Friday News Digest

This has been a very exciting week. It started Sunday with the Strong Towns Blog being featured in the St. Paul Pioneer Press. Then on Monday we announced the launching of Strong Towns, a non-profit organization dedicated to addressing the fiscal imbalances present in the way we are growing our towns and neighborhoods. The response has been greater than we anticipated. There are a lot of people out there talking about Strong Towns. Keep spreading the word - we need more and more people plugged into this concept.

I'd like to thank all of our long-time readers and then welcome all of our new Strong Towners to the Friday News Digest. Fridays in this space we provide a summary of the week's news as seen through our Strong Town prism, with commentary and perhaps some light-hearted fun. Last week some readers cursed me for putting commercial jingles in their brains over the weekend. I am really sorry that happened.

Hang on for this week's news.

  • But do we really have a true, unfettered market for housing? The answer is: of course not. Only now we are not even pretending. This week we transitioned from subsidizing only new homebuyers to anyone, anywhere that will buy a home. The headline to the article says it all:

"Buy a house, get a check"

  • In addition to the check, if you can't make the down payment you can get support from the Federal Home Administration. Only problem is, the NY Times reported this week that the FHA is running out of money. They think they can make it though.

Still, Mr. Donovan [Secretary of Housing and Urban Development] stressed that the agency, which had a role in one out of five home purchases in the last year, would not need a direct taxpayer bailout.

  • I am going to add an extra bullet point in here with no link just to summarize the news digest thus far....We are paying people thousands of dollars to buy homes and, for those that can't afford to (ostensibly one in five), we are further subsidizing AND YET housing prices continue to drop.
  • Someone named Ryan Avent on the DC.StreetsBlog.org explained this mess in a brilliant piece this week titled, "Has the government been bailing out sprawl?" I highly recommend the read, which goes through the many ways in which the government induces a problem and then spends huge amounts of money to address it. (Our readers may remember that discussion). We would not say "sprawl" as much as we would just say "inefficient", which more accurately describes what is actually going on. When the government subsidizes inefficiency, we get this cycle.

Foreclosures have been concentrated on urban fringes, so federal efforts to modify mortgages and otherwise reduce defaults have tended to direct more aid to exurbs than inner suburbs and city centers. In addition, rates of home ownership and car ownership are higher in the suburbs than in city centers, so federal housing subsidies (including the new home-buyer tax credit and low interest rates generally) and automobile subsidies ("Cash for Clunkers") have had a geographic bias toward suburbanites.

  • While the government is busy subsidizing inefficient, single-family development on the fringes of cities and metro areas, an organization like the Urban Land Institute is recommending investors buy in dense, urban areas - places where they see future demand. Consider this cheery outlook:

In the near term, the report advises investors to "buy or hold multifamily" as "the only place with a hint of hope, because of demographic demand" as a large contingent of echo boomers seek their first homes.

  • A series titled "Death of Sprawl" had an interesting dissection of the community of Victorville, CA, where the housing crisis has struck so badly that they have been tearing down the suburban-mansions that are now empty blight.

New research about the recession has also bolstered one of transit's central premises -- that highway-driven sprawl is bad for a city's economic health. Recent studies at the University of Utah, for example, concluded that foreclosure rates in the Washington area were much lower in counties served by the Metro rail system, compared with the next ring of counties farther out, and that home prices in Phoenix had also fallen in direct proportion to the distance from downtown.

  • We posted this article on our Facebook site earlier this week, but I wanted to include it in the digest. My eyes were opened to an entire new paradigm once I began traveling outside of this country, so it was fascinating to me to read that in reverse. Some Strong Town observations:

What's the cost for living our American way? It's not just the thousands of dollars for the second car, insurance and gas. We also have to support a lake of concrete around us - and gas, electric and sewer lines to stretch out past the near-vacant belts beyond the older suburbs.
...

That's a lot of concrete, wire and pipes to keep up - and patrol. Milwaukee's close suburbs have residential streets that have room for two lanes of traffic going each way, plus both parking and turning lanes. Six lanes of concrete.

I was driving on a street like that recently - it's residential, so I was the only car in sight, although several white lines directed me around like I had a ring in my nose on the rare chance that a second car may venture into sight. Not so long ago, people's eyes grew large when a news announcer glowed about "six-lane super-highways" in Los Angeles. Now we have them to serve blocks where only a few houses stand.

Where are the people? Nobody is coming; nobody is going.

If we gained something for our money, I'd happily pay it. But I look south out the window of my downtown office and see streets and highways, of course. Plus parking garages, ramps, driveways, surface lots and street parking - not to mention the gas stations, auto-part stores and car washes.

Our cities (and Milwaukee still remains one of the most attractive) are dead zones with small pods of life barricaded between the elements that support the passage, storage and care of cars. In our most densely trafficked sidewalks, it is a hundred feet between businesses whose windows have a chance of being interesting to look in at while walking past. Throw in a bank or two and one has to take a taxi to get between shops where people congregate over a cup of coffee or buy a shirt.

No wonder we all drive.

  • Driving used to be a hallmark of American prosperity. The reality, as reported in the San Francisco Chronicle, is that we pay a massive amount for the privilege of driving (....to our houses that our declining in value in our towns that can't afford to maintain their infrastructure.)
  • As our development patterns shift - and they will, despite the subsidy - here is a unique and quick read about how to get more out of our existing highway investments.
  • This week I was alerted to a series on the Discovery Channel about our country's failing infrastructure problem. I'm not sure if this is another one of those shows calling on us to spend more on essentially the same thing that got us here in the first place (more inefficiently-used infrastructure), but the trailer looked interesting.

  • On a personal note, I was very proud this week when the local paper ran a feature interview with my grandpa, a World War II veteran. Thank you to all our veterans and those who are now serving our country.
  • And last, this week two panoramic views of the new Minnesota Twins baseball stadium were released. You can check out the view from behind the plate or from left field. The countdown clock on my desk tells me 143 days until opening day 2010. I really can't wait.
Charles Marohn