One point that has been mentioned several times, but not examined, is the need for local businesses to have access to local sources of wealth, for both debt and equity1. In many cases, multi-national banks won’t lend to small businesses, so local financial institutions are the only way for local businesses to access the capital they need to grow. A community that shows broad-based support for its local financial institutions is one that will bootstrap the growth of the community’s wealth by ensuring existing wealth is reinvested locally, instead of globally.
For most communities, the financial system works something like this: people save and invest some part of their income. The savings are deposited in their account with Bank of America, Chase, or Wells Fargo; the investments are made through a mutual fund. The bank takes their deposits and lends that money to large borrowers around the world. The mutual fund manager purchases stocks from companies generally based in Delaware, with their headquarters in a major metropolitan area and operations globally. None of this money that the community saves is loaned or invested to the businesses in their neighborhoods. Continue reading Local Wealth
This week’s Link Roundup brings us a couple stories about the death of auto-dependant retail and the renewed life of walkable retail, a prediction on instability in the Middle East and its impacts on oil, transportation, and the continued decline of our suburban communities, one city’s attempts to save a half-developed neighborhood, and the places kids play.
- Saudi Arabia Plunges into an Abyss. John Robb, who has a sterling track record of predicting events in the Middle East, sees Saudi Arabia as ISIS’s next target. The impacts on the price of oil and the global economy would be dramatic if the current Saudi state is destabilized. This would rapidly drive up the cost of transportation, and likely speed the demand for urban, walkable communities and hasten the decline of our suburban neighborhoods.
- The Child Inside. “A community not built around children is no community at all. A place that functions socially is one in which they are drawn to play outdoors. As Jay Griffiths argues in her magnificent, heartrending book Kith, children fill the ‘unoccupied territories’, the spaces not controlled by tidy-minded adults, ‘the commons of mud, moss, roots and grass’. But such places are being purged from the land and their lives. ‘Today’s children are enclosed in school and home, enclosed in cars to shuttle between them, enclosed by fear, by surveillance and poverty and enclosed in rigid schedules of time.’ Since the 1970s, the area in which children roam without adults has decreased by almost 90%. ‘Childhood is losing its commons’.”
- Dallas shoppers turning to small retailers for unique holiday gifts. “Alternative shopping is more popular than ever, with Dallas shoppers looking for unique items, from the bohemian to the upscale. The Bishop Arts District has blossomed, and the Design District, Henderson Avenue, Deep Ellum and the Plaza at Preston Center are all largely populated with shops run by their owners.”
- What to Do With a Dying Neighborhood. “There are very few stories where a half-finished development has been saved from ruin. The rescue of one such development, by the city in which it is located, is being heralded as a potential solution to some of the worst mistakes of the housing crisis.”
- The Shopping Mall Death Spiral. “The shopping mall is the epitome of America’s Suburban Experiment. From a local government standpoint, it was the golden chalice of development, a winner-take-all prize in our race to the bottom. Whoever got the mall was able to steal from their neighbors that fraction of a sliver of retail taxes that local governments receive. When consolidated in one place, that could add up to a significant amount of money, at least for a while.”
During the late 1970s and early 1980s, Anaheim’s historic downtown was a seedy red-light district. Despite the fact that downtown dated back to the founding of the city in 1853, with a traditional street grid, mid-rise masonry buildings, and a Carnegie library, it had become overrun with adult bookstores and a movie theater that played adult films. It was, quite simply, the embodiment of the negative stereotypes of urban living that were so popular at the time. The Anaheim Redevelopment Agency’s solution to this situation was to bulldoze the vast majority of the historic buildings, re-route and expand the major thoroughfares, and replace everything with car-focused development. Over the past thirty years, Anaheim’s redeveloped downtown has stagnated and fallen once again into disrepair, while neighboring cities such as Orange and Fullerton preserved their historic downtowns to create vibrant urban districts.
This clean-slate approach to redevelopment is not a successful strategy for rebuilding our suburbs, and especially not our downtowns. The rapid destruction and redevelopment of entire neighborhoods displaces existing users, destroys any existing economics and community activity, and creates far too much supply of new development to be absorbed by the market. The result is a neighborhood with continued anemic economic and community activity, similar to the condition before redevelopment. In short, the redevelopment effort ends up being a failed investment into the community. Continue reading The Problem with a clean-slate approach to redevelopment
One of the outcomes of bankrupt suburbs and climate change is that many residents will be left with stranded assets. Quite simply, they will own property that they can’t sell, and will either be stuck or forced to simply walk away from their homes. It might be hard to see that decline while driving through today’s apparently affluent suburbs, but the same could have been said about Detroit and other Rust Belt cities in 1965. This is a powerful argument in favor of rebuilding our suburbs when confronted by residents who don’t want to see their neighborhood change. It is in their own self-interest to allow for some change which would make their neighborhood economically sustainable, instead of allowing their neighborhood to enter the Spiral of Decline.
The Spiral of Decline
Suburbs that are unable to sustain funding for basic city services, such as police and fire services, and street repair, end up in a Spiral of Decline. First, the least valued city services are cut, such as libraries and community programs, which reduce civic engagement and sense of community. This, in turn, drives down property values because people don’t feel as connected to their community. Continue reading The Suburban Spiral of Decline