Affordable Housing Institute : US

As the world urbanizes, in the century of cities, cities are becoming richer – and as they do, other beneficial things are happening, as explained in a lengthy and thoughtful essay by Alan Ehrenhalt in The New Republic:
 

Thirty years ago, the mayor of Chicago was unseated by a snowstorm. A blizzard in January of 1979 dumped some 20 inches on the ground, causing, among other problems, a curtailment of transit service. The few available trains coming downtown from the northwest side filled up with middle-class white riders near the far end of the line, leaving no room for poorer people trying to board on inner-city platforms. African Americans and Hispanics blamed this on Mayor Michael Bilandic, and he lost the Democratic primary to Jane Byrne a few weeks later.

 

Knocked out of office by a blizzard?  Michael Bilandic

 

Today, this could never happen. Not because of climate change, or because the Chicago Transit Authority now runs flawlessly.

 

And they sing flawlessly, too

 

It couldn’t happen because the trains would fill up with minorities and immigrants on the outskirts of the city, and the passengers left stranded at the inner-city stations would be members of the affluent professional class.

 

Throughout history, the rich have had the best locations, one dimension of which is commuting time: the world’s first apartments, the insulae of Rome and Ostia, were single-room-occupancy cubes on the top floors of densely crowded walkup high-rises. 

 

“Walk ’til you qualify”: the affordable insulae are up top

 

A hive of human activity – just like a modern slum, except older

 

Today our commutes are not up and down – elevators have taken care of that problem – but in and out, where “drive ’til you qualify” is a basic principle of the search for affordability.  That was true of English and American cities through the mid-nineteenth century, when the railroad’s invention enabled the common people to ‘move about needlessly’ (in the Duke of Wellington’s classic phrase) and created what Sam Bass Warner memorably described as ‘Streetcar Suburbs.’  In America, post-WW2 auto-mobility and highway system expanded the suburb’s commutable ring even further, and led to white flight: blacks moved into the inner cities and whites moved to the leafy suburbs.

 

The archetypal suburb: Leviittown, 1950s

 

American cities bottomed in the mid-1970s when the last of their industrial bases fled west, south, and overseas, and since then they’ve been rising:

 

In the past three decades, Chicago has undergone changes that are routinely described as gentrification, but are in fact more complicated and more profound than the process that term suggests. A better description would be “demographic inversion.” Chicago is gradually coming to resemble a traditional European city – Vienna or Paris in the nineteenth century, or, for that matter, Paris today. The poor and the newcomers are living on the outskirts. The people who live near the center–some of them black or Hispanic but most of them white–are those who can afford to do so.

 

European cities never had the auto-fueled white flight.  When the Paris high-rises exploded in flames and looting, I wrote about the structure of a European city and the risks of wealth eye-to-eye with extreme poverty:

 

The isolation-warehouse model never works.  We saw that in Watts 1965.  We are seeing it in Cape Town 2005 and Paris 2005.  That is where the anger brews, where the violence has erupted.  That is the terrain.  Those are the physical places to be fixed.  But their fixing, though it involves housing as a core intervention, requires much more than just a box inside which to sleep. 

 

As Jim Hoagland writes in the Washington Post:

 

Hurricane Katrina helped Americans understand in sickening detail the failures of local and federal emergency-response bureaucracies.  France’s riots should illustrate to the French the dead-end nature of the physical and social architecture of building a tall fence around the country’s 5 million to 10 million Muslim immigrants and their offspring, and then pretending they are essentially not there.

 

The warning prophet of urban riots: James Baldwin

 

I thought the French riots would presage the fire next time.  Candidly, I’m surprised – and thankful – it hasn’t happened yet.  Over time, however, we cannot have wealth and poverty living side by side without creating the sparks of envy, theft, mugging, and riots.  We cannot sustain it demographically, we cannot afford it economically, and it cannot justify it morally. 

 

Meanwhile, the cities are shifting – growing richer.

 

Atlanta, for example, is shifting from an overwhelmingly black to what is likely to soon be a minority-black city. This is happening in part because the white middle class is moving inside the city borders, but more so because blacks are moving out.

 

Exactly reversing the pattern a half-century ago.

 

Which way to the city?

 

Between 1990 and 2006, according to research by William Frey of the Brookings Institution, the white population of Atlanta has increased from roughly 30% to 35% while the black population has declined from 67% to 55%.  In this decade alone, two of Atlanta’s huge suburban counties, Clayton and DeKalb, have acquired substantial black majorities, and immigrants arriving from foreign countries are settling primarily there or in similar outlying areas, not within the city itself. The numbers for Washington, D.C. are similar.

 

America is also much more a rainbow nation than we were fifty years ago – just ride any subway or urban bus.

 

Race is not always the critical issue, or even especially relevant, in this demographic shift. Before September 11, 2001, the number of people living in Manhattan south of the World Trade Center was estimated at about 25,000. Today, it is approaching 50,000.

 

New apartments in Lower Manhattan

 

That’s a testament both to American courage and to economics – and it’s why cities like Manhattan are holding their value much better than the suburbs.  It’s also the idea behind the questionable but nevertheless provocative thesis that the McMansions will be the next slums.

 

Close to one-quarter of these people are couples (nearly always wealthy couples) with children.

 

Rich people demand services from their government.  Rich parents demand better schools. 

 

Demographic inversions of one sort or another are occurring in urban pockets scattered all across America, many of them in seemingly unlikely places. Charlotte, North Carolina, is in the midst of a downtown building boom dominated by new mixed-use high-rise buildings, with office space on the bottom and condos or rental units above.  Even at a moment of economic weakness, the condos are still selling briskly.  [Article published August 13, 2008 – Ed.]

 

At least as far I can tell (and my for-profit company provides asset management on a large portfolio of condo-development loans around the country), condo vacancies are more a consequence of overshooting market growth and picking locations where the demand was expected to be … and now isn’t:

 

“I skate to where I think the puck is going to be.”

 

If you believe the chatter I hear, our three sickest condo markets are south Florida, California’s Inland Empire, and Las Vegas.

 

We are not witnessing the abandonment of the suburbs or a movement of millions of people back to the city all at once. But we are living at a moment in which the massive outward migration of the affluent that characterized the second half of the twentieth century is coming to an end. For several decades now, cities in the United States have wished for a “24/7″ downtown, a place where people live as well as work, and keep the streets busy, interesting, and safe at all times of day. This is what urbanist Jane Jacobs preached in the 1960s, and it has long since become the accepted goal of urban planners.

 

Only when significant numbers of people lived downtown, planners believed, could central cities regain their historic role as magnets for culture and as a source of identity and pride for the metropolitan areas they served.  Now that’s starting to happen, fueled by the changing mores of the young and by gasoline prices fast approaching $5-per-gallon.  In many of its urbanized regions, an America that seemed destined for ever-increasing individualization and sprawl is experimenting with new versions of community and sociability.

 

Why has demographic inversion begun?

 

A change in household composition, maybe?

 

For one thing, the deindustrialization of the central city, for all the tragic human dislocations it caused, has eliminated many of the things that made affluent people want to move away from it. Nothing much is manufactured downtown anymore (or anywhere near it), and that means that the noise and grime that prevailed for most of the twentieth century have gone away.

 

Land is valuable based on what grows on it.  Empty land has minimal value — nomads don’t own land because each patch is as good as another, and there’s a functionally infinite supply.  Then come crops, and agricultural land gains value worth paying for. 

 

The land in back is way more valuable

 

Next is manufacturing: used to grow businesses that make products, land gains value – but most manufacturing produces byproducts people don’t like, from soot to sludge to fumes to waste.  The most valuable thing to grow on land is thus people: either people working in information-based jobs (no nasty byproducts), or people living.

 

And the highest and best use – the maximum value – is when people work and live in virtually the same space.  The home office isn’t just convenient, it’s also a wealth source.  Which is why so many downtowns are experiencing a conversion of office space into residential.  And why the cities keep going up and up.

 

Manhattan may seem like a loud and gritty place now, but it is nothing like the city of tenement manufacturing, rumbling elevated trains, and horses and coal dust in the streets that confronted inhabitants in the early 1900s.

 

The romantic haze of moviemaking (our principal window to the past) has conveniently elided the extraordinary filth and pollution of industrial cities.  A horse produces 30-50 pounds of manure daily (that’s about a cubic foot), and at the turn of the century, Chicago had 82,000 horses producing 600,000 tons of manure annually.  Think about the challenges of moving all that manure out of a city – and where do you put it?  Often in the rivers and lakes.

 

Industrialized cities were filthy, spectacularly so as recalled by London’s Great Stink of 1858, or Sherlock Holmes’ pea-soup fog (today we’d call it coal smog), or the 1952 smog.

 

 

Third-floor factory lofts, whether in Soho or in St. Louis, can be marketed as attractive and stylish places to live. The urban historian Robert Bruegmann goes so far as to claim that deindustrialization has, on the whole, been good for downtowns because it has permitted so many opportunities for creative reuse of the buildings.

 

Previously, in Sprawl, everything you know is wrong, I wrote about Bruegmann’s work.  Sprawl is just a pejorative for two things: mess (unplanned activity by those ‘common people moving about needlessly’) and increasing consumption. 

 

I wouldn’t go quite that far, and, given the massive job losses of recent years, I doubt most of the residents of Detroit would, either.

 

Actually, downtown Detroit’s reviving.  The problem is that Michigan has too many people for the number of jobs it holds, and hasn’t yet invented post-industrial jobs in sufficient number.

 

But it is true that the environmental factors that made middle-class people leave the central city for streetcar suburbs in the 1900s and for station-wagon suburbs in the 1950s do not apply any more.

 

No longer the height of fashion

 

As the cities get richer, something else changes too.

 

[Continued tomorrow in Part 2.]

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