Creative Class

There’s a great post by Edward Glaeser (in the Economix blog of the New York Times), titled “New York, New York: America’s Resilient City.”

In it, he describes how New York has managed to avoid the decay that has afflicted many large older cities, and, after a brief downturn in the 1970’s, came roaring back as arguably the most influential single city in the world.

His explanation? In a word - “smart people.”

“New York still has an amazing concentration of talent. That talent is more effective because all those smart people are connected because of the city’s extreme population density levels. Historically, human capital — the education and skills of a work force — predicts which cities are able to reinvent themselves and which ones are not. Those people who are continuing to pay high prices for Manhattan real estate are implicitly betting that New York’s human capital will continue to come up with new ways of reinventing the city. “

Glaeser continues, describing why dense cities succeed…

“They thrive by enabling us to connect with each other, which then promotes learning and innovation. The current downturn will only increase the returns to being smart, and you get smart by hanging around smart people. As long as New York continues to attract and connect those people, the city will continue to thrive.”

Now here’s what every city planner wants to know. Is this replicable? Can this success be engineered or encouraged, and are the effects measurable in 10 years, 20 years, a lifetime?

Does anyone have successful examples of campaigns and projects to replicate this resilient infrastructure? Or perhaps, examples of some cautionary unsuccessful attempts?

Best wishes to everyone for a creative and fruitful New Year!

Small spaces are all the rage as the economy tanks and eco-consciousness gains, according to Haya El-Nassar at USA Today (h/t Ian Swain). Is even more trouble brewing out in Mansion land?

I’ve been thinking and writing a bit about the need for a new type of housing that is flexible and rented rather than owned. This seems to fit the bill, as reported in the New York Times.

AVE complexes differ from extended-stay residences in that they offer both luxury hotel-style service and rental units, furnished and unfurnished, with condo-style amenities. A tenant can sign a lease for any time period 30 days or longer, and move in within 48 hours. Furnished units at the midrise AVE complexes — the other two New Jersey sites are Clifton and Somerset — are leased on a monthly basis, for daily rates starting at $145. … But it is the unfurnished units — leased for a minimum of six months, and ordinarily a year — that are emerging as a “hybridâ€� housing alternative … Set off in separate wings, and offering weekly social events for residents, in addition to the AVE concierge services, free cafe breakfast and fitness center access, they are evolving into small “neighborhoodsâ€�… On the professional side, the AVE complexes offer business centers with banks of computers, and fully wired conference rooms …  The price range for such units is $2,595 to $3,330 a month, when leased on a yearly basis. A two-bedroom unit with a study goes for $3,600 a month. One-bedrooms start at $1,995 per month and go up to $2,550. By contrast, a one-bedroom furnished suite costs $145 to $165 a day, if rented for a month. For a two-bedroom two-bath suite with a direct view of the New York City skyline, the rate is $295 to $395 per day.

Sure, I know they call it a money pit. And the money pit has turned into a financial death sentence for too many Americans. But it’s a veritable truism that owning a house makes you happy. It’s the pinnacle of the American Dream after all. Not so fast. According to this comprehensive study by the Wharton School’s Grace Wong, those who own their own homes are in fact a less happy lot than those that do not. Here are some of the study’s key conclusions.

I find little evidence that homeowners are happier by any of the following definitions: life satisfaction, overall mood, overall feeling, general moment-to-moment emotions (i.e., affect) and affect at home… They are also more likely to be 12 pounds heavier, report lower a lower health status and poorer sleep quality. They tend to spend less time on active leisure or with friends. The average homeowner reports less joy from love and relationships… Contrary to popular belief, I do not find significant differences in family-related time use patterns, family-related affect, number of normal work hours, indicators of stress or measures of self-esteem and perceived control of life by homeownership …

Homeowners are happier on average only on an unadjusted basis. Once household income, housing quality and health are controlled for, they are no happier than renters. What’s more, they report to derive more pain from both the neighborhood and their house and home. This positive pain gap remains stable and robust when health, neighborhood characteristics and financial stress are controlled for. As for the most frequently cited channels of a positive impact by homeownership, namely self-esteem, stress, health and family life, again there is very little supporting evidence in my data… [H]omeowners spend less time on active leisure activities or with friends, which have been documented as some of the most enjoyable affective experiences.

We can only hope policy-makers take this into account when think about what to do on the housing front.

The latest issue of Dwell Magazine looks at one of America’s first (and often considered the most successful) urban renewal projects. Detroit’s Lafayette Park, now undergoing a subtle transformation as a new wave of residents including Keira Alexandra and Toby Barlow settle in, remix the past, and make the place their own.

Given the uncertainty looming with the likely restructuring of the automotive and manufacturing base in this area, it’s encouraging to see a vibrant and stable cooperative community within the city that has endured the region’s many changes over the last 50 years. And, who knows, what comes next may in fact be orchestrated from this place.

In the current housing crisis, two sort of counter-intuitive things puzzle me:

In my close-in Portland, Oregon neighborhood there are several older houses being entirely gutted and renovated by new owners, five within two blocks of me. All for mid to high six figures I’m sure (on top of high six-figure purchase prices), plus some smaller five-figure remodels or additions. Many of the owners are younger (30s+) creative class professionals. So if there’s a fiscal crisis, where are people getting the money? And why are they doing this if the value of houses is expected to plummet?

Second, in the last couple of years there have been a half dozen new home and garden type magazines launched here, from the wonderful Portland Spaces, to the blah Ultimate Northwest, to the over-the-top Luxe Northwest, to the down-to-earth Oregon Home. They’re all part of local or national chains. But why would advertising vehicles for high end accessories be a good idea now?

It could be that these are both just poor timing, residual effects of the housing bubble - although Portland didn’t bubble like Las Vegas. Or is there something deeper going on? Is this happening elsewhere?

Forbes.com lists the best places for real estate to rebound (h/t: Dean Alexander): Seattle, San Francisco, D.C., New York, and L.A. come out on top. Hard-hit Detroit is last.

Prosperity Institute researchers Patrick Adler and Ronnie Sanders compare this to the creativity index. The Forbes’ rebounders have a creativity index score (.852) some 30 percent more than the hardest-hit group (.619).

Here are two eye-opening charts (via Calculated Risk). The first charts major swings in residential investment as a share of economic output over the past half century. The second shows architectural billings since 1996.

No, not the baseball teams! Which is the better city?

In a light-hearted nine-inning match-up, I compare the two cities head-to-head in the categories we normally use to rank places for quality of life. The categories include such areas as climate, crime, economy, and housing.

Which wins?  Gritty Philadelphia or sun-splashed Tampa Bay?

After nine hard-fought innings, the winner is crowned in the World Series of Cities.

Former Treasury Secretary John Snow told Congress the U.S. went “too far”‘ encouraging American home-ownership, saying that: “In retrospect, the bipartisan consensus to promote housing went too far.” As Bloomberg reports, Snow oversaw the “ownership society” where home-ownership rates hit an all-time high of 69.2 percent. He, like former Fed chief Alan Greenspan, now says they are “shocked” by the rapid meltdown of the financial sector.

One piece of the problem was granting mortgages to gullible or desperate people who truly wanted to buy a better home for themselves and their family. But a huge piece that continues to go under-recognized was the the incredible amount of real estate speculation undertaken by small scale investors, real estate agents and developers, and “regular Joes” trying to make a quick buck by flipping real estate.