Alon Levy on the Suburbanization of Poverty

Over at Pedestrian Observations, Alon Levy has a typically well-written and researched post on the gentrification of poverty. He explores the well-researched trend that low-income Americans are increasingly moving to the suburbs as gentrification is driving up rents in inner cities. He hypothesizes that this “current” trend has really been happening for the past fifty years:

Both the inner and the outer limits of poverty are pushed outward. What we saw last decade was just a tipping point in which the expansion of the gentrified core was by itself enough to offset the wealth loss coming from the expansion of the ghetto.

Levy suggests that this trend is largely due to the typical pattern of poverty moving outward in a “donut” pattern, but today the center of the donut is in the suburbs. He writes:

In general, a similar story played out in the first-ring suburbs of many Rust Belt cities, especially in ill-favored quarters: the places that people used to flee the city to are now cities that people flee.

His post sparked two thoughts:

1) Could part of the reason that wealthy and middle income residents are moving to inner cities have to do with the demand for time? As we as a society are becoming wealthier, the value of time — the ultimate finite resource — is increasing. So as the price of free time rises, people may be moving to places where their commute times are shorter. In many cases, they are trading off quality of public schools and public safety to enjoy shorter commutes. When they move to Jacobian mixed-use neighborhoods, they could enjoy the added benefit of shorter travel time when running errands and seeking out entertainment. I think this pull toward inner cities helps explain gentrification, in addition to the push away from suburbs that are no longer as desirable as they used to be.

2) In DC with its uniquely terrible height restriction, the city has never achieved the typical inner city growth pattern with the tallest buildings and densest office space is in the center. Instead, skyscrapers have to be built in parts of Silver Spring, Roslyn, Tysons, and other suburbs. Is this development pattern shaping gentrification in these areas?

Spreading ideas through the urban process

I’m at the Living Cities 20th Anniversary today, liveblogging on the discussions that panelists are having here. This post, a little out of the vein of the topics we typically talk about at Market Urbanism, originally appeared at Next American City.

Steven Johnson and Paula Ellis, of the John S. and James L. Knight Foundation, discussed some of the themes in his new book, Where Good Ideas Come From: The Natural History of Innovation, including the unique environment for innovation that cities provide. Johnson draws on the work of Jane Jacobs and Geoffrey West to demonstrate that innovation is most likely to happen in places where humans are densely clustered because entrepreneurs rely on the work of others. Both to see through the uncertainties of the future to realize profitable ideas, and to overcome the challenges of product development, entrepreneurs need to live in urban areas.

Johnson began his conversation explaining that many of the ideals that emerged in the Scottish Enlightenment came out of coffeehouses, through the spontaneous conversations that many brilliant men had, and the evolution of their ideas in this urban space. Looking back to these Enlightenment ideals, we can see that Adam Smith, perhaps one of the original urbanists, explained that the division of labor is limited by the size of the market. Continued urban growth provides individuals with growing opportunities to specialize, as both the consumers and technological developments that fuel the market process are consolidated in the same place.
In West’s work that Johnson referenced, he explains that, unlike firms that become increasingly bureaucratic and inefficient as they grow, cities continue to become more productive as they grow in size and density. As Johnson explained, cities have a “liquid property because they have the convergence of diverse people sharing a space. This is an incredible asset.” West demonstrates that the relationship between city size and innovation is exponential. “What the data clearly shows, and what [Jacobs] was clever enough to anticipate, is that when people come together, they become much more productive.” Smith demonstrated that wealth grows through the exchange that urban environments make possible. Urban scholars from Jacobs to West to Johnson have placed his insight into the context of modern cities, where the size of the market is continually growing. While it’s often easy to fall into critiques of urban policies and focus on the challenges facing individuals in cities, this afternoon’s conversation struck a happily optimistic note.

Capital markets for urban entrepreneurs

I’m at the Living Cities 20th Anniversary today, liveblogging on the discussions that panelists are having here. This post, a little out of the vein of the topics we typically talk about at Market Urbanism, originally appeared at Next American City.

Patrick McCarthey of the Annie E. Casey Foundation articulated one of the missions of the Living Cities collaboration as helping Americans in the bottom 40 percent of the income distribution. As the collaboration seeks to help cities develop, it also seeks to improve the development of human capital in these communities. To this point, Dudley Benoit of JP Morgan Chase suggested that improved efficiency in capital markets is key to achieving this goal.

While microfinance has flourished in developing countries, investors have not been as eager to provide small loans to small businesses in the United States. While philanthropic organizations focused on community development have often focused on the making top-down improvements to the physical landscape of urbanities, Benoit brings up that the human capital that allows cities to facilitate economic innovation is more important than their physical components, and that economic development must be a bottom-up process.

Living Cities’ President and CEO Ben Hecht points out that no one individual can solve the problems that a city poses – as Jane Jacobs and Friedrich Hayek both identified, complex human systems must draw on decentralized knowledge that cannot be centrally compiled. Access to capital for urban entrepreneurs is essential for the economic rebirth of cities that Living Cities fosters.


Transit Oriented Development in Chevy Chase

In Chevy Chase, MD county planners have revised plans for the Chevy Chase Lake Sector from high rise, mixed-use development to low-rise, primarily residential buildings. The trigger to allow for higher-density development will be the arrival of the Purple Line, a proposed light rail that would stretch across Metro’s Red Line.

The light rail would connect Bethesda directly to New Carollton. Construction is scheduled to be completed by 2020, but I for one am not betting on a light rail by that time. For one, no funding has been secured, and for another reason the project is met with considerable opposition to NIMBY-ists in Bethesda and Silver Spring. The town of Chevy Chase has been the most vocal opponent of the project.

Personally, I could see the Purple Line being very well-used, and potentially coming closer to profitability than the “cherry blossom” line. However, waiting for the arrival of transit to permit Transit Oriented Development creates a chicken and egg problem. When high-density development is not allowed where there is demand for it, the restriction limits potential for other viable transit options. For example increasing density along the proposed Purple Line could allow for a Circulator or increased MTA routes to provide service in the meantime. And opposition to the light rail is likely to remain strong as long as residents don’t see the clear value of mass transit in their municipalities.


New funding for roads in Georgia

The Georgia Department of Transportation recently approved $102 million in projects to improve the state’s infrastructure. The department gave the go ahead on these projects as the state is in the midst of a debate over a new proposed one percent sales tax to help fund infrastructure.

Highway supporters often argue that fuel taxes fund road construction and maintenance, but this is simply not the case, leading to the need for other dedicated transportation funding, like the Georgia sales tax. Improvements slated to benefit from the new fund include highways, bridges, and public transit. Metropolitan Planning Organization Coordinator Corey Hull said, “We … want them to know this is our only option right now. The state does not have a plan B for funding transportation and infrastructure.”

Clearly, the fuel tax is not meeting the funding requirements for the states’ drivers, so the funding is being drawn from the wider state population, including non-drivers. Currently, this may be a small distinction in Georgia, though, where only 2.7% of residents take public transportation to work. Like road improvements, public transportation projects in Georgia are funded by the broader tax base rather than the constituents that actually rely on the service.

Perhaps the number of Georgians who take public transportation to work will grow with the proposed expansions to Atlanta’s light rail. However, it’s hard to imagine that such marginal improvements to public transit will create meaningful change to transportation in a city like Atlanta, which was was largely designed around the highway system.

As a result of low demand for transit in Atlanta, the city hopes to cover only 20 percent of the operating costs of a new streetcar system with fares. Rail has many clear advantages over buses — these systems are typically faster and easier for riders to navigate. However, in a large, low-density city like Atlanta, geography simply does not allow many people to use a reasonably sized rail system. Without major reforms to density and parking regulations, Atlanta’s light rail is likely to largely run empty.

Rather than attempting to force a Smart Growth vision on their residents, Atlanta policy makers should take a step back and allow the market to guide transportation resources. In a city built around highways and cars, buses and bus rapid transit make much more sense for environmentally friendly, cost-saving public transit. They have a shot at paying for themselves, or at least necessitating fewer tax dollars than street cars, particularly if the state does not continue policies that subsidize driving. Light rail should not be built without the repeal of anti-density policies.