Friday News Digest

Yesterday has been marked on my calendar all summer. My baseball team, the Minnesota Twins, played a weekday day game and I knew it would be the perfect time to skip out of the office with my two daughters to share some time with them. We had a fantastic time -- very memorable. The only thing that disappointed was the play of the team, with two demotions of starters happening minutes after the game. Root, root, root for the home team. If they don't win it's a shame.

Enjoy the news.

• During CNU this past June I did a lot of interviews. I had forgotten about this one, which was fun and spontaneous and turned out really well. The topic -- How to talk to conservatives about cities -- is one that makes me cringe because generally the people asking questions like this are looking for some kind of secret handshake. That wasn't the case here. I'd recommend this one -- it is well done.

I can talk to conservatives…because I am one. [laughs] You know it’s a little like sending the urban city dweller out to talk to the farmer about like how to raise chickens and bring in the hay. You have to actually understand the point of view first before you can really have a conversation. So I get asked a lot of times, “so ‘smart growth’ is not working – what’re the magic buzzwords, Chuck, that we can use to engage conservatives?” And I’m like, well there is no magic buzzword. There’s no secret code among fiscal conservatives – you have to actually start asking a different set of questions.

And I think a lot of the liberal approach to the whole conversation about growth and development is to come at it from a starting position like “I care about the environment, I care about social equity, etc.” And I care about those things too. But they start with that, and then they try to backfill in the financial argument that justifies their point of view, and it gets totally lost because it’s a weak backhanded argument. We need to actually start with the financials and say look, we all agree that if our city goes broke, every other objective that we have is just not gonna matter. So let’s make sure we have a solvent, functioning city, and then when we have that, let’s see how we solve all these other problems.

• This coming week I have the opportunity to spend some time with some very good friends, among them, the Better Block crew. If you don't know their work, you really need to. It is some of the most important stuff going on today.

• There have been rumblings, particularly in California, that there are cities interested in using the power of eminent domain to stabilize their housing market. Here is how it would work. Say a house pre-crash was worth $500,000 but today is only worth $250,000. The property owner has a mortgage of $450,000 and so they are stuck, unable to sell without coming up with a lot of cash they don't likely have. When you have a lot of properties like this, your city is stuck. With eminent domain, the city seizes the property and compensates the owner -- the bank that holds the mortgage -- market value ($250,000) for their "loss" of property. The city then sells the property back to the occupant at cost, a transaction that improves the occupant's financial position by $200,000. Of course, the banks don't like this much, so expect some pushback now that one city has taken the plunge.

Banks, the real estate industry and Wall Street are vehemently opposed to the idea, calling it “unconstitutional” and a violation or property rights, and something that will likely cause a flurry of lawsuits.

Richmond has partnered with San Francisco-based Mortgage Resolution Partners on the plan. Letters have been sent to 32 servicers and trustees who hold the underwater loans. If they refuse the city’s offer, officials will condemn and seize the mortgages, then help homeowners to refinance.

• New York Times columinst Paul Krugman -- who has one more Nobel prize in economics than I do -- expanded on his Detroit musings this week. Krugman is a leading advocate for centralized intervention in the economy as a countercylical force to arrest recession. My ongoing critique of this theory is that, when applied to the Suburban Experiment, it props up an approach that is desperately trying to correct itself leaving only completely failure (Detroit) as the mechanism of correction. Krugman has been getting closer and closer to this insight. I'm fascinated to see if he has the mental flexibility to see this flaw in the theory that has been exposed by its application.

And in Atlanta poor and rich neighborhoods are far apart because, basically, everything is far apart; Atlanta is the Sultan of Sprawl, even more spread out than other major Sun Belt cities. This would make an effective public transportation system nearly impossible to operate even if politicians were willing to pay for it, which they aren’t. As a result, disadvantaged workers often find themselves stranded; there may be jobs available somewhere, but they literally can’t get there.

The apparent inverse relationship between sprawl and social mobility obviously reinforces the case for “smart growth” urban strategies, which try to promote compact centers with access to public transit.

• If you doubt this, understand that Quantitative Easing, Zero Interest Rate Policy and stimulus spending may buy you a couple projects that you like, but for every dollar of that, there are multiple dollars that are propping up this guy, Oakland county executive L. Brooks Patterson. We'd be a lot better off if cities had to figure this out -- and stay solvent -- on their own without the outside distortion.

In the 1970s, as county prosecutor, he compared Detroit residents under then-Mayor Coleman Young to “Indians on the reservation—those who can will leave Detroit. Those who can’t will get blankets and food from the government man in the city.” In 1997, the day after Young, the city’s first black mayor, died, Patterson told a newspaper that the deceased was “singly responsible for the demise of Detroit.” Of suburban sprawl, he has declared, “I love sprawl. I need it. I promote it. Oakland County can’t get enough of it.”

• And one last thing this week on Detroit; someone sent me this video. Enjoy.

• In Tulsa, one council member -- expressing the typical obsession with additional revenue (oh, if we could only have such an obsession with financial productivity instead) -- suggested beautification of the highway corridor as a way to attract tourists and keep pace with Wichita and Little Rock. Is there perhaps a lower cost, higher-yielding concept that could be deployed in the city that won the Parking Maddness "Golden Crater" Award in a landslide this year?

Chris Benge, the Tulsa Regional Chamber's senior vice president of government affairs, said Tulsa is already amid an economic resurgence, pointing to downtown's Brady Arts District and high-profile events such as the recent Bassmaster Classic, but he added that it would be helpful to outline the next steps. 

"I would really challenge anyone to say that Tulsa's not a vibrant, dynamic city," he said. "What has transpired over the last several years has really been amazing." 

Ewing agreed but added, "We have become an increasingly vibrant city, ... (but) so has Wichita, so has Oklahoma City and so has Little Rock in that same period. 

"It means we've got to keep our foot on the gas so that we're not driving 30 mph while someone else is driving 50."

• And in the most ridiculous statement you're likely to hear in a long time, during a hearing of the house transportation committee, a representative from Texas (reinforcing some sad stereotypes) made the argument for waste and gluttany as a tax revenue strategy. 

Rep. Roger Williams, R-Texas, said the best way to raise revenues would be to eliminate federal fuel efficiency standards. People would use more fuel and pay more fuel taxes, he said.

• One thing that didn't seem to be part of the house panel's conversation was questioning whether or not we have too many roads. Someone whose opinion I admire very much believes we do.

On the side of “too much” are arguments like those in the “Strong Towns” movement who argue that we can’t afford to maintain the infrastructure we have.

Also worth noting is the lack of economic development impacts of most new investments.

History suggests that if demand has peaked, supply is probably also at the peak of what we can support. This was true of rail in the 1920s, at which point the mileage of rail networks (both intercity and urban) declined. This may now be true of roads, with peak travel occurring, as we see rural areas continuing to depopulate, some places considering gravelization, some urban freeways being taken down and not replaced.

It is clear we under-price what we have, so naturally that leads to more consumption than if we properly priced things. It is also clear the roads sector (and some other transport sectors) are in the mature phase of development, and roads have at best diminishing returns on investment, if not zero or negative returns.

It is also clear that most roads are mostly empty most of the time, and that we build many roads far wider than are needed, so wide they can be used to store cars 24 hours a day.

I would conclude, that in general, we do have too much road infrastructure.

• And when it seems like things just can't get any crazier, Connecticut -- which outwardly seems like a relatively sane place -- is spending $167 million per mile to add two lanes to a STROAD. If we can financially justify this given our current economic situation, there is literally no project, however ridiculous, that cannot be justified in some way. Someone explain how this project gets top billing for a system in financial triage.

Among the projects approved is a plan to widen three miles of I-84 at a total cost of up to $500 million, or $167 million a mile. State leaders expect federal matching funds to cover 80 percent of that. But even federal matching dollars aren’t unlimited.

“To put this in perspective, Connecticut receives just $486 million a year in federal funds for all road and bridge projects,” said Tri-State’s Steven Higashide.

Higashide notes that a USA Today report recently highlighted the sorry state of Connecticut’s existing roads. The state had the second-highest percentage of roads rated in “poor” condition. Meanwhile, 35 percent of Connecticut’s bridges are considered structurally deficient.

• Windsor, Ontario, is a great city across the river from Detroit. I was invited by a neighborhood group to speak there last year and it was a really great experience. Unfortunately, the city was not engaged in the neighborhood conversation. Now it is reported that the city, for financial reasons, is divesting itself of its alleys, a really sad and confused solution to the financial problems they face. They are going to need those alleys again if they are going to have viable neighborhoods. Better to cut your costs by doing what Vancouver has done, something I used to see here in my hometown all the time.

• CNU has just started a podcast. I have not listened to the first episode yet but I see that the guest was John Anderson of Anderson|Kim so I'm going to be sure to download it.

• I'm a Catholic who is a dog lover but not a fan of auto-oriented signs or suburban-scale churches, so this little exchange was comical to me in four dimensions.

• And finally, this week we tried a couple of new things in our content stream, not only sharing the best of the Strong Towns Network but adding more short things to the overall stream. One of those was my take on the Hayward Loop. Well, one of the commentors shared this video on it that I have to pass on.

August is here so savor those last weekends of summer. See you all back on Monday.

We've started a contest over at the Strong Towns Network for those who like to write and have some thoughts to share. Even if that is not you, come and hang out with us there. There is a good conversation going on. 

And if you'd like more of my work, 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.