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  • In the Doldrums: Another Economic Indicator Heads South

    Lost amidst headlines of bank nationalization, credit market woes, and a worldwide equities rout, was news that the Baltic Dry Index, an index seen as a measure of world trade flows and future economic activity, has been in freefall this week. A drop of 8% on Tuesday was bookended by drops of around 11% on both Monday and Wednesday.

    According to the Guardian, the index is

    “seen as a good leading indicator of future economic production levels because it charts the cost of freight movements in 26 of the world’s biggest shipping lanes of “dry” materials, such as coal, iron ore and grain which feed into the production of finished goods some weeks or months ahead.”

    Since reaching a peak in July, the BDI has plummeted over 80%, leading to fears that demand for commodities, particularly in China, may be on the wane. This could, reports the Guardian, mean that the “great Asian miracle economy might now be coming apart at the seams, in spite of the official figures suggesting everything is still fine.”

    Agricultural areas throughout the United States, buoyed by recent high prices for commodities, have thus far shown economic strength in the face of increasingly difficult conditions nationwide. The good times may be, if not coming towards an end, facing some sort of moderation.

    Effects of the credit crunch have already begun to show some impact on international commodities trade. Last week, Canada’s Financial Post reported that grain shipments had begun to pile up in ports as international buyers found themselves unable to obtain letters of credit. In the words of one marketing expert, the situation is a “nightmare.” According to experts interviewed by Bloomberg, “letters of credit and the credit lines for trade currently are frozen,” and as a result, “nothing is moving”. Such credit issues, in connection with weakened demand for commodities in a potential worldwide recession and a downturn in international trade, may mean that communities around the nation will soon face a more difficult economic picture.

  • Gentrification from the inside out in Brooklyn’s Ditmas Park

    Twenty some years ago my husband, 2 young sons and I moved from our cramped 16-foot wide attached row house in Brooklyn’s trendy Park Slope to a free-standing, 7-bedroom Victorian house in the Ditmas Park section of Flatbush with stained glass windows, pocket doors, original wood paneling, a back yard, front porch, driveway and 2-car garage in a little-known, tree-lined neighborhood about 10 minutes away – on the other, high-crime side of Prospect Park. Friends thought we’d taken leave of our senses!

    Built early last century, our neighborhood Long has been known for its architecture, with the largest concentration of Victorian houses in America. It’s the kind of neighborhood sensible new urbanists dream about it; the only block in New York with subway stations at each end. This was a tribute to the clout of the neighborhood’s original developers who had a strong commitment to building “suburbs in the city,” and secured the best in public transportation for their customers.

    Driveways help preserve the neighborhood’s low density, while also allowing ample street parking. But before and after WWII, entire blocks of houses were torn down and apartment buildings erected in their place. Today, blocks of beautiful, 3-story Victorian houses with large front porches alternate with blocks of 5 and 6-story apartment buildings.

    Not surprisingly, the people in the houses differed, in terms of race and social class, from the people in the apartment buildings. They rarely interacted. The subway tracks demarcated the neighborhood; one side was mixed, the other predominantly black and lower middle class. When crime exploded in the 1960s and welfare tenants were moved into some of the apartments, much of the middle class – white and black – fled. By the early 1990s many assumed that nothing could be done about the collapse of the quality of life. It wasn’t unusual for police officers in that era, many of whom lived in suburban Suffolk County, to respond to crime victims condescendingly by asking, “What do you expect if you live in a neighborhood like this?”

    Little changed even after the extraordinary Giuliani/Bratton efforts brought down crime, little changed in the mid-1990s. The district’s once thriving shopping street, Cortelyou Road, still had no bank, no coffee shop, no diner, no sit-down restaurant, no children’s store, no real estate office. So there wasn’t much pedestrian traffic – or “eyes” – on the main commercial street, still dominated by 99 cent stores competing with 97 cent stores.

    Most neighborhood residents, if possible, shopped elsewhere. Frustrated by this situation, in 2001 I founded “Friends of Cortelyou,” a (very) small group dedicated to recruiting new businesses to our commercial strip. A couple of “friends” and I went to lunch, dinner, and coffee at places that we liked in other neighborhoods in Brooklyn. We introduced ourselves to owners and managers as Friends of Cortelyou, trying to convince entrepreneurs to expand into our still “below the radar” neighborhood.

    To us, the broader, social implications of local shopping were clear; people who walked to local stores on local streets, instead of driving or taking the subway to more developed neighborhoods would generate the everyday interaction that defines a lively neighborhood. Cortelyou’s commercial strip is only 7 blocks long, and a few new stores could have a significant impact.

    I figured that someone who had taken a chance in Brooklyn’s Ft. Greene, that edgy, racially (and income) diverse neighborhood might see the potential in ours which US News and World Report described as the “most diverse neighborhood in America.” One owner, a half Martiniquen, half Jewish former Parisian was hooked; he saw the possibilities for commercial development and knew first-hand the advantages of being first (namely, cheap rent and “buzz”).

    The former Parisian negotiated to take over the lease of an existing corner bar. When he ran into trouble securing “the last $30,000”, we put out a call to about 40 neighbors to raise the last start-up capital. Thirty six different neighbors agreed to loan (or give) $1000 each to back someone who would open a new restaurant in our neighborhood!

    One incredible woman, Susan Siegel, decided she wanted to bring a farmers market to the neighborhood. She worked on this full time, and a year later it opened! Some Cortelyou grocers objected to having it on their strip; a few vocal homeowners objected to unlocking a public school yard and using it to house the market. Ironically the fight over the market swelled into a local “pro-development” movement, made up of people alive to the new possibilities, and sparked a neighborhood newsletter.

    Once it opened in 2002, the Farmers Market became an informal community center, a literal common ground, for our neighborhood. The Market became a place where the full range of neighborhood residents could come together to buy fresh fruits and vegetables and to catch up on what’s happening in the schools, the playgrounds, and stores including a highly successful organic food co-op. Until then, only the homeowners were organized but now new co-op owners, home owners, and renters all came, mingling freely with each other, and with “veterans”, in a way that had not previously been the case.

    At that time we realized we needed more new and engaged residents. I tried to persuade two local realtors to sell the co-op apartments; they were far cheaper than co-ops in other good (or “good enough”) neighborhoods, and seemed like the way to bring in young or single people. But the realtors were dismissive explaining, “there’s not enough money,” or “too much work” in selling coops to make it worth their while.

    I realized I’d have to take this on myself. So I got a real estate license, affiliated with a Park Slope broker, and began selling co-ops in one building in our area. Other agents in that office didn’t mind; for them, too, it was too little money and too much work. Selling real estate and developing the neighborhood were two sides of a coin; the combination turned out surprisingly to be more fun and satisfying than I had imagined. Within two years I co-founded Brooklyn Hearth Realty, an agency I currently own with two partners, young, dynamic neighborhood residents who moved here in the twenty-first century.

    The neighborhood buzz kept growing. Jim Heaton, a local advertising executive initiated an online newsletter, FREND, and also designed a logo for Friends of Cortelyou. We had the logo printed on t-shirts and oversized shopping bags, and sold them to raise money for the few activities we sponsored that required financial support. We initiated and hosted “Welcome Receptions”, at first in our homes, then in the new restaurants that we recruited for the new residents. These turned out to be very popular, and were one more mark of distinction for our neighborhood. Local businesses joined in as sponsors.

    FREND served to “connect” nearly a thousand people and families to the new initiatives, particularly around the Farmers Market and crime, but the on-line contribution really blossomed in 2003 when Ellen Moncure and Joe Wong revived the Flatbush Family Network (FFN). This site has become an invaluable source of neighborhood and childrearing information for the many young families who live here. For many people moving into this neighborhood, FFN provides an initial introduction and orientation to life in this neighborhood. For those who live here, it’s a convenient, ongoing source of information and support.

    All this really began to congeal by 2002. New stores began to open on Cortelyou Road. One of the early successes was the Picket Fence restaurant. Picket Fence was followed by a vintage furniture store (opened by Nicole Francis, a staunch FOC member), a Mexican restaurant, a café, a bar, a bagel shop, a dance studio, a real estate office, wine store, furniture store, children’s store, natural food store, new flower shop/bar, and Tibetan Café. Meanwhile the long-established food co-op and the pizza shop both expanded and upgraded. The Farm on Adderley broke new ground in 2005, attracting attention and customers from far outside the neighborhood. The owners of that restaurant opened another a few blocks away the following year, and just opened the flower shop/bar a month ago. Once seemingly on its last legs, the neighborhood now pulses with a contagious energy.

    That energy gave birth to the Ditmas Park Blog, founded in early 2007 by Ben Smith and Liena Zagare. The blog sends local information and gossip beyond the neighborhood’s families, reaching growing numbers of singles as well. This was the first institution to target singles as much as families, extending the neighborhood’s expanding demographic boundaries. Zagare, her finger on the neighborhood’s pulse, went on to found the Ditmas Workspace in summer, 2008. She created a shared workspace in a former doctor’s office. Another former doctor’s office, also on the ground floor of a large house, has a neighborhood yoga studio and several artists working in small, separate spaces. That’s the “new use of old space” that’s helping to reconfigure our neighborhood for the 21st century.

    Much of what I’ve described occurred during the boom times of 2002 through the first half of 2008. Although Brooklyn’s market stayed strong through the summer of 2008, we now face an uncertain future in a very volatile economic climate. Perhaps people will stay closer to home, like the woman who stopped in my office on Cortelyou the other day who said, “I’m not going out as much, and trying to save money. So I’m going over to my friend’s with a bottle of wine.” After all, you can save money on transportation and on babysitting by staying closer to home.

    As I write this, the owner of a successful Manhattan restaurant is looking closely at Cortelyou, hoping to open in a “real neighborhood” where customers support local businesses. No one knows yet where the economy is headed, or what this means for our neighborhood. But we now have a vibrant neighborhood. This is no longer just a location where the houses are a comparative bargain. It’s an area with an identity.

    Jan Rosenberg taught Sociology at LIU’s Brooklyn Campus for 28 years; her studies of other Brooklyn neighborhoods, and of cities, inspired her work in Ditmas Park. She is cofounder of Brooklyn Hearth Realty.

    Photos courtesy of Joanna Grazda and Mark Gilman.

  • Sprawl is ubiquitous, even in my beloved Copenhagen

    The year I attended the University of Copenhagen as an undergraduate, I lived in a suburb north of the city and commuted to the central city via bus and rail (the famous S-trains). What a great system, I remember thinking as an impressionable ingénue (you could go anywhere, and trains were on time to the second!). When I returned as a graduate student I lived right in the city center and discovered that great public transit did not obviate the need for extensive walking (I must have worn out five pairs of shoes that year). Besides my two stints as a resident, I have been fortunate enough to return to Copenhagen countless times as a visitor for business, scholarship and pleasure, and I am familiar with the place both as a motorist and public transit user.

    In all the 37 years I have been traveling to and living in Copenhagen, it has always struck me that despite one of the best public transportation systems of which I am aware (in terms of coverage, efficiency, ease of use and affordability), and despite the fact that cars are at least twice as expensive as here in the States (the sales tax on cars is 180%), and despite the fact that gasoline is three to four times as expensive as here, and despite the fact that city parking is difficult, non-existent or prohibitively expensive (and parking fines severe) – despite all of this – rush hour traffic congestion is awful (a constant source of grief and complaint), and the endless streams of cars seem to contain, as in so many cities with lesser alternatives, lone drivers.

    It wasn’t supposed to be this way. The city development plan was designed as a hand with five fingers outstretched – the palm as city center and each of the five fingers as a corridor of residential, commercial and retail development (along rail lines, of course). This was smart growth before the term had been invented. It worked, but what was perhaps unforeseen was that development would also occur in areas in-between and beyond the five corridors. As a result, Copenhagen has become, like so many modern cities, a multi-centered urban metropolis. In order to function in this post-industrial economy and society, residents and workers need to travel freely and frequently to many different points around the metro area, at different times of the day, for different reasons, for different lengths of time, for different purposes. Because the existence of the five corridors has created a defacto hub-and-spoke system, it is difficult and prohibitively time-consuming to use public transit for such travel (and ungodly in winter). So of course Copenhagen has become as car-dependent as Los Angeles.

    Another piece of this picture is that Danes, being a free and intelligent people, prefer suburban living in detached single-family residences over enforced residential density, and prefer owning and driving their own cars over taking public transportation (if given the choice!). So despite a very leftist political orientation among elites, media, academia, government and public policy professionals (including urban planners), and despite a highly socialized component to its otherwise free-market economy, the Danish capital’s suburban job, business and population growth has been outpacing its urban growth for decades.

    According to Ronald D. Utt and Wendell Cox, writing on www.heritage.org (in response to a World Watch report, “City Limits: Putting the Brakes on Sprawl”), from 1950 to 1990 Copenhagen’s population dropped from 760,000 to 465,000, nearly 40 percent.

    Since 1960, the Copenhagen urbanized area (including suburbs) has dropped in population 14 percent, while its land area has expanded 24 percent. And from 1970 to 1990, per capita automobile usage increased nearly 70 percent in the Copenhagen area, while public transit’s market share declined 15 percent.

    This of course is a problem. People are not behaving according to our plans! According to the report “Urban Sprawl in Europe? The Ignored Challenge,” released by the European Environment Agency (based in Copenhagen, by the way), sprawl is affecting almost all of Europe’s cities: “If this trend continues, the European urban area will double in just over a century. Sprawling cities demand more energy supply, require more transport infrastructure and consume larger amounts of land. This damages the natural environment and increases greenhouse gas emissions.”

    The report identifies the key problem as too much local control of urban development decisions, and calls for “urgent action by all responsible agencies and stakeholders to realize common objectives,” or in other words, centralized planning and control. Among the report’s conclusions is this little chill-inducing nugget:

    “The EU has specific obligations and a mandate to act and take a lead role in developing the right frameworks for intervention at all levels, and to pave the way for local action. Policies at all levels including local, national and European need to have an urban dimension to tackle urban sprawl and help to redress the market failures that drive urban sprawl.”

    It’s all pointless, of course: sprawl is ubiquitous, natural, desirable, beneficial, and preferable. As Edward Glaeser (Harvard, Brookings) and Matthew Kahn (UCLA) document in “Sprawl and Urban Growth” (National Bureau of Economic Research), transportation technologies dictate urban form, and in the 21st century the dominant transportation technology is the car. Hence, the urban form of the 21st century is sprawl, or city living based on the automobile. Isn’t this a bad thing? Quite the contrary, per Glaeser and Kahn: “Sprawl has been associated with significant improvements in quality of living, and the environmental impacts of sprawl have been offset by technological change.”

    Robert Bruegmann, author of Sprawl: A Compact History (2005), would agree. He calls sprawl a logical consequence of economic growth and the democratization of society, a pattern of development that has provided millions of people with the kinds of mobility, privacy and choice that were once the exclusive prerogatives of the rich and powerful. Add Bruegmann, Glaeser, Kahn, Cox and Utt to the growing component of anti-anti-sprawl policy analysts such as John Carlisle (Capital Research Center), Peter Gordon (USC School of Urban Planning), Peter Huber (Manhattan Institute), Mark Mills (Competitive Enterprise Institute), Steve Hayward (Pacific Research Institute), Anthony Downs (Brookings Institution), and Harry Richardson (Cascade Institute).

    Copenhagen remains one of my favorite cities, a marvelous combination of the old and new. It has a great quality of life and in my experience, the Danes know how to live it. The central city is charming, and the urban sprawl adds to the possibilities and potentials for all manner of experience and opportunity. I’m already looking forward to my next trip back.

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

  • The American Dream: Alive and Well (Some Places)

    Even after the burst of the housing bubble, the American Dream of home ownership has remained alive in some places. As it turns out the “bubble” was far from pervasive, and as Nobel Laureate Paul Krugman indicated in The New York Times, the housing price increases were largely limited to the areas of the nation with stronger land use regulation.

    In all, at the peak of the housing bubble, 46 of 129 US markets had house prices at or below the historic ceiling of three times household incomes (see 4th International Demographia Housing Affordability Survey. Before the bubble, nearly all markets were at or below that norm, but many have risen to double, triple or even more than three times the standard.

    The American Dream can be said to have started with William Levitt, who revolutionized home building starting with his huge Levittown, New York development in the late 1940s.

    As Witold Rybczynski wrote in a recent Wilson Quarterly article, new Levittown houses could be purchased for three times the average wage in Levittown. This bought a detached 750 square foot house, without a garage. Interestingly, this was at a time when single-income families were still the norm.

    Levittown is the birthplace of the modern American Dream. It was only after the pioneering model of Levittown that home ownership became the norm by becoming affordable to middle-income and blue collar households in America. At the end of World War II, home ownership in the United States was 40 percent. By 1960, it exceeded 60 percent and since risen to above 65 percent.

    Levittown, and the automobile-oriented urban expansion it foreshadowed, resulted in the greatest democratization of prosperity in history. Wherever mass suburbanization occurred – whether in the United States, its first world cousins Canada and Australia, Western Europe or later even Japan – we have seen the unprecedented rise of a mass property-owning class.

    This economic and social advance was built on liberal land use regulation. It would not have been possible if the policies that have poisoned housing markets from Los Angeles and Portland to Miami and Boston had been in effect at that time.

    Yet there is still life outside the high-priced coastal regions. Indeed in much of the country today, new housing affordability is at least as good as it was in Levittown. Generally, where land regulation has remained reasonable, new houses can be purchased for less than three times median household incomes. Purchasers may need two incomes to get there, but the effect remains the same. Moreover, the houses in these markets generally boast two-car garages and living space nearly double that of the typical Levittown ‘starter’ house.

    The small selection of examples below is limited to metropolitan areas with high housing demand. These are not economic basket cases like those in and around certain old industrial cities. Nor are these places where the market has evaporated because so many people have left or are planning to leave. Instead these are places attracting domestic migrants from other parts of the country (especially from metropolitan areas with strong land use regulation). These listings are the result of a quick search; they may not necessarily represent the least expensive new houses available. Each has three bedrooms and all have two-car garages.

    Atlanta: A new 1,500 square foot for a base price of $130,000 – 2.3 times the median household income View listing.

    Austin: A new 1,200 square foot for a base price of $106,500 – 1.9 times the median household income View listing.

    Charlotte: A new 1,500 square foot for a base price of $133,000 – 2.5 times the median household income View listing.

    Columbia, South Carolina: A new 1,500 square foot for a base price of $130,000 – 2.7 times the median household income View listing.

    Columbus: A new 1,400 square foot for a base price of $130,000 – 2.5 times the median household income View listing.

    Dallas-Fort Worth: A new 1,250 square foot for a base price of $120,000 – 2.2 times the median household income View listing.

    Houston: A new 1,300 square foot for a base price of $100,000 – 1.9 times the median household income View listing

    Indianapolis: A new 1,500 square foot for a base price of $114,000 – 2.1 times the median household income View listing.

    Kansas City: A new 1,200 square foot for a base price of $150,000 – 2.8 times the median household income View listing.

    The list could go on and on, including virtually every area of the nation that has not driven up the price of developable land by land use regulations. The American Dream is alive and well where it has not been snuffed out by economics-be-damned urban planning policies.

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

  • California Disconnect: Don’t Get Out the Vote for Congress, State Legislature

    Have you heard about the current election season in Los Angeles?

    Sure, we’ve all gotten word about the presidential campaign. But how much have you heard about races for the U.S. Congress or State Legislature?

    The member of the U.S. House of Representatives who represents my neighborhood is up for re-election, along with his 434 colleagues. So is the fellow who represents me in the California State Assembly—and his 79 colleagues.

    I haven’t heard a peep from either one of them – no automated phone calls, signs, brochures, or door knockers. I’ll bet most of you could say the same for your representatives.

    There are a couple of reasons for all of this quiet, and the first is that elected officials don’t want to campaign.

    The U.S. Congress is just as unpopular as President George W. Bush. They’ve earned the low esteem, too, because many members of both major parties have been asleep at the switch these last eight years, dozing off while our nation continued to conduct warfare abroad and inflate a housing bubble at home, putting both ends of the deal on credit.

    Members of the State Legislature just did some foot stomping with the governor that caused their annual budget to be a couple of months late—a case of tardiness that has and will cost us all plenty.

    The second – and more discomforting – reason for the quiet campaign season is that an overwhelming number of the elected officials who represent Los Angeles in Washington and Sacramento don’t need to run hard. They have “safe seats,” with boundaries for their districts carved up to give them a lock at the polls.

    There’s also a measure on the November 4 ballot that claims to fix the process of drawing up boundaries for state offices in California. Rest assured that politicians have a hand in the deal, so don’t expect much.

    Where does that leave unhappy voters?

    It seems clear that there only a couple of ways to deal with a political system that’s in such shape. The first is for everyday folks to get together and start looking for individuals they know and trust as possible candidates for various offices. Forget about political experience—all the experience in Washington and Sacramento hasn’t done us much good. Just look for bright men and women whom you know to be honorable. Tell them you want them to run for office. Then help them make the race.

    Of course it’s too late to take such steps in this election, which leaves the matter of how to make the current crop of elected officials feel your displeasure.

    Voters could make a powerful statement by withholding their votes for members of Congress and the State Legislature. This is not suggested lightly, and it’s not to say that anyone should skip the presidential election, which is simply too important to sit out.

    It’s also understood that this will hit the few legislators who have actually been working in the best interests of their constituents lately. That’s a tough break, but it’s become clear that mass punishment of the legislative class is the only way to convince them of what poor use they’ve made of our hallowed institutions. Voters must let them all know that we know the game is rigged.

    The legislative class might get the point if its members see large numbers of us vote in the presidential election but find no reason to cast a ballot for other offices. They’ll win their rigged game, but victory will come with a warning. Maybe they’ll figure out that we’re tired of safe seats choking off any hope for vibrant campaigns where ideas matter.

    Again, this is nothing to take lightly. The right to vote is sacred. Yet the very same right is abused by the current system.

    So it’s true that your vote is your voice.

    Yet it’s also true that silence can sometimes speak volumes.

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

  • Neither fish nor fowl: Emerging urban enclaves in inner-ring suburbia

    By Peter Smirniotopoulos

    As I was walking my dog the other morning I was struck by the fact that the City of Falls Church, Virginia, the quaintly bucolic suburban “village” to which our family moved in mid-2001, was no longer suburban. It isn’t a city in the proper sense, like Washington, DC or even Alexandria, Virginia, but it is reflective of the trend towards quasi-urban places in the close-in rings – the original turn-of-the-century and pre-Levittown suburbs – enveloping our city cores.

    The City of Falls Church was formed around the middle of the last century by a group of secessionists residing in what was then a sliver of Fairfax County along the Arlington County border. The candy coated version of the city’s history holds that these secessionists were seeking to create a better school system for their children; the more cynical view is that they were creating a segregated, white school system. Whichever version of the truth you prefer, the Falls Church City Public Schools subsequently became the first public school system in the Commonwealth of Virginia to adopt the International Baccalaureate (I.B.) curriculum. In 2001, the city’s George Mason High School ranked #5 among the country’s most-challenging high schools, eventually reaching #2.

    Like many other metro areas, the geographic pattern of regional growth in the Washington metro area has been driven in by the successes of its suburban public school systems, with the Fairfax County and Montgomery County, Maryland, school districts being the most notable. A metro Atlanta county executive explained this phenomenon thusly: “People don’t want to live where they can’t educate their kids,” rationalizing why his county, with a well-respected public school system, was growing and thriving while the neighboring county, with a somewhat derided public school system, was not.

    So homebuyers have flocked to the City of Falls Church and its nationally ranked high school, putting sufficient pressure on home prices (primarily single-family detached homes on modest-sized yet verdant lots) to raise the median price precipitously. The high school certainly was a primary motivation for our move from Del Ray.

    Yet when we left our Del Ray neighborhood in Alexandria we also wanted to replicate – to the greatest extent possible – our community’s walkability and mixed-use character. Yet these fundamental attributes were not as pronounced in the City of Falls Church, in part because it is bisected by two major arterials: Va. Route 7 (cleverly named “Broad Street,” being four lanes wide), an east-west connector; and Washington Street, also known as Lee Highway or Rte 29, a north-south connector (also four-lanes wide but the name “Broad Street” had apparently already been taken).

    When we arrived in the city the stretch of Route 7 that extends west from this major intersection was characterized primarily by low-scale (i.e. one and two-story) retail and commercial buildings. The predominant commercial building typology along one stretch of Route 7 was one-and-a-half story single-family residential structures fronted by surface parking adapted for commercial uses (palm reading, anyone?), reflecting neither good urban nor suburban values.

    And yet since 2001 things began to change for the better. Local elected leaders had an epiphany that a city of two-square miles is not sustainable. Relying almost exclusively on property tax revenues from single-family detached homes simply does not generate enough money to cover the expenses they generate. The success of similar suburban-to-urban transformations in nearby Arlington County along the Metro line – like Clarendon and Ballston – was both instructive and politically comforting. City leaders and staff began to embrace the concept of denser mixed-use development, although not without taking some political heat from those insisting that their suburban village be protected and preserved.

    Today, Route 7 benefits from four, very urban mixed-use buildings – ranging in height from four to eight stories – adding dramatically to the diversity of the city’s housing stock, helping to diversify the city’s tax base, and putting boots (or at least pumps and loafers) on the street. These new buildings also provide a much better focus for the city’s “Main Street” than the single-story structures they replaced, with the new building heights and strong street walls better modulating the width and traffic flow on Route 7. A fifth new building is currently under construction and a hotel has also been approved.

    In addition, two new, mid-rise, mixed-use projects now anchor either end of Lee Highway, and an ambitious City Center project may finally become a reality, potentially trumping the visual cacophony of the nearby Route 7/Lee Highway intersection (an excellent example of bad urban forms meet typical low-rise, suburban development). Moreover, the attendant broadening of the tax base will eventually insulate the city’s fortunes from the ebbs-and-flows of either the commercial or the residential real estate markets.

    As a result, in terms of physical form and character the City of Falls Church is now much closer to “urban” than “suburban.” As ground floor retail spaces fill in and mid-rise residential units become fully occupied, that evolution from suburban to urban will become more pronounced. Residents in the single-family detached homes and newly minted McMansions lining the neighborhood streets on both sides of Route 7 also will benefit from having many more things to see and do within walking distance of their homes.

    The small-town origins of the city can still play out in somewhat nostalgic events like the Annual Memorial Day Parade (and who doesn’t love to see Shriners in their fezzes and tiny race cars). Neighbors will continue their weekly chats at the Saturday morning Farmers’ Market at City Hall. However, the train has clearly left the station on the question of whether the City of Falls Church is still a classic suburb: The only question remaining may be “What the heck do we call this thing?”

    Do any of you have a good idea?

    Peter Smirniotopoulos, Vice President – Development of UniDev, LLC, is based in the company’s headquarters in Bethesda, Maryland, and works throughout the U.S. He is on the faculty of the Masters in Science in Real Estate program at Johns Hopkins University. The views expressed herein are solely his own.

  • Resources and Resourcefulness – Welcome to The Real Economy

    By Delore Zimmerman

    The orchard-laden foothills of North Central Washington’s Wenatchee Valley are resplendent at this time of year. The apple and pear harvest is in full swing. The warm golden hues, the crisp mountain air and the bustle of trucks carrying produce to markets near and far provide a stark and welcome contrast to the daily barrage of bad news about the downward spiral of the nation’s financial markets.

    In places like New York, Chicago and San Francisco we can see the result of the demise of once-vaunted vapor traders. They created nothing but debts and are leaving whole economies in shambles.

    But in the Wenatchee Valley one can clearly see the fruits – both tangible and figurative – of the real economy. Over the course of almost ten years a determined coalition of community and business leaders has been working hard and working together to build an economy of substance and promise. The results of their efforts include a picturesque and vital downtown, a thriving and growing fruit and wine industry, a riverfront soon to be animated with housing and community recreation facilities, and a Yahoo data service center.

    These diverse elements make for an economy whose benefits are substantial and meaningful for the people of that region. The City of Wenatchee and the Port of Chelan County are the driving forces behind these initiatives. But the Wenatchee Valley’s success also can be traced directly to the investments and commitment of numerous private and government partners from within the region and from the outside. The Chelan County Public Utility District, for example, operates three hydro projects that deliver clean, renewable, low-cost energy to local residents and to other utilities that serve 7 million residents of the Pacific Northwest. The PUD operates a utility system that now includes local water, wastewater and wholesale fiber-optic services in addition to electricity.

    To capitalize further on its hydro power resources leaders in the Valley are aggressively pursuing an Advanced Vehicle Innovations (AVI) initiative. The AVI Consortium was conceived by the Port of Chelan County in 2005 to establish North Central Washington as a catalyst and center for development, demonstration, and deployment of flex-fuel plug-in hybrid electric vehicles. These are vehicles propelled by a combination of electricity-from-the-grid and bio-fuels (i.e., bio-diesel, ethanol). Both of these energy resources are in plentiful supply in the region.

    So here’s a lesson for our nation’s next stab at building a prosperous national economy. Put the money in the hands of those who can harness local and regional resources and make something useful out of them. It can be fruit, a manufactured product, or a service like data processing. The result is a community that, although not immune to the Wall Street tsunami, retains tangible assets that will survive the current storm.

    This real economy is working right now in the Wenatchee Valley. It also exists in many other communities and regions throughout the nation, from the Dakota plains to the energy corridor around Houston, and the growing industrial districts of the Southeast. These places represent the bright face of America’s future economy. If only they were taken more seriously by those – our nation’s leaders and so-called financial wizards – who are now driving us towards an era of darker expectations.

    Delore Zimmerman is President of Praxis Strategy Group and Publisher of NewGeography.com

  • Telecommuting will be a big part of our future

    There’s yet another study, this one from Hewitt Associates, that confirms our notion that telecommuting will be an ever bigger part of our future. A Washington Post piece picked up by blogger Steve Bartin also quotes consultant James Ware about the environmental and economic forces pushing firms and individuals towards full or part-time telecommuting, “The combination of gas prices and climate-change issues is going to push a lot of people in that direction.”

    You don’t have to be an Al Gore apostle or a new urbanist to see that telecommuting could be part of the solution for reducing commutes and energy use while also creating the basis for viable communities. What continues to mystify: only a few environmentalists and neo-traditionalist developers embrace this trend. Perhaps it has something to do with individual choice, and the fact that it does allow people to live in the kind of dispersed and low-density environments that so many of these kind of people tend to despise.

    Yet there is nothing anti-urban in embracing telecommuting. Many cities, such as San Francisco and Santa Monica, are hotbeds for entrepreneurs working from home. In fact, as the economy continues to decluster, this may be one way traditional cities can reinvent themselves: through the work of a new generation of high-tech artisans. It also offers opportunities for suburbs to reinvent themselves as something other than bedroom communities filled with miserable commuters. For rural towns, it provides a chance to plug into the broader global economy. All geographies benefit when people can choose the kind of community they both desire and can afford.

  • Why Omaha?

    I lived in or near cities for 30 years because that’s where the jobs are. I left southwestern Pennsylvania in 1977 as the closing of coal mines and steel mills wrecked the local economy. It cost almost $1,000 per semester to attend the state college, many times that for the state university. There were no opportunities for a young person. I moved to California where residents received free tuition at state universities. I earned 2 college degrees in California and advanced my career from Prudential Insurance through the Federal Reserve Bank and to the Pacific Stock Exchange. When the stock exchange closed my subsidiary, I was hired by the Depository Trust Company and moved to New York. Working in the city gave me the opportunity to further advance my career and my education. In 2000 I graduated with a PhD in economics and was hired by a think-tank in Santa Monica. In 30 years, I moved cross-continent 3 times, worked in 5 countries on 4 continents, and earned 3 college degrees.

    In 2004, I started my own business in Santa Monica to provide research and consulting in economics and finance. I attended a lot of local networking meetings for the financial services industry, chambers of commerce, economic development groups, etc. After 3 years, my business was proving quite successful, but I didn’t have any clients in Southern California. My clients were in Houston, New York, Washington DC, Chicago, London, Cairo and Taiwan. It occurred to me that I didn’t need to live in or near a city anymore. I might be able to work from anywhere that had phones and internet access.

    In May 2007, I went to Honolulu for 5 days. The time difference allowed me to work in the morning, answering emails and writing research reports. In the afternoon, I took conference calls on the beach and set up business meetings in DC for the end of the month. Pretty cool. In August 2007, I considered a job in Santa Barbara and that was the jumping off point. I didn’t take the job but I realized I could leave Santa Monica. I spent five or six months looking around in Southern California before I realized I couldn’t afford to expand there. I couldn’t increase revenue without getting more office space and bringing on staff; and I couldn’t afford the office space and staff without increasing the revenue. Call it the SoCal Catch-22: it’s just too expensive to do business there.

    In December 2007 I started looking around for a city with a lower cost base and an educated workforce. I have relatives and siblings spread around the country, so it could be any one of a dozen cities that have universities, military bases and research hospitals. I was looking for a city that understands that small-businesses are the fundamental driver of economic development. I found it in Omaha. Because my clients are outside the area, my small business also provides a layer of insulation to the local economy.

    Omaha has several universities, including the University of Nebraska and Creighton University. Offutt Air Force Base, home of Strategic Command (and the bunker where they secured the President on 9/11) is in Sarpy County, just twenty minutes to the south. Omaha ranked #22 by CNNMoney for best places to live and launch a business. The “Nebraska Advantage” tax incentives reach down to businesses of my size. By investing $75,000 and creating 2 jobs, my business receives tax incentives that can be used to recover sales tax and/or to offset my personal income taxes.

    Instead of a 6 hour flight from Los Angeles, I can reach my New York clients with a non-stop flight under three hours. I’m still only twenty minutes from the airport. For what I was paying just for a residence in Santa Monica, I have a residence, a 3-office suite and 2 assistants in Omaha. That means I can grow my business. As my business grows, the local economy will come with it.

  • Here They Go Again

    Recent soundings from Washington suggest that neither party has a solid idea of what to do about the deepening economic crisis. It makes me cringe to hear Barney Frank, Chairman of House Financial Services Committee, talking about a big stimulus to “prop up consumption”.

    Under the Democratic-controlled Congress, this would likely include the usual tax relief to middle and working class Americans, as well as big new payments to hard-pressed cities and states. To be sure, the interests of wage-earning Americans should be paramount, but this is reminiscent of the “stimulus” plan earlier this year that did little more than “prop up” spending on consumer goods for a couple months.

    Since many of these products are made in China or somewhere overseas, who are we helping most here? In addition, of course, the bail out of local governments benefits a prime Democratic constituency — public employee union. If we are going to cough up more to pay their salaries, why not ask them first to accept less largesse? Maybe they can agree not to retire until they are in their sixties, like the rest of us chumps, I mean, taxpayers. Then we can talk bailout.

    However, let’s not pick on Democrats alone. The Republicans seem to like consumer “stimulus” but only when spiked with more tax cuts for their dwindling, but still significant cadre of wealthy Americans. Maybe this will help consumption a bit more at Bloomingdales than Wal-mart, but in the end, who cares?

    My thought is that we should focus instead on the core issues of stimulating the “real economy” through incentives for high value manufacturing, domestic energy producers of all kinds (including nuclear power) and investment in basic infrastructure, including new transmission lines, research in clean and alternative fuels. All of these things would reduce our increasingly debilitating dependence on other countries to fund our deficits and consumption habits.

    To lift spirits of Americans the most we need a program that aims to make the country less dependent on both Middle East energy producers and Chinese manufacturers. As we did starting in the 1930s, let us create a climate for real upward mobility based on expanding the productive economy. It’s time to stop relying on quick sugar highs to spur more consumption of items we do not produce or can’t afford and time to start getting back to basics.