Friday News Digest

Last week I was able to head over to Milwaukee, Cheeseland with my best friend Mike to catch a Paul McCartney concert. I grew up on the Beatles and Mike and I spent years of our lives playing Beatles music (until we grew up and had kids -- now we are a little rusty). The concert was amazing, but Miller Park was a MAJOR disappointment. WTF, John Norquist? It was STROAD central surrounded by a sea of parking. What kind of public investment is that? We got out of the stadium and saw that it would clearly be an hour before we got out of the parking lot (it took at least that long to get in) and we were hungry/thirsty, but there was no place to even walk to have a bite to eat. I saw they had a nature trail, however. Nice feature to "green" it up a little, I suppose (not). Makes me really proud that we have a park like Target Field here in Minnesota where I can not only bike, walk, light rail, heavy rail or drive in, but I can meet some friends and hang out without having to pretend tailgating with mosquitos and car fumes is fun. Border Battle: Minnesota 1, Cheeseland 0.

Enjoy the week's news.

Given the likelihood that energy costs will continue to increase and that taxpayers will balk at funding massive infrastructure upgrades for lightly populated suburban areas, America’s pattern of suburban and exurban development feels increasingly like a house of cards. Add in the changing tastes of younger Americans, who are opting for more walkable, more bikeable neighborhoods, and an increase in suburban blight seems almost inevitable.

  • I also want to give a shout out to the Rochester Subway blog. Even thought they got our name wrong, I appreciated the quote and respect what you are trying to do. You might lose this battle, but understand that I've lost them all here in my hometown. Keep trying. The tide is turning and you'll be there with answers in the future when they need you most.
  • This article from Aaron Renn on the Illusion of Growth Economics was the most emailed my direction over the past week. It was a very solid piece that captured succinctly the transition that America's cities are going through. The concept of local government transitioning from managing rapid growth to operating a complex system is key. Highly recommended.

This is not to say that Charlotte is poorly managed. But the transition from thinking about managing rapid growth to thinking like an operator is a tricky one. Even many companies fail to make it. Retailers, for example, frequently fall on hard times when they reach the point where they can no longer simply open new stores to meet financial targets.

Cities that are benefitting from strong growth have the wind at their backs. But it would be naive to assume that they must be doing something better than everyone else just because of that. Places like Chicago and New York were the Charlottes and Houstons of their day, right down to their laissez-faire economies. But they eventually hit the limits of growth and had to wander in the wilderness while trying to reinvent themselves.

  • Perhaps the most tragic story I've read this month is about Sandstone, Minnesota, and how they left their historic school to rot after they built the trendy, new, remote campus (here's what the new site looks like - makes me want to bash my head through this screen). I'm sure the school administration justified that on a pro forma somewhere that excluded any analysis of transportation costs (they always do -- it's just so inconvenient when you want the shiny new toy). The article is from MPR so listen to it or read it. I'm not going to give you an excerpt but instead a picture and this question: what kind of culture would allow this building to be abandoned to thieves and vandals?

I just can’t get over this book. It haunts me. Living nearly my entire life in Akron, I am familiar with the Rust Belt and with urban decline. I am a regular visitor to Cleveland, to Youngstown, and to Pittsburgh. I’ve been to Detroit itself several times and have walked and driven around. I’ve seen the tragic art exhibits documenting the decay, and I’ve leered at the ruin porn.

But nothing prepared me for this book. Hard-bitten skeptic and cynical Northeast Ohioan that I so often am, I was still flabbergasted by what I was reading here: frozen corpses; burning houses; corrupt, thieving politicians; strung-out derelicts; murdered children – as common and as unremarkable to the jaded denizens of Detroit as the pallid sun that rises each morning behind a steel grey sky.

  • Paul Krugman and I don't see eye to eye, although I'll give my standard Krugman disclaimer than only one of us has a Nobel Prize in Economics (and it's not me). Even so, I found his insights on Detroit interesting. He stops short of making the connection between "sprawl killed Detroit" and the centralized economy goosed with easy credit that allows cities to kick the can way past the redemption stop on the road to ruin that he dogmatically advocates for. Nonetheless, thanks Paul.

It’s hard to avoid the sense that greater Pittsburgh, by taking better care of its core, also improved its ability to adapt to changing circumstances. In that sense, Detroit’s disaster isn’t just about industrial decline; it’s about urban decline, which isn’t the same thing. If you like, sprawl killed Detroit, by depriving it of the kind of environment that could incubate new sources of prosperity.

  • A proposal by one councilmember to erect a wall around the suburb of Hamtramck to keep out Detroit residents is rich in irony. The ship is taking on water and listing to port and they sit at the stern wanting to keep those port-siders out. Dude, your fates are intertwined. You're on the same damned ship! It might go down port side first, but the whole thing is going to be resting on the bottom eventually. That you have not realized that yet -- and that you think perhaps a wall will help you -- demonstrates how screwed you are.

With a population just over 20,000, Hamtramck is surrounded by the city of Detroit — except for a small portion on the west side that borders the similarly surrounded city of Highland Park.

Fabiszak has said such a tall wall would repel “outsiders” — from Detroit and Highland Park — who are committing crimes and vandalizing the city.

  • And in what is perhaps the most insane thing you are ever likely to hear, less than one week after the city of Detroit declares that it is bankrupt, that it will not be able to pay its debts or make good on its pension obligations, it was announced that $450 million in bonding was approved to build a new stadium in Detroit for the Red Wings. That's right. A full $284.5 million of that will come from property tax receipts in the redevelopment area. I'm not making this up. If there is one place where build-it-and-they-will-come stadium projects should have ZERO credibility, it is Detroit. Yet, try, try again. Our collective delusion and hubris continues to plumb new depths that astound even me.

In a statement today touting the project, Gov. Rick Snyder said construction of the arena alone will create 2,900 direct construction jobs and the ancillary development would mean another 1,480 construction jobs. Under the deal, half those jobs must be filled by Detroit residents, Snyder's office said in a statement.

Snyder paid a visit to the Strategic Fund board moments after it approved the deal and said the new arena is very exciting for Michigan. "Detroit's really on a comeback path," he said. "I think Detroit is absolutely poised for a bright exciting future. This is just another proof point in that exercise."

He said he can justify the use of tax dollars on the project, given Detroit's finances, because it is about investing in the city's future.

"This is a catalyst project," Snyder said. "This is going to be where the Red Wings are. Who doesn't get fired up in Detroit about the Red Wings? Come on now, the people that are criticizing are people from outside of Michigan. This is something that is important to all of us."

  • The antithesis of the $450 million stadium-as-catalyst approach is Tactical Urbanism, but does it work? Here's a great article about one community that has seen real progress with a broad embrace of New Economy principles.

Today, Hamiltonians are using cornstarch to paint safer crosswalks on their neighbourhood streets. They're showing up en masse at council meetings with signs and slogans. They're commenting on blogs and websites and reaching out to councillors, media, and the public on Twitter.

Hamilton residents are becoming more engaged in municipal affairs than ever before. From the CasiNO campaign, which lobbied against a downtown gaming facility, to the tactical urbanism movement that stages guerrilla traffic-calming interventions, to rallying to save buildings from demolition, Hamiltonians are taking a more active role in city politics.

  • And for those of you doubters, take a gander over at Seattle where the city's traffic engineer, Dongho Chang, responded proactively to some "reasonably polite Seattleites" by adopting, and then improving on, the demonstration project they recently undertook. When bureaucrats fear losing ground more than losing control, great things can happen. Chang's response is a model for this country's next generation of engineers who (when working productively) will be primarily concerned with right-scaling, adapting and sometimes dismantling what has been bequeathed them.

To recap, the anonymous group installed the pylons under the cover of night this spring. They then sent an email to Seattle Bike Blog and SDOT explaining why they did it and pointing out the fact that they used a simple adhesive to make them easy to remove should SDOT choose to do so.

In many other cities, such acts are met with scorn and threats of legal action from city officials. But Seattle’s Traffic Engineer Dongho Chang did not. Instead, he wrote an equally polite email back apologizing for the fact that they needed to remove the pylons, but thanking the group for making a statement about road safety.

Well, now Chang and the city have gone a step further. They have installed permenent pylons with safe clearance space for bike handlebars and extra buffer space on the roadway. They also completed a safer connection to First Hill by installing a bike lane on 7th Ave between Cherry St and Marion, which is a signed bike route across First Hill that will soon connect to the Broadway Bikeway when it is completed.

  • And when Tom Friedman is writing about it in the NY Times, well....you know at that point it has passed beyond being a rebel activity and is now a well accepted main stream notion. Someone tell our local governments.

Airbnb has also spawned its own ecosystem — ordinary people who will now come clean your home, coordinate key exchanges, cook dinner for you and your guests, photograph rooms for rent, and through the ride-sharing business Lyft, turn their cars into taxis to drive you around. “It used to be that corporations and brands had all the trust,” added Chesky, but now a total stranger, “can be trusted like a company and provide the services of a company. And once you unlock that idea, it is so much bigger than homes. ... There is a whole generation of people that don’t want everything mass produced. They want things that are unique and personal.”

  • There is something a little extra bizarre about Florida. Many Fridays we've documented the crazy highway projects taking place in a state I've dubbed the STROAD Capital of the World. This Friday I want you to watch a video, and as you watch this video, in the back of your head understand that this is the mayor and the city that recently received $42 million of federal money to build a 2.6 mile STROAD. That's over $3,000 per foot for a hunk of asphalt (greenwashed with a trail and a pond) that provides no appreciable return on investment although, according to the mayor, it was done so Cape Coral "can handle future growth".

  • Here in Minnesota we're doing well because we had the "courage" to raise taxes, including many regional governments that were benevolently allowed by the state to increase something known as a wheelage tax. Did we reform anything about our approach to transportation spending besides finding more money? No, although we did identify more things we want to do. Hold on....what's that I hear in the distance.....could it be.....yes, I believe it is.....the unforeseen and completely unanticipated transportation funding cliff. Good thing we reformed our approach years ago before committing to building a ton more stuff....er... Someone please make a credible argument that this is not simply a house of cards.

Due to a couple of kinds of borrowing from the state’s Trunk Highway Fund, the amount of money the state has for road construction will decline by more than $250 million a year in the fiscal year that begins July 1, 2015.

Two funding sources are set to run dry at roughly that time. One is the trunk highway bonding that was approved in the 2008 transportation funding bill that the Legislature passed by overriding Gov. Tim Pawlenty’s veto. The other source is advanced payments for transportation made by the state with the expectation of being reimbursed by the federal government.

Induced demand in the context of vehicle capacity simply means that building more space for cars encourages more people to use them. If I live in the suburbs and the city widens the freeway into downtown I might take a few extra trips into the city every month or decide that taking a job in the city is now feasible. The increase in average highway travel speeds also brings more distant suburbs and exurbs within driving distance, which encourages more development at the current sprawl boundary and beyond. These and other effects lead to more cars using the highway until the excess capacity is soaked up and traffic is just as bad as it ever was. According to most studies, about 80-90% of the excess capacity is soaked up within just five years.

This makes for a strong argument against highway expansion, but it ignores the impacts on local streets, which are far more severe. The problem here is obvious: unless 100% of the new highway users are bypass traffic--none of them using the highway to get into the city itself--local roads have to deal with a huge influx of additional vehicles. Many of those vehicles aren't bypass traffic, of course, so local streets (and their residents) are burdened with their presence and the congestion they bring.

We picked 3A as the locally preferred alternative in 2010 in a very…mysterious…decision that involved lots of…mysterious…math. Highlights include a $100 million dollar typo, a station with1,000 projected daily boardings in Kenwood, and the Feds changing the funding formula after we chose our alignment. We’ve recently discovered that we won’t be able to accommodate a bike trail, freight trains, and the light rail in the same right of way, and so we’re considering options to build a tunnel in the Kenilworth Corridor–the cheapest of which would increase the project cost to at least $1.37 billion dollars and as much $1.7 billion dollars, depending on the option.

Let’s not muck this up too much–we were told that building a tunnel through the city was too expensive, so we decided to skip the city and build what amounts to a commuter rail line (in the vein of the Northstar Line) for suburbanites. Now, three years later, we have been told that we’re probably going to build a tunnel anyway. This is crazy. Again: This is crazy. We need to start the process over.

  • So that whole housing comeback that is very real (not), ready to take off on its own (not) and totally justified by market forces (not) is now official because -- wait for it -- flipping is back baby! There's no way this is a sign of cheap credit propping up a housing market that is still vastly over valued, is it?

House flipping deals are on track to hit a record this year, RealtyTrac reports. Profits were up 19 percent in the first half of 2013 from a year ago and 74 percent higher than 2011. Profits are also climbing to the highest in seven years, with investors making an average $18,391 on each sale, more than triple returns in the first six months of 2012 and compared with losses of $13,206 two years ago.

  • Of course, a housing market in solid recovery would not be one where there are unexpected decreases in housing starts during prime construction months. If you look at the data, this market feels much more like an attempt to put air back into a deflating balloon. For reference, back in 2005 we were starting more than 2 million homes per month.

The residential real-estate rebound suffered a setback in June as housing starts unexpectedly fell to the lowest level in almost a year, curbing how much construction contributed to U.S. economic growth last quarter.

Work began on 836,000 houses at an annualized rate, the least since August and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington. The drop was led by a 26.2 percent plunge in multifamily projects, which are more volatile than work on single-family homes.

  • If you don't have a grasp of what is actually going on, what the root causes of this long malaise we are just getting started in here in the USA, then latch on to a straw man and beat him repeatedly. If you're not going to exercise your brain, at least you'll be exercising something.

Some Republican state lawmakers are still worried that a 1992 United Nations pledge for sustainable development could somehow be a threat here -- and they are now trying to pass vetoed legislation to ban the international policy agreement in Missouri.

After hearing more than an hour of impassioned public comment Thursday, the city's Board of Aldermen voted 5-0 to rezone the Frederick Towne Mall property.

Although the plan may not be perfect for everyone, the city needed to do something to spur development, said Alderwoman Shelley Aloi.

The rezoning will allow Rockwood Capital, which owns the 20 acres on U.S. 40, to move forward with a proposal to bulldoze the nearly vacant mall and build a Wal-Mart. The developers will need to bring forward a site plan before finalizing its plan.

 The land is now marked solely for commercial use, rather than a mix of commercial and residential uses.

  • Finally, while I've now seen Paul McCartney four times in concert, I've been able to see the Dave Matthews Band five times. I got a huge smile out of this story of a couple that picked up a hitchhiking Dave Matthews on their way to the concert. He had apparently been out biking, gotten a flat, had no cell phone and was trying to hitch a ride back in time. What a cool guy. Here's one of my favorites from the McCartney concert to kick off your weekend (although if you want my favorite song of all time, here you go.)

 Take care, everyone. Have a great summer weekend. See you back here Monday.

 

I'm going to be in the office this entire week -- such a rarity -- so you'll be sure and find me over at the Strong Towns Network. If you've been trying to email me without success (my apologies), I'm much easier to get a hold of over there, as are a lot of the people you see posting here. Please join us.

And if you'd like more, check out my book, Thoughts on Building Strong Towns (Volume 1). It is a primer on the Strong Towns movement and an essential read for those wanting to get up to speed quickly.

Charles Marohn