New Geography

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  • Job Growth in the Heartland Great Plains, 1990 – 2008

  • Manhattan Sinking

    Anyone in New York recently can see that the swagger is now gone. With the economy losing its primary engine – a relative handful of financial hotshots- the whole plutonomic system seems to be under major stress. The state and city budgets also seem to be heading south in a big way.

    You can see this strolling through Soho and peering into empty restaurants and nearly empty shops. Clerks and waiters now actually seem to want you to enter. The $350 children’s sweaters are now on the sales rack, for about a third the price.

    Wall Street area is in even worse shape, says friend of the New Geography, Jonathan Bowles of the Center for an Urban Future. Yet there are signs of dynamism. Jonathan and I went to lunch on 32nd Street, also known as Little Korea. Here the restaurants and stores, many of them tied to the global garment trade, seem as busy as ever. Good value, hard work and plain old sticktoitivness will still pay off, even in a recession.

    New York will bounce back but the impetus likely won’t come from the investment bankers or the fashionistas. Instead, look for the Koreans, Indians, Africans and other newcomers — and the skilled media and other artisans now mostly living in Brooklyn and Queens — to pick up the slack. A more affordable, less luxury-obsessed city is good news for them. It makes running a business or buying a house or condo a possible dream. These are the folks most capable of reinventing the city in the post-bubble age.

  • Old Manhattan Had a Farm

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

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

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

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

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

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

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

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

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

    With some algae here
    And some chickens there

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

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

    Here a cell
    There a cell
    Everywhere a solar cell

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

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

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

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

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

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

    Hmmm. Back to the drawing board.

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

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

  • Michael Lind

  • Financial Innovation: Wall Street’s False Utopia

    In the popular media much of the blame for the current crisis lies with sub-prime mortgages. Yet the main culprit was not the gullible homebuyer in Stockton or the seedy mortgage company. The real problem lay on Wall Street, and it’s addiction to ever more arcane financial innovation. As we try to understand the current crisis, and figure ways out of it, we need to understand precisely what, in the main, went wrong.

    I have studied financial innovation for years and worked with some of the best minds in that business. In 2003, I wrote in Beyond Junk Bonds that financial innovation is the “engine driving the financial system toward improved performance in the real economy”. Innovative debt securities, like collateralized mortgage obligations (CMOs), I had hoped, would add value to the economy by reallocating risk, increasing liquidity, and reducing agency costs. Like the broken promises of communism, it turned out to be a utopia that was not achieved.

    CMOs were designed to diversify risk by shifting risk to larger, better capitalized and diverse institutions. Traditionally, a bank in Riverside, California would write and hold the mortgages for homes in the area. Then, if some negative shock impacted jobs and income in the area, that bank would have to absorb all of the resulting defaults. This would put the local bank at an inordinate risk. With CMOs, the risk would be spread out across banks and investors in a broader geographic area. Since CMOs could be held internationally, even a nationwide economic downturn might have little impact on any single mortgage holder.

    Unfortunately, the dealmakers sold the riskiest pieces to a few hedge funds, thereby consolidating the risk rather than allocating it broadly. The result was the spectacular crash of Bear Stearns and the incendiary damage done to a slew of US and international financial institutions.

    CMOs were supposed to produce more money available for lending to homeowners than would otherwise have been the case. Instead it produced more paper, more heavily leveraged and less secure. Securitized mortgages were misused to the extent that $45 trillion in bonds were issued on $5 trillion in assets; it’s as if someone bought insurance for 9 times the value of the house. By 2007, the market was over-sold: more bonds had been sold than could be delivered, possibly even more than had been issued. On average, nearly 20% of CMO trades have failed to settle since 2001, driving down the price of the bonds.

    CMOs should have been used to protect against conflicts of interest between managers, stockholders and bond holders (agency costs). Instead, the same companies that issued the CMO were buying large positions in the securities. Most CMOs are typically initiated by banks seeking to remove credit risk from their balance sheets while keeping the assets themselves. Normally, these securities are issued from a specially created company so that the payments from the riskiest borrowers, i.e. the sub-prime mortgages, can be separated from the more credit-worthy payees. A trustee and a portfolio manager receive fees from the newly created company.

    While CMOs reduced some of the risk to the local banks, it also led some of those banks to lend imprudently. With the cash flowing easily back to the banks after the CMOs were sold, some lenders became increasingly risk-seeking – the opposite of the intended purpose of CMOs. Companies like Bear Stearns, who acted as trustee and portfolio manager for the CMOs, also purchased the CMO securities (usually through a subsidiary hedge fund).

    Critically missing from the market for CMOs was the lack of a standard for the issuance. In more than one case, when a CMO investor attempted to foreclose on a property for mortgage delinquency, courts found insufficient documentation to support the CMO’s lien on the property. Without legally binding “receipts” of ownership, CMOs
    have had insufficient real backing — producing results we are still trying to cope with.

    Sure, sub-prime mortgage defaults were the straw that broke the camel’s back. But Bear Stearns was in financial difficulty three to six months before the sub-prime mortgage default rate spiked. The real fundamental problem lay in the multiple sales of mortgages through CMOs – the result of too much faith in financial innovation. Experts believe that, for every $1 of mortgage that defaulted, the investment banks fell behind as much as $15 in payments on the CMOs. These, not the actual mortgages of homeowners, represent the bulk of the securities that Treasury Secretary Paulson wants $700 billion to buy.

    Susanne Trimbath, Ph.D. is CEO and Chief Economist of STP Advisory Services. Dr. Trimbath’s credits include appearances on national television and radio programs. Dr. Trimbath is a Technical Advisor to the California Economic Strategy Panel and Associate Professor of Finance and Business Economics at USC’s Marshall School of Business. Dr. Trimbath was formerly Senior Research Economist at the Milken Institute and Senior Advisor on the Russian capital markets project for KPMG.

  • Susanne Trimbath

  • Mortgage Credit Crisis: Homeowners Also Need to Look in the Mirror

    There is more than enough blame to go around for the sub-prime mortgage crisis, and the unraveling financial disaster. But I believe the fundamental blame lies in two places: A purely American NIMBY myth about homeowners being the only genuine contributors to their communities and a capitalistic axiom, presumably started and perpetuated by a troika among realtors, homebuilders, and mortgage lenders, that the only way for middle-income Americans to truly create wealth is through homeownership.

    The main mechanism for translating these two, fundamentally flawed “principles” into an action plan was hatched not under the rightly derided George Bush but the widely considered economic stalwart, Bill Clinton. It was Clinton who in his second term decided that what the United States really needed was to become the greatest nation of homeowners ever. The goal: Move the country from roughly 64% homeowners to over 67%.

    It was the role of the two Government Sponsored Entities, Fannie Mae and Freddie Mac, to oblige this national imperative by creating very aggressive mortgage products that, for all intents and purposes, diluted the true nature of homeownership by drastically reducing the level of investment and commitment on the part of the homeowner. Loan-to-value ratios (LTVs) rose, in some cases above 100% of the home’s value so that closing costs and other expenses could be financed as well. At the same time the amount of a homebuyer’s “skin in the game” dropped precipitously, sometimes below zero, with some homebuyers walking away from closing tables with their front door keys and cash.

    Some of us in the development community were alarmed by these aggressive first-time homebuyer mortgage products. Homebuyers would be shoe-horned into homeownership, putting little to nothing in to initiate the transaction. However, as soon as interest rates climbed or home value fell, these first-time buyers were left hopelessly overextended. This disaster-in-the making was compounded by the commodification of what was once a personal asset.

    The bundling of mortgage loans into mortgage-backed-securities (MRBs) completed the separation of borrowers from their lenders. At the same time, the home itself was transmuted from fundamental shelter to an investment instrument (as the realtors association likes to refer to it, the main wealth creator for middle-income Americans).

    As soon as there was any cushion at all between the principal amount of the mortgage and a home’s fair market value, it was often immediately monetized through a second mortgage or equity line of credit. At the same time, owners of MRBs had to rely on mortgage servicers to manage and monitor timely mortgage payments and overall collateral values for huge mortgage pools and parsed segments thereof, often secured by a wide array of homes in disparate markets and sub-markets across the country.

    And yet, policy makers, the housing and mortgage industries, and capital markets all touted this great new system for wealth creation. Why?

    Because, after all, housing prices will just continue to go up, right?

    That was the fundamentally flawed foundation on which this house of cards was built, with everyone along the way—homeowners included—pocketing the cash from what were double-digit, annual increases in value in some markets. The positive consumer sentiments from the good economic times of the Clinton years, that not even the 9-11 tragedy could quash for too long, dovetailed with a blatant disregard from Main Street to Wall Street to our Nation’s Capitol for the incomprehensible national debt that was accumulating, mirrored by record consumer debt. Spend, spend, spend became the national mantra and motto. We had been transformed from a producer nation to a consumer nation.

    Whether it was houses, cars, electronics, apparel, home furnishings, appliances, entertainment, dinners out, whatever you can think of: If it was for sale, Americans were buying it and in record numbers. Much of these manifestations of perceived wealth were financed by the seemingly never-ending appreciation in home values and the astronomical mortgage-related debt that was being amassed in reliance on unrealistic expectations regarding those values.

    To be sure, there are a lot of lower and moderate-income households — many of whom are immigrant families targeted specifically as potential first-time homebuyers — who were sold a bad bill-of-goods in the form of subprime mortgage products. If anyone deserves a bailout, it is probably them. But most Americans knew what they were doing and now should pay the price.

    This includes a large number of people who could afford a home but couldn’t purchase the McMansion of their dreams with a conventional mortgage. So they went with something a little more exotic and much, much riskier that allowed them to stretch just a little farther, to continue their conspicuous consumption and help the domestic economy keep rolling along.

    So in the end, it’s neither fair nor accurate to blame just the big guys on Wall Street: This crisis was also made by ordinary Americans as well, egged on by flawed policies about homeownership and wealth-creation, allowing obsession to overtake reason.

    If, as Gordon Gecko said in the movie Wall Street, “Greed is good,” then as a nation, we’re about as good as it gets. There is plenty of blame to go around indeed.

    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.

  • Villaraigosa’s Housing Proposal: Billions of Dollars and Too Little Sense

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • Bubble Opportunity: A New Life for Public Housing?

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

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

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

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

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

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

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

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

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

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

  • The future of suburbs? Suburbs ARE the future

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

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

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

    Suburbs remain home to a majority of Americans and a plurality of American families. Suburban population, business and job growth each outpace those of cities, have done so for decades and will likely continue to do so. In fact, from 2001 to 2006:

    • 90% of all metropolitan population growth occurred in the suburbs (American County Survey, US Census Bureau)
    • Job growth in suburbia expanded at 6 times the rate of that in urban cores (Praxis Strategy Group)

    A small recent surge in mass transit won’t really change this. Of the 130 million Americans who commute to work every day, 41 million – by far the largest number and share – commute within suburbs (i.e. to the same or another suburb). Only 18 million, or 14% of commuters, commute from a suburb to a central city. To put it another way, 60% of commuting is suburb-related in some way. [IAC Transportation (July, 2008)] By the way, 75% of all commuters drive alone in their cars.

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

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

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

    Welcome to the future: suburbia.

    Roger Selbert is a business futurist and trend guy. He lives in Los Angeles, edits and publishes the newsletter Growth Strategies, speaks and consults [www.rogerselbert.com]. He graduated from Bowdoin College in 1973, missed his graduation ceremony and has yet to return. But he thinks Brunswick, Maine was a great college town.