Category Archives: Places

Building a new subway in a big city is difficult, Rio edition

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A new subway line in Rio illustrates the issues of constructing subway lines in large cities:

Though it was barely completed in time for the opening ceremonies on August 5, the fact that Line 4 opened this year, let alone this decade, is undeniably because of the Olympics. The state government, which funded the $3.1-billion line, argues that the subway will vastly improve transportation options in the city. The state department of transportation said in an emailed statement that Line 4 will “provide locals and visitors a transportation alternative that’s fast, modern, efficient and sustainable.”

But many outside the government worry that Line 4 was built to primarily serve the Olympics and the upscale real estate developments that are planned in the event’s wake. Critics say Line 4 prioritizes access to the main event venues and wealthy neighborhoods, and disregards the transportation needs of the rest of the city. “This is to serve only the higher classes,” says Lucia Capanema Alvares, an urban planning professor at the Federal Fluminense University. “It’s not to serve the people.”…

This linear design leaves much of the area inside the arc—and the millions of people who live there and in the hinterlands beyond—with little access to rapid transit.

While there are likely unique issues at play in Rio, I suspect these issues would be present in any major city that undertook new subway construction:

  1. Huge costs. Building under a major city is expensive and costs often go beyond budget. The best way to fight this is to have foresight and build such lines sooner rather than later.
  2. Disruption. Again, a large city has all sorts of systems already in place and construction on this scale can take a long time.
  3. Charges of inequality. Who should mass transit serve? Do many major cities primarily have subway and rail service to wealthier areas? (And are these areas better off because they have had mass transit access?) And, why does it take so long to provide service for people who need it?

Such large infrastructure projects are not for the faint of heart but if done well could provide benefits for decades.

President Obama and McMansions on Martha’s Vineyard

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The president is vacationing in Martha’s Vineyard and this has become part of a local controversy over McMansions:

But film-maker Thomas Bena says the house the Obamas are renting this year is a prime example of the kind of mega-construction that is threatening to destroy the character of the island.

Bena has spent 12 years making a film called One Big Home, which is being shown to islanders this weekend. It documents an issue that is as tricky for residents of the Vineyard as it is for beach destinations everywhere: how to protect small communities from the distortions created by an influx of wealthy visitors who come for just eight weeks of the year. The film chronicles Bena’s crusade against the proliferation of outsize homes in the town of Chilmark, where he lives with his wife, Mollie, and daughter, Emma.

Bena argues that the giant homes – often referred to as McMansions – are not only out of proportion with their environment but are wasteful symbols of the over-reaching vanity of their absentee owners. Over the past 20 years, what started as an aberration is now a trend – Mansionisation, or the practice of building the largest possible house on a plot of land…

A backlash has started, with people in Martha’s Vineyard – and in the Hamptons on Long Island – questioning the wisdom of land being turned over to mansions that sit empty – but heated – for 10 months of the year. In Los Angeles, the city planning commission recently voted to eliminate various loopholes, including one that grants a 20% square footage bonus for building “green,” that has been contributing to bigger-is-better mansionisation…

Bena believes McMansions have contributed to a new sense of “us and them”, local people and summer visitors. “In the summer you feel that tension wherever you go,” he says. “People put a smile on their face because they don’t want to bite the hand that feeds them, but it’s there.”

It seems that there are three issues at hand:

  1. The construction of large houses – McMansions – within long-standing communities leads to tensions in many communities, not just prime vacation spots. The situation is exacerbated here because the large house owners aren’t in the community all year long and so there is likely less interaction between them and the long-time residents. Of course, having neighbors that know each other doesn’t necessarily limit the anger regarding McMansions.
  2. The limits of tourism to transform existing communities. On one hand, tourism is often viewed by places as an excellent opportunity: other people come in, spend money (and can be taxed at higher rates – see the hotel taxes in many major cities), and then go home (the community doesn’t have to provide long-term local services like schools for the tourists). This may be preferable to polluting factories or evil corporations. On the other hand, tourism can bring in an influx of people who have their own ideas of what they want and can swamp the smaller local population.
  3. Having the President visit provides an opportunity for locals to draw attention to their particular concerns. Should they be proud the President is visiting or unhappy that such visits can be disruptive? This may just depend on one’s political leanings and which party is in office.

In this case, if outsiders want to spend big money on large homes (providing some local construction money and increased tax money) plus spend some time there during the year (spending more money), what limits should a vacation spot put on them?

Street views of NYC going back to the 1800s

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Google Street View is impressive enough but how about linking old photographs to current maps? See the results for New York City here.

Having spent some time in suburban archives, there are plenty of old photographs ready to be matched to current maps. However, I imagine there are at least two major hurdles: (1) finding the hours to collect the photos and do the work (the photos exist in in numerous locations) and (2) how the work could pay off (New York City is a place of interest but what about every Main Street in America)

Should Baltimore provide $535 million in TIF funds for a new private development?

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The CEO of Under Armour wants to develop roughly 260 acres of land in Baltimore but is asking for public funds. A large debate has ensued:

The problem is that Plank, despite being a self-made billionaire, wants a lot of help to make his vision for Port Covington a reality. To that end, his real estate firm, Sagamore, has asked the city of Baltimore for a record-breaking $535 million in so-called tax increment financing. TIFs, as these types of loans are known, are used to fund infrastructure by selling municipal bonds to private investors, and then property taxes generated by the new development are used to pay them back. Though beloved by titans of commercial real estate, TIFs tend to draw scrutiny because they divert so much money away from a city’s general fund. MuniCap, a consulting firm that Sagamore hired to analyze its TIF application, projects that Plank’s development would not yield property tax revenue for Baltimore’s coffers until about 2040, even as the site would require substantial city resources in the interim…

“[We are] outraged that, one year after the world bore witness to the decades of disinvestment in poor neighborhoods and communities of color, city leaders would respond by bending over backwards to back a $535 million playground for the rich,” Charly Carter, the executive director of Maryland Working Families, a progressive political advocacy group, says. “This is the new Jim Crow—black and brown families subsidizing wealthy developers while our own neighborhoods crumble.”…

The campaign to remake Port Covington has been aggressive and well-funded. Sagamore has already spent hundreds of thousands of dollars on marketing the development to the public, and its forceful slogan—“#WeWill build it”—suggests that the project is a fait accompli.

Which isn’t far off the mark. The Baltimore Development Corp., a public-private agency, approved Plank’s $535 million TIF request in March, and the city’s Board of Finance backed it in April. Now all it needs is the Baltimore City Council’s final approval, which could come as early as August. Activists have urged the council to postpone its vote to give the public more time to comb through the 545-page proposal. But according to Councilman Carl Stokes, who heads the body’s economic development committee, Sagamore wants the deal approved by the end of the summer.

This is often how such things are done: a wealthy business leader wants to make more money in real estate development and asks for a tax break from the city or state to help make it more profitable. (There’s nothing in this article to indicate that the Plank has threatened to move to another city.) The big city, often desperate for large projects that supposedly bring lots of jobs but also spruce up areas that few developers would be interested in, doesn’t want to hinder business. The approval is made, the money is diverted, the big development occurs, and the business leaders behind the scenes are the ones who profit the most. This is the essence of the growth machines model in urban sociology and it often involves tax breaks for developers.

What will be interesting to see is if such a project would be voted down or the money significantly cut. Again, most cities are not in the business of angering leaders of big business. But, it isn’t unheard of to negotiate for some changes to the development that might benefit more people or reduce the dependence on public funds.

Chicago as “ideal venue” for sailing competition

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Chicago has plenty of sports events and will soon be the first freshwater host for the America’s Cup World Series:

The event organizers have marketed the Chicago round of the America’s Cup under the tagline “the Windy City is made for this.” While Chicago received its Windy City moniker from its long-winded politicians, the venue is nonetheless expected to have the waterfront breeze necessary for an exciting regatta. Even moderate wind pressure will allow the series’ fleet of high-tech carbon fiber catamarans — the yachting equivalent of Formula 1 race cars — to raise onto their hydrofoils and achieve speeds upwards of 40 knots (roughly 46 miles per hour). Because the racecourse is located entirely within the confines of Chicago’s protective breakwater, safety concerns over rough water are also eliminated.

Course conditions aside, perhaps Chicago’s greatest advantage for hosting such an event is the city’s uninterrupted shoreline. While the constant invocation of Chicago’s master planner Daniel Burnham has become somewhat of cliche these days, the America’s Cup can certainly thank his Plan for Chicago for allowing the city’s lakefront to develop as publicly-accessible recreational space rather than commercial and industrial wharfage.

Burnham might not have envisioned this, particularly with the city’s emphasis on industry and a lakefront and river banks that were covered with rails and shipping facilities in the early years. On the other hand, what took so long to move the event to a freshwater location that offers (1) a protected harbor and (2) a world-class city?

 

“Naperville named wealthiest city in the Midwest”

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Add another distinction to those collected by Naperville over the last 15 years:

Naperville has been ranked the richest city in the Midwest in a list by personal finance website NerdWallet.

The city topped the region — and came in at No. 19 in the nation — in the rankings announced Monday…

NerdWallet rated cities with at least 65,000 people based on data from the U.S. Census Bureau, Zillow Research and credit bureau Experian.

In the Midwest, the runner-up — Carmel, Indiana — bested Naperville in only one category, with a median household income of $109,375, according to NerdWallet.

For its size – over 140,000 people – Naperville is unusually well-off with a high household income, a low poverty rate, and plenty of good white-collar jobs. There are certainly wealthier communities in the Chicago region and the Midwest but many of them are quite small and have little interest in growth.

How did Naperville get to this point? Two articles I have published help explain the suburb’s rise: a 2013 article in Urban Affairs Review that compares Naperville’s growth to West Chicago and Wheaton and a 2015 article in the Journal of Urban History that examines narratives about Naperville’s growth.

Describing Detroit at its peak

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In discussing Detroit’s decline, it is good to be reminded of the city’s peak:

As Maraniss’s book opens, Detroit appears to be a city on the verge of unimagined greatness. President John F. Kennedy campaigns in the Motor City in October 1962 in support of the off-year elections. Democrat Jerry Cavanaugh is mayor of the city, then the fifth largest in the country with a population of nearly 1.7 million. Cavanaugh is the mayoral version of JFK, a relatively young man with a big Catholic family, liberal, civil rights minded. George Romney is elected governor, a Republican who also champions civil rights. Vice President Lyndon Johnson visits the city in early 1963 in recognition of the 100th anniversary of the Emancipation Proclamation. Motown, now well established, is conquering the Billboard charts. Mary Wells’ “My Guy” dislodges the Beatles from the number one spot in March of 1964. Following the best sales year in its history, Ford introduces the Mustang in the spring of ’64. The United Automobile Workers, under the leadership of Walter Reuther, has won an unprecedented standard of living for its members, setting the bar for workers across the country and building the foundation for the Affluent Society. Martin Luther King delivers the first version of his “I Have a Dream” speech to a Detroit crowd of 100,000 two months before the March on Washington in August 1963. The city nearly wins the bid for the 1968 Summer Olympics.

Of course, this is what helps make the Detroit case so interesting: the city was so large, so influential, so promising, and then the bottom dropped out over the next fifty years. Humans often make the mistake of romanticizing some sort of golden age where problems were few and life was good, but in this case there really does seem to have been a better era.

“Forty Percent of the Buildings in Manhattan Could Not Be Built Today”

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Manhattan’s zoning code is complicated and there are a number of buildings – many built prior to 1930 – that would not meet current standards:

New York City’s zoning code turns 100 this year. That may not sound like cause for celebration — except maybe for land-use lawyers and Robert Moses aficionados. Yet for almost every New Yorker, the zoning code plays an outsize role in daily life, shaping virtually every inch of the city…

New York’s zoning code was the first in the country, meant to promote a healthier city, which was then filling with filthy tenements and office towers. Since it was approved in 1916, the ever-evolving, byzantine code has changed many times to suit the needs of a swollen metropolis. Just in March, the administration of Mayor Bill de Blasio won approval for a vast citywide plan that would encourage sleeker, more affordable developments…

Mr. Smith and Mr. Trivedi evaluated public records on more than 43,000 buildings and discovered that about 17,000 of them, or 40 percent, do not conform to at least one part of the current zoning code. The reasons are varied. Some of the buildings have too much residential area, too much commercial space, too many dwelling units or too few parking spaces; some are simply too tall. These are buildings that could not be built today…

Nearly three-quarters of the existing square footage in Manhattan was built between the 1900s and 1930s, according to an analysis done by KPF, an architecture firm based in New York. In a way, the zoning code helps to preserve such architectural diversity. The laws have gotten more restrictive over time, giving an edge to properties built in earlier eras.

Three quick thoughts:

  1. I particularly like the two examples of buildings cited in the story where it is clearly shown what would have to change should the buildings be subject to current standards.
  2. It is not entirely clear but it looks like this article credits zoning for protecting a lot of these older buildings. If you wanted to purchase an older building, tear it down, and build a new one, the new structure would not be quite the same. This means that zoning acts as a kind of historic preservation. Of course, we could ask how many older buildings are too many?
  3. There are calls to overhaul the zoning code to make it simpler. One of the problems is that different areas of Manhattan want different standards. Even though New York City the global city, many of the building decisions are local and residents want some control. Think of Jane Jacobs’ efforts to save Greenwich Village and certain structures during the 1960s. A more vanilla zoning code would make things simpler but could hinder local character.

Expanding Chicago’s downtown zoning; a good deal for poor neighborhoods?

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Chicago Mayor Rahm Emanuel just released his plans to expand Chicago’s downtown which could provide new monies to help other parts of the city:

This week more details have emerged regarding Mayor Rahm Emanuel’s ambitious plan to expand the high-density “downtown” zoning designation to approximately 1000 additional acres outside the city’s central core to help fund improvements in underserved neighborhoods.

Under the scheme, the city will charge developers for the privilege of increased height and density permitted under the expansion. Each payment will be calculated by multiplying amount of additional space sought by 80 percent of the median price per square foot. In other words, if a builder wants to build an additional 5,000 square feet beyond what’s allowed under old zoning in an area where the median price is $30 per foot, the city will net an extra $120,000 for neighborhood reinvestment…

This week’s announcement also sheds some light on how the mayor plans to spend the extra cash. As reported by Greg Hinz of Crain’s, the administration plans to spend 80 percent of the money to help incentivize the construction of new grocery stores and cultural facilities in otherwise deprived neighborhoods. The remainder of the fund is earmarked for historic preservation efforts and streetscape and transit improvements.

The creation of this new value-capture mechanism is also aimed to supplement — if not help replace — Chicago’s reliance on its controversial TIF districts.

It sounds like Emanuel hears the criticism that poorer neighborhoods in Chicago need more resources and capital. However, is this the best way to do that or is it a deal with the devil? The idea seems to be that developers want new spaces to create downtown-like buildings and some of the revenue from this can be sent to help poor neighborhoods. The Neighborhoods Opportunity Fund – a description starts on page 2 of the proposed ordinance – can provide a unique pot of money to provide basic services, cultural and recreational opportunities, and help launch small businesses.

How much money will this generate?

The city says the plan will pull in about $50 million over the next several years. Eighty percent of the money would go to develop grocery stores, restaurants and cultural facilities in underserved neighborhood commercial corridors. The remaining 20 percent would be split among preserving landmark buildings, neighborhood streetscapes and public transit facilities.

I’ll leave it to others to consider how this money balances out with the goodies developers and others will get from the expanded downtown zoning…

Miami’s luxury housing market fueled by ill-gotten gains

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The latest big Wikileaks event shows what has been fueling Miami’s luxury housing boom:

Mossack Fonseca’s leaked records offer a glimpse into the tightly guarded world of high-end South Florida real estate and the global economic forces reshaping Miami’s skyline.

And MF’s activities bolster an argument analysts and law-enforcement officials have long made: Money from people linked to wrongdoing abroad is helping to power the gleaming condo towers rising on South Florida’s waterfront and pushing home prices far beyond what most locals can afford…

A Miami Herald analysis of the never-before-seen records found 19 foreign nationals creating offshore companies and buying Miami real estate. Of them, eight have been linked to bribery, corruption, embezzlement, tax evasion or other misdeeds in their home countries.

That’s a drop in the ocean of Miami’s luxury market. But Mossack Fonseca is one of many firms that set up offshore companies. And experts say a lack of controls on cash real-estate deals has made Miami a magnet for questionable currency.

Later in the article, one analyst suggests no one really wants to know this information as luxury housing is a big deal. Who benefits? City leaders who get to trumpet the new growth. Local construction firms, people in real estate, and the finance industry who are involved with the new units. Municipalities like the new tax dollars. Possibly, nearby business owners who could see an uptick in activity with more people nearby who have money to burn. And the whole region benefits from the status of some of the world’s wealthiest people plus an attractive (and expensive) housing market.

If this is happening in Miami, it is also likely affecting other important cities. Take New York: as the leading global city, wouldn’t people who have ill-gotten gains want to be there? Or, how about other leading cities in different regions like London, Hong Kong, and Tokyo?