Freep.com had an article about Detroit experiencing a rebirth. As a variety of groups such as young professionals, immigrants, and baby-boomers rediscover inner cities; will Detroit be a part of "The Fifth Migration"? Professor Robert Fishman, a professor at The University of Michigan, wrote an article about "The Fifth Migration" (which refers to people migrating to inner cities) for the Journal of the American Planning Association. Fishman spoke last night at an event called Cityscape Detroit.
Bill McGraw, a free press columnist, wrote in his article yesterday that Professor Fishman says that a Fifth Migration is under way in America. The Fifth Migration can be seen in other global cities as New York, Boston, San Francisco/Oakland, Chicago and Los Angeles. He said “the Fifth Migration is a counterbalance to sprawl in that it is slowing the rush to build at the edges of metropolitan areas.” McGraw wrote how Fishman discussed that Detroit falls behind almost every city in America that is currently experiencing a type of rebirth, but the city should one day become a part of this race. People are beginning to return to cities and this migration should happen in Detroit also. Professor Fishman is not foreseeing the return of the manufacturing economy, but is speaking of “simple urbanity -- a lively street with diverse stores and apartments on which people can enjoy the best that high-density living has to offer.” McGraw noted that Fishman said Detroit is perhaps the "most challenged" city and region in the nation, but will move forward at a slower pace than other major cities experiencing the same thing.
Tuesday, April 24, 2007
Monday, April 23, 2007
New Urbanist Sprawl
"New urbanism" conjures up many images in my mind: dense streetscapes with row houses, ancient shade trees hovering over the streets, neighborhood corner stores dotting the residential grid, and sprawling open fields for as far as the eye can see...
See a problem with this new urbanist vision? So do I. Unfortunately, leading new urbanist planning firm Duany Plater-Zybek & Co. (DPZ) doesn't. They are responsible for creating The New Town at St. Charles, one of the first new urbanist developments in the St. Louis metro area, located approximately 25 miles northwest of downtown St. Louis in St. Charles County, the metro area's fastest growing county. A new urbanist development so far away from the core city, you say? Well, at least it's close to something... right?
'Fraid not. Take a look at this September '06 aerial photo from New Town's website:
Standing in the heart of New Town, you'll quickly absorb the neighborhood's man-made, inorganic charm. But step to the edge of the neighborhood and you'll stare out over huge agricultural fields that separate this development from the rest of civilization. Of course, in the next fifteen to twenty years, expect to see New Town surrounded by more sprawling residential development.
There are two main flaws that The New Town at St. Charles embodies: sterilization and isolation. The first flaw is a complaint that could be directed at New Urbanism in general. In attempting to reconstruct the perfect traditional neighborhood, the product is created, packaged and sold to buyers for them to accept as it is. Every detail has already been considered, and there is no room for organic growth by residents of the community. Growth is planned for, never spontaneous.
The second flaw is the location of the development. Located 25 miles from downtown St. Louis, in a greenfield on the northern edge of the suburban City of St. Charles, in a county of 330,000 that doesn't even have a public transportation system, New Town is hardly connected to the metro region. Sure, you may be able to walk just five minutes to get to one of the neighborhood's shops, restaurants or other businesses; but New Town is not a self-sustaining community. To get anywhere outside the development, you'll need a car.
The Congress for New Urbanism, one of the leading promoters of the new urbanist movement, is self-described as "the leading organization promoting walkable, neighborhood-based development as an alternative to sprawl". Andres Duany and Elizabeth Plater-Zybeck of DPZ happen to be on the board emeritus for the Congress for New Urbanism. With that being said, we should expect that their work as new urbanists would embody the principles of the the new urbanist movement, including promoting alternatives to sprawl. Has the community they've created in The New Town at St. Charles really offered an alternative to sprawl? Or is it simply repackaged sprawl, designed with enough traditional character and substantial density overshadow its sprawling greenfield location? I would suggest the latter.
New urbanists should concentrate on the implied location of their moniker - the city. Reutilization of existing infrastructure, buildings, and transportation networks can help control the region's footprint and increase the efficiency of existing public services. When new urbanists develop greenfield sites on the suburban fringe, as DPZ have done with New Town, they are simply contributing to sprawl just like so many other developers, only they have a catchy name like "new urbanist" to help sell their product.
See a problem with this new urbanist vision? So do I. Unfortunately, leading new urbanist planning firm Duany Plater-Zybek & Co. (DPZ) doesn't. They are responsible for creating The New Town at St. Charles, one of the first new urbanist developments in the St. Louis metro area, located approximately 25 miles northwest of downtown St. Louis in St. Charles County, the metro area's fastest growing county. A new urbanist development so far away from the core city, you say? Well, at least it's close to something... right?
'Fraid not. Take a look at this September '06 aerial photo from New Town's website:
Standing in the heart of New Town, you'll quickly absorb the neighborhood's man-made, inorganic charm. But step to the edge of the neighborhood and you'll stare out over huge agricultural fields that separate this development from the rest of civilization. Of course, in the next fifteen to twenty years, expect to see New Town surrounded by more sprawling residential development.
There are two main flaws that The New Town at St. Charles embodies: sterilization and isolation. The first flaw is a complaint that could be directed at New Urbanism in general. In attempting to reconstruct the perfect traditional neighborhood, the product is created, packaged and sold to buyers for them to accept as it is. Every detail has already been considered, and there is no room for organic growth by residents of the community. Growth is planned for, never spontaneous.
The second flaw is the location of the development. Located 25 miles from downtown St. Louis, in a greenfield on the northern edge of the suburban City of St. Charles, in a county of 330,000 that doesn't even have a public transportation system, New Town is hardly connected to the metro region. Sure, you may be able to walk just five minutes to get to one of the neighborhood's shops, restaurants or other businesses; but New Town is not a self-sustaining community. To get anywhere outside the development, you'll need a car.
The Congress for New Urbanism, one of the leading promoters of the new urbanist movement, is self-described as "the leading organization promoting walkable, neighborhood-based development as an alternative to sprawl". Andres Duany and Elizabeth Plater-Zybeck of DPZ happen to be on the board emeritus for the Congress for New Urbanism. With that being said, we should expect that their work as new urbanists would embody the principles of the the new urbanist movement, including promoting alternatives to sprawl. Has the community they've created in The New Town at St. Charles really offered an alternative to sprawl? Or is it simply repackaged sprawl, designed with enough traditional character and substantial density overshadow its sprawling greenfield location? I would suggest the latter.
New urbanists should concentrate on the implied location of their moniker - the city. Reutilization of existing infrastructure, buildings, and transportation networks can help control the region's footprint and increase the efficiency of existing public services. When new urbanists develop greenfield sites on the suburban fringe, as DPZ have done with New Town, they are simply contributing to sprawl just like so many other developers, only they have a catchy name like "new urbanist" to help sell their product.
Is Sprawl What the People Want?
Last week on Slate.com there was a three day series of excerpts from University of Pennsylvania real estate professor, Witold Rybczynski's new book, Last Harvest: How a Cornfield Became New Daleville.
Rybczynski spent four and a half years observing the progress of New Daleville, a residential subdivision designed in a "neotraditional" style that builds houses close together on smaller-than-usual lots in order to foster a stronger sense of community or as some believe to fit in more homes to make a larger profit. He witnessed every stage of development, from the purchase of a large tract of land in rural Pennsylvania through meetings with local community leaders to get planning approval, to the moment when a family moves into one of the first completed units. In the book he explains how land gets developed in the era of the new urbanism and pro- and anti-growth debates, and why so many Americans choose to live in suburbs despite often lengthy commutes.
In the first excerpt Rybczynski discusses, Why do we live in houses, anyway? According to Rybczynski, there is a preference for a single family detached home. He backs up his assertion with the fact that four out of five new housing units built in the U.S. are single-family homes. This desire for an single-family home expands beyond the U.S., to Europe, Africa, and Asia for those who can afford it.
The second excerpt explains how Americans fell in and out of love with the ranch house. In chronicling the rise and fall of the ranch house, Rybczynski makes some generalizations about home buyers and the housing industry. Since houses are the largest investments that most families make, most homeowners tend to be conservative to avoid unnecessary risk. Also, housing has always been governed by a simple rule, as people become richer, they spend more money on their homes. Spending more money has usually meant making the home bigger. In recent decades, buyers wanted larger houses, but California's widely copied Proposition 13, which required developers to pay for their own infrastructure, made land much more expensive. The builders' solution was to return to two-story houses, which don't need such large lots, and are cheaper to build. Today, more than half of all new houses have two stories, and it's goodbye to the ranch and split-level home.
The series ends with a slide show that follows the step-by-step evolution of New Daleville, Pennsylvania, from a rural cornfield to subdivision. Rybczynski contends that rural growth is driven less by home buyers' desire for open space but rather by the movement of jobs to the periphery of metropolitan areas and by high property values in traditional inner suburbs. The latter are largely the result of the obstacles placed in the way of development. Suburban communities effectively slow growth and raise land prices through restrictive zoning and lengthy permitting processes. Unfortunately this further contributes to sprawl and residential greenfield developments like New Daleville.
Rybczynski spent four and a half years observing the progress of New Daleville, a residential subdivision designed in a "neotraditional" style that builds houses close together on smaller-than-usual lots in order to foster a stronger sense of community or as some believe to fit in more homes to make a larger profit. He witnessed every stage of development, from the purchase of a large tract of land in rural Pennsylvania through meetings with local community leaders to get planning approval, to the moment when a family moves into one of the first completed units. In the book he explains how land gets developed in the era of the new urbanism and pro- and anti-growth debates, and why so many Americans choose to live in suburbs despite often lengthy commutes.
In the first excerpt Rybczynski discusses, Why do we live in houses, anyway? According to Rybczynski, there is a preference for a single family detached home. He backs up his assertion with the fact that four out of five new housing units built in the U.S. are single-family homes. This desire for an single-family home expands beyond the U.S., to Europe, Africa, and Asia for those who can afford it.
The second excerpt explains how Americans fell in and out of love with the ranch house. In chronicling the rise and fall of the ranch house, Rybczynski makes some generalizations about home buyers and the housing industry. Since houses are the largest investments that most families make, most homeowners tend to be conservative to avoid unnecessary risk. Also, housing has always been governed by a simple rule, as people become richer, they spend more money on their homes. Spending more money has usually meant making the home bigger. In recent decades, buyers wanted larger houses, but California's widely copied Proposition 13, which required developers to pay for their own infrastructure, made land much more expensive. The builders' solution was to return to two-story houses, which don't need such large lots, and are cheaper to build. Today, more than half of all new houses have two stories, and it's goodbye to the ranch and split-level home.
The series ends with a slide show that follows the step-by-step evolution of New Daleville, Pennsylvania, from a rural cornfield to subdivision. Rybczynski contends that rural growth is driven less by home buyers' desire for open space but rather by the movement of jobs to the periphery of metropolitan areas and by high property values in traditional inner suburbs. The latter are largely the result of the obstacles placed in the way of development. Suburban communities effectively slow growth and raise land prices through restrictive zoning and lengthy permitting processes. Unfortunately this further contributes to sprawl and residential greenfield developments like New Daleville.
Monday, April 16, 2007
From Mill Towns to High-Tech Cities
Back in February, the RealEstateJournal.com's article: Steering Mill Towns Closer To Tech-Boom Riches indicated that the old mill towns in Massachusetts may be affordable housing solutions. The technology boom has benefited the Boston area, but bypassed the historic mill towns of Massachusetts, which are no longer an integral part of today's knowledge economy. But now those old manufacturing centers are being seen as an answer to the problems stemming from Boston's success: congested highways and workers who can no longer afford to live there. Between 1994 and 2005, real median home prices in Boston more than doubled to $429,000, complicating the area's effort to recruit workers and residential development in Boston consumed nearly 90,000 acres of undeveloped land between 1985 and 1998, contributing to road congestion.
A report by the Brookings Institution and Boston think tank MassINC, Reconnecting Massachusetts Gateway Cities, suggests that the old mill towns could provide the Boston area's high-tech employers with needed workers, affordable housing and a model for growth that doesn't involve suburban sprawl.
Massachusetts shows how unevenly distributed a high-tech boom can be. According to the Brookings and MassINC report, the Boston area's share of the state's technology companies has grown to 60% from 53% in 1994. The area added 467,000 jobs between 1970 and 2005. Today, it is home to 40% of the state's population and 50% of its private-sector jobs and generates 60% of the state's payroll.
During the same period, 11 Massachusetts mill towns or gateway cities -- Brockton, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Lowell, New Bedford, Pittsfield, Springfield and Worcester -- lost more than 11,000 jobs. Today they account for 15% of the state's population, 13% of its private jobs and less than 10% of its public payroll.
In addition to the uneven distribution of high-tech jobs, the wealth gap is correspondingly large. The mill towns, which have large numbers of immigrants and minorities, account for 30% of the state's residents living in poverty, according to the report. These trends represent "a serious threat to the overall economic competitiveness of Massachusetts" according to the report.
Brookings and MassINC acknowledge transforming the mill towns into realistic alternatives for high-tech employers will be a challenge. But the report suggests the state needs to try to make the mill towns more economically attractive. Among its recommendations: linking state aid to local governments' cost-control efforts, establishing data systems to track local spending, making city budgets more transparent, and developing public-private partnerships.
Haverhill, Massachusetts, an industrial town 35 miles north of Boston is already trying to capitalize on its location and affordability. The median home price is $266,000, 38% less than in Greater Boston and rezoning has allowed for the redevelopment of shuttered factories into residential loft space, as well as the city's first big-box retail development. The town has good rail and road connections to Greater Boston and is positioning itself to attract biotechnology and pharmaceutical companies. It will be interesting to see if these mill towns will be successful in luring high-tech industries or if they will continue to lose jobs to the Boston area.
A report by the Brookings Institution and Boston think tank MassINC, Reconnecting Massachusetts Gateway Cities, suggests that the old mill towns could provide the Boston area's high-tech employers with needed workers, affordable housing and a model for growth that doesn't involve suburban sprawl.
Massachusetts shows how unevenly distributed a high-tech boom can be. According to the Brookings and MassINC report, the Boston area's share of the state's technology companies has grown to 60% from 53% in 1994. The area added 467,000 jobs between 1970 and 2005. Today, it is home to 40% of the state's population and 50% of its private-sector jobs and generates 60% of the state's payroll.
During the same period, 11 Massachusetts mill towns or gateway cities -- Brockton, Fall River, Fitchburg, Haverhill, Holyoke, Lawrence, Lowell, New Bedford, Pittsfield, Springfield and Worcester -- lost more than 11,000 jobs. Today they account for 15% of the state's population, 13% of its private jobs and less than 10% of its public payroll.
In addition to the uneven distribution of high-tech jobs, the wealth gap is correspondingly large. The mill towns, which have large numbers of immigrants and minorities, account for 30% of the state's residents living in poverty, according to the report. These trends represent "a serious threat to the overall economic competitiveness of Massachusetts" according to the report.
Brookings and MassINC acknowledge transforming the mill towns into realistic alternatives for high-tech employers will be a challenge. But the report suggests the state needs to try to make the mill towns more economically attractive. Among its recommendations: linking state aid to local governments' cost-control efforts, establishing data systems to track local spending, making city budgets more transparent, and developing public-private partnerships.
Haverhill, Massachusetts, an industrial town 35 miles north of Boston is already trying to capitalize on its location and affordability. The median home price is $266,000, 38% less than in Greater Boston and rezoning has allowed for the redevelopment of shuttered factories into residential loft space, as well as the city's first big-box retail development. The town has good rail and road connections to Greater Boston and is positioning itself to attract biotechnology and pharmaceutical companies. It will be interesting to see if these mill towns will be successful in luring high-tech industries or if they will continue to lose jobs to the Boston area.
Friday, April 06, 2007
Wanted: Successful Economic Development
According to the March 30th edition of the Commercial Appeal, a recent study concluded that Memphis' economic development program is the "most underfunded in the nation." Here's the scoop, since access to the March 30th article appears to be hit-or-miss over at CommercialAppeal.com.
Memphis Tomorrow--a public-private group of chief executives that includes both mayors, the Memphis Regional Chamber and local businesses--commissioned the study as part of a broader economic growth initiative called Memphis Fast Forward that will focus on crime, government efficiency, economic development and education, and workforce development.
Atlanta-based Market Street Services prepared the study that compares the Memphis/Shelby County economic development budget to peer cities such as Louisville, Nashville, Knoxville, Charlotte and others. It found that the 2005 budget for Memphis' current economic development plan, Think Memphis, was $324,000 compared to Nashville's 2005 budget of $3 million for Nashville 2010 (incidentally, Market Street Services also developed Nashville 2010). Other examples in the article paint a clear picture that Memphis' economic development efforts are woefully underfunded. A little digging unearthed information suggesting that this is not a surprising or new trend. Think Memphis' Partnership for Prosperity report indicated that Memphis' 2002 economic development budget of $4.8 million placed it dead last in comparison to--you guessed it--Nashville, Louisville and Charlotte (see p. 17 of the report).
Referring to the Memphis Fast Forward economic growth initiative, the article mentions that it will target four key industries: logisitics, music/film, biosciences and tourism. Its goal is the creation of 49,395 jobs that will generate $53.3 million in tax revenue for the city and $32.1 million for the county after five years. The plan is being prepared by Market Street Services as well. A subsequent Commercial Appeal editoral on April 1st entitled "Mayors prime new jobs pump" considered the finer details of the plan and it is available here (apparently the CA has access to the plan that the general public has not been granted). The editorial noted that "one of the plan's most useful elements may be its list of 15 disparate strategies for progress in Memphis that engage our attention from time to time but are rarely considered as parts of a coherent whole." Hold onto that thought for a second.
Smart City.org has been tracking Memphis' economic development for quite some time and well-acquainted with many of its key players. If you are interested, I highly recommend heading over to the Smart City Memphis blog and check out its' April 1st post entitled "The money: First step in a long journey" where the author(s) (presumably Carol Coletta) suggest that while more funding is necessary to market Memphis, there needs to be a "new reality that is conducive to economic growth in the first place." This "new reality" is the understanding that a convergence, or alignment, of factors that are not generally considered in the realm of economic development--things such as sustainable communities, civic health, green spaces--is necessary to attract and retain valued businesses and labor. This is very similar to the sentiment expressed in the CA editorial statement quoted above. And it appears that a Refocused Chamber is working to organize along this principle as well.
There are a lot of issues at play here. Does successful economic development require a more holistic approach? If so, does Memphis need to change its perspective on economic development? How might a holistic perspective to economic development affect public and private funding in other areas? Does it make sense to provide additional funding for marketing the city--since that's really what the economic development budget is--without a viable strategy for "connecting the dots" in place? If we do need to connect the dots, should this initiative be generated by the economic development sector or by another sector, such as the mayors' offices?
This is fascinating stuff, y'all. Take a few minutes and check it out.
Memphis Tomorrow--a public-private group of chief executives that includes both mayors, the Memphis Regional Chamber and local businesses--commissioned the study as part of a broader economic growth initiative called Memphis Fast Forward that will focus on crime, government efficiency, economic development and education, and workforce development.
Atlanta-based Market Street Services prepared the study that compares the Memphis/Shelby County economic development budget to peer cities such as Louisville, Nashville, Knoxville, Charlotte and others. It found that the 2005 budget for Memphis' current economic development plan, Think Memphis, was $324,000 compared to Nashville's 2005 budget of $3 million for Nashville 2010 (incidentally, Market Street Services also developed Nashville 2010). Other examples in the article paint a clear picture that Memphis' economic development efforts are woefully underfunded. A little digging unearthed information suggesting that this is not a surprising or new trend. Think Memphis' Partnership for Prosperity report indicated that Memphis' 2002 economic development budget of $4.8 million placed it dead last in comparison to--you guessed it--Nashville, Louisville and Charlotte (see p. 17 of the report).
Referring to the Memphis Fast Forward economic growth initiative, the article mentions that it will target four key industries: logisitics, music/film, biosciences and tourism. Its goal is the creation of 49,395 jobs that will generate $53.3 million in tax revenue for the city and $32.1 million for the county after five years. The plan is being prepared by Market Street Services as well. A subsequent Commercial Appeal editoral on April 1st entitled "Mayors prime new jobs pump" considered the finer details of the plan and it is available here (apparently the CA has access to the plan that the general public has not been granted). The editorial noted that "one of the plan's most useful elements may be its list of 15 disparate strategies for progress in Memphis that engage our attention from time to time but are rarely considered as parts of a coherent whole." Hold onto that thought for a second.
Smart City.org has been tracking Memphis' economic development for quite some time and well-acquainted with many of its key players. If you are interested, I highly recommend heading over to the Smart City Memphis blog and check out its' April 1st post entitled "The money: First step in a long journey" where the author(s) (presumably Carol Coletta) suggest that while more funding is necessary to market Memphis, there needs to be a "new reality that is conducive to economic growth in the first place." This "new reality" is the understanding that a convergence, or alignment, of factors that are not generally considered in the realm of economic development--things such as sustainable communities, civic health, green spaces--is necessary to attract and retain valued businesses and labor. This is very similar to the sentiment expressed in the CA editorial statement quoted above. And it appears that a Refocused Chamber is working to organize along this principle as well.
There are a lot of issues at play here. Does successful economic development require a more holistic approach? If so, does Memphis need to change its perspective on economic development? How might a holistic perspective to economic development affect public and private funding in other areas? Does it make sense to provide additional funding for marketing the city--since that's really what the economic development budget is--without a viable strategy for "connecting the dots" in place? If we do need to connect the dots, should this initiative be generated by the economic development sector or by another sector, such as the mayors' offices?
This is fascinating stuff, y'all. Take a few minutes and check it out.
Thursday, April 05, 2007
Architecture, Planning, & a Few Other Tidbits
In light of many recent discussions and relevance to what we're learning in our classes, I thought this podcast, posted on planetizen.com would make for an interesting discussion on our next meeting. Some suggestions for what you might pay close attention to include: congestion pricing, national attitudes toward affordable housing, Gore's environmental struggles, and planning's visibility, to name a few. I feel that some of the numbers presented are next to amazing and seem to veer far from my hypothesis on national attitudes toward housing.
Sunday, April 01, 2007
Payment in Lieu of Taxes or Just Don't Pay At All (not delivering on promises)
This blog will concern itself with the March 27th article in the Commercial Appeal regarding Shelby County and its use (or abuse) of the PILOT program. The article stated that the Shelby County Commission recently voted on concerning the use of the "Payment in Lieu of Taxes." Local government typically uses this program to lure prospective companies from locating and doing business/creating jobs within the county while freezing its tax liabilities for an established amount of time with the agreement that the benefited company would create jobs and an acceptable salary/pay range for those jobs and thus benefit the economic impact for the county. While this program from its definition should spell a win-win situation for the county, the ugly truth is that the program is grossly taken advantage of with little oversight or consequences....Until now. The commission voted 12-0 "to alter the program to ensure better oversight and require companies seeking public funding to pay higher wages." While it does erode the potential tax base, the program is essential for the city and county to compete with other cities and counties. The new measures voted on included:
(1) companies offering medical benefits with targeted wages $12 to $15 (with new employees making $10) per hour.
(2) competitive site-based test requiring companies to demonstrate why public investments is necessary to stimulate public growth
(3) Tougher compliance measures, including random site visits to make sure companies are living up to their commitments
(4) 75 percent of employees must live within Shelby County
(5) to make the IDB's Jobs Plus program mandatory. (Jobs Plus is designed to give local minority, women-owned and small businesses a chance to do business with companies seeking PILOTs)
The issue that I have regarding the use of the PILOT program is simply the non-compliance issues. It is frustrating to know that the program lacks the teeth needed to ensure that companies comply with their agreements in order to gain the much desired tax freeze that ultimately saves that company millions while potentially costing the local government asizeable addition to its tax base. Only time will tell if these new proposed rules will have the teeth needed to ensure compliance or not. Much to come on this debated program.
(1) companies offering medical benefits with targeted wages $12 to $15 (with new employees making $10) per hour.
(2) competitive site-based test requiring companies to demonstrate why public investments is necessary to stimulate public growth
(3) Tougher compliance measures, including random site visits to make sure companies are living up to their commitments
(4) 75 percent of employees must live within Shelby County
(5) to make the IDB's Jobs Plus program mandatory. (Jobs Plus is designed to give local minority, women-owned and small businesses a chance to do business with companies seeking PILOTs)
The issue that I have regarding the use of the PILOT program is simply the non-compliance issues. It is frustrating to know that the program lacks the teeth needed to ensure that companies comply with their agreements in order to gain the much desired tax freeze that ultimately saves that company millions while potentially costing the local government asizeable addition to its tax base. Only time will tell if these new proposed rules will have the teeth needed to ensure compliance or not. Much to come on this debated program.
Wednesday, March 28, 2007
The Answer to the Farmer’s Cash Poor/Land Rich Dilemma?
Last night in class I asked about the difference between conservation easements and the purchase of development rights (“PDR”). While I wasn’t as familiar with conservation easements I was somewhat familiar with PDRs. I attempted to stumble my way through an explanation of PDRs as this “goofy” sort of conservation tool. Well I did a little research to see what I could come up with and I found two web sites of interest. (1) The Tennessee Land Trust is a group located in Nashville that manages and on occasion purchases conservation easements in Tennessee. As I read a little more I discovered that conservation easements sound a lot like PDRs. (2) I looked up PDR’s and I found this web site from Ohio State University that discusses PDR’s and conservation easements and told me that they are essentially the same things.
Here is how they work…
In an effort to preserve natural and historic landscapes for future generations and to allow current farmers to continue farming and resist the urge to sell farms to developers seeking to capitalize on the expanding urban fringe some states have established land trusts. Land trusts may come in the form of government affiliated organizations or, as in the case of Tennessee, 501(c)(3) organizations. Land trusts manage and acquire conservation easements or they purchase development rights from families, individuals or organizations. The land trust will acquire these properties in one of two ways. First, donation of development rights by the land owner to the trust which results in a substantial tax break for the land owner and makes him fell good while managing to sufficiently anger his money hungry children. The second way is for the land trust to purcahse the development rights. This is slightly more complicated because it requires determining the value of the land to produce agriculture or timber and the value of the land at market to a developer. Suppose the land has a value in agriculture of $2,000 per acre but that a developer is offering the owner $5,000 per acre to acquire the land for development. The Land trust would pay $3,000 dollars per acre to the owner for a restriction on the deed that restricts the uses of the land in perpetuity. The farmer continues to own the land and can keep farming it or pass it on to his heirs but neither he nor any subsequent purchaser or owner can ever develop it. Typically these restrictions contain some form of allowance for structures related to the use such as a house or a barn or may have some clause that states that only 10% of the land may be developed.
In many ways this is similar to landowners in Texas selling the mineral rights below the surface of their cattle farms to oil and gas speculators. The land trust owns the development rights regardless of whether it is a farm, natural area, or historic site and owes a moral and legal obligation to enforce the deed restrictions in perpetuity.
After class Charlie asked me what Char Miller would say about the subsidizing of these farmers?
Regardless land trusts are used for all kinds of non urban land uses but one thing that I keep thinking of and Kevin mentioned in class, is that while they claim to be protecting open space but the land that is protected remain in private ownership and trespass laws still apply. The one thing they do successfully is to protect view sheds from development which is particularly important in middle and east TN’s rolling hills.
~TP
Here is how they work…
In an effort to preserve natural and historic landscapes for future generations and to allow current farmers to continue farming and resist the urge to sell farms to developers seeking to capitalize on the expanding urban fringe some states have established land trusts. Land trusts may come in the form of government affiliated organizations or, as in the case of Tennessee, 501(c)(3) organizations. Land trusts manage and acquire conservation easements or they purchase development rights from families, individuals or organizations. The land trust will acquire these properties in one of two ways. First, donation of development rights by the land owner to the trust which results in a substantial tax break for the land owner and makes him fell good while managing to sufficiently anger his money hungry children. The second way is for the land trust to purcahse the development rights. This is slightly more complicated because it requires determining the value of the land to produce agriculture or timber and the value of the land at market to a developer. Suppose the land has a value in agriculture of $2,000 per acre but that a developer is offering the owner $5,000 per acre to acquire the land for development. The Land trust would pay $3,000 dollars per acre to the owner for a restriction on the deed that restricts the uses of the land in perpetuity. The farmer continues to own the land and can keep farming it or pass it on to his heirs but neither he nor any subsequent purchaser or owner can ever develop it. Typically these restrictions contain some form of allowance for structures related to the use such as a house or a barn or may have some clause that states that only 10% of the land may be developed.
In many ways this is similar to landowners in Texas selling the mineral rights below the surface of their cattle farms to oil and gas speculators. The land trust owns the development rights regardless of whether it is a farm, natural area, or historic site and owes a moral and legal obligation to enforce the deed restrictions in perpetuity.
After class Charlie asked me what Char Miller would say about the subsidizing of these farmers?
Regardless land trusts are used for all kinds of non urban land uses but one thing that I keep thinking of and Kevin mentioned in class, is that while they claim to be protecting open space but the land that is protected remain in private ownership and trespass laws still apply. The one thing they do successfully is to protect view sheds from development which is particularly important in middle and east TN’s rolling hills.
~TP
Tuesday, March 27, 2007
"Superstars"
Inelasticity, willingness-to-pay, and MSAs are all terms we’re familiar with, but how do they relate to “superstars,” and what is a “superstar” exactly? Authors Joseph Gyourko, Christopher Mayer, and Todd Sinai have created a working paper in which they’ve categorized several cities as “superstars” or cities with an inelastic supply of housing. In other words, construction is difficult within these cities due to geographical constraints or zoning. Similar to arguments set forth by other scholars we’ve read, such as Jan Brueckner, the authors of this paper assert that an increase in high income families has resulted in higher income families outbidding lower income families for scarce housing in preferred locations. The authors found that Los Angeles and San Francisco were the only two cities which qualified as “superstars” during the years ranging from 1960-1980. However, during the years ranging from 1970-2000, twenty more cities fell within the “superstar” classification, two of which were Boston and New York. Below are the links to an abstract and another description of the articles. You must subscribe in order to obtain a copy of the working paper.
http://papers.nber.org/papers/W12355
http://www.planetizen.com/node/23302
http://papers.nber.org/papers/W12355
http://www.planetizen.com/node/23302
Monday, March 26, 2007
...and the race is on
This blog will center upon the growth explosion for DeSoto County in Mississippi. From the article, which appeared in the Commercial Appeal's Monday, March 26th paper, DeSoto County ranks in the top three among the fastest growing counties of the Mid-South states (Tennessee, Mississippi, & Arkansas). According to the article, the growth is fueled by people moving out of Memphis and Shelby County and people moving into the the "Memphis" area and choosing it as the place to live. This revelation is interesting in the fact that the ex-Memphians are moving to the outer fringes of the metropolitan area only to come back into town to utilize its amenities. The DeSoto Civic Center can only host so many attractions, thus leaving Memphis as the central locale for entertainment as from cruising the Dairy Queens and holding impromptu car conventions at the AutoZone parking lot. But why are these people flooding Mississippi? Urban growth has, in my opinion, had a negative effect on the city of Memphis and a positive influence for counties such as DeSoto County in Mississippi and Fayette County in Tennessee. Once viwed as prestine farmland, now is only used as a cash cow. The developers don't want a growth plan because it simply stymies their earning potentials with converting once low demanded land to land that will generate a sizeable profit. It is just a simple numbers game to them. How many equals how much (money that is). Just simply look at the Tunica Casino growth area and how cotton fields turned to gold. The number one source for this hasty exodus from the city of Memphis, in my opinion, lies at the root of the problem; CRIME! If people feel safe in their homes or neighborhoods, they tend to want to stay there; not pack up and head to Mississippi. If Memphis officials could really get a hold on the crime issues at hand, Memphis would benefit in the sense that smart growth would be checked. That is, there wouldn't be such a demand for undeveloped land to be developed at the pace that it is currently reaching. In just under seven years, DeSoto County has moved from 5th place in Mississppi's 82 county population, to the number 3 ranking. Now that's smart growth. And you don't hear DeSoto county officials complaining about the economic boom to their once small area. In fact, Jim McDougal, DeSoto County planning director, says he sees no end to the growth. The housing slump that has been seen in other areas of the country have not affected DeSoto. With the notion of cheaper housing costs and the idea of moving to a crime free area, no wonder DeSoto County ranks 3rd on the list. Come on Memphis, you stand to lose more that just the race..... this is my opinion, I could be wrong.
Sub-prime Suburbs
Last week's New York Times article Foreclosures force suburbs to fight blight (March 23, 2007) describes how housing foreclosures are hitting several Cleveland, Ohio suburbs so hard the local government is spending big bucks (think millions) to forestall neighborhood blight by providing housing maintenance and working to keep home owners in their houses or to help them find apartments when evicted. The cause of the foreclosures is the large number of high-interest loans issued by the sub-prime housing loan market.
The rising federal interest rate has resulted in increased payments on adjustable rate mortgages and oftentimes homeowners cannot afford to make payments because of the lax standards in the predatory sub-prime market. Banks foreclose on properties but do not maintain the properties . Shaker Hills, Ohio, Mayor Judith H. Rawson notes that "managing the damage to our communities will take years."
Nationally, economists are concerned that the high rate of sub-prime loan foreclosures will result in tighter lending standards--thus reducing the market of qualified buyers--at a time when the market is being flooded with foreclosed properties. Locally, neighborhoods are looking for ways to respond to this very real threat that is developing.
In February 2007, Channel 3's Andy Wise reported that home foreclosures are skyrocketing in Shelby County. According to Wise, the Memphis Daily News reported that Cordova posted a 128% increase in foreclosure sales from 2004 to 2006 and Frayser's 926 foreclosure notices in 2006 set the record. As in Ohio, the culprit is predatory lending.
In January 2007, the Frayser Community Development Corporation received a $25,000 grant to inform and educate residents about smart borrowing practices. According to the March 23, 2007 Commercial Appeal, the Southeast Community Development Corporation is facing over 300 active foreclosures in the 38125 zip code--along with a myriad of other issues affecting its neighborhoods. In response, the Southeast CDC is providing credit counseling and looking into creating a nonprofit mortgage brokerage. RISE Foundation and former Orange Mound CDC executive director Roshun Austin (now at Homecoming Financial, LLC) are also working to educate consumers on the dangers of predatory lending and to provide financial counseling to help homeowners stay in their houses.
Unfortunately, responding to foreclosures resulting from predatory lending is taking scarce resources away from nonprofit and community leaders who were already struggling to overcome a host of urban decay issues. This should not be their battle to fight alone. If economists are correct, the housing market is ill-prepared to correct this transgression. While federal and state officials argue over who is to blame, they need to make sure that funding is available to specifically address housing foreclosures.
Note: Check out David Gest's commentary, Physical Effects of the Declining Housing Market over at Planetizen.com, for an excellent summary of this issue at the national level.
The rising federal interest rate has resulted in increased payments on adjustable rate mortgages and oftentimes homeowners cannot afford to make payments because of the lax standards in the predatory sub-prime market. Banks foreclose on properties but do not maintain the properties . Shaker Hills, Ohio, Mayor Judith H. Rawson notes that "managing the damage to our communities will take years."
Nationally, economists are concerned that the high rate of sub-prime loan foreclosures will result in tighter lending standards--thus reducing the market of qualified buyers--at a time when the market is being flooded with foreclosed properties. Locally, neighborhoods are looking for ways to respond to this very real threat that is developing.
In February 2007, Channel 3's Andy Wise reported that home foreclosures are skyrocketing in Shelby County. According to Wise, the Memphis Daily News reported that Cordova posted a 128% increase in foreclosure sales from 2004 to 2006 and Frayser's 926 foreclosure notices in 2006 set the record. As in Ohio, the culprit is predatory lending.
In January 2007, the Frayser Community Development Corporation received a $25,000 grant to inform and educate residents about smart borrowing practices. According to the March 23, 2007 Commercial Appeal, the Southeast Community Development Corporation is facing over 300 active foreclosures in the 38125 zip code--along with a myriad of other issues affecting its neighborhoods. In response, the Southeast CDC is providing credit counseling and looking into creating a nonprofit mortgage brokerage. RISE Foundation and former Orange Mound CDC executive director Roshun Austin (now at Homecoming Financial, LLC) are also working to educate consumers on the dangers of predatory lending and to provide financial counseling to help homeowners stay in their houses.
Unfortunately, responding to foreclosures resulting from predatory lending is taking scarce resources away from nonprofit and community leaders who were already struggling to overcome a host of urban decay issues. This should not be their battle to fight alone. If economists are correct, the housing market is ill-prepared to correct this transgression. While federal and state officials argue over who is to blame, they need to make sure that funding is available to specifically address housing foreclosures.
Note: Check out David Gest's commentary, Physical Effects of the Declining Housing Market over at Planetizen.com, for an excellent summary of this issue at the national level.
Tuesday, March 20, 2007
Urban Economics Potpourri
Tim Harford's recent article on Slate.com, The Renter's Manifesto: Why home ownership causes unemployment, is probably the most interesting thing I've read in the past few weeks. For an urban economist, it's got it all: globalization, economic restructuring, the importance of proximity in the face of technological advance, urban migration patters, and a quirky little theory about the economics of cities.
Monday, March 05, 2007
When in Rome, what?
http://www.palmbeachpost.com/politics/content/state/epaper/2007/03/04/m1a_TAX_REVOLT_0304.html
Over the past few months there has been talk of an impending tax revolt in the Orange State over rising property taxes. In the upcoming legislative session, an effort to “equalize” the tax burden is being led by House Speaker Marco Rubio who is starting to feel the heat from his retired constituents. In his plan, he’s seeking to repeal the property tax and replace it with a 2.5% increase in the state sales tax, bringing the total state sales tax rate to 8.5%. According to his logic, a consumption tax is fairer because "[it] means you decide how much taxes you're going to pay". After studying how the burdens of various taxes are distributed, this argument doesn’t seem to make much sense. After plugging a few numbers into Excel from the 2004 Tax Rates and Tax Burdens study, there’s definitely some “fuzzy” math going on behind the scenes in Florida. Just comparing the percentage of income for a hypothetical family of four, the regressivity of a sales tax is more than obvious.
| Property tax % of income | Sales tax % of income | |
| $50,000 | 1.76% | 1.72% |
| $75,000 | 2.43% | 1.72% |
| $100,000 | 2.57% | 1.63% |
| $150,000 | 2.72% | 1.55% |
An additional problem with Rubio’s plan is that it ignores the additional burden that’s going to be placed on the lower socioeconomic households who typically don’t own a home. While it’s true that property taxes are eventually passed along to renters, the burden of the tax is already known to them on the front end when they see the rent in the lease. By trading the property tax for an increase in the sales tax, the state would be asking families in lower economic brackets to pay an unfair amount of the cost to run the government.
Civil libertarians are trumpeting this as a potential victory for individual freedom, but where is the line between personal liberty and moral obligation, and whose job is it to be looking out for those who aren’t represented by the nation’s largest political lobby group?
Here's a link to the story: http://www.palmbeachpost.com/politics/content/state/epaper/2007/03/04/m1a_TAX_REVOLT_0304.html
Wednesday, February 28, 2007
Whoops! My Bad.
On February 27th, 2007, United States Congressman Steve Cohen introduced a bill that called for an official apology for slavery and the Jim Crow laws.
No one can deny that the institution of slavery and the subsequent Jim Crow laws helped to create the social, economic, and political environment of the country, particularly with respect to the conditions of African-Americans.
But really, what good will an apology do? Will it have an impact of the future of the African-American community? Is it intended to provide closure to those who have felt the repercussions of these institutions and practices? I would say not. Instead, it is just an excuse to clear the federal government from its unappealing past. This is a passive response that does not address the current situations, just the past. Cohen did mention that the affects of slavery and Jim Crow laws are "still lingering." Well, why not address these lingering effects instead? The federal government should stop trying to find ways to pat themselves on the back and instead explore opportunities to enhance the welfare of the African-American community. Racial segregation and discrimination have led to inequities across the board: housing, education, economic opportunity, public service allocation, access to resources, etc. If the United States government wants to apologize for their past, don't just say "Oh yeah, about that whole slavery/discrimination thing... sorry about that. My bad." It's time to look forward and find ways to alleviate these gross inequities and ensure opportunity and access to those still feeling these lingering effects.
Bottom line: actions speak louder than words... but that won't stop the United States government from ensuring that this self-indulgent flatulence will be heard around the world.
No one can deny that the institution of slavery and the subsequent Jim Crow laws helped to create the social, economic, and political environment of the country, particularly with respect to the conditions of African-Americans.
But really, what good will an apology do? Will it have an impact of the future of the African-American community? Is it intended to provide closure to those who have felt the repercussions of these institutions and practices? I would say not. Instead, it is just an excuse to clear the federal government from its unappealing past. This is a passive response that does not address the current situations, just the past. Cohen did mention that the affects of slavery and Jim Crow laws are "still lingering." Well, why not address these lingering effects instead? The federal government should stop trying to find ways to pat themselves on the back and instead explore opportunities to enhance the welfare of the African-American community. Racial segregation and discrimination have led to inequities across the board: housing, education, economic opportunity, public service allocation, access to resources, etc. If the United States government wants to apologize for their past, don't just say "Oh yeah, about that whole slavery/discrimination thing... sorry about that. My bad." It's time to look forward and find ways to alleviate these gross inequities and ensure opportunity and access to those still feeling these lingering effects.
Bottom line: actions speak louder than words... but that won't stop the United States government from ensuring that this self-indulgent flatulence will be heard around the world.
Tuesday, February 27, 2007
The "Field of Dreams" Theory
According to a report on Morning Addition (http://www.npr.org/templates/story/story.php?storyId=7599105) , a controversy is brewing in South Dakota over a proposed highway that would link rural towns in western South Dakota to a NAFTA expressway that will terminate in Denver. The hope is that traffic from the Heartland Expressway (http://www.heartlandexpressway.com/) will spill over and cause development throughout the southwestern portion of the state in what many people are labeling a “Field of Dreams” theory. The plan would cost an estimated $90 million and would bring a major 4-lane expressway to areas that are currently inhabited by mostly cattle and grass. While the effects that interstate expansion can have on development patterns have been largely affirmed since the first interstates opened up in the 1950’s, the sustainability of this type growth has proven to be nonexistent. Politicians seem quite adept at handing out band aids for bullet wounds, using short term, two-dimensional approaches to remedy problems whose roots spread across generations and draw from several different societal issues. It’s true that building a major highway will create a number of new jobs, and it’s also probably true that it will open up a corridor for new growth, but these benefits will probably only last for one or two generations. Hot Springs, South Dakota is facing the same problem that many small towns across the nation deal with, declining population and stagnating economies. The nature of the national economy is changing, and has been changing for well over a decade, and it is within this context that small towns should begin to formulate their solutions. We are finding that the nature of work is shifting, and location is becoming less of a consideration for many businesses, take India or China for example. These towns, it seems, should begin looking at how they can create an infrastructure that will be supportive of the future of business, instead of trying to jump on the tail end of a trade agreement.
Thursday, February 15, 2007
Sin Tax: Devil Sticks and Cash Flow
Below is an article that looks at the effects of a Sin Tax. Cigarettes are taxed heavily and are a great source of income for state governments but with recent increase in health awareness, smoking bans and some guilt/shame associated with firing up a square the sales of cigarettes are declining.
Great... This is a good thing right? less smokers mean less health related illness and fewer second hand smoke casualties and less strain on state run/subsidized health care. Despite the positive effects of fewer smokers there is one huge negative... Fewer tax dollars for education and other desperately needed programs.
My take on it is that sin taxes are great. The fact that this article is written is evidence that sin taxes work they discourage a behavior that is harmful to society and the individual and at the same time raise a little money for the state. The fact that tax revenues are decreasing because there are fewer smokers is a positive not a negative all it means is that another sin tax should take its place why not tax development on environmentally sensitive areas or better yet cell phone use in restaurants. In TN Gov. Bredesen is advocating for a higher tax on cigarettes to replace the sales tax on groceries. While there is not much of an argument for Sin Taxes being the primary form of state revenue I'm all for it as a secondary tax.
The article below sums up the debate pretty well so read it if your interested.
http://www.msnbc.msn.com/id/17170991/
Great... This is a good thing right? less smokers mean less health related illness and fewer second hand smoke casualties and less strain on state run/subsidized health care. Despite the positive effects of fewer smokers there is one huge negative... Fewer tax dollars for education and other desperately needed programs.
My take on it is that sin taxes are great. The fact that this article is written is evidence that sin taxes work they discourage a behavior that is harmful to society and the individual and at the same time raise a little money for the state. The fact that tax revenues are decreasing because there are fewer smokers is a positive not a negative all it means is that another sin tax should take its place why not tax development on environmentally sensitive areas or better yet cell phone use in restaurants. In TN Gov. Bredesen is advocating for a higher tax on cigarettes to replace the sales tax on groceries. While there is not much of an argument for Sin Taxes being the primary form of state revenue I'm all for it as a secondary tax.
The article below sums up the debate pretty well so read it if your interested.
http://www.msnbc.msn.com/id/17170991/
Wednesday, February 14, 2007
...and give us all the change in your couch cushions, too!
If you live in Oregon, the state wants to take the money you forgot you had and give it to schools. Not the change in your couch, but the unused balance on the gift card sitting in your junk drawer. Currently, many gift cards expire after three years. A proposed new law would ban those expiration dates and require stores to turn over to the state any money left unused on a gift card for more than three years. That's just nuts!
Don't get me wrong, I like schools -- and I hate gift cards. From an economist's perspective a gift card is a horrible gift. If you don't know what to get your new boss or new mother in-law or new girlfriend, give her cash. (She might call you thoughtless at first, but she'll thank you once you explain it to her.) The giftee will spend a $20 bill wherever she wants, on whatever will give her the greatest utility -- maybe that means a round of drinks, or a bag groceries -- but that $20 Target card is only good for cheap, mass-produced Cherokee chinos or Mossimo jeans and the like. Worse yet, the gift card acts as a short term, interest free loan to the retailer. You give Target $20 today for a gift card in exchange for them giving your girlfriend $20 worth of merchandise in the future. And when she only spends $17.98, that gift card becomes a loan with a negative interest rate! A pretty evil scheme pulled off by greedy and conniving retailers. (And your girlfriend can't be mad at you for railing against the forces of evil, right?)
So I 'm in favor of actions that erode the appeal of the gift card. But if the gift card is bad because it distorts individual spending decisions, clearly this scheme is even worse. Not that I think we should let the retailers keep the unused balanced after three years either. Instead, I say let's just ban the gift card outright. Give people back the ability to maximize their utility through their own decisions -- to spend their money, or their friend's money, however they want. Who knows, that might even include making donations to the schools.
Don't get me wrong, I like schools -- and I hate gift cards. From an economist's perspective a gift card is a horrible gift. If you don't know what to get your new boss or new mother in-law or new girlfriend, give her cash. (She might call you thoughtless at first, but she'll thank you once you explain it to her.) The giftee will spend a $20 bill wherever she wants, on whatever will give her the greatest utility -- maybe that means a round of drinks, or a bag groceries -- but that $20 Target card is only good for cheap, mass-produced Cherokee chinos or Mossimo jeans and the like. Worse yet, the gift card acts as a short term, interest free loan to the retailer. You give Target $20 today for a gift card in exchange for them giving your girlfriend $20 worth of merchandise in the future. And when she only spends $17.98, that gift card becomes a loan with a negative interest rate! A pretty evil scheme pulled off by greedy and conniving retailers. (And your girlfriend can't be mad at you for railing against the forces of evil, right?)
So I 'm in favor of actions that erode the appeal of the gift card. But if the gift card is bad because it distorts individual spending decisions, clearly this scheme is even worse. Not that I think we should let the retailers keep the unused balanced after three years either. Instead, I say let's just ban the gift card outright. Give people back the ability to maximize their utility through their own decisions -- to spend their money, or their friend's money, however they want. Who knows, that might even include making donations to the schools.
Tuesday, February 13, 2007
Decline is the New Growth (?)
In an earlier post, I linked to stories about "shrinking cities" or "smart decline" covered in Governing magazine and USA Today (as posted on Smart City Memphis). The shrinking cities movement seems to be growing, garnering more coverage on last Sunday's Smart City Radio show. Click here to listen to the show, which includes an interview with Youngstown, Ohio Mayor, Jay Williams.
I can see how such a paradigm could be appealing to a lot of people: In my former role as a planner for a city with a declining population, I was often frustrated with the planning profession's seemingly endless focus on dealing with growth. A focus on dealing with decline would be refreshing.
But, I wonder whether a shrinking cities movement really is the next big thing. In fact, I wonder whether the movement really is something new, or just a new package for old ideas. Mostly, I wonder whether shrinking cities strategies (accepting a smaller population as inevitable/irreversible and adjusting accordingly) could work in cities where the real decline has been confined to the central city, while the suburbs have continued to grow. There are many cities that have lost population in recent decades, but almost all of them are surrounding by growing suburban counties. Youngstown is in rare company as a city who's broader metropoliation area experieneced overall population loss between 1990 and 2000. (Of the 280 MSAs, only 24 lost population between 1990 and 2000.) Can a struggling city surrounding by more vibrant counties really adopt a strategy of accepting it's populaiton decline, or are these strategies only appropriate for Youngstown and the 23 other shrinking MSAs?
By the way, for an international perspective on shrinking cities, check out www.shrinkingcities.com. Interesting stuff. This is a project of the Federal Cultural Foundation, the Leipzig Gallery of Contemporary Art, the Bauhaus Dessau Foundation, and the magazine archplus. It's very German.
I can see how such a paradigm could be appealing to a lot of people: In my former role as a planner for a city with a declining population, I was often frustrated with the planning profession's seemingly endless focus on dealing with growth. A focus on dealing with decline would be refreshing.
But, I wonder whether a shrinking cities movement really is the next big thing. In fact, I wonder whether the movement really is something new, or just a new package for old ideas. Mostly, I wonder whether shrinking cities strategies (accepting a smaller population as inevitable/irreversible and adjusting accordingly) could work in cities where the real decline has been confined to the central city, while the suburbs have continued to grow. There are many cities that have lost population in recent decades, but almost all of them are surrounding by growing suburban counties. Youngstown is in rare company as a city who's broader metropoliation area experieneced overall population loss between 1990 and 2000. (Of the 280 MSAs, only 24 lost population between 1990 and 2000.) Can a struggling city surrounding by more vibrant counties really adopt a strategy of accepting it's populaiton decline, or are these strategies only appropriate for Youngstown and the 23 other shrinking MSAs?
By the way, for an international perspective on shrinking cities, check out www.shrinkingcities.com. Interesting stuff. This is a project of the Federal Cultural Foundation, the Leipzig Gallery of Contemporary Art, the Bauhaus Dessau Foundation, and the magazine archplus. It's very German.
Monday, January 29, 2007
On Liberty
Hunter introduced an interesting issue in his previous post. My thoughts on the subject are too long for a typical "comment," so I'll share them here.
As many of you know, I’ve spent a good amount of time studying and researching municipal investment in sports facilities. I tend to be less skeptical of stadium subsidies than most academics who study the issue; in part because I’m a sports fan, and in part because I believe that sports teams can produce some community benefits (mostly the intangible quality of life kind). That being said, I’m having a hard time finding the merit in the idea of building a new Liberty Bowl.
Generally, the findings of empirical research on the subject can be summarized in three words: not worth it. Most of this research has focused on the ability of professional sports facilities to serve as economic catalysts. A slew of studies that compare cities with new stadiums to those without, or examine the economic performance of cities before and after they build a new stadium, have shown that sports facilities have little or no effect on local jobs or income levels. There are several reasons for this, but the main one is that sports venues do not bring much in the way of “new money” to the local economy. While a lot of money changes hands at a sporting event, the vast majority of the wallets in the stadium belong to local residents. A sports venue gives these resident another leisure option, but it does not increase their leisure budget, which means that most of the spending that occurs at the game is substituting for spending that would have occurred elsewhere in the local economy in the absence of the sporting event (the movie theatre, the bowling alley, etc.).
For these reasons and others, I’m glad to see that, so far, the Liberty Bowl rebuild/repair debate has been addressed as a quality of life issue, not an economic development one. But in the case for new Liberty Bowl, the quality of life argument doesn’t seem to hold much weight either. Compare the development of a new Liberty Bowl to that of the FedEx forum. The Forum was a requirement for luring an NBA team to Memphis. The simple fact that Memphis is home to an NBA team improves the welfare of some residents – it makes them happier and better off than they were without the Forum. Even if they don’t attend a single game at the Forum, fans might enjoy reading about the home team in the paper, listening to sports talk radio, and discussing draft picks around the water cooler. Even non-fans benefit if they feel that having an NBA team is good for the city’s image or civic pride. (In economic terms, then, sports teams create positive externalities and possess the characteristics of a public good.) These public consumption benefits are worth something, and are not captured by ticket prices.
So, to some extent, I buy the quality of life argument for the FedEx forum investment. By contrast, a replacement Liberty Bowl would not bring anything new to the city of Memphis. And there is certainly no concern that the city is going to lose the main user of the current facility; it’s not like the Memphis Tigers are threatening to move to Little Rock. (A new stadium might help the U of M with recruiting, and a team that wins more could increase the welfare of some Memphians, but I think the magnitude of such benefits would be quite small in comparison to the cost of a new stadium.) Factor in recent reports that the organizer of the Southern Heritage Classic seems quite content with the current facility, and building a new Liberty Bowl seems even more frivolous.
A couple of years ago I conducted a study to project the potential quality of life benefits that would be associated with attracting a Major League Baseball team to Portland. The analysis was based on a survey that asked residents about their willingness to support a referendum for increased taxes of various levels to fund construction of a required stadium. In that survey, 85 percent of respondents somewhat or strongly agreed with the statement, “Portland has more pressing social issues that should be addressed before public money is spent on a sports stadium.” My analysis showed that this belief had a large and significant negative impact of the tax level that respondents were willing to support. The results of the Portland survey are not transferable to the Memphis population, but I think it’s safe to say that if there are more pressing social issues than professional baseball in Portland, there are more pressing social issues than college football in Memphis. Perhaps my feelings will change when (if?) detailed building and financing plans are unveiled, but for now I believe that allocating significant time and resources to this project sends the wrong message.
As many of you know, I’ve spent a good amount of time studying and researching municipal investment in sports facilities. I tend to be less skeptical of stadium subsidies than most academics who study the issue; in part because I’m a sports fan, and in part because I believe that sports teams can produce some community benefits (mostly the intangible quality of life kind). That being said, I’m having a hard time finding the merit in the idea of building a new Liberty Bowl.
Generally, the findings of empirical research on the subject can be summarized in three words: not worth it. Most of this research has focused on the ability of professional sports facilities to serve as economic catalysts. A slew of studies that compare cities with new stadiums to those without, or examine the economic performance of cities before and after they build a new stadium, have shown that sports facilities have little or no effect on local jobs or income levels. There are several reasons for this, but the main one is that sports venues do not bring much in the way of “new money” to the local economy. While a lot of money changes hands at a sporting event, the vast majority of the wallets in the stadium belong to local residents. A sports venue gives these resident another leisure option, but it does not increase their leisure budget, which means that most of the spending that occurs at the game is substituting for spending that would have occurred elsewhere in the local economy in the absence of the sporting event (the movie theatre, the bowling alley, etc.).
For these reasons and others, I’m glad to see that, so far, the Liberty Bowl rebuild/repair debate has been addressed as a quality of life issue, not an economic development one. But in the case for new Liberty Bowl, the quality of life argument doesn’t seem to hold much weight either. Compare the development of a new Liberty Bowl to that of the FedEx forum. The Forum was a requirement for luring an NBA team to Memphis. The simple fact that Memphis is home to an NBA team improves the welfare of some residents – it makes them happier and better off than they were without the Forum. Even if they don’t attend a single game at the Forum, fans might enjoy reading about the home team in the paper, listening to sports talk radio, and discussing draft picks around the water cooler. Even non-fans benefit if they feel that having an NBA team is good for the city’s image or civic pride. (In economic terms, then, sports teams create positive externalities and possess the characteristics of a public good.) These public consumption benefits are worth something, and are not captured by ticket prices.
So, to some extent, I buy the quality of life argument for the FedEx forum investment. By contrast, a replacement Liberty Bowl would not bring anything new to the city of Memphis. And there is certainly no concern that the city is going to lose the main user of the current facility; it’s not like the Memphis Tigers are threatening to move to Little Rock. (A new stadium might help the U of M with recruiting, and a team that wins more could increase the welfare of some Memphians, but I think the magnitude of such benefits would be quite small in comparison to the cost of a new stadium.) Factor in recent reports that the organizer of the Southern Heritage Classic seems quite content with the current facility, and building a new Liberty Bowl seems even more frivolous.
A couple of years ago I conducted a study to project the potential quality of life benefits that would be associated with attracting a Major League Baseball team to Portland. The analysis was based on a survey that asked residents about their willingness to support a referendum for increased taxes of various levels to fund construction of a required stadium. In that survey, 85 percent of respondents somewhat or strongly agreed with the statement, “Portland has more pressing social issues that should be addressed before public money is spent on a sports stadium.” My analysis showed that this belief had a large and significant negative impact of the tax level that respondents were willing to support. The results of the Portland survey are not transferable to the Memphis population, but I think it’s safe to say that if there are more pressing social issues than professional baseball in Portland, there are more pressing social issues than college football in Memphis. Perhaps my feelings will change when (if?) detailed building and financing plans are unveiled, but for now I believe that allocating significant time and resources to this project sends the wrong message.
Tuesday, January 23, 2007
Quick fix or new stadium: Can we afford either?
This post will concern itself with the City of Memphis' (Mayor Willie Herenton) call for a new stadium to replace the Liberty Bowl Memorial stadium which was originally built as Memphis Memorial Stadium in 1965 for $3 million. According to recent reports, the Liberty Bowl is in violation of the Americans with Disabilities Act and has been reported to cost $50 million to become within compliance. The other suggestion has been put forth to replace the aging stadium with a new state-of-the-art stadium to the tune of over $200+ million. I have a few questions regarding this proposal/suggestion as put forth by our mayor. First, and no offense intended to anyone with disabilities, but I cannot fathom that it should cost the estimated/reported amount of $50 million to provide adequate compliance with the Americans with Disabilities Act. How do you justify that amount? Persons with disabilities should and do have the right not to be impeded from attending a stadium event due to their handicap. I would like to see the itemization list for the purported cost of $50 million. Secondly, if a new stadium were to be built, how would it be paid for and how would it be used to maximize its costs versus benefits. The FedEx Forum, which is an incredible facility, has had it share of problems when dealing with the overall cost of the project and not following federal guidelines, which has cost the city a few million dollars. One suggestion would revolve around corporate naming rights. However, to attract a suitable corporate sponsor, it might be prudent to think outside the box. For example, instead of having the naming rights for a 20-year contract, if the corporation put up a sizeable amount of the overall projected costs, then the naming rights would be granted for as long as the stadium is standing (i.e. 30, 40 or 50 years). Also, the stadium could be used for more activities to maximize its profit potential. The University of Memphis Tigers football program is the largest user of the facility and could stand to maximum its ticket sales if it were to schedule teams that typically draw large crowds (i.e. University of Tennessee, Ole Miss, etc.). Also the annual Tennessee State versus Jackson State football game (which typically draws a large crowd) would continue to contribute to the stadium's success. The city could use the stadium to host high school football and soccer playoffs. Also, the city could host an abundance of other activities such as an annual track and field event for high schools &/or colleges. The stadium could play host to more larger crowds of concert veterans such as The Rolling Stones or U2 or other bands that could bring the crowd potential. The stadium could host soccer tournaments much like the 70s were host to the NASL Memphis Rogues professional outdoor soccer team. I went to many of their games and loved it! The stadium could host outdoor X-Games (such as motocross or BMX) or truck and tractor pulls, you know GraveDigger and Bigfoot. I see the biggest beneficiaries of a new stadium being the University of Memphis football program, since they are the main users of the current stadium and stand to improve theie recruiting by offering a state-of-the-art facility to practice and play in, much like the FedEx Forum has done for the University of Memphis' basketball team. Could the immense cost of a new stadium be a curse or a cure for a city that is very sportsminded but not likely to support another stadium while two sit empty and one is still a way off from being paid off. The debate will rage on. More to come.....
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