New Urbs

A Traditional Christmas Needs a Real Downtown


The Christmas season is once again upon us. For many, “it’s the most wonderful time of the year.” But as our culture continues to squeeze the most out of the holiday, many of us have seen it become a relentless rat race. Presents need to be bought, pageants need to be held, dinners must be cooked, and cards have to be sent.

The saving grace of this onslaught of tasks is that Christmas music is back on the radio, in stores, and pretty much anywhere that has a PA system. Many of these songs were written during the immediate postwar period of optimism, cultural unity, and thriving Main Street economics. It’s Beginning to Look a Lot Like Christmas mentions all the classic signs of the holiday—the carols, the bells, the snow—but the first thing it portrays is “the five and ten (variety store) glistening once again with candy canes and silver lanes aglow.” The song then conveys the excitement of Christmas as toys appear “in every store.”

It’s clear that the role of these local shops and their front window displays goes far beyond shopping. They not only provide all the toys needed for presents and gifts (the entire third verse of the song) but are an essential part—if not the most central aspect—of the holiday ambiance.

Think about how that compares to our experience today. Once a rarity, “toys in every store” was a telling change in the season. Now corporate drug stores such as Walgreens and CVS are constantly flooded with cheap plastic molds designed to placate your child while you wait to pick up your prescription.

At one time, the seasonal arrival of toys was a careful decision made by small businesses. Because these shops were often housed in humble downtown buildings, they didn’t have the shelf space to keep toys all year. These small shops would go out of their way to get into the spirit of Christmas and give customers a truly inspired experience that made shopping feel special.

Today, however, we’ve lost this unique part of the season. Whether it’s the constant sale of toys at our big retailers, or the year-round availability of holiday products through the internet, there is nothing actually special about shopping at Christmas. And it’s not just the experience we’ve lost—there is now less joy in the products that we buy. Every gift from a big-box store is tainted with the knowledge that it is one of a million copies, while “artisan” gifts brought from small shops are so profligate with campiness (organic blueberry goat’s milk soap) that buying them becomes a smug competition in who can spend the most money on the oddest item.

The very layout of the typical auto-centric American suburb also quietly kills the spirit of Christmas. Everything leading up to the holiday has become stressful and hectic, while still being glum and uninspired. The mall and the big-box stores feel even more depressing around the holidays, as you walk through an expanse of parked cars in the cold and snow. There’s no reward for your misery: Target and Wal-Mart still feel the same when you get inside, except that they’re probably more crowded. You’ve been here a thousand times before and you’ll be back next Tuesday to return the gifts you didn’t want and pick up toilet paper. This cheerless shopping experience is underpinned by the knowledge that your dollars are not staying in the community but are being vacuumed out to Wall Street.

While the parade of lights that so many suburban communities put up are nice, they lack real community engagement. You don’t get out or talk to anyone—you just sit in your car and look at the lights. Soon, we’ll probably have light tours done in virtual reality, so you don’t even have to leave your couch.

It doesn’t have to be this way. There is no magic panacea for rampant consumerism, but we can make our shopping experience meaningful again by focusing on developing our walkable, traditional downtown areas.

The architectural beauty and community space found in classic American downtowns is far superior to what we build now. Streets lined with structures designed to last centuries highlight traditions of generations past. This connection to history is an essential part of creating a community, especially during Christmas when old buildings are made to sparkle and shimmer, sharing the holiday cheer as they have for decades.

But it’s not just about history and tradition. Classic cities are built for humans and beget human interactions. So while you’re busy with holiday shopping and appointments, you’ll be out walking among other people, following the advice of A Holly Jolly Christmas as you “say hello to friends you know and everyone you meet.”

The traditional cities that are sung about in our Christmas music don’t just highlight the spirit of the holiday, they create it. They make us take things slower. They get us walking amidst the lights and decorations on the buildings. They put us on the street, interacting with the other people enjoying the Christmas atmosphere. They are part of the season itself—free and welcoming to all.

For so many families around the country, Christmas is still rooted in tradition. Whether it be meals, songs, events, or the simple act of being together, it is a time where we turn our eyes to our family and acquaintances. Many people work hard to instill their Christmas traditions in their children. Why not ask the same thing of our cities? Do we want our children to associate Christmas with spending hours at the mall or lazily clicking through Amazon? Or do we want them to realize that our physical structures can be part of their heritage and have a lasting impact for generations?

As we deemphasize the role of the cityscape in our lives, we remain giddy about decorating our own houses with images of traditional community. People spend hundreds of dollars on ceramic models of Christmas villages with corner stores, decorated public squares, and open-air Christmas markets. They hang Thomas Kinkade paintings of brightly lit villages on a snowy evening. None of this imagery depicts giant retail stores, neon signs, or vast parking lots. Imagine how ghastly a ceramic model of WalMart or Toys ‘R Us would look perched upon a piano at Christmas time. Yet these are the buildings our city governments often support with generous tax credits.

Some conservatives will dismiss these reactions to the contemporary retail landscape as mere nostalgia: Big-box stores are good and in keeping with the creative destruction of capitalism. Likewise, they might claim that our downtowns fail because they aren’t competitive, and traditionally patterned cities are “not what the market wants.” Such naysayers appear tone deaf to the idea that conservatism might also balance these concerns with the preservation of beauty, place, or tradition.

There is no question that our built environment underscores the idea that as a community feast day, Christmas is no longer important. Our poorly constructed cities are encouraged to overconsume, while the lack of quality public space has eroded our sense of community. The charm of Christmas now only lives in black-and-white movies, where it harkens back to a time and place that people have forgotten how to build. We’ve lost the “Main Street” that made it possible to frame public celebrations and holidays. Is Christmas now limited to plastic trees and lights in the front yard that we put up haphazardly because it’s the social norm?

As you run your errands this holiday season, pay attention to your surroundings. Ask yourself if these built environments are really emblematic of the “greatest nation on earth” or if they serve the purpose of interests—Wall Street and global corporations—not in line with your own best interests and those of your community. We vote with our pocketbooks. If enough of us reject the seeming enticements of the malls and strip centers, we can restore a more humane holiday season. Instead of bumper-to-bumper traffic, cold parking lots, and sterile big-box stores, you might again have a place where you can tell that it is indeed beginning to look a lot like Christmas.

Matthias Leyrer lives in Mankato, Minn. He has also written at Strong Towns and his blog,

Posted in , , , , , . 20 comments

City Regulatory Hurdles Favor Big Developers, Not the Little Guy

Credit: John Sanphillippo

When it comes to land use policy, we have a collection of rules, regulations, social expectations, and a cost structure that reinforces and mandates a very specific set of arrangements.

Here’s one example of how these things shape our lives. A family in a town I visited bought an old fire station a few years ago with the intention of turning it into a Portuguese bakery and brewpub. They thought they’d have to retrofit the interior of the building to meet health and safety standards for such an establishment. Turns out the cost of bringing the landscape around the outside of the building up to code was their primary impediment.

Mandatory parking requirements, sidewalks, curb cuts, fire lanes, on-site stormwater management, handicapped accessibility, drought-tolerant native plantings…it’s a very long list that totaled $340,000 worth of work. They only paid $245,000 for the entire property. And that’s before they even started bringing the building itself up to code for their intended use. Guess what? They decided not to open the bakery or brewery. Big surprise.

I’ve heard many officials and professionals get very derisive in their assessment of such efforts: “Oh, they were idiots. They didn’t do their homework before they started their project. What? They thought they could just do whatever they want with the place? There are rules you know.” These are precisely the same individuals who butter their bread each day with impact fees and billable hours. They have no skin in the game.

Meanwhile, the space has been pressed in to service as a printing shop for the family’s specialty advertising business. It’s a productive and profitable use of the existing space that doesn’t require structural changes or special regulatory approval. But it’s significantly lower down on the economic food chain, creates less taxable revenue, employs far fewer people, and does nothing to activate the town’s social or cultural life. And if anything were to happen to the building it wouldn’t be cost effective to rebuild so the lot would most likely remain vacant. There are plenty of empty parcels all around that attest to this reality.

Here’s an example of the kinds of things that are now required in order to open a new business. Each element of the design is based on an accumulation of amendments to the code over many decades. Individually it’s impossible to argue against each of the particulars. Do you really want to deprive people in wheelchairs of the basic civil right of public accommodation? Do you really want the place to catch fire and burn? Do you want a barren landscape that’s bereft of vegetation?

Consider the example of the gas station and an automated car wash pictured above.

And here’s the larger context. Can you spot the human? Look closely. She’s there. All our collective legislation to make individual establishments achieve specific goals are in direct conflict with the larger development pattern, which is also institutionally mandated. There is zero chance that any of these laws and procedures will be changed in my lifetime. However, it’s highly likely that before I die this gas station will close and the property will work its way down to a series of lesser uses until it remains vacant. After fifteen years the building will be fully amortized for tax purposes and the corporation that operates it will probably move on. That’s just good business. And before I shuffle off this mortal coil the cost of maintaining the road and associated sewer and water infrastructure will outstrip this town’s tax revenue—especially after the disposable chain businesses close down.

I was in Hamtramck, Michigan a couple of years ago to participate in a seminar about reactivating neighborhoods through incremental small-scale development. A young woman had just bought a century-old bank building for $50,000. It was a Roman temple made of carved stone, elegant wood, stained glass windows, and beautiful tile work. The place was enormous. But it had worked its way down the value chain for decades as Detroit declined.

While the event was underway the fire marshal happened to drive by and noticed there were people—a few dozen actual humans—occupying a commercial building in broad daylight. In a town that has seen decades of depopulation and disinvestment, this was an odd sight. And he was worried. Do people have permission for this kind of activity? Had there been an inspection? Was a permit issued? Is everything insured? He called one of his superiors to see if he should shut things down in the name of public safety. Fortunately, the woman he called was in the meeting at the time and talked him down.

One of the side conversations included an exploration of how to activate the space without doing the kinds of things the building code required. There was already a kitchen in the back of the building from when the place had been a Chinese restaurant. But the current rules required a long list of upgrades, including a $20,000 fire-suppressing hood for the stove and new ADA-compliant bathrooms. It could all be done, but at a price point that would grossly exceed both the purchase price of the building and any conceivable cash flow the business might generate.

One workaround was to have a certified and inspected food truck park in the back alley and deliver food into the building for temporary events. ADA portable toilets could be rented as needed. The building—now called Bank Suey—has continued along these lines as a rental hall for pop-up events while the owner waits for the value of the neighborhood to increase enough to justify the required investment in physical upgrades. It’s not a bad plan, but it’s going to be awhile, folks.

I noticed an array of cell phone antennas on the roof of a nearby building. Rent on those things generates serious revenue—far more than what these empty buildings are likely to collect from commercial or residential tenants. Too bad Bank Suey isn’t taller.

On a walking tour of town officials and development consultants pointed to empty buildings and described all the things that could be done to bring them back to productive activity: open up the blank walls and re-install windows, incubate all kinds of new businesses, paint, outdoor seating. I rolled my eyes. None of those things make any economic sense given the regulatory hurdles involved and the likely negative return on the upfront investment. I’ve seen this scenario play out many times before.

The buildings that most appeal to me are the anonymous blank inscrutable structures that could quietly contain storage facilities or a non-retail live/work space under the radar without attracting the attention of officialdom. If the inhabitants were really discrete they might be able to carry on unmolested for a number of years. Meanwhile, the usual big-money developers might buy enough of the neighboring buildings and vacant land—with the accompanying subsidies and tax breaks—to rapidly transform Main Street at a much higher economic level. There’s no in-between. You either get permanent stagnation or massive redevelopment. Baby steps are essentially illegal. “Hold, wait, and do nothing” works for the little guy.

The same officials who decry this kind of obstructionist “land-banking” that gums up the works of their revitalization dreams do exactly nothing for small-scale operators who run straight into the buzz saw of multiple opaque unresponsive bureaucracies and inspectors hungry for violations. The only tool they have to offer is loans to bring things up to code. That’s a great plan if you want to go into a huge amount of debt and declare bankruptcy in a couple of years. No thanks.

There are all sorts of things individuals can and should do at a low price point without much debt to build up their personal household economies and contribute to a better community. But this ain’t it. Mind the gap.

John Sanphillippo is an amateur architecture buff with a passionate interest in where and how we all live and occupy the landscape. He blogs at Granola Shotgun, where this post originally appeared. 

Posted in , , , , . 10 comments

Why Amazon Won’t Save Your Struggling Town

When e-commerce giant Amazon announced that it would be searching for a location for a second headquarters—and bringing as many as 50,000 jobs and $5 billion in investment to a lucky city—it set off a stunning chain of events. The scene was not unlike that of the classic film It’s a Mad, Mad, Mad, Mad World, where a group of ordinary people lose all their moral sense as they race for a hidden fortune buried under a big “W.”

It’s the stuff of dreams for economic development agencies, so it’s not surprising that, according to Reuters, Amazon received 238 proposals from across the United States, Canada and Mexico. According to Amazon, they intend their second headquarters to be similar to their main offices in Seattle: around eight million square feet, 33 buildings, $25 billion in wages paid to employees and $43 million for the public-transportation system.

These are big numbers and if it were just Amazon or a few cities looking to use these kinds of incentive policies, it would be no big deal. But it isn’t: Every city and state in the country seeks to attract established businesses to relocate with a variety of incentives, normally without any regard for the cost. Some of these packages result in such eye-popping numbers that one is forced to question if anyone in municipal government can do math at all.

Over the summer, Apple, which is not only the most highly valued company at the moment, but of all time—and is sitting on another record $200 billion in cash reserves—announced plans to build a $1.3 billion data center in Iowa. Reuters reports that a combination of state and municipal incentives there is worth about $208 million. According to CNBC, 50 permanent jobs will be created. Do the math. $208 million divided by 50 positions results in a cost of $4.2 million per job. If you have a job making the GDP per capita every year, about $56,000, $4.2 million is what you would make after 74 years. There’s no way so few jobs will ever justify that much foregone tax revenue, especially if the new facility is a greenfield project that will need new infrastructure and other services.

Similarly, the Chinese company Foxconn got a $3 billion incentive package from Wisconsin for promising to create between 3,000 and 13,000 manufacturing jobs. That’s a cost per job of between $1 million and $230,769. According to CNN, Wisconsin won’t break even on the deal for 25 years.

All of these incentive deals—and most economic development agencies around the country—operate under the fallacy that growth can be bought. There’s this idea that it’s all a matter of building factories, widening roads, lowering taxes, and suppressing unions. But if that was the case, more economically stagnant places would be reaping the rewards of public spending.

Writing in City Lab a few years ago, Richard Florida and Charlotta Mellander looked at how economic incentives related to state performance and found no relationship. “Our biggest takeaway: there is virtually no association between economic development incentives and any measure of economic performance,” Florida wrote.

They reviewed other studies that found that companies that received incentives grew more slowly and tended to overestimate employment growth by almost 30 jobs. In a post on the topic from this year, Florida reported on the research of Timothy Bartik, who found further evidence that such public spending is ineffective and wasteful. According to Florida, Bartik found that states don’t target their incentives well, passing over industries that would produce local benefits and giving away too much upfront, instead of tying them to performance.

As Joe Cortwright of City Observatory points out, the sense of competition between localities is a facade. When big corporations move or set up branches, they make those decisions based on their needs and plans, but they use the idea that they’re considering multiple places to squeeze out the most subsidies. For example, the subsidy-tracking website Good Jobs First found that Amazon has received about $250 million in breaks and handouts to build the warehouses it needs to make rapid deliveries.

Ultimately, true economic development cannot be bought. As Judith Schwartz explained in Pacific Standard, studies have found that when businesses are brought in with incentives, 90 percent of corporate spending still happens out of state. This attenuates local economic development by reducing the opportunity for the people supposedly benefitting from development to learn the skills of running the larger enterprise. In some cases, companies have received tens of millions in tax abatements or subsidies without providing anything more than a few part-time retail jobs.

For example, over a 15-year period, Bass Pro Shops received over $1 billion in subsidies from state and local governments while its competitor Cabela’s took in about $551 million, according to CityLab. One study found that they produced no net increase in jobs, while several stores fell below sales projections, defaulting on their bonds and forcing the cities to pay.

Moreover, as Charles Marohn of Strong Towns has shown, cities that buy jobs (whether they’re high-paying ones like Amazon engineers or low paying ones in a WalMart) are forgoing the property taxes they need to keep schools open and pipes and roads in good repair. Meanwhile the income taxes paid by the employees or sales taxes generated by retail stores normally go to the state or county.

The sad truth is that the money being given to these wealthy corporations is not money in the bank, but money towns have borrowed or will do without in taxes, so it’s not a question of what they could otherwise spend it on. The only way to turn things around is by the trial and error, with small proprietors using existing resources to their utmost.

In our small towns and less regarded cities, we have to solve our problems ourselves, instead of fooling ourselves that Amazon, Tesla, or President Trump will solve them for us.

Matthew M. Robare is a freelance journalist based in Boston.

This article was supported by a grant from the Richard H. Driehaus Foundation.

Posted in . Tagged , , , . 5 comments

The Yelp Index of Economic Growth

dennizn /

Words on the Street highlights the best writing on the built environment we’ve encountered recently at New Urbs. Post tips at @NewUrbs.

Using Yelp to Track Economic Growth

The advent of big data, in the form of massive databases augmented with crowd-sourced information, adds a new dimension to our ability to track and measure local economies. One of the most exciting sources is Yelp, which tracks and publishes user reviews of millions of businesses. Yelp has just introduced its new “local economic outlook” which rates cities and neighborhoods based on their “economic opportunity.” The rankings are based on Yelp’s extensive data, and are summarized in the form of national rankings of cities (and a parallel rankings of the top 50 neighborhoods). [Read more…]

—Joe Cortright, City Observatory

How Jane Jacobs and Christopher Alexander Unlock 21st Century Problems

Those in the land-use planning and development business know the stories of urban renewal damage, the failure of modern urban projects like Pruitt-Igoe, and the consequences of suburban sprawl. Most are are familiar with Jane Jacobs’s The Death and Life of Great American Cities and Christopher Alexander’s A Pattern Language, both of which have been influential in urban planning, architecture, and other fields.

But something was going on at a deeper level that underlay the dysfunction Jacobs and Alexander fought from the 1960s onward. Cities Alive by Michael Mehaffy examines Jacobs and Alexander together to get at the root philosophical problems that created erroneous thinking in city building in the 20th Century, continuing to the present day. [Read more…]

—Robert Steuteville, CNU Public Square

The Disruption That’s Putting Bikeshare Into a Higher Gear

A couple of months ago, silver bikes with bright orange wheel rims began appearing around Washington, D.C. One here and one there, like someone had left their new toy unattended while they ran inside to grab a cup of coffee. These are Mobikes, one of four companies (two of which are Chinese) that are pushing the dockless bikesharing phenomenon in the nation’s capital. Unlike the traditional systems that require users to pick up a bike at a fixed station and drop it off at another station at their destination, dockless bikes have a rear-wheel horseshoe locking system allows riders to park the bikes anywhere they want, essentially a car2go for bikes. The GPS-enabled bikes are usually unlocked with two taps on a smart phone app. [Read more…]

—T.R. Goldman, Politico Magazine

Bill Gates’ Smart City in Arizona Is Not Smart, Not a City, and Has Little to Do With Bill Gates

Here are some things you should know about the smart city Bill Gates is building in Phoenix. It’s not a city, nor is it “smart,” nor does the Microsoft founder appear to be involved in any meaningful way. And when outlets like CNBC say it’s in Phoenix, well … the plot of land in question is some 40 miles west of Phoenix, on the western edge of the metropolis’s westernmost suburb…. What’s happening in Buckeye looks much more like the foolish past of the American city than its future. The state of Arizona is working on a long-deferred dream to build a new highway, Interstate 11, to connect Phoenix to Las Vegas. It would run right through this arid valley, putting those parcels along a big transportation corridor. The project was singled out as a “boondoggle” by public interest groups, who noted that ridership predictions for highways are routinely inflated. [Read more…]

—Henry Grabar, Slate

Why the Ideas of Jane Jacobs Are Still Vital

Vital Little Plans collects for the first time Jacobs’s interviews, speeches, talks and short pieces of journalism – and there is much in this lucid and persuasive anthology that resonates today. In her essay “Downtown Is for People”, from 1958, she criticises the lack of variety in cities: “Notice that when a new building goes up, the kind of ground-floor tenants it gets are usually the chain store and the chain restaurant.” Later, bemoaning the primacy of buildings over people, she writes: “The logic of the projects is the logic of egocentric children, playing with pretty blocks and shouting ‘See what I made!’” This could well apply to London’s current skyline, with its Walkie Talkie building, Cheesegrater and Gherkin – a VIP cocktail party guarded by corporate bouncers. [Read more…]

—Chris Hall, The Guardian

Posted in , . Tagged , , , . Post a comment

What to Do When Suburbia is Your ‘Hometown’

Town Hall in downtown Herndon, Va. /Shutterstock

Americans have always had a contentious relationship with permanence. Mobility, both social and geographic, is in the American DNA. As Alexis de Tocqueville famously observed, “In the United States, a man builds a house in which to spend his old age, and he sells it before the roof is on;…he settles in a place, which he soon afterwards leaves to carry his changeable longings elsewhere.” While this sort of mobility has now spread across the globe, it was a novel trait to the 19th century Frenchman, and stood in stark contrast to the Old World Europe that Tocqueville knew. Indeed, his very surname belies the rootedness to place that defined European aristocracy: he was Alexis of Tocqueville, a particular place with a particular history.

There are, of course, profound political implications of American mobility. The meritocratic nature of American democracy encourages the most talented to pursue career opportunities without regard to place. This has helped create Charles Murray’s “superzips” and contributed to the “brain drain” that has so devastated Middle America and the inner cities. The meritocratic sorting of American society is much to blame for our severe political polarization, whereby educated, predominately liberal elites congregate in urban areas on the coast, leaving the large swaths of flyover country from whence they came.

But even beyond political homogenization and polarization, mobility weakens civil society by lessening our obligations to our neighbors. Tocqueville, contrasting Old World aristocracy to American democracy, observed, “Aristocratic families maintain the same station for centuries, and often live in the same place. So…[a man] freely does his duty by both ancestors and descendants and often sacrifices personal pleasures for the sake of beings who are no longer alive or are not yet born.” Permanence, that sense of rootedness to place, provides a constant reminder of our familial and neighborly obligations, absent which the incentive to invest in civil society is greatly diminished. It’s no surprise, then, that more and more Americans are “bowling alone”. Why invest in the difficult work of forming associations when one could move across the country—or world—at any time?

Fortunately, the perils of mobility have not gone unrecognized. Those who care about place, permanence, and civil society have taken up the argument for remaining in one’s hometown. Justin Hannegan, writing in The Imaginative Conservative, presents a compelling case for hometown living, urging Americans to consider that “perhaps permanence—the guardian of family, tradition, practical wisdom, environment, and culture—is worth it.”

Bill Kauffman, in his address at TAC’s September event on revitalizing Main Street in Jackson, Michigan (and subsequently published in this space), made a similar appeal to the value of permanence:

And if we are disloyal to our place, to the place our ancestors made, then why should our children show any loyalty to us? If the city in which they grow up is stripped clean of its landmarks—and I don’t mean just the homes of great men, of presidents and thieves—I mean the corner groceries and baseball fields and the front-porched homes that make a neighborhood—well, why should young people choose to stay in such a self-disrespecting place? Why not just move to a manicured suburb with high average SAT scores—say, Columbine, Colorado, where all your dreams can come true?

It’s Kauffman’s passing reference to “manicured suburbia” where the case for permanence gets messy. To be sure, suburban patterns of development are their own obstacles to Burke’s “little platoons” that are so vital to a functioning polity. A neighborhood built around reliance on the automobile necessarily discourages interactions among neighbors. This is all the more compounded when residents’ places of employment—and the community that organically emerges from the workplace—are scattered throughout a thirty-plus mile radius. The very design of the suburban McMansion, with its two- (and sometimes three- or four-) car garage and expansive back (but not front) porches, decks, and patios, is a physical manifestation of the retreat from the public type of living that forms community to a more privatized, insular existence. In the words of Christopher Lasch, “The case for the suburban way of life as opposed to the small town or the old-style city neighborhood cannot very well rest on the claim that it promotes a sense of community.” (Lasch, Revolt of the Elites, p. 124)

But what happens when suburbia is our place? The explosion of the suburban model of development in the postwar period has put record numbers of Americans in the uncomfortable position of having no other place than placeless suburbia to call home. By some estimates, as many as 53 percent of Americans describe their residential area as suburban. Adolescence in suburbia has become such a common experience that it now pervades our pop culture, as the familiarity of the references on (and, frankly, the mere existence of) Buzzfeed’s list here shows. The ubiquity of suburban modes of development has pitted the ideals of permanence and place against each other.

The inverse of Kauffman’s question, then, becomes arguably more pressing for those who value permanence and place: Why not just move from your manicured suburb with high average SAT scores to a small town (or city neighborhood) with a built environment much more conducive to fostering civil society? It seems many millennials are making the gamble to do just that, as demand for walkable, mixed-use developments is on the rise, and increasing numbers of city dwellers are eschewing the previously obligatory flight to the suburbs as they start families.

Yet is this really the solution to the ails of suburbia? As much as flight from suburbia may help to mitigate the aforementioned obstacles to a robust civil society, it will also trigger the malevolent effects of rampant mobility. It’s quite possible that those who settle in small towns or city neighborhoods from the suburbs will develop a sense of rootedness in their new place. But in doing so, local and familial ties to place are necessarily severed, which simply further atomizes American life. Mobility, even if undertaken with the intention of building community, is by its very nature an act of severing previous communal bonds.

There is no simple resolution to the tension between permanence and place—and that is before even considering the extenuating financial or personal circumstances that often dictate where we live. But for those concerned with permanence and place, for the ways in which our surroundings shape how we interact as neighbors, family members, and political beings, this is a tension that must be confronted. Buzzfeed, that unlikeliest of sources, concludes its “signs you grew up in suburbia” list on an unusually profound note: “You loved it and hated it, but either way, it was home.” Perhaps it’s time we learn to love our home—cul-de-sacs and all.

Emile Doak is director of events & outreach at The American Conservative. He lives in his hometown of Herndon, Virginia.

Posted in , . Tagged , , , . 15 comments

Did the State Destroy the Best Model for Affordable Urban Housing?

The New York City region has a high concentration of cooperative apartments (“co-ops”), a method for creating owner-occupied, high-density housing with a longer history than the condominium model that now prevails throughout much of the country. A large subset of New York’s co-op stock is held under a limited-equity arrangement, a unique framework that combines the benefits of home ownership with long-term affordability. As the cost of housing continues to soar in regions with strong economies, this idiosyncratic model deserves a fresh look nationwide.

Like market-rate co-ops, limited-equity buildings are owned by residents whose shares represent equity in a business association. The association owns the buildings and grounds, and the resident-owners elect a board that sets policy. What distinguishes limited-equity buildings from market-rate co-ops is that the initial purchase price and the subsequent resale value of a unit is limited. In other words, the value of a unit does not float with the city’s land markets. Instead, when a resident leaves, the co-op repurchases his or her initial investment (plus some modest, formulaic measure of appreciation); it then charges the next resident, essentially, what the previous resident had been paid.

In New York, most limited-equity developments are now regulated by the state’s Mitchell-Lama affordable housing program, making them subject to income guidelines and other measures. Such oversight is not strictly necessary, and some do not participate. Significant tax benefits are also available for maintaining affordability. Presently, there are about 70,000 limited-equity units in the city, but, despite their value and viability, their number has been declining. The temptation of windfall appreciation has caused some boards—particularly in Manhattan—to reorganize as market-rate co-ops. At the same time, a shortage of cheap land, even on the city’s outskirts, makes it costly for new co-ops to be established. Finally, a general lack of knowledge about its merits has probably kept the limited-equity model from being a more prominent part of today’s affordable housing proposals. This is unfortunate, because limited-equity co-ops can work; and many American cities now have shortages of good housing for middle-income residents.

Cooperativism and New York City’s Early Housing Co-ops

The limited-equity framework is closely related to the modern cooperative, more generally, whose roots can be traced to Rochdale, England, in the mid-19th century. In 1844, a group of tradespeople pooled their buying power to form a food co-op, allowing them to source high-quality ingredients at lower costs. In the course of forming their association, the group developed a set of seven basic principles that have since guided the framework of most cooperatives: open membership; democratic control; dividend on purchase; limited interest on capital; political and religious neutrality; cash trading; and promotion of education. By the turn of the 20th century, the Rochdale vision had achieved a leading role in the reform currents of Europe and North America. In England, the planning visionary Ebenezer Howard proposed a Rochdalian cooperative structure for his Garden City in his 1899 classic, To-Morrow: A Peaceful Path to Real Reform. In Germany, Theodor Herzl relied on a similar model in his blueprint for Israel in Old New Land. In the United States, Edward Bellamy had already envisioned a similarly utopian future age in his novel, Looking Backward. But while cooperativism took root in the visionary writings of the Victorian period, it remained limited in its practical applications, particularly in the world of housing. In practice, co-ops only became a component of New York City housing once the labor movement gained traction in the early 20th century.

Early in the 20th century, labor in New York was at the forefront of cooperativism. The 1911 fire at the Triangle Shirtwaist Factory, in which 146 people—mostly young women—died, marked a turning point. The ensuing outrage about dangerous working conditions fueled labor activism, and demands for better housing were made a priority. The convergence of a powerful labor movement with the city’s uniquely apartment-oriented housing stock made the phenomenon of limited-equity cooperative housing possible.

But it is an irony of the changing nature of politics that cooperativism was championed by many on the Left in the early 20th century, yet in today’s politics its principles dovetail nicely with a more conservative approach. This is because cooperativism is essentially a self-help solution from a time when the role of the state was presumed to be limited. As a result, it does not require much public-sector involvement to work. In practice, establishing and managing a co-op has much more in common with starting a business or governing a small town than it does with subscribing to an ambitious political ideology.

Abraham Kazan was the central figure in the early narrative of American co-ops. He grew up on Manhattan’s Lower East Side; his parents had brought him to New York from Russia as a child. By the 1920s his career was already entwined with the Amalgamated Clothing Workers (“ACW”) union, where he served as president of its cooperative credit union. Perhaps as an outgrowth of that role, he sought to apply a version of the Rochdale principles to the need for better housing in New York. Kazan and other labor leaders lobbied the New York State legislature to enact a framework that would facilitate construction of affordable new apartments, and in 1926 their efforts yielded the Limited Dividend Housing Act (LDHA). This law granted 20-year tax abatements to new buildings aimed at low-income tenants and whose profits were capped at just six percent. Although the legislation was not as strong as the initial proposal, it provided a new opening and ACW leaders quickly established the Amalgamated Housing Corporation (AHC), a new entity to take advantage of the new law; Hillman appointed Kazan as its president. The AHC was charged with developing housing for union members and others who qualified under the guidelines of the LDHA.

The 1920s land market presented a practical challenge: in neighborhoods like the Lower East Side, where new housing was most badly needed, scarce land was available for construction. Echoing Sir Ebenezer Howard’s strategy to make Garden Cities affordable by building them on inexpensive rural land, the ACW selected a site for its first co-op far from its home base on the Lower East Side. Kazan chose a canvas in the northwest Bronx—on the suburban outskirts of the 1920s city. The development was financed by combining a down payment drawn from ACW funds with a $1.2 million loan from Metropolitan Life Insurance. Meanwhile, a separate pool was established by the owners of a community newspaper, the Forward, to finance the upfront equity payments that would be required of cooperators. Herman Jessor, a young architect who supported the goals of the labor movement, came to work on the AHC project. Jessor and Kazan formed a strong bond that would result in a lifetime of collaboration.

Jessor’s site plan comprised a cluster of six mid-rise, Tudor-style apartment buildings, with spacious rooms and landscaped grounds. Alexandra Hans, who grew up in the Amalgamated Housing Cooperative, described the key elements of its design:

Each apartment had hardwood floors throughout and ceramic tile bathrooms with marble thresholds. The kitchen was eat-in, and there was a foyer and a living room. The apartments to be selected had one, two, or three bedrooms. They all had cross-ventilation and sunlight. Some of the larger apartments had three exposures, depending on where they were located in the building.

A landscaped courtyard and detailed masonry demonstrate the strong aesthetic design elements that were incorporated into the Amalgamated Co-op, located in the Van Cortlandt Village section of the Bronx, New York City. (Photo: Amalgamated Housing Cooperative.)

When the Amalgamated opened in November 1927, with 303 original cooperators, the one-time purchase price for a standard two-bedroom apartment was $2,000—or around $28,000 in 2017 dollars. This amount constituted the cooperator’s limited equity in the cooperative—while the market value of the complex was presumably greater than the sum of shareholders’ investments. Carrying charges, or “maintenance fees,” for such a unit in 1927 were pegged at $44 per month—or about $600 in 2017 dollars. In addition to housing, the Amalgamated arranged for a number of community services for its cooperators. Milk and ice deliveries were purchased on the co-op model, and several cooperatively-owned stores were established in the immediate vicinity, including a pharmacy, a barber shop, a tailor, a shoe repair, a grocery store, and a butcher.

The LDHA had opened the door for groups other than its active sponsors to begin raising the necessary capital for limited-equity developments and created a legislative blueprint for them—and other players in the city’s real estate market perceived opportunities. Notably, the rush that characterized the early history of the limited-equity housing sector was marked by ironies: Although it was sponsored by one of the key stakeholders that had pushed for the LDHA, the Amalgamated was beaten to the market by another limited-equity development, the Bronx Park East Co-ops, on Allerton Avenue. Similar co-ops that opened for occupancy around the same time included the nearby Shalom Aleichem Houses, on Sedgwick Avenue, and the Farband Houses, near Pelham Parkway. All were sponsored by various labor or left-wing groups.

So, while early limited-equity co-ops grew out of the activism of some of the most radical political organizations in the city, they also brought members of the city’s workforce into homeownership, giving them a stake in the private economy. And despite its early support from radicals, the limited-equity housing arrangement provided a framework that was in many ways compatible with a conservative, market-based approach to real estate: a tax credit for developers and owners was the primary form of government support. As a result, even today, the limited-equity model has the potential to transcend some of the most controversial political subjects that may present obstacles to other affordable housing proposals.

In 1927, trouble for any new business venture was just around the corner. Yet how the Amalgamated survived the Depression illustrates the genuinely cooperative nature of the community in its early days. Kazan’s personal involvement was certainly an important factor. To save money, he met with residents and devised a plan to share custodial and grounds-keeping work on a volunteer basis. Undoubtedly, the residents’ ownership stake in the community made these sacrifices easier to elicit. The co-op also enjoyed a degree of leeway with its creditors, because it remained solvent and continued to perform on its debt at a time when many debtors were bankrupt. Kazan used the co-op’s stability to negotiate more favorable mortgage terms with Metropolitan Life. Most critically, the co-op implemented a proactive plan to generate needed cash while keeping its apartments occupied and its membership growing. Hans describes the approach:

Vacant apartments were rented out for a higher carrying charge than $11 [per room], and a lowered per-room investment of $200. The new residents could stay on for two and a half years. If the new family liked living [there], they could remain and apply the excess rent they had already paid in to bring their investment up to the $500 per room level.

Following this approach, in one of the worst years of the Depression, the co-op generated a surplus, and the board used some of the revenues to purchase an adjacent parcel.

The Amalgamated Dwellings, on New York’s Lower East Side: no longer affordable. (Photo: Theo Mackey Pollack)

Kazan’s second limited-equity co-op was the Amalgamated Dwellings, also underway when the Depression struck, located back on the Lower East Side, at Grand and Columbia Streets. The Dwellings brought the limited-equity housing model to the geographic heart of the ACW’s membership base. Partially financed by a loan from the nearby Bowery Savings Bank, residents began to occupy the new units in the fall of 1930. The 231-unit complex was arranged around an open courtyard, with lower lot coverage ratios than the tenements that comprised the surrounding urban fabric. In a 1994 Times article, Christopher Gray interpreted its architecture:

[The architects] worked in a romantic side of European modernism in a way rarely seen in New York, with rich brickwork patterns and colors following Austrian, Belgian, and Dutch designs of the 1920s. The red- and salmon-colored brick veers around in wild angles and staccato soldier courses, interrupted by occasional stucco panels, and voluptuous cast-stone door surrounds and curvy iron decoration. New York 1930, [a highly regarded book] by Robert A. M. Stern, Thomas Mellins, and Gregory Gilmartin, calls it “a major achievement in American housing.”

Along with his efforts to maintain solvency in the Bronx, Kazan employed similar approaches to shepherd the downtown Dwellings through the Depression years, working with resident-owners to control expenses and make good management decisions. The Dwellings, like its precursor in the Northwest Bronx, survived the 1930s and remained an affordable co-op for decades. However, in 1997, the Amalgamated Dwellings board traded the myriad benefits of limited-equity for the windfall to current owners, whose neighborhood had been absorbed by the astronomical real estate universe of Manhattan.

Both Amalgamated cooperatives were thoughtfully designed and built on a traditional neighborhood scale. These were not simply utilitarian housing blocks; they were planned communities. In addition to their spacious, modern rooms, they provided residents with landscaped grounds and attractive architectural details, grounded in the traditions of European town planning. The Amalgamated Co-op and the Dwellings expressed, respectively, the broader Tudor and Art Deco styles that predominated among the city’s private multifamily buildings in the early 20th century. Accordingly, the cooperatives themselves comprised political communities that allowed for broad and direct participation by resident stakeholders.

The postwar limited-equity cooperative: The Amalgamated-Warbasse Houses (Brooklyn, late 1950s), reflect the high-density, highway-oriented model that was pursued with support of Robert Moses and a more active role by the public sector. (Photo: Joel Raskin.)

Robert Moses and Transformation in the Post-War Era

The success of early labor-sponsored co-ops attracted new political interest in the period immediately after World War II. The original co-ops became a template, however, for a notably different approach to urban housing. Returning veterans had fueled a surge in local housing demand. In addressing this need, the infamous New York planner Robert Moses saw a new opportunity to remake the city: He began to promote a supercharged version of limited-equity cooperativism.

In 1945, Moses met with Kazan and obtained his support for a new development. Much larger than the adjacent Amalgamated Dwellings, Moses’s Hillman Houses represented the start of a collaboration with Kazan that would yield increasingly massive limited-equity cooperatives that, unlike the leading lights of the pre-war period, benefited from strong government support. Not only would public money flow to these developments, but in many cases the power of eminent domain would be used to clear a canvas that was unhindered by existing urbanism. Kazan and Moses held differing political philosophies, but shared two critical beliefs about urban housing: first, the demolition of tenements was a clear benefit to the city; second, large-scale, high-rise developments could address the modern city’s housing needs.

In 1949, the Federal Housing Act authorized slum clearance for housing developed under its auspices; Moses and Kazan took this as a green light. By 1951, they had transformed the AHC into a new, larger entity: the United Housing Federation (UHF). Jessor was appointed chief architect, and with the added support of the state’s new Mitchell-Lama Act, the UHF became the most prolific builder of middle-income cooperative housing in U.S. history.

The stark new developments fostered a reduced degree of intimacy, with buildings that vaguely resembled Le Corbusier’s concept of A Machine for Living In. This was a time of modernity and state action. Although these middle-income buildings were more well-appointed than low-income housing projects of the same era, and although they enjoyed the benefits of being owner-occupied, they exhibited some of the same questionable design choices that characterized contemporary public housing for the poor.

The most salient of these problems centered around a radical departure in scale, form, and layout from the cultural traditions of town planning that had shaped urban development down to the eve of World War II. And yet, these novel qualities also represented a previously impossible efficiency that produced more units; a materialist approach that defined success by the gross number of people who received a benefit. In Working-Class New York, Joshua Freeman delineates the order of UHF priorities:

[The developers] placed the highest value on building comfortable housing at affordable prices, with exterior appearance secondary. Apartments in UHF projects were thoughtfully laid-out, with plenty of light, cross-ventilation in most rooms, eat-in kitchens (with windows) and parquet floors.

In the post-war period, new UHF limited-equity cooperatives included the Hillman Houses (1947-1950); East River Houses (1956); Seward Park (1957); Penn South (1962); Rochdale Village (1963); and Co-op City (1968-1972). Together, these six developments added more than 28,000 new units to the New York City housing stock. During the same period, other, non-UHF-sponsored co-ops were also organized or expanded, amplifying the total number of new units.

Spacious, modern housing in stable, owner-occupied neighborhoods had long been a tall order for middle-income families—and post-war limited-equity cooperatives offered many New York City residents a measure of economic and social stability. Kazan and his team appeared to subscribe to the conservative adage that private property is the cornerstone of democracy. In fact, their radicalism was the belief that the base of people who lived by this truism could be so broadly expanded, even amid the challenges posed by a crowded, expensive, and increasingly regulated city.

But some of the design choices that were used to facilitate greater unit quantities in these behemoth, post-war developments eroded several of the pre-war cooperative model’s inherent strengths. The sheer size of the post-war cooperatives was an affront to any intuitive sense of human-scaled community. The massing and layout elements—towers in the park, superblocks without street life, and a near absence of humanizing aesthetic considerations—manifested all the prominent mistakes that Jane Jacobs identified in the urban planning orthodoxy of post-war America. Finally, the formalization of the co-ops under the state’s Mitchell-Lama program, combined with their attenuated connections to the grassroots labor and community organizations that had been so important during the pre-war period, watered down the character, independence, and autonomy that had contributed to a sense of purpose and community.

The Twin Pines logo was once a common marker of cooperative organizations around the world. It can be found in the architectural details of many New York City limited-equity co-ops. Here, it is seen in the brickwork of a perimeter fence around the Amalgamated Dwellings on New York’s Lower East Side.

The largest and—not coincidentally—the last of the large limited-equity developments was Co-op City. Begun in 1968 by the UHF team, its monotonous 32-story towers would dwarf the detached houses and small apartment buildings that characterized the surrounding neighborhoods of the East Bronx near the Westchester County line. Co-op City was car dependent. It was located far beyond the last subway stop, and its only public transportation was a bus. Worst of all, its builders discovered, much too late, that the marshland on which it was being built was too soft to support the massive towers—and the structures immediately began to subside. More than even the other large post-war developments, Co-op City was lacking in good design. While its location along Eastchester Bay and Pelham Bay Park provided a natural counterpoint, it remained the starkest and most institutional of the limited-equity developments. After several expensive engineering feats, Co-op City’s units began to come onto the market in the fall of 1968.

In 1971, Kazan died from the effects of a debilitating stroke while Co-op City remained in development. In the absence of his leadership, a series of allegedly broken promises led the UHF-allied management to be sued by cooperators, who accused it of fraud. The case marked a sour turning point: Some of the plaintiffs were longtime New York City labor activists who had shared Kazan’s beliefs in self-help and participatory communities, but at Co-op City, the UHF had become an adversary, rather than an advocate for their interests. In 1975 and 1976, a yearlong “rent strike” followed, in which residents withheld their maintenance payments, citing a litany of overlooked complaints. Ultimately, the UHF-backed candidates withdrew their names from a board election and were replaced by a slate that represented the strikers. The new board negotiated more favorable terms for cooperators for its state-backed mortgage and other expenses. The UHF was effectively finished.

Since the 1970s, the dearth of new limited-equity developments, along with soaring market housing costs in New York City, has resulted in years-long or suspended waiting lists—or sporadic “housing lotteries”—for units in most of the remaining limited-equity buildings. Frustrating as this situation may be, it illustrates the continuing value and viability of limited-equity co-ops in a highly competitive, heavily regulated real estate market. In his later years, Kazan criticized co-op residents whom he perceived to take little interest in the spirit of cooperativism, and instead seemed narrowly interested in UHF communities because of the value they provided as affordable housing. Be that as it may, it is interesting to consider how the various post-war changes to co-ops—greatly increased scale, radical site planning, and a supplanting of a literal community by its proxy, the state—may have diluted the benefits, beyond simply affordable housing, from an approach that once also created strong communities.

When implemented on a smaller and more traditional scale, and when integrated into established neighborhoods, the results had been, and remain, meaningfully different from those which Kazan lamented. If it is true that the dysfunction that characterized Co-op City was partly a product of the same types of urban-planning mistakes that Jane Jacobs and the New Urbanists have identified in other aspects of post-war American planning—and if it is also true that some of the other large developments of the post-war period were less lovable than they might have been because of their sheer size—then there may be space for a revival of limited-equity cooperatives on a more human scale.

Such an approach would likely be closer, in essential ways, to the original housing co-ops that were sponsored by labor, political, and community organizations. Many of these organizations, at their time, were aligned with the specific labor or left-wing organizations that had pioneered cooperative housing; yet in practice, their organization is very compatible with philosophies across the political spectrum. At a time when both affordable housing and stable communities are increasingly difficult to find in a growing number of regions, the story of New York City’s limited-equity communities deserves to be told again.

Theo Mackey Pollack practices law in New Jersey, is a consultant on urban-planning projects, and has worked on Hurricane Sandy recovery projects in New York City. He blogs at Legal Towns, and has also written for the Metro New York Transit-Oriented Development Newsletter and the Steven L. Newman Real Estate Institute’s white papers series.

Copyright 2017 Theo Mackey Pollack

Posted in , , , , . 3 comments

Philadelphia’s Boulevard of Broken Dreams

The Schuylkill Expressway, a clogged four-lane artery into Center City Philadelphia, requires emotional stamina and automotive endurance. The eastbound lanes, crammed between wooded hills and the Schuylkill River, present a stop-and-go orchestra dictated by traffic volume, weather, and sudden exits. Drivers slowly pass trains, the ubiquitous Action News ZooBalloon, and remnants of Philadelphia’s industrial past before the city’s skyline emerges beneath the arched Girard Bridge.

The expressway leads to a stunning structural and arboreal vista of gleaming glass and water. Boathouse Row, 19th-century gingerbread houses that designate allegiance to university rowing clubs, charmingly commands the languid river. On warmer afternoons, rowers furiously keep pace with bikers along Kelly Drive, an alternative route for wearied commuters. Just beyond the boat houses is the Fairmount Water Works, an elegant reminder of the city’s history of municipal innovation. Dominating the entire scene, stoic and majestic above Fairmount Park and beneath rising skyscrapers, is the Philadelphia Museum of Art.

The Art Museum, a yellow-hued neoclassical masterpiece, overlooks a flag-lined linear boulevard that leads to City Hall. This impressive stretch, the Benjamin Franklin Parkway, marks its centenary this year. From the air, the Parkway resembles a Parisian thoroughfare of monuments, buildings, and trees. But a closer inspection leads to apprehension. A century after its creation, the Parkway appears unfinished, an assembled boulevard of pedestrian confusion, architectural contrasts, and impaired urban scale. Understanding how such a prominent city feature came to be—and suffered setbacks as the urban landscape was overtaken by cars—may point to ways in which the Benjamin Franklin Parkway can achieve its promise as a great public space.

The Philadelphia Museum of Art, Water Works, and Schuykill Expressway. (

The Parkway’s completion was a multi-generational endeavor. In 1858, Philadelphia’s City Council presented a plan to run boulevards between the city’s center and its growing suburbs. This proposal paralleled the city’s relentless explosion in population, industry, and commerce. Between 1850 and 1860, Philadelphia witnessed a 367 percent increase in population—in just one decade, going from 121,376 to 565,529 residents. Immigrants drove this staggering increase, principally from Ireland’s Ulster and Connacht. When this Irish influx arrived at Philadelphia’s ports, they typically settled in the city’s neighborhoods to work for textiles factories, locomotive works, or the Pennsylvania Railroad. But many Irish continued north, following the Schuylkill River’s headwaters to work in the anthracite coal mines. 

Irish migration necessitated the creation of parishes. In 1864, Napoleon Le Brun, a Philadelphia architect, designed an edifice that served as an everlasting tribute to this period. Completed during the Civil War, the Cathedral of Saints Peter and Paul remains a brownstone masterpiece, a gracefully proportioned basilica overseeing what was Logan Square. The square was named after James Logan, the Irish colonial secretary under William Penn who established shipping links between Philadelphia and Ulster. The cathedral was built under Archbishop James Wood, a Catholic convert from a prominent Philadelphia family. Wood presided over the diocese while forging an alliance with the industries that employed Irish immigrants.

The Cathedral towered over a poorer immigrant neighborhood known for fairs and special events. Through the late 19th century, industrial, commercial, and residential homes expanded from Logan Square. In 1876, the Academy of Natural Sciences, the oldest institution of its kind in the Americas, opened its doors on 19th Street during the nation’s centennial. The structure, initially designed to resemble a Gothic cathedral, opened in a neighborhood that, for all its growth, remained on the city’s outskirts. The neighborhood’s future remained frozen until an urban planning movement enraptured the nation’s industrial cities in the early 1890s.

The City Beautiful movement, introduced at the World’s Columbian Exposition in 1893, popularized multi-building neoclassical and Beaux-Arts revival projects throughout the Progressive Era. At a time when corruption corroded civic institutions and industry polluted air and water, the City Beautiful movement served as an aesthetic-conscious response to the Gilded Age. In his book on the Parkway, the historian David Brownlee explains that the planning movement was a “model of an orderly, classical metropolis, crisscrossed by boulevards and dominated by stately groups of public buildings.” Cities like Philadelphia worked to improve their urban presentation. Despite the nation’s unparalleled economic growth, these cities still lagged behind London, Paris, and Vienna. 

In the early 1890s, the city council reviewed the first proposal for what became the Parkway. A citizen-led petition accompanied the proposal, which called for a 160-foot wide road linking Center City to Fairmount Park, Philadelphia’s largest municipal park. The proposed boulevard would cut through a dense neighborhood, Logan Square, and ultimately, the still incomplete City Hall. The multi-tiered Second Empire structure, the nation’s largest municipal building, was finally completed in 1901. Its ornate tower, crowed by a William Penn statue, remained the tallest building in Philadelphia until the Liberty Place skyscrapers broke the tradition in the mid-1980s.


Prudent urban planning followed a sustained period of city corruption. By the turn of the century, Philadelphia’s Republican party had controlled the city since the Civil War era. The Republicans operated City Hall like New York’s Tammany Hall, its power extending to police stations that were placed adjacent to the party’s ward clubs. One observer called City Hall an “unholy alliance” among the “‘best people,’ representing the city’s financial, industrial and commercial interests, and a tightly-knit machine made up of grafters, gamblers and goons, whose political philosophy [was] based on the simple formula ‘what is in it for me?'”

The reporter Lincoln Steffens famously called Philadelphia “corrupt and contented,” but the city experienced a renaissance in architecture and planning despite this reputation. Reform simply expressed itself through brick and mortar. By 1907, ground was broken for what was presented as the “Fairmount Parkway.” Its planners, commissioned by the Fairmount Park Art Association, called for “a direct, dignified and interesting approach from the heart of the business and administrative quarter of the city, through the region of educational activities grouped around Logan Square, to the artistic center to be developed around the Fairmount Plaza, at the entrance to Philadelphia’s largest and most beautiful park.”

The project commenced through a series of corrupt mayoral administrations. For a decade, the construction, which cleared over a thousand structures, slowly moved toward completion amid political fights for reform. But the Parkway owed its existence to the long-standing machine. In his book, Brownlee wrote that “an invincible alliance…between powerful citizens and corrupt politicians” ensured the Parkway’s opening. 

In 1917, following years of demolition projects and public debate, the Fairmount Park Commissioners adopted a formal design for the Parkway. The design was presented by Jacque Gréber, a French architect who specialized in landscape design and city planning. Gréber was a leading proponent of the City Beautiful movement, whose urban planning in Ottawa later transformed the modern layout of Canada’s capital city.

Gréber’s Parkway plan called for two linear segments running between Fairmount Park, through Logan Square as the central anchor, and narrowly toward City Hall. In 1918, over a decade after the groundbreaking, Philadelphia’s Evening Public Ledger triumphantly declared that the “Uninterrupted Parkway at last leads from City Hall to Fairmount’s entrance.”

What followed were a series of building projects designed to match the intended grandeur of the Parkway. Gréber modeled the Parkway after the Champs-Élysées in Paris, and he hoped visitors would behold a thoroughfare of monumental buildings, arresting statues and fountains, and bountiful greenery. Following World War I, Gréber stated, “I am glad to say that, if by this work the city of Paris may be enabled to bring its sister in America the inspiration of what makes Paris so attractive to visitors, it will be the first opportunity of Paris to pay a little of the great debt of thankfulness for what Philadelphia and its citizens have done for France during the last three years.”

Following World War I, the Parkway physically embodied the prosperity enjoyed by American cities. Major construction projects commenced during the Roaring Twenties, including the Insurance Company of North America building, the Free Library of Philadelphia, the Fidelity Mutual Life Insurance Company building, and the Rodin Museum. The succession of buildings personified the ideals intended by Beaux-Arts and neoclassical architecture. The Parkway itself became Philadelphia’s center for culture, a boulevard of elegance in a city sprawling with steeples, smoke stacks, and row homes. 

By the Great Depression, parts of the Parkway resembled a Parisian boulevard. Logan Square was reconfigured as a circle to imitate the Place de la Concorde, a major public square in Paris. The Swann Memorial Fountain was placed as the circle’s centerpiece, a sculptural tribute to the Schuylkill River, Delaware River, and Wissahickon Creek. The Family Court building, along with the Free Library, were painstakingly modeled after the Hôtel de Crillon and Hôtel de la Marine. Overlooking the circle, they created a structural gateway to the Parkway, which slowly fulfilled Gréber’s architectural and planning vision. 

Completing the postcard was the Philadelphia Museum of Art, an ongoing project that created a barrier between Fairmount Park and the Parkway. Designed as a Greek Revival temple, the structure stood over its fraternal buildings on the Parkway, creating an Acropolis for Philadelphia. Through World War II, one could ascend the Art Museum’s steps to behold the Parkway’s ongoing development. From the Franklin Institute to the School Administration Building, the Parkway—renamed after Benjamin Franklin in 1937—deceivingly had limitless possibilities. But the Depression slowed its continued development. By mid-century, the Parkway appeared unfinished, an imperfect arrangement of Gréber’s Parisian dream.

In the 1960s, the celebrated urbanist Jane Jacobs panned the Parkway. Jacobs was a leading skeptic of the City Beautiful movement, labeling its planning approach an unrealistic theory that destroyed the natural order of urban neighborhoods. “The library has no business being out here and neither do the Art Museum or the Franklin Institute,” she said. In The Death and Life of Great American Cities, Jacobs observed that Logan Circle was “discouraging to reach on foot,” noting that it was “mainly an elegant amenity for those speeding by” and “gets a trickle of population on fine days.”

Edmund Bacon, the esteemed urban planner and long-time executive director of Philadelphia’s City Planning Commission, disagreed with Jacob’s assessment. Although Bacon steadfastly defended the Parkway, his planning vision disrupted Gréber’s intentions from an early age. Bacon’s 1932 thesis at Cornell called for “A Civic Center for Philadelphia,” which included the replacement of City Hall with two small civic buildings, along with a tree-lined promenade that awkwardly met the Parkway.

Bacon’s plans arguably hastened the Parkway’s decline. In the 1950s and 1960s, Philadelphia embraced ill-advised urban renewal projects. The city attempted to respond to the ascendant automobile culture and the accompanying flight to the suburbs. More cars made the Parkway nearly inaccessible to pedestrians endeavor, as it became less of an urban boulevard and more of a route for escaping downtown. Bacon attempted to “rescue” the city by planning the Vine Street Expressway, a gross interruption of the Parkway’s streetscape that created gaping holes and pedestrian inaccessibility. Such planning also failed to stall Philadelphia’s industrial and population decline. Between 1960 and 2000, the city lost nearly 500,000 people.

By the time Ed Rendell became mayor in the 1990s, the Parkway was an urban wilderness. Lifeless office buildings—modernist slabs of concrete—disrupted the scenery. The Park Towne Apartments awkwardly stood near the Art Museum, a lonesome structure reached by car, not foot. Chain restaurants were more common than cafes and bars. In Hidden City, the urban designer Greg Meckstroth called the Parkway “a veritable museum ghetto that often becomes desolate at night.” He concluded that it appeared to be “condemned to sour monotony.”

The Parkway endures as a symbol of disappointment in Philadelphia. In a 2014 piece, Gregory Heller—a biographer of Bacon—wrote that the “Parkway looks good on the Fourth of July and during the [Philadelphia] marathon. But otherwise it’s an underutilized, poorly planned, highway wasteland of an urban space.” Heller argued that Philadelphians “should face up to the fact that as much as we love the view from the museum steps, and the boulevard of flags on the evening news, the Parkway is a disaster and the city would be better if it were never built.”

During the spring and summer months, the Parkway transitions into a landlocked pit for festivals and concerts. Temporary security fences and portable bathrooms vandalize a frustrating boulevard of unfulfilled promises. In a recent Philadelphia Inquirer column, the architecture critic Inga Saffron wrote that this year’s “anniversary events, which…focus on high-toned cultural offerings, are a painful reminder that we still haven’t figured out what the Parkway should be.”

At the same time as the Parkway is struggling, Philadelphia is also experiencing a renaissance. Over the past decade, the city witnessed a boom in commercial and residential development, game-changing investments made by universities, and gentrifying neighborhoods that had recently suffered from crime and blight. The Fairmount neighborhood, near the Art Museum, has turned into a thriving residential quarter and a popular nightlife destination. A controversial property-tax abatement program, spearheaded by the city and embraced by developers, contributed to this rapid change. But Philadelphia, a city with an ambivalent future in the 1990s, continues to enjoy an upward trend in population growth, business investment, and neighborhood-level improvements. 

Philadelphia’s leading planners still debate how to turn the Parkway into the European-style street envisioned a century ago. The city is leading a study to properly manage festivities and for-profit events. Frequent street closures and disruptive concerts spoil the revival occurring in the Parkway’s surrounding neighborhoods. The city’s study would join numerous plans previously intended to address the Parkway’s flaws. 

In 1999, Paul Levy, president and CEO of Center City District, called for more pedestrian-friendly park space, apartment buildings, and cultural venues. Levy’s radical proposals languished through the decade. In 2013, however, Philadelphia’s park officials released “More Park, Less Way,” which prescribed ideas to attract people to the Parkway. In recent years, the Parkway experienced minor improvements, including reconfigured sidewalks, expanded plazas on the north side of Logan Square, and the opening of a serene art museum, the Barnes Foundation. But the Parkway lingers as a lonely pocket in a lively setting, a major city artery with cultural institutions more likely accessed by taking Uber than walking. 

In 1998, Buzz Bissinger wrote A Prayer for the City, a magnificent profile of the Rendell years and Philadelphia’s fight for survival during that period. Nearly two decades later, Philadelphia’s prayers appear answered. A city that ignited America’s industrial rise seems ready for the future. But the Parkway, designed to signify Philadelphia’s place in the world, remains in purgatory. It awaits special dispensation. The Parkway, along with Logan Circle, have significantly evolved since the Cathedral opened its doors to immigrants. For now, it remains a destination to daydream. It could use a prayer or a lucky penny in Logan Circle’s fountain. 

Charles F. McElwee III works in the economic development sector in northeastern Pennsylvania. Follow him on Twitter at @cfmcelwee.

Posted in , , , , . 6 comments

The Infinite Suburb Is an Academic Joke

“The Jetsons” (Warner Bros. publicity)

The elite graduate schools of urban planning have yet another new vision of the future. Lately, they see a new-and-improved suburbia—based on self-driving electric cars, “drone deliveries at your doorstep,” and “teardrop-shaped one-way roads” (otherwise known as cul-de-sacs)—as the coming sure thing. It sounds suspiciously like yesterday’s tomorrow, the George Jetson utopia that has been the stock-in-trade of half-baked futurism for decades. It may be obvious that for some time now we have lived in a reality-optional culture, and it’s vividly on display in the cavalcade of techno-narcissism that passes for thinking these days in academia.

Exhibit A is an essay that appeared last month in The New York Times Magazine titled “The Suburb of the Future is Almost Here,” by Alan M. Berger of the MIT urban design faculty and author of the book Infinite Suburbia—on the face of it a perfectly inane notion. The subtitle of his Times Magazine piece argued that “Millennials want a different kind of suburban development that is smart, efficient, and sustainable.”

Note the trio of clichés at the end, borrowed from the lexicon of the advertising industry. “Smart” is a meaningless anodyne that replaces the worn out tropes “deluxe,” “super,” “limited edition,” and so on. It’s simply meant to tweak the reader’s status consciousness. Who wants to be dumb?

“Efficient” and “sustainable” are actually at odds. The combo ought to ring an alarm bell for anyone tasked with designing human habitats. Do you know what “efficient” gets you in terms of ecology? Monocultures, such as GMO corn grown on sterile soil mediums jacked with petroleum-based fertilizers, herbicides, and fast-depleting fossil aquifer water. It’s a method that is very efficient for producing corn flakes and Cheez Doodles, but has poor prospects for continuing further into this century—as does conventional suburban sprawl, as we’ve known it. Efficiency in ecological terms beats a path straight to entropy and death.

Real successful ecologies, on the other hand, are the opposite of efficient. They are deeply redundant. They are rich in diverse species and functions, many of which overlap and duplicate, so that a problem with one failed part or one function doesn’t defeat the whole system. This redundancy is what makes them resilient and sustainable. Swamps, prairies, and hardwood forests are rich and sustainable ecologies. Monocultures, such as agri-biz style corn crops and “big box” retail monopolies are not sustainable and they’re certainly not even ecologies, just temporary artifacts of finance and engineering. What would America do if Walmart went out of business? (And don’t underestimate the possibility as geopolitical tension and conflict undermine global supply lines.)

Suburbia of the American type is composed of monocultures: residential, commercial, industrial, connected by the circulatory system of cars. Suburbia is not a sustainable human ecology. Among other weaknesses, it is fatally prone to Liebig’s “law of the minimum,” which states that the overall health of a system depends on the amount of the scarcest of the essential resources that is available to it. This ought to be self-evident to an urbanist, who must ipso facto be a kind of ecologist.

Yet techno-narcissists such as MIT’s Berger take it as axiomatic that innovation of-and-by itself can overcome all natural limits on a planet with finite resources. They assume the new-and-improved suburbs will continue to run on cars, only now they will be driverless and electric, and everything in their paradigm follows from that.

I don’t think so. Like it or not, the human race has not yet found a replacement for fossil fuels, especially oil, which has been the foundation of techno-industrial economies for a hundred years, and it is getting a little late in the game to imagine an orderly segue to some as-yet-undiscovered energy regime.

By the way, electricity is not an energy source. It is just a carrier of energy generated in power plants. We have produced large quantities of it at the grand scale using fossil fuels, hydropower, and nuclear fission (which is dependent on fossil fuels to operate). And, by the way, all of our nuclear power plants are nearing the end of their design life, with no plans or prospects for them to be replaced by new ones. We have maxed out on potential hydroelectric sites and the existing big ones are silting up, which will take them out of service inside of this century.

Electricity can also be produced by solar cells and wind turbines, but at nowhere near the scale necessary, on their own, for running contemporary American life. The conceit that we can power suburbia, the interstate highway system, truck-based distribution networks, commercial aviation, the U.S. military, and Walt Disney World on anything besides fossil fuels is going to leave a lot of people very disappointed.

The truth is that we have been running all this stuff on an extravagant ramp-up of debt for at least a decade to compensate for the troubles that exist in the oil industry, oil being the primary and indispensable resource for our way of life. These troubles are often lumped under the rubric peak oil, but the core of the trouble must be seen a little differently: namely, a steep decline in the Energy Return on Investment (EROI) across the oil industry. The phrase might seem abstruse on the face of it. It means simply that it is becoming uneconomical to extract oil from the ground, even with the so-called miracle of “fracking” shale oil deposits. It doesn’t pay for itself, and the EROI is still headed further down.

In the 1930s, the oil industry could get 100 barrels of oil for every barrel of oil in energy they put into production. Drilling on the Texas prairie was like slipping a straw in a milkshake and the oil gushed out of the ground under its own pressure. Today, those old wells are far into depletion and we’re left with unconventional oil. Horizontal drilling and fracking into shale is enormously more expensive to carry out, and offshore deepwater drilling that requires a $100 million floating oil platform is nothing like slipping a straw into a milkshake. They have to go down a mile or more beneath the surface and then another mile into the undersea rock. It’s very expensive and dangerous. (Remember the BP Deepwater Horizon blowout of 2010?)

The aggregate ratio of oil-out-for-energy-in these days is 17 to 1, and for shale oil it’s more like 5 to 1. You cannot run industrial civilizations at those EROI ratios. Thirty to one is probably the minimum. And you can’t run renewable alternative energy systems without an underlying support platform of fossil fuels. The implacable reality of this dynamic has yet to sink in at the graduate-school fantasy factories.

The world’s major oil companies are cannibalizing themselves to stay in business, with balance sheets cratering, and next-to-zero new oil fields being discovered. The shale oil producers haven’t made a net dime since the project got ramped up around 2005. Their activities have been financed on junk lending made possible by arbitrages on the near-zero Fed fund rate, itself an historical abnormality. The shale-oil drillers are producing all out to service their loans, and have thus driven down oil prices, negating their profit. Low oil prices are not the sign of a healthy industry but of a failing industrial economy, the latter currently expressing itself in a sinking middle class and the election of Donald Trump.

All the techno-grandiose wishful thinking in the world does not alter this reality. The intelligent conclusion from all this ought to be obvious: Restructuring the American living arrangement to something other than “infinite” suburban sprawl based on limitless car dependency.

As it happens, the New Urbanist movement recognized this dynamic beginning in the early 1990s and proposed a return to traditional walkable neighborhoods, towns, and cities as the remedy. It has been a fairly successful reform effort, with hundreds of municipal land-use codes rewritten to avert the inevitable suburban sprawl mandates of the old codes. The movement also produced hundreds of new town projects all over the country to demonstrate that good urbanism was possible in new construction, as well as downtown makeovers in places earlier left for dead like Providence, Rhode Island, and Newburgh, New York.

When the elite graduate schools finally noticed the New Urbanism movement, it provoked extreme jealousy and hostility because they hadn’t thought of it themselves—it was a product of the property-development industry. Harvard’s Graduate School of Design, in particular, had been lost for decades in raptures of Buck Rogers modernism, concerned solely with “cutting edge” aesthetics—that is, architectural fashion statements aimed at status seeking. They affected to be offended by the retrograde front porches and picket fences of the New Urbanists, but they were unable to develop any coherent alternative vision of a plausible future urbanism—because there really wasn’t one.

Instead, around 2002 Harvard came up with a loopy program they called “Landscape Urbanism,” which was a half-baked revision of Ian McHarg’s old Design with Nature idea from the 1970s. Design with Nature had spawned hundreds of PUDs (Planned Unit Developments) of single-family houses nestled in bosky, natural settings and sheathed in environmental-looking cedar, and scores of university housing “complexes” bermed into the terrain (with plenty of free parking). Mostly, McHarg’s methodology was concerned with managing water runoff. It did not result in holistic towns, neighborhoods, or cities.

The projects of so-called Landscape Urbanism were not about buildings, and especially the relationship between buildings, other buildings, and the street. They viewed suburbia as a nirvana that simply required better storm-water drainage and the magic elixir of “edginess” to improve its long-term prospects.

Apparently MIT, down the street from Harvard, got jealous. They had snootily ignored the New Urbanism movement too, and done next to nothing on their own to rethink the next phase of the urban condition, besides the usual stale fantasies derived from the Radiant City playbook of Le Corbusier, the Swiss modernist who tried to destroy Paris in the 1920s with a skyscrapers-in-a-park scheme (which ended up being appropriated for the notorious American housing projects for the poor of the 1950s).

That’s where MIT’s Berger came in, having previously been at Harvard during the birth pangs of Landscape Urbanism. He brought over to MIT the P-Rex Lab (The Project for Reclamation Excellence) which put a “cutting edge” super high-tech veneer on what was still just environmental mitigation on previously used landscapes—pushing polluted soil around with front-end loaders.

Berger’s P-Rex lab showed absolutely no interest in the particulars of traditional urban design: street-and-block grids, street and building typologies, code-writing for standards and norms in construction, et cetera. They showed no interest in the human habitat per se. Berger and his gang were simply promoting a fantasy they called the “global suburbia.” Their fascination with the suburbs rested on three pillars: 1) the fact that suburbia was already there; 2) the presumption that mass car use would continue to enable that settlement pattern; and 3) a religious faith in technological deliverance from the resource and capital limits that boded darkly for the continuation of suburban sprawl.

I will tell you without ceremony what the future actually holds for the inhabited terrain of North America. The big cities will have to contract severely and the process will be fraught and disorderly. The action will move to the small cities and small towns, especially the places that have a meaningful relationship with farming, food production, and the continent’s inland waterways. The suburbs have three destinies, none of them mutually exclusive: slums, salvage, and ruins. The future has mandates of its own. If we want to remain civilized, we will be compelled to return to a landscape composed of relationships between town and country, at a scale that comports with the resource realities of the future.

These days the failure of American imagination, especially at the university level, is epic.

James Howard Kunstler’s many books include The Geography of Nowhere, Too Much Magic: Wishful Thinking, Technology, and the Fate of the Nation, and the World Made by Hand novel series. He blogs on Mondays and Fridays at

Posted in , . Tagged , , , . 36 comments

How We Subsidize Suburbia

Wikimedia Commons/BrendelSignature

What image springs to mind when you picture “federally subsidized housing”? Most people imagine a low-income public housing tower, a homeless shelter, or a shoddy apartment building.

Nope—suburban homeowners are the single biggest recipient of housing subsidies. As a result, suburbs dominate housing in the United States. For decades, federal finance regulations incentivized single-family homes through three key mechanisms:

  1. Insurance
  2. National mortgage markets
  3. New standards for debt structuring

The housing market hides these details from the typical home buyer. As a result, most people are unaware of these subsidies. But their effects are striking—they determined the location and shape of development across America for generations.

A New Deal to Restore the Housing Industry

Debt has a negative connotation these days. Credit cards, student loans, and auto loans are the anchors that keep many Americans in debt for most of their lives. Meanwhile, we view mortgages very differently—they are seen as an investment, a symbol of adulthood, and a sign of financial stability.

This was not always the case. In the early 1900s, mortgages were just like any other kind of debt. Nowadays payments are spread out over decades, but back then they came due all at once after a few years. Most people didn’t have enough cash at the end of the term. It was standard to pay back some and negotiate a new loan for whatever they still owed.

This worked fine while the economy was booming, but investors refused to renew the loans after the 1929 stock market crash. Homeowners missed payments and foreclosure rates doubled. The housing industry collapsed, taking the economy down with it.

New Deal policymakers realized that restoring the economy depended on restoring the housing sector. In 1934, they created the Federal Housing Administration (FHA) with two key mandates:

  1. Revive the housing market, and
  2. Make homeownership attainable for more Americans

In pursuing these goals, the FHA determined the design, structure, and location of new private development. In turn, it made suburbia the dominant form of housing in the United States.

“The most ambitious suburbanization plan in U.S. history”

By making an offer lenders couldn’t refuse, the FHA exercised tremendous power over residential design. Mortgages had to meet an opinionated set of criteria to qualify for the federal insurance. Lenders could invest in mortgages not covered by the program, but they had a strong preference for homes that conformed to the guidelines. Compliance was mandatory for the insurance, so they pressured developers to follow the rules. By 1959, 25 years after it was formed, the FHA had helped three out of every five American families purchase a home.

FHA rules had implicit and explicit hierarchies of what homeowners ought to want. They had two key purposes: to stimulate the economy, and to constrain the market to only good investments. These goals—plus the social assumptions of the time—were reflected in the FHA’s evaluation of a mortgage. The standards included:

  • Large, new homes were given a higher score, because they increased demand for labor and materials. Older homes with small spaces didn’t create demand for new furniture. Features like long hallways and steep staircases lowered the rating, because they prevented easy moving of furniture.
  • Homogeneity of neighboring housing stock was believed to indicate stable housing prices. To get the max score on the FHA evaluation, the manual preferred that a house be a part of “a sparsely developed new neighborhood … completed over the span of very few years.”
  • The ideal house had “sunshine, ventilation, scenic outlook, privacy, and safety,” and “effective landscaping and gardening” added to its worth. The guide recommended that houses should be set back at least 15 feet from the road, and well-tended lawns that matched the neighbors’ yards helped the rating.
  • The manual had strict definitions for how streets should be built.
  • It prescribed minimum street widths and other specific measurements.
  • It recommended a hierarchical network, with a major arterial roads interlaced with smaller streets. The idea was to separate through traffic and enable efficient circulation.
  • It saw cul-de-sacs as the most desirable home locations, because they were most isolated from foot and auto traffic coming from outside of the neighborhood.
  • The guidelines favored auto- rather than transit-oriented development. The idea was that this would increase demand for cars, which were a growing part of American manufacturing.
  • The manual emphasized that suburbs must be arranged to promote strict separation of land uses
  • Multi-use districts with “commercial, industrial, or manufacturing enterprise” were seen to threaten residential value. So the FHA simply did not provide insurance for units where the first floor was a shop with residences above for most of the agency’s lifetime.
  • Development like what you see in Greenwich Village and other traditional neighborhoods in East Coast cities could not get an FHA loan. (These rules only changed in 2015.)
  • “There would be no corner groceries; if there were any stores at all, they would be grouped into a single shopping center,” wrote Tom Hanchett in The Other “Subsidized Housing.”

The combined effect of these standards was the most ambitious suburbanization plan in United States history. The FHA favored suburbia, so subdivisions became one of the most common neighborhood types within a few decades.

New Frontiers for Suburbia

New Deal programs enabled the expansion of suburbia into new regions, too. Prior to the Depression, mortgages were extremely local. Investors could not lend money from a distance, so capital accumulated in slow-growth areas and was scarce in fast-growing ones.

In commoditizing mortgages, New Deal programs made possible a national mortgage market for the first time. FHA guidelines standardized home loans, which allowed lenders across the country to treat loans of the same rating as fungible. Since the quality of these homes was assured by FHA inspectors, “investors from all over the country would know exactly what a particular mortgage was worth.” For the first time, capital-rich investors could lend money to developers expanding into the South and West.

The creation of the Federal National Mortgage Association (FNMA, better known as Fannie Mae) in 1938 took this a step further. Fannie Mae created a secondary market by purchasing mortgages from lenders. It created liquidity for these originators, which in turn allowed them to underwrite more mortgages. The federal government created Freddie Mac (FHLMC) in 1970 to serve a similar purpose. The combination of these secondary markets and the FHA guidelines was in effect a massive financing of suburban sprawl, all facilitated by the federal government.

The government also set a national limit on interest rates for mortgages. It created a standard rate for the country as a whole, where before there had been immense variation. Mortgages had been far more expensive in the West and South than in the capital-rich Northeast. The new standard rates made it artificially cheap to finance new development in the Southwest. This subsidized sparsely populated parts of the country, while disadvantaging older metropolitan areas. It also coincided with the creation of the interstate highway system, on which we’ll go into more detail in an upcoming post.

New Markets for Suburbia

While federal programs increased the geographic size of the market, they also increased the number of people who could afford a down payment. They did this by tweaking the structure of mortgage debt in two ways:

1. They decreased the size of monthly payments by spreading them over a longer period of time.

  • Federally-backed loans required terms of at least 10 years, replacing the balloon mortgages of the 1920s. This paved the way for the standard 30-year mortgage that we have today.
  • Borrowers focused on the size of these monthly payments rather than the total, so this made mortgages more affordable without actually decreasing their cost.

2. Federal programs slashed what was an acceptable down payment.

  • Before, the buyer had to pay upwards of 50 percent of the purchase price in cash, but with the FHA guarantees, banks were willing to accept down payments of just 10 percent.
  • To reward G.I.s returning from WWII, the Veterans Administration (VA) offered mortgage aid as well. The VA insurance program was even more generous than the FHA, so by midcentury banks offered as low as 0 percent down to newly returned veterans. These set the standard for conventional mortgages within a few years.

Harvard economist Edward Glaeser described the impact of “the mortgage subsidies that were explicit in the tax code and implicit in Freddie Mac and Fannie Mae” in a Boston Globe op-ed:

These home-borrowing subsidies … pull people out of America’s urban centers. More than 85 percent of people in detached homes are owner-occupiers, in part because renting leads to home depreciation. More than 85 percent of people in larger buildings rent. Since ownership and structure type are closely connected, subsidizing homeownership encourages people to leave urban high-rises and move into suburban homes.

By making long-term, amortized loans with low down payments the norm, federal policies made it possible for millions of people to buy single-family homes. These homeowners enthusiastically moved into the new mass-produced subdivisions to the west.

Invisible Subsidies

On the surface, mortgages appear to be a mostly free-market enterprise. Buyers take out financing through a private broker; they find a home through a private real estate agent; and they purchase their home from a private developer. Some people take out FHA loans, and everyone has to deal with the pesky permitting process, but for the most part homeowners transact with private parties.

The system masks a huge amount of government intervention. It isn’t evident to the average person, because it works through obscure mechanisms like insurance and financing terms. These don’t look like conventional cash subsidies, but they distort incentives, supply, and demand in the same way. Though these mechanisms go mostly unnoticed, they have transformed residential finance in America.

The U.S. is the most suburban country in the world. Most assume this is the organic result of individual preferences, because there’s little visibility into the ways that policy has shaped incentives. The reality is that the government played a huge role. Because these subsidies are complex and technical, it’s easy to forget their long history, but if we want to begin to understand the current state of the housing market, we have to first understand how we got here.

Devon Zuegel is a software engineer and urban planning enthusiast. This article originally appeared at Medium.

Posted in , , , . 21 comments

Struggling Cities Don’t Need Creative Class Leadership

Connecticut State Senator John Fonfara joins Mayor Luke Bronin (far right) to announce new business accelerator for the city, Startupbootcamp, in September. Credit:Ct. Senate Democrats/Creative Commons

Any unbiased observer of our cities can see that mediocrity is the salient characteristic of the typical local American politician. Another important problem in small and mid-sized cities is that they are poor and in need of revitalization, especially in Rust Belt areas. A natural conclusion to draw from the coincidence of inept leadership and socioeconomic decay is that better leaders are needed. But in the poorest, most troubled cities, talented leadership is not much of an asset, and it can be a liability. Talent does real harm by raising false expectations of a revival—distracting from mundane yet essential operational matters, and forestalling state intervention at critical junctures.

To assess the value of talented urban leadership, it’s best to start by looking at exceptions to the rule: places where it does exist. Hartford, Connecticut’s capital and home to 123,000 people, is one such exception. Mayor Luke Bronin is a former Rhodes Scholar and intelligence officer in the Naval Reserve. He investigated terrorist financing at the Obama Treasury Department, and served as the state of Connecticut’s general counsel before being elected mayor in 2015. An amateur musician, he wrote a song that was featured on Dawson’s Creek. He is 38. This is not a typical resume for a mayor of a small, deeply impoverished city. Decades of economic decline and imprudent budgeting have brought Hartford to the brink of bankruptcy.

Yet it remains unclear if Bronin’s talents will do anything to stabilize Hartford’s budget, and they may even constitute an impediment. Hartford can only regain solvency through the involvement of the state government. The most sensible solution would be a financial assistance package accompanied by a state takeover. Were Hartford now led by a long-serving mayor under indictment for corruption, a state takeover would be a foregone conclusion. But since it is being led by a brilliant up-and-comer, the case for state oversight is weaker—as helpful as that option may be for the city.

When public-spirited reformers call for better leadership for cities, they typically have in mind a collection of qualities that are more likely to be possessed by an outsider. They are not sounding the call for everyone to get behind this or that city councilmember, someone who got his start as a campaign worker to some local hack and has patiently waited his turn. Instead, they want someone with experience and/or education that most of the local crowd does not have, derived perhaps from service in the private sector or government at the federal or state level. This is likely to be someone who did not come up through the ranks and can thus apply a novel approach to longstanding challenges; who admires innovation; who can envision a solution to every problem, instead of a problem with every solution.

That was how many once viewed former New York City mayor John Lindsay. When Lindsay, a Republican congressman from the Upper East Side, first ran in 1965, New York Post columnist Murray Kempton famously opined “He is fresh and everyone else is tired.” Handsome, standing 6’4’’, and articulate, Lindsay was celebrated by the city’s elites. He emphasized youth and intelligence over government experience in his staffing decisions, and used the phrase “Fun City” to describe his vision for a revitalized New York. Now, however, historians mostly use “Fun City” in an ironic way, with reference to how lousy things got under Lindsay. Crime skyrocketed. Jobs and residents exited at a galloping rate. Though Lindsay was not mayor when New York almost went bankrupt in 1975, he was arguably more responsible than any other figure for the fiscal crisis because of his tolerance for budget gimmicks that papered over the widening gap between revenues and spending. Lindsay’s responsibility for the “bad old days” has caused many to forget what a dashing figure he first cut on the scene when he arrived.

The Progressive Turn to Experts

One of President Franklin D. Roosevelt’s major legacies was to make the public feel entitled to hold politicians directly responsible for the health of the economy. As a result, elected officials at all levels of government are now held to totally unrealistic standards. This is nowhere more clearly so than in the case of struggling cities.

Here’s how Edward McClelland, in his 2013 book Nothin’ But Blue Skies: The Heyday, Hard Times, and Hopes of America’s Industrial Heartland puts it: “Running Flint [Mich.] requires the financial acumen of William Pitt the Younger, the law-and-order bullying to Benito Mussolini, the city-building vision of Romulus, the labor negotiating skills of Franklin D. Roosevelt, and the industrial efficiency of Otto von Bismarck. Obviously, no politician has all these qualities. Any politician who had even one probably wouldn’t settle for mayor of a bankrupt city of one hundred thousand and counting backward. Flint is ungovernable, yet Flintstones continually punish mayors who can’t govern it.”

In order to compete in a mayoral election, all candidates must promise better days are ahead. But not every city has mayoral elections, or not consequential ones. So called “council-manager” cities do not. Under the council-manager form of government, the head of the city administration is an unelected appointee of the city council. The mayor is a ceremonial figurehead. Also known as the “weak mayor” model, the council-manager system was a Progressive-era innovation whose premise was that, by separating politics and administration, the former will become less corrupt and the latter more effective. Slightly more than half of all small and mid-sized cities have council-manager, according to the International City/County Management Association.

The council-manager system has not achieved its ideal. A century of experience with the form of government—Dayton, Ohio was the first major city to adopt council-manager, in 1913—has produced numerous examples of waste and corruption. It appears that politicians will always want to meddle in administrative matters, and top city administrators, if they want to survive in their position, must cultivate and use political skills to some degree. But you can say this for council-manager: At least it has the right ideal, and everyone has a right to expect competent delivery of basic municipal services.

But there’s no such thing as a right to revitalization. City reformers call for inspired leadership because they see it as a condition of revitalization, but what if that’s impossible? Our conception of urban renaissance is unduly influenced by the experience of a small handful of large cities. If you look past New York, San Francisco and Boston, and survey their dozens of small and mid-sized Rust Belt peers, it is very difficult to find an example of true revitalization. In a forthcoming research report, I survey 96 major poor cities in the Rust Belt and find that every single one has seen its poverty rate increase since 1970.

The Problem With Public-Sector Unions

The best argument for the benefits of talented urban leadership its ability to question the power of public-sector unions. Someone from outside city politics is more likely to grasp the many bizarre pathologies that result from having allowed teachers, police officers, and other public servants to assert formal influence over their own compensation and terms of employment, regardless of what’s in the public interest. Government unions are able to do this via their sway over the electoral process, selecting the “management” with whom they will be negotiating their contracts.

In the contemporary urban era, the threat of municipal bankruptcy looms large. Due to the steady corrosion of their tax bases, and the escalating costs of bonded debt and retirement-benefit liabilities, poor cities have a thin margin of error, fiscally speaking. Cities that have seen no substantive economic growth for decades should not be making retirement-benefit promises that stretch sixty years out into the future. And yet this practice is routine for all cities that still compensate their workforces through defined-benefit pensions.

If fiscal policy is one of the most important issues in urban politics today, and government unions are the greatest barrier to a more responsible fiscal policy, then bringing in more talented outsiders to mayor’s offices across the nation may be one of most important things we could do to help cities. But those who came up through a city’s political system are likely to view government unions’ stranglehold on city finances and operations with a “twas always thus” attitude. Examples of outsiders who grasped the lunacy of municipal compensation structures are Hartford’s Bronin and New York’s Michael Bloomberg.

But there’s a limit to how much any American mayor wants to be identified as a union-buster. Republicans revere Gov. Scott Walker of Wisconsin as a happy warrior who “sit[s] upon a throne made out of the skulls of his enemies.” But Democrats must take pains to avoid the Scott Walker tag. And only a Democrat can get elected in most cities. Long ago, it was possible for an American politician to be against public-sector unions while supporting private unions—FDR is the obvious example. But such a political brand is not possible now because the decline of unionization in the private sector is so far advanced. Local Democrats who go too far in their battles with teachers unions risk being seen as anti-worker, even though going “too far” is what needs to be done to stabilize municipal budgets. So they have to counterbalance their union fighting with all manner of very liberal policies, some of which are will mean more spending.

A 2016 analysis by the Citizens Budget Commission found that Bloomberg, the centrist who frequently tussled with the unions, increased spending in New York City during times of economic growth at an even greater rate than his openly labor-friendly successor Bill de Blasio has. In the end, it is almost impossible not to succumb to the lure of “labor harmony.” No Democratic mayor relishes the thought of fighting government unions across two or three terms in office, even though that may be how long it takes to effect genuine fiscal reform.

Big Ideas or Sound Management?

Perhaps the biggest problem with the talented-outsider mayor is that he is apt to get ideas. He may be more educated than the local doofuses, but that does not mean he is fully enlightened. It’s a case where a little knowledge can become a dangerous thing. State and local politicians who are known as big thinkers will always be strong candidates for a “public official of the year” award from Governing magazine or singled out as one of “America’s 11 Most Interesting Mayors” by Politico. New York and DC-based reporters from national publications are naturally attracted to mayors who can speak the language of urbanism.

But too much of urbanists’ advice for small and mid-sized cities consists of trying to impose lessons from successful top tier cities such as New York, Washington, San Francisco and Boston. Poor small and mid-sized cities should spend more time comparing themselves to other poor, small, and mid-sized cities. If you’ve lost half your population since 1950, you probably don’t have an affordable housing crisis; you’re not grappling with the challenges of density but rather a lack of density. If you have no wealth to redistribute in the first place, then Bill de Blasio can teach you little about the joys of redistribution.

In public budgeting, which is the area of greatest concern for many cities today, getting ideas is especially dangerous. John Lindsay’s innovative fiscal maneuvers were noted earlier. Detroit lit the fuse for its 2013-14 bankruptcy with a complicated $1.4 billion debt issuance that former Mayor Kwame Kilpatrick and his advisers dreamed up in 2005 in order to evade both the city’s legally-imposed debt limit and a pension contribution it could not afford. The Bond Buyer, the preeminent trade publication for state and local finance, gave Kilpatrick—now in federal prison for convictions on separate corruption charges—its 2005 “Midwest Regional Deal of the Year” award for so cleverly arranging “future flexibility” for his city’s budget. But all Kilpatrick’s deal really did was pile on more debt and make a bad fiscal situation worse.

“Flexibility,” like “innovation,” may be a core value in Silicon Valley, but it’s frequently a bad thing in the world of municipal finance. Remember all the encomiums to “boring banking” in the wake of the 2008 financial crisis? Often enough, the same principle applies for how to run a city.

Stephen Eide is a senior fellow at the Manhattan Institute

Posted in , . Tagged , , . 11 comments
← Older posts