Monday News Digest

The Friday News Digest is a regular feature of the Strong Towns Blog. Due to the Thanksgiving weekend, I’ve shifted our normal Friday recap of the news to Monday.

Enjoy the week’s news.

  • I want to take a brief moment here and recognize Gregory Jones of The Studio Stoop. His blog post on why he donated to Strong Towns meant a lot to me and the others here. Testimonials like this are incredibly powerful — it is a compelling post. Thank you, Gregory, so much for sharing this.

If there is one term I would use to describe the Strong Towns philosophy it would be productive growth. It is this focus on making our cities and towns productive that gives Strong Towns its unique edge. In a field so dominated by advocates rightly proclaiming life could be so much better, Strong Towns tells us that those things we all want to help us thrive actually end up costing us less.

  • I also want to recognize Dave Alden of Petaluma who is hosting a book club meeting to discuss the Curbside Chat Companion Booklet. I frightened him a little when I contacted him with an offer to send some nice copies of the booklet and even participate by Skype (had to explain I was not a stalker but simply using a pertinent Google alert). If you live in the San Francisco area and want to meet some locals to talk Strong Towns, check out his meeting on December 11. I can’t patch in this month but I hope to for a future meeting. And note: Anyone in Minnesota wanting to hold an event like this just needs to call and we’ll make it happen.
  • Staying in California, the blog Getting Around Sacramento took my post from last Monday (What is the Federal Role?) and put their only local twist on it, calling for a “no net pavement” approach. While I tend to be a touch more libertarian, as a regulation it would meet my tests of being simple to apply, easily understood by all and effective. While I have no doubt that the lawmakers meeting in Sacramento could develop a cap-and-trade scheme to give their cronies a loophole and weaken the approach, the concept is a great place to start. It is not like the reality of highway contraction/abandonment isn’t staring CalTrans square in the face, now is it.

The only reason new developments are built rather than rehabilitating or reconstructing old ones is that the developers make more money by shifting their expenses onto society. So do we need to build more single family houses? We don’t.

I think that it will be necessary in the not too distant future for transportation agencies to reduce the amount of pavement in order to maintain what is needed at a reasonable quality. Potholes are proliferating, and expansive pavement makes no sense.

  • I received a notice Sunday that Amazon had just shipped Nicholas Nassim Taleb’s latest book, Antifragile, although not in time for my trip to Colorado (Curbside Chat in Rocky Ford on Tuesday). I just couldn’t wait for Christmas for this one. This week NNT (who is the Patron Saint of Strong Towns) had a fascinating piece in the Wall Street Journal. I’ll excerpt a small bit, but read the entire thing. It is pure mental gold.

As a practical matter, emphasizing antifragility means that our private and public sectors should be able to thrive and improve in the face of disorder. By grasping the mechanisms of antifragility, we can make better decisions without the illusion of being able to predict the next big thing. We can navigate situations in which the unknown predominates and our understanding is limited.

  • If you are in Central-West Minnesota (Fergus Falls area), you should be following the Bureau of Urban Experimentation. Follow them even if you are not to (a) show your support and (b) learn from their efforts. #worthrepeatinginyourtown
  • For all of our obsession on economic development and job creation, we are very confused as a nation about the realities of either. The choice we have is generally as follows: Do we need more government programs or do we need more tax breaks and subsidies? Some would say “both” but, for the most part, I would say neither, especially if we persist in misunderstanding which types of businesses create jobs and drive growth. A city-centric approach focused on import replacement strategies should start with some recent insights in the Wall Street Journal, mainly that a small percentage of second stage businesses create almost all new jobs and economic growth.

For a start, our public policies should recognize that some small businesses are built for rapid growth while others are likely to stay small forever. Firms that are young, say five years or less, and exhibit potential for rapid growth and innovation should be classified differently than older firms that are less likely to grow and add jobs. Let’s call that former group “startups” instead of “small businesses.”

That simple definition change can make all the difference. The SBA would continue to provide its valuable loan programs and other services to small businesses that are likely to remain so. The high-growth-potential firms identified as startups would get customized attention from a team of advocates drawn from across the government—the White House, Treasury, Commerce and other relevant departments, including the SBA.

This structure would ensure startups receive high-level attention from the various agencies that impact their fortunes. And having the SBA play a prominent role also recognizes that the line between startups and small businesses won’t always be clear.

  • And understand that, not only would Jane Jacobs find bike repair rooms popping up in apartment complexes a sign of economic vitality, we should all be cheering the city of Denver for not quashing this innovation with archaic land use regulations administered by reactionary bureaucrats.

“Bicycling is booming right now in Denver, and adding bike amenities in downtown properties is more than just clever marketing,” said BikeDenver executive director Piep van Heuven. “This is a response to demand.”

  • In stark contrast to the past two articles (and far more indicative of what you are likely to find out there in America’s cities today) comes this delusional video from Merriville, Indiana. There were times when I laughed out loud and then other times when I wanted to weep. If you were playing an economic development cliche drinking game, you would be totally wasted by the end. I would bet cities across the country spend waste more (in money and in focus/energy) on this type of effort than all the economic gardening efforts going on.
  • And following in the footsteps of Merriville here locally in Minnesota is the city of Corcoran, a place where there are willing to spend whatever it takes to prove 2005 was not a bubble but the natural progression of American progress. Now they have paid to run the central sewer line out to the city and “big things” are surely on the horizon. Good luck, Corcoran.

The city of Corcoran is 20 miles from downtown Minneapolis, but it might as well be 200.

The downtown is little more than a road crossing with a traffic light, liquor store, bank, gas station and convenience market. The town’s 36 square miles has no apartments, supermarkets, public schools or big-box stores.

“It’s frustrating to see all the commercial development that’s gone around us and has skipped over us,” said Dorothy Theis, a former City Council member.

  • One of the subtle subtexts of last Monday’s piece (What is the Federal Role?) was my critique of the “active living” advocates of modern America. Representative Oberstar and many others believe that we have have  highway and STROADS along with a decentralizing, auto-oriented living arrangement in addition to a Dutch biking system. That their aspirations manifest so pathetically financially (1.5% of all federal spending goes to bike trails, mostly recreational) has not prompted them to consider that perhaps the answer is not the federal purse. This fantastic blog in the International Herald Tribune, along with the video embedded within it, goes a long ways towards explaining the mental shift we need to make as a culture if cycling is to become (as it must) more than a niche mode of transport. (Note: Increasing federal spending from 1.5% to 2.8% of the transportation budget will not get us there.)
  • Along those lines, imagine if Florida were as willing to drop a billion dollars on urban bicycle infrastructure (and by the way — the ROI would be astounding if they did) as they are to make modest improvements to their STROAD-dominated auto transport system. It is incredible how far beyond the point of diminishing returns we are with this system yet we continue to mindlessly pump more and more money into it believing a different outcome will magically appear. Well, it ultimately will, won’t it Detroit (the only major US city thus far to successfully build its way out of congestion — others to follow).

With few freeways, arterial roads in South County do a good portion of the heavy lifting for transportation needs. OCTA is working on synchronizing signals to make the existing infrastructure work more smoothly, and several widening projects are in the works.

Keeping traffic flowing on large streets is imperative, OCTA board member Winterbottom said.

“Those major arterials have to be treated almost like freeways,” he said.

  • I had a number of people forward me this article in the Atlantic Cities about a neighborhood developer that went through all of the SEC rules so that they could get local investors — normal, non-rich people — to invest in their own neighborhood. Emily Badger does a great job explaining the complex regulatory obstacles that scare off nearly everyone (myself included) that has ever had this idea. It is a great story about a pair of developers that persevered and does have some hope for rule changes that would allow more of this in the future, but I’m not holding my breath. Washington regulators, prove me wrong.

Regulators have long sought to protect inexperienced investors from fraud. But the financial system we’ve built has perpetrated plenty of it anyway – and on a massive scale. Besides, the Internet has already changed these expectations. Politicians and regulators don’t want small-time investors to lose all their money, but every day, people are voluntarily giving it away on Kickstarter. Why not give them the possibility of some return better than a commemorative poster?

  • Of course, the same people who worry obsessively about whether or not grandma is going to get a fair rate of return on the $200 she “invests” in the building rehab up the block — the people who feel it is their moral duty to protect such people — sit idly by while the “shadow banking” sector grows to $67 trillion. Trusting regulators to protect society is backward. Simplify, reduce risks, sacrifice growth for resiliency and understand that nobody can protect their interests more zealously than the individual.

“The objective is to ensure that shadow banking is subject to appropriate oversight and regulation to address bank-like risks to financial stability,” it said.

Officials at the European Commission in Brussels also see closer oversight of the sector as important in preventing a repeat of the financial crisis that has toppled banks over the past five years and rocked the euro zone.

  • For those of you that want to get your economic learn on, I challenge you to listen tolast week’s Econtalk with Russ Roberts. This is a podcast I regularly tune in to so I recommend it be added to your list. This episode I am sharing here is about the economics of fuel rationing post Hurricane Sandy. I guarantee that it will challenge you to think differently about the world. Try it out.
  • As long as we’re on audio, NPR had a fascinating report this week called Can a poor country start over?. The experiment being proposed and undertaken in the piece reminded me so much of what needs to happen in our cities — and what is keeping it from happening — that it was eerie.
  • I’m actually in the process of rereading some Jane Jacobs (brilliance — I never cease to learn more each time) and, in that light, enjoyed this little blog piece by the CEO of Gallup. Yes, mayors are more important than presidents in the New Economy, just as the aggregate of cities creates the wealth of nations. This is why a nation of Strong Towns will be a strong nation, while a nation of weak and crumbling cities will ultimately decline.

The reality is, when it comes to creating economic growth and good jobs, local leadership trumps national leadership. For instance, Austin and Albany are both capital cities in big American states. Neither city is located by a port or a natural tourist attraction with beaches or mountains. They’re pretty much alike, except that Austin wins big and Albany loses big.

The difference, in my view, is that Austin has deeply caring, highly engaged business, political, and philanthropic leaders with principles, policies, beliefs, and values about human nature that work. They understand how to build a thriving, growing economy — one that welcomes business and entrepreneurship. Albany has the opposite, as I see it: Leaders with principles, policies, values, and beliefs that discourage business and entrepreneurship, if not outright scaring them away.

Cities across the country with great leadership are filled with booming startup companies, and those cities have thriving economies that create authentic, organically grown good jobs. These cities are saving America, while the others are letting the country down.

  • I can’t say that I understand a business model that can sustain nearly eleven months of losses in order to make a profit for one month, especially when said business model is reliant on scenes like this to turn that corner. From someone who has almost completely cut the cord with mainstream bricks-and-mortar American retail — and could not be happier about it — I wish all of you safe shopping.

On my way to Rocky Ford, CO, today via Brainerd International to MSP, MSP to Denver, Denver to Pueblo, then by car for the last leg. Am very much looking forward to being back in Colorado and sharing this important message.

Charles Marohn

About Charles Marohn

Charles L. Marohn, Jr. PE AICP is the President of Strong Towns, a Minnesota-based 501(c)3 non-profit organization. He is a Professional Engineer (PE) licensed in the State of Minnesota and a member of the American Institute of Certified Planners (AICP). He has a Bachelor's degree in Civil Engineering from the University of Minnesota's Institute of Technology and a Masters in Urban and Regional Planning from the University of Minnesota's Humphrey Institute. Strong Towns supports a model of growth that allows America's cities, towns and neighborhoods to become financially strong and resilient.