Friday News Digest

Last Friday my girls and I spent the day playing outside. We planted a couple of trees in the yard and even put some strawberry plants to soil. It was a bright, sunny and glorious day and I wore shorts and sandals. I even got the grill going, got the outdoor table from the shed and cooked us all a great meal to eat out on the porch. As dinner time approached, the clouds crept in and the wind picked up. By the time we ate, we were stubbornly defying logic, bundled in our sweatshirts, shivering while eating our meals. The snow came that evening and when we woke up the next day the ground was covered. Thus we welcomed in May to Minnesota. This weekend is officially a "do over". Here's hoping the mercury flows in the other direction.

Enjoy this week's news:

  • Minnesota Public Radio's Dave Peters explained the machinations a small town - in this case, St. James, MN - will go through to react to their budget problems. You'll notice the list is generally full of relatively minor adjustments with little long-term impact. Nothing that would mean a restructuring like, for example, a change in street standards or the preparation of a multi-year budget (see our post Starter Strategies for a Strong Town). I did find this characterization in his reference to Monday's post on consolidation kind of funny:

Chuck Marohn is too relentlessly critical of the status quo for some people but in this post Monday he makes a plea worth reading for new approaches and innovation.

  • I guess if I have to be labeled, being called "too relentlessly critical of the staus quo" is one I can accept. It is certainly better than the opposite: too relentlessly supportive of the status quo. The latter is an accurate description of the human condition - resistance to change - while the former at least acknowledges that change is inevitable and that we can do better. The whole story is worth reading, although -- sadly -- this quote kind of sums it up for me:

"I'm holding my breath to see what the state does," says city administrator Joe McCabe [relentlessly?].

  • The PA5113 course at my old haunts, the Humprhey Institute at the University of Minnesota, did a technical writeup on the Old Economy Project the Refuses to Die (aka, the St. Croix bridge) that included Strong Towns as a source. I'm proud of my school to see that they reached the right conclusion on this one as well.

This is not the right bridge and definitely not the right price. While alternative financing is an option, the true cost of the project is out of scale considering the number of vehicle crossings per day, the environmental impact, and the opportunity cost of other projects. Stillwater needs a new bridge, but not this bridge.

  • In our Wednesday post (What it takes to be a planner) I recommended reading the Economist. If you want an outsider's insightful summary of the current problems we face with infrastructure, then read their article that deals with the issue in their latest edition. Here's a small sampling from an analysis full of eye-opening insights:

The federal government is responsible for only a quarter of total transport spending, but the way it allocates funding shapes the way things are done at the state and local levels. Unfortunately, it tends not to reward the prudent, thanks to formulas that govern over 70% of federal investment. Petrol-tax revenues, for instance, are returned to the states according to the miles of highway they contain, the distances their residents drive, and the fuel they burn. The system is awash with perverse incentives. A state using road-pricing to limit travel and congestion would be punished for its efforts with reduced funding, whereas one that built highways it could not afford to maintain would receive a larger allocation.

Formula-determined block grants to states are, at least, designed to leave important decisions to local authorities. But the formulas used to allocate the money shape infrastructure planning in a remarkably block-headed manner. Cost-benefit studies are almost entirely lacking. Federal guidelines for new construction tend to reflect politics rather than anything else. States tend to use federal money as a substitute for local spending, rather than to supplement or leverage it. The Government Accountability Office estimates that substitution has risen substantially since the 1980s, and increases particularly when states get into budget difficulties. From 1998 to 2002, a period during which economic fortunes were generally deteriorating, state and local transport investment declined by 4% while federal investment rose by 40%. State and local shrinkage is almost certainly worse now.

  • But here in Minnesota we are "boldly" seeking to spend an additional $400 million in highway funding in an initiative Mn/DOT Commissioner Tom Sorel is calling "Better Roads for a Better Minnesota". Most of the money is borrowed, but even so, according to Mn/DOT's own figures, the $100 million per year over four years is just 4% (1/25th) of the $2.5 billion they would need to spend each year to keep up with the state's needs. I'm not sure whether to laugh or cry. 
  • Rob Steuteville published an excellent two-part series this week at New Urban Network on the pending housing collapse. Yes, that was pending, not past. (Part 1, Part 2) Rob presented some excellent analysis from housing market researcher Arthur Nelson to support a conclusion that the worst is yet to come from the housing sector. A follow up article by Sarah Goodyear in Grist was, as to be expected, equally insightful. But my favorite was the cutting analysis by our friends over at Walkable DFW. Here's a taste: 

So if they're [suburban McMansions] not well built and likely can't last more than a decade or two without essentially being "totalled," if they can't be reasonably well subdivided w/ shared formal entry because of the asymmetrical design, and they can't grow food (unless you expand property), and they are in the middle of nowhere, where those that will still be able to afford to drive every/anywhere can choose to also live anywhere, why would they live there? What is the impetus to maintaining the house?

  • Star Tribune blogger and columnist James Lileks this week talked about the changing face of student housing. My wife sent me this article because his descriptions perfectly fit our experience with the unscrupulous slumlords near the University of Minnesota. But not anymore. With the advent of "luxury" student housing (which I caught a whiff of as I saw it going up in my last days of graduate school), students today face some more difficult choices over what to do with their student loan money.

If you live in a lousy college apartment, everything else will be a step up. If you take out substantial loans to live in a luxury apartment, you will end up in the lousy apartment, because you have to pay off your loans. You'll spend some time there eventually. Choose wisely. 

  • A couple of weeks ago, S&P issued a warning on U.S. sovereign debt indicating that it could face a downgrade from its AAA rating, the highest rating possible. We pointed out that S&P gave China - a country with massive cash reserves - a lower credit rating of AA-. Well, this week Weiss Ratings, an independent ratings agency (meaning they are not licensed by the U.S. government) gave U.S. debt a C rating, which is equivalent to S&P's BBB- and is dramatically lower than AAA. The Weiss models also give China an A rating based on their growth rates, lack of debt and reserves. I understand the notion that S&P factors in political stability and Weiss does not, but stability alone cannot explain this discrepancy. After all, while a bank may balk at lending to a family that they know has an abusive and dysfunctional home life, they will certainly decline to lend to the really nice family that has the massive debt and insolvency problem.

  • I'm really excited to hear Ed Glaeser speak at CNU 19. I have a birthday coming up and his recent book is at the top of my list (or so I told my sweet mother-in-law, who asked for a list about a month ago). I'm not sure if Mary Newsom - who blog's beautifully - will be there, but you should read her writings on Glaeser's Truimph of the City.
  • Of course, I'm also excited to hear one of CNU's founders, Andres Duany, speak in Madison. Here is a piece he wrote responding to some criticisms of the New Urbanist movement. It gives a good history and overview of New Urbanism and contains the following insight, which sums up succinctly how I became involved in the movement:

As always, there are no prerequisites for acceptance of any notions that pass that good old American pragmatic test: “Whatever works best in the long run.” This aspect of New Urbanism has famously exasperated our only well-informed critic, Alex Krieger, who once accused us of being “impossible to debate, as you instantly assimilate all good ideas.” And why not?

  • Michigan has become the canary in the mineshaft for many states. Here is an article about their effort to take over and restructure failing cities, or as the article calls it, impose "financial martial law". Will it work? I have no idea, but it is an interesting approach and is worth watching.

On Apr. 14, Joseph Harris, the emergency manager of Benton Harbor (population 11,000), test drove his new powers—by stripping all of Benton Harbor's elected officials of what remained of theirs. A former chief financial officer of Detroit, Harris had been overseeing the community near Kalamazoo since April 2010. He's one of four emergency managers appointed by the former governor, Jennifer Granholm, under a 20-year-old law that granted managers less authority. (Pontiac, Ecorse, and the Detroit school system currently have emergency managers.) "The local elected officials constantly passed resolutions against Harris. They threatened lawsuits. They impeded his ability to do the job," says Pscholka, who represents the area that includes Benton Harbor. "Harris put them in the timeout chair."

  • And finally, growing up on a farm in rural Minnesota while dreaming about being a drummer in a rock band, I can't tell you how many times I played out rhythms in my head synched to the monotonous grind of farm implements. I never imagined a drummer being entirely replaced by the farm implement.

May your entire weekend stay in perfect time.  

 

Last month we started collecting donations to cover the cost of producing a DVD version of the Curbside Chat. Our goal was to connect with 100 of our readers that would be willing to donate $25 each. We've taken quite a bite out of this so far -- we've signed up 31 -- but we still have a ways to go. If you value what you read here or what we produce in our podcast, please do what you can to help us spread this message. We thank you, especially if you are one of our 850+ Facebook connections! It was only a year ago we were still below 200. Thanks for spreading the word. 

Charles MarohnCongress for the New Urbanism, minnesota