New Geography

Tag: middle class

  • Urban Infill With Less Hype and More Serendipity

    By Richard Reep

    Urban infill in cities of the Southeast follows typical patterns: assemblage of several blocks of older building stock at a low price; careful navigation through the zoning and public process to mix uses and increase density; and finally design and construction of parking, office, residential, and retail uses. The next phase is often marked by alienation and departure of the existing surrounding residents, concerns of safety and security within the development, and a socioeconomic wall between new and old.

    This sad pattern is evident in Orlando at Winter Park Village, a 90s New Urbanism infill, where a failed indoor shopping mall was eviscerated and converted to an outdoor retail and entertainment district. Initially it generated a buzz, attracted shoppers, and signed anchor tenants. But the adjacent lower-income residents benefitted not a whit from this development, surrounding land remains fallow or abandoned, and recent store closings call into question the long-term viability of the project.

    Such problems worsened during the real-estate bubble, which promoted residential-driven development. This tore even bigger rifts in the fabric of cities. Sodo, the most recent cluster development opening in south Orlando at the dawn of financially uncertain times, could have a different future. This development is free from preconceptions about urban form and style and does not pretend the world is as simple as it was at the turn of the 20th century. Sodo offers a mix of uses clustered in medium density with access to jobs in the city’s older, denser infrastructure.

    Typically, brave new residents buy into urban infill projects at a higher rate and higher price than the surrounding community, creating a class schism. The surrounding community in need of good jobs is reluctant to become the service workers in these developments, and this uneasy coexistence breeds anxiety and insulation. City planners consider these urban infills successful as they bring ‘higher-end’ residents (translated: higher tax contribution) and create the demand for more such projects. Older residents often despise the new construction and move out, driven out by a combination of increasing property values, loss of neighborhood identity, and a sense of alienation.

    In its infancy, Sodo appears to have the ingredients to become a good alternative to so-called “TND” or Traditional Neighborhood Development, as set forth by the Congress for the New Urbanism. Originally planned as condominium units, Sodo opens as a luxury rental community, which recognizes the current mortgage meltdown and the future of residential real estate in the Southeast. This neighborhood was typically oriented to the surrounding Wadeview railroad industrial district, but Sodo clearly looks north up Orange Avenue, beckoning hip, young, downtown workers.

    With a certain gritty charm, South Orange Avenue winds below downtown, anchored by orange-bricked Orlando Regional Medical Center, a vast complex shoehorned into the old, industrial neighborhood. Sodo is not within walking distance of 300 luxury units worth of anything, not now nor in the near future, which makes it decidedly un-New Urbanist. But as the economy idles, Sodo has attracted some interesting comments from its neighbors that tell a positive story.

    The development’s website is refreshing for what it does not proclaim in its marketing hype. It does not reference New Urbanist ideology anywhere. It does not claim to be a live-work-play solution to all life’s problems. It does not show happy white families riding bikes in parks. Its logo and presentation is simple and direct: Orlando is growing fast, and we want a piece of that pie. Rather than promote ideology, Sodo appears to promote itself as a blank slate upon which the future residents, retail and office tenants may write the future identity of this cluster.

    It is probably dangerous to draw conclusions from blogs, because the bloggers do not represent a broad cross-section of the population. Computer-savvy, opinionated, and sophisticated, bloggers do not include many elderly, minorities, and people too busy with their lives to dash off a few lines about their feelings. Therefore, the local bloggers’ positive attitude about Sodo may not represent the entire range of feelings of people affected by this development.

    However, rather than fear and loathing, Sodo has generated this: “I have had drunken people from the local bar (closing soon…HOORAY) pass out on my front yard. I am thrilled that this development is happening. It will no doubt enhance my quality of life and take us into a direction that the Wadeview Park area has sorely needed.” Similar comments abound, and the overall sense of approval from residents who bother to write about Sodo is a sign that this urban infill development is being welcomed rather than shunned.

    Another sign that Sodo may blend into its neighborhood is the developer’s choice to market it as exclusively rental. Although the rental is “luxury” starting at $1,000 per month for 659 square feet, the economic step between this property and the next-door homes is less than it would have been if these units had been sold as 300 trendy urban condos.

    Examined closer, Sodo makes some concessions to reality. It connects to the surrounding street grid on 3 sides, and the sense of safety and security within Sodo is beefed up with private security. The apartments have uninspiring views into their own parking garages, and the lack of green space throughout is harsh and startling. In order to accommodate parking, the anchor retail store parks its cars on the roof; shoppers are treated to the novelty of an outdoor shopping cart escalator, which should be interesting during the monsoon season of Orlando’s summer.

    While all this is encouraging, Sodo is not an example of organic growth, blending new and old seamlessly. For example, it is doubtful that Sodo residents and existing locals will bond over coffee in the Starbucks or burritos in the Taco Bell. Exclusively private, Sodo has no library, park, school, or other public amenity except for its shopping sidewalks, and it seems strange to think of Sodo hipsters venturing into the local community to worship, walk the streets, or volunteer. Sodo seems to be a social oasis, at least for the present moment.

    Sodo therefore exemplifies the problems of growth with which Orlando grapples: if taken in lumps, like Sodo, growth represents a jarring socioeconomic schism between the old and the new. If taken in lower density, like subdivisions, growth represents huge tracts of land being gobbled up, a jarring ecological schism between the natural and the manmade. Less lumpy than most, Sodo seems to have timing in its favor, with the slower growth of the near future allowing it to enter the economic slipstream at a lower speed.

    What is refreshing about Sodo, besides its crisp, clean, architecture, is that it does not carry the baggage of ideology and fetish for form that recent urban infill developments seem to carry. It is therefore free to evolve its identity by delivering safety and security to its residents, a sustainable mix of shopping and office spaces, and a sense of place that transcends the physical. Success is measured by functional yardsticks – not form yardsticks – and urban infill projects across the country can be measured the same way. Sodo may represent a realistic model of urban infill, welcomed by the community, able to assert its identity through the social and economic futures of its businesses and residents. This is the way healthy cities grow.

    Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

  • Island of Broken Dreams

    A The New York Times editorial wonders why foreclosure rates are so high in the two Long Island counties it rightly calls the “birthplace of the suburban American Dream.” After all, the area has “a relative lack of room to sprawl.” which in Times-speak should be a good thing, since “sprawl” is by definition both bad and doomed.

    Yet it is precisely the constraints on new housing that has served as a principal cause for Long Island problems. Long Island was the birthplace of the suburban American Dream, in principal measure because new housing development was permitted to occur at land prices reflecting little more than its agricultural value plus a premium to the selling farmer. The same financial formula expanded the American Dream throughout the country and many parts of the world, at least until urban planners were able, in some instances, to drive the price of land so high that housing was no longer affordable to average households.

    Indeed, land use regulation throughout the New York suburbs downstate, in New Jersey and Connecticut has long since rationed land for development. As a result, once loose mortgage loan standards became the practice, house prices escalated. Throughout the New York metropolitan area, the Median Multiple – median house prices divided by median household incomes rose from 3.2 to 7.0, in the decade ending in 2007. In traditionally regulated markets – like Long Island in the past and still much of the country in the present – the Median Multiple has been 3.0 or less for decades.

    Various regulations have led to this precipitous decline in the area’s housing affordability, virtually all of them falling under the category of “smart growth.” There are the regulations that have placed large swaths of perfectly developable land off limits for housing. There are large lot zoning requirements that have forced far more land than the market would have required to house the same number of people, producing an entirely artificial “hyper-sprawl.” Much of this ostensibly has been done in the interests of controlling “sprawl.” Where quarter acre lots would have been the market answer, planning authorities often have required one-half acre, one-acre and even more as minimum lot sizes.

    In fact, however, Long Island’s housing cost escalation has not been visited anywhere with more traditional liberal land use policies. From the first world’s three fastest growing metropolitan areas of Atlanta, Dallas-Fort Worth and Houston, to much of the South (excluding Florida), to the Midwest, housing prices rose little relative to incomes during the period of profligate lending. The difference, of course, was that the liberal land use regulations in these places allowed sufficient housing to be built that supply kept up with demand, thus accommodating new demand. Speculators saw no potential windfall profits to bring them into the market.

    The Times is not alone in misunderstanding the dynamics of land use regulation and housing affordability. But there is a very clear, demonstrated relationship – where land use regulations constrain development, prices are forced upward. This is because scarcity raises prices of goods that are in demand.

    Fortunately, not everyone at the Times shares the wrongheaded views of its editorial department. Had the editors walked down the virtual hall of their own department, or taken the train down to Princeton, where he lives, they would have encountered someone who understands all this. He is Paul Krugman, Times economic columnist and, much more importantly, Nobel Laureate. In August of 2005, Krugman noted that house prices had escalated strongly in the more regulated markets, but had changed little in the less regulated markets. He further rightly associated the less regulated markets with more sprawl, not less. In January of 2006, Krugman noted: that the highly regulated markets accounted “for the great bulk of the surge in housing market value over the last five years.” Krugman further predicted “a nasty correction ahead.”

    Meanwhile the non-Nobelist Times also make a point to bemoan the high levels of racial segregation on Long Island. Is it beyond them to understand that the very policies they favor are at fault? When one considers that ethnic minorities tend to have lower than average incomes and that land rationing nearly doubled the price of housing relative to incomes, it’s not surprising that they have not moved en masse to expensive places like Long Island, with the exception of Hempstead and a few other pockets. There are costs to restrictive land use regulation. One of the most pernicious consequences is the denial of the American Dream to groups of citizens that have so long been excluded from the economic mainstream.

    It is time to recognize that the regulations that raise the price of housing – however well-intentioned – work against housing affordability and represent one of the prime contributors to the high levels of foreclosures in many communities across the country.

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

  • Financial Bailout Shortchanges Taxpayers and Does Little to Fix the Economy

    Last month, Congress gave the treasury secretary $700 billion, which he said he urgently needed to buy toxic securities from the balance sheets of some of our largest financial institutions that were in financial trouble.

    The secretary said that the economy was in danger, and the bailout funds were necessary to prevent a collapse.

    I agree the economy is in trouble. And I am anxious to support emergency measures that will give our economy a lift.

    But I voted against the $700 billion dollar fund for the secretary because I insisted that any bailout had to include measures that would stop the reckless behavior that caused this financial wreckage.

    Unfortunately, the bailout fund was approved without the tough, new regulations necessary to prevent the actions that steered our economy into the ditch.

    In recent weeks, the treasury secretary changed his mind. He decided not to buy toxic securities. Instead, he used the first big chunk of bailout money to buy $125 billion of capital in the nine largest banks. It would free up some lending in the credit markets, he claimed.

    But, strangely, he gave the big banks the money “with no strings attached.” He didn’t require them to use it to expand lending. He didn’t stop the payment of big bonuses to their executives. And in a final insult to common sense, his department is encouraging the big banks to consider more mergers.

    Weeks later, we learn that the big Wall Street banks plan to pay over $20 billion in executive bonuses to their employees.

    What’s wrong with this picture? The American taxpayers, who are struggling through this economic crisis, are told they have to fork over a pile of money to bailout some big banks, while the big banks are busy calculating their year-end bonus payments — maybe to the same geniuses who built this financial house of cards and were last seen driving the getaway car from the scene of the wreckage.

    I think it’s nuts!

    Should anyone in Washington be surprised that the American people are steamed?

    During the past few decades and especially in recent years, the big financial firms were having a field day trading in complicated derivatives, creating a sub-prime loan scandal and engaging in risky, reckless business practices. All the while, many of the government regulatory agencies were doing their imitation of a potted plant.

    Finally, the speculation bubble burst, some big financial firms failed, and it is causing major damage throughout our economy.

    By contrast, on Main Streets across America, community banks and small businesses were still doing business the old-fashioned way.

    A couple of weeks ago, I was sitting across the table from a North Dakota community banker. I asked him if, in light of the financial crisis, his small-town bank had any money to lend if a business from his town wanted to expand.

    “Oh, sure,” he said. “We didn’t get involved in all of those fancy, risky business practices that the big banks were involved in. We take in deposits, and we make good loans.”

    Good for him. It is the way business is supposed to work.

    We do need to take urgent steps to put our economy back on track, but it needs to be smart, effective action that will work. So far, that hasn’t been the case.

    When Congress is back in session in mid-November, I am going to push the following changes to the misguided policies of recent weeks:

    • Prohibit the payment of big bonuses in the firms that are getting the federal bailout money.

    • Attach conditions to any bailout money to make sure the funds are used for the purpose intended and to prohibit the reckless business practices that created this crisis.

    • Restrict further mergers by big banks. It was many of the big banks that caused this crisis, while the smaller community banks largely steered clear of the reckless behavior in high finance.

    • Immediately create a Federal Investigative Task Force to investigate and establish accountability for this financial crisis. Criminal behavior should be investigated and prosecuted.

    Dorgan, a Democrat, represents North Dakota in the U.S. Senate.

  • Young Voters Turn America Left

    Nothing made Barack Obama’s victory potentially more historically significant than his overwhelming support from millennial voters, members of the generation born in or after 1982. Obama won voters under 30 by roughly two-to-one, compared with barely half for John Kerry, making some Democrats positively giddy with the prospect of long-term domination of American politics. Most of these voters also stayed with the Democrats down ticket, enhancing the mass slaughter of GOP lambs across the country.

    Whether the Democrats keep this edge, however, depends not so much on the new president’s personal appeal, but on whether he and his party can deliver economically for workers entering a very tough economy. This will become increasingly critical as millennial voters age and begin focusing less on symbolism and more on how the new regime has worked for them in terms of income and upward mobility.

    The poor economy impacts young voters more than commonly believed. Even before the recession kicked in, a 2006 survey by the Center for American Progress found 15- to 25-year-olds twice as likely to view the economy as the main issue than the rest of population. When they came out to vote earlier this month, young voters had little reason to support continued Republican rule. Even in the expansionary period earlier in this decade, the incomes of younger workers continued to fall, in part because they were too young to enjoy gains from either the stock or housing bubbles.

    More ominously, since 2000, these reverses have been shared even by those with college educations–the very group that, outside of the poor and African-Americans, most supported Obama. They voted for him at a time when, according to a survey by the National Association of Colleges and Employers, half of all companies planned to cut the number of new graduates hired from the previous year.

    In contrast to previous generations, millennials are finding that a four-year degree no longer insulates them from declining earnings or the specter of under-employment. This may be in part because college-educated workers today face unprecedented competition from skilled labor in other countries, particularly in the developing world.

    Reversing this trend for younger workers may well prove the greatest challenge and opportunity for the new administration. If the millennials stick with President Obama and the Democrats, we indeed could witness a long-term shift toward the left in American politics.

    Certainly, the initial indications are positive. As Morley Winograd and Michael Hais point out in their groundbreaking book Millennial Makeover, younger voters were attracted to the egalitarian and “civic” orientation of the Obama campaign. They first rejected the individualist, combative baby-boomer ethos represented by Hillary Clinton, who did very poorly among younger voters. Later they also turned against the harsh tone of the McCain campaign and its embrace of both Cold War rhetoric and social conservatism.

    However, how long will the millennials’ leftward tilt last? It all depends on whether the new administration fixes the economy and creates opportunities for the millennials who will be flooding the workforce in the coming years.

    A generation’s early exposure to politics and politicians can shape their perspective for decades. The politics of the generation that came to age during the 1930s, for example, reflected their experience first with the New Deal and then with Democratic leadership during the Second World War.

    Although conservative ideologues can argue incessantly that Franklin Roosevelt’s policies prolonged the Great Depression, the fact remains that most Americans supported Roosevelt through the entire period. More importantly, after the great stimulus of the Second World War, large parts of an entire generation shared in one of the greatest periods of prosperity in global history.

    Not only did they enjoy a steady increase in real incomes, but also the average person’s access to homeownership and college education expanded at an unprecedented rate. In addition, critically, the economy’s expansion took place without increasing the gap between the rich and everyone else, unlike the most recent expansions.

    Economists can bicker all they want, but most people believed that the New Deal and the Democrats delivered. This won them the loyalty of a generation that kept them as the majority party well into the 1960s.

    If President Obama and the Democrats can deliver similarly prolonged economic growth with a strong egalitarian distribution, the millennials would seem destined to constitute the bulwark of a quasi-permanent new majority. Nothing that the Republicans could do with cultural issues or security could offset this phenomenon. Indeed, millennial positions on issues such as gay marriage and abortion suggest that contemplating a continuation of the “culture wars” could be self-defeating.

    This is not the only possible scenario. In the 1960s and 1970s, many baby boomers also embraced liberal politics, largely for cultural reasons and in opposition to the Vietnam War. However, the dismal economic failures of the Carter years, and the apparent cluelessness of the Democratic Congress in finding ways to compete in a changing world economy, ultimately drove many boomers to Ronald Reagan and the Republican Party. This shift allowed the GOP to dominate American politics for a quarter century.

    For the new president, the critical millennial challenge will be to create a vibrant, productive economy that can expand opportunities for new workers, including those with college degrees. Style and symbolism will seduce young people only for so long; ultimately, they will also want jobs, income and the chance to live a decent middle-class life.

    Everything depends on what the Democrats now do. Few of the forces closest to the new president–the gentry liberals, the legal establishment, the green lobby and big city mayors–have a track record of creating widespread new employment and expanding opportunity.

    In addition, much of the leadership of the congressional party, based in urban and elite locales, favors positions that might constrain broad-based growth.

    A policy of raising taxes on entrepreneurs (as opposed to the accumulated wealth of the gentry class), increased regulation on small businesses and spending on an ever-expanding public sector bureaucracy does not bode well for a strong economic resurgence.

    It is true that younger voters, as a recent Center for American Progress report suggested, support higher taxes and expanded government as the preferred way to solve social ills. But as they age, some of those very millennials will be the ones paying the bills for their good intentions. They will have to try establishing businesses in a harsh regulatory climate. This could turn even some now fervent Obamaphiles into retro-Reaganites.

    However, if the new president proves as clever at policy as at politics, and sparks a new growth economy, all this could prove moot. With a grateful new generation behind him, Obama could help the Democrats achieve a period of predominance every bit as extended as the one shaped by Franklin Roosevelt three-quarters of a century ago.

    It all boils down to whether the senator can meet the millennial challenge not only this year but also in the years ahead.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • Obama: Making History but Not Ending It

    Barack Obama won a mandate among younger voters so large that it literally defies comparison, and with it, we’re told, a mandate to retire tired old fights of little concern to this new generation. Yet in the long run, it may well be that his victory has only put on hold some enduring political conflicts and may even ignite new ones.

    Obama’s 34-point, 66-32 percent win among the group that made up about 20 percent of voters and 60 percent of new voters was nearly four times the margin of John F. Kennedy in 1960 and Clinton in 1992.

    This differential has been put down to the vast age gap between the first post-boomer candidate and his pre-boomer foe. A poll comparing support in an Obama-McCain race against a theoretical Clinton-McCain race in September, though, showed no gender gap in support for the respective Democrats, but a vast difference in the age of their supporters, with the Illinois senator faring 20 percentage points better than his New York counterpart among voters 35 and under, which was more or less cancelled out by Clinton’s 6-point lead among the larger pool of voters 35 and older.

    It’s clear that Obama’s victory represents, among other things, a generational transfer of power. What’s less clear is the oft-repeated claim that with it the culture wars of the 1960s have finally been “won,” or at least that the two sides have agreed to a cease-fire.

    Vietnam vets, pollster James Zogby points out, are oh-for-the-last-three elections, and vets overall oh-for-the-last five. Race has been put away, perhaps since Obama’s post-Wright speech and certainly since his election. (That particular cease-fire, as it were, was immeasurably aided by McCain’s decision, not always honored by his campaign, to stay clear of former Obama spiritual guide Reverand Jeremiah Wright in particular and race more generally).

    Gender? It turns out the Hillary supporters came around to Obama after all. When feminists blasted Sarah Palin for working despite having five children and conservatives insisted they’d never had an issue with unmarried teen pregnancies, it became clear that yesterday’s core principles had been reduced to this election’s politically expedient positions.

    The era-ending nature of Obama’s win has been vouched for by no less an authority of the old culture wars than William Ayers. Writing in These Times after the election, the Weatherman founder turned Hyde Park friend of the Chicago machine writes:

    “The idea that the 2008 election may be the last time in American political life that the ’60s plays any role whatsoever is a mixed blessing. On the one hand, let’s get over the nostalgia and move on.

    On the other, the lessons we might have learned from the black freedom movement and from the resistance against the Vietnam War have never been learned. To achieve this would require that we face history fully and honestly, something this nation has never done.”

    Ayers is right that we haven’t faced history, in part because Americans are always so busy trying to bury it. We have opted to use Obama – who referred to himself in The Audacity of Hope as “A blank screen on which people of vastly differently political stripes project their own views” – as a proxy for history. With his election, the old politics are behind us.

    Or not. As Mario Cuomo might say, it’s a poetic notion but it won’t survive four years of prose.

    By the time the election was called for Obama at 11:00 Tuesday night, it was already clear that the old racial, ethnic, gender, class and regional antagonisms remain very much in play.

    The heated and at times nasty name calling between blacks and gays (mostly aimed at the former by the latter) in the aftermath of Proposition 8’s passage in California even as those same voters gave Obama a 23-point, 2.6 millon vote win, represents one illustration. (Gays incidentally, preferred Clinton to Obama by more than 2-to-1 in the state’s primary, according to CNN exit polling). Arizona and Florida voters also passed referenda defining marriage as between one man and one woman, and Arkansas voters passed one prohibiting unmarried couples from adopting children or serving as foster parents.

    It’s clear that the strong generational consensus of equal rights for gays isn’t a broader American consensus just yet.

    New York Mayor Michael Bloomberg’s dismissal of the automakers’ appeals for federal monies (which spawned a predictable round of New York to Detroit: Drop Dead headlines) is another, representing both the clash of cities and regions for their share of the federal bailout funds, and the clash of wealthy Wall Street Democrats with what’s left of the old industrial union branch of the party.

    So too will be coming tension between the party’s urban core and vulnerable new exurban House members, who may not easily accept the urbanist green agenda embraced by the party’s city-oriented congressional leadership, and which would pass tremendous upfront and long term costs to industries ranging from airlines and aerospace to truckers and energy producers. Whatever the potential environmental and economic benefits down the road, this tack will prove politically difficult to implement if the economy continues to struggle and oil prices continue to fall.

    More generally, there’s the tension between the socially libertarian instincts of younger voters and their pro-big government tilt, especially but not exclusively on the environment, a dynamic that’s just now beginning to play out but augurs conflict to come.

    Then there’s the continued dissatisfaction of those Hillary voters who gritted their teeth while pulling the lever for Obama. What if the Republicans find a more effective and proven female standard-bearer than Sarah Palin?

    New black and Latino voters culturally closer to the religious right than to the wealthier liberals with whom they united in support of Obama have not had a chance to express those culturally conservative views. Perhaps a Bobby Jindal or some other non-white Republican figure could emerge to exploit these potential fissures once memories the anti-immigration fervor of the GOP primaries has faded.

    It’s critical to recognize that all these conflicts – regional, geographic, ethnic and philosophical – were suppressed this year by the economy, which drove voters of all stripes running to the Democrats. When the economy improves, or becomes the problem of the Democrats as opposed to George Bush’s cross to bear, many issues now considered resolved won’t be.

    Barack Obama may have made history but he did not end it. As we have seen over the past decades, the end of one set of conflicts often sets the stage for another. This is likely to be the case again.

    Harry Siegel is a contributing editor at Politico. hsiegel@politico.com

  • Bringing Hope to Red America

    In the end Appalachia remained out of sync with much of America this year. West Virginia, Kentucky, Tennessee and much of the hill country went for John McCain. Senator’s Obama’s message of “hope” did not play as well here as elsewhere.

    This may seem a bit odd. The major targets of the election were Joe six-pack, Joe the plumber; Joe the ordinary man. Joe represented the disaffected males, the lost ones yearning for a simpler time and a better time. Enough Joes in other states voted for Obama to get him a spectacular victory in places like Ohio, Florida and Michigan.

    But no one thought much of Joe the coal miner and not much thought has been given to what this election means to the many “Joes” who live in Appalachia. For too many generations, our Joes have either hunkered down and worked the coalfields, or eked out a meager living on rocky hillside terrain. Many survive on the cash economy, tinkering as best they could to put together a living. My father tells me his grandfather made mandolins to supplement his farm earnings and played them at family gatherings. He describes his upbringing as poor, but happy.

    There were town centers where, as my dad put it, families would come to “trade” on the weekends. Baseball teams formed and played in the circuit of small towns. I once saw a 1914 picture of my grandfather as a member of one of those teams – called the Mize Nine. Today you could not get nine people together in Mize, now barely a wide place in the road.

    It is a world where the much discussed disappearance of the middle class didn’t apply because it never existed. Like my father, many of them left for the factories of the north in the 40s and 50s. The culture was and is a story of unparalleled literary and artistic musical strength, but little in the way of jobs outside of coal.

    Appalachian people were sometimes portrayed during the primary as racist, ignorant and pathetic. Appalachian towns like Inez, Kentucky – the site of LBJ’s proclamation of the war on poverty in 1964 – were visited and heralded as the towns to be rescued – only to once again be left behind.

    In an era of demand for change, what can be expected of or for Appalachia? It is a land where minerals are king and largely owned by outside interests. It has resisted change and remains ridden with poverty and an image that defies change even in the face of success – and there are some success stories in Appalachia.

    Barack Obama is the candidate known for his message of hope. He is known for his soaring speeches that lift us up. But, he is a Chicago kind of guy and seems to grasp the need to pay attention to the big cities and surrounding regions where 75 percent of Americans will likely live in the year 2050.

    But, “hope” also applies to places like Appalachia. We don’t need to be caricatured in the national media as pathetic, poor and somehow outside the brave new world.

    Yet we should not expect that help will come from Washington and solve the problem. It is dawning on all of us that what is big and glittery may not be what we seek. The environmental, energy and fiscal crises have converged to drive home what Katrina only began – the need for a realignment of our priorities.

    Those priorities are not fundamentally about big new investments in infrastructure or Washington support for improved education. Those would be welcome, but the change that will work long-term comes from the local level, from the ability of smaller places to reinvent themselves.

    I see some signs of this. Places that were left behind or written off are coming alive once recalling the early days of the Mize Nine as we seek to build locally what is beyond our scale in those more glamorous venues.

    Being “left behind” is something that implies that others must reach out and provide the rescue. In Inez, the people are speaking and they are saying we will take control of our own destiny. We want to write a new story that transcends poverty and the painting of images by the 24 hour news outlets. Perhaps, instead of trying to catch-up, these places can leap forward to lead the way toward local prosperity and a better quality of life. Will we in Appalachia now finally make the intentional choices to secure a better future or will we continue to let others tell our story of woe and misery?

    The truth is that the story won’t change if we don’t begin to write and tell our own stories. As the new administration grapples with the many issues it faces – health care, energy and fiscal distress to name just a few – it should remember the words of Colin Powell: “All villages matter.” Small places – and big ones – do not need Washington to save them, just to acknowledge that they are important and deserving in their own way.

    So, as President-elect Obama looks to the future, he should grasp the opportunity that is upon us to build great communities in all corners of the nation under the new rules of the game of the 21st century. Appalachia may not have voted with him, but we are still part of his constituency; “red” America, as he suggested last night, is still part of his America.

    Our new President needs to realize – as do we – that the tired old policies of Washington will not work any longer – “handouts” have never been the answer. And, as one voter here said: “We intend to hold Obama accountable in his presidency.” She paused before adding: “And, we expect him to hold us accountable as well.”

    Sylvia L. Lovely is the Executive Director/CEO of the Kentucky League of Cities and the founder and president of the NewCities Institute. Please send your comments to slovely@klc.org and visit her blog at sylvia.newcities.org.

  • No More Urban Hype

    Just months ago, urban revivalists could see the rosy dawn of a new era for America’s cities. With rising gas prices and soaring foreclosures hitting the long-despised hinterland, urban boosters and their media claque were proclaiming suburbia home to, as the Atlantic put it, “the next slums.” Time magazine, the Financial Times, CNN and, of course, The New York Times all embraced the notion of a new urban epoch.

    Yet in one of those ironies that markets play on hypesters, the mortgage crisis is now puncturing the urbanists’ bubble. The mortgage meltdown that first singed the suburbs and exurbs, after all, was largely financed by Wall Street, the hedge funds, the investment banks, insurers and the rest of the highly city-centric top of the paper food chain.

    So, now we can expect some of the biggest layoffs and drops in income next to be found in the once high-flying urban cores. In New York alone, Wall Street has shed over 25,000 jobs – and the region could shed a total of 165,000 over the next two years.

    Not surprisingly, the property crisis once seen as the problem of the silly, aspiring working class and the McMansion nouveaus has now spread deep into the bailiwick of the urban sophisticates. For the first time in years, many Manhattan apartments are selling for well below purchase price, something unheard of during the boom. In Brooklyn, a 24% drop in sales over the last three months even has boosters talking of an imminent “Brownstone bust.”

    Even San Francisco – arguably the most recession-resistant big city due to its large concentration of nonprofits and “trustifarians” – is seeing prices drop for the first time in years. Far more vulnerable are fledgling neo-urban markets like Los Angeles, Atlanta, Oakland, Calif., San Diego, Memphis, Tenn., Miami and Dallas. Sales are down in most of these markets, as are prices.

    Signs of the times: desperate developers offering goodies to buyers. One downtown Los Angeles property owner has even offered to buy a Mini Cooper for anyone bold enough to buy a loft. Others, in Oakland, Boston and Atlanta, are resorting to auctions to offload their product. Foreclosures have taken place in several other markets, including Charlotte, N.C., and Philadelphia.

    Not surprisingly, many new projects conceived at the height of the bubble are being canceled, and some newly minted condominiums converted into rentals. The rental option makes immediate sense but does not help create the ambiance of luxury so coveted by wannabe cool cities. High-end buyers generally do not covet the idea of having a bunch of college-student renters enjoying a similarly granite-counter-topped unit next door. This is not necessarily good news for expensive restaurants or boutiques either.

    In addition, just if anyone is checking, even at the peak of gas prices, there remains virtually no evidence of any massive movement of the bourgeoisie back into the burghs. One assumes that the now plunging oil prices will not hurt suburban commuters.

    In reality, what we have is a market that is stuck in almost all geographies. Rather than shift people into the urban cores, or vice-versa, the mortgage crisis is simply stopping everyone in their tracks. Even if people wanted to move into the core cities, they could not sell their suburban houses to make the down payments.

    Nor is there ample reason to believe the urban migration will pick up in the near future. Crime has soared in some cities such as Oakland and Chicago. (“Obamastan” has suffered more murders this year than much larger New York and Los Angeles.) Overall, urban crime remains three times that of suburbs; a suddenly rising instance of mayhem threatens many urban recoveries.

    And in the end, it’s really all about the economy. The looming massive layoffs in many key urban markets – notably New York, Chicago and San Francisco – cannot possibly help. Finance has remained one industry that has continued to cluster in core cities, even as most others moved to the suburbs and smaller towns.

    Moreover, it is not just New York. Now, as the butcher’s bill for mortgage mania comes due, Chicago, Boston and San Francisco are all facing large-scale layoffs. The office market in the Windy City, for example, is being decimated by cutbacks at JPMorgan Chase, Merrill Lynch, Lehman Brothers and Wachovia, as well as at the commodity exchanges. So far, the less finance-dependent suburban market appears less impacted.

    A recent visit to Chicago confirmed these trends. The once ballyhooed Trump Tower, once seen as the nation’s tallest luxury condominium, remains incomplete, with a massive crane still perched at its top and troubled by persistent rumors of failing financial support. Another hyped project, Santiago Calatrava’s 2000-foot, 150-story Chicago Spire, is stuck in the ground because the developer has stopped paying his “starchitect’s” bill. All this is not too surprising, given a reported 73% drop in downtown home sales for the first half of the year.

    For a decade or more, city leaders have kept thinking that something from outside – demographic changes, high fuel prices or changing consumer tastes – would create a revival for them. This allowed them to avoid doing hard, nasty things like cutting often-outrageous public employee pensions, streamlining regulations, cutting taxes levied on businesses or improving often-dismal schools and basic infrastructure.

    Maybe the current downturn can be a wake-up call for city boosters. Overall, since 2000, the average job growth in cities has averaged less than one-sixth that of suburbs, according to research by my colleagues at the Praxis Strategy Group. This has been particularly notable in higher-paying blue collar positions in manufacturing and warehousing, but increasingly applies also to higher-end business services.

    Cities should start realizing that their biggest problem is not a shortage of cultural venues and performance artists but a chronic lack of decent, middle class jobs. And to be sure, older cities do possess critical advantages such as already existing, if often tattered, transportation systems and the best strategic locations. Their old industrial districts possess an existing infrastructure and, in some cases, a residual pool of skilled labor and some decent job-training facilities. If properly prodded, local universities could also become part of the solution by seeding new entrepreneurial ventures.

    But such a return to basics may be nullified by the prospect of an urban Democrat coming into the White House and a Congress dominated by the likes of Speaker Nancy Pelosi, Charles Rangel and Barney Frank. This will revive hope that largely suburban middle-class taxpayers will now bail out bloated city budgets and often-absurd projects (convention centers, stadia and associated nonsense).

    City leaders and land speculators may also play the Al Gore card of combating “global warming” to block new roads, single-family housing estates and even the transfer of jobs to the supposedly energy-inefficient suburbs. However, over time, the suburban-exurban majority is unlikely to support this approach. To experience a real renaissance, cities need to learn how to make themselves more congenial again to those – industry, entrepreneurs and the middle class – who have found themselves forced to head to the fringes for almost a half century.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • Industry, inequality and the middle classes

    The financial collapse dominates the news, but its unregulated rise is not unrelated to the relative decline of manufacturing over the last quarter century, and the outsourcing of much of industrial production. One consequence of this de-industrialization and financialization of everything has been an astounding increase in inequality, a massive concentration of wealth at the very top and the squeezing of the middle classes.

    Places that remained strong in manufacturing tend to have had and still have lower inequality than places more dependent on services, lowly to professional, and experienced a smaller change in inequality. This case has been argued by many, perhaps most eloquently by Zimmermann and Beal (2002) in Manufacturing Works, and by Scott (2003) The High Price of Free Trade.

    Zimmermann argues the importance of industrial production for national and local prosperity. In Part 2, “Changing geography and what it means”, he treats the relocation of industry, and then follows with “Counties gaining momentum:, Counties losing momentum, and Big City Blues (Philadelphia and beyond)”. He notes the huge northeastern losses in industry coincided with increased inequality, e.g., New York, St. Louis, Philadelphia, and Rochester and in large numbers of smaller metropolitan counties. In contrast decreased inequality in many places in the South, Mountain states and plains (e,g, ND, SD, WY, UT, NE) with rapid industrial growth.

    Local economies dominated by manufacturing generally have had less inequality than ones dominated by services. Although this is particularly true in mostly northern states with a long history of labor unrest and successful unionization, even the more recent largely nonunionized industrialization in the South has reduced income inequality, although statewide levels remain a high, a hangover from their long pre-industrial and even feudal histories.

    What distinguishes lower levels of inequality? In my work using Census data these areas generally experience female labor force participation, higher shares of manufacturing and a larger population with only a high school education (i.e., not overloaded with us professionals!), but lower shares of government and of services. Manufacturing is just one of many factors, but it is a powerful one.

    It is instructive to look at some example areas of higher and of lower inequality in 2000 relative to the composition of their labor forces. The most unequal large areas/counties are New York (Manhattan) and Washington DC – by far, both with high levels of professional services and government, and low levels of industry. Also very unequal are many retirement and environmental service areas, with almost no manufacturing, such as St. Petersburg, Naples, Vero Beach and many other growing Florida cities, Jackson, Wyoming, and several ski dominated areas in Colorado and Utah.

    In stark contrast, inequality is quite low in such strong manufacturing communities as Kansas City, Worcester, Appleton-Green Bay, Fond du Lac (and several other Wisconsin cities), Duluth, Grand Rapids, Davenport-Rock Island, Manchester, NH, Lancaster, PA and Tacoma, WA.

    In sum, economic characteristic variation is real: egalitarian regions exhibit higher labor force participation, especially of women, and high levels of manufacturing – this is probably the most meaningful economic variable to account for lower inequality – and conversely higher inequality is associated with service and government job dependency. High shares of both managerial-professional occupations and service jobs, with lower shares of craft and manufacturing jobs are typically characteristic of elite metropolitan areas and helps account for their higher inequality.

    Change in inequality 1970-2000
    Since the 1970s most major metropolitan areas became less industrial and far more dominated by professional, finance, and other services, and by trade, and concomitantly, have become far more unequal. Prominent examples are Los Angeles, Chicago, Detroit Minneapolis, Dallas, Houston, St. Louis, Atlanta, Rochester, Pittsburgh, Cincinnati, Cleveland, Indianapolis, Birmingham, Baltimore and Boston – a roster of historic giants of industry.

    There are probably only limited opportunities for these areas – particularly in California and the Northeast – to reindustrialize. Yet there may be more opportunities in dozens of smaller metropolitan areas, in all parts of the country, but especially in the historic Midwestern and Northeastern “urban-industrial” heartland, that have suffered varying degrees of deindustrialization. These places enjoy low costs and often retain concentrations of skilled labor. Places like Florence and Gadsden, AL; Pueblo CO; Peoria and Rock Island, IL; Evansville and Muncie, IN; Dubuque, IA; Shreveport, LA; Saginaw, Midland, Benton Harbor, Flint and Muskegon, MI; Binghamton, NY; Toledo, Akron, Dayton, and Canton OH; Tulsa, OK; and Charleston and Wheeling, WV all could benefit from a new emphasis on productive enterprise. But the question remains: does Congress or the next President possess the will to make this happen?

    Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist)

  • Income Inequality on the Rise

    A new report released today by the Organization for Economic Co-operation and Development (OECD) says that income inequality between the rich and poor has grown in three quarters of OECD nations over the past twenty years. The report, “Growing Unequal?”, states that the gap between the rich and middle class in the United States has also grown.

    According to the OECD report,

    “The United States is the country with the highest inequality level and poverty rate across the OECD, Mexico and Turkey excepted. Since 2000, income inequality has increased rapidly, continuing a long-term trend that goes back to the 1970s.”

    As this inequality has risen, rich households “have been leaving both middle and poorer income groups behind.” According to the 30 nation report, “this has happened in many countries, but nowhere has this trend been so stark as in the United States.”

    Commenting on the report, Business Week notes that such increases may pose a threat to “the ‘American Dream’ of social mobility,” with the OECD report noting that social mobility “is lowest in countries with high inequality such as the United States”.

    Facing a potentially deep economic downturn, the middle and lower classes may be in for rough times. Economist Anthony Atkinson, interviewed by Business Week noted that while much of the growth in inequality has taken place during a time of economic expansion, “If a rising tide didn’t lift all boats, how will they be affected by an ebbing tide?” As newgeography.com Executive Editor Joel Kotkin noted earlier today, the survival of the “American aspirational model” may be on the line.

  • The biggest issue remains undecided

    Unless something completely unexpected occurs, the presidential election has been settled, with Barack Obama the clear winner. Yet, except for the Republican Party’s demise, the most important issue of this era — the future of the middle class — remains largely unaddressed.

    Indeed, even as social polarization has diminished — a change that is reflected in Obama’s electoral success — economic polarization has intensified. Globalization and the securitization of almost everything have created arguably the greatest concentration of wealth since before the Great Depression.

    During much of the 20th century, the middle class was on a roll, with strong income gains and increasing rates of homeownership. But in the past few decades, while returns to capital and to certain elite occupations grew rapidly, wages for lower-income and middle-class workers have stagnated.

    To date, neither Obama nor John McCain has articulated a clear message of how to restore the path to upward mobility. Recent proposals from both candidates have been distinctly ad hoc and have had a short-term orientation — not surprising, given the severity of the crisis and the brief period left before the election.

    Yet over time, how the next president, presumably Obama, addresses the problems of middle-class Americans will determine the future of American politics. The party that captures the loyalty of that class — as Republicans did in the early 20th century; Democrats, from the 1930s to the 1960s; and Republicans, again after that — will dominate the nation’s politics in the coming decade.

    The political future may lie with a party that embraces a growth-oriented economic strategy that focuses on the creation of higher-income productive jobs for both younger and older workers. But it’s far from clear that the Democrats under Obama are ready to play that role.

    Clearly, these are not the Democrats of Franklin D. Roosevelt’s New Deal, Harry Truman’s Fair Deal or even Lyndon Johnson’s Great Society. Working- and middle-class Americans, including small farmers, low-level proprietors and ethnic businessmen, constituted the primary base for those Democrats. Although some leading Democrats, notably Roosevelt himself, came from the aristocracy, the upper classes and most of the corporate hierarchy remained fiercely Republican.

    But now the old class lines have changed. The once-impregnable visual barriers of the past — which separated the ultrarich from the rest of us — have largely dissolved. As Irving Kristol once noted, “Who doesn’t wear blue jeans these days?” Today, you can walk into a film studio, software corporation or high-tech firm and have trouble distinguishing the upper tiers from at least the middle ranks.

    Many of these moguls today tend to be socially and environmentally liberal and strong supporters of the Democratic Party. Yet despite their attire and attendance at U2 concerts, their economic concerns will remain radically different from the rest of society. Having secured their support, a President Obama may be forced to take great pains to secure the fortunes of the likes of George Soros, Robert Rubin, the Google decabillionaires and other big party funders.

    We may have witnessed the birth of this new class in the bizarre alliance of Nancy Pelosi, Harry Reid and Barney Frank with Wall Street’s viceroy, Treasury Secretary Henry Paulson. Once fully in power, these Democrats likely will begin by propping up the financial elites — much as Bush has done — but will also have to make a “grand bargain” to satisfy key party constituencies outside of the financial elite.

    There are already hints of this in Obama’s recent statements. His program to send cash to the poor through tax credits and other largesse can be seen as a political payout to his large, heavily minority, urban constituency. Massive bailouts for failing city, state and county governments — another part of the senator’s program — would also bolster public employee unions and their pension funds, both of which have emerged as key Democratic backers. New handouts for the U.S.-based auto industry, as Obama has recently suggested, would, not coincidentally, help one of the last large, unionized private sectors.

    Sadly, none of this will do more to create upward mobility, particularly for the next generation. The working poor may get a few hundred desperately needed dollars to spend, but this is no substitute for a policy that would stimulate production of jobs. Unions and their pension funds would get an extended holiday from addressing their often outrageously generous retirement and medical benefits, but that comes at the expense of the larger, private work force. The financial elites could secure government support for stabilized markets but would have little incentive to invest in domestic production industries and middle-class employment.

    Finally, Obama’s base of highly educated, socially liberal, professional Democrats — largely insulated in universities and nonprofits from economic distress — would be rewarded with the political validation of their worldviews on everything from gay marriage and diversity to environmentalism. More federal support for education, another likely Obama initiative, could also allow them to keep comfortably feathering their nests.

    Over time, however, such an approach could threaten the unity of the Democratic Party. This prospect emerged in the first House vote on the initial Wall Street bailout package. In addition to economic fundamentalist Republicans, many suburban, exurban and rural Democrats also found the plan objectionable. Hostility was particularly marked in the Great Plains, Appalachia, South Texas and other areas strongly oriented toward energy production, manufacturing and logistics.

    This growing wing of populist Democrats, often more socially conservative than their coastal and urban counterparts, tend to favor steering capital toward sectors such as domestic energy production, agriculture, manufactured goods and domestically sourced specialized services. All these, they believe, could drive up incomes and salaries for a wide spectrum of Americans far better than boosting transfer payments or shoring up investment banks.

    This political approach does not appeal to the urban liberals now dominant in both the Democratic Congress and the Obama camp. These represent places, such as New York, San Francisco and Chicago, that are increasingly more dependent on speculative real estate and financial assets than producing goods. Their primary interest in the next few years will be to find out how to create yet another bubble, perhaps tied to designated “green” industries, which could send local land values and stocks soaring again to unsustainable heights.

    All this, however, leaves the Democrats and Obama in a quandary. They could favor programs to expand industry, energy production and basic infrastructure, but they would risk of a wrathful Gore and his allies. It will take all Obama’s considerable political skill to balance his commitments to the greens, the hedge fund industry and venture capitalists with creating a program that will increase the incomes and prospects for middle-class Americans.

    Republicans could take advantage of this schism — if they have the intelligence and foresight to do so. The GOP could embrace the old Hamiltonian policy of internal improvements and incentives for the country’s industrial, energy and logistics companies that still employ millions of working- and middle-class Americans.

    After all, the legacy of corporate socialism bequeathed by President Bush makes it almost impossible for Republicans to sell themselves as economic libertarians. They will need to offer something to the middle class besides the well-worn politics of social resentment and military belligerence.

    But such a GOP rebirth likely lies in the future, if ever. In the next few years, the Democrats will have to address the nation’s growing class chasm on their own. How they do this may well determine not only the future success of the Obama presidency, but the survival of the American aspirational model, as well.

    This article originally appeared at Politico.

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