As part of the multi-day World Habitat Day activities, AHI, along with the National Housing Conference and the Housing Partnership Network, will be sponsoring a presentation and panel discussion on a topic that we think has great relevance, both in the Global South and back home in America.

Being hosted in Washington for the first time

Mission Entrepreneurial Entities:

Essential Actors in Affordable Housing Delivery

Thursday, October 8, 2009 ? 9:00 am to 10:30 am

National Housing Conference ? 1801 K. Street Suite M-100 ? Washington, DC

Attendance is free, but space is limited.

[For those impatient among you, click here to register. – Ed.]

We’ve organized the panel (which I’ll be moderating) to announce the publication and present the principal findings of AHI’s landmark new study, Mission Entrepreneurial Entities: Essential Actors in Affordable Housing Delivery, which examines MEEs’ characteristics, role in housing delivery, importance, and principles of success.  Using extensive case analysis of US and UK MEEs, it develops a theory of what makes successful MEEs or puts this ‘keystone species’ at risk, in which environments MEEs can flourish, and where lie today’s challenges and opportunities.  These insights apply not just in the US and UK but around the world, including the Global South.

I’ve previously posted about Mission entrepreneurial entities; we see MEEs as a distinctive species in the ecosystem, whose role is critical to ecosystemic success.

A definition that reveals a new species and opens a new field of inquiry

Other terms (e.g. Non-Governmental Organization, Community Development Corporation, Housing Association) are imprecise and obscure fundamental similarities of this distinct species.

We commissioned the study more than a year ago, and in that time an extraordinary amount has changed globally and in the UK and US housing finance ecosystems. 

Today’s affordable housing sector is undergoing great change.  Even as need is rising, the current delivery system – the value chains by which policy and resources are converted into tangible properties and successful outcomes – is under pressure, in the UK and here in the US. 

The UK has restructured its housing regulatory scheme. 

Formerly known by many names

The US LIHTC pipeline is disrupted by demand drops.  This sea change is redefining not just how individual deals are done, but which types of actors are most effective at doing them.  Effective MEEs represent innovation platforms that can deliver transit-oriented development, energy sustainability, and asset recovery – activities that urgently need to be converted from intangible goals to tangible properties and results.  Embracing the MEEs’ distinctive role can bring palpable value to funders, policy makers, and government agencies.

Our study is built around detailed profiles of more than twenty MEEs in both countries, compiled and analyzed by our two principal authors, one from each side of the Atlantic:

Ray Christman, former CEO Federal Home Loan Bank of Atlanta

Ray Christman, study principal co-author

Ray Christman is a business leader and senior executive whose thirty-year career spans all aspects of affordable housing and community development, including leading and managing large and complex financial services, housing and economic development organizations. 

Appointed by Mayor Shirley Franklin as chair of the Peachtree Corridor Partnership, Mr. Christman is leading Atlanta’s public-private partnership to implement the first phase of proposed $1 billion investment program to transform Atlanta’s main corridor into one of America’s great streets.  As interim president and CEO of the Georgia Trust for Historic Preservation, he is providing day-to-day leadership and management for the nation’s second largest statewide historic preservation organization, while search occurs for permanent head. 

For nearly a decade, Mr. Christman was president and CEO of the Federal Home Loan Bank of Atlanta, one of a dozen such federally chartered, for-profit companies that provide funding and liquidity to the nation’s retail banks, thrifts and credit unions. 

Gaynor Asquith, Principal, arc⁴ Consulting, Manchester UK

Gaynor Asquith, study principal co-author, arc4

Gaynor is a co-founder of arc4, a housing and regeneration agency that works with the public, social and private sectors to find solutions to any regeneration challenge. She leads work in areas from innovative research and stakeholder consultation through the development of fresh policies and strategies– all to make sure good changes happen.

Gaynor had over 25 years experience before setting up her own company, abra, in 2002.  This, she merged with DCHR in 2007.   Gaynor has since helped to create one of the largest independent specialist consultancies of its kind in the UK.  arc4 helps organisations and individuals to help secure sustainable communities through:

We particularly sought out parallel expertise in two countries to enable paired comparisons.  When two nations have convergent evolution or similar forms, that tells us something.  When they have evolved in highly different ways, that tells us something as well.

The topic’s importance and relevance is highlighted by the remarkable group of panelists we’ve assembled to discuss the report and its finding, including two MEE experts, and two national experts involved in working with, funding, and growing MEEs:

Carol J. Galante, Deputy Assistant Secretary for Multifamily Programs, HUD

I was a DAS before she was a DAS:

Carol Galante, Deputy Assistant Secretary (DAS) for Multifamily Housing Programs

As Deputy Assistant Secretary for Multifamily Housing, Ms. Galante spans the critical new production and refinancing insurance programs; is responsible for the multifamily inventory; and leads HUD’s efforts on multifamily preservation (a current portfolio of over $58 billion).  She is also integral to several new initiatives that promote sustainable development.

Before joining HUD, she spent 22 years at BRIDGE Housing, the largest nonprofit developer of affordable apartments and homes in California, specializing in the development of family and senior affordable apartments, rental and ownership housing, and an array of revitalization, transit-oriented, urban infill, and mixed-use/mixed-income developments.  She joined as Vice President from 1987 and President from 1996. Prior to BRIDGE, she was the Executive Director of Eden Housing, Inc., where she developed affordable homes and formed a property management subsidiary. She has also worked for the cities of Santa Barbara, Richmond and Philadelphia.

Galante has received many honors including: Multifamily Executive magazine’s 2008 Executive of the Year, California Homebuilding Foundation Hall of Fame 2008, Builder magazine’s Top 50 Most Influential People in Home Building 2006, San Francisco Business Times 2003 Deal Maker of the Year, Most Influential Women in the Bay Area, and the 2002 U.C. Berkeley College of Environmental Design Distinguished Alumna Award. She is a licensed real estate broker and holds a B.A. from Ohio Wesleyan and a Master of City Planning from U.C. Berkeley.

Debra Schwartz, Director of Program Related Investments, MacArthur Foundation

Social lender to the multifamily arena: Debra D. Schwartz, MacArthur

Debra D. Schwartz is Director of Program-related Investments for the John D. and Catherine T. MacArthur Foundation where she oversees a $300-million portfolio of below-market loans and investments used principally by economic development and affordable housing organizations. She also co-leads the Foundation’s $150-million national initiative, Window of Opportunity: Preserving Affordable Rental Housing.

Schwartz joined MacArthur in 1995 as Senior Associate to the President.  She became a member of the Program on Human and Community Development in 2000 and assumed her current post in 2002.  Previously, Schwartz was an investment banker in public finance for John Nuveen & Co. where she structured tax-exempt bond issues for municipalities and nonprofit health care organizations.  From 2002 through 2006, she served as one of nine presidential appointees to the US Treasury Department’s Community Development Advisory Board.  She is a founding member of the national PRI Makers Network steering committee and frequently speaks at philanthropy-related meetings on the topics of social enterprise, nonprofit sustainability and program-related investments.

Schwartz graduated summa cum laude from Yale University with a bachelor’s degree in history. She earned a master’s degree in finance and nonprofit management from the Kellogg Graduate School of Management at Northwestern University.

In addition to the two benefactor/ regulatory entities with perspective on MEEs, we’re featuring two MEE representatives, one from a network perspective, one a direct actor:

Thomas Bledsoe, President, Housing Partnership Network

A man who envisioned and oversaw creation of a network:

Tom Bledsoe, Housing Partnership Network

Tom Bledsoe is the chief executive officer of the Housing Partnership Network and three affiliates – the Housing Partnership Fund, Housing Partnership Ventures, and Housing Partnership Insurance.

Founded in 1990, the Network currently has 95 members, all of which are mature nonprofit housing partnerships with strong track records in development, financing, and management. Collectively, they have developed or financed more than 500,000 affordable homes, helped lower-income families improve and repair 175,000 homes, and served as homeownership counselors to 400,000 families.

Under his leadership, the Network has become the leading voice for the high-capacity, partnership-based nonprofits in the affordable housing industry; has launched innovative, high-impact efforts and business enterprises; and been repeatedly recognized by Fast Company magazine as one of the leading social capitalists in the country.

Prior to joining the Network, Mr. Bledsoe was the executive director of the Metropolitan Boston Housing Partnership (MBHP), one of the nation’s first public/private housing partnerships. He facilitated the merger of two nonprofit housing agencies, creating a comprehensive regional organization that operates a continuum of programs from services for the homeless to homeownership.  He holds a BA from Wesleyan University (CT) and a master’s degree in public policy from the John F. Kennedy School of Government at Harvard University.

J. Michael Pitchford, President and CEO, Community Preservation and Development Corporation

Acquiring and developing in metro Washington DC: Mike Pitchford, CPDC

J. Michael Pitchford, President and CEO, is responsible for the overall strategic direction and management of the real estate development and community development programs of our affordable housing communities.   Since 1989, CPDC has developed 27 properties, over 4,000 apartments, with over $300 million in real estate value.

Having spent a decade serving on the Board of the National Housing Conference, including a three-year stint as its president, Pitchford has developed a strong understanding of how national and local policy impact housing affordability. This, along with his leadership skills in generating a shared vision with employees, has helped him build infrastructure for stable and rapid growth.

Pitchford also has participated in or led associations, workshops, conferences, and forums on policy, networking, and the sharing of best practices. He has served in leadership roles with the National Equity Fund, the Urban Land Institute, the Washington Area Housing Partnership, the District of Columbia, Northern Virginia, and Maryland Building Industry Associations, and the Old Dominion University Board of Visitors.

Previously Pitchford led the Community Development Equity Group at Bank of America Corporation in Charlotte, NC. The Group developed or rehabilitated 23,000 units of affordable housing since 1994 and increased equity commitments 3,000%. The development of these affordable housing communities included Make A Difference Centers , community life programs tailored to the needs of the resident population. These programs included computer training for residents of all ages, career and academic mentoring, and on-site health clinics.

And then there’s myself, whom I list for completeness:

David Smith, Founder, Affordable Housing Institute, and CEO, CAS Financial Advisory Services

This is an event you won’t want to miss.  Attendance is free but space is limited.  Click here to register.

It’s a good thing I’m speaking or I might not be able to get in

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[Continued from yesterday's Part 1.]

In yesterday’s exploration, we suggested that if you want to understand a housing finance ecosystem and lack the statistics or reference resources to compile a proper survey, you can do well by conducting a simpler ‘physical exam.’

Is that all I am to you, just a pretty johnny?

Any given housing finance ecosystem processes activity across three dimensions – homes, people, and money.

Locate yourself in space and you define yourself relative to others

By poking and prodding the system as it processes residences, occupants, and money, you can deduce its functions.

I’m sure one of these links to her motivation

Yesterday we covered the concept and Question 1, how do I find housing, and what types are available?

Once you’ve found your desired pied a terre, you have to secure possession. 

Question 2: Selling and buying

If I own housing and you want to own it, how does the system recognize transfer of ownership from you to me?

You’ve found a place you want to own – my place – and I’m ready to sell it to you for an agreed price.  I need your cash; you need evidence that you’re the owner now.

A Turkish title deed: note the owner’s picture!

Between us and the transfer stand a host of professionals who specialize in these handoffs.  Who handles what, what documentation (pieces of paper), what do they say, how are they prepared and signed, who holds them?  What certificates, what protections, what recourse to authority?

You’ll have questions like these:

1. How do you know I own it?
2. What defines my property?   Does it include land, outbuildings (garage, shed), furnishings and fixtures, utilities and systems?  How are its boundaries specified, and why is that specification accepted in the wider world?
3. How can you later prove that you have now acquired ownership from me?
4. Via what piece of paper (if any; in some places, understandings are verbal) is my ownership currently documented?  A deed of title, a purchase receipt from a previous owner?
5. Where can you expect to find or examine my documentary proof of ownership? How do we designate a neutral repository (escrow agent, lawyer, realtor) to hold the valuables – money and certifications like title deeds – while we’re preparing for the closing?

This question gets to the roles and services in the title transfer value chain, both the governmental side (recordkeeping, recognition of transfer, and neutral enforcement) and the private side (professionals involved) and will touch on all these real or potential professionals:

• Closing attorney to prepare the new title deed (and the purchase and sale that precedes it).
• Registry clerk who places in the new title in the great big book and gives you the filing and recordation information.
• Title insurer.  Warrants that your new title is good, and will pay you the property’s value if that proves false.
• Real estate broker or estate agent.  Match-makes between sellers and buyers.  Brokers always face the question of who works for whom.
• Mortgage broker.  Represents you in searching for the best financing.
• Surveyor makes a detailed and personally inspected map of your demesne (pronounced domain), so as to provide the metes and bounds. 

Everything inside the rock wall is my demesne

(Love that Middle English!)

Whan that blogger with his essayes wroote
The metes and bounds hath posted the Web soote,

Depending on where you are in the world, and what type of residential property you’re seeking to transfer, you’ll encounter more or fewer of these folks.  Each check you write, at the closing table or before it, pays for a link in that value chain, a link done by a professional who is (usually, or at any rate supposed to be!) more expert than a generalist, and a vast leap over your effectiveness if you tried to do it yourself. 

The more checks you write at the closing table, the better your ecosystem; while I won’t claim this postulate as absolute fact, that’s my instinct. 

That’s pretty basic, isn’t it?

How do you the newcomer learn about the mechanics of property transfer?

In most developed nations, that’s pretty simple – just Google “home purchase closing” or similar phrases.  Further, many countries have consumer-protection or consumer-disclosure laws that make it easy to learn what you need to know.  In the US, for instance, we have:

The Real Estate Settlement Procedures Act (RESPA), which has been around for 35 years (since 1974, holy moly) as a consumer protection statute:

We need settlement procedures

1. RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

2. RESPA also prohibits certain practices that increase the cost of settlement services. Section 8 of RESPA prohibits a person from giving or accepting any thing of value for referrals of settlement service business related to a federally related mortgage loan. It also prohibits a person from giving or accepting any part of a charge for services that are not performed. Section 9 of RESPA prohibits home sellers from requiring home buyers to purchase title insurance from a particular company.

Additionally, any professional association (like the US realtors) will have extensive exposition, and a little bit of poking around will reveal dozens of law firms eager to let you download standard agreements.  Indeed, looking for the forms will also surface the types of practitioners who specialize in transactional services, and they in turn will lead you back to the sequential steps.

Similarly, the settlement statement – a standard form listing what costs for what services might be paid at the closing – acts as an effective checklist of possibilities.  A good example is the HUD-1 settlement statement (link in .pdf), which zeroes in on possible costs, as shown in the large image below.

If HUD thinks you might be paying these, there’s probably a good reason why

Well-developed (and typically higher-income) ecosystems have these mechanics down pat, so much so that everyone takes them entirely for granted.  As a result, first-world investigators who travel to developing nation environments often presume they know how the system works when in fact they don’t.

Hence it’s important, in less-developed ecosystems, to forget everything you think you know about the property transfer value chain, and start from first principles.  One learns by asking the same questions, over and over again, walking step by step through the imagined process and collecting samples of the documents along the way.  Most significantly, how the process works in the formal world of mortgages and electronic records often differs dramatically from how it works in the informal world of unregistered property, cash transactions, and verbal rather than written rights.

Tracing the mechanics of a transfer of ownership, and the recognition/ enforcement of that transfer, also expansively touches everything to do with the broader society and property rights – and that, being one of the pillars of a liberal democratic society, provides a window into government’s functionality, integrity, and legitimacy.

Somebody’s worried

However, such speculations into political philosophy would take us ‘beyond scope’ (as the compleat consultant would say), so let us stay with the more prosaic element of that single dwelling unit.  You’ve located and chosen it, you’ve agreed with its owner about your occupancy.  Now you have the last piece – you have to pay for it.

“Hamburgers!  The foundation of any nutritious breakfast.  Do you know what a quarter-pounder costs in France?”

[Concluded tomorrow in Part 3.]

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By: David A. Smith

If you get a new doctor, what’s the first thing he or she does – after establishing how you or your insurance will pay, of course? The physical exam.

We make them cold so that we know you’re dead if you don’t flinch

When we don’t know how a system works, what do we do? We palpate it.

Tell me if this hurts

We shake it and hear the rattles.

Louder sounds are better, aren’t they?

We twiddle the knobs and observe the changes.

Wonder if this detonates it?

Indeed, long before we had any taxonomic understanding of medicine, we tracked biological processes by their outputs, whether in reading the entrails of a goat or examining the patient’s stool.

What comes out reflects what went in …

… and what happened to it on the way through

In the modern era, we do the sample systemic analysis remotely, with radioactive isotopes that serve as tracers through the body, highlighting circulation and concentration, learning about the system by following particles on their way through it.

If I were you I’d worry about the glowing parts

In the same way, when we consider a housing finance ecosystem, the blood plasma is money, and its tracing is a time-honored investigative technique.

“Follow the money”

When it comes to housing, the money moves in three dimensions: homes, people, and money:

1. Homes. Providers and consumers finding each other.

2. People. Sellers and buyers exchanging money for consumption and use rights.

3. Money. Capital providers and capital consumers financing a home purchase.

Understand these three dimensions and you go a great ways toward placing an ecosystem in its space.

Thus, if you come new to a housing finance ecosystem, either because you’re visiting a country and want to buy or rent a home, or as a student, researcher, or consultant tasked with designing a new program intervention, you can learn a lot about the ecosystem if you follow the money through each of its three dimensions.

Use all three eyes and you’ll see the full dimensions

Keep on truckin’ for insight

The investigative technique

To understand each process, follow it step-by-step, actor by actor, cost by cost. Take a journey through the system, getting up close and personal with each of its elements.

Pretty fantastic voyage, if you ask me

Imagine yourself starting the journey, a hopeful fool empty of knowledge, and ask yourself, How do I encounter? How do I interact? What money changes hands, how and for what purpose?

My ignorance and my bundle are soon parted?

Question 1: Owner-consumer value chain

If you have housing (to rent or sell) and I need housing (to occupy or buy), how do we find each other and what kind of tenure relationships could we establish?

You’re new in town, and you need a place to live. Think of all the sub-questions you’ll have.

1. Can I find plenty of places, or are they scarce?
2. How much space can I afford?
3. Can I buy or do I have to rent?
4. If I want to buy, how far out of downtown do I have to be?
5. Is there enough good-quality rental?
6. Is the government in the business of providing housing?
7. Is the government in the business of subsidizing the supply side (helping create more homes)?

Now I’m going to ask you a simple question – do you feel … lucky?

This simple question – what housing is around? – gets at everything to do with the supply, flexibility, and affordability of housing:

• Ranges of tenure. Ownership, condo, co-op, shared ownership, rental, affordable rental, rent-controlled rental, roommates, public housing. Which of these are formal, which informal? What gray tenures exist (like in-laws apartments, illegal sublets, or overcrowded student housing)?
• Diversity of configuration. Apartment types, bedroom counts, flats or gardens or townhouses or duplexes or free-standing bungalows.
• Cost and affordability. What percentage of income do households pay for occupancy? How does this vary by tenure? How are utilities provided, and who pays them?

How do you the newcomer find out housing supply, configurations, tenures, and costs?

• Ask people.
• Apartment guides.
• Newspaper advertising.
• Banners and flyers and signs. (Learn how they advertise FOR RENT and FOR SALE.)
• Realtor/ real estate broker/ estate agent shop windows. Nancy and I have got into the habit of staring at these pretty much anywhere we find them. We’re always astonished at how little you get for your money in the UK or Europe.

Each window pane is another comparable

(Except the Uncle Sam, who wants You to Buy)

Remember, every form of configuration, tenure, and price point exists because somebody thinks that’s the right niche for some fraction of the market. By their homes ye shall know them.

Further, the question also opens a window into the property-transfer value chain, including what types of markets link property providers (owners and landlords) with property consumers (renters and buyers), and conveniently bringing us to the second question.

[Continued tomorrow in Part 2.]

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[Editorial justification for the tour: If we want to improve slums, we have to see them as ecosystems – spontaneous self-generated communities, self-organized, economically rational, economically efficient, adaptive and robust.  We may not like the slums (like Dharavi in Mumbai, Kibera in Nairobi, or Sao Paulo's favelas) we may wish them away or wave our hands (or our bulldozers) to disappear them.  Yet they will return, resisting our efforts almost as if conscious, unless we see them as organic and dynamic, and come to understand how a slum dies. – Ed.]

I started this multi-part post, using as text Steven Johnson’s excellent book The Ghost Map that chronicled John Snow’s mapping of the 1854 London cholera epidemic.  Johnson, by background a scientist, makes a hero out of Snow, the scientist who discovered cholera’s truth despite establishment scorn.

Snow is a hero; so too is Joseph Bazalgette, who retrofitted a modern sewerage system under and through London – and by doing so, fatally wounded the Victorian slum.

Eventually, these slums disappeared … but not their buildings

Slums do not simply vanish; nor are they wiped out at a stroke as by an epidemic.  Slums evolve – into formality, into the formal city. 

Buildings endure; like brick hermit crabs, the buildings’ skeletons may survive multiple generations of use, scoured every score of years, periodically reborn as ‘historic renovations’ or ‘period treasures.’  All that can happen only if the buildings are embraced within the formal city.  This takes judicial recognition, which always follows after political recognition, which follows after economic recognition.

Civic acceptance comes in baby steps: painting a street number on a shack, delivering mail to a hovel, enumerating the residents, connecting the toilets to a sewerage system, putting in a legal electric meter.  Bit by it, these increments bring the informal into the formal.

Electric hookup box, Ahmedabad Municipal Corporation, Gujarat, India

Even as the world is urbanizing at a rate unprecedented in human history, so too are our global cities trying to come to grips with that urbanization.

Somewhere in the world, right about now [2006 – Ed.], a villager is moving her family to a city somewhere, or an urban dweller is giving birth, or a farmer is dying—and with that local isolated act, the global scales will tip decisively.  We will enter a new era: a planet whose human population is more than 50% urban.  [It's already happened – Ed.] 

When John Snow and Henry Whitehead roamed the urban corridors of London 1854, less than 10% of the planet’s population lived in cities, up from 3% at the start of the century.  Less than two centuries later, the urbanites have become an absolute majority.  No other development during that period—world wars, the spread of democracy, the use of electricity, the Internet—has had as transformative and widespread an impact on the lived experience of being human.  The history books tend to orient themselves around nationalistic lines: overthrowing the king, electing the presidents, fighting battles.  But the history book of recent Homo sapiens as a species should begin and end with one narrative line: We became city dwellers.  Pages 231-234

People come to cities because, for all their faults, they are richer, livelier, safer, and healthier than rural poverty.

To date, those fears [of cities overrun by population] have proved unfounded.  Modern urbanization has thus far offered up more solutions than problems.  Cities continue to be tremendous engines of wealth, innovation, and creativity, but in the 150 years that have passed since Snow and Whitehead watched the death carts make their rounds through Soho, they have become something else as well: engines of health. 

We forget that in addition to employment, cities also offer access – access to politics (nearly all revolutions and democracies were born in cities), access to education (the world’s universities were all founded in cities), access to services.

Two-thirds of women living in rural areas receive some kind of prenatal care, but in cities, the number is more than ninety percent.  Nearly 80% of births in cities take place in hospitals or other medical institutions, as opposed to 35 % in the countryside. 

Cities are places of enterprise.

Delivering fresh eggs back to the neighborhood: Mumbai

You’re much likelier to become rich if you grew up in a city than in the country.

Future millionaires?

We think of cities as making us dumber; actually, cities are hives of innovation.

Because the table condenses down its data into a power-law variable beta, a bit of explanation may help.  When the authors speak of an increasing beta, they’re measuring the rate of growth in the quantity as a city gets larger (measured in number of people). 

Thus, if a Small city has a patent rate of 1x, when the city becomes Medium sized (growing to 3x its original), it will be producing 35% more patents per capita.  It’ll be 35% more competitive.  If it makes the leap to a Large city (10x the Small size), its patent rate will be 86% higher.  Bigger cities are smarter.

Wages too rise faster than the rate of population.  Bigger cities are richer.  Move to a city 10x your current one and your earnings will probably rise 32%.  (So too will your housing prices!)

We speak of going to the country for our health.  Yet on balance we live longer, happier lives in cities:

For those reasons, as you move from rural areas to urban ones, infant mortality rates tend to drop.  The vast majority of the world’s most advanced hospitals reside in metropolitan centers. 

I know a half-dozen people who would not be alive or healthy today had they not lived in or near Boston.

According to the coordinator of the United Nations Global Report on Human Settlements, “Urban areas offer a higher life expectancy and lower absolute poverty and can provide essential serviced more cheaply and on a larger scale than rural areas.”  For most of the world’s nations, living in a city now extends your life expectancy instead of shortening it.  Thanks to the government interventions of the seventies and eighties, air quality in many cities is as good as it has been since the dawn of industrialization.  Pages 231-234

Cities also are, counterintuitively, greener:

Cities are a force for environmental health as well.  This may be the most surprising new credo of green politics, which has in the past largely associated itself with a back-to-nature ethos that was explicitly anti-urban in its values. Dense urban environments may do away with nature altogether—there are many vibrantly healthy neighborhoods in Paris or Manhattan that lack even a single tree—but they also perform the crucial service of reducing mankind’s environmental footprint. 

Cities sustain greater density for two reasons: they are richer, and being geographically compact, they benefit from square-cube and network effects. 

Maybe not welcoming but efficient: Habitat 1967

As we saw in Cities and Scale:

Many diverse properties of cities from patent production and personal income to electrical cable length are shown to be power law functions of population size with scaling exponents,   , that fall into distinct universality classes. 

Quantities reflecting wealth creation and innovation have    1.2  > 1 (increasing returns),

As cities get bigger, people in them get richer, cleverer, and more creative.

whereas those accounting for infrastructure display    0.8 < 1 (economies of scale). 

As cities get bigger, they need less infrastructure per person.

It’s much easier to hook a peri-urban neighborhood up to a city’s systems than it is to run pipes and wires into the wilderness.

Compare the sewage system of a midsized city like Portland, Oregon, with the kind of waste management resources that would be required to support the same population dispersed across the countryside.  Portland’s 500,000 inhabitants require two sewage treatment plants, connected by 2,000 miles of pipes. A rural population would require more than 100,000 septic tanks, and 7,000 miles of pipe.  The rural waste system would be several times more expensive than the urban version. 

As the environmental scholar Toby Hemenway argues: “Virtually any service system—electricity, fuel, food—follows the same brutal mathematics of scale.  A dispersed population requires more resources to serve it—and to connect it together—than a concentrated one.” 

Hemenway likes living close together

From an overall ecosystems perspective, if you’re going to have 10 million human beings trying to share an environment with other life-forms, it’s much better to crowd all 10 million of them into a hundred square miles than it is to spread them out, edge-city style, over a space ten or a hundred times that size.  If we’re going to survive as a planet with more than 6 billion people without destroying the complex balance of our natural ecosystems, the best way to do it is to crowd as many of those humans into metropolitan spaces and return the rest of the planet to Mother Nature.  Pages 231-234

The ecology of slums and the ecology of cities are linked.  Slums are an ecology of concentrated poverty; cities are an ecology of distributed wealth.  So in cracking the problem of slums, we are cracking the problem of healthy cities, and hence wealthy city-dwellers.

Buildings survive.  Many of those called slums by Snow, Chadwick, and Whitehead still stand in London.  They’ve been scoured of filth, rewired for broadband, re-insulated, resold, rehabbed, resold again, divided and subdivided and combined and recombined.

Where did the slums go?  As their economic ecology changed, they melded invisibly into the rest of the city.

This is the world that Snow and Whitehead helped make possible: a planet of cities.  Page 234.

If we want a planet of cities, we have to cure a planet of slums.  We kill a slum not with demolition but with dollars:

To improve a neighborhood, raise the shelter-cost-paying power of its inhabitants.  To do that, raise their ability to earn money, and with it their choices about where to live and what to invest.

How do you eradicate slums?  You drive them bankrupt.

The way to win

That’s what Snow and Whitehead sought.

A man who saw the future? Henry Whitehead, 1884

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