Home Prices Continue Rising

Charts from this morning’s S&P/Case-Shiller Home Price Release. Data available here.

from S&P Dow Jones Indices – HousingViews
http://www.housingviews.com/2016/05/31/home-prices-continue-rising/

Chicago Is the Duck-Billed Platypus of American Cities

“Chicago sunrise 1” by Daniel Schwen – Own work. Licensed under CC BY-SA 4.0

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

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

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

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

Click through to read the whole thing.

from Aaron M. Renn
http://www.urbanophile.com/2016/05/26/chicago-is-the-duck-billed-platypus-of-american-cities/

The Goldilocks Growth Rate

I’m back with another “Ask Aaron Anything” podcast. If you have any questions you’d like me to answer, or topics you would like to see me cover, send them my way, because I want to be looking at the things that are on your minds.

Today a reader asks, what is the maximum growth rate a city can have without running into excessive negatives like congestion or environmental issues? He asked it in the context of Milwaukee. I also respond to a question about which smaller cities – less than 100,000 – are thriving without either being based on tourism/second homes, or having a single large institutional employer like a university. It’s a great question, and I’d love to hear any that you would add. Just post in the comments.

Also, thanks to those of you who left an iTunes podcast rating. If you haven’t already, please click over quickly and leave one, because this helps people to discover the podcast. Thanks.

If the audio player doesn’t display for you, click over to listen on Soundcloud.

Subscribe to podcast via iTunes | Soundcloud.

Featured image photo by Dori CC BY-SA 3.0, which I downloaded from the Wikipedia Milwaukee page.

from Aaron M. Renn
http://www.urbanophile.com/2016/05/25/the-goldilocks-growth-rate/

How Newcastle Went From Post-Industrial Wasteland to Top 10 Global Travel Destination

Creating Cities
by Marcus Westbury

I’ll make it easy for you: buy this book.

Creating Cities is an engaging, well-written overview of the Renew Newcastle effort in Australia that helped turn the moribund downtown of a fading steel city into one of Lonely Planet’s top ten global travel destinations in 2011.

But not only a breezy read and a feel good case study, this book is also a celebration of bottom-up urbanism, and citizens taking the revitalization of their city into their own hands. In contrast to the typical top down planning, or consensus-driven civic initiative, this is about taking a small scale, organic, DIY approach to urban life. And about how the legal, regulatory, and business practices environment of a city can be hacked to make that possible.

When you think of the problems facing Newcastle, start with the fact that you have to tell every single person outside the country that it’s the one in Australia, not England. That gives you a sense of the brand challenge the place faced. It’s a smaller Australian city, only seventh largest in the country and not even the biggest in its state, one historically centered around a major steel making complex. This would be like being the seventh largest city in Texas. The places that come to mind in the US when I read Marcus Westbury talk about Newcastle are Allentown or Youngstown. As he puts it:

For decades, Newcastle was the BHP Steelworks. We grew up in its shadow. The night sky was lit by the flames of blast furnaces, and the city set its rhythms to its changes of shifts. In nearby suburbs, mothers and grandmothers played washing-line roulette around its belching smoke and changes of wind direction. It was a city of a few hundred thousand people, and at its peak, a tenth or more of the Novocastrian workforce was employed in the steelworks. The whole city was directly and indirectly dependent on it.

Westbury was a young festival organizer who grew up in Newscastle. After getting a start there, he moved on to success in Sydney and Melbourne. He was originally attracted back to his home town by the prospect of starting a small pub. Central Newcastle was full of boarded up buildings, so he was sure that he’d be able to find a place with dirt cheap rents to open his dream bar.

As it turned out, he couldn’t have been more wrong. He had great trouble finding anyone who would even show him a property, much less offer him rental terms.

Something more substantial was wrong here. I lost sight of my original purpose — starting that bar is still on the long list of unrealised dreams — and became more and more intrigued as to why the market and the owners weren’t behaving the way Economics 101 told me they should. An oversupply of properties should have led to a drop in the market price. So many sellers and so few buyers in the market should have meant that agents and owners were falling over themselves for my business. But the response to my approaches was indifference and lack of interest. It was a diagnosis out of kilter with the debate that the city was having at the time. The debates in local papers or in political circles had always begun from the premise that the reason the city was failing was due to a lack of interest and investment. No one wanted to do anything there. But as I had directly experienced, this wasn’t always true. What if the problem was more complex? What if the problem was not that no one wanted to do anything but that those who wanted to, for whatever reasons, couldn’t?

Thus began Westbury’s education in the vagaries of urban real estate. Some building owners were sheer speculators, hoping to cash out later at a higher price in the wake of some hoped for government redevelopment scheme. Having actual tenants might complicate that. Others didn’t want to rent at lower values because of their bankers, who would have to write down their loans once an actual lease revealed the shaky assumptions on which the financing rested. Some people were just using their buildings as tax writeoffs. In other cases, buildings had passed into the hands of multiple owners and heirs, drastically complicating doing deals. Westbury even learned to have some sympathy for the indifferent real estate agents. Because they were paid on commission, it wasn’t even worth their time to talk to someone about a low priced deal. As Westbury observes:

The bigger picture in all this was bizarre. A city full of people desiring to do things, staring at a seeming surplus of space in which to do it. Dozens of property owners unintentionally driving down the value of their properties. Bankers concerned so much with the paper value of assets that they were running down the actual value. Perfectly legal and simple things that no one could confirm the legality and simplicity of. Governments at all levels were obsessing over how they might revitalise the city while unintentionally and inadvertently making the problems worse by confused processes, deferred decisions, and making promises they could not keep. Everyone was acting in their own interest while the city as a whole was literally falling apart.

With the help of a pro-bono lawyer and others, Westbury’s response was the creation of Renew Newcastle. Renew Newcastle cut deals with real estate owners, the city, and would-be tenants to create a new model of making space available to people with ideas. Instead of having to write a business plan, obtain enough financing to sign a long term lease, get insurance, etc, etc. etc., Renew Newcastle makes space in vacant buildings available to startups – retailers, artists, small-scale manufacturers, etc – on a model in which the user can have the space subject to being kicked out at any time if the landlord needs it back. There’s no lease and the property is not formally rented. Renew Newcastle serves as the guarantor of the user’s behavior, provides insurance under an umbrella policy, etc. As Westbury puts it:

Renew aimed to invert processes. It aimed to make what once had been hard easy, and what would once have been risky much less so. To take as much of what might once have been near impossible in the city and make it comparatively simple. The purpose was always to plant many seeds and see what grew. For that to work, the seeds couldn’t all be the same. To nurture an ecology, you can’t begin by planting a monoculture.

In the first six years of its existence, Renew Newcastle launched 170 different endeavors. Some of them turned into actual businesses that ultimately signed real leases. It created a media sensation around the world, attracted academic investigators, and even led to Newcastle making Lonely Planet’s top ten global destination list in 2011.

Beyond just an interesting case study, Creating Cities outlines Westbury’s philosophy of citizens taking responsibility for their own cities and neighborhoods. The book opens with a vignette about his grandfather creating a handmade sign for a hard to find local landmark. He laments that as our society matured and bureaucratized, we lost something of this spirit of citizen initiative without noticing it amongst the gains we were making.

I’m not sure he’d see the lineage between the sign he raised on that hill those many decades ago and the ideas outlined in this book. But that sign has always animated me. It has given me a sense of place, of continuity and connection. It has given me something else: an idea planted in the concrete up there. The idea that you could do that. That a community is built up by the thousands of actions from hundreds of individuals and their collaborations, and not down from the whims of the few. A recurring reminder that a community is something you make and remake through your actions….I’m not sure exactly when it happened, but somewhere along the line between my parents’ generation and my own, we forgot that it could work like it did in Bert’s time. Public space became more regulated, and the once-simple intersection between individual and community action, civic improvement and control became more and more complex. Cities became expensive, privatised, professionalised and bureaucratised. Infrastructure became the job of master planners and middle managers. Societies became more individualistic, more competitive, and more unequal. People got busy. They ran out of time for such things. By the time I came of age, the idea that an individual could build something in their shed and place it permanently on public lands was almost unthinkable.

Westbury is also acutely aware of the way that his professional mindset affects his approach to city problems. I, for example, come from a management consulting background. That shapes the way I think about cities, and one reason people find my take on cities refreshingly novel is that I’m one of the few people using that lens to look at cities. Westbury is open about the way that being a festival organizer led him to think about the possibilities of utilizing urban space in ways that planners, politicians, and architects couldn’t.

He fails to mention one aspect of the festival organizer’s DNA, however: promotion skills. Undoubtedly Renew Newcastle became so widely known in part because of Westbury’s savvy marketing skills. In fact, I suspect that back home he’s got quite a collection of haters going, who think that he’s used it as a massive self-promotion platform. I say more power to him.

While not the purpose of the book, Creating Cities also implicitly throws a bit of cold water on some conventional wisdom explanations of central city decline. For example, some Americans blame racism for white flight that decimated cities. No doubt that played some role, but Newcastle had virtually no minorities, yet its downtown collapsed anyway. It’s similar for explanations predicated on freeways. I haven’t investigated in full detail, but Google maps does not appear to show inner city freeways of the type that carved up so many US cities in Newcastle. Yet its urban core faded anyway.

It would appear that something in the very nature of industrialization and deindustrialization produces these types of declines. Other factors are merely enhancers at most. The ubiquity of post-industrial struggles in cities all over the globe undercuts many country-specific explanations.

The book also shows that what appears simple and straightforward in economic theory is often much more complex in practice. If this is true at the micro level, then how much more so at the macro.

Can the ideas being Renew Newcastle work elsewhere? I don’t see why not. In fact, I even know one organization in Indianapolis that did something similar, albeit not as an institutionalized approach. Big Car Gallery did a deal with the landlord to take over an abandoned service station near Lafayette Square in Indianapolis, on the proviso that they vacate if an actual tenant was found. Eventually one was found and Big Car relocated. Big Car executive director Jim Walker was very clear to stress that this had always been the plan, and I didn’t see any negative media suggesting that Big Car had been “kicked out.” This is critical as Westbury notes. Landlords have to be confident that if they allow temporary uses like this, they can actually get their building back when they want it without looking like the bad guy.

Renew Newcastle is a powerful story that I hope to one day be able to check out in person. In fact, I previously ran a guest post about it by Westbury. I’m glad to see he turned this into a book, and Creating Cities is one that belongs in every urbanist’s Kindle.

from Aaron M. Renn
http://www.urbanophile.com/2016/05/22/how-newcastle-went-from-post-industrial-wasteland-to-top-10-global-travel-destination/

The Cultural Power of New York City

Promotional image for Hamilton the musical.

I’ve never been a huge theater guy in general, much less Broadway shows. So I never paid that much attention to it.

But the smash success of Hamilton is something hard to ignore. And it really provides a window into the overwhelming cultural power of New York.

Hamilton is a play that is running at a theater that seats 1,300 people. You’d think that by its very nature as one play, in one city, in a not that big venue, it would be limited in the effects it could have.

But Hamilton turned out to be a sensation whose effects extended far beyond Broadway. President Obama saw it multiple times. The Wall Street Journal reported that even in Washington, in political circles it’s embarrassing if people find out you haven’t seen Hamilton. The cast album was a best seller, reaching #1 on the Billboard rap charts and #12 overall.

But the most interesting thing to me is the role that Hamilton the musical played in keeping Hamilton the man on the face of the $10 bill. The Treasury secretary had previously announced that Hamilton was going to go, replaced by a female to be named later. Eventually he reversed course and decided to put a woman on the $20 instead. Various factors played into this. Some women’s groups lobbied for the $20 because it is more widely used than the $10. Others decried Jackson for racism. But even the New York Times said, “nothing so roiled the debate as the phenomenon of the musical ‘Hamilton.’”

The idea that some play running in New York could affect the decisions of the federal government is pretty stunning, and validates the dictum that politics is downstream from culture.

What’s more, it shows the cultural clout of cities, and especially that of New York. Broadway and London’s West End are the theater equivalent of major label record company or major Hollywood studios. In many such media and cultural fields, there are a handful of key entities, and those are overwhelmingly based in New York, London, and Los Angeles, which wield grossly disproportionate cultural clout compared to other cities.

from Aaron M. Renn
http://www.urbanophile.com/2016/05/18/the-cultural-power-of-new-york-city/

Things I’ve Learned: Passion Is a Choice

I’ve gotten quite a few messages from readers, especially younger people, who want to figure out how to follow my path into urban related work because they are passionate about it.

To help them and others, I’ve been sharing some of the things I learned along the way. I’ve talked about personal vs. corporate branding, the myth of the viral tweet, and why you should think twice before starting a blog.

Today I do a podcast on another lesson I learned, this one from top corporate executive and politicians. It’s about the one passion related skill they have that sets them apart from the equally talented folks that fell short of the top ranks.

If the audio player doesn’t display for you, click over to listen on Soundcloud.

Subscribe to my podcast via iTunes or Soundcloud.

from Aaron M. Renn
http://www.urbanophile.com/2016/05/16/things-ive-learned-passion-is-a-choice/

A $63 Million High School Football Stadium Shows Changing Republican Values

Rendering from McKinney Independent School District via New York Times

A lot of so-called “movement” conservatives dislike Donald Trump because he isn’t conservative in their view. Some of them have sadly concluded that much of their own base is not as well, being much more open to things like protectionist trade policy than in years gone by.

Their focus has been on working class voter, but another chunk of the Republican electorate, namely upscale metropolitan Republicans, is also moving away from some traditional conservative positions.

These middle to upper middle class Republicans have little interest in yesterday’s puristic version of reducing government spending. Instead, they actually are clamoring for more of it in many cases.

We see this illustrated by an article in the New York Times about a planned $63 million high school football stadium in McKinney, Texas, a north Dallas suburb.

Voters in McKinney, Tex., have given the go-ahead to spend nearly $63 million on building a high school football stadium after months of contentious debate in the suburb north of Dallas….The McKinney project has frequently been compared to the $60 million high school stadium in nearby Allen. With seats for 18,000 people, the Allen stadium has nearly the same capacity as Madison Square Garden. Another school stadium under construction in Katy, outside Houston, will have 12,000 seats at a projected cost of more than $62 million.

McKinney, with a population of around 150,000, is 65% Republican. A $63 million football stadium for a high school team is practically the definition of a boondoggle to traditional conservative thinking. Yet it was put to a referendum and passed with two-thirds of the vote as part of a $220 million schools spending plan.

This shows the change in places like McKinney that ring America’s major metro areas. These are generally solidly Republican but increasingly are taking the view that they want more nice stuff, not just low spending and taxes.

These places generally do have low taxes, and certainly the populations are not indifferent to tax rates. But they are not interested in low government spending for its own sake in the way that the Tea Party was.

I have written about this extensively with regards to Carmel, Indiana, one of these types of cities north of Indianapolis. That city has undertaken a vast series of public improvements in everything from streets to sewers to parks to downtown redevelopment to a $175 million concert hall.

This spending provoked major acrimonious disputes between traditional fiscal conservative Republicans and these new school ones. The latter solidly won in the last election and opponents of the current regime today mostly seem to make arguments based on process points rather than substance. That’s because the improvements are extremely popular.

I’m not certain major elective projects like a pricey football stadium are actually wise expenditures. But precisely because they are “nice to haves” they particularly illustrate this new suburban Republican tendency towards desiring high amenity environments and using amenities as a strategic tool to compete with other cities.

The bottom line on this is that yet another Republican constituency, one you’d like associate more with Kasich than Trump, is also diverging from traditional Republican orthodoxy on government spending and service levels. This will have significant implications for state level politics in many places.

from Aaron M. Renn
http://www.urbanophile.com/2016/05/13/a-63-million-high-school-football-stadium-shows-changing-republican-values/

Is Wal-Mart Taking Advantage of Local Police Services?

Photo by Mike Kalasnik from Fort Mill, USA – CC BY-SA 2.0

Richard Layman pointed me at this article from the Tampa Bay Times examining the quantity of police calls to local Wal-Marts. These Wal-Marts generate a high volume of police calls – an average of about two per hour, 24 hours a day. This is much higher than Target stores. The newspaper even accounted for square footage differentials in the analysis. Here are some excerpts:

Police come to shoo away panhandlers, referee parking disputes and check on foul-mouthed teenagers. They are called to arrest the man who drinks a 98-cent iced tea without paying and capture the customer who joyrides on a motorized shopping cart. The calls eat up hours of officers’ time. They all start at one place: Walmart.

…

When it comes to calling the cops, Walmart is such an outlier compared with its competitors that experts criticized the corporate giant for shifting too much of its security burden onto taxpayers. Several local law enforcement officers also emphasized that all the hours spent at Walmart cut into how often they can patrol other neighborhoods and prevent other crimes.

…

“Law enforcement becomes in effect a taxpayer-paid private security source for Walmart,” said New York-based leading retail analyst Burt Flickinger.

This is a long article with a ton of stats – definitely worth reading in more detail.

It raises interesting questions about the true net tax value of some of these big box stores. Also, about people and businesses who consume a disproportionate share of public services that are supposed to be for everybody. I occasionally see stories about some guy who has accounted for some insane number of ambulance runs or something, for example. In this case, however, it is a large, highly profitable corporation.

One interesting anecdote was that a police chief in Beech Grove, Indiana threatened to cite his local Wal-Mart for creating a public nuisance, with a $2500 fine for each shoplifting run. Police calls there fell by two-thirds in just three months.

I don’t have much comment at present, but this is an interesting story.

from Aaron M. Renn
http://www.urbanophile.com/2016/05/11/is-wal-mart-taking-advantage-of-local-police-services/

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A New Urban Map For America

Friday I was on the nationally syndicated public radio program To the Point, along with guests Parag Khanna and Benjamin Barber. The main focus was Khanna’s new book Connectography (see his recent NYT op-ed), and a bit about Barber’s Parliament of Mayors initiative.

I appreciated Khanna’s focus on infrastructure for the movement of physical goods, such as pipelines and ports, and his stressing of the importance of the tangible economy in the United States. Also, it’s always good to be reminded that one of America’s great strengths as a country is that we are a continental scale nation.

I disagreed somewhat with Barber’s mayoral triumphalism (mayors in the US typically represent only a fraction of the metro population in any case), but think the idea of a global parliament of mayors is a good one. Cities should come together to exchange ideas and collaborate on areas of mutual concern.

Thanks to KCRW I’m including the segment in the podcast. Again, you can also click over to find out more about To the Point. If the audio player doesn’t display for you, click over to listen on Soundcloud.