Megaregions and Memphis' position in the future

The lifecycle of the urbanized world has followed a certain pattern the world over. First came the city, followed by the suburbs, which then transformed into the metropolitan region. As these metropolitan areas expand, their edges meet the edges of other metropolitan areas to eventually form a Megaregion. Megaregions are vast areas that encompass many metropolitan areas and often cross state and possibly national boundaries.

In early 2007, the Policy Research Institute for the Region and the Regional Plan Association brought together experts in urban planning, housing, and economics to think about the implications of the Megaregion. This group identified 10 megaregions that will emerge in the near future. The map below outlines the 10 regions:



Much like cities, each region has its own unique personality. The table below identifies some characteristics of each megaregion:



Below is a summary of each megaregion and their export industries:

• Northeast – the human capital-intensive sectors of finance and business services and the more traditional sector of wholesale trade
• Northern California – similar to the Northeast; finance and insurance and professional services; agglomeration of technology producers
• Cascadia- information producer
• Midwest – manufacturing; some degree of business services
• Texas Triangle – manufacturing; energy sector; some degree of business services
• Southern California – manufacturing; some degree of business services
• Piedmont – manufacturing; some degree of business services
• Arizona Sun Corridor - manufacturing; some degree of business services
• Southern Florida – health care and social assistance; some degree of business services
• Gulf Coast – health care and social assistance; some manufacturing; the most economically troubled

The study of megaregions is important because this new worldview may change the way control is distributed. How should control be distributed across the following policies?

· Economic Development
· Education
· Transportation
· Housing

So what becomes of our lovely city of Memphis, Tennessee that is left out of the megaregions of tomorrow? Do we just become a distribution hub where packages and people travel on their way to a “real” city? Will Memphis become a city full of low-wage distribution jobs and blues musicians? In a world of megaregions, should Memphis focus on being a niche player? If so, what is our niche? These are questions that we must answer or we will have to answer to the consequences.

SOURCE: The Economic Geography of Megaregions http://www.princeton.edu/prior/publicatons/docs/megaregions.pdf

Creating a Memphis Brand

Using Memphis-themed artwork to create a sense of place

The Memphis metropolitan area lags behind peer cities in several key benchmarks of administrative and economic development concern: population growth, job growth, and educational attainment of citizens. Economic development efforts often focus on luring manufacturing jobs through infrastructure improvements and tax incentives and the Memphis area has had mild success in that regard. Other local efforts have focused on physical structural improvements through the development of libraries, convention centers, arenas, stadiums, and museums, and again, Memphis has arguably reaped the benefits of these investments. However, quality of life concerns tend to be more of a political issue than an economic development tool and this has hindered Memphis’s growth opportunities, reduced the return on its infrastructure and capital investments, and made the metropolitan area less competitive than peer cities like Nashville, Austin, and Jacksonville.

A good quality of life is integral to attracting and maintaining a qualified and vibrant workforce, which in turn invites potential employers and stimulates the economy. It also encourages homegrown talent and intellect to remain in Memphis and invest themselves locally. Memphis’s efforts at capitalizing on its cultural, physical, geographical, and historical uniqueness to improve residents’ quality of life have been underwhelming at best and nonexistent at worst. Memphis is a unique city in many ways, but it is not unique in the fact that it must adapt itself to attract economic development by promoting a quality place talented individuals desire. Clearly the failure of manufacturing cities like Detroit, Cleveland, and St. Louis – cities not too unlike Memphis – should be a harbinger of things to come if Memphis does not seriously consider its duty to encourage, attract, and retain talent through investments aimed at enhancing the area’s quality of life.

A globally competitive city does three things: they protect their glowing reputation, they differentiate themselves, and they meet the needs of their citizens (Pooley 2005). Toronto, Ontario understands that formula by investing directly and indirectly in cultural activities that both differentiates the city and helps meet the needs of their citizens. Investing in public space artwork, public amenities, and cultural and creative outlets, they see a $3.20 return in economic activity for each $1 invested (Pooley 2005). Cultural investments that acknowledge and respect the culture of the city become investments by the residents. “Cities have the capability of providing something for everybody only because, and only when, they are created by everybody,” (Curtis 2006). This inclusive approach involves members of the community creating the streets and neighborhoods of their city to mirror themselves, their values, and their culture. Many cities have undertaken projects to make their streetscapes “more enticing, thereby adding to the quality of hidden places,” because they understand that attractive streets strengthen the neighborhoods they connect, and a city’s neighborhoods are the defining units of that city (Curtis 2006).

What would be useful, therefore, is a way to create public art that improves the streetscape, strengthens the neighborhoods around it, and creates a city “brand” for Memphis. Many existing city-owned facets of public life are prime candidates for works of public art. University of Memphis art students, alumni, and other area artists could easily be commissioned to develop artwork, murals, or sculptures that reflect the Memphis culture and adhere to a theme reflecting something unique about the city. This art would then be placed at noticeable and heavily trafficked locations, both public and private, and would communicate to passersby that Memphis is a unique place that is different from other cities, knows itself, is proud of itself, and has something to offer everyone. Many other cities already have a similar program in place - Anchorage, Alaska dots its downtown with grizzly bear sculptures; New Orleans, Louisiana uses the fleur de lis symbol; and Omaha, Nebraska (naturally!) uses "O!" to represent its tagline, "O! So Surprising". Each city gives its artists creative license to develop the sculpture, but still remain true to the overall desired theme.

Anything Memphis can do to create a unique and viable brand that is not a cotton boll, a riverboat, or Elvis would be arguably useful in creating a place that talented people and employers want to be. And anything Memphis can do to strengthen its neighborhoods, aesthetically improve its streetscapes, and help residents have a reason to be proud of Memphis is something all city leaders should aspire to.

An alternative explanation for the decline in crime in the 1990s

Many theories have been posited to explain the steep decline in crime in the 1990s. Theories have ranged from innovative policing to an aging population to a strong economy to tougher gun control laws. I would like to add an alternative theory to the mounds of research on crime. My theory is that the steep decrease in crime can be attributed to the decline of concentration of poverty.

Poverty became more and more concentrated in inner city neighborhoods in the late 1960s through the 1980s. This trend directly correlates with the rise in violent crime in the US. Before that, the poor often resided in the back alleys and the side streets of the rich or in the many rural farms through the American countryside. Then after World War II, the federal government began putting low-income people into urban high-rise public housing complexes and encouraged suburbanization through federal assistance to highway construction. This coupled with the move of employment from central cities to the suburbs and general racial division in American culture, created an inner city of high poverty, high crime, and an overall deterioration of the central city.

In the 1990s this trend began to reverse. The Brookings Institute explored this issue in the paper “Stunning Progress, Hidden Problems: The Dramatic Decline of Concentrated Poverty in the 1990s.” The number of people living in high-poverty neighborhoods (HPV) – where the poverty rate is 40 percent of higher – declined by a dramatic 24 percent, or 2.5 million people in the 1990s.

The social costs of concentrated poverty are well documented. Researchers at the Joint Center for Housing Studies at Harvard University devoted a 68 page papers on the costs of concentrated poverty in the paper: “The Social Costs of Concentrated Poverty: Externalities to Neighboring Households and Property Owners and the Dynamics of Decline”. Their research showed that residents in high poverty areas suffered from poorer health, lower levels of academic achievement, fewer employment opportunities, heightened vulnerability to gang recruitment, and greater exposure to violence relative to other comparable people living in more advantaged neighborhoods.

Some may argue that this theory is not sufficient because the rate of change in the concentration of poverty did not linearly follow the rate of change in the decline of poverty. I would argue that the reason behind this is that there is not a linear relationship between these two elements but an exponential relationship. Much like the images of Bill Gates and Warren Buffet are enough to keep the middle class in a structured and motivated existence, the image of residents in poor neighborhoods being able to improve their conditions is enough to motivate the poor to want to participate in the mainstream economy. So the residents that move out are less likely to commit crime because their position in society has increased and the residents still in the neighborhood are less likely to commit crimes because they see hope through the progress of their neighbors.

While this theory is at this stage just that- a theory, I believe that it is one worth exploring. I certainly find it more credible than the controversial and unproven theory of Steven Levitt (author of Freakonomics) that relates crime to unwanted pregnancies. Whether one agrees or disagrees, there is certainly enough research out that proves that concentrated poverty is not good for either the residents of these neighborhoods or society in general.

Are You a MetroNational?

Brookings Institution’s Metropolitan Policy Program recently unveiled its Blueprint for American Prosperity, an initiative that seeks to insure America's global economic success by capitalizing upon resources inherent in its metropolitan areas through a more responsive and strategic federal government role. Brookings argues that in the 21st century's global economy, metropolitan areas are our best source of innovation, knowledge creation and other drivers of economic success. America is fast becoming a "MetroNation" and the federal government must reconfigure its role to support and encourage the success of our metropolitan areas.

MetroNation: How U.S. Metropolitan Areas Fuel American Prosperity describes America's metropolitan areas as holding 65% of the nation's population, 68% of its jobs, 78% of its patent activity--a measure of innovation, 75% of its graduate degreed workforce and generating 75% of the U.S. GDP (MetroNation, 7). They host and encourage "agglomeration economies...that enhance productive growth" and "foster the quality places...that by virtue of their density and diversity help speed the acquisition of human capital and contribute to resource-efficient sustainable growth" (MetroNation, 7). These attributes are key drivers in a global economy because they facilitate the sharing of information and tacit knowledge, encourage innovation and knowledge spillovers, grow human capital and maximize our investments in infrastructure (MetroNation, 36-44).

Although our metropolitan areas hold the keys to American prosperity, they are increasingly threatened by changes resulting from global competition, a widening income gap in the U.S. labor market, shifting demographic trends and increasing environmental and natural resource pressures. MetroNation argues that America's ability to address these challenges is hindered by a federal government who is out of tune with globalization and whose policies are ill-equipped to facilitate the success of metropolitan areas. The Blueprint Policy Series "will argue for specific reforms in selected areas of federal policy including innovation and economic development, transportation, education, housing, income support, energy and immigration" (MetroNation, 47).

Brookings' Blueprint is clearly an aggressive, well-timed proposal. At a minimum, it should prompt serious conversation on a variety of issues including America's economic competitiveness in a global economy; the urbanization of America and how we respond to both the challenges and the opportunities that it presents; and the changing demographics of our nation. It drags the issue of increasing globalization out of the corporate halls and ivory towers and onto America’s doorstep where it is joined with local urban issues that our cities face. If nothing else, it reminds us that while our cities emphasize place-based, supply-side approaches to local economic development and compete against one another to attract human capital, as a nation we are competing in the global marketplace. Should our local and state leadership be forced to address global issues when their focus should be on local issues?

Some will be inclined to dismiss it as another attempt by a liberal institution to expand the role of the federal government. But is this really the case? Brookings notes that "nine federal departments and five independent agencies collectively carry out 180 disparate federal economic development programs" (MetroNation, 54). The problem is that the federal government is not responsive to the dual demands of metropolitan areas and global competition, and it is not strategic in its application of policy and resources.

Oddly enough, there appears to be little reaction to Brookings' Blueprint. Neal Peirce of The Washington Post Writers Group and The Citistates Group was naturally inclined to support the Brookings Initiative; however, he did question whether or not our federal government is capable of "flipping the pyramid" and effectively challenging and responding to U.S. metropolitan areas. To do so would require a federal government that is innovative and responsive to change, concepts that seem to be quite foreign to our current federal government.

Greening the Economy

Earlier this week the Commercial Appeal had an article about growth of "green collar" workers. These people are working in new fields that have just been developed with jobs in bio-fuel development, energy-efficient buildings, renewable power and repairing energy-efficient cars.

The green economy is described as a $341 billion industry which creates 5.3 million jobs, according to a 2006 study by Management Information Systems Inc. Earlier this fall, Washington D. C. Mayor Adrian Fenty announced the launch of a green-jobs initiative through the development of renewable-energy solutions and of green buildings. D.C. has can see that the economy is in transition with rising energy costs and demand for a greener economy is coming.

Many cities throughout the country are recognizing this green trend and developing incentives to encourage green buildings which in turn can develop and support green industry in cities. Incentives for green building include expedited permit review and reduced permit fees, tax incentives and property tax abatements for Leadership in Energy and Environmental Design (LEED) buildings, tax credits for green built affordable housing, and density bonuses among others.

Sustainable construction is one of the fastest-growing segments of the commercial building industry. The annual market for green building products and services is estimated to be $12 billion in 2007 according to the U.S. Green Building Council. Green building is defined as “design and construction practices that meet specified standards, resolving much of the negative impacts of buildings on their occupants and on the environment.” The LEED Green Building Rating System is the widely accepted standard for the design and performance of green buildings. Levels of voluntary LEED certification are based on the number of points awarded to a building project. Points are based on standards in six areas: site planning, water efficiency, energy and atmosphere, material use, indoor environmental quality, and innovation and design process.

Mayors around the country are advancing bold visions for making their cities more environmentally sustainable through strategies to reduce greenhouse gas emissions, manage water and energy resources and create more livable communities. Ensuring new and existing buildings are healthy and efficient should be a key strategy for any green city. Governments at all levels see many long-term cost savings in sustainable building technologies as major property owners with large capital and maintenance budgets. 46 percent of LEED-certified projects in the U.S. are owned by federal, state, and local governments and 681 mayors have signed the U.S. Mayors Climate Protection Agreement which pledges that their city will meet or beat the U.S. target of the Kyoto Treaty to reduce greenhouse gas emissions to 7 percent below 1990 levels by 2012.

The economic and environmental goals of cities can be met through an environmental sustainable agenda that concentrates on attracting and developing the green economic sector. The green economic sector includes all businesses that provide environmental goods and services such as alternative sources of energy and pollution prevention technology. This burgeoning sector offers opportunities for revenue generation and job growth within the city.

Unlike traditional forms of economic development, green economic development, if practiced equitably, is uniquely positioned to present solutions for some of the conditions that disproportionately impact low-income communities: environmental degradation, lack of quality jobs, and economic decline. Equitable green economic development offers the potential for living-wage jobs in non-polluting industries that provide a clear career ladder for low-income residents.

Are green collar jobs the future? Should Memphis be investing in this new industry rather than trying to recruit manufacturing and distribution jobs that may require little education or skill? With rising energy costs and growing environmental awareness it should be interesting to see whether green incentives will be the new economic development tool used by cities.

The Problem in Omaha

Rosenblatt Stadium - the home of the College World Series

Omaha, of course, has been the annual host of the College World Series since 1950. Johnny Rosenblatt Stadium, 5 miles south of downtown Omaha, is the country's largest minor league baseball stadium. It seats 23,145 and for 57 years has been the site of the annual College World Series. The Omaha Royals (triple-A affiliate of the Kansas City Royals) and Creighton University also use the facility. The city of Omaha is responsible for maintaining and upgrading the stadium and in 2001 alone, spent more than $7 million in repairs.

But more than $25 million in repairs are needed because of the aging of the structure and because of the changing needs of the CWS for a larger concessions area, more parking, newer locker rooms, concourses with views of the field, closer hotels, and alcohol-free zones. The city, hostile to the idea of pouring more money into Rosenblatt, has floated the idea of an entirely new stadium for $50 million, in exchange for a 10-year contract with the College World Series, Inc. in lieu of the traditional 5-year one. The new stadium would be build adjacent to the Qwest Center and Creighton University in downtown Omaha. It would be close to the amenities of downtown and have 9,000 permanent seats (all that's needed for the Royals and Creighton), but have 14,000 expandable seats for a capacity of 25,000 for the annual College World Series. Currently, Rosenblatt is mostly empty at Royals and Creighton games because of the massive size of the stadium.

The entire concept of a new stadium - and leaving Rosenblatt - has stirred a lot of criticism and served as the impetus for the creation of grass roots efforts aimed at preventing efforts to move the site downtown. A new non-profit entitled Save Rosenblatt has sprung up with the motto "Improve it, don't remove it". Former players and coaches from all over the country have been particularly vocal against a new stadium and Kevin Costner, a regular at CWS games, has even joined the fray by shooting TV commercials and giving vocal support for saving Rosenblatt. And many Omahans who do not feel a vital emotional connection to the history of Rosenblatt also oppose the cost of a new stadium because of already-high property, wheel, and income taxes.

But on the other hand...

But other locals and Mayor Fahey and the City Council are concerned that if expensive upgrades aren't made, the CWS will leave Omaha altogether, and take their money and $35 million economic impact with them [here is a podcast of Mayor Fahey discussing the options]. The experience of Kansas City several years ago is fresh on city leader's minds. It served as the headquarters for the CWS, but after failing to offer fiscally attractive options, the CWS moved its headquarters to Indianapolis.

The CWS is in agreement that a new stadium may be in its best interests, but has committed no money for its construction. Additionally, the city's contract to host the CWS expires in 2010, and rumors are floating that Indianapolis will also make a bid to host the series (however, Omaha gets first options at proposing any new contract).

So Omaha is left with 2 sticky options:

1). Save Rosenblatt and risk losing the CWS and it's annual $35 million economic impact

2). Build a new stadium and pay for it, but keep the CWS

The city absolutely cannot afford to maintain two stadiums, so if a new stadium is built, Rosenblatt will be bulldozed and the site sold to the Henry Doorly Zoo to pay off bonds for a new stadium. The cost for a new stadium, however, is projected to exceed the $50 million pricetag originally proposed by the city, and funding for it almost certainly cannot come from increased taxes.

What does Omaha do? Spend a ridiculous amount of money rehabbing an old facility and risk losing the CWS, with empty seats for the Royals and Creighton? Or build a new one, lose the memories and sentimentality from Rosenblatt, and dance on a political landmine with possible tax increases or failure to fund other projects?

Conservation in the Cumberland Plateau

Over 127,000 acres of the northern Cumberland Plateau in eastern Tennessee entered into conservation status last week when Tennessee Governor Phil Bredesen signed documents preserving the land for public use. The $135M cost was funded by a public-private partnership between the State of Tennesee ($82M from the State’s surplus revenue fund), the Nature Conservancy ($13M), and Conservation Forestry, LLC and Lyme Timbers companies ($40M). The complex deal includes State-purchased land, as well as the purchase of timber easements that allow the State to enforce sustainable forest management practices, conservation easements purchased by the Nature Conservancy to prevent development of some privately held land, and long-term acquisition plans for other properties. The announcement prompted some thoughts about how might translate to our understanding of cities.

First, innovation is a key element in our ability to address issues, whether it is stimulating economic growth, confronting "wicked" urban problems, or preserving our environment. The Cumberland Plateau's public-private partnership was an innovative first-step in preserving a complex eco-system that neither the State nor the Nature Conservancy could accomplish single-handedly. Do we demand the same level of innovation from the public sector as we seek from the private sector? What are the challenges presented by public-private partnerships and what level of understanding do we have of those challenges?

Second, our perspectives about sustainable urban growth should encompass non-urban areas. While we are conscious of the negative effects of sprawl and pollution, we also have to consider the effects of our urban growth on those areas that provide the resources necessary for growth. Central city revitalization is not just good for the city itself, but it also helps conserve resources and protect environments in other areas. How effectively do we connect urban growth issues to concepts of conservation and preservation of natural resources located far away from urban areas?

Finally, it seems that there is a question of which government entity should be responsible for establishing and managing conservations areas. The public benefits derived from conservation areas cannot be confined to political boundaries such as states; however, as we see in the Cumberland Plateau conservation area, $82 million of state surplus funds were invested in just the initial stages of establishing the conservation areas. Should the federal government have played the role of public partner in this instance?

Conservation, preservation and other elements of sustainability will most likely gain in popularity and importance due to increasing concern for the environment. It seems that urban scholars need to be aware of, and interact with, the non-urban environment through a variety of channels in order to advance their understanding of and ability to develop sustainable urban spaces.

Conflicting Priorities

A Local News headline in this week's Commercial Appeal reports that "Poor kids a school majority only in the South." According to the Southern Education Foundation, a whopping 80% of Memphis' elementary and secondary school students participated in the free or reduced-price lunch program in 2006. The Foundation's report concludes that "unless more is done for this under-served population, the region will face a crisis." This is an apt follow-up to the reality check offered by Mayor Wharton and former Congressman Harold Ford, Jr. in their article "Fixing broken dreams" (Viewpoint section of the October 28, 2007 Commercial Appeal). Here, authors argue that improving school children's futures through education will require a variety of policy changes for school systems that are "built for the Industrial Age". While we hear much using economic development policy to attract single, well-educated, young people, how can an economic development policy for Memphis encourage growth AND respond to tough urban problems such as poverty and substandard education in an effective manner?

In 2001, the Brookings Institution published an interesting article entitled Envisioning a Future Washington, in which authors Carol O'Cleireacian and Alice Rivlin compare two very different approaches to economic development and fiscal stability in Washington D.C.. The first strategy evaluated is the "Adult Strategy" where the District would seek to attract higher-earning singles and couples--think creative class here. In addition to enjoying city living and valuing the diversity of the urban environment, these people would also seek a safe city with good government.

Making the District more attractive for these folks would mean sprucing up some public areas, creating vibrant mixes of commercial and residential, fast-tracking new home construction and revitalizing existing housing and commercial areas. The authors estimate that the in-migration of 50,000 people under the Adult Strategy could produce a net annual increase over operating expenditures of $300 million for the District.

Some anticipated results include the city increasing its ratio of adults to children; experiencing an increase in upper-middle income residents; and probably see an increase in the ratio of Blacks to Whites. Without strong leadership, this strategy could also risk exacerbating race and class tensions, gentrify neighborhoods, push lower-income residents out of the city, and create a population of newcomers that would not stay and fight for "better schools or help for low-income families." Communities in the District would fail unless supported by strong leadership and, most likely, tax deferrals and rent subsidies.

The second strategy is predictably entitled the "Family Strategy." Here, the District seeks to attract middle-income parents with children. Many would be educated and employed in service and knowledge industries such as law enforcement, medical services, universities and government. The authors recommend that the District target distressed neighborhoods for revitalization by encouraging families to move in to these areas. The families would probably live modestly in comparison to the single and coupled adults. They would increase demand for affordable and subsidized housing, and place greater demands on the school system.

The additional requirements would probably strain the District's budget, since the families would generate less tax revenue but require greater investment in the community by the District. The in-migration of families could shrink the middle income gap, lead to greater profitability of neighborhood businesses by increasing demand for local services, stimulate the development of healthy neighborhoods and strong communities, and lead to better educated, more committed citizens who participate in local political processes and stay in District neighborhoods. The authors suggest that District leadership would need to be aware of and manage the effects of neighborhood revitalization on long-term residents of targeted areas.

For O'Cleireacian & Rivlin, the point is that the best economic development strategy recruits both adults and families. This approach would also seem to work well for other cities. Transcience in adults can be moderated by commitment to community from families. An increased fiscal burden on local government resulting from the need for school facilities and housing can be reduced by increased tax revenue from higher-earning single and coupled adults. Race and class tensions can be reduced by introducing diverse middle income families and local consumption economies as well as export-based knowledge economies are encouraged to grow.

Memphis should continue to work to attract those 25-34 year old, single, intelligent members of the creative class. Quite frankly, the city needs their income potential and knowledge-making abilities. However, Memphis should also take appropriate steps to encourage families to return. Memphis’ neighborhoods and children need the stabilizing effects of committed families as badly as they need revenue from single people. Only a comprehensive economic development strategy that acknowledges existing urban issues, suggests multi-faceted responses and demands quality public leadership to manage the policy changes necessary to produce effective results will alter a much too predictable future.

City Budget Surplus, a Bad Thing?

Fair Haven, A small town in Vermont, with 3,000 residents recently discovered that their government has a surplus of close to one million dollars, which amounts to about two-thirds of the annual budget. At first glance, this surplus seems great and it appears that the community is doing well. Many residents, however, are angry about learning about the surplus. They charge the town has mismanaged money or worse overtaxed them. The surplus which has been accruing since 1994 occurred because the town did not spend the full amount allotted for projects such as road paving. Instead of applying the leftover money to the next year’s budget, the town treasurer invested the money in certificates of deposit and bank account and a new budget was created from scratch.


Other cities have budgets that cover the spectrum from healthy to barely staying afloat. In San Francisco they have managed to move from a deficit to having available money for economic development. Toronto's budget problems have lead to a cut in the quality of life and services for residents. Minneapolis has worked to develop a budget that reduces its debt service to provide more money for city services.

It would be interesting to see how many cities have regular surpluses and how many barely operate in the black. What should a budget look like? Low taxes, but low services and barely operating in the black. Higher taxes, good services and managing routine surpluses.

Are cities required to have a reserve fund? If so, does it have to be a certain percentage of their operating income. What is the frequency that cities dip into reserve funds to cover deficits?


Should cities slash services to reduce their deficit or do they make incremental changes and reduce costs to multiple items in their budget. Or worst of all to a resident, raise taxes.

When services are reduced, do cities take into account that lowering the level of services provided may cause people to leave since they do not feel that their tax dollars are being used properly. Budget saving techniques such as not hiring the needed number police officers or not maintaining city parks or even streets do not encourage investment in areas. The people who can and will move to get better services for the tax dollars are the kind of people the city wants to keep. There is much talk about attracting the 25 to 34 years old to cities as an economic development strategy. This can only be successful if there is a good quality of life in the area and amenities like good schools, parks, etc. A city operating in survival mode to reduce its deficit and keep the budget afloat will not be able to attract these young people and the entrepreneurial spirit they bring with them.

With all that said, what kind of state is the City of Memphis budget in?

Central Place Theory...or not

Ghost town in Nebraska sued for taxing farmers

Rock Bluff, Nebraska was a sizeable town 150 years ago. Situated on a bluff overlooking the Missouri River about 30 miles south of Omaha, Rock Bluff was incorporated in 1856, and boasted of three stores, a port, two blacksmith shops, three churches, a post office, more than 100 homes and it's county's first high school.

Town officials, convinced a boom was imminent, annexed thousands of acres into the village's incorporation limits. The boom, though, bypassed Rock Bluff when the railroad bridge across the Missouri River was constructed at Plattsmouth, 10 miles north. By 1910, not much was left of the town. Today, Rock Bluff is no longer listed on a Nebraska map (not even on Mapquest) and consists of corn fields, 12 single family homes, and an old school building called Rock Bluffs School (yes, with an "s"). It has no government, provides no services, nothing indicating it's even a community.

But here's my point. The town (or what's left of it) includes 600 acres of prime farmland that a judge has ruled should be valued and taxed at $1,750 an acre because it's in the "city limits." If it were outside the limits, the value would only be $1,300 per acre, presumably because it's further from any non-existent magnet site. Because Rock Bluff never took official steps to dissolve itself, it legally still exists; therefore the farmers should be paying taxes on $450 additional value per acre -- what adds up to taxes on an additional $270,000 per year. Hence the farmers are suing to "secede" from a city that currently exists only on paper and in history.

But there's another twist. Omaha exurbs are beginning to encroach on this area. A major subdivision of 1,700 people lies one mile away from the city limits and county officials just approved a new project within the incorporation consisting of a campground with 24 R.V. spaces. Officials say thousands of acres are now ripe for development because of suburbanization and the magnetic, panoramic views of the river.

So...the boom is coming, 150 years later. Maybe Rock Bluff should tax those farmers after all.

Aerotropolis: the new Central Business District

The development of urban areas has often been defined by transportation. Ports were the primary determinant of development in the 18^th century. Cities such as New York City developed because of its legacy of the ports. The 19^th century saw the railroad industry develop cities such as Chicago as a world-class city. Cars, trucks, and the massive highway system pushed the suburbs to every major and minor city during the 20^th century. John Kasarda, a professor at the University of North Carolina and an airport consultant, says that the air travel will determine the next major American city in the 21^st century. Kasarda, in The Rise of the Aerotropolis, argues that airports will no longer be a place to transport passengers and cargo, but will become the new central business district composed of shopping, dining, and commercial services of all types.

Access is key for companies attempting to compete in the 21st century. The ability to transport people and cargo quickly is just the competitive advantage corporations need to compete in the speed-driven, global economy.

As the distribution hub of North America, Memphis is in a unique position to establish itself as an aerotropolis. One may assume that this is a far-fetched idea if one takes a drive through the Memphis metropolitan airport area. The main strip of Winchester Road is littered with C-class apartments and mom-and-pop shops. The next major street of Brooks Road is more famous for its strip clubs than for its world-class corporations such as Smith-Nephew.

Despite this, the airports importance to the local economy is unmistakable. According to a study by the Sparks Bureau of Business and Economic Research/Center for Manpower Studies at the University of Memphis, the airport has a $21.7 billion impact on the local economy and one in four jobs are linked to it. Dr. Kasarda called Memphis the lone aerotropolis in the United States with “the world's top air cargo city by a wide margin.”

As an international traveler, I can personally testify to the fact that the aerotropolis is alive and well in many cities around the world; Singapore and Amsterdam are great examples. As a Memphian, I can only hope that my hometown is able to take advantage of this latest trend and make Memphis THE AEROTROPOLIS of North America.

Advantage Memphis?

We’re in good company -- the folks at Smart City Memphis read Ed Glaeser, too. Inspired by his musings in “Urban Colossus” about small advantages that grow through agglomeration economies they posted this question of the week: Knowing that small advantages can become huge economic advantage, what should Memphis be keying on?

I look forward to seeing some comments with your ideas. As for me, I think there’s reason to believe that we must have some small advantage in some subcategory of the broad term “music.” Maybe it’s a combination of musical heritage, music industry infrastructure, musically inspiring urban decay (in a good way?), and general affordability. (That would make a great Chamber of Commerce Slogan.) I’m not sure what the exact advantage is, or how Memphis might capitalize on it, but consider this piece about how Portland has become America’s Indie rock Mecca.

Portlander Taylor Clark shares his thoughts on why a growing number of successful musicians who got their start in other places have chosen to settle in the Rose City. Read it if you have the time, but I’ve tried to distill his theories to four mains reasons here:

1. Indie rockers come to Portland because they want “to live in a place where they could walk like gods among mortals.”
2. For Indie rockers, Portland is a comfortable place to live. It has “laid-back weirdness,” which, in part means “you can venture into public dressed like a convicted sex offender or a homeless person, and no one looks at you askew.” Other related reason include “the people are nice,” “the food is good,” and “creativity is the highest law.”
3. “Housing is affordable, especially compared with Seattle or San Francisco.”
4. Indie rockers love Portland because “the city produces very enthusiastic rock crowds.”

Nothing earth shattering there. Maybe this kind of success needs to happen “organically,” but if it is possible to create it, why not here? Laid back weirdness? Well, we’ve got laid back, and we’ve got weirdness, so why not “laid back weirdness?” Housing is affordable in Portland? No, it’s not. I spent four years there not too long ago. Housing is affordable in Memphis. And we’ve got plenty of mortals for gods to walk among. Better still, here they can walk among mortals along streets that some of their gods walked back in the day. As for the enthusiastic rock crowds, I haven’t been in a real rock crowd since my daughter was born 4 years ago, but I’d imagine Memphis could muster up a mosh pit with the best of them, right?

Going back to my earlier point about the musical inspiration of life in a gritty city, consider this comment on Taylor piece by Slate reader “Anse”:

“I remember Tom Waits once said the reason he preferred to stay in cheap hotels when he was on tour wasn't just because he could save money; lower-class neighborhoods had more stories. Luxury was an obstacle to getting to the root of things.”

Word of the Day (September 11, 2007): Resilience

Intertwined with other more obvious concerns in the aftermath of 9/11 emerged a new set of worries about the future of cities and urban form. Prior to that day, urban planners and economist considered the primary threats to the advantages of proximity that made dense urban concentrations work to be the declining cost of moving goods and people, along with advances in information technology. But discussions of the impact of telecommuting on urban form were suddenly replaced with dialogues about the impact of terrorism.

Many worried that refugee firms displaced by the loss of office space in lower Manhattan would never return from the places they had moved to in New Jersey or Connecticut. Others (including noted urbanist James Howard Kunstler) argued that the lesson of the day was that skyscrapers were inherently dangerous (and unnecessary), or that density itself put people in harm’s way. For safety’s sake, “don’t bunch up,” urged historian Steven Ambrose. “In this age of electronic revolution… it is no longer necessary to pack so many people and office into such small space as lower Manhattan. They can be scattered in neighboring regions and states, where they can work just as efficiently and in far more security.” (For more overt “sprawl as defense” arguments go here or here. For a response go here.) Some worried about the impact of hardening security on the culture of city life. Perhaps surveillance would erode freedoms and encroach on public spaces to the point of stifling the interaction that helps makes cities vibrant.

A feeling emerged, that these new concerns might team up with the effects that had previously been chipping away at the benefits of proximity, exacerbating the diffusion of density and the transformation of urban form. At the time there was broad public discussion of whether cities as we knew them might be doomed.

Before we ever considered whether these fears were founded – before we could sift through the data that emerged in the months and years following the 9/11 attacks that would empirically describe the impacts of terrorism on urban form – we collectively stopped thinking about the issue. Life went on, and after a period of thinking about the impact of 9/11 on everything, we simply stopped.

If you want read about the impact of terror on urban form from an empirical perspective, the best place I’ve found to start is Peter Eisinger’s “The American City in the Age of Terror: A Preliminary Assessment of the Effects of September 11,” from the September 2004 issue of Urban Affairs Review. (You can download it here if you have a U of M user ID.) Eisinger gives a thorough review of academic thought about the future of cities in the period immediately following the attacks. Then, presenting evidence regarding the impact of the attacks on urban government and policy, urban economies, and city life, Eisenger explains why many of our immediate fears were unfounded. Eisinger concludes that “perhaps the biggest lesson so far about cities in the aftermath of the terror attacks is that they are resilient.”

And that is the word of the day: resilient. You can read it in Howard Chernick’s 2005 book Resilient City: The Economic Impact of 9/11. You can read it Lawrence Vale and Thomas Campanella’s The Resilient City: How Modern Cities Recover from Disaster. And you can read it James Harrigan and Philippe Martin’s “Terrorism and the Resilience of Cities,” which appropriately concludes, “the forces that lead to city formation also enable cities to be highly resilient in the face of catastrophes such as terrorist attacks, because they constitute a force for agglomeration that is very difficult to overcome.”

The benefits of proximity prevail, for now.

Will Detroit be reborn?

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.

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:

When complete, the New Town at St. Charles will have sprouted 4,900 residential units and six town and neighborhood centers on 740 acres of land, according to an article from New Urban News. To give credit to DPZ, they've thought of just about everything for this start-from-scratch new suburbanist development: dense layout, commercial/residential mix, open space lining a series of man-made lakes doubling as retention ponds for stormwater runoff.

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.

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.

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.

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.

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.

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

"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

...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.

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.

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