Is the Creative Class Taking Over Cities?

(cross-posted from cnu.org)

In a recent Washington Post article, Emily Badger uses a set of maps to prove her claim that an affluent “creative class” is taking over urban cores, and as a result “service and working-class residents are effectively left with the least desirable parts of town, the longest commutes and the fewest amenities. ” But her maps don’t seem to support her point. In the article’s color-coded maps, gray and pink mean “service class” and purple means “creative class.”

If her claim was correct, every neighborhood for miles around downtown would be purple. But in Chicago and Washington and Houston, there seems to be a small purple ring around downtown- but except for that, the city is divided into a purple side (in Washington and DC, West; in Chicago, north) and a gray/pink side. Badger supplies approximately zero evidence that the pink side has worse transit service than the purple side. I’m not saying her claim is wrong- but her maps haven’t proven the case.

Learning from Kansas City

(cross-posted from planetizen.com)

Kansas City, Missouri (where I am a visiting professor for the current academic year) is a medium-demand city: a city with more successful neighborhoods than Cleveland or Detroit, but one still dominated by its suburbs to a greater extent than more successful cities. One reason the city keeps losing people to its suburbs is the low reputation of the city’s school district. In the city’s affluent southwest side, only 27 percent of K-12 children attend public schools. Moreover, many people who would otherwise live in those neighborhoods have moved to Kansas so they can send their children to the overwhelmingly white public schools of Overland Park, Leawood, and other suburbs. Why are Kansas City’s schools so unpopular?

I recently read Complex Justice, a book by political scientist Joshua Dunn about Kansas City’s schools. While much of Dunn’s work focuses on litigation strategy and judicial decision making, he also makes a few points relevant to the problems of urban school districts.

In particular, Dunn shows that some of the city’s public schools became all-black almost as soon as desegregation took place. For example,Kansas City’s Central High School was almost 90 percent white in 1955, and by 1965 had only 16 white students (out of over 2000). Similarly, Paseo High School was 6 percent African-American in 1959 and 97 percent African-American in 1969. So it appears that Kansas City’s whites were ready to move out as soon as blacks moved in—a fact that suggests that whites decided that a school was “bad” as soon as a critical mass of African-Americans moved in.

Some commentators argue that if government spends as much money on urban schools as on suburban schools, everyone will achieve at suburban levels, and the middle-class lion will lie down with the low-income lamb. But Dunn shows that during the 1990s, the federal courts tried this strategy in Kansas City. To desegregate the schools, a federal judge sought to entice white suburbanites into the school system by ordering the city to create numerous magnet schools, raise teacher salaries by 44 percent, and reduce class sizes. At the zenith of the desegregation program,Kansas City was spending twice as much per student as its suburban rivals. Yet the number of white students did not increase, nor did test scores. And during the 1990s, student enrollment in Kansas City schools decreased among both blacks and whites, as middle-class pupils of all races moved to private schools and to suburban school districts. It seems to me that another lesson of the Kansas City fiasco is that money didn’t matter—or more precisely, that even if money matters, it doesn’t matter enough to reduce suburbanites’ collective cultural distaste for urban schools full of poor people.*

So what can be done? Numerous cities have selective schools that limit entrance to students who do well on an admissions test. For example,Buffalo’s City Honors school is as prestigious as any suburban school; U.S. News ranks it no. 14 in the state, lagging primarily behind similar public schools in New York City. Today, these schools are not so numerous that affluent families can expect their children to get in, and as a result many families prefer suburbia as a lower-risk option.

But suppose that a school district established a multitude of such schools, so that any student who was in the top quarter or so of the district’s students could be in a classroom filled with equally bright students. It seems to me that the existence of such schools would eliminate suburbia’s competitive edge.

It could be argued that such schools are harmful to lower-achieving students, who will not benefit from having higher-achieving students in the same classroom. But today, the latter students’ parents, unless they are very poor indeed, can always leave the school district. As the working poor have spread through suburbia, even parents who cannot afford the most exclusive suburban school districts can afford to live in a working-class suburb with less ill-reputed schools than those of the central city. For example, Kansas City’s school district is surrounded not only by the rich school districts of the Kansas suburbs, but also by more diverse school districts to the city’s east, north and south. So a parent who cannot afford Overland Park can always move to a not-so-upper-class suburb. So as long as suburban school districts are allowed to exist, and as long as those districts are not as poverty-packed as urban schools, few parents will be willing to send their children to a typical urban school.

Moreover, even the best “exam schools” are often far more diverse than most suburban schools; for example, City Honors is 34 percent minority, and Lehman College high in the Bronx (which the U.S. News ranks as number 1 in the state) is 46 percent minority.

Thus, it may be the case (leaving aside possible fiscal constraints) that an expanded system of selective schools may be an urban school district’s best hope for retaining middle-class families.

*I note that Kansas City is not atypical. In numerous other regions, city schools spend more per pupil than suburban schools. On the other hand, it may be the case that students from impoverished backgrounds cost more to educate than students from better-off backgrounds, and that if urban schools outspent suburban schools by some as-yet-unknowable amount (three times? four times?) spending might start to matter.

Retrofitting Suburbia — Henrico Edition

Regencyby James A. Bacon

Regency Square Mall, a failing, 39-year-old shopping mall in the heart of the prosperous “West End” of Henrico County, is expected to go up for sale by year’s end. While the sale likely will prove distressing to bond holders — nearly $70 million in loans are 70% secured by the mall, which is appraised at only $25 million, reports the Times-Dispatch – a change in ownership creates a tremendous opportunity for Henrico County to reinvigorate a major commercial district.

While Regency enjoys an excellent location and serves an affluent market, it faces tough competition from two newer, pedestrian-style malls: Short Pump Town Center and Stony Point Fashion Park. Regency has zero pedestrian appeal — it is a boxy building set in a vast parking lot, and it is largely surrounded by strip shopping centers, some of which are themselves getting long in the tooth. It is no longer a place where anyone enjoys spending time.

I know Regency well — it is located a couple of miles from my home, and I shop there by necessity. Despite a superficial design makeover a few years ago, the place has little appeal. The problem is that the mall and the commercial area surrounding the mall were designed in the 1970s heyday of autocentric suburbia. Everything has been sacrificed for the comfort and convenience of the automobile. There are sidewalks in the area but no one uses them; the design violates every tenet of walkability. Ironically, the Regency Square area doesn’t even work well for the automobile. There are so many ill-timed stoplights that driving through it is a nightmare — to be circumvented if at all possible. Continue reading

Millennials Want a New Kind of Suburbia

urban_suburbanby James A. Bacon

The Millennial Generation (18- to 29-years old) will be a predominantly suburban generation, contends a new study by the Demand Institute based on a survey of 1,000 Millennial households. Significant majorities of the younger generation aspire to owning a single-family home and consider automobiles a necessity, while a 48% plurality expresses a preference to live in the “suburbs” over an urban or rural environment.

These findings, the authors contend, contradict “myths” perpetuated by advocates of smart growth and urbanism that Millennials “all want to move to the city and rent; they don’t want to own things; they won’t need cars anyway — and there will be a massive slump in demand because they are all going to be living single in their parents’ basements for the foreseeable future.”

Phew! It’s hard to know where to start with this. The study does provide a useful benchmark for what Millennials are thinking and it reaches at least one very interesting conclusion. Unfortunately, the analysis totally clouds the debate by misstating what smart growthers and urbanists are actually saying and by what employing what our old friend Ed Risse terms “core confusing words.” Continue reading

Learning From My Condo

While reading the Market Urbanism blog a few weeks ago, I noticed the following comment: “In cities with high rents and exclusivity, developers don’t build low-income or affordable housing, they build to maximize their profits. That means simply a greater abundance of unaffordable housing.” In other words, housing prices are whatever developers want them to be: if a developer decides that it feels like charging a million dollars for a condominium, it can wave its Magic Wand of Luxury, and can forever find rich people who will gladly pay a million dollars.

But my own condo-buying experience suggests otherwise. In 2002, I bought a one-bedroom condominium in Atlanta for $133,000. On one hand, Atlanta is not one of the nation’s more expensive cities; on the other hand, my condo is in one of the city’s most affluent areas, Buckhead. The average house or condo value in Buckhead’s zip code is about half a million dollars—lower than in Manhattan, but higher than that of many outer-borough neighborhoods. In short, this is a high-demand zip code.

My condominium was certainly a luxury building when it was built. In addition to the pools and clubhouses common in Atlanta buildings, this building has a 24-hour doorman, a fairly unusual feature in Atlanta. So I would imagine that when my building got its first occupants in 1988, the developer did not think it would be “affordable housing” in any sense of the word.

But then the recession happened. The last time I checked, Zillow.com said that the condo was worth only $94,000, and that if someone bought it, he or she would pay $516 for the mortgage and property taxes (plus condo fees). My condo is certainly far more affordable than I had envisioned, even by Atlanta standards.

What happened? Of course, the recession reduced demand for housing in Atlanta. But according to the National Association of Home Builders, regional housing prices are only about 10 percent below their 2006 peak—far below my unit’s 30 percent drop.

More importantly, there seems to be a lot of newer housing in Buckhead; Zillow lists 126 condos for sale in zip code 30305; almost half of them were built after mine (which was built in 1988), and 45 of them were built after 2000.  (By contrast, on New York’s 10023 zip code in the Upper West Side, only 30 of 291 units for sale were built after 1988.) Thus, it appears that Buckhead’s surge of new housing may have held down the price of older units such as mine.

It could be argued that because Atlanta is a low-cost city, its experiences are therefore irrelevant to those of more expensive cities. But in Atlanta, as in New York, new units are luxury units. Of the 45 condos for sale in my zip code built after 2000, not one is as cheap as mine. Only two of the condo units are being offered for less than $200,000 (though seven foreclosed units being put up for auction have lower “Zestimates,” which are Zillow’s guess of their value), and the median price is $375,000. Pre-2000 units are cheaper; five were less expensive than my $94,000 estimate, and ten foreclosures have lower Zestimates. The median price of pre-2000 units was slightly below $200,000. So in both Atlanta and New York, it appears that newer units are more expensive than older units.

It therefore seems to me that the law of supply and demand applies to housing even where new housing is significantly more expensive than older housing. The presence of new units holds down the price of older units by increasing the overall supply of housing and by making the older units less desirable in comparison. It logically follows that if any city builds (or allows the private sector to build) enough new housing, the desirability of new construction should make existing units more affordable. The only difference between a high-demand city and a low-demand city is that the city has to work harder to produce the new housing.

BRT to Nowhere?

West Broad Street: not exactly pedestrian friendly

West Broad Street: not exactly pedestrian friendly

by James A. Bacon

There’s a whole lot of fuzzy thinking going on. People in the Richmond area are so enamored with the prospect of building a Bus Rapid Transit route through the city that they are saying the most astonishing things.

Bus Rapid Transit can be a great idea if done correctly. But it must be done correctly, or it will create a long-term drain on public resources in the City of Richmond and, to a lesser extent, in Henrico County that neither locality can afford.

In the company of Governor Terry McAuliffe, Mayor Dwight Jones and other local luminaries, U.S. Transportation Secretary Anthony Foxx announced Saturday that Uncle Sam will provide a $24.9 million grant toward the cost of the $54 million project, which would run along Broad Street from Rocketts Landing to Willow Lawn. (See the Times-Dispatch story here.) Virginia, flush with transportation tax revenue from former Governor Bob McDonnell’s tax increase, will kick in $16.8 million toward the project, while Richmond and Henrico will contribute a total of $8 million. (If that adds up to $49.7 million on your calculator like it does on mine, that leaves more than $4 million unaccounted for.) Continue reading

A Myth Exploded

Every so often I read the following argument: “We shouldn’t upzone popular urban neighborhoods, because if we freeze the status quo in those areas, the people who are priced out will rebuild our city’s devastated neighborhoods.”  This argument has a conceptual flaw: Most middle-class peoples’ choices aren’t limited to rich urban areas and poor urban areas, because they can always move to suburbia.

A recent blog post by Chicago blogger Daniel Kay Hertz makes the point decisively. He shows that Chicago has been so effective at limiting redevelopment in its affluent lakefront areas that such neighborhoods actually lost population in the late 20th century. If people priced out of rich urban areas inevitably moved to poorer ones, then Chicago’s traditionally poor south and west sides would be growing and gentrifying. Instead, many such areas have lost more than half their 1950 population.

(Cross-posted from cnu.org)