Monthly Archives: June 2013

Silicon Valley to eventually lose out to cities?

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An urbanist argues that Silicon Valley will die out because workers want to be in cities:

Why is Silicon Valley in Silicon Valley?

“You’ve got Stanford, you’ve got federal expenditures, and you’ve got an ecosystem” of start-up mentors and established institutions, said Bruce Katz, the founding director of the Brookings Metropolitan Policy Program. But Silicon Valley’s stranglehold on West Coast innovation is in danger, he said at the Aspen Ideas Festival on Friday. The main problem?

It’s no fun to live in Silicon Valley.

“What’s happening now is workers want to be in Oakland and San Francisco,” he told Walter Isaacson. Young workers want to live in a city — somewhere they can ride bikes, shop locally, walk to their favorite restaurants and bars, and live in a dense urban or urban-lite environment with nearby amenities. But Silicon Valley isn’t like a city. It’s like a suburb. “Silicon Valley is going to have to urbanize,” Katz said. “[There is a] migration out of Silicon Valley to places where people really want to live.”

This sounds like Richard Florida’s arguments about the creative class: a younger generation of educated workers want to be in thriving urban environments. However, I’m not sure Katz’s arguments are consistent – at least as presented in this article. He suggests that groups of politicians and business leaders help create certain environments. Hence, an area like Silicon Valley exists because there was a concentration of investment and infrastructure. Yet, Florida’s argument emphasizes more the individual desires of the creative class (or perhaps some sort of class consciousness). If Silicon Valley was indeed losing workers to cities (not just the Bay Area but places like Austin or Chicago or Manhattan), it could respond by creating more urban environments. This is a popular idea these days in more suburban settings: retrofit older developments like strip malls, shopping centers, office parks, and tract home developments into something denser and mixed use. Young workers may want a certain kind of environment but business leaders and politicians can help create and develop such areas, whether in Silicon Valley or somewhere else.

Another interpretation of Katz’s arguments is that corporate efforts to build all-inclusive work campuses (like with Facebook recently building a Main Street) just isn’t as appealing as the more “authentic” urban life.

Overview of the move of Toll Brothers into urban development in the last ten years

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Commonly known as builders of McMansions, Toll Brothers has branched out into urban development in the last decade. Here is a description of their efforts in New York City, as told by the head of Toll Brothers City Living:

We did some projects early on in Williamsburg, which I didn’t think would have been ahead of the curve. But for a lot of people who came to our sales office from places like Manhattan felt the neighborhood hadn’t arrived yet.

Based on that experience, we’re really focusing on neighborhoods that are established. When your main focus is condo, the way ours is, it needs to be that way, because you get one chance to sell a project. If everything isn’t perfectly right, then you’re going to suffer for it…

We’re certainly busy, but we’ve been more selective, so we’re on Gramercy, we’re on Park at 89th, we’ve got a tower on Park Avenue South going up, we just did the Touraine at 65th and Lex. Further down the line, we’ve got something on First and 52nd and in Hudson Square, on King Street. The project we’re doing in Brooklyn is in Brooklyn Bridge Park, which is basically in Brooklyn Heights, which was basically the first suburb…

We were fortunate coming out of the real estate recession and having a lot of cash and not needing to borrow, when most lenders were very reluctant to do condo loans. Toll has about a billion in cash and a billion-dollar credit line nationwide. We bought the Touraine site with just cash; we bought the Gramercy site with just cash; we bought a site in Dumbo with just cash. This was in ’09 and ’10. Most of the condo guys were not yet back, and we were competing with the rental guys, and we can always pay more than them.

Three quick thoughts:

1. It is hard to tell whether the image of Toll Brothers is changing. This article is similar to a number of other ones in recent months (example here) discussing the company’s efforts in New York City. At the same time, Toll Brothers is consistently linked to the construction of large suburban houses. In the long run, I wonder if there are critics who will never be able to look past the company’s connections to McMansions and see whatever else they are doing.

2. Few of the articles that discuss the efforts of Toll Brothers in New York City give any numbers about how much of the company’s business is in cities versus suburban development. From the projects described above, I would guess the urban efforts are still just a small part of the total operations.

3. The last paragraph hints at the dynamics of the housing market in recent years. Toll Brothers had the resources to capitalize on the housing market bubble. They aren’t alone but while these flush buyers make more money at the upper-end of the market, the lower end languishes.

A rising ideology of shareholder value in the United States

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How and why corporations make decisions has changed over the decades. Here is a quick argument of what has changed in the US:

Such is the power of the ideology known as shareholder value. This notion that shareholder interests should reign supreme did not always so deeply infuse American business. It became widely accepted only in the 1990s, and since 2000 it has come under increasing fire from business and legal scholars, and from a few others who ought to know (former General Electric CEO Jack Welch declared in 2009, “Shareholder value is the dumbest idea in the world”). But in practice—in the rhetoric of most executives, in how they are paid and evaluated, in the governance reforms that get proposed and occasionally enacted, and in almost every media depiction of corporate conflict—we seem utterly stuck on the idea that serving shareholders better will make companies work better. It’s so simple and intuitive. Simple, intuitive, and most probably wrong—not just for banks but for all corporations.

As Cornell University Law School’s Lynn Stout explains in her 2012 book, The Shareholder Value Myth, maximizing returns to shareholders is not something U.S. corporations are legally required to do. Yes, Congress and regulators have begun pushing the rules in that direction, and a few court rulings have favored shareholder primacy. But on the whole, Stout writes, the law spells out that boards of directors are beholden not to shareholders but to the corporation, meaning that they’re allowed to balance the interests of shareholders against those of stakeholders such as employees, customers, suppliers, debt holders, and society at large…

To be sure, the case against putting shareholders first is not quite the slam dunk for all corporations that it is for highly indebted, too-big-to-fail financial institutions. Outside of banking, the empirical evidence against the doctrine is more suggestive than dispositive. Supporters of shareholder rights can point to studies showing that certain shareholder-friendly changes, such as removing defenses against hostile takeovers, tend to bring higher share prices. Skeptics argue that this says little about long-term impact, and point instead to a more expansive, but impressionistic, set of indicators. The performance of U.S. stock markets since shareholder value became doctrine in the 1990s has been disappointing, and the number of publicly traded companies has declined sharply. The nation in which shareholders have the most power, the United Kingdom, has an anemic corporate sector; on Fortune magazine’s list of the world’s 100 largest companies, it claims only three, compared with nine from France and 11 from Germany, where shareholders hold less sway. Multiple studies of corporations that stay successful over time—most famously the meticulously researched books of the Stanford-professor-turned-freelance-business-guru Jim Collins, such as Good to Great—have found that they tend to be driven by goals and principles other than shareholder returns.

Collins’s books embody the most common criticism of shareholder value: that while delivering big returns to shareholders over time is great (it is, in fact, Collins’s chief measure of “greatness”), focusing on shareholder value won’t get you there. That’s what Jack Welch was getting at, too. In a complex world, you can’t know which actions will maximize returns to shareholders 15 or 20 years hence. What’s more, most shareholders don’t hold on to any stock for long, so focusing on their concerns fosters a counterproductive preoccupation with short-term stock-price swings. And it can be awfully hard to motivate employees or entice customers with the motto “We maximize shareholder value.”

Corporations and what their directors want, what their investors want, and how they operate changes over time based on surrounding economic and social forces. They can also innovate and develop new ways of pursuing profit or contributing to the public good. Thus, to understand them, invest in them, and develop regulations and policies involving them, we need to know their social context and their patterns of development.

One of the more interesting books I’ve read related to this topic is Frank Dobbin’s Forging Industrial Policy: The United States, Britain, and France in the Railway Age. Dobbin shows there was no “right” way to promote and develop railroads. France’s approach was to develop a centralized railroad system based on Paris and highly regulated by technocrats. Britain took the opposite tack: no regulation to start as railroad firms could build and do what they wanted. After a while, Britain had to introduce regulations because corporations were putting profits first over public concerns like railroad safety (an example: a need to regulate railroad brakes to avoid large crashes). The United States took a middle approach: some public-private partnerships with some regulation but also with the ability for corporations to make big money. Looking back from today, the “right” way might seem obvious but this whole process was strongly driven by social and cultural circumstances and norms.

Knowing all of this, perhaps the next question to ask is how might corporations change in 20 or 50 years?

McMansions just a symptom of sprawl

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Reflecting on a recent case of building a wall along the edge of a suburban property, a Bakersfield, California columnist suggests the wall is a larger symptom of sprawl:

And now we’re a nation of cul-de-sacs and dense residential mazes that, except for the most ambitious among us, are navigable only by automobile. Wonder why the U.S. is the most obese nation on earth? Look no further than a culture that favors cars to walking shoes and cherishes the illusion of privacy over the interactivity of community.

The design of our cities is killing us. We drive a mile to a supermarket that’s just a quarter-mile away as the crow flies. We buy McMansions on the outer edge of the city’s metro footprint and drive 10 miles to work, sending up emissions we needn’t have produced. And we recruit city councilmen to help us block off walking paths near our houses because we’re tired of seeing people actually out and about on our streets.

So many of our societal ills can be traced to a Calle Privada mindset. Half-acre lots with three-car garages on longtime ag land instead of smaller homes closer to work. Municipal tax dollars devoted to new roads, new sewers, new traffic signals and new utility infrastructure instead of public safety and the maintenance of what we already have. And homeowners who barricade their streets instead of developing neighborhood bonds that encourage cooperation, build trust and hinder crime. Cinderblock walls don’t do much to facilitate any of that.

This is an example of what the critique of McMansions is often about. Note that the houses in sprawl themselves don’t get much attention in the argument above. We see that they are on large lots, half an acre, with lots of garage space. But, the bigger issue is what the sprawl in which McMansions are a part. Here are the problems with sprawl, as suggested above:

(1) the infrastructure is costly;

(2) driving is required;

(3) it is bad for the environment;

(4) and it inhibits neighborliness and the development of community.

Those who don’t like sprawl suggest it is a whole system of public investment and choices. Americans may like their large, private houses but there are costs associated with it. Opponents of sprawl tend to assume that if homeowners and policymakers knew these costs, they would make different decisions. That hasn’t exactly happened yet…but the term McMansion is certainly part of the critique of sprawl.

Should the Newtown shootings be considered a mass shooting, a school shooting, mass murder, workplace violence…

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Sociologist Joel Best provides a history of how American scholars and media have classified mass shootings:

It may seem self-evident that the killings at Sandy Hook Elementary ought to be classified as a shooting event, or as a school shooting or a mass shooting. Of course we classify events into categories that make sense to us, and it is easy to take familiar categories for granted. We learn of terrible crimes and we are accustomed to commentators talking about incidents as instances. But the ways we make sense of the world—the terms we use to describe that world—are created by people, and they are continually evolving, so that specific categories come into and fall out of favor. In fact, in recent decades, Americans have understood events like the Newtown killings in a variety of ways…

By the early 1980s, the Federal Bureau of Investigation promoted the distinction between mass murder and serial murder. The Bureau had a new databank—the Violent Criminal Apprehension Program, or VICAP—that could help law enforcement identify similar crimes that had occurred in other jurisdictions. But in the aftermath of revelations about the FBI’s surveillance of the civil rights movement, an effort to expand the bureau’s domestic data collection invited suspicion and resistance. The FBI used the serial murderer menace—and particularly the idea that serial killers might be nomadic, able to kill in different jurisdictions without the authorities ever recognizing that crimes in different places might be linked—to justify the VICAP program. That set the stage for Clarice Starling and all the other heroic FBI agents who began pitting their wits against serial murderers in crime fiction and movies. “Son of Sam” would no longer be classified with Charles Whitman…

Journalists notice patterns, so similarities between cases invite the creation of new categories. For example, in 1986, a postal worker killed 14 postal employees; then, in 1991, there were two more incidents involving former postal workers killing employees at post offices. This led to the expression going postal. Eventually, after further incidents in 1993, the Postal Service responded with a program to improve their workplace and prevent violence. Some criminologists began writing about workplace violence, although this category was defined as including any violence in a workplace, not just mass murders. Under that definition, a large share of workplace violence involved robberies. (According to one analysis, the three most common sites for workplace violence were taxicabs, liquor stores, and gas stations—all isolated settings likely to have cash on hand.)

At the end of the 1990s, attention shifted to schools. During the 1997–98 academic year, there were heavily publicized incidents in West Paducah, Kentucky; Jonesboro, Arkansas; and Springfield, Oregon. The Jonesboro story made the cover of Time, which featured a photo of one of the shooters as a young child wearing camouflage and holding a rifle, with the caption “Armed & Dangerous.” Thus, the expression school shooting was already familiar a year before the April 1999 killings at Columbine. Advocates and academics began compiling databases of school violence, although the results were surprising: The average number of deaths per year fell, from 48 during the period from the fall of 1992 through the spring of 1997, to 32 during the period spanning September 1997 through the end of the school year in 2001, even though Columbine and the other best-publicized cases occurred during the latter period. In spite of commentators declaring that the nation was experiencing a wave or epidemic of school shooting, the evidence suggested that violent deaths in schools were declining.

Best has written a lot about how social categories, experiences, and data then get used in political and civic discussions. The classification as a school shooting or the result of mental illness then shapes the rest of the discussion including what should be done in the future. Social problems can’t be social problems until they can be shown to be worth the public’s attention.

What Best doesn’t do is try to forecast how the Newtown shooting will come to be known in the future. What is the dominant narrative that will develop? And how will it be used?

Comparing ethnography and journalism, stories vs. data

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A letter writer to the New York Times unfavorably compares ethnography and social scientific methods to journalism:

David Brooks’s review of George Packer’s book “The Unwinding: An Inner History of the New America” (June 9) is befuddling. First, Brooks praises Packer’s “gripping narrative survey” of recession-era life, comparing it to earlier efforts like that of John Dos Passos. Then, bizarrely, he faults Packer for not providing a “theoretical framework and worldview” that would include “sociology, economics or political analysis.” Narrative description and evocation has for centuries been among the most powerful forms of argument — so powerful, in fact, that the social psychologists Brooks admires appropriated the styles and cloaked them in the pseudoscientific garb of “ethnography” (which we used to call “journalism”).

Have we reached a point where devotion to instrumental reason is so maniacal we can’t handle mere stories anymore? Or perhaps we accept stories only when they’re accompanied by the tenuous methodology of social “scientists.” I would bet that a single profile by Packer, one of America’s best journalists, provides a better snapshot of real life than the legions of sociology and economics articles published since the crash.

Here is someone suspicious of social science. This is not an uncommon position. There is no doubt that stories and narratives are powerful and also have a longer history than the social sciences which developed in and after the Enlightenment. Yet, we also live in a world where science and data have also become powerful arguments.

Intriguingly, ethnography is a social scientific method that might help bridge this gap between narrative and data. This method differs from journalism in some important ways but also shares some similarities. The ethnographer doesn’t just work with statistics and data from a distance or through a few interviews. Through an extended engagement with the research subject, even living with the subjects for months or years, the researcher gets an insider perspective while also trying to maintain objectivity. The participant observer is engaged with larger social science theories and ideas, trying to understand how more specific experiences and groups line up with larger theories and models. The research case is of interest but the connection to the bigger picture is very important in the end. At the same time, ethnographies are often written in a more narrative style than social science journal articles (unless we are talking about journal articles utilizing ethnography).

Stories and data can both be illuminating. I know which side I tend to favor, hence I’m a sociologist, but I also enjoy narratives and “mere stories.”

Colbert: watch out for “egg McMansions”

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In discussing a recent stance by Iowa House member Steve King, Stephen Colbert suggests chickens don’t deserve McMansions:

Now, King is fighting a California law that would give egg-laying hens more room in their cages and trying to keep it from becoming national law.

“Damn straight,” said Colbert. “This is just another case of the left-wing loons in California imposing their deviant values on the heartland. I’ll bet those California chickens don’t even have to be married before they have an egg.”

The law mandates that a poultry cage must measure 200 square inches, which Colbert called an “Egg McMansion.”

“This is a chicken Xanadu,” he said. “It’s way bigger than the cages I keep my interns in.”

Two quick thoughts:

1. It sounds like Colbert is primarily hinting at two traits of McMansion. First, they are big homes. They have lots of space. For chickens, that apparently equates to 200 square inches. Second, also suggesting the homes are like Xanadu also plays out the wealthy and luxurious aspects of McMansions.

2. Since Colbert is poking fun at King, this might be the commentary: conservatives and others might want themselves and other Americans to have the opportunity to own McMansions and large homes, but they don’t want to extend these privileges to other living creatures.

Making a clear contrast: “Micro-apartments: The anti-McMansions”

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CNN profiles micro-apartments and frames them as the opposite of McMansions:

Move over McMansions: These days, pint-sized, micro-apartments are all the rage.

Typically ranging between 180 and 300 square-feet, these tiny apartments are becoming increasingly popular among the young-and-single set and even some retirees, seeking affordable places to live in the nation’s costliest cities.

Nowhere is the micro trend hotter than in Seattle. More than 40 micro-apartment developments have been built in the city in the past three years, according to Jim Potter, chairman of Kauri Group, a Seattle-based developer. Many of these apartment buildings offer shared patios, roof decks and even communal kitchens. (Zoning laws in Seattle allow up to eight apartments to share one kitchen)…

The key selling point is affordability. In Seattle, 250-square-foot apartments rent for under $800 a month, almost half the average $1,400 people pay for newly built studios of 400 square feet or more in the city, according to Potter.

The first comparison is not surprising: as McMansions came to be the symbol of large houses, micro-apartments are just the opposite. The whole unit is the size of perhaps a smaller owner’s suite in a McMansion and often features space-saving designs.

The second comparison is less common: micro-apartments are also cheap compared to McMansions. Particularly in the cities cited in this article, places like Seattle or San Francisco, affordable housing is in short supply. Micro-apartments may be small but more importantly, they give people an opportunity to live closer to work and in or near places they couldn’t afford otherwise. McMansions were also known for their price, or at least for the mortgages that owners had to take on. The comparison is not perfect since McMansions are assumed to be in the suburbs and less of an issue in the big city.

It will be interesting to see how this comparison plays out down the road. McMansions are a powerful symbol while micro-apartments are on the rise and still could change quite a bit as they grow in number and spread to more places. The article hints at one change: the micro-apartments might be popular with retirees. Such a development could set up some interesting stories of

The changing definition and use of “Latino”

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Here is a quick recap of how American society has defined and used the term Latino in recent decades:

If all ethnic identities are created, imagined or negotiated to some degree, American Hispanics provide an especially stark example. As part of an effort in the 1970s to better measure who was using what kind of social services, the federal government established the word “Hispanic” to denote anyone with ancestry traced to Spain or Latin America, and mandated the collection of data on this group. “The term is a U.S. invention,” explains Mark Hugo Lopez, associate director of the Pew Hispanic Center. “If you go to El Salvador or the Dominican Republic, you won’t necessarily hear people say they are ‘Latino’ or ‘Hispanic.’?”

You may not hear it much in the United States, either. According to a 2012 Pew survey, only about a quarter of Hispanic adults say they identify themselves most often as Hispanic or Latino. About half say they prefer to cite their family’s country of origin, while one-fifth say they use “American.” (Among third-generation Latinos, nearly half identify as American.)

The Office of Management and Budget defines a Hispanic as “a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race” — about as specific as calling someone European.

“There is no coherence to the term,” says Marta Tienda, a sociologist and director of Latino studies at Princeton University. For instance, even though it’s officially supposed to connote ethnicity and nationality rather than race — after all, Hispanics can be black, white or any other race — the term “has become a racialized category in the United States,” Tienda says. “Latinos have become a race by default, just by usage of the category.”

A good discussion throughout. And, the definition and usage of the term Latino or Hispanic is likely to change in decades to come. All together, it suggests racial and ethnic categories can be quite fluid based on a whole host of social factors.

Returning to past Olympic cities

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Intrigued by the tens of billions of dollars spent on recent Olympics by host cities, a photographer returns to the cities and structures of past Olympic games and documents some of the change:

The result is The Olympic City a book (out tomorrow) and traveling exhibition (opens tomorrow at Brooklyn, N.Y.’s Powerhouse Arena) of the photos Hustwit and Pack snapped, from Helsinki, Finland’s 1952 Olympic Stadium to London’s 2012 architectural spread, from Athens’ “completely unused” village to Beijing’s hulking gray structures. “It’s a little bit of an archaeological excursion,” Hustwit says. “We’re trying to find the evidence of the olympics in these places and look at how it’s affected that neighborhood and how people are living in these spaces.”

The pictures are interesting as is seeing how cities are utilizing these venues:

Beijing’s Lao Shan Velodrome is still being used, though the amount of wear (Pack speculates degradation could be accelerated by pollution) makes it look like a building from the ’60s. The giant parking lots are being used for driver training: “When I was there there were people to there learning how to parallel park,” Pack said…

Another shot of Athens’ Olympic Village, which is now totally empty. “The takeaway [of the project] is that the cities that really needed these venues already have done well,” Hustwit said. “But the majority of these cities weren’t really thinking about the long-term benefit for the people who lived there.”…

Despite the fact that Sarajevo’s Olympic infrastructure is totally destroyed, the Olympics remains “a point of pride” and “very much part of the city’s cultural history,” Hustwit said.

Cities tend to vie for Olympics for the prestige they offer but the buildings and money tend not to benefit the average person of the country (unless you count civic and/or national pride). Given the costs of preparing for the Olympics, I wonder if we are nearing a point where no cities will even want to compete for the games. Yet, my urban suspicions suggest there may just be a few cities who might want the power of the Olympics to do some major redevelopment in their cities that would be much harder to accomplish otherwise.