New Geography

Tag: Chicago

  • Can the Chicago White Sox Help Turn Around the South Side?

    As a displaced Detroit Tigers fan who adopted the Chicago White Sox as my team, I often wonder how our city’s other team, the Cubs, became an integral institution in the remaking of our city, while the White Sox have not. I published a piece at my Forbes site some time ago that detailed my thoughts on how the Cubs facilitated that transition. The Cubs’ growth in prominence, particularly from 1969 until today, parallels the city’s transition from Rust Belt to Global City. Conversely, the White Sox have diminished in prominence over the same span. I realized the Sox missed out on the locational advantages the Cubs enjoyed, and circumstances and mistakes have hurt them.

    Once again, readers may ask, “what does any of this have to do with cities?”, so let me explain. Baseball, I believe, holds a special place as a sport that is an institution and amenity for the places they call home. As the nation’s oldest professional team sport, it has an enduring history in many of our largest cities. In its early years, major league teams sought to establish close relationships with the neighborhoods that surrounded them; with 77 (and now 81) home games scheduled each year, that was just a good business practice. Teams in other sports have tried to replicate the institution/amenity feel, with varying degrees of success. Basketball and hockey are winter sports and played indoors. Football plays to much larger crowds and with far fewer games, and is far more likely to be viewed as a neighborhood intrusion than an amenity. But baseball is summer. It’s (mostly) outdoors. It can be easily integrated into a neighborhood fabric. So, yes, I see baseball teams, baseball stadiums, as having an outsized impact on city revitalization that other sports teams can’t compete with.

    What I tried to capture in my Forbes piece is that before the Cubs enjoyed their current baseball success, they have for some decades enjoyed that locational success, and parlayed that into a successful partnership with the surrounding neighborhood. From that piece:

    “Starting in 1969, the Cub mythology begins to grow, and television becomes a bigger part of it. Chicago kids would come home from school to watch day baseball games. Plays by David Mamet were being written about bleacher bums. At the same time, the economies of north and south were continuing to diverge. Institutions like DePaul and Loyola University, Children’s Hospital, and others, were attracting more of the Midwest’s best and brightest to study and work. And the Cubs became a very attractive amenity to people returning to cities exactly for that reason.

    It was in the 1980s that the real and enduring changes occurred. WGN became a cable television superstation, and now Cub games were broadcast nationally. Throughout the ’80s, especially with Harry Caray at the helm in the broadcast booth, every game was a celebration of what Chicago, and specifically North Side Chicago, had to offer. A jewel of a ballpark, day baseball, views of sailboats on Lake Michigan and a dramatic skyline nearby — all of this became not just a Midwestern phenomenon, but a national one. Suddenly, it wasn’t just Midwestern kids who dreamed of moving to big city Chicago. It became national.”

    In other words, the heart of Cubbie fandom lies in its place: the old ballpark, the surrounding neighborhood, the bars and restaurants, the nearby lakefront, even the nearby eds and meds institutions that employ many of the neighborhood’s residents — they all blend together to create a unique and enviable environment.

    Conversely, over the last 50 years or so the White Sox lost whatever locational advantage they had. Deeply identified as the “South Side’s Team”, their fortunes diminished just as the South Side’s:

    Meanwhile, as the Cubs became more popular in the late ’60s, the luster on the White Sox began to dim. The Bridgeport neighborhood that is home to the Sox is in many respects the polar opposite of the Cubs’ Lake View neighborhood. It’s working-class, with far fewer eds and meds institutions, and a Bronzeville neighborhood — also known as the Black Belt — that stood between it and the south lakefront. While Cubs fans sitting in the upper reaches could see sailboats on the lake, Sox fans could see a never-ending row of public housing towers.

    Beginning in the late ’60s and early ’70s the fortunes of the Cubs and White Sox diverged as dramatically as their respective parts of the city.

    First, Some Facts

    Let’s try to establish a context for the Cubs and White Sox by using the most accepted measure of popularity in baseball, attendance. Since 2001 the Cubs have been in the top tier of MLB attendance, with an average annual rank of eighth out of thirty teams. The Cubs are regularly in the mix with the Yankees, Dodgers, Cardinals, Giants, Mets, Red Sox and Angels as a top MLB draw. Over this period the Cubs have averaged just under 3 million fans per season, or about 37,000 per game. Cubs attendance has proven to be remarkably consistent and impervious to big fluctuations in wins and losses. The Cubs paid a big price in 2013 when attendance dropped by 11.8% after disappointing seasons in 2011 and 2012, but overall the Cubs increased attendance at a rate of 1.2% a year over the last sixteen seasons. MLB attendance has grown at a rate of about 0.6% annually since 2001.

    The White Sox, however, are quite a different story. Since 2001 the Sox have consistently ranked in the bottom third in MLB attendance. They’ve averaged just over 2 million fans annually, or nearly 26,000 per game. That’s enough to rank them 21st out of thirty teams in that span.

    I haven’t been able to document this yet, but I suspect the Sox may be among the more win-sensitive teams in MLB. Attendance jumped 21.3% from 2004 to 2005, the year the Sox won the World Series, and jumped another 26.2% in 2006, in the World Series afterglow. The Cubs have no such huge year-to-year gains over the last sixteen seasons. However, subsequent poor seasons meant attendance has dropped for eight consecutive seasons before ticking upward again in 2015. The Sox have gained about 0.5% annually in attendance since 2001, just under the MLB average.

    Cubs fans, and Chicagoans in general, seem to accept the Cubs/Sox fandom differential as an immutable fact, but that’s not the case. Historically speaking, as I wrote previously about this at Forbes, the White Sox regularly outdrew the Cubs following World War II and into the ’60s. From the late ’60s to early ’80s, there was general attendance parity between the teams. Since the early ’80s, the Cubs have regularly outdrawn the Sox. The Cubs have outpaced the Sox in attendance every year since 1992.

    Downtown, Neighborhood and Suburban Teams

    The Cubs are one of just a handful of major league baseball teams that have maintained a strong neighborhood identity and association. Out of 30 MLB teams, just nine are located in neighborhood locations today, with 18 located in downtown areas and three in the suburbs (including the Atlanta Braves, who moved to suburban Cobb County this season). Here are the nine so-called neighborhood teams, located at least two miles outside of the center of a city’s CBD:

    • New York Yankees
    • Boston Red Sox
    • Chicago White Sox
    • New York Mets
    • Philadelphia Phillies
    • Washington Nationals
    • Miami Marlins
    • Oakland Athletics
    • Chicago Cubs

    Philadelphia, Washington, Oakland and Miami deserve special attention. By my eyes, the Phillies, Nationals and A’s all play in stadiums that are beyond their cities’ central business districts, but appear to be located in areas that are largely warehouse or former manufacturing districts, as opposed to residential or mixed-use areas. The home of the Miami Marlins opened in Miami’s Little Havana in 2012, so one could argue it’s had little time to develop — yet — a strong relationship with the surrounding neighborhood. (Kansas City — the Royals’ Kauffman Stadium, although within the city’s limits, is so far from the city’s downtown, and relies on interstate access to reach it, that it gets a “suburban” designation from me.)

    The Yankees, Red Sox and Cubs are each intimately connected with their surrounding neighborhoods. Yankee Stadium is in the Bronx; while it doesn’t seem to have the same revitalization impact on its surrounding area, it is within easy reach affluent Manhattan. The Red Sox’ Fenway neighborhood and Fenway Park might be the closest analogue to the Cubs’ Lake View/Wrigleyville neighborhood and Wrigley Field in terms of vibrancy and impact on the city. I’m less familiar with the connection between the Mets and the nearby Queens neighborhoods.

    What Happened?

    The White Sox, however, seem to have far less impact than the others on the surrounding neighborhoods. In fact, the White Sox’ home seem most similar to the Oakland A’s — beyond downtown, and in the less-favored area of a two-team baseball market.

    I don’t know what happened with the A’s and Oakland, but I think it’s easy to figure out how the neighborhood fortunes, and subsequently the fan fortunes, of the Cubs and White Sox diverged. Keep in mind that prior to about 1950, the areas around Wrigley Field and Comiskey Park were more similar than they are today. But the area around Clark and Addison retained its neighborhood fabric, while the area around 35th and Shields mostly lost it. A few things factored into the divergence:

    • Macro: the general decline of the South Side. A quick and easy way of seeing the difference between the North and South sides is looking at the median household incomes for the communities that house the respective teams, Lake View (Cubs) and Bridgeport (Sox). In 1970, the median household income in Lake View (in 2014 dollars) was $44,889. In Bridgeport, it was $48,548. In 2015, median household income in Lake View was $76,424, and in Bridgeport it was $42,951. This plays out more broadly as well; wealth has flowed into the north lakefront neighborhoods of the Near North Side, Lincoln Park, Lake View and Edgewater, and it flowed away from Bridgeport, Bronzeville, Washington Park and Woodlawn.

    • Micro: Sox Park’s hemmed-in geography. The home of the White Sox has long been hemmed in by two freight rail lines, about a third of a mile apart — the Norfolk Southern line on the west and the Rock Island on the east. For much of its stretch on the South Side, the narrow corridor has been treated as a no-man’s land with manufacturing uses, intermodal facilities, and poor quality housing strewn in. The intact Bridgeport neighborhood lies further west, and Bronzeville further east. A look at an aerial of U.S. Cellular Field highlights this:

    • Lack of nearby institutions and amenities. Several key institutions are located near Wrigley Field — DePaul and Loyola universities, several hospitals — that make the area an attractive place to live. Near old Comiskey, the much smaller Illinois Institute of Technology and Mercy Hospital are still there, but their presence might not be felt in the same way in the community as those further north.

    • Public housing construction. The year 1949 began a 20-year period where public housing was constructed just to the east of Comiskey Park. Dearborn Homes, Stateway Gardens, and Robert Taylor Homes were built within eyesight of Comiskey over that period, concentrating tens of thousands of low-income residents along the area’s eastern edge.

    • Dan Ryan Expressway construction. Between 1957 and 1962, the Dan Ryan Expressway was constructed just feet from Comiskey’s eastern edge. Remember the narrow rail corridor? The 16-lane expressway, with a new public transit line in the median, made it even narrower.

    When you combine these with some management differences between the Sox and Cubs, like the spotty radio and TV presence the Sox had when compared to their Cub brethren, and the failed venture to showcase Sox as a pay-per-view attraction on CableVision in the early ’80s, and it becomes clearer how the two teams took vastly different tracks.

    Paths to White Sox Success — And Urban Revitalization

    That being said, I think there are ways the White Sox could reclaim the kind of locational advantage they once had and the Cubs currently enjoy. However, it would mean the Sox would have to view themselves as a city institution invested in the revitalization of its surrounding area and employ unconventional tactics. Otherwise, they may need to consider other options. Here’s what they can do:

    • Stay at 35th and Shields — and partner with commercial and residential developers. In the late ’80s, when the White Sox threatened to leave Chicago and received the public gift of U.S. Cellular Field in return, a counter-proposal was floated by Chicago architect Philip Bess to create Armour Field. It was to be a stadium that wouldn’t just be firmly integrated into the fabric of the surrounding community — it would create community where none currently existed. Take a look:



































    The oddly-shaped outfield harkens back to the New York Giants’ Polo Grounds, and Bess took pains to re-create the outlines of old Comiskey. More importantly, Bess frames the stadium with mixed-use development to the east, west and south of the stadium, and includes a circle at 35th and Wentworth that creates a signature entrance into the area. I’m guessing this type of development would bring the same types of residents who live near Wrigley today. I’ve never heard an explanation from the Sox for why this proposal was rejected, but I assume costs had much to do with it. And yes, working on the commercial and residential sides of the project would be a challenge.

    This, of course, is just one redevelopment option. If the Sox are serious about staying at 35th and Shields, it would be in their best interest to lead the revitalization of the surrounding area.

    • Find another neighborhood site on the South Side. There are likely other spots on the South Side that don’t have the constraints that prevent Cubs-style community cohesiveness and neighborhood connection. One such site could’ve been the 49-acre site of the former Michael Reese Hospital on the Near South lakefront; it was formerly considered as the site for the Olympic Village in Chicago’s 2016 Olympic bid, but is now being redeveloped as a major mixed-use development. I’ve also considered locations in largely manufacturing areas adjacent to the Southwest Side’s Orange Line. I’m sure there are other possible sites out there. All, however, would probably come with some significant neighborhood resistance, and have the same cost challenges inherent in the above scenario.

    • Find a downtown or near-downtown location. It’s quite possible that in a two-team baseball market, only one team can be the “neighborhood” team. If so, the Cubs are it. The White Sox could find a site downtown or nearby (to be sure, very expensive) and begin to shed their South Side identity by becoming the team at the center of the metro area. Even though they’re not in a two-team market, the Detroit Tigers invigorated their fan base by moving from antiquated Tiger Stadium to Comerica Park in 2000, leaving the city’s Corktown neighborhood for a downtown locale. During the ’90s the Tigers were among the lower rung teams in attendance, drawing 1.5 million annually. The Tigers vaulted into the middle tier with the new stadium (and some on-field success) in the 2000’s, averaging 2.5 million a season. Of course, the last option would be to…

    • Move to the suburbs. The White Sox flirted with suburban locations in the late ’80s. However, suburban stadium locations are seen less often today, particularly for baseball stadiums (Atlanta Braves excepted). Perhaps it’s because suburbs or suburban counties are less able to put together the public financing packages that team owners often demand (or extort?). If it were to happen, my guess is that the Sox would target relatively affluent south or southwest suburban communities like Orland Park or Bolingbrook, so that the team could easily attract fans from a broad spectrum of the metro area without completely compromising its South Side heritage. Honestly, I see this as highly unlikely, as the return-to-the-city movement is moving ahead in Chicago as much as anywhere.

    I couldn’t fathom a move to another city now, so I won’t explore it as an option.

    Bottom line, despite their on-field failures over the years, the Cubs have done a masterful job of taking advantage of locational opportunities presented to them. The White Sox have had a more difficult go of it for the last 60 years or so, but could turn it around with the right kind of thinking. Here’s hoping the White Sox can become the kind of integral institution of South Side change that the Cubs have been up north.

    This piece originally appeared on The Corner Side Yard.

    Pete Saunders is a Detroit native who has worked as a public and private sector urban planner in the Chicago area for more than twenty years.  He is also the author of “The Corner Side Yard,” an urban planning blog that focuses on the redevelopment and revitalization of Rust Belt cities.

    Top photo: U.S. Cellular Field, home of the White Sox. Source: sportingnews.com

  • The Superstar Gap

    The biggest challenge facing many cities in transitioning to the knowledge economy is a shortage of “A” talent, especially true superstars.

    All “talent” isn’t created equal. Crude measures such as the percentage of a region with college degrees, or even graduate degrees, don’t fully capture this. It is disproporationately the top performers, the “A” players and superstars that make things happen.

    Sections of the knowledge economy have long been geared to superstars. Economist Enrico Moretti cites research on biotech hubs, in which he notes that it is not just having a top university nearby that mattered in establishing biotech clusters, but having the true handful of academic superstars researchers. In The New Geography of Jobs, he writes:

    In a fascinating and now classic article and in a series of subsequent studies, they argued that what really explains the location and success of biotech companies is the presence of academic stars – researchers who have published the most articles reporting specific gene sequencing discoveries. Among top universities, some institutions happened to have on their faculties stars in the particular subfield of biology that matters for biotech; others had comparable research but did not have stars in that specific subfield. The former group created a local cluster of biotech firms while the latter did not.

    Richard Florida devotes a significant amount of his latest book The New Urban Crisis discussing the rise of the superstar phenomenon, which he also links to specific superstar cities.

    Superstars are important in tech because of the 10x principle I mentioned in my recent post on the Silicon Valley mindset. The best coders are 10x as productive as the merely very good coder. The top entrepreneurs are probably 100x or or more. The presence of superstars, along with some amount of good fortune, can transform the economy of a city or region.

    Jeff Bezos is a superstar. Mark Zuckerberg is a superstar. Michael Bloomberg is a superstar.

    These superstars are disproporationately located in only a handful of regions.

    To see this effect, just look at Austin vs. Seattle. Austin is a booming, prosperous city with a major tech industry. Yet Seattle is generating significantly greater value. Seattle’s real per capita GDP is $75,960 vs. only $55,323 in Austin. Seattle’s per capita income is $61,021 vs. $51,014 in Austin.

    Austin had some good entrepreneurs like Michael Dell, but not superstars in industries that would create massive platforms like Microsoft and Amazon. Austin has a lot of quantity, but it looks to me like there’s a big quality gap vs. Seattle.

    And it’s not just that superstars create things, they act like a magnet attracting others. As economic development consultant Kevin Hively once told me, “When you’re the best in the world, people beat a path to your door.”

    To see this in action, just look at Carnegie Mellon University in Pittsburgh. CMU has the #1 ranked computer science program in the country. And companies like Google (600 employees), Uber (500 employees), Apple (500 employees), Intel, and Amazon been drawn there and set up shops around it. Ford is investing a billion dollars into autonomous vehicle ventures there. And GM also has a presence.

    It’s interesting to contrast with the University of Illinois’ program. U of I is ranked 5th in computer science. My impression is that from a commercial impact, they used to be bigger time than they are now. The web browser as we know it was invented there, but that was a long time ago. They have a research park designed for companies wanting to take advantage of proxmity of U of I. There are a lot of companies there, but the tech roster isn’t as marquee as Pittsburgh’s and my impression is that the scale is smaller.

    There’s a big differnce between being number one and number five, particularly when something like ownership of the driverless car market is at stake. Maybe that’s why former GE CEO Jack Welch said he only wanted to be in a business if he could be number one or number two.

    Cities and states in the Midwest and elsewhere in the interior like to boast of their assets, which include many great schools, but very few world dominating number ones in important fields. This is a big challenge for them.

    Superstars aren’t the entire world. The presence of superstar businesses also creates problems as well as wealth. But if these places want to not only thrive but perhaps for some of them even just survive in the knowledge economy world, they need to look at their attractiveness to the truly top tier talent (I will address “A” caliber but not superstar talent in a future post). I don’t often see this talked about.

    For example, one thing I don’t see in most discussion of Chicago is its lack of superstar talent. Chicago is very good but not the best in a lot of things. Where they do have arguably world beating talent, such as in their culinary industry, they shine. (I know people in New York who happily admit Chicago has better restaurants).

    If I were that city, I’d be looking to see how to create a world’s best talent pool in additional particular high impact industries. Maybe the state should consider some radical type action, such as relocating U of I’s entire computer science and select engineering programs to Chicago as part of UI Labs, and putting serious muscle behind getting at least some critical subspecialities with high commerical potential to be clear #1’s in the world.

    This is actually a scenario I plan to study in the future. Right now I’m not sure it’s necessary and some of my initial thoughts are impressionistic. So this post is in part a honeypot to try to lure in those who might react to this or even help flesh out the facts (which might augur against it).

    Regardless, this lack of superstar/number one type talent in the interior is a big handicap in the world we live in now. For example, just look back at a 2010 analysis Carl Wohlt did of where the people on Fast Company’s “100 Most Creative People in Business” list lived. Only six in the Midwest and seven in the South vs. 35 in the West and 32 in the Northeast (with 20 international). This isn’t a scientific survey but illustrates the scope of the problem.

    Cities and states need to take a more finer grained view of talent, and understand the criticality of having at least some of the absolute best talent to kicking a region’s knowledge economy into high gear. Too many places have a superstar gap.

    This piece originally appeared on Urbanophile.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo by John Picken (Flickr: Chicago River ferry) [CC BY 2.0], via Wikimedia Commons

  • Welcome to South Chicago

    If you’ve been reading my stuff here long enough, you probably know that cringe when I hear people talk about Chicago’s South Side as a monolith, as code for black and poor.  The truth is, there are many facets to the South Side.  It is largely black, but not exclusively so; it is less wealthy than other parts of the city and region, but with pockets of wealth also.  It has its very troubled spots, but it has places of promise.  I’ve written about one part of the South Side here, and recently wrote about a nearby but very different part of the South Side too.  With that in mind, I’m adding another entry into my “Welcome To” series.  Today, I’ll talk about one of the oldest parts of the South Side, and indeed Chicago — the neighborhood of South Chicago.

    Others in the “Welcome To” Series:
    Welcome To Mount Greenwood
    Welcome To Rosemont
    Welcome To The South Side, JRW Style

    South Chicago does indeed fit one image of the South Side: it is a classic late 19th/early 20th century industrial neighborhood, and that sense is captured in the image above.  Virtually from its inception, steel production, port activities and rail transportation defined the community.  Situated at the mouth of the Calumet River as it enters Lake Michigan, the neighborhood was well suited to produce manufactured goods and deliver them to the entire nation. 

    Had things gone a little differently, South Chicago could’ve been at the center of Chicagoland, rather than on the periphery.  The Calumet is in fact a larger river than the Chicago River, closer to the centerpoint for today’s metropolitan area.  There are historical reports that suggest that the early U.S. government nearly established Fort Dearborn where the river empties into Lake Michigan, but later opted for the less flood-prone area further north. 

    The swampy areas around South Chicago may have inhibited early development but never diminished its importance.  Settlement of the area began in the 1830’s, and happened independently of Chicago’s settlement and growth, ten miles to the north.  The Chicago Fire (1871), the establishment of the South Works steel mill (1880), annexation into Chicago (1889), the acquisition of South Works by U.S. Steel (1901), and the creation of the Calumet Harbor/Port of Chicago (1921) all served as catalysts for growth that started in South Chicago and spread to its surrounding communities.   

    South Chicago has a unique physical and demographic character derived from its growth independent of Chicago and relative isolation because of the surrounding swampy land.  To the north, west and south of South Chicago, most residential and commercial development consists of structures built between about 1925-1955.  But within South Chicago itself, you can find plenty of blocks that look like this:

    92nd and Brandon, South Chicago

    or like this:

    90th and Houston, South Chicago

    that have much more of the 1890’s/1900’s/1910’s-era construction that could be found in places much closer to the Loop, like Bucktown or Bridgeport.  When driving into the area, it gives a sense of stepping back in time. 

    South Chicago’s commercial heart, the aptly named Commercial Avenue, also has the rather dusty appearance.  Here’s the primary commercial intersection of 91st and Commercial (presumably scrubbed of all cars and pedestrians just for this Google Earth pic):

    South Chicago is also served by a spur of the Metra Electric line that provides transit service to much of the South Side.  The South Chicago branch begins (or ends, I guess, depending on your perspective) at 93rd and Baltimore, just east of the Commercial Avenue view you see above.  The only electrified train line in Metra’s transit system, and the only one that does not share its tracks with freight lines, South Chicago has regular service that connects it to the Loop within 35 minutes.

    I had the pleasure of working with the South Chicago Chamber of Commerce during my time with the City of Chicago about 25 years ago.  It was then that I found out another unique characteristic of the community — a substantial and long-established Latino community, mostly Mexican, that’s been based in South Chicago for more than 100 years.  Significant Mexican immigration to Chicago began around 1910, with immigrants drawn (or recruited) to the city to work in steel plants and packinghouses, and also pushed by the upheaval of the Mexican Revolution that began around the same time.  Steel mill jobs were plentiful at the time, but so were worker strikes.  Mexican workers were often cast as strike breakers, putting them at odds with recent European immigrants.  By 1960 Latinos made up more than one-third of South Chicago’s population, even as it was less than ten percent citywide.  Today, blacks are the largest racial/ethnic group in the community, but Latinos still make up nearly one-fourth of the population there.

    Developers are trying to bring South Chicago into the 21st century by parlaying its lakefront location into new development.  The former U.S. Steel South Works site, closed in 1992, is the single largest vacant site on the Chicago lakefront.  A development team is working out the details of a purchase of the 430-acre site to build as many as 12,000 residential units and new retail on the site.  This effort comes on the heels of a failed joint venture attempt by U.S. Steel and a developer that fell apart in 2004, and considerable infrastructure investment by the city into the area (remediation of the U.S. Steel site, an extension of Lake Shore Drive, and the creation and upgrade of lakefront parks). 

    I’m guessing that there will come a time when South Chicago sheds its industrial past and embraces its potential.  A key lakefront location, with nearby parks and excellent transit options, and a funky, authentic building stock that might appeal to urban pioneers might mean that South Chicago could get discovered.  We’ll see.

    Pete Saunders is a Detroit native who has worked as a public and private sector urban planner in the Chicago area for more than twenty years.  He is also the author of “The Corner Side Yard,” an urban planning blog that focuses on the redevelopment and revitalization of Rust Belt cities.

    Lead photo: A freighter leaves Lake Michigan and enters the Calumet River Turning Basin in South Chicago, near 95th Street and Lake Shore Drive.  Source: still from youtube.com

  • Chicago’s Crime Wave Understood: Complex Problem, Simple Formula

    Chicago’s violent crime problem can be understood through this formula:

    It’s a simplistic, reductionist, even crude, but it explains the roots of Chicago’s crisis as well as anything.

    It has been particularly grueling time in Chicago this recently.  We experienced the murders of at least ten Chicagoans, including two girls, age 12 and 11, shot within 30 minutes of each other in different locations, and a 2-year-old boy.  Once again, Chicago is thrust into the spotlight as President Donald Trump spoke of “two Chicagos” and renewed his pledge to send some kind of federal assistance to deal with the violence (note: you may have seen me refer to “two Chicagos” before, but I’m definitely uneasy with our current President making even starker distinctions between them).  And with each new story of violence, of television and newspaper reporters being sent out to document another life lost, of an expression of heartbreak from a grieving parent, we ask ourselves, “how did it get this way?  How do we solve it?”

    In many respects the violent crime wave is a reaction to the same trends that got our president elected, but coming from even deeper and longer lasting strains of dislocation and disenfranchisement.  It’s also a set of unintended consequences related to very specific policies undertaken by the city itself.  While Chicago’s experience is rather unique among American cities, other cities that exhibit similar traits are seeing the same spike as well.  In each case, the spike is decades in the making.

    Segregation

    It starts with segregation.  Chicago’s leaders during the early years of the twentieth century were the innovators of a segregation system that plagues the city to this day.  Natalie Moore, South Side bureau reporter for Chicago public radio station WBEZ and author of The South Side: A Portrait of Chicago and American Segregation, noted the pervasiveness of segregation in Chicago in this interview with the Chicago Tribune:

    “People know that segregation exists, but they don’t always think about it,” said Moore, WBEZ’s South Side Bureau reporter and the author of “The South Side: A Portrait of Chicago and American Segregation.” “It’s like air and water: You just kind of live it, but you don’t think about it.”

    And how was it established?  Tribune reporter Jeremy Mikula and Moore go on:

    “The institutional racism Moore charts in the book goes back generations and has its roots after the start of the Great Migration. Restrictive covenants prevented African-Americans from moving outside the city’s historic Black Belt until U.S. Supreme Court cases such as Hansberry v. Lee (1940) and Shelley v. Kraemer (1948) eliminated such restrictions in housing.

    Through that time, Moore writes, “the city designed a way for blacks to not fully participate in the freedoms of the North,” and later formulated subtle policy decisions that can still be felt today, she said.

    “All the things from redlining to the Home Owners’ Loan Corporation to blockbusting to white flight, there are so many things that happened in the 20th century that have lingering effects,” Moore said. “It’s never been about white people want to live there and black people want to live there. This is where the history is really important for us to understand.”

    Emphasis added. 

    Tools were developed and employed to create a segregated Chicago — restrictive covenants, redlining, exclusionary zoning, urban renewal, interstate highway development, public housing development, aggressive policing tactics and a judicial system that exploits inequality — and those tools are foundational to our understanding of the way the city operates today. 

    Chicago is not alone in its history of segregation, nor is it alone in its current spike in violent crime.  In fact, it may not even be the worst.  In late 2016, USA Today reported on the nation’s most violent cities, based on 2015 FBI violent crime data.  Chicago was not among the top ten.  The list was headed by St. Louis, followed by Detroit, Birmingham, Memphis, Milwaukee, Rockford, IL, Baltimore, Little Rock, AR, Oakland and Kansas City.  What’s dispiriting is the number of violent cities that are also among the most segregated.  St. Louis, Detroit, Birmingham, Memphis, Milwaukee and Kansas City are on most lists of highly segregated cities, as well as Chicago, Indianapolis, Cleveland, Cincinnati and Philadelphia.  Nearly all have seen violent crime increases.

    Neighborhood Destabilization

    So Chicago became a highly segregated city, with large numbers of blacks cut off from the economic and social networks necessary for upward mobility.  Old segregated spaces increasingly became impoverished spaces, as former white neighborhoods became new segregated spaces.  Concentrated poverty became super-concentrated with the development of the public housing in Chicago, and by the ’80s and ’90s Chicago was notorious for two features of its segregated system: 1) a gigantic collection of gangs operating as organized criminal enterprises; and 2) a depraved and dysfunctional public housing system, which also served as a base for gang activity.  To many, the dysfunction of Chicago’s public housing was crystallized in the story of the murder of Eric Morse, a 5-year-old taken to a vacant 14th floor Ida B. Wells public housing complex apartment by two preteens, and dropped to his death because he would not steal candy for them.  The city, and the nation, was outraged.

    It’s at this point that Chicago made a significant departure from other cities and pursued three policy choices that impacted the stability of its neighborhoods.  First, it made a concerted effort to lock up the leadership of the gang hierarchy, intent on “cutting off the head” of the gangs.  Second, the city recognized the failure of its public housing system, and elected to dismantle its most troublesome projects through its Plan for Transformation.  Third, in a cost-saving measure, the city closed nearly 50 public schools, with nearly all being in the highly segregated south and west sides.

    Each played a role in undermining the stability of Chicago’s south and west side neighborhoods, sending them into the violent crime spiral we see today.

    In the mid-’90s, Chicago police worked with the U.S. Attorney’s office to establish Operation Headache.  At the time the Chicago drug trade was largely controlled by gangs that were more akin to organized crime syndicates than gangs in the conventional sense.  The Gangster Disciples, the Black Disciples, the Vice Lords and the Latin Kings covered large parts of the city and developed distribution networks and open-air drug sales areas, and law enforcement found the problem nearly intractable.  Operation Headache represented a shift in tactics designed to bring them down.  Rather than focus on lower-level drug dealing youth who cycled in and out of the criminal system, they chose to go after gang leaders in an effort to destabilize them, and it was successful:

    “The first wave of convictions stemming from Operation Headache came in March 1996. But the biggest, most symbolically meaningful blow to the Gangster Disciples was delivered in May 1997, when Hoover was convicted of 42 counts of conspiracy to distribute drugs, received a sentence of six life terms, and was transferred to a supermax prison in Colorado, where his cell was located several stories underground and his ability to communicate with the remnants of his gang were severely constrained. Soon, the GDs in Chicago had been all but neutralized, and the authorities shifted their attention to decapitating the city’s other major drug organizations, the Black Disciples and the Vice Lords.

    Over the course of a roughly 10-year stretch starting in the mid-1990s, leaders from the GDs, the Vice Lords, the Black Disciples, and to a lesser extent, the Latin Kings were successfully prosecuted and taken off the street. The top-down assault appeared to work as Safer and his colleagues had hoped: violent crime in Chicago began to decline, with the city’s murder total dropping from a high of 934 in 1993 to 599 10 years later.”

    Beginning in 2000, the Chicago Housing Authority moved out public housing residents from developments that looked like this:

    and demolished them.  The goal was to replace them with less concentrated developments that would be integrated with their surrounding communities that looked more like this:

    or like this:

    The critical difference would be, however, that the CHA would now pursue a mixed-income approach to public housing development to address the city’s segregation problems and poverty concentration.  To do that, a third of residential units in new developments would be reserved for public housing residents, another third would be developed as affordable units for working-class and middle-class residents, and the last third would be sold or rented as market-rate properties. 

    Just as Operation Headache was successful in its early stages, so was the Plan for Transformation.  CHA worked closely with the U.S. Department of Housing and Urban Development to tear down the old public housing towers, and completed developments that did indeed appear more integrated into the surrounding neighborhood and fulfilled the mixed-income character that people desired.  By the mid-2000s both policies looked to be successful elements in the remaking of Chicago.

    But there were unintended consequences that law enforcement and housing officials did not see.  Violent crime in Chicago dropped to historic lows by 2005, leveled off for a few years, and started trending upward.  One reason cited?  Law enforcement became a victim of its success:

    “While experts say the Latin Kings, a Hispanic gang, continue to run a large and rigidly organized drug-selling operation on Chicago’s West Side, the majority of Chicago residents who call themselves gang members are members of a different type of group. Rather than sophisticated drug-selling organizations, most of the city’s gangs are smaller, younger, less formally structured cliques that typically lay claim to no more than the city block or two where they live. The violence stems not from rivalries between competing enterprises so much as feuds that flare up with acts of disrespect and become entrenched in a cycle of murderous retaliation.

    Many close observers of Chicago’s violence believe that, as well-intentioned as it was, the systematic dismantling of gangs like the Disciples led directly to the violence that is devastating the city’s most dangerous neighborhoods in 2016. Taking out the individuals who ran the city’s drug trade, the theory goes, caused a fracturing of the city’s criminal underworld and produced a vast constellation of new entities that are no less violent, and possibly even more menacing, than their vanquished predecessors.”

    Meanwhile, CHA was successful in the dismantling of old projects, but had limited success in the development of new ones, especially when trying to implement the mixed-income model.  In 1999, CHA committed to finding replacement housing for all public housing residents who would be displaced by the demolition, counting on their ability to construct mixed-income developments.  However, they soon ran into several challenges.  Private developers were finding it difficult to obtain financing for mixed-income developments, despite federal, state and local commitments.  But more importantly, market-rate buyers and renters, and even buyers and renters in the affordable range, showed little desire to share space with public housing residents. 

    This curtailed CHA’s ability to construct new developments, and forced them to rely much more heavily on Housing Choice Vouchers (HCVs, commonly referred to as Section 8 vouchers) to provide housing for former public housing residents.   An April 2011 report by CHA found that of the 16,500 public housing family households they committed to developing mixed-income units for, only 20% were actually in such developments.  There were 36% living in CHA projects that weren’t demolished, and 44% received HCVs and were living wherever their voucher would take them.

    Where did voucher holders go?  Generally to working-class black neighborhoods further south or west of former public housing sites on the south and west sides.  Many Robert Taylor and Stateway residents left Bronzeville and moved to the Englewood and Auburn-Gresham neighborhoods further south; many Horner and Rockwell residents left the near west side and Garfield Park and moved to Austin, further west. 

    The last straw was the closure of schools by the Chicago Public Schools in 2013.  By the mid-2000s, for anyone who cared to note it, there was growing evidence of conflict within the city’s public schools as children new to various neighborhoods competed with children of long-time residents.  At the same time the school system continued down its own budget spiral as the service delivery costs went upward and pension obligations went unmet.  That forced consideration of closures by CPS, much to the dismay of community residents familiar with the disruption caused by gang disorganization and an influx of poor residents.  Not only would the education of students be compromised by the closings, they argued, but the conflicts seen as voucher-holding residents moved into their communities would arise again.  New school boundaries would put combustible mixes of vulnerable children in new and dangerous environments.

    Globalization

    The election of Donald Trump as president has brought sharp focus to the polarization of our nation by economics, class and geography.  Well-educated and high-skilled workers are succeeding in today’s economy; less-educated and lower-skilled workers are failing.  A lot of people view this within the context of our nation’s white working class in small cities and rural areas, but the same applies to blacks in cities like Chicago as well.

    I’m going to plagiarize myself and pull some things about Chicago I wrote last year, when I saw six distinct categories of neighborhoods in the city.  Here’s the map:

    Gentrified Communities (dark green): Former middle and working-class neighborhoods that have firmly become well-to-do neighborhoods over the last 30 years or so. Home to a substantial amount of Chicago’s walkable urbanism inventory. Transit supported and amenity rich.

    Gentrifying Communities (light green): Historically similar to the adjacent gentrified communities, but part of a second or third wave of growth that emanated from the first group. Almost as affluent and educated as the first group, and quickly catching up, but not quite there yet.

    Frontline Communities (yellow): Largely working-class neighborhoods that may be experiencing development pressure generated in the gentrified/gentrifying communities. People in the above two areas may identify with communities here as places for authentic ethnic dining or shopping. Less wealthy and with more minorities than the gentrified/gentrifying communities, but less than those on its outer flank. In Chicago, at least, fear of the prospects of gentrification here may exceed reality.

    Stable Prosperous Communities (gold): Middle-class neighborhoods that sprouted in the city at the advent of the suburban era and have changed little since. Single-family home oriented and auto-oriented. In Chicago, home to many city workers who must remain in the city due to residency requirements. Rapidly growing older in its makeup.

    Transitioning Communities (orange): Structurally similar to the stable prosperous communities, but more deeply impacted by one or two transitions. Some are receiving a large influx of new minority residents, largely Latino. Others are experiencing a huge outflow of middle-class families, largely African-American. Those experiencing the Latino influx are becoming younger and less affluent; those experiencing the African-American outmigration are being hollowed out, leaving behind large numbers of older and younger less affluent residents.

    Isolated Communities (brown): Impoverished areas of the city. Middle-class white residents left here in the ’50s and ’60s, replaced by middle-class and working-class blacks who bore the brunt of job loss in the subsequent decades. Plenty of walkable urbanism exists here, but demolition means it’s fading away.

    Here are a few data pieces I gathered for each of the categories I identified (you can click to see bigger):

    Looking at the map, the green and light green neighborhoods have been Chicago’s winners in today’s global economy.  The gold neighborhoods have been doing reasonably well.  Depending on your perspective, the yellow neighborhoods are threatened with gentrification encroachment, or have a reasonable expectation of upcoming revitalization.  The orange and brown neighborhoods?  They’re not doing so well.  They’re the ones largely impacted by Chicago’s century-old segregation legacy, or in various stages of instability via the actions undertaken over the last 25 years. 

    Chicago’s rigid segregation patterns set the stage economic divergence before globalization did, but globalization made it worse.  And in the aftermath of the Great Recession, when globally connected communities returned to their upward trajectory, troubled communities sunk further into the abyss.

    Chicago’s violent crime spike will not be solved with National Guard troops patrolling the streets.  It will not be solved with greater emphasis on gun control laws.  It will not be solved by a wholesale reform of the Chicago Police Department, which has just come out of a year-long investigation by the U.S. Department of Justice that excoriated its “excessive force, lax discipline and bad training.”  All of these measures would have some incremental impact on violent crime.  Crime would go down, if only temporarily.  However, these measures treat the symptom.  None would do anything to address root causes and eliminate the problem for good.

    There is an answer to Chicago’s madness.  It would not solve the problem overnight, but it would have the potential to solve it for the long term.  I’ll outline it in my next blog post later this week.

    Pete Saunders is a Detroit native who has worked as a public and private sector urban planner in the Chicago area for more than twenty years.  He is also the author of “The Corner Side Yard,” an urban planning blog that focuses on the redevelopment and revitalization of Rust Belt cities.

    Top photo: A body is removed from the scene after a man was shot and killed in the 3000 block of West 53rd Place in Chicago. — Anthony Souffle, Chicago Tribune, April 13, 2014

  • Globalization’s Winner-Take-All Economy

    “If you are a very talented person, you have a choice: You either go to New York or you go to Silicon Valley.”

    This statement by Peter Thiel, the PayPal founder and venture capitalist, unsurprisingly caused a stir, given that he made it in Chicago. Simon Kuper had made a similar observation in the Financial Times when he described how young Dutch up-and-comers had their sights set on London, not Amsterdam. “Many ambitious Dutch people no longer want to join the Dutch elite,” Kuper wrote. “They want to join the global elite.”

    Populist movements in Europe and the United States have fueled talk of social and economic division, of a small class of winners at the top and a far larger group of increasingly disaffected lower-skilled workers at the bottom. This attitude seems to flow through to places as well, with global city winners like London and post-industrial losers like Flint, Mich.

    Because these divides cleave along social class, educational and cultural lines, they are clear and easy to see. But there’s another — less visible — divide cutting across the seemingly monolithic group of the successful. This one separates those who are indisputably winners from those whose success is ambiguous, more qualified and more contingent. This difference is the one between the hedge fund principal, raking in wealth seemingly effortlessly, and the young adult struggling to pay urban rent despite possessing an excellent degree and professional employment. It’s the difference between New York and Cincinnati — or even Chicago.

    The same forces of globalization that  have pulled top Midwest talent into Chicago from below are also acting on the city from above, drawing its talent further up the global city hierarchy. The knowledge economy favors the college degreed over the less educated, but those with the highest and most differentiated skills are most favored, while those whose skills are second tier — less perfectly in tune with the emerging economy — are more vulnerable to competitive pressures.

    It’s easy to see that the Flints of this world have struggled. Less visible are the stresses put on second-tier cities — the Chicagos and Cincinnatis — from a system that is disproportionately giving the greatest rewards to those at the very top of the hierarchy while threatening even the seemingly successful cities with being left behind.

    Economist Richard Florida calls this phenomenon “winner-take-all urbanism.” It’s the superstar athlete or celebrity effect transposed into the urban world. Just as A-list stars earn far more than the merely famous, the top business talent and the top cities are reaping disproportionate riches over the merely prosperous.

    This divide is harder to spot because the people and places involved are often superficially similar. The people in both possess university degrees. They share similar cultural norms, aspirations and politics. The places they live in all have their farm-to-table restaurants, tech startups, artisanal coffee roasters and bicycle commuter infrastructure. As with a sports team, they all wear the same uniform. But some are all-stars while others are role players who are more easily replaced.

    When young workers or artists struggle to find an affordable apartment in a global capital, this isn’t just proof of a failure to deregulate housing development. It’s also a marketplace sending a powerful signal that their position among the winners of society is much more precarious than they might imagine. Most would agree that there are some businesses and people who shouldn’t be in New York or San Francisco. We shouldn’t expect a peanut butter spread of talent and economic activity across the country. The nature of the industries concentrated in these places produces a higher-end specialization. So there will be some economic value line below which it isn’t viable to be there.

    There’s an argument to be made that building more housing to reduce rents can draw the line lower. But that still presumes a line. When aspirational millennials — or even older people like me — can’t afford the current rent, that’s a signal that they are near or below that line. In a time in which rewards seem to be skewed to the top, that should be worrisome to them personally, not just to the poor or working classes.

    Similarly, cities that remain a notch below the top tier should be worried. Chicago’s financial crisis, population loss, violent crime spike and other problems suggest fundamental structural challenges facing the city. And if even Chicago is not fully achieving the global-city status it craves, shouldn’t other cities be worried?

    Yet the leaders of these cities, and the ambiguously successful people who live in them, have tended to identify themselves as among the winners. They haven’t really grappled with the fact that the global economy puts them at risk. It’s not just people in Flint or Youngstown, Ohio, who are being buffeted by globalization. If these people and cities ever came to view themselves as at risk, they could become a powerful voice for reforming the system to be more equitable while retaining its fundamentally open character. They are the exact potential champions for change in a system that badly needs it so that we can broaden the pool of success.

    Unfortunately, those among the ranks of the second-tier successful have instead sided with the global capitals and the global elite to defend the economic status quo, leaving the reform fight to the populists who prefer an overly closed system. They may yet discover to their chagrin that the very system they so vigorously supported will ultimately become their own undoing.

    This piece originally appeared in Governing Magazine.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo: Kevin D. Hartnell (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

  • Is Peter Thiel Right About Chicago?

    Peter Thiel recently made one of his trademark provocative statements by saying, “If you are a very talented person, you have a choice: You either go to New York or you go to Silicon Valley.”

    The problem for Thiel was that he said this while speaking at an event in Chicago. No surprise, it didn’t go over well. An enquiring questioner wanted to know, “Who comes to Chicago if first-rate people go to New York or Silicon Valley?”

    Thiel sputtered a bit and suggested he was employing hyperbole, but said “It’s an extremely important question, and it’s the type of question that we don’t ask enough,” though admitting he isn’t sure “exactly what Chicago should be doing right now.”

    After being initially reported by the Chicago Tribune, the story was picked up by Vanity Fair, Chicagoist, and Crain’s. A blogger named John Carpenter posted a sharp retort at Forbes.

    Having lived nearly 20 years in Chicago and now two in New York, I’ve had a few observations about the differences between the two cities that I’ve resisted posting because it would inevitably be seen as taking a cheap shot at a city I chose to leave. But given the hook of Thiel’s comments, I decided to take the plunge.

    Is Thiel right? Factually speaking, no. Obviously there are first-rate people in places other than San Francisco or New York. Given its size, history, status, etc. Chicago has a number of them.

    But Thiel is highlighting something real with uncomfortable implications for the Windy City.

    Cities of Ambition

    Let’s rephrase Thiel slightly and we’ll get a stronger statement: if you’re a person with global-scale ambition, you move to either New York or Silicon Valley.

    There’s a lot of truth to this version of the statement. Think about the egos and the ambition of the people in Silicon Valley. People like Thiel (Paypal, Palantir, others), Mark Zuckerberg (Facebook), and Travis Kalanick (Uber) practically define Silicon Valley. In New York, think about the incredible ambition of a Michael Bloomberg or a Donald Trump – two radically different people to be sure, but both extremely ambitious.

    How many of these kinds of people live anywhere in the US outside those two cities? A few. You can think of Bill Gates (Microsoft) and Jeff Bezos (Amazon) in Seattle. Or Elon Musk (Tesla, Space X, et. al) who lives in LA. But there aren’t many. It’s telling that Mark Zuckerberg started at Harvard and moved to the Valley. It’s similar for Mark Andreesen (Netscape) and many others before them.

    The bottom line is that the ambition level in Silicon Valley and New York is simply off the charts. That kind of ambition is not what you find in Chicago (or pretty much anywhere else). It can exist from time to time – think Barack Obama – but is a big anomaly.

    If you are someone who is dreaming big – really big – it helps to be in an environment where other people are dreaming big. That means NYC or SF.

    America’s New Upper Class Elite

    Charles Murray’s book Coming Apart charted the rise of a new upper class, an elite – the people who really call or influence the shots in American business, politics, culture, etc – that increasingly lives in self-segregated bubbles of others just like them.

    These bubbles of the American elite are heavily concentrated in four coastal cities:

    [I]t is difficult to hold a nationally influential job in politics, public policy, finance, business, academia, information technology, or the media and not live in the areas surrounding New York, Washington, Los Angeles, or San Francisco. In a few cases, it can be done by living in Boston, Chicago, Atlanta, Seattle, Dallas, or Houston—and Bentonville, Arkansas—but not many other places.

    Murray here puts Chicago in a special class; it’s one of the handful of cities outside the Big Four where it’s possible to be part of the national elite. That’s not nothing. But clearly there’s a big gap in there.

    Murray undertook a variety of quantitative analyses to try to sleuth out the geography of the new elite. One of them was to look at where the graduates of elite schools lived, particularly the Big Three of Harvard, Princeton, and Yale (HPY). Here is what he found:

    As mature adults, fully a quarter of the HPY graduates were living in New York City or its surrounding suburbs. Another quarter lived in just three additional metropolitan areas: Boston (10 percent), Washington (8 percent), and San Francisco (7 percent). Relative to the size of their populations, the Los Angeles and Chicago areas got few HPY graduates—just 5 percent and 3 percent, respectively. Except for the Philadelphia and Seattle areas, no other metropolitan area got more than 1 percent.

    There’s an East Coast bias to these schools as we might expect, but New York has over eight times as many HPY grads as Chicago. San Francisco has over two times as many, and notably has more than much larger Los Angeles. This is pretty remarkable given that the region’s focus is technology, not exactly what comes to mind when you think HPY (although Gates and Zuckerberg tell a different tale, even if not actually graduates).

    So Murray’s research also foots to Thiel’s observation in a generalized sense.

    Personal Observations

    I had four of my own previous observations.  First a pre-observation: I never noticed any difference between the caliber of Accenture people in Chicago vs. New York. (It generally seemed to me that in the consulting space, the talent level of Accenture employees was pretty consistent across geographies). Obviously I had a network that included a lot of Accenture type corporate people in Chicago, whereas in New York my network is more skewed to policy, media, finance, and startups (though includes quite a few Accenture people too).  These network differences obviously shape my personal experiences, but my observations are consistent with Murray and with some others who lived in both cities and with whom I’ve compared notes.

    With that, my observations are:

    1. New York has a higher horsepower rating. Growing up in Laconia, I was a straight-A student and valedictorian of my high school without studying. Similarly, I was simply smarter than most people in college. As I moved up in life, the competition got tougher, obviously, but even at Accenture I basically just had more horsepower to throw at problems than most. (You may recall that I was also somewhat lazy during this period). In New York, that’s just not true. I am constantly around people who are at least as smart as I am, if not smarter. You can’t just think you can get ahead here by throwing more MIPS at the problem than the next guy, because he’s just as good as you or more so.
    2. New Yorkers have incredibly vast and wide-ranging knowledge. That famous New Yorker cover portrays NYC as an incredibly provincial place. And it is. But I continue to be astonished about how much New Yorkers know about what’s going, not just around the world but across the country. A couple years before moving there I was visiting the city and had dinner with Fred Siegel in Brooklyn. When I mentioned Indianapolis, he proceeded to provide a number of extremely accurate and insightful comments about the city. I was taken aback. What were the odds he would know anything about Indianapolis? I’ve since come to see that kind of encyclopedic knowledge as commonplace. People in NYC are connected to networks and have their fingers on the pulse of what is going on all over the country and the world. I’ve similarly ceased to be amazed every time I run into someone with a vast array of cultural knowledge. People here are just like that. This is a world away from the much less connected and more limited expanse of knowledge in Chicago.
    3. Chicago is Big Ten, New York is the Ivy League. The numbers above illustrate this well. Chicago is dominated by Big Ten grads and Notre Damers. New York has a vast seat of Ivy League and other elite school grades.  This is well attested above, so no more on that.
    4. New Yorkers are connected to the highest levels of politics, business, media, and culture. This is almost a truism, but it’s remarkable when you actually experience it. This is where the sausage is made. (I suspect one can get a similar feeling in DC, or in SF for tech, or Houston for energy). A friend of mine who was also a long time Chicago area resident that now lives in Philadelphia observed, “Chicago doesn’t know they’re not in the game. They’re in a game, but they’re not in the game.”

    None of these is probably news in a sense. They were things I could have probably told you before. But intellectual awareness of truth is one thing, visceral experience of it is another.

    The Draw of New York and San Francisco

    Now, none of this is to say one must live in NYC. I love it, but when I was two years into living in Chicago, I loved that city even more.  Some people have a transformational experience in college as they are exposed to new experiences, ideas, people, etc. That wasn’t the case for me. But I did have that in Chicago. Moving to Chicago was personally transformational for me in a way that moving to New York was not. (Of course, I was much younger then too). And there are lots of places in America that I think I could enjoy living in. Let’s not invest too much in NYC and SF.

    On the other hand, let’s not invest too little either. It’s clear that Greater Greater New York, and the Bay Area, are uniquely dominant and have a unique draw. It’s the same with London in Europe. (No surprise that the top overseas expansion destination for Chicago based firms is London. Boeing has 2,000 people in London – four times as many as at its Chicago HQ – and plans to double that. Where do you think the top intercontinental investment location for London firms is?)

    If you want to get a sense of this, just read Ted Gioia’s piece in the latest City Journal abouthow New York became the capital of jazz, displacing New Orleans and Chicago, and beating back a midcentury challenge from LA.  And Michael Agovino’s piece in the Village Voice, “Almost Famous, Almost Broke: How Does a Jazz Musician Make It in New York Now?”  As Gioia puts it,

    Jazz has gone global. Just like your job, your mortgage, and the cost of gas at the pump, the music now responds to global forces. As a jazz critic, I now need to pay attention to the talent coming out of New Zealand, Indonesia, Lebanon, Chile, and other places previously outside my purview. Almost every major city on the planet now has homegrown talent worthy of a worldwide audience.

    Yet one thing hasn’t changed on the jazz scene: New York still sits on top of the heap. Great jazz artists often don’t come from Manhattan, but they struggle to build a reputation and gain career traction if they don’t come to Manhattan. The recent sensation over Indonesian jazz prodigy Joey Alexander is a case in point. At age eight, this formidable youngster had already caught the attention of jazz icon Herbie Hancock, and at nine, he beat out 43 musicians (of all ages) from 17 countries to win a prestigious European competition. A year later, Alexander’s parents moved to New York, realizing that even the greatest prodigy in jazz needed what only that city could offer.

    And as Joel Kotkin, who frequently speaks to audiences full of civic leaders around the country, told me, “No matter where I go, invariably the richest guy in the room has a kid in either New York or San Francisco.”

    Chicago: The Semi-Elite City

    This problematic status of Chicago as “semi-elite” is really at the root of many of its problems. It’s something I’ve talked about before, such as by noting its global city functions are weaker, and resultantly it spins off far less wealth and tax revenue. Or my notion that it’s the duck-billed platypus of cities.

    This isn’t unique to Chicago. It affects other cities like Amsterdam. Simon Kuper of the Financial Times wrote a column on the rise of the global capital about how young up and comers in the Netherlands had their sights set on London, not Amsterdam. As he put it, “Many ambitious Dutch people no longer want to join the Dutch elite. They want to join the global elite.”

    As with Thiel, I don’t have the answer to this problem, but he’s absolutely right that it’s one that’s too seldom asked, but which needs to be squarely faced. Studying and comparing notes with these other cities like Amsterdam and how they are coping with this problem might be a good start.

    In the meantime, to end on a positive note, I do think there are fields where one could unquestionably have top level talent and ambition, and move to Chicago in search of success.  I would include aspiring comedians, chefs, architects, and indie rockers in this list. There may be others. Protecting and building on these while finding a strategic response may be another good place to start.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo Credit: Berlin, Germany, March 19, 2014. Hy! Summit – Image by Dan Taylor. www.heisenbergmedia.com

  • What the Blues Brothers and Ferris Bueller’s Day Off Tell Us About Gentrification

    The Blues Brothers and Ferris Bueller’s Day Off are two of the seminal films set in Chicago. Indeed, Chicago itself is a character in both films.

    The films are radically different even though released only six years apart. There are many ways to slice this. Some have said that one is the South Side movie (The Blues Brothers) and the other the North Side movie (Ferris Bueller). Some see one as more urban, one more suburban.

    One other way to look at it is to see how the films portray an urban transition in progress. The Blues Brothers is a look backward at a fading industrial, working class metropolis.  Ferris Bueller looks forward to an upscale, gentrified city.

    I explore the parallels and contrasts in my new article in the Summer issue of City Journal, “Gentrification on the Big Screen“:

    Florida might regard some of Ferris Bueller’s traditional settings for diversion—the Art Institute and Chez Quis, a fictional fancy French restaurant—as stodgy relics from the city’s older, pre–knowledge economy era. But the scene in which Ferris bluffs his way into Chez Quis for lunch, claiming to be Abe Froman, “Sausage King of Chicago,” is perhaps the most revealing one in the film—and it marks another contrast with The Blues Brothers, in which a French restaurant also figures prominently. In the earlier movie, when Jake and Elwood show up at the legendary Chez Paul, they behave boorishly on purpose, to compel a former bandmate now working a legit job as the maître d’ to quit and rejoin them. By contrast, when Ferris and friends crash Chez Quis, they foreshadow a changing of the social guard. The hip young friends are destined to become Chicago’s new proprietors. They will soon be remolding the city, and its restaurants, in their own image. Chez Paul closed in 1995. Today, the city’s highest-end restaurants—like Alinea, a sleek, uber-hip purveyor of innovative cuisine—represent the culmination of this transition. A 48-year-old Ferris might well be eating at Alinea today.

    …

    Watching these films today, viewers under the age of, say, 45 would be struck by how alien Jake and Elwood’s Chicago seems and how familiar Ferris’s Chicago has become. The vibrant working-class culture, tough old nuns, SROs, and Maxwell Street Market of The Blues Brothers have all either disappeared or survive only as shadows of what they once were. With a bit of cultural updating to cars, hairstyles, fashion, music, and phones, however,Ferris Bueller’s Day Off could be remade today, virtually shot for shot. Modern proto-hipsters might well still skip school to visit Wrigley Field, the lakefront, the Sears Tower Skydeck, or the Art Institute. Three decades after Ferris Bueller played hooky from the suburbs, the triumph of the gentrified city is complete.

    Click through to read the whole thing.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo: Aretha Franklin singing in a diner in The Blues Brothers. Image via City Journal

  • UberPool & LyftLine: How the New Carpools Will Change Travel

    How will new carpool options like LyftLine and UberPool affect the marketplace of transit services? When mobility conversations turn to Lyft, Uber and other ridesourcing — or ridesharing — companies, the discussion typically centers on their effects on the taxicab business. Here in Chicago, Lyft and Uber recently survived a turbo-charged regulatory battle with cabbies that could have forced them to entirely withdraw from our city.

    Ridesharing carpools add a new dimension to the extraordinary rise of these companies. Many users have not until recently begun experimenting with carpooling options, but by all indications their popularity is accelerating. Both LyftLine and UberPool were unveiled in summer of 2014, and then rolled out gradually.

    To use LyftLine or UberPool, a rider inputs his or her location and destination on a smartphone, which then displays two options — a traditional rate, and a discounted rate for those who choose to ‘pool’. The driver of a pool may make other pickups and drop-offs. A four-mile trip on UberPool may cost around $6, whereas on UberX (the standard Uber service) it might cost $10; a taxi ride would run much higher.

    In communities with lackluster public transit, carpooling fills an enormous void by giving millions without a private vehicle a new, lower cost travel option. Even in areas saturated with public transit, however, this new option promises to reshuffle how people move about.

    The opportunity raises critical questions. Will significant numbers of time-sensitive travelers, including commuters, opt to use public transit less, in favor of rideshare service carpools? How much time can they expect to save? To what extent do the additional stops negate the benefits of this option, compared to using transit?

    I created a controlled experiment involving 50 one-way trips between various urban locations in a transit-rich part of Chicago. Data collectors measured the differing costs, time, and conveniences associated with UberPool, trains, and buses. One person used Chicago Transit Authority (CTA) services while the other hailed an UberPool (Figure 1).

    We evaluated only weekday trips during daytime hours to and from the north and northwest sides of the city, in order to focus on a transit-rich environment. Our trips, which linked the centroids of community areas, averaged about six miles long.

    UberPool did not disappoint. Regardless of the type of trip involved, our study found that carpooling tended to get you there faster than public transit, although often not by enough for to justify — for many passengers — the cost difference. The average elapsed time for all UberPool trips was about 36 minutes, besting transit by about 12 minutes. UberPool was faster on 39 trips, while the CTA was faster on 11 (Table 1). The carpooling costs averaged $9.66, compared to transit’s $2.29.

    Stops to pick up other passengers were not as prevalent as many might expect, with UberPool trips averaging just under one extra stop. Still, one fifth of all trips made at least two extra stops, while two out of the 50 trips involved three extra stops

    The appeal of carpooling may depend on the type of travel involved. On downtown-oriented trips, the time savings averaged a mere six minutes. UberPool was faster on eleven of these, and the CTA on seven.

    Moreover, UberPool can be challenging during rush hour, when it is slowed by traffic congestion and taking rapid transit is often faster due to the heightened schedule frequency.

    We suspect that primarily people in a hurry, those carrying heavy or bulky items, or those uncomfortable with transit would be inclined to regularly carpool to work downtown. The level of exertion is also greater on public transit. Our transit passengers were unable to find seats on about one-fifth of trips, and walked more often. UberPool involves minimal walking, whereas the average transit trip involved about a half-mile trek. Eleven transit trips required passengers to hoof it for at least two-thirds of a mile, while three involved doing so for more than a mile.

    On trips from the peripheral ‘outer downtown’ to the neighborhoods, though, UberPool outpaced transit by ten minutes. Carpooling starts to look more tempting to the transit rider in this scenario.

    The most dramatic benefits from carpooling, however, involve neighborhood-to-neighborhood travel (Figure 2). Such trips can be painful to transit users in Chicago, in part due to our slow pace of getting bus rapid transit off the ground and our ‘legacy’ rail system, with its radial design that focuses primarily on travel to and from downtown. And busses on some routes stop every few blocks.

    On these trips, UberPool dominates, averaging 28 minutes per trip, almost 19 minutes faster (about 40 percent) than transit. Carpooling was more than 10 minutes faster on all but four of our 23 trips, and more than an hour faster on one.

    A notable negative aspect of using UberPool is, of course, the variability in pricing. Six of the 50 trips involved ‘surge’ pricing (premium fares due to heavy demand), resulting in prices as much as 60 percent above the normal fare. We did not study the price and speed of UberPool during the evening and late-night hours, when demand is reportedly heaviest, and when surge pricing appears to be more prevalent.

    The inescapable conclusion is that carpooling services are appealing to far more than transit-averse and extremely time-conscious travelers, although perhaps not as an option that many commuters would use daily. UberPool tends to perform best precisely where transit is at its worst, e.g., on trips between the neighborhoods, especially during the off-peak periods when traffic is lighter.

    On one level, our results support the conclusions of a new Shared Use Mobility Center/American Public Transit Association report showing that such mobility innovations tend to be complementary to public transit. Shared-use services like Lyft and Uber fill the gaps that exist in urban bus and rail operations, and encourage people to pursue lifestyles that do not center on private cars.

    Still, carpooling should also be regarded as a potential game-changer. Federal guidelines recommend that analysts assume the average urban traveler values time savings at $24 per hour. An average traveler on an UberPool making a neighborhood-to-neighborhood trip may, therefore, by arriving about 20 minute earlier than a transit rider, derive a benefit from carpooling of around $8 per trip, which would be a far greater amount than the extra cost. The most time-sensitive travelers and groups of travellers would derive an even higher benefit.

    Even though rideshare carpools represent a mobility breakthrough, it unfortunately continues to take a backseat in the taxi-centric debate over Lyft and Uber. It is certainly going to pose an increasing challenge to public transit agencies. Heightened competition in urban transit markets appears here to stay, and is now poised to bring dramatic changes to the way we travel.

    Joseph P. Schwieterman is director of the Chaddick Institute for Metropolitan Development and Professor of Public Service at DePaul University in Chicago.

    Flickr photo of the S2 smartwatch from Samsung Newsroom: Travel NYC with the Gear S2 and Uber

  • Chicago’s Advantages

    When I wrote that Chicago is the duck-billed platypus of American cities, I noted that there were a lot things about Chicago that were unique – both good and bad – putting it in a class of its own and making it hard to compare Chicago with other cities.

    Today I want to put together a starter list of some of the positive distinguishing factors about Chicago. This doesn’t include things like a downtown construction boom because lots of places have one of those. If Chicago’s boom is big, well, it’s a big city. I only want to put something on the list if it is truly distinguishing, or perhaps something limited to only one or two other places.

    I’ll create a starter list. Feel free to share yours in the comments.

    • Cheap – least expensive major urban center in America. A middle management level couple can afford a very nice condo in Chicago.
    • Only globally important financial exchange in America outside NYC (the CME Group)
    • Only full slate of globally renowned cultural institutions outside NYC
    • Only large scale, transit oriented central business district outside NYC – and with a skyline to match
    • Fantastic architecture
    • Not only does Chicago have great skyline, it’s got great vistas of the skyline even from within the city (something missing in NYC inside Manhattan)
    • It’s the alley capital of America
    • Improv capital of the world, and one of only three major training locations for comedy in the US (with NYC and LA)
    • Incredible lakefront park system
    • Most car friendly urban big city in America (traffic is bad, but much of housing stock comes with a parking spot, and there are plenty of stores you can drive to – great for families)

    There are probably some things like food and music scene were you can rate Chicago as in a league above most cities, but it’s tougher to make that case since you can get great food everywhere now, etc.

    Share your thoughts in the comments because I don’t want to leave anything out.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo by Doug Siefken

  • Chicago Is the Duck-Billed Platypus of American Cities

    Census results last week show Chicago as the only one of the twenty largest cities in America to lose population. The freaking out over a tiny loss isn’t really warranted. The comparison to Houston is bogus. Etc, etc. Yet Chicago’s leaders have refused to grapple with the real and severe structural and cultural challenges that face the city. That’s something they need to do if they want it to succeed over the longer term.

    I wrote about this in my latest City Journal web piece, “The Duck-Billed Platypus of Cities“:

    When it comes to population estimates, municipal-level data is largely irrelevant, especially when comparing cities with one another. That Houston may soon outpace Chicago in municipal population doesn’t mean that much—the city of Houston includes vast tracts of suburbia, making for an apples-to-oranges comparison. Chicago’s metro area is much larger than Houston’s and will remain the third-largest in the country for years to come. Similarly, while Chicago has the most murders in America, its murder rate is lower than other major cities like St. Louis, Baltimore, and Detroit. Comparisons with Detroit, with its hollowed-out economy, particularly infuriate Chicagoans, who reside in what remains a major economic center. And Detroit’s population loss far exceeds Chicago’s.

    But just because Chicago shouldn’t be compared to Detroit doesn’t mean that it should be compared with San Francisco.

    Click through to read the whole thing.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Chicago photo by Bigstock.