Wednesday, November 24, 2010

The Windy City – A Love Story

Last week I was in Chicago for a presentation, actually a history lecture and book signing in Chicago. I was in the village of Park Forest, the subject of my book America’s Original GI Town, Park Forest, Illinois (see right and above header). Chicago is where I grew up and have my earliest memories of the “Urban Life.” High school escapes to Old Town on Wells Street (head-shops and deep dish pizza in Piper’s Alley), great jazz and Stan Getz, the movie Endless Summer at the Playboy Theater, illicit drinks at Mr. Kelly’s (now Gibsons and still a great watering-hole) and college tours of the great buildings and architecture balance the ‘68 Democratic Convention and Chicago politics.

Chicago is like New York but more manageable. The two core areas State Street and Michigan Ave. remind me of neighborhoods in San Francisco, Boston, Wall Street and mid-Manhattan: walkable, busy, good food, and a street level texture that keeps you involved. With the exception of an over-priced and inadequately poured drink at one hotel, the bars in this town know what a real pour is. Glorious food, good God, now I know why Oprah still lives in Chicago. As a kid I remember Italian – that was the special meal for a kid from the ‘burbs, even though our town 30 miles south of the Loop was half Italian. The magic of downtown restaurants is still here, walleye at the Millennium ice rink, great pizza – Chicago style, burgers at Gibsons, Italian everywhere, pancakes at the Pancake House (pure Midwest). Visiting Chicago is worse than a cruise vacation on the waistline.

The retail is both vertical and horizontal. Michigan Avenue for its ¾ mile is one of the best retail streets in America. Great on-street stores and the vertical malls at Water Tower Place and North Bridge, from Tiffany’s to Crate and Barrel to the American Girl store; high-end to low-end clothing are everywhere (New York is creeping in with Filene’s Basement, Bloomingdales, and Barney’s), sadly Marshall Field & Company only exists as a memory (the bastards!). In late autumn and at Christmas the streets are alive with shoppers from all over the Midwest making a day or weekend of it. Other cities would kill for the opportunity.

The town is also becoming a vertical residential community, especially to the east of the Loop in the areas between Michigan Ave. and Lake Michigan called Streeterville-it is a city onto itself. Thousands of high rise condominium and rental units have been built, most in the tradition of good to great Chicago architecture. This increase in downtown residents has pushed high-end boutique food and service retail into the area. There are excellent parks within walking distance such as Millennium Park (one of the best urban parks in America), a very classy park called Park No. 946 (I think?), all surrounded by high rise condos and apartments; numerous smaller urban parks as well as the 16 mile long lake front from Rainbow Beach to Grant Park are a short walk or stroller push from thousands of residents.

I love this city and get back often, but so as not to sound like a travel log all is not well in Chicago. I had lunch with one of the best Midwest and urban bloggers Aaron Renn whose base is in Chicago (go to his The site) for the latest, he cautioned that one must look beyond the glass and glitter. As a Californian now, it is easy to look around and wonder what's the big deal about race. California is without a doubt the most integrated place in the world. The friction is minimal, the advantages great. Sure there are problems, huge problems, but they stem more from small minds not big ideas. But across the heart of the country race plays an important part, and, as some tell me, we should watch the upcoming race for mayor of Chicago. It is pitting neighborhoods against neighborhoods, race against race, and sadly the future of the streets may be held up for ransom. Richard Daley, the current mayor, is the poster boy politician for not having term limits, he has helped to make this city one of the best and has adapted the city to the changes of the last twenty years, but the city is in serious debt and the ugly bits of urban life are returning with unemployment and empty stores.

Sitting out on the sidewalk at the Tavern-on-Rush on a comfortable Thursday evening brought home a unique urban experience that other cities dream of. A steady stream of residents, business suits, visitors, shoppers, and cute young and not-so-young ladies in tight skirts (not those ladies but as the bartender said, Thursday is “cougar night”). I had not seen this kind of sidewalk pedestrian life since the Left Bank days in Paris and the Sloan Square type neighborhoods of London. This is the urban life at its ancient best: sidewalk tables, a constant flow of the interested and disinterested, good looking girls, bright cars, good food and even better drink, shorts, suits, high skirts, cute dogs, a few chain smoking Argentinians, and horse drawn carriages. This is what the city is about, that is why we are attracted to it (even though rare), and it is what we aspire to.

Stay Tuned . . . .

P.S. My latest mystery/investigator story, Land Swap 4 Death is now available on Amazon as an ebook and in paper. Shady developers, oversexed environmentalist, and a good looking red head that carries a gun, what more do you want?

Friday, November 19, 2010

Affordable Housing – A Death Spiral

To ask what is affordable housing is a find oneself in a quandary. Affordable to whom, why is it affordable, and, most especially, who is providing this housing are many of the questions. Let’s make it a simple fact at the outset: Governmental affordable housing is not a direct result of market values and regional housing affordability. Affordable housing, in the United States, is a politically driven, subsidized, and artificial construct that provides a residential unit bought with intentionally contrived political land uses, OPM (Other People’s Money), and unrealistic social beliefs and demands.

During the last century there has been a consistent and successful growth of wealth and equity in this country, much of it due to the increase in property values. This has resulted in some being left behind. The obligation of supporting these people (a significant portion being urban dwellers) through welfare and subsidized housing; was taken on by the public institutions at all governmental levels. An inevitable divide was created between the “haves” and “have-nots,” a pejorative argument that implies one owes something to another. As such, housing, being the most visible, becomes a vehicle to push the agenda of supplying shelter by one group for another.

This effort is accomplished through fees paid by builders to the community so the government and its agents can provide this housing. It is also done by requiring a set number of units within a new community to be “affordable”-the formulas are fascinating to calculate. The solutions bear no semblance of current housing values and the marketplace. In fact, I would not be surprised, today in some areas of the Central Valley of California some affordable projects are MORE expensive than the current market value of foreclosed homes in the same area. These contrived housing units are the product of entrenched political operations within city, county and statewide housing programs.

The argument is that public housing is needed (there are Public Housing Authorities in most states) and the marketplace is not meeting this demand. In most cases this is true, but the developer and builder cannot compete in this marketplace, not when the carrot of approval hangs before the applicant. To not contribute means your development cannot be approved. Fairness is not a visitor to this party.

It is also a social issue of extreme importance. Wealthier communities are concerned that this type of housing (in reality it is not the housing—it is the resident) is not acceptable in their backyards. It is literally kicked down the freeway. The urban areas contain the largest number of people and as a result the burden of affordability falls on them the most. Like welfare itself, it becomes a vicious circle that continues from one generation to the next.

In the wealthier neighborhoods these housing projects have literally changed the name of the game by calling this housing “workforce housing;” housing intended to keep the resident with essential skills the community needs, police officers, firemen, teachers etc., in the community. With today’s excessive benefit packages for these specific groups one wonders whether this is a good argument now.

There will always be a place for affordable housing, but the model must be changed to reflect the marketplace. And, in fact, during some economic times, it may be necessary to drop the charade entirely. These housing institutions must be accountable to the taxpayer and the development community. In fact one of the most fascinating arguments has been that this socialized housing (let’s call it what it really is) is necessary to protect the capitalist system by providing economical housing for workers closer to jobs. In fact this housing has been cited as a solution to congestion, sprawl, family problems (more time with kids) and not having enough time for yourself. Aren’t we lucky that it is available; let’s plan more!

Stay tuned . . . .

Wednesday, November 10, 2010

Centrist versus Decentrist – The Future of American Growth

I apologize right up front that this posting may be a bit disjointed – but the following bits are my initial thoughts in an rough attempt to get my arms around the subject of where growth will occur in the United States during the next fifty years. It is a personal view – but based on a lot of experience.

There are today two broad schools of thought on American growth. The first says we must return to the cities (use force if necessary), reuse and revitalize our urban centers, densify, and above all use transit to make this all happen. These are what I call Urban Centrists. The second school is certain that most of the new growth necessary to absorb the next 100 million Americans has to be in the outlying suburbs and small towns across the country. These are the Rural Decentrists.

I am a Rural Decentrist.

The growth of suburban and urban areas since the end of World War II has continued to feed this discussion to the point of rabid reaction and political leveraging. These schools have had their champions and buzz words. To mention a few: Transit Oriented Design (TOD), Traditional Neighborhood Design (TND), Edge Cities, New Urbanism, Neo-Traditional, Sustainable Development, Penturbia (the 5th Internal American Migration), Satellite Towns (a Cold War remainder?), Greenbelt Communities, and one of the most curiously recent, New Pedestrianism. Billions of dollars have been spent and made in each camp promoting and building their view, like Ebenezer Howard and Raymond Unwin one hundred years ago, of the Utopian community.

Each has their intrinsic value and success stories. The neighborhoods and villages built and reconstructed on the New Urbanist model are excellent examples of low density, mixed-use neighborhoods; their long term viability is yet to be determined. But it is safe to say they are very expensive and, for some, elitist in their maturity. These concepts are strong — their execution expensive.

Decentrist neighborhoods tend to be sprawling (there is that word) and are areas of growth connected to existing communities and towns. They are more affordable, adaptable, and accessible to more people. While not paradigms of planning in their choc-a-block layouts and executions they meet the most important need – demand. And yes this can lead to excess (witness the current housing mess), but the community designs are not the reason for their collapse.

The fundamental flaw of each school is that old bugaboo, the marketplace. People can only rent or buy what they can afford (except the last few years). As land values increase (usually closer to urban centers) the costs to develop and build increase, sometimes substantially. The result is higher and higher housing costs. To counter this affect either units get smaller, densities rise, heights increase, or they become too expensive. The increase in price directly affects who buys and where. While the European model works (the expensive and really nice housing is downtown) for Paris, London and other old-world cities I suggest, quite strongly, that that is not the traditional American model.

The American housing model and its attendant marketplace is unforgiving – look at the current rates of foreclosures. Many foreclosures were based on the attempt to subvert the marketplace with political incentives (tax rebates, subsidies, and outright grants), others through fraud and deceit. I do not include those that face foreclosure due to illness and job loss — the market already includes these difficulties in its traditional model.

The rural decentrist model begins with a significantly lower basis in the land cost (land costs within a few miles of Urban Growth Boundaries can be 10% of the inside land values). Approval costs are less, utilities are significantly easier to build and the costs of labor - lower. No matter how loudly the centrist school stomps their collective feet; they cannot come close to offering the same competitive product to the marketplace. The urban areas do offer a more diverse society, more arts, more distractions, finer stores, restaurants, and even more and better opportunities for employment — but it is not a moral issue.

To attribute and/or apply a moral aspect to this growth is just wrong. This castigation continues to appear in articles and even books that espouse one form of development as intellectually and morally superior to others. Phooey. There is good development and bad development; there is profitable development and there is unprofitable. The marketplace takes care of the bad and unprofitable in a very unforgiving manner. Developers with high standards. imagination, and community spirit will continue to develop excellent projects no matter where they are located. And there will also be a lot of junk foisted on the public covered with sustainable green neo-traditional transit oriented worker’s housing labels (SGNTTO&WH).

There are state and national efforts to change how we grow through political muscle and legislation. These regulations fight the marketplace and its simple needs. They will become very costly and take revenues from more important community needs. I suggest a time-out, a sideline breather — put your hands on your knees and take a breath.

Off to Chicago tomorrow for a presentation and book signing in Park Forest, Illinois. Talk with ya’all next week.

Stay tuned . . . .

Thursday, November 4, 2010

High Speed Rail and Vision California - Boondoggles

With the change at the top in California, what will be some of the big things that Governor Brown will try to deal with? Will he, by doing so, tick off his supporters and constituents and at the same time raise the eye brows of the loyal opposition? Let’s start with a big ticket, in fact THE biggest ticket on the agenda of the state: the “Vision California” plan and the high speed rail system.

The “educated citizens” of the state have voted to support AB32 (Global Warming Act) and in doing so give ballot lip-service to the $45 billion high speed rail line (current estimate) to connect California’s northern and southern urban areas. I would caution the reader to remember that the new eastern span Bay Bridge construction estimates are three to four times the initial estimates of $780 million to $1.4 billion; it is now pegged at $6.3 billion. Simple math (pardon my hyperbole) would suggest by the time this rail system is functioning throughout the state it will have run the costs north of $100 billion—about $3,000 for every California resident (or 15 round trips on Southwest Airline from LAX to SFO). And by the way Governor Brown, as mayor of Oakland, had a big hand in adding to the cost overruns of the bridge by challenging the design.

Yesterday the new governor elect of Ohio, John Kasich, announced that he is putting the brakes on the Cincinnati to Cleveland high speed rail in his state. It is one of 13 selected systems to receive federal money. The amount he turned down was $400 million. How much from the state coffers has yet to be determined. For now the 3C, as it is called, is dead. Why? One can assume that with all the difficulties in the federal budget and Ohio’s state budget it is time to put off buying those new toys. It can be done later; the cities aren’t moving, the land is there, and when the economy is right, built it then. The end of the world, due to global warming, will just have to wait. This rejection, along with Governor Chris Christie of New Jersey’s canceling of the new rail tunnel under the Hudson River, is beginning to show a trend.

These may be the first significant salvos across the tracks of high speed rail. With the change in congress there will be a major review of the funding of these systems. This review is similar to the slow decline in federal dollars for state highway systems. Now states and counties are carrying the costs of road construction and maintenance. There will not be the rich uncle to fund these systems; they will have to be paid for by the states and the users. Any federal funding will be for upgrading and expanding existing rail systems, commuter lines, and transit. Transit systems where millions of people will reap the benefits, not thousands.

Governor Brown will be faced with some very hard choices. As California’s Attorney General he led the fight, and contributed to the confusion, about global warming and air quality issues, to the point of holding the updated General Plans of cities hostage until they toed the line (and spent millions doing so). Brown now says the state needs to cut wasteful spending and lower-priority programs. This will be very difficult, painful, and my guess, extremely difficult for him.

The rail is an expensive distraction and boondoggle, especially in a state that has a $12 billion budget deficit. There are hundreds of millions of dollars being spun off to unions, planners, engineers, brokers and land owners in an attempt to ADD four to six hours of travel time between the north and the south. This system will add tens of thousands of dollars to tax bills and bond indebtedness to every California. I do not believe there is the stomach to fund these systems in congress during the next two years; there will be no money coming to bail these programs out. And based on the results of November 2nd, Brown said, “…the electorate is in no mood to add to their burdens.”

We cannot afford these systems. They must be self-sustaining. There are cracks appearing in the world of solar energy (once they lose their subsidies, they do not make sense), electric cars (comparative costs to operate), and expensive high speed rail. To continue throwing federal and state tax money down these holes is vanity. We need to move on and rebuild and improve the current infrastructure, before we start asking for new Christmas presents from Santa.