California’s Disposable Cities
I write this column from Sacramento, the heart of the Central Valley’s real estate rust belt. The great recession has transformed this traditionally well-to-do city into a place of 11.3 percent unemployment, tent homelessness and newly empty storefronts. Yet Governor Schwarzenegger brings fantastic news from the confines of this milieu. The state’s latest budget will (perhaps) close its whopping deficit without raising taxes, not even on the state’s richest denizens! How? By cutting $9 billion from education, $1.3 billion from low income health care, $850 million from vital social services, and by extracting $4.7 billion from cities and counties. We already knew what the classist architects of all this savagery were going to repeat ad nauseum: The recession! The deficit! The (gasp) state-issued IOUs! So much for shared sacrifice.
There are good things happening in this city, too. More people are using light rail and the exurbs are putting together pockets of walkability. Midtown is far less sleepy than it was only a few years ago. Downtown could be linked to high speed rail by some future stardate. It is nevertheless impossible not to notice signs of the great exodus of the real estate capital that had fueled the construction bonanza here. Freshly built houses and apartment buildings still stand empty. Two-thirds of home sales this March were from bank repossessions. Other central valley cities are hit even harder. Modesto, Fresno and Stockton have the first, second and third worst unemployment rates respectively among the nation’s 100 largest metro areas.
For the past few months I’ve been writing about what in my view is a global consensus that favors dense, mixed use and public transit centered development over the old anti-urban, suburban-centric model of the last century. These policies, the consensus goes, can grease the wheels of a global economy that relies increasingly on urban connectivity, personal mobility and access to ideas. As capital is mobile, so should people be. My problem is that the consensus relies excessively on market pressures to decide where people should live and migrate, and forces cities to deal with the swift vicissitudes of global capital. This city—hopefully temporarily—is on the losing end of what is euphemistically known as a market correction.
The capitalist world has always created winners and losers out of individuals and firms. Now it’s creating them out of cities. In the U.S., geographic inequality has been a glaring feature of the recession. Here in the valley, Modesto’s unemployment rate is 17.5 percent. Salt Lake City’s by contrast is only 5.2 percent. The resiliency of some metro economies is a good thing. The problem is that the bubble-based economy we’ve been building over the past few decades threatens to push some communities into decline at cataclysmic speeds. The decline of Rust Belt cities happened over decades. The Central Valley has been thrust to the bottom of the economic pack in only months.
To hear purveyors of the consensus tell it, capital flight isn’t a matter of public responsibility. It should be accepted as Mother Nature, like tornados or earthquakes or hurricanes. Go live somewhere else if you don’t like the danger of economic obsolescence. But the problems here were very much man made. The central valley is proof that banking and securities deregulation was an awful idea. Sticking with the old fashioned regulated system of lending—what Paul Krugman calls “boring” banking—could have prevented this.
Sacramento has the best and the worst of the new urbanism. It has taken some initiative measures, especially in midtown, to create commercial and residential diversity. Amtrak and light rail are in vogue. It’s trying to bring residents downtown. These efforts are shaping the map here in a good way. More powerful market forces are altering the map in a bad way—in the form of empty houses, condos and storefronts. Not to mention the so-called tent city that rose to national infamy. It’s these forces that governments should provide a semblance of balance against. Instead the state just sent a loud and clear message to cities caught in this storm of capital flight: sink or swim.
Josh Leon is a regular contributor to Next American City.
Shanghai Dispatch #3: Architecture on Acid
Bike Lane Bickering
The Mystery of Bed-Stuy’s Missing Jobs
Brittanicus in Indianapolis, IN on Fri, Jul 24, 2009 at 4:17pm
Now that our legislators are supposedly on the same track with E-Verify, it needs to be rigorously enforced? California—a Sanctuary State—will need exclusive attention along with other border states, because they have been occupied by millions of illegal immigrants, causing major damage to their economies. Once E-Verify is fully implemented on a permanent basis for all the working population, including all persons on a payroll? My suggestion is an army of federal inspectors of perhaps retired civil servants, senior citizens in their resident community, to make unexpected inspections on large and small businesses.
The inspectors will probably have to be armed with a general search warrant, but honorable business will hardly impose this restriction if they have nothing to hide? This will be a strict deterrent to parasite businesses, who will never be aware—WHEN THAT FEDERAL OFFICER—is going to turn up, to observe their workers? They will audit their books and check for irregularities in the workplace. This is happening in Italy and other countries, because of the importation of illegal foreign labor, has caused major concerns amongst the countries bona-fide workers. If Washington is really sincere about the10.5 jobless Americans, then we need to impose heavy penalties on those business that scorn the law. Another possibility is a reward system for informants, who have positive knowledge of companies that are scoffing at E-Verify, and committing the offense of hiring illegal aliens. Business are living off taxpayers taxes, because they don’t convey health care to their illegal hires.
Get on the phone and tell your Representative, you support—THE SAVE ACT—202-224-3121 Believe it! Your voices are having the right effect.?Support for the bi-partisan SAVE Act, which will expand E-Verify and protect American jobs! We must focus on the key to this major problem-the jobs that attract illegal aliens. It would phase in a requirement for every employer to use the electronic verification system. We must also be aware that the Democrats are ready to open the gates to our nation, once a path to citizenship is announced. Search out the facts at NUMBERSUSA, AMERICANPATROL
Copy, paste and distribute freely.
Ondrae on Mon, Jul 27, 2009 at 12:52pm
I’m nervous of what Arnold’s new cuts are going to mean to our local governments. I’ve never really seen cuts this drastic before. So the poor and middle class will receive reductions in services, while the rich will just have less money in the bank?
Then it was made worse by the comments by Brittanicus spewing hate at me during my morning cup of coffee. I know I should ignore the haters but I didn’t have my defenses up in time.
Louisville Business Directory in u.s on Thu, Jul 30, 2009 at 10:15pm
As a Newbie, I am always searching online for information that can help me. Thank you. Please come visit my site Louisville Yellow Page Business Directory when you got time.
Lexington-Fayette Business Directory in u.s on Thu, Jul 30, 2009 at 10:16pm
I found your site on google, great site, keep it up. Will return in the future. Submitted this post to Google News Reader. Please come visit my site Lexington-Fayette Yellow Page Business Directory when you got time.
ed in Sacto on Fri, Jul 31, 2009 at 3:55am
The problem in Sacramento wasn’t capitalism it was a series of regulatory failures. Credit standards were lowered nationwide (the first regulatory failure), that meant the loose credit was available nationwide. Sacramento is in the middle of a giant 400 * 80 mile Valley. There is no land shortage here, but during the boom there was a shortage of land zoned for housing (the second regulartory failure). That meant that during the housing boom housing prices spiked here. The reason Salt Lake City, Austin, Dallas and Houston have handled the housing crisis so much better is that in those areas, the housing boom was experienced as a construction boom, not a price spike. This meant that these other areas have not made themselves completely unaffordible to businesses that wanted to expand. In those areas prices didn’t need to fall more than 60% for the median priced home to be affordible to a person earning a median income in those areas.
If we had perfect regulators who did their work perfectly all of the time, your argument that more regulation is necessary might be more persuasive. But the housing industry is already among the most regulated industries in the country. From the land zoning process, to construction, to finance, to buying and selling a home, the government is throughly involved in all parts of this process. Almost no part of the housing industry isn’t throughly regulated by several different regulators. The problem isn’t lack of regulation, but so much regulation and so many different regulators working at cross purposes against each other. Its partially a cordination problem among all of the different regulators. You also have massive regulatory capture by almost all of these regulators. The bankers control the lending regulations, the builders set the building standards, the developer’s finance the local politicians. So while all of these industries are regulated, the regulators are much more interested in protecting the interests of the industry than public at large. When you have a two party system in which the two parties seem to split running the government about half the time, you are definitely going to have regulators who are imperfect in the perception of about half the population at any given time.
Transit works best in areas where you have large numbers of people concentrated in one large central business district. You also need either very high gas taxes to get people out of their cars or expensive parking at work to make transit more cost effective than driving to work.
In the Sacramento region investments in transit haven’t been effective in actually boosting the share of people commuting to work by transit. The region instituted a half cent sale tax for transit and has been building out a light rail network, but the share of people commuting on transit has actually fell in the City of Sacramento from 4.6% of the population in 2000, to 3.7% in 2007 according the US census. That is true for the country and region overall as well. The growth in transit ridership isn’t keeping up with population growth of the region.
The problem is multifaceted. While the state government was willing to build next to transit lines and subside transit passes, private employers have moved out to suburban office parks, where they can pay cheaper rent and offer their employees free parking. It also reduces commute times for employees. This region has one of the highest rates of employment diffusion in the country.
If this country taxed gasoline like europe, than there would be some incentives to densify in a place like Sacramento. But Sacramento isn’t San Francisco. Its a flat area surrounded by hundreds of miles of other flat land. There is no ocean, nor hilltop views that people will pay a huge premium to live near. There are no micro climates that people will pay a premium to live near. In short the only reasons that things densify in this region are because of government subsidies. But competing budget priorities pose a real limit and how much and how effective you can densify a region when the basic economics of the region are undercutting efforts to densify. Its always cheaper in this region to build on cheaper land at the edge of the region. No area in this region is that unique. Elk Grove isn’t that different from Rancho Cordova, so you never develop land prices anywhere in this region that are valuable enough to densify absent subsidies.
If gas was taxed enough to raise gas prices in Sacramento to european levels we probably would see a tremendous move to transit in this region. But at current gas prices, spending more money on transit in Sacramento is a waste of resources. The money spent on rail here should have been spent somewhere like Geary Blvd in SF where it would have been cheaper to provide transit by rail than by the current bus service.
Transit is only green if people are riding it. The average bus gets 3 mpg. Most of the buses in Sacramento are driving around mostly empty for most of the day. At current rates of usage, transit in Sacramento fails to provide an enviromental benefit over driving. So why do we keep expanding it here?