"Slumburbs?"

http://www.citylab.com/2015/01/minorities-and-the-slumburbs/384680

Suburbia at night
Maureen Still via Flickr
citylab.com

Hello Everyone:

The problem of suburban poverty is not unique to Caucasian middle class families hit hard by rising property taxes and the collapse of the home mortgage crisis.  Minority families in suburbia have been severely affected as well. Today we are going to look at minorities in the suburbs.  Specifically, minorities in suburban areas following the collapse of the global economy.  To help us begin to understand this subject is Kriston Capps's article for CityLab titled "Minorities and the 'Slumburbs.'"

History tells us that Caucasian families left the inner cities in droves during the fifties and sixties, seeking the promise of larger homes, safer schools, and generally better lives then ones their ancestors experienced.  Minority families remained in the inner cities until they heeded the clarion call of a greener pastures.  Instead of the promise of a brighter future, minority families found a place decimated  by the "...subprime mortgage crises and the collapse of the global economy."

Slumburbs by day
gawker.com

Kriston Capps writes, "That's the theory behind 'slumburbia,' the notion that dark conditions that once characterized the inner city are following minorities as they pursue the American Dream to the suburbs."  The term "slumburbs" was used by Gawker's Hamilton Nolan to explain the rapid rise in suburban poverty and Timothy Egan of the also used the word in an opinion piece for the New York Times (opinionator.blogs.nytimes.com)  While the tempting knee jerk reaction would be to blame minority suburbanites, Mr. Capps suggests that there is a flaw in the current theory of growing suburban poverty and "the notion that the suburbs are contributing to the ever downward social and economic mobility for minorities relative to whites."

Post Civil Rights suburbs versus central city 2000-12
census.gov
citylab.com

In a new study, finds, in fact, minority households are doing better in some suburbs then others, referring specifically to the suburbs that have "matured" following the 1968 Fair Housing Act.  Most of the gains are in places the study refers to as "post-civil rights suburbs," with growing low-income and African-American residents.  The lead researcher for the study, Deirdre Pfeiffer of Arizona State University, used data gleaned from the 2000 Census and the 2013 American Community Survey to compare neighborhood conditions over time in eighty-eight American regions.  Ms. Pfeiffer compared the central cities (CC) and older suburbs, the housing markets in the "post-civil rights suburbs" (PCS) presented distinct features.  In the key factors: neighborhood poverty, college education attainment, and homeownership, the PCS communities worked better than the CC and older suburban communities.

Mother and daughter in a suburban kitchen
huffingtonpost.com  

In her study, Ms. Pfeiffer writes,

Living in the post-civil rights suburbs during the 200os and early 2010s usually meant having better and more racially equatable neighborhood conditions than living in the central city or older suburbs...Gains were greatest for African American and low-income households and smallest for whites and higher-income households.  With few exceptions, they persisted over time.

In cities such as: Houston, Texas; Richmond, Virginia; Tulsa, Oklahoma PCS neighborhoods presented more racial equality than the CCs or older suburbs in a startling 100 percent of the indicators, incomes, and periods, studied by Ms. Pfeiffer.  This was also true of Latinos living in PCS neighborhoods in Los Angeles and Asians living in Minneapolis, Minnesota.  In short, in fifty-seven out of eighty-eight regions, "neighborhood conditions in the post-civil rights suburbs were more racially equitable for minorities the majority of the time," elucidated the study.  Further, "Nine regions had more racially equitable conditions in the post-civil rights suburbs close to or fully 100 percent of the time."

Average gains in racial equity in neighborhoods
census.gov
citylab.com

While shedding light on how minorities are faring in suburbia, Kriston Capps writes, "This study doesn't dispel every fear associated with 'slumburbia.'  It dos help put those fears in proper context though: Controlling for housing age is key in assessing racial dynamic and suburbanization."  Deirdre Pfeiffer also writes, "The newer the housing and the greater the residential integration and income parity among racial groups in the post-civil rights suburbs as compared to the central city and older suburbs, the greater their racial equality."

Therefore, it would be safe to surmise that all is not bleak for suburban development, in terms of racial parity.  As Kriston Capps writes, "Indeed, newer suburbs demonstrated better parity and lasting equality than other neighborhood typologies over a difficult decade."  Sounding an optimistic note he continues, For black families and other minority households who have only ever been hurt by U.S. housing policy, post-civil rights suburbs may be the dream right now."  While yours truly concurs with Mr. Capps in not describing suburbs like Irvine, in Orange County, or Palmdale in Los Angeles County as "slumburbs."  What Palmdale, Irvine, Tinley Park and Bolingbrook near Chicago are good examples of what fair housing can be and serve as possible models for the future.

The Future Of Historic Preservation In China

http://www.nextcity.org/daily/entry/china-historic-preservation-culture-urbanization

Wang Fu Jing Street
Beijing, China
en.wikipedia.org

Hello Everyone:

Today we are going to take a trip to the People's Republic of China and take a look at the country's historic preservation efforts.  Our guide will be Sascha Matuszak and his article for Next City titled, "Modernizing China Seeks Historic Preservation Model."  Over the past three decades, China has been on a demolition spree, razing older places and rebuilding cities all in the of urbanization and modernization. In the process, countless historic buildings and communities were lost forever, trampled over by some space-age looking ("weird architecture" according to President Xi Jinping) building.  What does the future for historic preservation in the People's Republic of China hold?  Perhaps a way to honor its social and cultural history while moving forward into the future.

Hutong destroy in Beijing, China
Photograph by Boris van Hoytema/Flickr
theculturetrip.com 

 Throughout China's rapid growth, preservation of historic places was a serious topic of discussion, but rarely did developers and officials halt the demolition derby.  While China has outwardly embraced conservation and preservation recommendations from agencies such as UNESCO, the country's decision-making vis-a-vis cultural heritage preservation have by and large been disregarded by the hurried need to modernize, urbanize, and make money.  In the wake of this manic rush to prove that China was on par with Western nations, many of Beijing's hutong neighborhoods have fallen and historic sites have been turned into tourist ventures.

In recent months, the pace of urbanization has slowed down in several major cities, giving scholars and citizen to have a little more say about cultural heritage preservation.  Before, developers and officials only considered profits; now community, culture, and historic value play a greater part in the discussions.  Mr. Matuszak writes,

China's preservation strategy has developed into a basic two-fold process.  First, places with strong social and cultural value (and therefore economic value) are identified.  Once those spaces are listed and protected by UNESCO or the domestic equivalent, the State Administration for Cultural Heritage, authorities decide to either replicate or renovate that space in order to maximize profit, protect the spirit of the space, and still allow for the urbanization drive to continue unabated.

Xintiandi, Shanghai, China
beijingfeeling.com

Sascha Matuszak uses Shanghai's Xintiandi as a case study that has helped define this two-pronged approach for the rest of the country.  Xintiandi is an upscale district in the heart of the city's shopping and financial district.  Only a few blocks long, Xintiandi mimics Qing Dynasty design, while housing retail and commercial enterprises.  At the heart, amid the faux-imperial design, are several neighborhoods recall turn of the century European-like buildings that are now used for residential and professional entities, which provide the cultural heritage and Xintiandi provides the revenue.  Xintiandi has be so economically successful that any city in the nation with a similar "old district" has followed the Xintiandi model.  Mr. Matuszak observes, "Unfortunately, much of what the Xintiandi model has 'saved' lacks the social power that the original community once had, and people have to, in effect, re-inhabit the space and re-create the lifestyle that gave life to the space in the first place."

Kuan  Zhai Xiang Zi
Chengdu, China
tour-beijing.com

One good example of a city adapting its development strategy to accommodate the loss of a community is the Kuan Zhai Xiang Zi in Chengdu.  Chengdu was the city where imperial representatives lived and Manchurian warriors trained; Kuan Zhai Xiang Zi became a "...valuable and consistent space for communities, despite the many changes to the core demographic."  In the wake of the demise of Qing Dynasty, Kuomintang officers moved, replacing the Manchu aristocracy.  The generals were later displaced by the Communists who gave the homes to "the people."  The working-class, who took over the the stately homes, were slowly moved out beginning in 2004 to make way for renovation of the area.

Kuan Zhai Xiang Zi became the city's version of Xiantiandi-faux-imperial façades with a Starbucks. However, developers in Chengdu took a slightly different tack.  While Xiantiandi is solely a commercial and retail development, developers opted to leave several of homes and a plethora of the historic architecture in tact-allowing some of "the people" to continue living there-in order to maintain the community.  Mr. Matuszak writes, "Xiamtiandi and Kuan Zhai Xiang Zi are steps in a progression toward a realistic preservation policy for a modernizing, urbanizing China."

West Lake with Linying Temple
Hangzhou, China
lonelyplanet.com

One of the outstanding examples of the melding of urbanization and historic communities is the cultural preservation, in a sustainably successful manner, is the West Lake development in Hangzhou.  Hangzhou is an extraordinarily culturally rich city and was the capital of powerful Song Dynasty (960-1279).  West Lake has been a source of poetic inspiration for decades.  Mr. Matuszak enthuses, "The efforts of the city to shield the lake from Hangzhou's rise as a major economic power in eastern China, while simultaneously bringing the cultural and historical significance of the 11th-century Hangzhou into the 21st century is nothing short of remarkable."

The western side of the lake faces Hangzhou and, like many historic districts, has been given over to retail, commercial, and tourist ventures. However the remainder of the lakefront, in particular the western hillside, is dedicated to the preservation of the old pagodas and temples, passing the cultural achievements of the old city.  There are several smaller temples free and open to the public.  Educational plaques line the lakeside path and Hangzhou's famous Longling green tea is still cultivated, in the traditional manner, along the western hills.  Sascha Matuszak writes, "The developers have successfully isolated the economic engine so necessary for any development to be approved in modern China, thereby allowing the rest of the lake to add value as  cultural and education resource.

The first thirty years of China's urbanization process is completed and with the next three decades ahead, local officials throughout the nation are increasingly studying Hangzhou's successful West Lake development.  The Chinese people have long tolerated the wonton destruction of much of its history in the name of progress.  However, priorities are changing and the pressure is mounting to find a preservation strategy for the future.

Historic Preservation And Suburbia

http://blog.preservationleadershipforum.org/2015/01/27/the-new-suburban-/#.VMlc_mTF84T

Aerial view of Tyson's Corner, Virginia
blog.preservationleadershipforum.org

Hello Everyone:

Today we are moving off the subject of income inequality and onto historic preservation and suburbia. These words, used in the same sentence, may sound incongruous but as Elaine Stiles reports in her post for the Preservation Leadership Forum, "Preservation and the New Suburban Reality," historic preservation may be the new reality of suburbia.  The 2000 Census revealed that the United States was officially a suburban nation, with the majority of Americans living in suburban areas. This revelation has urbanists taking a fresh look at the urban edge and what they are finding contradicts many assumptions of what suburbs are, who lives, and why.  Ms. Stiles writes, "The Brookings Institution has called the suburbs the locus of the new American reality, and as suburbs continue to age and remake themselves, they will become part of the growing new preservation reality." (Brookings Institution, 34, 2006)  Thus, whether you are a preservationist or not, Ms. Stiles outlines the issues that we all need to know about understanding the past, the present, the future of suburbs, and how preservation can play within a diverse and changing landscape.

Fifties couple house hunting
marketplace.org

1. The suburbs are slated to undergo tremendous change over the next 30 years.

The suburbs, like urban areas, are organic entities.  They are in a constant state of change as residents move in and out of houses.  Ms. Stiles writes, "There are many reasons preservationists should pay more attention to the suburbs, not least of which is that all suburbs...are headed for what can only be termed as period of suburban renewal." Population growth and a shortage of developable land in denser locales will increasingly drive suburban development. Transformation will also occur as the suburbs approach the 70th and 100th milestone anniversaries, seeking infrastructural renewal. Suburban communities are aware of the environmental deficits that attend their land use and are pursing master plans that will centralize and even urbanize suburban developments.  Most of the changes will occur in the older inner ring of suburbs, not in the exurban areas.  The relative density of the inner core suburbs and their integration into existing infrastructure an transit lines will make them attractive to developers.  According to Urban Land Institute CEO Patrick Phillips, "America's first-ring suburbs...could be the sweet spot for future growth." (Brookings Institution, ULI,  5-9, 2012)

Fifties backyard barbecue
atacrossroads.com

While suburban renewal may sound like welcome news but for those of us in the preservation community, it should give us a reason to stop for minute.  Ms. Stiles asks us to "...recall the difficult lessons learned from 20th-century efforts to remake urban environments deemed inadequate-the limited recognition of community, the destruction of older buildings, and the disproportionate impact on minority and underprivileged populations."  These concerns are equally applicable to suburban areas, particularly in light of the growth of suburban poverty.

2. The suburbs are-and have always been-zones of diversity.

Historically, the suburbs have never be fonts of diversity.  However, in the past fifteen years suburbia has become a more socioeconomically, racially, and ethnically diverse place, overriding the previous historic narrative.  The suburbs have become opportunity zones for a broader swath of socioeconomic classes, creating: blue-collar suburbs, self-built suburbs, and ethnic-oriented suburbs along the traditional suburbs.  Many suburbs were economic drivers in their own right.  For example in Los Angeles and San Francisco, "suburban development followed industrial decentralization, office decentralization, and ultimately jobs." (Hise, 1997; Kruse and Sugrue, 2006; etc)  Elaine Stiles uses the example of Levittown on Long Island, New York as a suburban development that was strategically placed near a major aircraft manufacturing plant.  Perhaps the most startling research has been in racial diversity in suburbia. Racial covenants and segregation prevented many minorities from buying property in suburban areas. Eventually, political fragmentation and limited regulation on the urban fringes undermined the exclusive nature of suburbia and allowed for a more diverse demographic.  In short, "North American suburbs were as socially and racially diverse as the cities they surrounded." (Wiese, 2004; Harris and Lewis, 262-92, 2001)

Suburban strip mall in Monterey Park, California
Photography by Chris Cusson under Flickr-Creative Common
blog.preservationleadershipfourm.org

The diversity patterns have gained strength over time.  Citing the Brookings Institution, Ms. Stiles writes,

...the majority of population of all racial and ethnic groups in the U.S. now lives in the suburbs of major metropolitan regions.  Major metropolitan suburban areas also house more than half of al foreign-born U.S, residents, many who maintain a transnational identity.  Perhaps most striking, as of 2010, the majority of the nation's poor now live not in the urban centers, but in suburban districts.  Other forms of diversity are also growing in the suburbs.  Seventy percent of baby boomers live in suburbs and their status as the first  suburban generation signals their likelihood to remain. (Brookings Institution, 33, 51,65, 77)

In short, the suburbs may seem superficially bland and boring but if one digs a little deeper, one finds that the suburbs are as much about "place" and "story" as the more bold faced places.  Thus it is crucial to recognize their embedded diverse social and cultural values, often layered, within the contemporary context.

Cape Cod style house in Levittown, New York
Photography by Sean_Marshall  via Flickr under Creative Common
blog.preservationleadershipfourm.org

3. Like all older building, suburban building types and forms serve essential roles in social, cultural, and economic sustainability.  (Yes, even strip malls.)

Some preservationists, building professionals, and urbanists dismiss the otherwise "banal, repetitive, and dysfunctional built environment" that has supported the assorted social and economic needs of generations of suburbanites. This attitude has often manifested itself through tried and true  preservation practices of adaptive reuse.  Ms. Stiles writes, "Suburban building types were designed to be flexible, working landscapes, adapting to the needs of shifting populations."  No truer is this then in Levittown, Long Island, New York which retains only a handful of their original Cape Cod form.  Succeeding generations of owners have remade their affordable, flexible small home in a myriad of way "to accommodate changing families and tastes."  (Kelly, 1993)  Conversely, "Bigger Boxes" are also part of the landscape, in particular the frequently derided strip mall, as centers for suburban entrepreneurship.  The strip mall has historically been a magnet for new businesses and many minority-owned businesses thanks to low rents and flexible space. (Davis, 93-114, 1997; Benfield, 2010)  Elaine Stiles cites the Silicon Valley "...where scholars have argued that the adaptability of its sea of inexpensive, common, and repetitive building types helped support exceptional innovation." (Crawford, Fall 2013)  Ms. Stiles also reminds about what Jane Jacobs said about the usefulness old buildings.

Bernard Levey and family in front of Cape Cod original
uic.edu

4. Better environmental performance is important, but some methods deserve greater scrutiny.

Any discussions about the future of suburbia usually leads to a discourse on their biggest and most commonly acknowledged problem: environmental sustainability.  Many a scholar are addressing the problem from a design point of view, "...pursuing increased residential densities, improved walkability and public transit access, and greater levels of land conservation." (Dunham-Jones and Williamson, 2009: Tachieva, 2010) While many preservationists, building professionals, and urbanists concur in principle with the goal of retrofit and repair strategics aimed at fixing suburbia, however, some of the proposal bear further examination from the preservation minded.  For example, the current retrofit and repair strategies heavily emphasize the spatial and morphological over the social and cultural elements of a place.  What is really needed in the analyses frequently draw from a specific set of professional values that present little connection with user values.  Ms. Stiles writes, "Popular approached like the Sprawl Repair Manual are lacking the need analyses that might capture a broad demographic profile or preserve exist use patterns.  More troubling, discussions of preservation in some key texts are either missing, or limited to natural resources."  As preservationists acknowledge the "place-ness and social fabric of suburban districts, what will it mean to dramatically change or even erase them?"  If we are to adequately deal with with the changes in the suburban landscape, we have devise a definition of sustainability that goes beyond environmental issues.

Children with their bicycles
Suburb of Roseville, Minnesota
pbs.org

5. Preservationists have an important role in the suburban future and vice versa.

Too often, preservationists ignore the suburban landscape, dismissing it as not worth a second or third look.  Yet, as the 2000 Census data indicates, suburbia is where half of America lives.  The suburbs present a treasure trove of untapped opportunities to develop a set of more germane tools and standards for smart preservation in places that demonstrate diversity and constant change. The challenges of suburbia present preservationists with the fantastic prospect of more timely preservation policies and tools in order to worker with a broader range of people and places.  How can existing policies and tools aid people preserve the layered suburban locales?  Elaine Stiles writes, "We are also increasingly acknowledging  that existing standards often fall short of embracing working, vernacular landscapes.  Images of affluent, well-preserved suburbs aside, most suburbs were meant to be flexible, working landscapes, adapting to the needs of shifting populations."  What can preservationists do?  Ms. Stiles proposes reusing or preserving the layers but how do preservationists go about that?  "What will it mean for historic areas when need to consider spatial uses values, and practices beyond those envisioned by a historic majority that no longer lives there?" (Lung-Amam, 220-241, 2014)  Do established preservation practices subvert others's ability to shape or create meaning in their environment?  Elaine Stiles asks some very important and open-ended questions that will no doubt shape the future of historic preservation, especially as the suburbs continue to age and come under consideration for landmark status.

How Cities Can Effectively Deal With Income Inequality

http://www.citylab.com/politics/2015/01/the-connection-between-successful-cities-and-inequality/384243/

Capital in the Twenty-First Century cover
en.wikipedia.org

Hello Everyone:

A joyous Monday to you all.  We are celebrating 25,151 page views.  Woo Hoo.  This totally unbelievable.  In just a little over two years we have gone from a boring little blog to something that found and continues to find an audience around the world.  I cannot do this without you and I am eternally grateful for your continued readership.  My deepest gratitude to you all.

Today, sort of going to continue on a subject we talked about on Wednesday January 28, income inequality.  Last Wednesday we looked at Richard Florida's article for City Lab about how neighborhoods affect your income.  Today, we are going to look at another article from the fertile fingertips of Mr. Florida titled, "The Connection Between Successful Cities and Inequality."  Mr. Florida discuss how new research demonstrates that the largest American cities would be better off if they focused on workers at the bottom of the economic scale.

French economist Thomas Piketty's hefty book Capital in the Twenty-First Century made inequality one of the most used words in 2014 by arguing that "it's a basic outcome of modern capitalism."  The New York Times commentary section, "The Upshot," announced "that inequality has been the theme du jour at the American Economic Association's annual meeting."  Mr. Florida observes, "inequality has become an increasingly dominant feature of U.S. cities."  The 2014 U.S. Conference of Mayors report (http://www.usmayors.org/pressrelease/uploads/2014/1211-report-hh.pdf) revealed that income inequality increased in more than two-thirds of American metropolitan areas between 2005 and 2012. In the interim, the wage gap nearly doubled from 12 percent to 23 percent  between 2002 and 2012. Case in point, New York City's Gini coefficient-"the measure of the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution" (http://www.data.worldbank.og/indicator/SI.POV.GINI)-was equal to Swaziland; Chicago's was nearly on par with El Salvador; San Francisco's Gini coefficient resembled that of Madagascar.

"End income disparity"
citylab.com

While all this anecdotal information may sound grim, Mr. Florida reports on "A pair of new economic studies [that] take on the rising challenge of urban inequality in new and important way."  The first is a study conducted by Jung Hyun Choi and Richard K. Green et al. of my alma mater the University of Southern California and the second by Nathaniel Baum-Snow of Brown University, Matthew Freedman of Drexel University, and Ronni Pavan of Royal Holloway-University of London.

The Choi-Green study, titled "Financial Crisis and Increase in Income Inequality Across Cities," (appam.confex.com), focuses on metropolitan area-level inequality through the top tenth percentiles of the American income

Income Level of Top and Bottom 10th Percentiles
citylab.com

distribution between 1980 and 2011.  This measure, an alternative to the Gini coefficient,
allowed the researchers to determine whether changes in inequality levels were caused by
shifts in the top or bottom percents of income distribution.  The graph on the left composes the first part of the authors's analysis, demonstrates that "while absolute changes in the level of income for the top 10th percentile have been relatively volatile in response to broader economic trends, the incomes of those in the bottom 10th percentile have been flat." To understand why this is the case, Messrs. Choi and Green used regression analyses to study the relationship between income inequality throughout American metropolitan areas and their character defining features such as: "...race, industry, skill, job market conditions, residential mobility and unionization."

In his own analyses of the findings, Richard Florida found that Messrs. Choi and Green's results concurred with his own conclusions.  The conclusions demonstrated that levels of income inequality are greater in urban areas with a negative labor market condition condition, better educated populations, and greater industrialization specialization, i.e. "skills clustering."  Between 1980 and 2000, the authors also discovered that "highly skilled labor was positively associated with changes in income inequality, though that relationship reversed itself between 2000 and 2011.  In the pre-recession housing boom, the authors's resulted demonstrated that urban areas with "...greater number of Hispanic and Asian households had greater increases in income levels in the bottom 10th percentiles, while the period after the bust saw real income drop in the bottom 10th percentile in areas with greater proportions of black households." Also, Messrs. Choi and Green found that unionization in metropolitan areas concurred with reduced income inequality.

Tech culture and rising income inequality
citylab.com

The second study, written by Nathaniel Baum-Snow, Matthew Freedman, and Ronni Pavan, titled "Why Has Urban Inequality Increased?" (econ.brown,edu) hones in on larger cites to establish how a number of determinants have affected increases in wage inequality from 1987 to 2007.  This paper is a follow up to previous work, which concluded that the size of a city alone "...accounts for about 25 to 35 percent of the total increase in income inequality between 1979 and 2007, beating out the effects of skills, human capital and industry composition."

The researchers used U.S. Census information to take a detailed look at how "...the clustering of manufacturing capital and changes in the relative supply of skilled labor affect large-scale wage inequality."  They evaluated the connections between the workers's hourly wages and variables such as: age, gender, race, occupation, place of residence, immigration status, and skill level.

Income inequality handbill
nextcity.org

Nathaniel Baum-Snow, Matthew Freedman, and Ronni Pavan revealed that "...high-skill clustering is associated with higher returns and wages for high-skilled workers..."  However, they add this one caveat, wage gaps expanded and there were less employment opportunities for unskilled workers in large cities. Rather, the findings suggest that city or metropolitan size accounts for one-third of the increase in national wage inequality since 1980.  The blame lies at the feet of the clustering that drives the engine of urban growth.  Quoting Baum-Snow et al, Mr. Florida writes, "an important fraction of the nationwide increase in the skill premium since 1980 can...be traced back to increases in the skill bias of agglomeration economies."  The authors note the growing link between high-skill work and city size in the nineties, a period of wage stability in context to city size, is further proof of the importance of city in making and perpetuation clustered economies.

Apartment building with Rocinha  shantytown in the background
Rio de Janeiro, Brasil
opinionator.blogs.nytimes.com

The takeaway here is income inequality is not an occasional occurrence in urban economies.  It is a fundamental part of the urban economies, the result of the same essential clustering forces that is at the foundation of metropolitan regions's rise as centers for innovation, startups, and economic growth.  In short, "the exact same phenomenon of skill clustering that has made tech hubs like San Francisco, New York, and Boston such successes has contributed to the rise of inequality, the growing gap between the haves and have-nots.

This creates a difficult situation for policymakers who may be tempted by political trends to craft measures that would impeded economic growth.  However, it is hard to see the logic in undermining economic growth in order to mitigate income inequality.  Rather, Richard Florida suggests, "Urban leaders would be much better off focusing on policies that boost the conditions of people at the bottom of the economic ladder, enhancing skills, upgrading low-end service jobs, and raising the minimum wage, as well as increasing the the supply of housing, particularly affordable housing." The key to battling income inequality is bring together the new urban growth in ways that make a more inclusive city.

What Does The Neighborhood Have To Do With Income?

http://www.citylab.com/work/2015/01/how-your-neighhood-affects-your-paycheck/384536/

"Welcome To Fishtown"
Philladelphia, Pennsylvania
phillymag.com

Hello Everyone:

Here is an interesting question, does the neighborhood you live in affect your paycheck? Interesting question, that blogger had never considered until right this moment.  This is a subject that Richard Florida recently considered in his City Lab article "How Your Neighborhood Affects Your Paycheck."  Mr. Florida writes, "The part of town where you live-especially where you grew up-can profoundly affect lifetime earnings." It is not something that we readily think about [where we grew up] when planning a career but yours truly will venture a theory that the neighborhood you grew up in plays a strong part in the career choices available to you.

Tree line neighborhood in Portland, Oregon
sfgate.com

Richard Florida starts off with a quote from economist Tim Harford recently published in the Financial Times, "[A] as I check off my list of privileges, I won't forget the biggest of them all: my passport."  Why is a passport such a big privilege in today's world?  In an increasingly tenuous world, where social and financial capital is clustered in specific places, "the country in which you're born obviously affect the opportunities you will be present with later in life."  We can further understand how place of birth affects what opportunities are afforded to you at the neighborhood level.  It sounds like an obvious thing, a person who grows up in an affluent neighborhood will be granted opportunities than someone who is raised in a less affluent or poor neighborhood.  The 2012 American Presidential election made this point abundantly clear.

Rudd's Trailer Park just off Jefferson Davis Highway
South Richmond, Virginia
washingtonpost.com

Cities are not a single giant entity, they are a collection of neighborhoods.  Mr. Florida concedes the obvious, "And we know that the outcomes among children who grow up in poor neighborhoods, those with under-performing schools, under-prepared peers and less access to high-quality libraries or museums, are often very different than those who grow up in wealthier areas."  This schism can not only contribute to wage and income inequality, but also what Stanford University economist Rebecca Diamond refers to as "inequality of well-being."  "Inequality of well-being" describes neighborhoods that a greater percentage of high-skilled workers who not only have more money, but better amenities such as grocery stores and schools.  According to Ms. Diamond, the well-being inequality gap is "20 percent higher than what can be explained by the wage gap between college and high school grads."  This is something social scientists defined as a "neighborhood effect" and two recent studies illustrate how this works.

Fresh Meadow
Queens, New York
queenscrap.blogspot.com

The first study was conducted by Princeton University sociologist Douglas Massey and Jonathan Rothwell, a Brookings Institute's Metropolitan Policy Program economist.  The study examined how where you live for the first sixteen years of your life affects future income between the age of 30 to 44.  (http://ssm.com/abstract=2460101)  The paper was published in Economic Geography used information from the Panel Study of Income Dynamic gathered by the University of Michigan's Institute for Social Research, which followed a national sampling of families and individuals since 1968.

There have been previous studies that accounted for the different ways in which parents have had a profound effect on the economic future of their children. Nevertheless, Messrs. Massey and Rothwell speculate that "the characteristics of neighborhoods have an effect on future earnings independent of the well-established roles of factors like parents' income or education."  Their results were startling.  Messrs. Massey and Rothwell found the neighborhood effect accounted for "50 to 66 percent of the effect of parental income."  They wrote, "growing up in a poor neighborhood would wipe out much of the advantage of growing up in a wealthy household."  Startling indeed.  They call this finding the "million dollar neighborhood effect," revealing that "lifetime earning are roughly $900,000 higher (or $730,000 net present value terms) for those who grow up in the richest 20 percent of neighborhoods than for those who grow up in the bottom 20 percent, even after corrected for parental income."  This results in as big a difference in the wage gap between high school-only graduates and college graduates, estimated by the Census Bureau to be about "$1 million dollars in lifetime earnings."

Predicted difference in lifetime earnings
 By neighborhood
citylab.com

This effect becomes more stark when Messrs. Massey and Rothwell take into account the cost of living.  There is more 'bang for the buck' in Des Moines than New York City.  Thus, the researchers built in a local price index, using residential rental prices and rolled the numbers back through their intergenerational mobility models. The results are presented in the chart on the left, from the Brookings Institute.

Richard Florida points out, "Of course, the neighborhood effect is also associated with a host of other variables, race chief among them."  The authors used two Census tract-based to indicated data points that determine the neighborhood effect based on race.  They found that both variables and specific neighborhood effect alone are significant predictors in future earnings.  However, they also found that the neighborhood effect is the clearest explanation of the three.  The authors note, "It thus appears that the lower intergenerational income mobility of African Americans can be explained by their disproportionate segregation in poor, disadvantaged areas."

Renovated brownstone
Bedford-Stuyvesant, Brooklyn
urbanology.com

The second study was conducted by Richard Florida's colleagues at the Martin Prosperity Institute: Charlotta Mellander, Keving Stolarick, and José Lobo, which looks at how the location of a neighborhood affects income.  This paper looked "...at the effects of residential neighborhoods and workplace neighborhoods on individuals' incomes in Sweden between 2002 and 2011." Why Sweden between 2002 and 2011?  The Scandinavian country had "unusually detailed micro-data that enable the researchers to study the connections between, firms, neighborhoods and individual earnings over time in a systematic way."  The information included about 22 million observation of the ten-year time period.  (http://www.martinprosperity.org/category/research/research-working/)

King Street-Meeting Street corridor
Charleston, South Carolina
charlestoncitypaper.com

The study employed the idea of "neighborhood effect" somewhat differently: Whereas sociologists focused on the ways one's early neighborhood environment affected life outcomes, Ms. Mellander and her co-authors analyzed the was the locations where a person works and lives affect current incomes.  Vastly different.  The goal of their research was to, "examine which social community most affects an individual's productivity."  The models they used looked at effect of neighborhood location and workplace on the income of higher skill knowledge and creative workers and less-skilled blue collar and service workers, while controlling factors such as education and gender.

The big, somewhat obvious, takeaway: "Neighborhoods have a very different effect on the incomes of blue collar and service workers as compared to knowledge and creative workers."  Residential neighborhoods have a bigger impact on blue collar and service worker incomes.  The researchers suggested that "This...may be because these workers are more likely to 'network' with friends and neighbors to find good jobs."  Meanwhile, residential neighborhood locations has less of an effect on knowledge and creative workers, whose incomes are more affected by their workplaces.  Further, creatives and knowledge-based employee received an income boost from working in a creative cluster location, perhaps "because these clusters are also where 'they can change jobs frequently and where firms compete for some talent.

The two studies cited in this article sheds light on how the powerful role of neighborhoods affects income.  Most of the findings seem obvious but what is groundbreaking is that the research is crucial to understanding why certain locations experience growth while others do not and how segregation and other divides can resonate in the future.

The de Blasio Gambit

http://nextcity.org/features/view/new-york-city-affordable-rent-affordable-housing-de-blasio-alicia-glen

Winter Storm "Hercules" slamming New York
photograph courtesy of Shutterstock
nypost.com

Hello Everyone:

I would like to give a shout out to everyone from southern New Jersey to Maine who are about to be buried under the coming blizzard.  Stay warm, stay safe, stay indoors.  Meanwhile, those of us on West Coast can take particular glee in the relatively benign weather.

Is affordable housing possible in New York City? Can gentrification be the solution to the city's affordable housing problem?  This is the paradox that Henry Graber explores in his article for Next City titled, "Inside the Gamble That Could Make or Break Bill de Blasio."  In the waning weeks of his twelve year tenure, former Mayor Michael Bloomberg insensitively expressed this thought, "Somebody said that there's not enough housing.  That's a good sign...That will bring in investment for people to build for all income levels, different kinds of housing."  Maybe.

New York City housing project
stvinc.com

From an Economics 101 point of view, demand should generate demand.  At least that what blogger remembers from Economics class.  Mr. Graber writes, "New York City added 180,000 units of housing between 2002 and 2011-more than the 167,000 it added between 2000 and 2010-and the vacancy rate has risen slightly."  However, the average apartment rent went up by 75 percent between 2000 and 2012, while real income dropped. Thus, Mr. Bloomberg's "filtering" theory-a sort of housing version of trickle down theory-housing construction boom would alleviate the housing crises has not held up.  The more progressive Mayor Bill de Blasio avoided Mr. Bloomberg's sledge hammer-like rhetoric in his first year of office but despite his pro-worker stance, Mr. de Blasio has a deep like for the real estate industry.  Thus, Mr. de Blasio is banking on "new, market-rate construction to alleviate the housing crisis as much as Bloomberg was."

"Housing New York"
nyc.gov

In 2014, Mayor de Blasio announced an ambitious municipal housing plan, "Housing New York," designed to remedy the lack of affordable housing in the city.  The 117-page plan offers solutions for a wide range of problems, some the city's own issues and some not.  The essence of the plan is leverage, "having investor contributions triple or even quadruple the city's own financial stake."  Increasing the city's financial stake is one reason why building affordable housing is economic issue.  The job of overseeing this task belongs to Alicia Glen, a former Goldman Sachs executive and early mayoral appointee.  Ms. Glen is the first deputy mayor for housing and economic development.  At times, Ms. Glen comes off like former Mayor Bloomberg, "rents are rising, the market's hot, it's great," she declared at a conference this past autumn.

Given this perspective, gentrification flows from the "reserve of pent-up demand who financial power was not properly harnessed during the Bloomberg years."  Ms. Glen told Mr. Graber, "Had we had the tools at the time...we would have gotten a lot more affordable housing out this boom.  May New Yorkers would feel less, quite frankly, pissed off by the fact that's all this luxury housing and not so much affordable housing."  Now, the tools have finally arrived.

New York City brownstone
stvinc.com

The toolkit includes a new set of requirements and incentives all intended with bold goal of inducing the "private sector to build about half of the 80,000 new affordable units" promised by the mayor.  On a broader note, the de Blasio administration hopes that private funding will buttress public investment by a factor of at least three.  The city will commit $8.2 billion to the enterprise, as well as $2.9 billion in state and federal money.  Both Ms. Glen and Mayor de Blasio hope that the private sector will add $30 billion.

"The plan incorporates cross-subsidization more than any plan I've seen in the country," Andrew Ditton, the managing direct of Citi Community Capital share with a group of architects, planners, and developers at conference in October 2014.  Affordable housing and real estate developers?  Sounds strange in the same sentence.  However, Mr. Graber points out, "...this is conventional wisdom in high-cost, capitalist cities like San Francisco and London.  In New York too, the wagon of affordability will be hitched to the engine of high-end development.  It's an efficient use of public dollars.  But does it work?"  At the moment, interest rates are low, demand is up, and there is a political consensus regarding the immediacy of New York's affordable housing crises.  Mr. Graber speculates, "If the plan falls far shot of its goals, it won't just be a setback for New York's progressive mayor.  It will go to great length toward disqualifying the dominant municipal philosophy of affordable housing which eschews widespread regulation in favor of leverage, incentives and a hearty embrace of real estate power."  Therefore in order to solve the affordable housing crises, a plan must be implemented to "stoke the fire that created it."

New York City affordable housing development
nyshcr.org

An "Urbanist Asset Class"

The New York City affordable housing crisis is one of the biggest on the planet.  Citing a recent report from the McKinsey Global Institute, Henry Graber writes, "the cumulative distance between what New Yorkers should pay for housing (30 percent of income is most common metric) and what they do pay for housing is $18 billion.  No metro area in the world has a larger 'affordability gap' than New York."  The burden is greatest on families making less than 50 percent of the area median income.  In fact, over eight of ten families are "rent-burdened."  It is not just families below the area median (under $40,000 for a family of four) that are "rent-burdened,"  this problem continues up the economic scale.  Over 60 percent of the families at or above the area median income ($42-$67,000) are also "rent-burdened."  Over 30 percent of New York renters spend over half their income on housing.  A family applying for the affordable housing lottery in Manhattan has a 400 to one chance of getting a new residence.

"New York City Preserves Public Housing"
archdaily.com

The "Housing New York" plan was released in May 2014, calls an additional 200,000 units of affordable housing over the next ten years: 80,000 new units and 120,000 "preserved' units not permitted from leaving the city's subsidized housing programs.  What makes this plan different from the current plan-reliance on the public sector-is its reliance on the private sector. The  post-war housing program in the five boroughs was a response to an estimated shortage of 430,000 units in 1950.  This created a two-fold problem.  First, it resulted in clearing dozens of "slum" neighborhoods and the building of almost 150,000 public housing units.  Second, the state of New York inherited jurisdiction over the federally imposed rent control, which covered a staggering two million New York City apartment units in 1950.  With the current plan's emphasis on leveraging public investment, the appointment of Alicia Glen with her background in finance, is no surprise.

Kings Theater
Flatbush, Brooklyn,  New York
nyrealestatelawblog.com

While at Goldman Sachs, Ms. Glen ran the Urban Investment Group, an program that directed investors towards inner-city projects, neglected by banks.  The UIG also played an important part in financing several New York-area projects such as the $90 million restoration of the Kings Theater in Flatbush, Brooklyn. One of the group's big success was the creation of an "urbanist asset class."  According to Ms. Glen, "It's become sort hip and trendy to talk about this...but ten years ago, when I started all this, that was not much in the nomenclature."  Ms. Glen's function in the de Blasio administration, in one respect, continues her previous work at UIG: convincing the private sector (i.e. businesses, developers, and investors) that there is money to be had in New York City, including in less affluent neighborhoods and on unconventional projects.

This is particularly important for the residential construction industry, which has recovered more slowly in New York City, then other places.  Moving ahead, any housing project wishing to take advantage of neighborhood rezoning or seeking rezoning change will have to include affordable housing units.  The program, "mandatory inclusionary zoning," is meant to improve on the meager stock under the Bloomberg  administration's optional inclusionary zoning program, which yielded a paltry 2,700 units in ten years.  The current administration, which expects 20 to 30 percents of privately financed units to be affordable, will surpass the Bloomberg 10-year total every year.

Boricua Village
wirednewyork.com

 The Million Apartment Question

Like almost every municipal affordable housing scheme, the New York City plan is split between preservation and development. Despite lopsided numbers, the emphasis is very much on preservation.  The rental stock, subject to rent stabilization, could be smaller in a decade.  Mayor de Blasio's preservation goal is modest improvement over former Mayor Bloomberg's minuscule achievement.  However, the largest amount of New York City's affordable stock is something beyond Mayor de Blasio's control: the remaining one million rent controlled apartments.

Bronxdale Houses
AP photo/Bebeto Matthews
nydailynews.com

In the last twenty years, the city's rental stock has grown and changed.  For example, in 2011, the number of rental units covered under the rent stabilization ordinance was 47 percent, a twelve point drop from 1991.  Some of this decline could have been the result of new market-rate rentals. Nevertheless, the decline in rent stabilized units has been big.  To quantify how big is big, New York City endured a net loss of over 150,000 rent stabilized units between 1994 and 2012.  That is equivalent to the entire housing stock of Cincinnati, Ohio.

From the beginning, rent stabilization has been the enemy of property owners, real estate developers, and economists who argue "that their subsidy for longtime residents stunts the continuing evolution, strains landlords and distorts the city's housing market."  Blogger remembers hearing this argument in economics class and the uproar it caused in yours truly's oh-so-liberal college.  Truth be told, rent stabilization does little good for new arrivals to the city.  As blogger understands it, a person can live out their entire life in a rent controlled apartment, then pass it down to a family member, thus keep a perfectly viable unit off the open market.  The consequence of this is a newcomer's housing costs go up.  However, New York State's twin rent control program, with an average tenant income of $36,000, is the single most potent guardian of New York City's economic diversity.

Affordable housing in Brownsville, Brooklyn
inhabitat.com

Through various unit exit opportunities, the available rental housing stock has dramatically shrunk the city's portfolio.  While Mayor de Blasio has been aggressive in trying to wrest rent stabilization control from the majority Republicans in the New York State Senate, however, the prospects for the Mayor accomplishing this feat have diminished.  Barring any late breaking miracle in Albany, the program's reach will also continue to disappear, placing a great deal of pressure on New York City's ability to retain as much affordable housing as it can.

Benjamin Dulchin, the executive director of the Association for Neighborhood and Housing Development said, "As much as it's important for the city to build, because there are so many New Yorkers coming, it's also true that we can't build our way out of an affordability crisis...The Bloomberg administration said that by creating all the new development opportunities and by allowing all these market-rate units to be developed, that would relieve pressure on the lower end of the market.  It's pretty clear that it didn't happen."  With barely any room to expand the preservation programs, Mayor de Blasio has to hope that developers can take up the slack.

Atlantic Yards B2 Tower
Brooklyn, New York
therealdeal.com

The Point of No Returns

In early 2014, the de Blasio administration reached an accord with Forest City Ratner, the developer of the Brooklyn area project formerly know as Atlantic Yards.  This deal was one of Alicia Glen's first major affordable housing negotiations, giving the de Blasio administration reason to celebrate, but not everyone was jumping for joy.  The reason, back when he was still Councilman Bill de Blasio from Park Slope and the project was still in the planning phase, Mr. de Blasio insisted that the maximum income for affordability qualification should be $80,000 (income for a family of four).  By blogger's own estimation, even in 2007 New York City, if someone is making $80,000 a year they can afford a small place in a decontrolled apartment building. For further reading see http://www.furmancenter.org/files/sotc/SOC2012_Renters.pdf  Currently, about half of the designated affordable units in the first two towers will be rented to families with incomes of up to $138,000.  The brain reels at the absurdity of it.

Richmond Place
Queens New York
brokelyn.com

    
Henry Graber concedes, "Critics have a point: The metropolitan 'area median income' measurement, which determines which projects qualify for Low-Income Housing Tax Credit, is ill-suited for urban neighborhoods."  To illustrate this point, Mr. Graber cites "Staten Island is the only one of the city's five boroughs with a median income that surpasses the area median income."  The Bronx, where the majority of affordable housing projects have been built, the majority of the residents have an income of less than 40 percent of the AMI.  This means that the affordable apartments, which are geared toward residents earning 60 percent of AMI, are out of reach. Therefore, equating degrees of subsidy often does nothing more than puff out the affordable housing records of politicians.

Atlantic Yards under construction
indypendent.org

Atlantic Yards reflects an inconvenient truth about housing construction in New York City. Even the units affordable to residents who make comfortably more that city's median income are not built without subsidy.  This fact is not changing anytime in the near future. According to developer Jonathan Rose, even in the high cost markets, "the cost new construction is higher than the cost of providing affordable and middle-income housing.  To some extent, this has always been true," Mr. Rose added for emphasis.  Further, by using federal money to raze older neighborhoods and build public housing, New York has "subsidized private affordable and middle-income housing construction since the 1940s."  Cooperative buildings such as Penn South on Manhattan's West Side were put up with labor financing on land taken and donated by the city.  Nowadays, developers use the Low-Income Housing Tax Credit to build new affordable housing.

Chrystie Place
jameslimadevelopment.com

Federal LIHTC standards-i.e. 50 to 60 percent of the AMI-assume that affordable housing is built for the truly.  In the case of New York City, the proportion of the population that needs subsidized housing is greater than this sum.  In the past decade, the percent of market-rate apartment affordable to individuals and families making less than the 50 below the NYC median income has declined from 6.2 to 4.4 percent.  While those making up to 80 percent of the NYC AMI has also dropped from 38 to 24.  The steepest decline in the city median income was experiences by individuals and families making the NYC AMI.  In 2002, 63 percent of New York City's de-controlled stock was affordable, however, by 2008m that number dropped to 42 percent.

Richmond Hill
observer.com

The interesting thing here is in New York, affordable housing is not just for those in economic dire straits.  "It's all the people we deal every day," declared Housing Commissioner Vicki Been  at an Urban Land Institute conference in October.  This is due to the housing market being beyond the grasp of half the city and rapidly spinning away.  Despite the fact that the city can expedite housing, it cannot do much to hold down the costs of materials, land, or labor.  To give you an idea of the rising costs, "The average price of land in Brooklyn, the city's most populous borough, rose 25 percent between September 2013 and 2014.  In some the borough's neighborhood the increase was larger: Between January 2013 and 2014, land prices in Downtown Brooklyn...rose from $75 to $350 a square foot..."

To further complicate matters, the high cost of building and insatiable demand for high-end rentals is hampering the city's production rate.  The New York Building Congress forecasts that "residential construction spending will hit $12.4 billion by 2016, more than twice what was spent at the peak of the market in 2007."  Between now and then, the NYBC estimates that only 24,000 units will be built, less than three-quarters of the 2007 total.  To give you some idea of how this dynamic operates, the cumulative price of all 104 apartments in the luxury skyscraper 432 Park Avenue, opened in October 2014. totaled more than "all the residential real estate in Hartford, Connecticut."

77 Columbia Street and 321 8th Avenue
therealdeal.com

The current mayoral administration has looked at the variety of strategies to compensate for the structural imbalance and encourage more affordable housing construction.  Two possibilities: higher tax on vacant lots and mansions.  Other options: "A mandatory inclusionary program that allows for off-site construction.  Speeding the urban land use review process.  Reforming tax incentives.  Relaxing zoning restrictions."  Despite these ideas, many experts do not believe that the city is capable of fixing the housing market by itself.  Regulation is under the jurisdiction of the state.  Federal homeowner subsidies is about $175 billion versus the measly $25 billion in LIHTC and Section 8 vouchers combined.  As with any metropolitan areas, a disproportionate number of high-income households are in the suburbs.

Via Verde
Grimshaw Architects, The Bronx
inhabitat.com

 Pressure on Both Sides

New construction is one element the city can and does control.  An affordable housing development, based on private investment, sounds like a neo-liberal concept but it is a reaction to strong political restraints.  Bu forging a strong tie between market-rate development and affordable housing, the de Blasio administration is performing a balancing act.  Limiting the returns on residential investment could inhibit new projects.  Insufficient pressure, affordable housing goals will be forgotten in the dash to build newer high-end buildings.  The question becomes, "Who will leave New York first: real estate investors in search of higher profits, or the poor in search of lower rents?"

Dinkins Gardens
Harlem
inhabitat.com

Like former Mayor Michael Bloomberg, New York City historian Kenneth T. Jackson also worries that the city risks losing its attraction to the wealthy and developers who cater to them. "Toronto is not that far away...There's a limit what you can do in the private sector." However, he adds that the public will feel the strain, "The problem is: How expensive can New York City become and still remain competitive with Houston, which is the now the poster child for the successful city?"  New York City has always cherished its identity as the center of capital accumulation and working-class progressivism and now, the former is displacing the latter.  "You don't do income inequality in a capitalist city," said David O'Rear, the chief economist for the Hong Kong General Chamber of Commerce at a Municipal Arts Society gathering last autumn.  "It's not the nature of the beast," he added.

What is emerging from all of this a New York City with a split housing market with a middle ground between apartments that subsidize and new units that are subsidized disappearing.  For New Yorkers who survived decades of disinvestment, the de Blasio gambit is worrisome because of the burden it places on developers.  Another concern is the "city's desire to stimulate new, market-rate construction will transform sections of working-class New York faster than corresponding new affordable housing can preserve them."  What is the consequence of a continuing affordability crisis?  In New York City, the affordability crisis coincided with increasing rates of suburban poverty and rapid displacement of long-term residents in newly hip neighborhoods.  The rental crisis was a major factor in Bill de Blasio's election.  Can he use it to remedy the affordability crisis or will it fall victim to politics?