vibrant, mixed-income communities.”

Is this proposal aimed at reducing the city’s carbon footprint by getting residents to trade their cars for train rides? Is it about social services for the homeless? Poor folks in housing projects? The middle class?

All of those subjects merit a clear focus, but this is a mish-mash.

Villaraigosa should review his proposal and think again about whether he wants to pursue these goals in this way.

Perhaps it’s worth his effort, and there might be more to like with a better explanation.

For now, however, this is a $5 billion proposal that just doesn’t add up.

That’s not a line Villaraigosa or any other elected official ought to be walking in today’s world.

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

October 3, 2008
Bubble Opportunity: A New Life for Public Housing?

The globalization of housing markets stood at the center of the vast, now unraveling, economic change of the past decade. The creation of new investment vehicles in the 90s diverted vast amounts of capital into housing markets around the world. The results were many and varied. Design features began to converge, with gated communities following shopping malls into cites in Latin America, China, Turkey and most other countries. Home prices began to rise, with The Economist even publishing a table of global house prices, indicating those with the most inflated costs (Spain and the UK usually led this undesirable ranking).

It’s been clear for the last few years that housing was becoming the primary investment vehicle for many American families, who otherwise had a negative savings rate. Everything that happened up to 2007 was built on that premise. So here we are in 2008, facing an unraveling not just of the housing market and its financial networks, but much more besides. As the cliché has it, the devil is in the details, and those are getting much less attention. Obsessed with design features and public-private contrasts, it is hard for many urbanists to return to the old-fashioned concern for what is happening ‘on the ground’. Long gone are the days when researchers tramped the streets; now Google and GIS have replaced shoe leather.

This is unfortunate, because there is a ‘new geography’ emerging from the wreckage. During the bubble, home buyers would purchase larger and more expensive homes because that was how they maximized the returns on their investment. And, for several years, that worked. Now, as I roam around in my neighborhood, I see that it’s the newest and largest homes that are standing empty.

Why? In large part these were speculative constructions, and the speculation went awry. Elsewhere in this relatively affluent part of Phoenix, small subdivisions are standing virtually idle, the construction workers long returned to Central America. But this is one of the costlier parts of town. In the blue-collar West Valley, the impact has been hardest on the new master planned communities of relatively affordable homes. These were examples of what is sometimes termed in the trade ‘qualifying by driving’—that is, the homes are cheap because they are a long way from job concentrations. Many first time buyers were lured into home ownership with the teaser rates that have been replaced by higher monthly payments, along with higher gas prices. The result: whole developments with a forest of ‘for sale’ signs.

Most discussion of the mortgage crisis has been at the elite level — where it impacts banks, Wall Street investment houses, interest rates, liquidity. But on the street level, there are other, less obvious, consequences. Animals are abandoned as owners decamp; untended swimming pools breed mosquitoes. Abandoned dwellings in far suburbs don’t attract vagrants but they do get used by human smugglers as drop houses, since there are few neighbors to notice. Owners stop paying their HOA dues and maintenance is neglected, even as the dues escalate for those who stay behind. And much of the time there is no-one to do the work, due to the disappearance of the Latino labor-force.

So what happens now as the current crisis blows through suburban neighborhoods and some form of federal bailout comes into place? If a new Resolution Trust agency begins to buy up hundreds of thousands of single family homes, we could find ourselves face to face with a new form of public housing that hasn’t been seen since the end of the First World War. In the UK, for instance, local government built many thousands of duplexes, in what are now inner suburbs, for returning soldiers. These were high quality dwellings which provided excellent accommodation for decades, until they were sold off, at suitably inflated prices, by the Thatcher government. Over time, this design experiment was forgotten, as public housing across Europe and the US became associated instead with the construction of vast apartment complexes that turned into visions of hell, strewn with burned out cars. Only in Singapore was this kind of failure avoided, for very specific social, political and cultural reasons.

So, we may be on the verge of reconnecting with that original vision of public housing, one that emphasized homes in neighborhoods rather than vast and anonymous apartment blocks. For this to happen, the impulse to scoop up these bad mortgages and dump them back on the market at fire-sale prices will have to be avoided.

Instead, the Federal government should venture back into the public housing sector by keeping these bad mortgages and re-letting the properties that it accumulates. There are two good reasons for this. First, they are, in the main, desirable homes of acceptable quality, so there will be no stigma attached to public housing. Second, because no-one will be building publicly-owned houses from scratch, they will not be concentrated in public housing enclaves. Rather, they will be diffused across the city, concentrated in some neighborhoods to be sure, but not to the exclusion of other forms of tenure. Of course, some existing owners will be less than pleased to find renters living next door—but at least the grass will be mowed and the pool will cease to stink.

How to prevent this crisis from reoccurring when things get better? Rules need to be observed. Three times your income dictates your mortgage, and you can’t buy a home in an HOA if you aren’t going to live in it. This would greatly restrain speculative frenzy. And let’s take advantage of this crisis by making affordable homes available to families in a variety of forms—as permanent rentals, as leases, or as leases-to-own. And most important, this new public housing will not be concentrated in the inner cities, far from most employment opportunities, or in dense Stalinesque apartment complexes. For years, planners have been wringing their hands about how to get low-income housing into desirable neighborhoods. Perhaps fate has now shown them the way forward.

Andrew Kirby is the editor of the interdisciplinary Elsevier journal “Cities.”This is his 20th year as a resident of Arizona.

October 3, 2008
The future of suburbs? Suburbs ARE the future
I entered the field of futures research in 1981. No, not futures – contracts to deliver a certain commodity at a certain price at a date certain (God, I wish I had) – futures research, as in scenarios, trends, strategic planning and market planning. Unfortunately the place was soon lousy with what I call “futurism”: extrapolations of the unsustainable to make the improbable look inevitable.

A current example: suburbs are doomed because of high energy prices (peak oil!), the housing bubble, the obsolescence of the internal combustion engine, and yes, global warming (and what hasn’t been blamed on global warming?). Besides, the urban renaissance is underway; people want to live in the city for the culture, food, music and hipness, don’tchaknow. This is what I read in the Freakonomics quorum on the future of suburbia (New York Times, 8/12/08), and in The Atlantic magazine (“The Next Slum,” Christopher Leinberger, March 2008), The International Herald Tribune (“Life on the fringes of U.S. suburbia becomes untenable with rising gas costs,” 6/24/08), and elsewhere, ad infinitum.

Well, I could be clever and say that predictions of the demise of suburbs are premature, be in fact they are just plain apocalyptic and absurd. Suburbs are the nexus of American life, have been for decades, and will certainly remain so (because, like, where else are we going to put the next 100 million Americans). Suburbs are where the majority of Americans today, and in the future, live, work, shop, create, consume, recreate, educate and, perhaps most importantly, procreate.

Suburbs remain home to a majority of Americans and a plurality of American families. Suburban population, business and job growth each outpace those of cities, have done so for decades and will likely continue to do so. In fact, from 2001 to 2006:
- 90% of all metropolitan population growth occurred in the suburbs (American County Survey, US Census Bureau)
- Job growth in suburbia expanded at 6 times the rate of that in urban cores (Praxis Strategy Group)
A small recent surge in mass transit won’t really change this. Of the 130 million Americans who commute to work every day, 41 million – by far the largest number and share – commute within suburbs (i.e. to the same or another suburb). Only 18 million, or 14% of commuters, commute from a suburb to a central city. To put it another way, 60% of commuting is suburb-related in some way. [IAC Transportation (July, 2008)] By the way, 75% of all commuters drive alone in their cars.

Repeat after me: “multi-centered metropolitan region.” This is the model that characterizes most city/suburban regions in the US, where the urban core is just one of several nodes of development or centers of economic, residential, office, industrial, educational and recreational facilities and life. This is the model that, planned or unplanned, has evolved in the United States. It works, we like it, we’re keeping it. I know, congestion is horrible, but it’s horribly unnecessary: as explained by both Roth in Street Smart and by Stanley and Balaker in The Road More Traveled (both books published last year) [can we find a link to sites for these books] , we have the knowledge and means to reduce or even eliminate traffic congestion (more capacity, and more rational use of current capacity), but we don’t have the political will to deregulate, privatize and build.

Repeat after me again: “mixed-use.” OK? I’m not talking about New Urbanism or smart growth, which are concepts whose utility and desirability are debatable. I’m talking about the availability, in a suburban setting, to access services and amenities, or what Wally Siembab calls “smart sprawl” – retrofitting suburbs of any density so that residents can shop, obtain services and work all within a mile or two of their home.

One last point: Telecommuting, small home-based businesses and self-employment make suburban living all the more plausible and sustainable. If you add the number of part-time and full-time telecommuters plus home-based businesses, you’re talking about 36 million Americans, more than a fourth of the workforce.

Welcome to the future: suburbia.

Roger Selbert is a business futurist and trend guy. He lives in Los Angeles, edits and publishes the newsletter Growth Strategies, speaks and consults [www.rogerselbert.com]. He graduated from Bowdoin College in 1973, missed his graduation ceremony and has yet to return. But he thinks Brunswick, Maine was a great college town.
October 3, 2008
With Debate in Town, St. Louis is the Nation’s Capital for a Day

In 1869 L. U. Reavis spoke for many when he made the case for moving the nation’s capital from, as he put it, “the banks of the Potomac to the banks of the Mississippi.” Citing St. Louis’s location in the exact center of the nation, the growing population of the Mississippi Valley, the presumably temporary expediency that had led leaders to place the capital in Washington in the first place, and the commercial advantages of a capital city on the Mississippi River, Reavis thundered that just as Mohammed had gone to the mountain, so the nation would go to St. Louis. Predicting Congress would make the move within five years, Reavis concluded: “Before 1875 the President of the United States will deliver his message at the new seat of government in the Mississippi Valley.”

140 years later, the mountain waits. St. Louis today is not without the advantages that led Reavis to paint it as a bustling river town. The city hosts a federal reserve bank, a growing financial sector, a Boeing factory, excellent universities, and a collection of museums, gardens, and theatres that do, in fact, rival D.C.’s. Local demographics reflect the nation as a whole. Behind the Obama and McCain signs that dot my neighborhood are union members, Catholics, college professors, veterans, Jews, Reagan Republicans, pro-lifers, Muslims, and Hillary supporters. I can walk to the city where residents debate gentrification, community continuity, the quality of schools, and the costs of segregation. But if someone had asked me to describe the political vibe of the city when I first moved here in 2006, I would have settled on “resigned.”

Compared especially to residents of my previous home, Los Angeles, St. Louisans seemed reluctant to admit that they or their concerns mattered at all. At its best, this attitude comes across as midwestern plain-spoken humility. Whereas I couldn’t spend a day in LA without hearing about its status as the city of the future, few folks here mentioned that Missouri is a bellwether state, voting for the winner of every Presidential election since 1904 except that of 1956. And while St. Louisans regularly express familiarity with LA’s geography or its demographics or, at least, its Hollywood productions, I have had to tell Angelenos that St. Louis is on the Mississippi River, that it’s a union town and that, with a greater metro-area population of well over 2 million, we do, in fact, get first-run films in our theaters. At its worst, local humilty seemed to mean passivity and obeisance to national whims dictated by the coasts. When the rest of the nation figured out how to handle crumbling downtowns and failing schools, maybe they’d let us know what to do.

But in the past month, there’s been a slow rise in local pride. I’ve noticed more signs out for political candidates. Maybe that’s just because the election is nearing. No doubt, too, McCain’s surprise selection of Palin had similar effects here as elsewhere in the country. I see “Hockey Mamas for Obama” scrawled in shoe polish on the backs of mini-vans and sealed with a lipstick kiss. Local moms are writing their suburban papers to say they see themselves in the governor of Alaska and it feels good. The city turns its collective head to Phyllis Schlafly to hear what she has to say. But there’s also suddenly interest in who gets to attend the vice-presidential debates. And the St. Louis Post Dispatch is interviewing a retired high school debate coach on pointers for Biden and Palin, not for Obama and McCain.

The debates will be here, in St. Louis, at Washington University (what the father of a friend of mine used to call “the best university you’ve never heard of”) and people are excited. WashU has hosted presidential debates before. In fact, it’s hosted more than any other institution in history. And I confess that I detected the slightest disappointment among locals when we first learned that it would be the vice presidential, rather than presidential debates, that would be held there on October 2. But no one complained too loudly. After all, what are you going to do? It’s just St. Louis.

But all that has changed now. Although the sentiment may be tacit, people are beginning to think that St. Louis matters. Maybe instead of waiting for the nation to tell us what to do, we should be telling the nation. On my way to class at St. Louis University, in the city, I stop and chat with an African American man out registering voters. He’s an Obama supporter. I ask how I can get a handle on which way different St. Louis neighborhoods will go in the election. He tells me to stay in the city: “That way you can talk to immigrants, black people, white people – you’ll get diversity.” It’s an unusually gray day for September. We shiver. I ask him what he thinks of the vice presidential debates. He lights up. “They’ll decide everything!” he tells me enthusiastically. “The debate will determine Missouri, and Missouri is a bellwether state – and it’s going to make all the difference. I’m going to be there! I’m going to be there!” It is the most enthused he’s been in our conversation, the most enthused I’ve seen anyone here about the election.

I wonder if he’s heard of L.U. Reavis.

Flannery Burke is an assistant professor in the Department of History at St. Louis University. Originally from Santa Fe, New Mexico, she writes about the American West, the environment, Los Angeles, and St. Louis.

October 2, 2008
The future of urban settlement? Look in the suburbs

Let’s look at general urban settlement and suburbia from a geographic and demographic, not a planning or ideological viewpoint. There’s really no point to the fruitless and unscientific harangues about how people ought to live or about allegedly better or poorer forms of settlement. This is really trying to understand what is happening in the metropolitan level of settlement, agglomerations of at least 50,000 and their commuter hinterlands — where at least 80 percent of Americans live.

Definitions: I will use terms precisely. The central city is the historic, largest core incorporated place (OK, there are a few with 2 or 3 core cities). Suburbs are the rest of the urbanized area and may be usefully be differentiated between older, inner and newer, outer suburbs. Exurbia is the area of intense commuting to the urban core from beyond the urbanized area boundary, and it can be differentiated between rural territory (a.k.a. “sprawl”) and satellite towns.

As of 2000 “central cities” had 70 million persons (25 %) of the population, suburbs 120 million people (43 %) and exurbia up to 36 million (12 %). That puts the suburban and exurban share to well over 50 percent of the US total population, not even including the suburbs or smaller towns and cities.

Even worse for urban boosters, the suburbs — and particularly the exurbs — is where the growth is. In the Seattle metropolitan area, which is under unusually strong growth management restrictions and has a stronger than usual urban core, growth continues to head outwards, with inner, outer suburbs, as well as exurbs easily adding many more people than the central city.

The question now is whether this pattern will hold for a longer term or whether significant change can be expected. My sense is that these trends will broadly continue —that suburban and exurban growth will continue to be greater than central city growth, despite the passing of peak oil, the passion of anti-suburb intellectual currents, the energy crisis and new urbanist planning policies. But central cities will probably do somewhat better than they have in the last 20 years. So it is sensible to ask: what are forces for and against central city, suburban and exurban growth; and, as important, how will the character of these components of urban settlement change?

Demography

The combination of many suburban empty nesters, later marriage and fewer children for generation X’ers (those born 1965-1981) should foster selective central city growth . But this appears to apply only for the subset of more glamorous cities with a well-developed amenity structure. . But these cities often suffer housing price inflation and strong anti-growth lobbies which constrain may constrain growth. Many, perhaps most, cities lack the appeal to attract population in from lower-density areas.

Older inner suburbs represent a zone of significant change between and the traditional newer middle class family suburbs and the gentrifying or stagnant central cities. Some are receiving the displaced poor and minorities; some have matured into quality communities, and, like parts of the central city 50 years earlier, are still attractive to families, with or without children, as well as many recent immigrants.

Housing prices and taxes vary greatly across the US, which will like push movement toward lower cost places, including to non-metropolitan small towns and rural areas. This may be particularly true for those with adequate retirement income. But middle class families remain a huge demographic component for far suburban and exurban living (see market forces below).

On balance, demographic forces seem to reinforce existing patterns rather than favor either central cities or suburbs, or more rapid non-metropolitan growth.

Economic factors

Economic changes are even more uncertain. The vast expansion of producer services to replace the huge decline in primary and secondary (manufacturing) jobs clearly is in some jeopardy, as evidenced by the problems evident finance and insurance sector. The key is whether American entrepreneurs can partially restore a greater industrial base. In general, suburban and exurban sites are likely to be cheaper, more politically pliable and more available than central city sites, particularly compared to more elite gentrified core cities. A partial recovery of production in some less glamorous cities with available idle plant could occur but does not seem very likely.

Energy, technology, environment, and cars

Most observers concerned with the “end of oil” and with global warming argue that these will inevitably drive people to denser concentrations of settlement in central cities and older inner suburbs. They even predict a decline in far suburban and exurban settlement. US technological history, however, suggests that if innovation and investment take place anywhere, it will likely be on alternative energy sources, conspicuously including the continued popularity and dominance of trucks and cars. Nevertheless, persistent high energy prices could yield some acceptance of moderately higher densities for housing and business, and a slightly higher growth in central cities and older inner suburbs.

Market forces

Markets refer to preferences and needs, and the willingness to pay among households and businesses. There is relatively little uncertainty as to preferences. Even in the biggest metropolises, no more than 30 to 40 percent of households prefer denser urban settings and enjoy apartment or townhouse living. For the nation as a whole, the share is only 10-15 percent! Those who prefer it tend to be younger, unmarried persons and empty nesters without children and are (or will be) more educated and professional than the US norm. But 60 to 70 percent of households, and not just families with children, prefer single family homes and cars. These households will pay or MOVE in order to act on these preferences. At the same time perhaps 35 to 45 percent of jobs thrive in dense urban settings, as downtown towers, leaving 55 to 65 percent to seek less dense suburban and exurban settings, often by logistic necessity. These are the continuing and overwhelming facts that created and will sustain suburban living.

Planning

Intellectual hatred of suburbia is a century old and has been especially fervent in the last 60 years. From the late 1970s the planning profession has embraced what has come to be called “new urbanism,” advocating urban containment, urban redevelopment, densification, urban villages, and a new wave of rail transit, now under the broad rubric of growth management. These efforts often have been strongly supported by environmental groups concerned with the loss of open space as well as by central city political and business interests.

Several metropolitan areas are becoming increasingly regulated by such planning ideology. But to date the movement has not been successful at significantly slowing suburban or exurban growth. A few central cities, such as San Francisco, Seattle, New York, San Francisco and Portland, have gentrified, but have not grown much in population, since the mass of new housing is occupied by much smaller non-family households. Costs of growth management include displacement of minority and less affluent families, often to the older suburbs or to other neighborhoods of the core city.

Conclusions

Market preferences have prevailed. Businesses as well as households have resisted substantial concentration or been priced out of the gentrifying core. So the suburbs persist. But they have changed, especially in those more regulated metropolises. The older inner suburbs have become more central-city like, with more diversity in ethnicity and class. But this has not slowed the long-standing trend of net growth of housing and of jobs at the suburban edge – even in the most growth managed cities, and even in the most recent 2000-2007 period.

Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist).

October 2, 2008
How Low Can House Prices Go?

There is much speculation among economists and others about how close we are to the bottom of the collapse of housing prices. This is, of course, an important question, and goes to the heart of the wisdom or folly of the proposed $700 billion government bailout of financial markets, which is a consequence of their own profligate lending practices.

You would think that the experts would look at history. We have decades of experience with housing prices. Indeed, for at least the past six decades, median house prices have tended to be around three times an area’s median household income. It bears looking at where house prices are today compared to that standard.

And looking at it from the perspective, we may have a long way to go. As late as 1999, there was only one major metropolitan market among the top 100 with a median multiple (median house price divided by median household income) exceeding 5.0 (Honolulu), according to data compiled by the John F. Kennedy School of Government at Harvard University. The national median multiple was less than 3.0. By 2006, 23 markets, all highly regulated, had median multiples of more than 5.0.

Last week, we estimated that the aggregate value of the owned housing stock in the nation had risen nearly $5.3 trillion since 2000. Approximately 85 percent of that figure – $4.5 trillion – had occurred in metropolitan markets with severe land use regulations (strategies often called “smart growth”). These areas accounted for only 30 percent of the nation’s population. The large, more traditionally regulated markets experienced an estimated value increase approximately $200 billion, while outside the major metropolitan markets, the increase was approximately $500 billion.

If you accept this logic we may not be close to the bottom yet in many markets. Based upon an analysis of housing price declines from the peak, it appears that the losses in the highly restricted markets have taken back between one-third and, at most one-half, of the unprecedented house price increases relative to incomes.

If the economists and analysts had been paying attention, they might have looked at what happened in the last bubble, in bubble-land itself, California. From the middle 1980s to the housing bubble of the early 1990s, median house prices rose nearly 40 percent relative to household incomes in California’s largest markets (Los Angeles, San Francisco, Riverside-San Bernardino, San Diego and Sacramento metropolitan areas). By 1996, after a particularly deep recession in the early 1990s, the median house prices had declined to their previous household income relationship.

Yet there the bubble of the 2000s dwarfs what happened in the 1990s, a decline set off by a severe economic decline, particularly in Southern California. In the latest run-up California house prices doubled relative to household incomes in the five largest California markets by 2007. In effect the present bubble topped out at about a 2.5 times increase from pre-existing prices relative to the previous bubble. In 1985, the median multiple in these Golden State markets was 3.7, not much above the historic norm. By 1990 the median multiple had peaked at 5.3 and fell to 3.9 by 1996, rising to 4.2 by 1999. By September of 2007, the median multiple in these markets had risen to 9.1, far above the 1990 peak of 5.3.

It is not inconceivable that history will repeat itself – that prices will fall to the equilibrium level that has been the rule for so long. That would mean that the bottom may not yet be in sight. Moreover, it could well mean that the house prices reached at the peak of the bubble will never return except in another bubble, or in a hyper-inflating economy (another potential consequence worthy of concern).

In the next few weeks there will be no shortage of speculation about whether or not the bottom has been reached. Before house prices began to collapse in the highly regulated markets, many analysts gleefully reported on the unprecedented house price increases as if could continue without relation to the economy. The law of gravity appeared to have been repealed.

But my guess is Newton is still a very relevant person. If so, we should expect additional price decreases of 30 percent or more could occur in already declining markets such as Los Angeles, San Diego, Washington, D.C. and Miami. Similar declines from now could take occur in places like New York, Boston and Seattle, which have only recently experienced a downturn in prices.

Of course, it is always possible that smart growth regulation in these markets might have created a new floor that prevents prices from falling to historic norms. That would be good news for the owners of real estate – largely older and Anglo – in these areas. On the other hand, it would be disastrous news for millions of households and the next generation, many of them younger and minority, who will now have to remain on the sidelines of the housing markets of their choice. For many the choice may be moving to one of those places – like Indianapolis, Dallas-Fort Worth or Kansas City, Houston or Atlanta – where the opportunity to own a home still will exist for those without trust funds and elite occupations.

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.”

September 30, 2008