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  • Will New Urbanists Deliver A Home-Win With Miami 21?

    By Richard Reep

    “A walkable city, more like… Manhattan, Chicago, or San Francisco,” is how The Miami Herald characterizes the future of Miami under Miami 21, the new form-based code adopted on October 22nd by the Miami City Commission. This seems to be the hot new dream not just of Miami, but of all cities struggling under corruption and greed, codes and regulations, with an imagined underground urbanity, yearning to breathe free. Citizens may now expect to see Miami remodeled after cities that grew before the car came, but the lyrics to The Who’s “Won’t Get Fooled Again” echo in the minds of some: “Meet the new boss…same as the old boss.”

    Miami 21, controversial for nearly four years and over 500 public meetings, met a critical need for citizens who were tired of the corruption and greed that seemed to result in an increasingly ugly, congested quasi-urban nightmare. Planning and zoning regulations, which were originally designed to protect property values, could be reinvented when enough power and money was at stake, and the code enforcers allowed more and more bizarre juxtapositions of high rises among low-scale residential neighborhoods. During the recent condo boom, variances became business as usual for the Miami City Commission and the Mayor. Now that the condo boom is over, it appears that both are rushing in to make amends to voters by passing this new form-based code.

    The code places height limits on neighborhoods similar to the old, Euclidean code, ominously named 11000. But this time around, uses are not segregated; instead, a mix of retail and other uses is intended to encourage increased pedestrian activity and a taking back of some of the city from the car. For citizens, there has been much to like about the arguments in favor of this code. As a result of the change, the pleasant weather that drew so many to the city will now perhaps be enjoyed on the boulevard; fear of shadows from looming high-rises will, according to the plan, now recede a bit. And a more organized, easy-to-understand building pattern should replace the Rube Goldberg-like zoning code full of special exceptions, arcane “bonus” rules, and a process all too easily subverted by tax-hungry politicians.

    With private development comatose, it is a perfect time for many jurisdictions to perform a much-needed overhaul of their development regulations. In the boom-bust atmosphere of Florida, most of the development industry sees this cease-fire as simply a pause to reload, and the Department of Community Affairs – Tallahassee’s growth management gatekeeper – is busy helping developers get ready for the next boom by making the Rural Land Stewardship Areas, a regulation designed to protect rural areas from development, officially optional.

    The American Institute of Architects chapter in Miami proposed to reform the old code, rather than start from scratch, arguing that the new code is complicated, fussy, and inhibiting. Reform of the existing 11000 code never seemed to be an option, and instead the Miami 21 code, written by New Urbanist gurus Andres Duany and Elizabeth Plater-Zyberg of DPZ, replaces the old code. Citizens of Miami, when presented with this new code, seemed ready for a change.

    This was an important home-win for DPZ and for New Urbanism in general. Increasingly associated with greenfield prettyboys like Celebration and Seaside, New Urbanism seemed to be losing ground and losing relevance at solving real-city problems. With the support of a massive public relations campaign, New Urbanism has now been given a chance to deliver on its promises of a “a clear vision for the City that will be supported by specific guidelines and regulations so that future generations will reap the benefits of well-balanced neighborhoods and rich quality of life.”

    Arcane spreadsheets, full of formulae and footnotes, have been replaced by transects. These silhouettes of buildings and streets – a sort of cross-section through the city – begin with the way a natural, un-built environment might look, progress to how a rural road looks, and go all the way up to how high-rise canyons might look. Patterning a city on a consensual, pre-approved notion of order is what New Urbanism is all about. There are no surprises – no high-rises in your backyard – but, as some local architects worry, there’s no spontaneity either.

    Walkability is another promise of the new code. Ideas such as transforming blank walls, promoting urban infill development, and lining parking garages with retailers, are all illustrated with magical dissolve images that change ugly parking garages into charming shopping districts. If it were only that easy.

    Transit-oriented development is a strategic goal of the code, creating density clusters that get people out of their cars and into alternative forms of transportation. Buses, bicycles, vanpools, and Miami’s Metrorail are closely interlinked with Miami 21.

    The marketing website for Miami 21 makes it impossible to be against the code. Opposing Miami 21 would be like opposing lifesaving drugs or opposing the blue sky. New Urbanism won this victory because there weren’t any compelling counter-arguments to their basic argument for urban hygiene. And Miami 21 comes at a time when the city has been egregiously abused at the hands of the free market; its citizens disenfranchised and suffering from an environment of ugliness, traffic and congestion.

    As noble as Miami 21’s goals are, however, they are only as good as the politicians in whose hands they will be used. Making new laws, rather than enforcing the old laws, is a favorite activity of politicians who, backed against the wall by irate voters, seek a grand solution. Much harder work will come when developers try to seek waivers against Miami 21, and if the history of Florida is any guide, it is not likely things will change much. For Miami 21 has some inherent costs that will split the haves and the have-nots of Miami-Dade County even further apart than they are now.

    For the haves, the higher cost of development under Miami 21 is already a concerning factor. The code promises increased regulation, and the density transects favor already high-value districts. At the last minute, for example, City Commissioner Marc Sarnoff switched his support to be in favor of a 35-foot height limit in Miami’s MiMo historic district, to the chagrin of property owners seeking higher buildings. Whether he stays on one side of the fence, or switches back at the behest of a developer, remains to be seen.

    In Miami, the validity of New Urbanism’s principles of how cities are regulated will finally be put to the test. By spelling out the city’s form in detail, through technical images, watercolor perspectives, and mock-historical drawings, Miami 21 is illustrating a preordained vision of itself. The public’s trust in its elected officials has been so broken by the recent capitalistic building frenzy that, by consensus, an agreed-upon “ideal city” has been created on paper. Now it is up to the building officials to deliver this vision when the next building boom hits.

    Instead of exploring how to improve the planning process, as AIA Miami suggested, Miami 21 seems to have avoided confronting the planning and process issues that no one seems to know how to solve. Have our cities become so complex that we are unable to manage their growth through the traditional public planning process? An even bigger question is whether the village-planning model at the core of New Urbanism is a valid model? Will it achieve the lofty goals that have been promised?

    Miami 21 will be a fascinating experiment to watch during the coming years. Miami is already known for taking risks: it built an elevated rail system in a suburban, multipolar city and encouraged an international development binge that resulted in a dozen or two empty skyscrapers. Now it has added formal prototyping to its use regulations. As Miami 21 is implemented and tested, other cities like St. Petersburg, Denver, and Philadelphia are following suit, hoping that the increased regulations will be the quick fix needed to assure the public that the civic realm is being cared for.

    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.

  • The Case for Walking Away

    First American CoreLogic, a real estate research company, recently released data on negative equity mortgages for the third quarter of 2009. The situation is stark. Nearly one in four U.S. mortgages (23%) is currently underwater, with the borrower owing more than the property is currently worth. According to First American, when mortgages “near” negative equity are tallied, the total number of mortgages near or currently underwater is around 14 million- “nearly 28 percent of all residential properties with a mortgage nationwide.”

    Being underwater does not necessarily mean that a borrower is at risk of default. Although foreclosures and payment delinquencies are currently at record levels nationwide in the wake of the popped real estate bubble, most borrowers facing negative equity continue to make their mortgage payments. While being underwater “is the best predictor for loan defaults,” according to Sam Khater, economist with First American, “if you have your job and don’t encounter economic shock, you’ll most likely keep paying on your home.”

    But should you keep paying if you’re underwater? Brent White, an Associate Professor of Law at the University of Arizona has examined the situation, and argues in a recent discussion paper that homeowners “should be walking away in droves.” According to White, millions of homeowners “could save hundreds of thousands of dollars by strategically defaulting on their mortgages.”

    Such a strategic move comes with consequences for the borrower- most notably a negative impact on one’s credit score. This has a quantifiable cost, but White states that “a few years of poor credit shouldn’t cost more than few thousand dollars,” and notes that individuals can rebuild their credit rating over time, and can “plan in advance for a few years of limited credit.”

    Such costs are, argues White, “minimal compared to the financial benefit of strategic default.” White makes use of the hypothetical example of a California couple purchasing an average priced ($585,000), averaged sized home in 2006 to demonstrate the case for default:

    “Though they still owe about $560,000 on their home, it is now only worth $187,000. A similar house around the corner from Sam and Chris recently listed for $179,000, which, with a modest 5% down, would translate to a total monthly payment of less than $1200 per month – as compared to the $4300 that they currently pay. They could rent a similar house in the neighborhood for about $1000.

    Assuming they intend to stay in their home ten years, Sam and Chris would save approximately $340,000 by walking away, including a monthly savings of at least $1700 on rent verses mortgage payments… If they stay in their home on the other hand, it will take Sam and Chris over 60 years just to recover their equity”

    White argues that in such cases, borrowers are better off taking a short-term hit to their credit, and strategically defaulting to escape a long-term, crushing financial burden. By staying in the home, borrowers are taking money that could otherwise be saved for retirement or used for other purposes, and throwing it away to service a liability that is unlikely to show positive equity in their lifetime.

    Such advice seems most likely to appeal to those upside-down in particularly hard-hit areas of the country, including California, Florida, Nevada and Arizona. However, as noted, most homeowners are sticking it out, and continuing to pay their mortgages. According to White, many who might otherwise make such a decision avoid doing so due to “fear, shame, and guilt,” sentiments which are “actively cultivated” by the government and financial industry to keep homeowners from walking away.

    It remains to be seen if underwater borrowers will overcome fear of the consequences and take White’s advice to strategically default. Mortgage lenders most likely hope that his ideas remain firmly in the minority- as one mortgage executive stated in comments reacting to White’s report, the argument for strategic default is “incredibly irresponsible and misinformed,” and, if widely embraced, has the potential to “‘tear apart the very basis’ upon which mortgage lending rests”. Losing otherwise performing mortgages to strategic default, whatever the economic sense for borrowers, could be yet another blow to an already reeling industry.

  • Goldman’s Gunslingers: 401k + 9mm = 666?

    In the new Wall Street math of the post-9/08 world, it seems that some people turn to humor and others to rage. First they burned down our 401k plans: some people found this funny and made jokes about their “201k” plans. The French got angry and took CEOs hostage. Now, Goldman bankers are buying semi-automatic weapons to protect themselves from the angry mob. Matt Taibbi is desperately seeking humor in this, currently rating it a 7 on a scale of 1 to 10. Alice Schroeder, the story’s originator, finds it humorless, suggesting there could (should?) be “proles…brandishing pitchforks at the doors of Park Avenue.”

    In true on-the-ground reporting, a Bloomberg reporter wrote a story after a friend told her that he had written a character reference so that a Goldman Sachs banker could get a gun permit. Alice Schroeder (author of “The Snowball: Warren Buffett and the Business of Life”) also recounts a few examples of Goldman bankers using their other-worldly prescience to protect themselves: Goldman Sachs Chief Executive Office Lloyd Blankfein – only too well known now for saying that Goldman is doing “God’s work” – got a permit “to install a security gate at his house two months before Bear Stearns Cos. collapsed.”

    All of this contributes to the view that Goldman Sachs is, indeed, “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” I’m certain that Rolling Stone and Bloomberg have taken action to protect their right to be critical of Goldman. I’ve spent plenty of time on the phone with their fact checkers to know they put a lot of effort into being able to support every word they print. Blogger Mike Morgan, who founded www.GoldmanSachs666.com, had to defend his right to be critical of Government Sachs by going to court last April when Goldman lawyers Chadbourne & Parke threatened him with trademark infringement.

    But it isn’t just Goldman and it isn’t just our 401k retirement plans that have been damaged. There are fundamental problems in the way our capital markets are being run. The people running the system have known about these problems since at least the Crash of 1987 – I warned the U.S. central depository for all securities (Depository Trust Company) about it in 1993. Brooksley Born warned a presidential working group about it at a Treasury Department meeting in 1998 – and it contributed to the crash of 2008. As you read this today, nothing has been done to stop it from happening again. The real question is: which group will be the first to turn to action? Those with a sense of humor, those with a sense of security provided by a handgunor those with the sense to make changes?

  • DUBAI: A High Stakes Bet on the Future

    I picked up a copy of The Wall Street Journal-Europe on the concourse while boarding my Emirates Air flight from Paris to Dubai. The lead story provided an unexpected relevance to the trip – my first to Dubai. Dubai World, owned by the Dubai government, had announced a 6-month moratorium on payments of some of its $60 billion in debt. Since the announcement, stock markets have been dropping and recovering, company officials have attempted to calm borrowers and government officials have provided considerably less assurance than Dubai’s investors would have preferred.

    Here’s a brief guide to Dubai and some thoughts about its future.

    The United Arab Emirates: Dubai is one of the seven emirates of the United Arab Emirates (UAE), which like the United States and Canada is a federation. Broadly speaking, the emirates represent states or provinces. By far the richest is Abu Dhabi, with something like 10% of the world’s oil reserves. Just 100 miles up the eight-lane freeway is Dubai, with little in oil reserves, but which has used its previous income and massive borrowings to create one of the most spectacular urban environments in the world.

    An Architectural Feast: Dubai is a feast of modern high-rise architecture on shore, off shore and in man-made islands shaped like palms and a map of the world. A tour of the world’s most spectacular modern high-rise architecture could take many trips to China, including Shanghai’s Pudong, the developing western downtown of Beijing, the transforming core of Nanjing, around north station in Shenyang and the world’s largest boom-town, Shenzhen. But Dubai provides nearly as impressive a list of attractions within a comparatively few square miles.

    The Burj: Soon, the new world’s tallest building will open in Dubai. The Burj is virtually complete, with 160 floors and rising nearly 2,700 feet or more than 800 meters. The Burj is more than twice the height of the Empire State Building and a full 60% higher than the previous world record holder, Taipei 101. Adjacent to the Burj is Dubai Mall, which when completed will be the largest in the world. Another Mall, Emirates Mall, has an indoor ski area, a rather unique feature for the desert.

    The Main Street Freeway: The main thoroughfare in Dubai is Sheikh Zayad Road, a 12-14 lane freeway, with additional service lanes on both sides. On either side, there is a row of some of the world’s tallest buildings, often not more than a few feet apart. Except in the Burj area, the tall buildings tend to be in single rows, with low rise development beginning virtually at the rear lot lines.

    Dubai’s Upper North and South Sides: Manhattan has its upper east and west sides, while Dubai has its upper north and south sides. It is an open question which is more impressive, but if all of the planned construction is completed, Dubai’s skyline will overshadow that of New York. On the north side of Sheikh Zayed Road, there is the Dubai Marina, which played prominently in press reports expressing concern about the debt moratorium. Much of the Dubai Marina is still under construction. On the north side of Sheikh Zayed Road there is another development that appears to be at least as large as Dubai Marina, Jumeirah Towers, with many buildings still under construction. These two developments line the freeway for two miles and stretch at least 0.5 miles in each direction from the freeway. There are twin towers that appear to be generally modeled on New York’s classic Chrysler Building just to the east of the Marina on Sheikh Zayed Road. However, uncharacteristically for Dubai, they are not as tall.

    The Palms and the World: Some of the most spectacular architecture is just to the west of the Marina, in and around the Palm Jumeirah Island (actually four islands). The Palm Jumeirah is home to the Atlantis Hotel, which would be the talk of any town in the world, except Dubai, that is. The Jumerirah Palm island includes single family housing on its “fronds” and high rise condominiums at the entrance. A monorail operates, largely empty, to the Atlantis Hotel from the mainland, though does not connect to the Dubai Metro.

    The developer of the Palms and a group of islands called “The World” (in a shape somewhat like the world) is Nakheel, a subsidiary of Dubai World. This subsidiary was the unit that first indicated it would not be able to meet its financial obligations on time

    Burj Al Arab Hotel: Just to the east of Jumeirah Palm is one of Dubai’s oldest and best known architectural masterpieces, the Burj Al Arab Hotel, which sits offshore, though not at the distance many of the publicity photos suggest. This is a prehistoric structure by Dubai standards, having opened in 1999.

    Ring Roads and the Silicon Oasis: Dubai has two incomplete ring roads. The inner ring (Route 311 or “Emirates Road”), 12 lanes, runs through partially developed desert. The outer ring (Route 611), which is up to 10 lanes, runs through even less developed desert. There are, nonetheless, interesting projects along both roads. Dubai’s Silicon Oasis contains massive commercial buildings, still under construction, high rise condominium buildings and single family housing, which is behind security. This impressive development would be illegal in virtually all Australian urban areas, all of the UK and some US urban areas, because it would lie outside the urban growth boundaries that have been imposed by planners in those places.

    Academic City: On the edge of Silicon Oasis lies the Academic City, which contains branches of universities such as Murdoch (Perth, Australia) and Michigan State. Perhaps someday there will be an annual gridiron or soccer match played between the two in the nearby new Cricket Stadium nearby the Academic City.

    The Urban Area: The Emriate of Sharjah is to the immediate east of Dubai and continues the urbanization for many miles. The urban area (containing both Dubai and Sharjah) has approximately 2 million people. This is a very small population (less than that of Sacramento or Portland) for an urban area of such world significance and monumental architecture.

    The Dominant Ethnic Minority: The native or citizen population of “Emiratis” is much smaller, estimated at under 20%. The balance of the population is primarily expatriate workers who are in Dubai on temporary visas. So long as the hundreds of thousands of Indians, Pakistanis and others have employment, they can stay.

    Future Plans: Dubai has every intention of continuing its building binge. Already, a huge new international airport is under construction, which will have an annual capacity as much as 50% greater than the world’s largest airport (Atlanta). Unbelievably, the present airport, which has had significant recent expansion, would remain open. The two airports together would provide Dubai with more passenger capacity than the five airports of Los Angeles (with its 18 million consolidated metropolitan area population). There are many more hotels, large condominium and residential projects on the drawing boards. There are plans for a luxury hotel under water.

    Projects on Hold: However, Dubai may not be the master of its own fate. The UAE and the Emirate of Abu Dhabi, both with much more in financial resources, are expected to provide Dubai some relief. However, any assistance will come at a price. Control of crown jewel “Emirates Airlines” could be lost. The new international airport could be put off, particularly with nearby Abu Dhabi also expanding its airport

    The question is whether Dubai can rebound. There are plenty of uncompleted projects like the “City of Arabia” development along the Emirates Ring Road, far from the core. The project’s website says it will be completed in 2008. It is nearly 2010, and to put it mildly, from Emirates Road, the project appears to be a bit behind schedule.

    The undersea hotel project also appears to be on hold. The proposed Nakheel Tower could rise to over 4,000 feet and would be located just to the east of Jumeirah Towers. It was, however, put on hold in early 2009. Nakheel, of course, is at the heart of the Dubai financial crisis. Construction has apparently stopped on Nakheel’s Deira Palm (the largest of the palms) and the World.

    Of course, Dubai is not the only place where financial difficulties have put buildings on hold. Chicago’s “Spire” is little more than a circular hole next to Lake Shore Drive, rather than a rapidly rising edifice that would have been the world’s second tallest tower, after Dubai’s Burj.

    Whither Dubai? It seems fair to ask what Dubai was seeking to accomplish. On one hand, there was an interest in developing a strong tourism base, and tourism has increased over the past decade. Yet, Dubai attracts only 1/10th of tourism of Las Vegas, while having more than one-half the hotel rooms. One challenge is that what has been built may already be too large to be supported by the permanent population, Emirati or expatriate.

    But the real question is where Dubai goes from here. Late reports indicate that Dubai World intends to restructure nearly one-half of its debt. Creditors had hoped that the richer Emirate of Abu Dhabi would bail out Dubai, not much different from Texas bailing out a virtually bankrupt California. The more likely possibility could be that the UAE federal government itself might guarantee some debts but neither seem in any hurry to provide blanket relief. This could be reflective of the growing revulsion to the massive government bailouts from the Great Recession.

    At this point, the international repercussions appear unlikely to be large enough to start phase II of the Great Recession. Yet the notion of providing a safe “haven” in a tough neighborhood could still pay off in the long run as it has for cities like Singapore. It may not be conventional wisdom to say this, but the Emiratis could end up with the last laugh.

    Top photograph: Dubai Silicon Oasis
    Second Photograph: The Burj (November 27, 2009)

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

  • Capping Emissions, Trading On The Future

    Whatever the results of the Copenhagen conference on climate change, one thing is for sure: Draconian reductions on carbon emissions will be tacitly accepted by the most developed economies and sloughed off by many developing ones. In essence, emerging economies get to cut their “carbon” intensity–a natural product of their economic evolution–while we get to cut our throats.

    The logic behind this prediction goes something like this. Since the West created the industrial revolution and the greenhouse gases that supposedly caused this “crisis,” it’s our obligation to take much of the burden for cleaning them up.

    Plagued by self-doubt and even self-loathing, many in the West will no doubt consider this an appropriate mea culpa. Our leaders will dutifully accept cuts in our carbon emissions–up to 80% by 2050–while developing countries increase theirs, albeit at a lower rate. Oh, we also pledge to send billions in aid to help them achieve this goal.

    The media shills, scientists, bureaucrats and corporate rent-seekers gathered at Copenhagen won’t give much thought to what this means to the industrialized world’s middle and working class. For many of them the new carbon regime means a gradual decline in living standards. Huge increases in energy costs, taxes and a spate of regulatory mandates will restrict their access to everything from single-family housing and personal mobility to employment in carbon-intensive industries like construction, manufacturing, warehousing and agriculture.

    You can get a glimpse of this future in high-unemployment California. Here a burgeoning regulatory regime tied to global warming threatens to turn the state into a total “no go” economic development zone. Not only do companies have to deal with high taxes, cascading energy prices and regulations, they now face audits of their impact on global warming. Far easier to move your project to Texas–or if necessary, China.

    The notion that the hoi polloi must be sacrificed to save the earth is not a new one. Paul Ehrlich, who was the mentor of President Obama’s science advisor, John Holdren, laid out the defining logic in his 1968 best-seller, The Population Bomb. In this influential work, Ehrlich predicted mass starvation by the 1970s and “an age of scarcity” in key metals by the mid-1980s. Similar views were echoed by a 1972 “Limits to Growth” report issued by the Club of Rome, a global confab that enjoyed a cache similar to that of the United Nations’ Intergovernmental Panel on Climate Change.

    To deal with this looming crisis, Holdren in the 1977 book Ecoscience (co-authored with Anne and Paul Ehrlich) developed the notion of “de-development.” According to Holdren, poorer countries like India and China could not be expected to work their way out of poverty since they were “foredoomed by enormous if not insurmountable economic and environmental obstacles.” The only way to close “the prosperity gap” was to lower the living standards of what he labeled “over-developed” nations.

    These predictions were less than accurate. World-wide systemic mass starvation did not take place as population escalated. Rather those many millions wallowing in poverty in the developing world, particularly in Asia, lifted themselves into the global middle class. Far more efficient ways to use energy have been developed, and unexpected caches of new resources continue to be discovered all over the planet.

    Yet however wrong-headed, Holdren’s world view now has jumped from the dustbin of history into the craniums of presidents and prime ministers. President Obama’s pledge to “restore science to its rightful place” has morphed into state-sponsored scientific ideology.

    The blind acceptance of this agenda threatens the credibility of Obama and other Western leaders. For one, if the crisis is by its nature global why should we allow massive increases in carbon emissions in developing countries–China will soon surpass us in greenhouse gas emissions, if it hasn’t already–while we draconically cut ours? Does the planet really care if it’s turned to toast by American- vs. Chinese-made gas?

    Then there’s the specious historical narrative that insists we pay for creating the industrial revolution since it brought on global warming. Should the West pay for the sins of the British who brought electricity and railroads to India? Does America owe carbon penance for making the technology transfers critical to East Asia’s remarkable rise? Maybe we should start by making Wal-Mart cancel its China orders. That might help de-carbonize the planet a bit.

    There’s also growing skepticism about the whole warmist narrative. Climate change now ranks last among 20 top issues in a recent Pew report. There’s been a similar rise in skepticism in the U.K., once a hot bed of warmist sentiment.

    The reasons for the shift may vary. First, there’s a controversy over the temperatures of the past decade, with even some concerned about climate change admitting that there has not been the expected warming. Or perhaps a deep recession has made many “rich” countries feel a trifle less “overdeveloped.”

    And now we have Climate-gate–where leading warmist pedagogues are trying to suppress unsuitably conformist scientists and perhaps even cook the numbers a bit. Although you won’t see too much tough coverage in the mainstream press, the tawdry details have poured out over the Internet and diminished the aura of scientific objectivity of some leading global warming researchers. One recent poll shows that a large majority of Americans believe scientists may have indeed falsified their research data. By well over 4 to 1, they also believe stimulating the economy is a bigger priority than stopping global warming.

    Clearly the political risks of giving first priority to the carbon agenda are on the rise. Australia’s Senate just voted down that country’s proposed cap and trade scheme. The Western center-right, once intimidated by the well-financed greens and their media claque, has become bolder in challenging climate change alarmism.

    There’s also something of a rebellion brewing, at least toward emissions trading schemes, among some liberals from the South and Midwest, notably Wisconsin’s Russ Feingold and North Dakota’s Byron Dorgan. As analyst Aaron Renn has pointed out, these areas are most likely to be negatively affected by the current climate change legislation. Feingold recently stated that he was “not signing onto any bill that rips off Wisconsin.”

    So why do leaders like Barack Obama and British Prime Minister Gordon Brown continue identifying themselves with the climate change agenda and policies like cap and trade? Perhaps it’s best to see this as a clash of classes. Today’s environmental movement reflects the values of a large portion of the post-industrial upper class. The big money behind the warming industry includes many powerful corporate interests that would benefit from a super-regulated environment that would all but eliminate potential upstarts.

    These people generally also do not fear the loss of millions of factory, truck, construction and agriculture-related jobs slated to be “de-developed.” These tasks can shift to China, India or Vietnam–where the net emissions would no doubt be higher–at little immediate cost to tenured professors, nonprofit executives or investment bankers. The endowments and the investment funds can just as happily mint their profits in Chongqing as in Chicago.

    Global warming-driven land-use legislation possesses a similarly pro-gentry slant. Suburban single family homes need to be sacrificed in the name of climate change, but this will not threaten the large Park Avenue apartments and private retreats of media superstars, financial tycoons and the scions of former carbon-spewing fortunes. After all, you can always pay for your pleasure with “carbon offsets.”

    So who benefits from this collective ritual seppuku? Hegemony-seeking communist capitalists in China might fancy seeing America and the West decline to the point that they can no longer compete or fund their militaries. A weakened European Union or U.S. also won’t be able provide a model of a more democratic version of capitalism to counter China’s ultra-authoritarian version.

    The Chinese may win a victory in Copenhagen greater than anything accomplished so far in the marketplace–and our leaders will likely thank them for it. Forget bowing to the emperor in Tokyo; like vassal states at the height of the old Middle Kingdom, the new requisite diplomatic skill for Westerners will be kow-towing to Beijing.

    Yet most people in the developing world will not benefit from the suicide of the West. The warmists’ vision is not one of growing prosperity, but of capping wealth at a comparatively low level. De-industrialization means the West falls back while emerging economies grow a bit. The “prosperity gap” may close, but ultimately everyone is left with less prosperity.

    In the long run developing countries gain less from harvesting guilt than enjoying a bounty of customers, capital and expertise. The West’s experience and technology can assist developing nations in improving their far more greatly threatened environment. Turning the West into a spent force will leave the world poorer, dirtier and ultimately less hopeful.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press early next year.

  • pabarge

  • Fighting Spirit Lives On In Northern Montana

    On a hot July day in 1923 northern Montana served as the unlikely backdrop for a boxing extravaganza on the international stage. There on the plains right outside the City of Shelby, Jack Dempsey defended his World Heavyweight Boxing Championship against the hard-hitting Tommy Gibbons – the only world championship fight that Jack Dempsey ever fought that went the full fifteen rounds.

    The fight began as a real-estate stunt and a chance to get the recently oil-rich town’s name into the national media. As recounted in a 2004 Chicago Tribune story “The prestige and attention brought by a world-class sporting event could bring more money — perhaps even new residents and investment — into the community, or so thought town leaders at the time. Boomtown mentality had taken over.”

    Local boosters lauded the bustling town near the Canadian border as the Tulsa of the West and built a 40,208-seat stadium to host the match – the biggest outdoor arena in America at the time.

    But there on Champions Field the “gladiatorial battle” between Dempsey and Gibbons was fought amidst ticketing problems reminiscent of the modern day Woodstock Festival.

    Reports throughout the last days leading up to the fight cast doubt on the event. And even though Jack Dempsey stepped in to assure organizers that a bout would take place, the damage had been done. Rail services had been cancelled for special trains, advance reservations cancelled and fight fans stayed home. In the end, only 7,702 paying fans showed up. An estimated 13,000 people got to see the fight free.

    Today a local group of dedicated citizens are working hard to build a park on the original fight sight with a full size ring holding life size bronzes of Jack Dempsey, Tommy Gibbons and the referee. Kiosks throughout the park will depict pictures and audio highlights recounting fight events as well as feature the history of northern Montana homesteading, the oil and gas industry and the railroad.

    The fighting spirit lives on in other ways in Northern Montana as four-term Mayor Larry Bonderud (Shelby, Montana) and other civic leaders step into the ring of economic development on a daily basis.

    Shelby, the County seat of Toole County, is a small community that thinks and acts big. Led by Mayor Bonderud and supported by a strong cast of local and regional civic and business leaders, the city has set in play a diverse, aggressive and successful approach to economic development focusing on attracting young families by bringing new businesses, industries and family wage jobs to the community. This approach is paying off, with the city realizing a 6.31 percent population increase since 2000.

    Capitalizing on long-term vision and an entrepreneurial approach to economic development, Shelby has been successful in attracting and growing business and employment opportunities within the city and county. Going back ten years, in an effort to grow job opportunities in the region, the city worked to attract a private adult correctional center near the city. Fast forward to today, the Crossroads Correctional Facility is the top private employer within the county with over 150 employees.

    Always the promoter, Bonderud suggests that “We’re one of the safest counties anywhere,” noting some 230 correction officers, Border Patrol agents, local police and regional FBI and Montana Highway Patrol officers who work in the county with 5,100 residents.

    The community continues to work on growing its industrial base by expanding its industrial park, capitalizing on its growing wind energy developments and a concerted development effort to put together an innovative 25 million dollar intermodal facility and energy park that capitalizes on existing rail capacity, access to energy and a location adjacent to the Canadian border. The city, county and regional port authority are working and investing together to make this opportunity a reality.

    Working together seems to come naturally in these parts. Shelby and Toole County are part of the 5-county Sweetgrass Development region (Cascade, Glacier, Pondera, Teton and Toole counties) that is working collaboratively to diversify and grow the regional economy and capitalize on its competitive advantages. Nestled together adjacent to the I-15 corridor and along the Rocky Mountain front, the five county region is well positioned to meet growing needs for domestic energy consumption in the western United States. The region’s renewable energy sources including wind and hydro-electric based power, and its significant agricultural capacity (the backbone of the regional economy) have served as a buffer in the recent economic downturn.

    The Sweetgrass Development organization is spearheaded by Cascade County Commissioner Joe Briggs, an affable and effective leader who along with regional partners Corlene Martin, Cynthia Johnson, Cheryl Currie, Bill McCauley, Brett Doney and Mayor Bonderud are working to set aside parochial power plays and find economic development solutions that work for the region. A common refrain is “what is good for one is good for all”. This team spirit is exemplified by regional efforts to retain and expand value-added agriculture opportunities including milling operations and packing plants and assistance in growing the regional capacity for wind energy development and transmission.

    The region is not driven by wind and wheat alone. The area’s numerous high-tech, knowledge-based industries such as D.A. Davidson (financial consultants), Centene (healthcare services), AvMax (aviation support and management services), Intercontinental Truck Body (truck body manufacturing) exemplify the knowledge base and work ethic inherent in the region and speak of the natural appeal of the Sweetgrass region as one component in the race to attract and retain a quality work force.

    A combination of “can do” spirit and strategic investments to support growing local companies and new infrastructure to feed new industries fitting with the region’s strengths place the Shelby, MT region in a strong position to beat the recession.

    Doug McDonald is a Senior Associate with , a development firm specializing in economic development strategies and initiatives for small to medium-sized metropolitan areas and urbanizing rural regions. Delore Zimmerman is president and CEO of Praxis Strategy Group and publisher of Newgeography.com

    Photo by jimmywayne

  • NGVideo: East St. Louis (Part III)

    Part III in the video series on East St. Louis explores ideas put forward for (re)development of the city, including cultural tourism based on the city’s African American heritage and use of vacant land for farming to create a local food source for the St. Louis metropolitan area.

    Part II gives views of downtown today, shows how its history can be seen in the city, and explains why the city could still be a good place for new development.

    Part I discusses the origins and development of East St. Louis as an industrial city.


    Michael R. Allen is an architectural historian currently serving as director of the Preservation Research Office, a technical assistance and preservation consulting firm. Allen also serves on the boards of the St. Louis Building Arts Foundation and Preservation Action.

    Alex Lotz is a graduate of the Film Production program of Chapman University’s Dodge College of Film and Media Arts.

  • The European Model Gets A Makeover

    Does the United States finally have its first European President in Barack Obama? Does he truly want to Europeanise the American health system and impose European-style socialism on the US? RealClearPolitics.com assures us that ‘his policies on government spending, taxation, health care and carbon emissions would all tend to bring America in line with European norms.’

    It is a powerful message – or it would be were the US not already in line with European norms in nearly every way that matters. In terms of social welfare expenditure, working hours, socialized health and even military spending, the US slips snugly in place among its European counterparts.

    So why the constant comparisons between the US and Europe? It’s all rather simple: people who refer to ‘Europe’ as an alternative to the United States rarely specify which European countries they mean. Europe is a continent consisting of around 50 countries (its borders are debatable) of which only 27 are in the EU and 26 in NATO. These countries run from Liechtenstein, with the highest GDP per capita in the world, to Kosovo, which is poorer than Nigeria. The idea that one common European policy or culture could exist in such a diverse environment is absurd.

    Europe, as a single economic system with a single culture simply doesn’t exist. It is a myth, pushed by some on the left as an egalitarian liberal alternative to the US, and by some on the right as an example of a socialist failure – neither side ever defining what Europe actually is.

    Perhaps this is all a little pedantic. After all, we know that when people talk about European socialism they mean France, Germany and Sweden, not the irrelevant, piddling little states like Ireland, Latvia and, eh, Russia. By far Europe’s largest and most populous country, with more than three quarters of its population living on the European side of the Urals, Russia is rarely counted as European at all. Commentators often ponder ‘Europe’s response to Russia,’ a nonsensical statement unless ‘Europe’ is clearly defined as the EU, or the European NATO members, or whoever.

    When Europe is left undefined in this way, it becomes a convenient catch-all tag to mislead, reinforce prejudices and polarise debates. Look no further than the present debate about health care in the US, where Obama has been criticized for wanting to Europeanise American health care, the implication being that there is a single European socialist alternative to the US. Glenn Beck pounced on this idea last July:

    America’s health care is much better than Europe’s…. Americans have a better survival rate for 13 of the 16 most common cancers than Europe. Take prostate cancer: 91.9 percent of men live through it, versus 73.7 percent in France and just 51.1 percent in Britain.

    These are shocking statistics, but puzzling. France and Britain are just two of Europe’s 50 countries, so why are they picked to represent the rest? In fact there is massive variation in cancer survival rates across Europe. Poland managed to save only 37.1% of prostate cancer victims. But Austria, with its heavily socialized health system, had a survival rate of 86.1%.

    Just days ago a study by the Israeli Health Ministry showed that the US has a total female survival rate of all cancers of 66%, with Finland managing 67%. Glenn Beck could avoid the fact that Finland’s socialized health care is a bit better at saving women from cancer than the American system, because he simply generalized about the entire European continent and cherry-picked two convenient statistics from it.

    This October, former Italian prime minister Romano Prodi told an audience at Brown University that the US should follow Europe’s lead in recognizing health care as a right. As a left-wing Italian, it’s understandable why Prodi would say this: in 2006, government expenditure on health made up 77.2% of total health spending in Italy, compared with only 45.8% in the US. The European region as a whole averaged at 75.6%, much higher than the US.

    Yet government health expenditure in Italy’s neighbour Albania made up only 37.3% of the total health spending. Cyprus was 44.8%. Switzerland 59.1%. Moldova 46.9%. Georgia was only 21.5%. Prodi seems to have ignored these countries because they were inconvenient for his generalization, yet they are crucial to the debate. If Obama is trying to ‘Europeanise’ the American health system, does it mean he wants to cut government expenditure to Albanian levels or increase it to Iceland’s?

    As it happens, the US government under Bush spent more on health as a percentage of GDP than most European countries: 7% in 2005 compared with only 4.3% in Poland, 5.3% in Slovakia and 5.8% in ‘socialist’ Norway.

    Nobody would judge American policies – for example, its social protection or welfare programs — by averaging out policies in Cuba, Costa Rica, Canada, Nicaragua and any other countries that happen to share the continent with it, but this happens with Europe all the time. Donald Rumsfeld seemed to realize it was silly when, in 2003, he dismissed Germany and France as ‘old Europe’, pointing to NATO’s centre of gravity shift into eastern Europe. Rumsfeld had a point: many of the former Communist countries have distinctly different economic situations to some of those in ‘old Europe’.

    In 2005 the EU countries with the highest expenditure on social protection as a percentage of GDP were Sweden (32%), France (31.5%), Denmark (30.1%), Belgium (29.7%) and Germany (29.4%), all ‘old Europe’ nations. OECD statistics for 2005 show the US has a much lower expenditure on social protection, only 15.9%.

    How about new Europe? Latvia spent only 12.4% of its GDP on social protection in 2005. Estonia spent 12.5%, Ireland spent 18.2% and Romania spent 14.2%.

    Perhaps the strangest reference to Europe in recent times came after Obama won the Nobel Peace Prize. The Wall Street Journal had this to say:

    George W. Bush may have retired from American public life, but the Europeans want the Yanks to know they never want to see his likes again…. On one level, all of this represents the parochial European foreign policy agenda…. The Europeans are applauding that at long last there is an American President willing to let himself and his country mingle as equals with this amorphous global “majority.”

    The Nobel Peace Prize Laureate is chosen by five Norwegian committee members, who are, in turn, elected by the 169 members of the Norwegian parliament. Norway is not a member of the European Union.

    Yet somehow the Wall Street Journal managed to convince itself that five Scandinavians in a small non-EU country represent well over 700 million people and all fifty European countries’ foreign policies. This makes as much sense as phoning up Fidel Castro, Hugo Chavez and Evo Morales and dubbing their opinions as representative of ‘American foreign policy’.

    Let’s be clear. It’s not that there aren’t trends among European countries, especially among the ‘old’, wealthy, West European countries. But in terms of most socio-political indicators, the US sits quite comfortably inside the European group, rather than standing apart as a radical alternative to it. The US isn’t even the highest in military spending as a percentage of GDP: Turkey, Bosnia and Herzegovina and Greece all spend more.

    It would take little effort for journalists to point out what exactly they mean by Europe: EU members, NATO members, Western Europeans, etc. So let’s not talk about this non-existent Europe anymore. At best it is lazy and inaccurate; at worst it is misleading and divisive.

    Shane Leavy is a freelance journalist for hire. Born and raised in Ireland, he has lived on three continents and been published on four, made an award-winning radio documentary on the banned Chinese religious movement Falun Gong, and written about science, religion, travel, culture, politics, environment and business.

  • The Fed and Asset Bubbles: Beyond Superficiality

    There is considerable discussion about tasking the Federal Reserve Board with monitoring and even taking actions to prevent asset bubbles. Before they move too far, the Fed needs to understand what happened in the housing bubble to which they responded after the world economy was decimated.

    Any initiative on the part of the Fed to seriously understand, much less do anything about asset bubbles requires that their causes be comprehended at more than a superficial level. To this day, the Fed appears to presume that the housing bubble was simply the result of financial factors, such as loose money and loose lending. In fact, however, the housing bubble was far more complex than that.

    The averages on which the Fed and much of the business press have based their analysis hide the dynamics that were at the heart of the price explosion. The housing bubble inflated with a vengeance in only one-half of the major US metropolitan markets, and inflated very little in the others.

    There is no doubt that the bubble would not have occurred without the loose monetary policies. However, where the bubble inflated the most, it was in a metropolitan environment of excessively strong land use controls or artificially constricted land supply (called compact development or smart growth). In these markets (such as in California, Florida, Phoenix, Las Vegas, Portland and Seattle), regulation is so strong that when the loose credit induced expansion of demand occurred, the housing market was not permitted to respond with a supply of new affordable housing, and there was a rush to purchase existing stock, which drove prices up.

    On the other hand, in the traditionally regulated markets, including fast growing metropolitan areas like Atlanta, Dallas-Fort Worth and Houston, there was comparatively little escalation in house prices. In short, one-half of the country had a housing bubble, the other half did not. In the more highly regulated markets, the Median Multiple (median house price divided by median household income) increased to from 4.5 times to more than 11 (compared to the historic ratio of 3.0). In the traditionally regulated markets, the 3.0 standard was generally not exceeded. Thus, as Nobel Laureate Paul Krugman of Princeton University and The New York Times noted more than three years before the crash, the United States was really two nations with respect to house price escalation, and the difference was land use regulation.

    We have estimated that the house value losses were overly concentrated in the compact development markets, accounting for 85% of the peak to trough declines. Without these artificial losses, which were the result of unwise policy intervention, the international Great Recession might not have been set off or it certainly would have been less severe. All of this is described in the last two editions of our “Demographia International Housing Affordability Survey” and related items (the 6th Annual Demographia Housing Affordability Survey will be available early in 2010).

    The purpose of compact development and smart growth is to stop the expansion (the ideological term is “sprawl”) of urban areas. Clearly, given the distress that has occurred in the US housing market and the wave of additional losses in both the domestic and international economy that followed, the price of stopping urban expansion (or attempting to) has proven to be immensely larger than any gains.

    At least in housing, until the Fed understands what happened, it will be powerless to effectively apply whatever new powers it employs to control future housing bubbles.