22 January 2008

Did You Just Double Dip?

This post is a little more personal. I live in a Boston neighborhood that 45 years ago reached its zenith in terms of actual families with kids living here, like many urban neighborhoods around the country. The neighborhood is full of triple-deckers - turn of the century house with three floors - built primarily to house established immigrants (mostly Irish in our case) and their extended families and/or boarders. Basically, the guy who built my house worked at a local brewery and I assume was about 30 years old, had saved some cash, and had this house built. He then probably moved in with his wife and kids, and I'm sure an aunt, uncle, grandparent and ol' Francis who needed a place to stay. There were probably 18 people living here when it was built. Today there are 9, and it's really meant to be 7.

In any event, about 45 years ago, the people in the neighborhood left for the suburbs. More accurately, the children or grandchildren of the first generation to move in here moved to the suburbs. This loss of bodies, i.e. taxpayers and children, was a huge blow to the city and the neighborhood. Schools declined with them the neighborhood in general. Which made more people leave. We all know the story.

The houses then became rentals, usually to students in the nearby universities. The disproportionately high number of students puts these strange ripples into the economy. First, the rents are paid by a third party (the student's parents). So a four-bedroom apartment is being rented, in effect, to at least four - perhaps even eight - incomes. And they are incomes of moderately well off people - I mean, their kids are going to college. Somewhat expensive colleges too.

So this purchasing power is amazing. Say each family that sends their kid to college has an income of $100,000. That's like someone with a $400,000 salary renting that apartment. And the price of anything is what the market will bear. This is essentially renting to the same people that shop at Louis Vuitton when they need a new handbag.

Put that next to a family of four that does well, say, brings in $70K a year. There is no comparison, even at that level.

The triple decker has three apartments in it. Each has usually 4 bedrooms. Each bedroom goes for about $800 a month - putting it on par with a dorm room. So your typical triple-decker brings in $9600 a month. This makes the defacto price of a triple decker about $950,000 (the mortgage of which would be paid for in the rent money, leaving a little each month for maintenance).

This prices out that family of four even more. I suppose they could buy the triple decker at $950,000, live in the top floor and rent out the two other floors. But that means that they are effectively paying $3200 a month in rent. Which is impossible for a family making $70K a year.

This ripple in the housing economy further denegrates the neighborhood and the city, if you go by the notion that familes with children need be of a good population proportion in order to grow economically and address social instability.

So here's the kicker. The neighborhoods that this sort of market has been affected most are the areas around Northeastern, Wentworth Institute of Technology and Boston University. The majority of students from these schools are from...the suburbs and exurbs of Boston. Produced by parents whose parents and grandparents who moved out there from...the neighborhoods where the students now live.

Fool me once, shame on you. Fool me twice, shame on me.

It's The Energy, Stupid!

Energy is the earth's salary. We've been being paid for about 4 billion years, from our employer, the sun. For the first 3,999,999,799 years, we only used a very small portion of the salary and threw the rest in million year CDs. And each time one of those CDs matured, we just bought more. But now we cashing those things out. Like a gambling addict with a bad run at the table. Now those CDs are becoming scarce and we're trying to figure out how to spin gold from straw. It's as if we hired Enron to cook the energy books.

But thankfully, some people are starting to wonder, look a little closer.

Why is Europe always so cool? (see article link at the end of this post) I mean, they have manufacturers that love to pollute just as much as anywhere. Mercedes and Porsche produce cars that makes most American SUVs look positively green! The EU bureaucracies must have just as many crazy lobbists as the US Congress. So why is it that Europeans seem to actually look into things before jumping on the bandwagon and even if they do, they seem to be able to stop in their tracks and change course for the better?

My prediction: we will soon realize that much of any green hype is just an energy shell game, and will be forced to do two things to survive: bring up the standards of solar, wind and tidal to the efficency level of fossil fuels and concurrently cut our energy use in half. HALF! Then, each year, drop it by another percent.

There is hope. Fossil fuels have had 100 years to reach their efficency level (mostly in the past 30, as we've started to run out of the easy stuff) plus they were the main product on the market, so they had the production and distribution in place to work all the kinks out. As we get closer to $200 barrel oil, we'll start killing each other en masse for the stuff (as opposed to the few thousand or so we murder each year now). Then, maybe we'll start thinking about the way forward.

The article that inspired this post:
Europe, Cutting Biofuel Subsidies, Redirects Aid to Stress Greenest Options
http://www.nytimes.com/2008/01/22/business/worldbusiness/22biofuels.html?pagewanted=all

21 January 2008

The Oil Hurricane

I’m not going to rant about this too much, but I think all these things about the side affects of energy useage is the top issue facing us today as a nation and world, as it is directly related to healthcare, economy, environment, immigration and war. And I have yet to see anyone – aside from Bill Richardson, perhaps Ron Paul or Bruce Babbit – speak in these terms.

Two great stories on energy that illuminate the issue.

Did Oil Canals Worsen Katrina's Effects?
http://ap.google.com/article/ALeqM5jnnbJOkWvrj9pYlZIpA-XEEM9eRAD8U9OMF80

A New, Global Oil Quandary: Costly Fuel Means Costly Calories
http://www.nytimes.com/2008/01/19/business/worldbusiness/19palmoil.html?em&ex=1201064400&en=ebc8e54eb8913c3d&ei=5070

15 January 2008

Build It And They Will Come

The UAE is amazing. The competition between Ras al-Khaimah, Dubai, and Abu Dhabi is becoming a spectator sport. Each want the best of the world built or rebuilt at its doorstep, in hopes of creating a world city that will rival all the rest. It is difficult to pass judgement over this (wait for it) because every other city in the world has done and is doing the same thing to some degree for at least the past century. The difference here is these places have the funds, courtesy of the G8 and their oil-based economy (at least partially; there is a financial industry too. Ras al-Khaimah actually doesn't have much oil). So the scale of this desire is unprecedented.

Last year, there were announcements of franchises of the Louvre and the Guggenheim. The former was somewhat unexpected, but the latter not so much. And what self-repecting city wouldn't want a solid cultural institution to add to the foundation of a metropolis?

When I used to live in West Virginia, small towns would hope for a McDonalds so it would put them on the map. Dubai's intentions are on the other end of that. Stratospherically on the other end, but the end result is the same. It gives them clout in hopes of creating sustainable growth.
(Financially sustainable should be stressed here).

But when I read the latest tit for tat game going on in the UAE, I was shocked. Dubai now will recreate Lyon, France. Not just a street or two, but the whole damn thing. Apparently, a Dubai businessman fell in love with Lyon and wanted to take it home with him. I'm wondering the real motivation here though. This is a place that hasn't known urbanity in the sense of the 20th century form. It was generally a tribal prior to the British showing up, and I think the emirates reflect that heritage. Like Las Vegas, everything has to be new. And it's easier to copy than innovate.

Ras al-Khaimah is the most innovative of the three (they recently hired Rem Koolhaus to do the master plan for a new city), but even here it has the glitz of Vegas: bigger, shiner, newer.
But urban centers, I would argue, to be sustainable (both environmentally and financially here) must be granular and geologic. I mean that they must be developed on the intimate scale and must lay down new layers as time goes on. They are not works of art. They are process. This is the same reason a new downtown civic center/stadium/office tower/et al. never reinvigorates a neighborhood. Cities are not linear ideas.

Master plans are great. They solidify and document a concept at one point in time, and hopefully guide development for several years. But they change too. The best places know this, this sort of vernacular planning approach. The successful cities didn't begin with a plan. Not that they didn't have planning concepts, but there was no one thing that said this goes here and that goes there and that is the way it will be for all eternity. Like life paths laid down in this way, planned cities are existentially barren.

So the idea of both Ras al-Khaimah to start a whole city (not a town) from scratch or Dubai to import one in totality is short sighted to say the least. I see the motivation. The competition at home is tough and all the other cities around the world have had a head start. But what's the goal here? A place to live? Or a showpiece that is only interesting as long as it is new. This stuff is urban design porn. Some of it, a little more arty perhaps. And in reality, it is no different than going out to the middle of Cobb County Georgia and putting in a subdevelopment. Blowing your wad all at once is fantastic for a few moments. Then the whole place is becomes flacid and only the instigator is satisfied. Come to think of it, for the next trick, how about Cobb County - Dubai? It would make a better fit philosophically.

Read this version of the Lyon Dubai story:
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2008/01/04/wdubai104.xml

To see what Ras al-Khaimah is doing, watch this excellent piece:
http://www.pbs.org/wnet/wideangle/shows/uae/index.html

07 January 2008

Patches: City Life is a Spreadsheet

I have this whole "thread" of thoughts lately about the urban fabric. I brought it up in the last post even, but want to talk a little more about it.

Cities all over the globe have been experiencing a real change in land ownership. Most older cities were made up of "city parcels," with dimensions like 40' x 100'. Even downtowns, originally at least. The big shift in sizes downtown came in the 1950's (30 years earlier for larger cities like New York). That how urban centers changed from pedestrian scaled blocks with many buildings and tons of doors to mega blocks and four doors (one for each face of the block). This really screws up the nature of the city. As a pedestrian, you have to walk a lot farther to reach the laundromat, the bank, the shop, etc. Even when new development that takes whole block tries to replicate the old with many doors along a sidewalk, the regularity of the building (being designed and developed by a single party) gives this Disney impression of fakeworld.

The interesting thing is that this is now moving out of the urban centers to the next ring or two out as the "way to develop". Don't let anyone fool you. All development is about the economics of the thing, never about design or best scenarios for life. The costs of development must be repaid as soon as possible. Developers don't set out to make something that last for 100 years (they never did, even 100 years ago). They need to get their returns and then turn a certain about of profit (usually 25%) as soon as they can. So with all the talk about "pedestrian" scale or "lifestyle center", don't forget that those are just labels and perhaps minor adjustments make to designs to get things built faster (with less community or city interference) and see their returns.

City life is a spreadsheet.

The spreadsheets say that footprints need to be X size, because stairways, hallways and entrances take away from leaseable or sellable space. All builings, now with modern building codes, need to have two staircases, an elevator and be accessible. By law. All of it steming from local fire departments and the Disabilities Act. So to a developer, that's like a car maker putting air bags and doors on cars. They gotta do it.

So ten 40' x 100' buildings in a block, if they are all new, require 20 staircases and at least 10 elevators. Plus accessible bathrooms on each level. You can get around some of this, but it requires time and headache. And that's money.

But one 400' x 100' building in a block would require much less than 20 staircases, and definately less than 10 elevators. And a lot less hallways. You can't lease hallways, so when development happens, we get the 400' x 100' building. Development always wants to consolidate parcels and build bigger buildings. Not because developers hate us and want us to drive everywhere. Because the spreadsheets they use, or rather, the spreadsheets that their bankers use (or actually, the ones the banks buying the loans from the bank that is lending to the developer use). These aren't bad people. They just can't go to their investors and say they are giving Mrs. Big Developer $300 million dollars so he can make pedestrian friendly urban centers. "Where's proof of our return?" the investors say. And the nice bank says just believe in them. "This new development is gonna work, dangit, I CAN FEEL IT!"

If lending worked like that...wait, that's EXACTLY how we got into the housing mess!...but alas, another post.

Anyway, the best urban centers are a bunch of thin threads that make a fabric. They are knitted together, hopefully by people who were not paying attention to the directions. That way the fabric is all knotted up with irregular holes in it. It doesn't really lay flat, like the first time you tried to knit a scarf. That's the best urban centers (see Tokyo, London, Barcelona, the left bank of Paris, downtown Boston, lower Manhattan, et, al).

So when new development happens in these places, they gotta buy up a bunch of parcels, and combine them to build a big ass building so they can see that return on their investment. But instead of being nice threads reweaving the hole, the easiest thing to do (as any mother fixing a hole on their children's jeans will attest) is to patch it.

Eventually, we get a city of patches. And that never looks good.

One interesting note. I've seen a lot of new buildings in Tokyo that are 10 stories tall and still occupy that 40' x 100' plot. And see four or five together. They look pretty cool. But from up high, you can see new developments, like Roppongi Hills, that totally disenegrate the surrounding fabric. We know Roppongi is successful, economically. So what spreadsheet was the guy that built the little thin thing? (Aside from different egress and accesibilty requirements?)

Secondly, a lot of new development in The City (London) (again, aside from the Gerkin), is taking a whole block of old buildings, keeping the exterior shells and then putting in whole new cores and keeping all the doors on the street -- maybe adding a couple floors. Again, what does this spreadsheet say?

So when people lament that new development destroys cities, tell them to write a better spreadsheet. Marching like a hippy to change the "bad" developers is pointless. Get a real estate degree and start a company. Development is ESSENTIAL for cities. They gotta change, always. We just need to show that good change can be more profitable than what we've been doing.

05 January 2008

The Magic Negro

Spike Lee once wrote about The Magic Negro and Barack Obama has been referenced as this person in the political spectrum. I'm not sure how much of this I can see in the thread, but I've noticed a little parallels.

Pantone, the company the gives us color, has selected our new colors for the year, a somewhat innocent blue-purple. The excutive director of the Pantone Institute says "Emotionally, it is anchoring and meditative with a touch of magic." There is a touch of irony to all of this. First, Barack is a democrat - commonly associated with blue. Second, Barack's media spin says he speaks across party lines, which nicely references the purple. Lastly, the director specifically mentions that it is "anchoring" and has a "touch of magic." Barack is seen as the guy who can unite this (still mostly white) country. Maybe he is the Magic Negro.

Perhaps I'm crazy, but here's my take. Remeber that EVERYTHING is connected to urban design. (See earlier posts.)

One of the main reasons we live how we do today, as one of the main pieces of a series of disconnected events that coincided to feed off each other, is racism. Specifically, blacks in the US demanding (asking?) for more equal rights and becoming more upwardly mobile and the the federal government forcing desegregation. First, I'm all for desegregation. Completely! But in the 1950's, 60's and 70's, most whites were not. Not even in the North. In fact, some Southerners might say that Northerners are actually repressed racists. But anyway, look at Boston, which I think plays out as an example (though with differing conditions) across all cities in the US.

Boston got busing, forcing "equal" schools and most of the whites living in Boston said "Okay, fine. But I'm leaving. Johnny isn't going to school with black kids." They never said this, but they did it. They moved to the suburbs. They took with them the capital that gave cities economies. I'm not saying this is the only reason, but it certainly was the icing on the cake. The chocolate icing. And these were yellow cake vanilla icing people.

I've spoken to old timers from one Boston neighborhood, a once incredible well-knit (if perhaps highly racist) urban and social fabric woven by church, friends, and family. "Why did you move?" I'd ask. I mean, these people lived here their whole lives. Their grandparents lived here. The uncles, etc. This was a real PLACE. "Well, it was the busing." Perhaps it wasn't so much that blacks and whites were in school together (which probably wasn't a big deal, really), but more about the fact that the government said "Black and whites must be in school together." Oh, and, we're gonna bus them all over the town to make equal schools. Most parents don't like that.

Urban fabrics are like sweaters. The best are made up of fine and intricately woven threads. Neighborhood grociers. Churches. Small shops. Daycare centers. Elementary schools. People who care about each other on some level or another. Once the sweater begins unraveling it is hard to stop. You can mend it, but eventually, the weave is too loose and falls apart.

Taking away neighborhood schools was a big thread. Whites resented blacks because of it. They shouldn't have, but they did. And that is a tough thing to get over. It has taken us 40 years to even start the conversation. And I think that the conversation started last night with the Obama win. He's not black, as in American black. No, he's an international student's son that happened to be from Africa. But in America, we gloss over that. The good thing is that he doesn't carry his own historical baggage that any black in this country (save all the wonderful people in Prince Georges County) carry with them. So he can leap ahead of that, which is great. But to black Americans, perhaps the most accepting and loving group of people in the US, he's one of them (at least the media will have you believe that). And that is awesome.

We were divided until last night. Because of this, white people give black kids asthma as they drive on freeways into the city to their bank jobs and make so-called "sub prime" loans with high interest rates to black families trying to move their kids away from the freeways. Nobody planned it that way. Nobody even thinks about that.

The suburbs gave us obesity, diabetes, processed foods and global warming. They fueled/reinforced our consumption and trashed our planet. The suburbs were a product of racism. So, welcome Magic Negro.

Now, somebody get this man an energy secretary that knows what he's talking about. Obama's doesn't seem to have a clue (he likes coal and nuclear). Richardson! I hear you're good at this.