Month in Review: August, 2012: Part 1, Upgrading the brown

October 11, 2012 | Boston, Capital markets, China, Galveston, India, Informality, Month in review, Municipal bankruptcy, New York City, Nonprofits, NYCHA, Public housing, Redevelopment, Remittances, Subprime, Vouchers, Workouts

[Previous Months in Review available here: July 12, Jun 12, May 12, Apr 12, Mar 12, Feb 12, Jan 12.]


By:David A. Smith


Remember how much good there is in us


Amid all the gloomy economic news, it’s pleasing now and then to lead with an urban revival story that is both heartwarming and true, as I chronicled regarding Newark in Not growing food, growing people: Part 1, cultivating the jobs desert, and Part 2, cultivating the property desert:


Small entities are the last-block counterparty for larger ones.  Maybe we don’t need mega-grocery stores; maybe we need more storefronts with owners living above.


Does that make you feel nostalgic?


Mostly, we need people to own and tend for lots, and turn them from urban wastelands into visual amenities:


A program for city residents to adopt a vacant lot for a dollar a year was promoted and made less bureaucratic, Ms. Dougherty said.


Absolutely: we are primates, we mark our territory, and the territory that we mark, we protect.


She said crime in the gardens has been minimal. Beer bottles occasionally get tossed into them, and a prized watermelon was recently stolen. But local residents tend to protect the gardens as their own, she said.


Mark Kearney , center, leads a group of students on a tour of the Court Street Urban Farm. Mr. Kearney, who was in prison, came to the farm two years ago as part of the Greater Newark Conservancy’s vocational programming for offenders called the “Clean and Green Team.”


Give people moral ownership over space, even if that ownership is informal, and even if it is potentially subject to revocation,and they will improve it – and that fact has global application as it is a key to Home Asset Loan Finance.


The other side of claiming urban ownership is the tendency to shift a lift on someone else’s infrastructure, and as we saw in India, that can lead problems to escalate From black market to black out:


As much as I explore informality in housing and urban enterprise, readers might conclude that I celebrate it uncritically, but any form of informality has enormous costs, and not just on the informal society, as demonstrated by a recent article from the Christian Science Monitor:


A two-day blackout for half of India was caused in large part by a massive theft of electricity.


A maze of telephone, electrical, and cable wires runs across a street in Delhi.


Modern urban utilities – power and water — are such tempting things to steal, because although everyone needs them (increasing our sense of moral entitlement), they are also delivered continuously, almost invisibly, by large impersonal networks that represent sunk costs and whose maintenance costs are invisible and “a slice off a cut loaf’s never missed.”


Quite a range of points of comparison


From India I posted again on China, starting on a magnum opus (at least measured in blog standards), with a six-part post (carried over into September) presenting a comprehensive Theory of China’s cities and housing: Part 1A, “Nothing outside China matters”, and Part 1B, But the world is globally connected:


Over the years, I’ve written extensively about the apparent paradoxes of China’s economy, urban growth, and approach to housing.  Each post has been its own puzzle piece – and some of them have linked together.  Finally I’ve crystallized a theory of China’s current situation as a breakdown of governing principles that China has used since time immemorial.  While for decades and even centuries these premises may have served China well, the modern world renders them untenable – and it is that effort to preserve what can no longer be maintained which is roiling Chinese society. 


Three premises and their twenty-first century breakdown


1.  “Nothing outside China matters” … but China cannot succeed except in a globally connected world – and the consequence is that China is burying money in fixed assets that people do not want. 


2.  “An imperial economy is a successful society” … but modern economies and cities are so vast and complex they have to be self-managed – and the consequence is that China’s cities are obsolete before they are built.


3.  “Between observation and doctrine, report doctrine” … but markets, including information markets, will not be fooled for long – and the consequence is that all Chinese statistics are questionable and the economy is mismanaged.


Three premises to guide Chinese society


These premises find their physical expressions in China’s cities and its housing.  Housing in China today is a massive industrial output not seen as any different from mountains of coal or miles of concrete, just another machine for living that will house the workers of the future.  Hence the breakdowns we see today in China’s society and cities are not simply failures of local delivery, but breakdowns across the whole system:


The man who couldn’t be Chinese: Mark Kitto and his family


Fear of violent revolution or domestic upheaval, with a significant proportion of that violence sure to be directed at foreigners, is not the main reason I am leaving China, though I shan’t deny it is one of them.


[I am leaving China because I have] a justifiable human desire:


To be part of a community and no longer be treated as an outsider.

To run my own business in a regulated environment and not live in fear of it being taken away from me.

Not to concern myself unduly that the air my family breathes and the food we eat is doing us physical harm.

To give my children a decent education. 


[Mr. Kitto’s words modestly reshuffled for emphasis – Ed.]


The China posts made me sad, as did the shattering of one of my few remaining cherished illusions when the New York Daily News, with investigative journalism of a caliber that if more common might restore the profession to some pride of place, revealed how badly New York City’s Housing Authority is run, with two posts, the first one observing that NYCHA’s performance has been Inexcusable, as in no excuse:


Any press is good press?


Many years ago, I became the volunteer treasurer for an organization whose previous treasurer, though both intelligent and responsible, was being roundly criticized for his job performance.  “You’re doing a terrible job as treasurer,” the organization’s president berated him (or so I heard the story).  “What do you mean?” he replied in outrage and bewilderment.  “I’m not doing anything!”


Such is the quality of defense being offered by the executive leadership of the New York City Housing Authority (NYCHA, rhymes with bite-cha), as reported by the New York Daily News (August 3) article and accompanying New York Daily News editorial (August 3, 2012) (blue text), as the continuation of an enterprising series it’s been running on NYCHA’s failure:


NYCHA board sitting on nearly $1B in fed cash


The New York City Housing Authority and its board members have failed to spend nearly $1 billion that it has been hoarding since 2009 to make life more livable for the 400,000 residents of its 334 developments, the Daily News has learned.


Three weeks later, I looked in greater detail at Scandals are what happen when we are busy making strategic plans:


But I’ll bet NYCHA could not do that, because of public-sector union contracts dictating who does what, and how it is done.


The counting — which began in January and is now 52% complete — is expected to end by October.


Got that?  It has taken NYCHA seven months to count what it has.  This is worse than inexcusable, it’s outrageous.


Seven months ago, I didn’t even exist, and look at the progress I’ve made


Rhea said he’s confident the new system will save millions of dollars by eliminating the time workers spend looking for missing parts, and by ensuring the entire authority knows what supplies it has.


What new system, Mr. Chairman?  The one you haven’t implemented yet?


Making a tawdry tale even worse was NYCHA’s systematic evisceration by the Boston Consulting Group, performed to the tune of ten million buckadingdongs, which I detailed during September in When you can’t say anything NYCHA:


No wonder NYCHA Chairman John Rhea, who in my opinion should immediately resign his position, was in no hurry to release the Boston Consulting Group’s extensive and detailed report, Reshaping NYCHA support functions (link to the full 1.78 Meg report in pdf), for it is a relentless critique of NYCHA’s inexcusable performance and its awful Authority practices made inferentially more damning by the consultants’ report (despite their having no housing expertise; see box below on The unconscious arrogance of all-purpose management consultants) detailing so many wretched outcomes and horrible management practices, and by the consultants’ touching and pathetic effort to sweeten the pill by finding something nice to say even when nothing good can possibly be said. 


Oh, you think nothing good can be said about our board?


Another community’s view of public housing – one might say, a violent rejection of it – was presented on the Gulf Coast, where Galveston sought to have its former public housing residents Vouchered off the island? Part 1, stranded, Part 2, immunity idol, Part 3, tribal council, and Part 4, the tribe has spoken:


Galveston’s city council voting on the public housing plan


By rights, the sandbar we now call the island of Galveston, Texas, has no business existing as a city.  Like Venice’s Lido, New York’s Fire Island, Holland’s Zeeland, and the North Carolina Outer Banks, it’s merely a long drift of granules temporarily perched above sea level.


What the ocean giveth, the ocean taketh away


But exist it does, despite once being obliterated in 1900, and as the city does not exist that has no poor people in it, Galveston has its share of the poor – who, until Hurricane Ike in September, 2008, lived in large numbers in Galveston’s public housing.


Cedar Terrace in Galveston, damaged by Hurricane Ike


This story caught my eye from a very recent Wall Street Journal (August 3, 2012) article that made little sense to me when I read it and that proved, on further exploration, to be shockingly simplistic and inaccurate, and hence to obscure the real issues.


A note on sources


I started this blog post using a Johnny-come-lately story in the Wall Street Journal (August 3, 2012), only to discover that to make sense of events we had to go back in time and use material from the Houston Chronicle (July 26, 2012) (blue text), Texas Observer (April 5, 2012) (red text), and documented in a Houston Chronicle July 1, 2011 story (green text).


Underlying the current passions are several issues that are fundamental to urbanization and housing assistance:


1.     Place-basing versus portability

2.     Poverty concentration versus poverty dispersal

3.     Choice versus exclusion

4.     Pure-public versus public-private


And throughout the next four days’ posts (and the multiple newspaper stories I’ll cite), the question is omnipresent but never asked: Is vouchering out public housing tantamount to exile?


Don’t worry, you’ll have a housing voucher


(As I wrote it would, Galveston is reluctantly complying with HUD’s edict.)


[Continued tomorrow in Part 2.]