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  • Localism – What’s the Attraction?

    As I drive to work here in Wisconsin Rapids, I cross the bridge where the view of the river is stunningly peaceful, with the mystical morning mist rising off the calm water reflecting the warm early morning sunlight as it surrounds the pristine wooded islands. It takes me all of five minutes by car to make my journey to work – one of the beauties of living in a smaller community. I can get to most places in town within five minutes.

    It does not mean, however, that I lack access to the same amenities that an urban dweller has. When I’m looking for my arts and culture fix, I don’t need to go far; there is a new show opening at Alexander House, one of the local galleries which regularly features accomplished artists with local ties. The local theatre productions rival professional quality, as several of the key performers and producers are professionals, who choose to live in an area that offers a better educational experience and quality of life for their families.

    You can get the local word on “what’s happening” by heading to the local coffee shop, pub or walking to the post office and greeting other “locals,” drinking in the character of the community. In a flash, I can be at the airport, and be on my way to countries around the world. Although the airport is 45 miles away, I can actually get there in less time (under 45 minutes), than someone living in Chicago or Minneapolis can get to the airport in those cities. I might pass a total of 25 cars in my entire drive to the airport, and at the airport a long line to check in at the kiosks might be two people ahead of me. Air fare from our central Wisconsin airport, even to international locations, is usually cheaper than if I fly from any of the surrounding big metropolitan airports.

    Five years ago, I purchased my three-bedroom 1300 square foot ranch home two blocks from the seven-mile Riverwalk trails for $75,000. My neighbor, the previous mayor, mows my lawn and does odd jobs for me. I have the beauty of woods and water that is easily accessible and safe to go alone and enjoy. I am tapped into the world and information super-highway with redundant high-speed internet access. I live the good life without the long lines, high costs or hassles of the city. It also offers me an opportunity to be civically engaged and give back to the community, as well. This is why I choose to live in the heart of Wisconsin. I want “where I live” to offer exceptional quality to enhance my life, and it does here in America’s Heartland.

    The pace of our lives increased exponentially in the last half century, and continues to escalate at a rate that is staggering. During this evolution, we went through the period of being caught up in this fast pace and trying to “keep up with the Jones” and the speed of technology advancement. We were attracted to the fast lane and glitz of urban lifestyle, which symbolized chic and sophisticated. The Baby Boomers, in their career primetime, driven to succeed, gravitated to the coasts and large metropolitan areas to be where it was “happening.” As a result, housing costs in these regions skyrocketed, the highways became unbearable during commuting hours, adding hours on both ends of the already longer work day necessary to keep up with the increasing global competition and faster and faster pace. Crime rates soared. People became numbers and life was about mass production, cookie cutter franchises, big box shopping and having the most goods – a popular Calvin and Hobbes cartoon reflected this fad, “He who dies with the most toys wins!”

    Now as the Baby Boomers are entering retirement and their children are having children, we are noticing a trend that may bring new life to the Midwest and the patchwork quilt character that rural communities offer. No longer does the rat race of the urban life style hold a compelling calling. A resurgence of wanting something more real, more balanced, more representative of our agricultural roots and our rural heritage, which made the country rich in Americana, seems to be calling. The new trend that is emerging is localism – the desire to have a strong sense of place and connection to where we live, what we eat, how we participate in civic engagement.

    As Baby Boomers look to wind down, they are seeking a more relaxed atmosphere and authentic sense of place. This is also the demographic that is beginning to drive the trend towards self-employment, often using their acquired professional expertise from their high powered career investment as the product, and seizing the opportunity that technology and mobility provide to be located in a place that appeals to their quality of life factors. Their children, who are entering that phase of life, where they are having children, are seeking that housing affordability, safe neighborhoods, beautiful natural landscape and good public education system for their kids, often found in the upper Mid-west. This generation that is now beginning to make an impact in the workforce, exhibits a high level of civic responsibility in its decision making. Put that together with the Baby Boomers growing sense of awareness that our past actions of ignoring our affects on our environment must change and that starts with changing our own habits and choices in what we buy and how we live, creates relatively large movement towards “local.”

    An article, by Marian Burros, in the New York Times, published on Aug. 6, 2008, stated,
    “One of the biggest brand names in food this summer doesn’t carry a trademark. It’s the word ‘local,’ which has entered the language as a powerful symbol of high quality and goodness.”

    So, what is the “local” appeal? It is the character and quality of life that provides a sense of place – a reminiscence feeling of authenticity and knowing the source of where things come from, who made it and how it was grown. There is a desire to make the personal connection and create an experience in the purchase of a product. That experience often equates to wanting to have that sense of place association. The sense of place character is one that has a unique quality, a distinction and flavor that brings out the emotional response which translates to being an experience of culture and belonging.

    As we have come to grips with growing fuel prices and climate change, a sense of social responsibility has grown. We see a growing social movement to also protect the character of our communities by revitalizing downtowns, curtailing big box retail development, seeking non-franchise purchasing experiences, and patronizing local specialty shops, geared toward sustaining that sense of unique character and experience that a community offers. Even in urban areas, the sense of neighborhood culture and pride is having a resurgence.

    As we experience the personal economic affects of globalization and the resulting loss of jobs due to sending our production work overseas, we have seen a rising understanding of the connection and benefit that demanding “local” provides, to our area economies, our own families, our neighbors and friends. Supporting “local” gives people the good feeling of “making a difference” and playing a responsible role in the sustainability of our communities, while also stimulating that sense of pride and authenticity. It says we have a choice in the matter, and that choice matters. “Localism” is not only good for our economy, it represents a sense of social responsibility and desire to sustain our patchwork quilt of Americana that represents our country’s heritage and character.

    Connie Loden is the Executive Director for Heart of Wisconsin Business & Economic Alliance that coordinates community economic development projects in Central Wisconsin. Connie is an internationally recognized leader in rural development, holding leadership roles with the Community Development Society and National Rural Development Partnership.

  • Recalibrating Destination Marketing

    In the dark days following the Sept. 11, 2001, terrorist attacks on New York City and Washington, D.C., when traveler anxiety hit previously unknown levels, there developed among tourism marketers a new emphasis on targeting what was then called the “drive” market. During a time when formerly fearless flyers were concerned that airport delays could add hours to their trip or that there might be another attack on the nation’s air passenger system, a new sort of traveler’s calculus evolved: Would it be quicker to make a trip of 500 miles or less by simply driving to the destination rather than allowing the extra two to three hours for airport security that the airlines and the FAA recommended?

    Today, with the unpleasantness of air travel at what’s perceived to be an all-time high, many of the post-9/11 circumstances seem to be upon us once again. Now, though, with gasoline prices also setting historic highs, it is no longer advisable to refer to something called the “drive” market. Instead, the term of the moment in the travel and tourism industry is the “in-state” market, the idea that people are less likely to travel by air and would prefer vacationing closer to home, giving us this past summer’s buzziest buzz word in travel, the “staycation.” For harried destination marketing professionals, anxious to keep the hotel rooms in their cities occupied, giving some thought as to whether this trend is one that will pass quickly or not is certainly worthwhile. Here are some things to consider:

    • A recent poll commissioned by the Travel Industry Association (TIA) indicated that 41 million airline trips were avoided during the past year by passengers not because the fares were too high, but because air travel has become too inconvenient. The TIA estimated that the trips that were avoided represent a $26 billion loss in consumer spending, including $4.21 billion in federal, state and local taxes that would have been collected. Most observers agree that the airlines’ current proclivity toward nickel and diming passengers with nuisance fees to compensate for higher jet fuel prices is unlikely to make passengers more inclined to fly to their destinations.
    • At the annual meeting of Destination Marketing Association International in late July, several sessions touched on the necessity of destinations to work with local attractions not typically considered tourist attractions—such as farmers’ markets, central business districts and seasonal and cultural festivals—in a way that will prompt locals to spend what would normally be their travel budgets in their own hometowns. Interestingly, the most recent TIA/Ypartnership TravelHorizons survey indicated that among travelers expecting to take vacations in or near their hometowns, 22 percent planned to stay in a hotel, motel or resort.
    • These developments fit with what urban policy expert Joel Kotkin calls the “new localism,” the trend toward people becoming less geographically mobile than at any time since the advent of commercial aviation. According to Kotkin, high energy prices and an increased concern regarding environmental impact are causing more people to seek recreational and cultural experiences that are closer to home. And Kotkin, who’s writing a book on the subject, believes this is a long-term trend that will continue to grow between now and the year 2050.

    While no one is predicting the immediate demise of long-haul domestic or international air travel, it does make sense for destination marketing professionals to consider recalibrating their marketing efforts with these new realities in mind. As always, the best advice is to maintain an approach that balances a destination’s marketing efforts between the most sought-after visitors and the visitors that the destination is most likely to attract.

    This is an approach that assures a destination that even if the city-wide conventions they covet do not materialize, hotel rooms and convention centers can still be filled with the multitude of meetings and events organized by groups that are local, state and regional in scope. For the majority of cities that can only dream of hosting a once-in-a-lifetime Super Bowl or the Olympic Games, there are countless youth and amateur sporting events that generate millions of hotel room nights year in and year out. Setting a course that is mindful of the healthy volume of business available in a destination’s own backyard is the natural hedge against the larger phenomena that seem to be developing and over which the typical destination marketing executive has very little control.

    Timothy Schneider is the president & CEO of Schneider Publishing, the Los Angeles-based company that publishes Association News and SportsTravel magazines and organizes the world’s largest conference for the sports-event industry called TEAMS: Travel, Events And Management in Sports. TEAMS 2008 will be held October 21-25 in Pittsburgh. The group travel markets served by Schneider Publishing generate 106 million hotel room nights annually. For additional information, please visit www.SchneiderPublishing.com or call toll-free (877) 577-3700.

  • Human Migration Through History

    Check out this video short produced by Imaginary Forces for the Lexus L Studio. The short features New Geography Executive Editor Joel Kotkin discussing the impact of human migration throughout history and how migration is changing for the future.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    This article originally appeared in the Washington Post.

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

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

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

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

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

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

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

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

    The scene leaned toward tension for several reasons.

    The mother of the baby was African-American.

    The neighbor was Latino-American.

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

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

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

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

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

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

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

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

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

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

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

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

    No, they didn’t, they replied.

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

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

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

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

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

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

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

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

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

  • “The Not So Big House” Ten Years Later

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • Beyond The Bailout: What’s Next in the Housing Market?

    The Emergency Economic Stabilization Act of 2008 (we’ll call it the “Bail Out”) was signed into law on October 3rd. This, combined with the new reality in capital markets and current economic conditions, will result in some major shifts in the outlook for housing over the next few years. It is always possible that the federal government will try to do even more to fix what will be an agonizing housing problem over the next few years, but seems unlikely even Bernake, Paulson or their appointed successors will be able to change the basic story line.

    The Credit Market
    Let’s set up the dynamics. The era of easy credit, especially in terms of mortgages and home equity lines, is over. The 2002 through early 2006 period will turn out to be an aberration in history. During that period, about all a person needed to do to qualify for a mortgage was to be healthy. For the foreseeable future, we will see the return of such requirements as a down payment and the ability to repay your loan based on income, along with a good credit history, that will allow a person to qualify. The tighter credit and the slow down of the economy already is making it difficult for all but the best borrowers to get mortgage loans. Thus, the housing market will remain under significant pressure and the excess supply will be absorbed only slowly.

    The Consumer
    Consumers have accumulated far too much debt; they don’t have much in the way of traditional savings; are faced with job declines and declines in hours worked and are also facing a reverse wealth affect (i.e. people tend to spend more when they feel richer and less when they feel poorer). In the 1990s, consumers felt wealthier because the stock market did very well. Studies of the wealth effect indicate that people spend about five cents out of every dollar of increased net worth from stock and housing price appreciation over about a three to five year period of time. In the early part of this decade, not only were housing prices rising rapidly, but, almost unbelievably (in retrospect), easy credit allowed people to use their house as a credit card. The result was a boom in retail spending and home buying. In fact, the rate of homeownership in the U.S. went from a long term average of about 65% in 2002, to a high of nearly 69% in 2006. The percentage of people who bought homes, as a percent of total households, reached a record level.

    Supply and Demand
    Today, there are roughly two million more homes for sale in the nation than normal (4.3 million new and resale listings versus the long-term average of 2.3 million homes for sale). In addition, foreclosures are skyrocketing and are likely to stay high for quite some time. Many recent buyers simply were not financially ready for home ownership’s financial realities. Basic demand has diminished significantly as the number of prospects who can qualify has declined. Put all of these things together and you will have a period where not only will there be fewer homes purchased, but there will be high levels of foreclosures, a decline back to the normalized level of homeownership. There will be fewer people moving (i.e. if you can’t sell your house in California, Michigan or Pennsylvania, you are not moving to Arizona). What this implies is that the demographic demand for housing will be lower than normal over the next few years until the excess supply is absorbed.

    How long will this take? Analysis suggests that it is two to four years away nationally and longer in the bubble states: Arizona, California, Florida and Nevada. All this suggests that as the homeownership rate comes down, more people will be moving to apartments, people will “double up” or move back home. As a result much of the housing demand will be absorbed by foreclosures and the excess existing housing inventory, mitigating the need for significant new housing in the near term.

    If you add this all up, this also means slower growth in what were normally rapid growing areas (like Phoenix) where a full recovery could take four to five years for housing. As the home-ownership – including condos – rate moves back to its long term trends there will be a shift back to apartments.

    Overall, there will be fewer single family homes demanded, more apartments demanded, and the homes that are demanded will be more affordable. The most affordable areas will continue to be at the edge of town. In addition, given how difficult it has been to get the entitlements necessary for new apartment construction in areas like Phoenix over the past several years along with the number of condos that are being converted back to multi-family rentals, rents are likely to increase past 2009 or 2010 as the excess supply of rental single family homes, condos and apartments are absorbed.

    Overall homeownership will still be the American dream, but that dream will not again be something people think about until housing prices stop declining and start recovering. It’s going to be a tough ride, particularly in Sunbelt ‘boomtowns’ like Phoenix.

    Elliott D. Pollack is Chief Executive Officer of Elliott D. Pollack and Company in Scottsdale, Arizona, an economic and real estate consulting firm established in 1987, which provides a broad range of services, specializing in Arizona economics and real estate.

  • The Geography of Inequality

    The global financial crisis has drawn greater attention to the world of the super rich and to the astounding increases in inequality since 1980, returning the country to a degree of inequality last seen in 1929 or perhaps even 1913. In the year 2006 alone, Wall Street executives received bonuses of $62 billion. Financial services increased from 10 percent of all business profits in 1980 to 40 percent in 2007, an obscene and indefensible development that now threatens the rest of the ‘real economy’.

    Here’s what happened to income and wealth between 1970 and 2005

    These figures reveal an inexorably growing concentration of income and wealth, which has taken place under both Democratic and Republican regimes. Conversely, given inflation over the last 35 years, lower and middle classes receive smaller shares. Only the affluent – the top 10% – and the rich – the top 1% – have gained ground.

    This pattern of inequality also has a geography with variations across the country between different places (here counties). Generally between 1970 and 2000 the greatest inequality has developed in the largest metropolitan regions and their suburbs.


    Large metropolitan core counties are by far the most likely to have higher inequality. In contrast other geographies have much lower inequality, with small metropolitan, small city and rural counties near the national average. In other words, core metropolitan counties are skewed toward greater inequality (higher shares of very rich and of very poor), while suburban and exurban areas generally exhibit lower inequality (values bunched centrally, with fewer extremely rich or poor households).

    Overall the greatest inequality lies in the very largest metropolitan cores (Los Angeles, Chicago, New York, Houston, etc), areas with large racial or ethnic minorities (e.g., in FL, TX, CA and much of the South), as well as in selected large northeastern metropolises (suburb as well as core, as in Chicago, Cleveland, Pittsburgh, New York, Philadelphia, and Washington DC) and across the southern half of the country more generally. Lower inequality occurs mainly in suburban or small metropolitan counties, and mainly in the north.

    Among smaller metropolitan (< 50,000 households) and non-metropolitan counties there emerges a truly dramatic north-south cleavage just around the Iowa border and along the Ohio River divide. A more mixed pattern prevails in the west and in the northeast, where intermediate levels of inequality are common. Especially high rates of inequality characterize racial and ethnic minority areas and Appalachia, as could be expected, but also many environmental amenity areas, especially in the west. Low inequality is fairly extensive in the hinterlands of selected Great Lakes and upper Midwest metropolises, like Omaha, Minneapolis and Chicago. Generally more egalitarian areas boast higher incomes, female labor force participation, more shares in manufacturing, greater incidence of husband-wife families, of whites, of home ownership, but lower percentages of government and service jobs, fewer residents with less than a 9th grade education, people 18-24, singles, single parent families, and less Blacks and Hispanics. High levels of inequality are generally the opposite of the egalitarian areas: more minorities, single parent families, less manufacturing and dependence on government as well as service sector jobs. Inequality varies by both kinds of settlement geography and by the social and economic character of areas. The most obvious and visible attributes that signify greater inequality are social characteristics: racial and ethnic minorities, low levels of education, low proportions of traditional husband-wife families (partly because of fewer earners), and high dependency (many of the very young and very old). Unequal places tend to be those with low concentrations of manufacturing and higher shares of both managerial-professional occupations and service jobs. Geographic impacts vary. Most rural, newer suburban and exurban areas tend to have lower inequality because they tend to maintain middle income homogeneity. Yet rural areas that are isolated and have weak economies, like Appalachia, suffer high inequality. Large metropolitan areas with the highest inequality also tend to have large concentrations of racial minorities and of non-families, especially young singles Overall it is clear that inequality has been on the rise since 1970. This was a time when the nation was prosperous, manufacturing was strong, as were unions, income taxes fairly progressive, while “war on poverty” legislation had helped those at the bottom, the baby boom was still on and families dominant. But if the extent of inequality has grown, its geography has changed far less. Large metropolitan cores had the highest inequality in 1970 and 2000, and metropolitan suburbs and exurbs the lowest, with small cities in between. Yet inequality grew fastest in large metropolitan cores and suburbs. Small metropolitan areas (many were small cities in 1970) had the next highest increase (80 percent) and rural small town areas the lowest (69 percent). Sadly, only a few counties had decreases in inequality. Many were military base counties, mainly in the south. Another group of counties with lower inequality are new suburban counties, which have become more uniformly middle class as a result of significant urban growth, mainly in the South with more rapid urban and industrial growth. Overall, the change in inequality between 1970 and 2000 was substantial and wide ranging. The causes for this tend to be national and structural, including deindustrialization, the rise of a service economy, the decline of the traditional family and tax changes favoring the very wealthy. Areas that traditionally were most unequal – notably the great global cities – have simply become more so. It is here, in the command and communication centers of the economy, that the greatest wealth has been accumulated and where we can see the rise of a new aristocracy nevertheless dependent on a large low wage service class. The next Administration and Congress should start to address these trends or the traditional American dream will become, for most citizens, no more than that. 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)

  • Gas boom ripples through Pennsylvania economy

    Almost 150 years after Colonel Edwin Drake drilled the country’s first commercial oil well in Western Pennsylvania and transformed Pittsburgh into a manufacturing powerhouse, a huge natural gas field could be about to rescue this region’s sluggish economy from its post-industrial death spiral.

    The future energy boom will come from tapping an estimated 50 trillion cubic feet of recoverable natural gas that is locked into the Marcellus Shale, a huge, 400-million-year-old layer of sedimentary rock that lies about 8,000 feet beneath all of Western Pennsylvania and most of West Virginia, eastern Ohio and western New York. Worth an estimated $1 trillion, the gas from the Marcellus Shale could do for the Pittsburgh area what the smaller but similar Barnett Shale did for the Dallas-Fort Worth area in Texas – pump billions of dollars into local economies for two decades.

    Rodney Waller, a vice president at the Fort Worth-based Range Resources Corp. oil and gas company, said the exact size and scale of the Marcellus play is not yet known. But he says his company – the leading gas driller in Pennsylvania with 5,400 shallow producing wells – already has invested $500 million in the project. Marcellus’s gas is costly and technologically tricky to reach.

    Wells must be drilled to 7,000 or 8,000 feet, then a high-pressure mix of water, sand and chemicals is used to fracture the shale and liberate the gas molecules locked in it. Horizontal drilling allows each well to capture the gas within a 3,000- or 4,000-foot radius.

    Western Pennsylvania’s “Gas Rush” has already started slowly and quietly in the rural counties surrounding Pittsburgh and Allegheny County, where, since 1950, the economy has shed hundreds of thousands of manufacturing jobs and the metro population has been stuck at about 2.3 million. Thousands of landowners have leased their mineral rights to energy outfits like Range Resources. Waller said the coming gas boom could last 15 years or more, as the Barnett Shale field has in Texas. And the drilling pattern in Pennsylvania will follow the same rural-to-urban scenario it did in Texas, with the richest and most easily accessible deposits taken first and densely populated areas near Pittsburgh last. Waller says that in Dallas-Fort Worth, where gas production has escalated in the last five years, it seems everyone has been getting a cut of the Barnett Shale’s riches.

    For example, the homeowners’ association that runs Waller’s 38-acre gated community received a $25,000-per-acre signing deal. That $950,000, plus royalties, will be shared proportionally by the association and residents. Thanks to the techno-miracle of horizontal drilling, the well will be three blocks away.

    A million dollars is chicken feed compared to what the city of Fort Worth expects to get from gas leases and royalties over the next 20 years – nearly $1 billion. For the right to drill for gas under its 18,460 acres, the Dallas-Fort Worth International Airport alone received a check in 2006 from Chesapeake Energy for $185 million – not to mention the additional 25 percent of all royalties.

    Meanwhile, Arlington, the growing community of 367,000 between Fort Worth and Dallas, has already banked $50 million in signing bonuses for leasing 4,300 of its acres, according to city real estate manager Roger Venables. Signing bonuses in Arlington – $75 per acre in 2005 – were $30,000 in July, said Venables, who estimates that the city’s nearly 7,000 acres will ultimately generate about $850 million. He said most of that gas revenue will go into an endowment and be distributed through community grants to improve the quality of life in Arlington.

    In Washington County south of Pittsburgh, where Range Resources drilled a test well in 2002 that proved the Marcellus Shale contained enough gas to be profitable, the early returns are more modest. Hundreds of landowners who own the mineral rights beneath their property have penned “signing bonuses” that have now risen to $4,000 per acre. They also will get at least 12.5 percent of production royalties.

    Washington County’s government has already scored a small benefit: Planning Department Director Lisa Cessna says the county was paid an upfront bonus of $17,000 from Range Resources in 2002 to explore for gas in 2,700-acre Cross Creek Park. Plus, it gets a now laughably low price of $10 per acre per year. So far, the county has realized about $60,000 in gas-related revenue, but royalty checks will soon sweeten that figure, as will a deal the county is seeking for its other major land holding, 2,289-acre Mingo Park.

    Whoever wins the right to drill at Mingo must pay Washington County at least $4,000 an acre, fork over at least 15 percent in royalties and abide by strict environmental regulations, Cessna said. Bids will be opened Nov. 4.

    By the end of the year, Range Resources will finally see its first commercial flow of gas from the Marcellus from three wells operating in Cross Creek Park, Waller said last week. As for the cash-starved governments of the City of Pittsburgh and Allegheny County, which controls 9,300 acres of land at Pittsburgh’s two airports, they too will most likely benefit handsomely from the Marcellus gas play.

    But they’ll have to be patient. In Texas, the development of the Barnett Shale took 15 years to spread from the hinterland to downtown Fort Worth, where drilling is occurring now.

  • New York’s Decentralized Economy?

    Even before the Wall Street meltdown, the New York area was going through its own de-clustering. No it hasn’t – and probably never will – become a multi polar area in the style of Los Angeles, Houston or Phoenix, but the trend to deconcentrate jobs has been inexorable over the last thirty years, according to a new report by our friends at the Center for an Urban Future.

    The report states:

    “In 1975, New York City accounted for 53.1 percent of all private sector jobs in the 17-county metro region. But by 2005, the five boroughs’ share was just 47.2. Most of the ci ty’s losses occurred in Manhattan, which had 33.9 percent of the region’s private sector jobs in 1975 but only 28.8 percent in 2005.”

    None of this is particularly worrisome in that the shrinkage of the city’s jobs slowed considerably in the past decade up to 2005. The whole region showed some growth. But what happens now with an estimated 150,000 or more jobs expected to be wiped out due to the financial crisis? This may prove the biggest crisis faced by the city since the “Ford to City: Drop Dead” days of the 1970s.

    Both the Giuliani and the Bloomberg legacies surely will now be tested.