My wife Lori and I began the day by dropping off our oldest son Graham at school for his first day of kindergarten. Not knowing just how he would react to the frenzy of activity and the sound of his first school bell, my mood went from trepidation to relief when he was the first one to jump into line when the teacher called for the kids. A later peek inside the window as we were leaving revealed that he had hung up his backpack and was sitting at his seat ready for the day’s lesson.
On this morning, life was good.
On the way home, Lori and I had a conversation that I am sure millions of parents have had on their child’s first day: Is he ready? Have we prepared him well? Will he enjoy his new environment?
I assured Lori that all would go smoothly. That’s my job . I talked about how we read to him, provide life lessons, and introduce him to things that open his mind to new ideas.
We also talked about how we moved to an area that would provide him and his brother Chase with an excellent environment for growing up. After about a year or two of searching for the right house, we recently moved into a historic, old downtown neighborhood. While every family has its own theories about what makes for a good home when searching for real estate, the only “must haves” on our shopping list were walkability, authenticity, and strong educational opportunities for our kids. So what did we get?
- Walkability – our home has a WalkScore of 75.
- Authenticity – Although our home isn’t as old as some in the historic district, we live adjacent to the downtown among dozens of late nineteenth century Victorians.
- Educational Opportunities – Public school system is good, lots of non-traditional opportunities, and unlike 87% of Americans, we can actually walk Graham to school!
So while it’s no Utopia, we’re very happy. Which brings me to the subject of this entry, namely, why don’t we have more places like these? Statistics show that these types of neighborhoods are actually preferred by young and old alike, the economics of government service delivery are far superior to less dense places, and they generally provide a healthier lifestyle than the auto-centric developments that often surround them.
The answers to this question are numerous. However, in pinpointing a root cause, one critical area to explore is our federal urban policy, or a lack thereof. And while I intended to wow you with a masterful critique on the history of government policies around housing, transportation, and development patterns, I soon realized that I couldn’t match what has already been written by John Norquist, former mayor of Milwaukee and the current president of the Congress for the New Urbanism. John’s article comes from the recently published Economics of Place: The Importance of Building Communities Around People. It is timely, thought provoking, and provides great insight into the current state or urban places. The article puts a focus on Michigan, but it is relevant across the U.S.
Happy reading… and enjoy the day. I am heading home to go check up on a new student.
Federal Urban Policy: Remedy or Obstacle to Michigan Municipalities
Michigan enjoyed prosperity even before it became a state in 1837. Its forests, natural resources, and position at the center of the Great Lakes gave it great advantages. Its industrial innovation produced great wealth that was used to create well-built cities like Detroit, Grand Rapids, Lansing, and Flint. In the last 40 years, decline set in and many manufacturing jobs were lost. Many of Michigan’s municipalities have suffered decline in population and the tax base. While it may be tempting for some Michiganders to believe that this just happened like bad weather, it is important to try to understand and remedy policies that may have hastened decline. In this chapter, I examine federal policy and its impact on Michigan and its cities.
Since the Great Depression, municipal organizations like the U.S. Conference of Mayors and the National League of Cities have frequently called for a federal urban policy. By policy, they mean federal programs that benefit cities, particularly city governments. Revenue sharing, federal block grants, disaster relief, homeland security grants, energy grants, housing programs, and most recently stimulus funds are all programs that have provided cash to local governments. Some programs currently exist. Others have been cancelled. Revenue sharing, enacted under President Richard Nixon, was ended under President Reagan. While federal aid to cities is often discussed, it might surprise people to know that cities actually get little of their revenue from the federal government. In most years, it’s less than 5 percent and the biggest share of that is assistance to public housing residents. The mostly unsuccessful effort to extract more money from the federal government should perhaps be replaced with an effort to remove obstacles the federal government has placed in the way of urban development and redevelopment.
1) Traditionally, through the history of human civilization, streets have served three purposes in the urban context: the movement of people and goods, the conduct of commerce (the market place), and the social interaction of the community (Main Street). The U.S. Department of Transportation (DOT) and by extension state DOTs, however, classify streets almost exclusively by their “level of service,” which reflects the street’s performance on just one of these three key functions: movement. And narrower still, this functional classification system excludes considerations of how well streets serve pedestrians, bicycles, and transit service, and instead focuses solely on motor vehicle traffic. Since the system rates streets more highly for carrying more automobile and truck traffic regardless of impacts on the economic and social value of streets, federal and state funding flows to street designs that actively undermine the community’s efforts to create valuable, livable, and sustainable communities. The goal of the federal road program is reducing automobile congestion. This is far too simple since congestion is much like cholesterol: congestion can be both good and bad. In sustainable communities with highly connected networks of walkable streets and transit, concentrations of people are signs of health, vitality, and outstanding environmental performance.
Federal funding also facilitates long trips and fails to account for the value of short-distance and non-motorized trips. In an economic and social sense, a person walking across a street to work at a job contributes as much as a person driving 25 miles to work at the same job. Federal policy should support economic value without disadvantaging compact, energy-efficient, transit-served urban development, as Edward Glaeser, economics professor at Harvard, argued persuasively in the Boston Globe (March 9, 2010).
2) Federal housing policy disadvantages urban living by favoring home ownership over renting through subsidized mortgage programs (Fannie Mae, Freddie Mac, the Federal Housing Authority (FHA)) and by allowing tax deductions up to $2 million on mortgage interest. Also, Department of Housing and Urban Development’s (HUD) 221 D4 capital subsidy for rental housing obstructs mixed-use development, including housing and retail, by prohibiting more than 20 percent of the imputed value of a project to be non-residential. Fannie Mae and Freddie Mac impose similar restrictions on owner-occupied housing. Potential buyers in a new four-story building with three floors of housing and shops on the ground floor would find it difficult or even impossible to secure mortgage financing because rules at Fannie Mae or Freddie Mac bar the mortgage giants from involvement in buildings where non-retail uses exceed 20 percent. Likewise, developers of either for-sale housing under Fannie and Freddie or rental housing under the 221 D4 program find it nearly impossible to get financing from banks, almost all of whom mimic and impose the federal restrictions on mixed-use.
Scale, building type, and financing (rent or mortgage) are the ingredients of a housing market that serves the varied needs of citizens. When federal programs are built around specialized concerns, they can obstruct the beneficial complexity of urban places. Financial requirements that dictate a separation of use or discourage rent-based housing work against the interests of diverse urban areas and the people who live in them. They also severely limit the ability to bring homes, schools, stores, offices, and other important destinations within walking distance—a pattern shown to yield dramatic benefits in energy efficiency, public health, household transportation costs, and environmental impact.
Midwest cities have especially suffered from federal and state programs and local policies that undermine urbanism and population density while subsidizing and encouraging decentralization—often referred to as sprawl. For example, the Interstate Highway program subsidizes grade-separated highways that facilitate fast long distance travel by motor vehicle. Connecting distant metros by express roads certainly holds benefits for travelers. Also, interstates hold a practical utility that makes great sense in rural areas with low costs per acre and few if any existing structures to remove. But in densely populated cities, roads are expensive, weaken property value, and disrupt the efficiency of existing street networks. The large grade separated highway undermines one of the fundamental assets of cities—location efficiency. If two people hold similar jobs and one person walks across the street to work and the other drives 25 miles, their value to the economy is the same, but their cost is not. The government rewards the longer, energy-consuming trip with a large subsidy and ignores the value of the short walk. Federal policy should support economic value without disadvantaging compact, energy-efficient, transit-served urban development.
Billions of dollars being spent on infrastructure across the nation provides an opportunity to plan for a better America, but politics-as-usual favors sprawl over city. This anti-urban bias of national policies must end.
Over the past 60 years, cities have been hit by a painful policy trifecta: subsidization of highways, subsidization of homeownership, and a school system that creates strong incentives for many parents to leave city borders. Nathaniel Baum-Snow, an economist at Brown University, has documented that each new federally funded “highway passing through a central city reduces its population by about 18 percent.’’ Subsidizing transportation decreases the advantage of living close together in cities, which should make every urbanite worry about the Senate’s fondness for using highway spending to fight recession.
The clear and often-stated goal of federal transportation policy is to reduce congestion. This narrowly focused objective clashes with the very purpose of cities as a gathering spot for commerce and cultural interaction. Let’s face it: successful cities become congested because people choose to be in them. Cities, like New York, Chicago, and San Francisco, with vibrant economies and high real estate values/square mile, experience congestion. However, it is not just traffic congestion, but also people, money, and job congestion. Cities like Detroit and Buffalo, with shrinking economies and low real estate values have low congestion. They also may have low congestion because both cities are crisscrossed with freeways. In one way, the freeway building in Detroit and Buffalo has succeeded in achieving the stated goal of government policy, the American Association of State Highway and Transportation Officials’ (AASHTO) Green Book, to reduce congestion. AASHTO uses a system that would rate Detroit quite highly.
The Highway Capacity Manual and AASHTO Geometric Design of Highways and Streets (“Green Book”) list the following levels of service:
A= Free flow
B=Reasonably free flow
D=Approaching unstable flow
F=Forced or breakdown flow
By this measure, congestion is no longer much of a problem for Detroit. While cities like New York City and San Francisco suffer from congestion ratings at E and F, Detroit enjoys almost free flowing traffic. So, while federal and state transportation value low congestion, the market, as measured by real estate prices, values places with high levels of congestion.
Cities are beginning to understand that focusing narrowly on moving traffic on big roads is counterproductive. In 1975, New York City’s West Side Highway fell down. The expressway, built in the 1930s, was literally at the end of its design life of 40 years. The elevated roadway blocked views of the Hudson River from Chelsea, Tribeca, and the Battery. The neighborhoods wanted their views back. They wanted to reconnect with the river. After a struggle that lasted more than a decade, the decision was made to replace the expressway with a surface thoroughfare, West Street. It paid off in higher real estate values, more development, and more jobs. Similarly, San Francisco and Portland eliminated freeways and gained population, jobs, and housing. In Milwaukee, we sought the elimination of the Park East Freeway on the north end of downtown. After a decade of struggle, we opened McKinley Boulevard in 2003. It replaced the freeway and is now a lucrative site for development. Manpower Inc., a Fortune 500 corporation, moved from the suburbs to a site adjacent to the boulevard. Thousands of new housing units have been added to the neighborhood and traffic distribution has actually improved without the freeway. Millions of dollars of development has occurred along the corridor. One cautionary note—Milwaukee County, which owned almost 90 percent of the land under the Park East Freeway, encumbered the right of way with “community benefits” restrictions on developers, contractors, and landowners that have slowed development in the right of way itself. Adjacent properties have surged in value, but the social restrictions have, in my opinion, been a drag on redevelopment.
Traffic that is just moving through cities without visiting, holds little or no value for the city; while traffic that is moving to a destination within the city can hold great value. As I mentioned before, traffic congestion is a bit like cholesterol. There is both good and bad cholesterol and cholesterol levels need to be managed, not eliminated. Trying to defeat congestion, without considering the nature of particular traffic, can generate collateral damage that can severely damage a city’s vitality. Detroit and many other cities have removed on-street parking to free up room for through traffic. With the same objective, they have also converted two-way streets to one-ways. Both these actions hinder the ability of shoppers to conveniently visit downtown retailers. Streets like Gratiot and Jefferson should be the bustling centers of Detroit’s commerce and civic life, but instead, they are mostly devoted to moving cars during Detroit’s very brief commuter rush period. The threat of congestion was also addressed by the construction of three freeways through downtown Flint, a city of 111,000 people. Paris and London, by comparison have about 10 million people and no freeways running through their centers. Interstates 69, 75, and 475 (the UAW Expressway) are clear examples of infrastructure serving the government’s narrow-minded battle against congestion, even though there is little congestion to be concerned about.
To the Federal Highway Administration’s credit, they have helped the Institute of Transportation Engineers and the Congress for the New Urbanism produce the Urban Context Street Guide. This manual provides guidance for engineers and planners who wish to build thoroughfares as avenues, boulevards, and streets instead of freeways and large arterials. It is available for free download at ite.org.
Another example of a policy that undermines urbanism is the application of strictly separated use zoning to cities. The federal government started promoting such zoning in 1931 in an Executive Order issued by President Herbert Hoover. Hoover, who had served as administrator of the U.S. relief effort to help a devastated Europe recover at the end of World War I, felt that U.S. cities, like those in Europe, were crowded and dirty and needed to spread out and separate commerce from housing. Although his order was more exhortatory than mandatory, its underlying intent remains embedded in many federally created policies and programs, including the two huge federal guaranteed secondary mortgage markets, Fannie Mae and Freddie Mac, as well as the Department of Housing and Urban Development’s 21(d) capital subsidy program for multi-family rental housing. Separate use zoning has undermined the value of existing neighborhoods and had the effect of mandating new development be separated into pods with housing, retail, and office uses strictly separated. This confounds efforts to build a traditional Main Street with apartments built above storefronts.
Luxembourg architect/planner, Leon Krier, compares experiencing the traditional city to eating a delicious chocolate cake, properly assembled from ingredients and carefully baked. He then describes U.S. style suburban sprawl like the ingredients of the cake: the sugar, water, cocoa, flour and baking powder spread over the kitchen counter and then consumed separately. Not very tasty! It is, Krier says, the complexity, connectivity, and diversity of the properly assembled city that can be better enjoyed. Many federal and state policies have encouraged sprawl and undermined urbanism. But market and demographic forces, as described by Chris Leinberger, Urban Land Strategist and Developer, in his book The Option of Urbanism: Investing in the American Dream, have begun to favor urban places. As household sizes shrink, demand increases for urban forms such as apartments and town houses. Young adults prefer urban living, seeking greater social and job opportunities. Urbanism is more popular, so now would seem to be a good time to change rules and policies that discourage it.
In Milwaukee, as mayor from 1988 to 2004, I set out to reform coding and zoning to encourage mixed-uses in commercial and retail corridors. The code reforms adopted in Milwaukee “legalized” urban forms, like apartments or offices above shops. Also, setback requirements for buildings were adjusted to encourage construction of buildings along sidewalks and closer to streets. In newer portions of the city, setbacks from streets had been set as deep as 100 feet, often with no provision for sidewalks.
In some older portions of the city zoning, overlays had been imposed on commercial streets in the 1950s and ’60s that made existing buildings non-conforming uses, thus condemnable for the purpose of eventually widening streets. This had the effect of undermining the ability of property owners to attract capital to repair or improve property, as banks and title insurance companies held no interest in assuming risk in property likely to face condemnation. For example, one of Milwaukee’s east/west thoroughfares (National Avenue) is 54 feet wide—wide enough for two moving lanes in each direction, plus a lane on each side for parking. In 1962, the city council of Milwaukee, at the request of the Public Works Department, imposed a setback on the south side of the street that would create a travel surface of 72 feet, thus providing room for two additional lanes. If this policy had been carried to completion, three miles of buildings, collectively worth many millions of dollars, would have been removed to speed up traffic on National Avenue. Instead, we repealed the non-conforming use setback and legalized the avenue’s existing dimensions.
Another counterproductive encumbrance on urban property is off-street parking regulation. Water Street runs along the west side of Milwaukee’s city hall. In the early 1960s, off-street parking requirements were imposed on private property on Water. A building with a frontage of 19 feet had been lost to fire. The new ordinance required seven off-street parking spots on the lot, even though it was only 70 feet deep and the other buildings on the block were three and four stories. As a result, the lot sat vacant for 35 years until we relaxed the off-street parking requirement. A four story mixed-use building was constructed almost immediately after the change. Cities all over America have unnecessarily repressed their own real estate development with counterproductive parking requirements. Don Shoup, a University of California Los Angeles economist, wrote a book about it called The High Cost of Free Parking. He discourages local officials from requiring parking, and instead urges them to leave that decision to property owners and their tenants. According to Shoup, most medium and large U.S. cities under price on-street parking. They also not only have parking regulations that undermine the value of the city, but wastefully invest taxpayer funds in underutilized publicly owned parking.
All of these interventions—oversized streets, separated uses, and parking minimums—derive from an attitude that undervalues urbanism. Fortunately, the current markets do place a higher value on urbanism.
At the end of World War II, the U.S. was triumphant and undamaged by war. Many of the cities of Germany and Japan—Hamburg, Dresden, Berlin, Tokyo, Hiroshima and Nagasaki—lay in near total ruin. America had won and Germany and Japan had lost. U.S. cities had produced much of the war material that fueled the Allied victory. No city was more productive on either side of the battle lines than Detroit, which produced tanks, jeeps, artillery, aircraft, ammunition and firearms. At war’s end, Detroit had nearly two million people, a vast streetcar system, quality housing, and a vibrant downtown. It was a well-planned city with the Woodward Plan, named for Augustus Woodward, modeled after the L’Enfant plan of Washington D.C. Its radiating streets carried motor vehicles and served as trunk routes for a vast streetcar system. After World War II, the plan was ignored and a system of freeways was built and the streetcars removed.
How did this work out for Detroit? Today, all the cities of Germany and Japan are rebuilt; while Detroit, having lost more than half its population, looks as though it was Ground Zero for World War II. Other industrial cities have also suffered, usually not to the extent of Detroit, but enough to appear in dire need of repair. Pittsburgh, Buffalo, Gary, St. Louis, and Cleveland, all lost half their populations from 1950 to 2000, and many medium and small industrial cities shrank as well.
There are, of course, many reasons that U.S. cities deteriorated in the post World War II period. New technology, particularly the automobile, changed travel patterns in a way that undermined the supremacy of downtowns as centers of commerce. Also, as America gained prosperity, many citizens freely chose to enjoy their prosperity in larger houses on larger lots outside the city. Yet, a significant part of the decline of U.S. cities can be traced to U.S. transportation and housing policies that distorted markets and pushed decentralization far beyond where market forces alone would have taken it. The federal government, and by extension state governments, subsidized and otherwise encouraged, through regulation, non-urban forms of development.
While not a major source of discretionary revenue, the federal government has, from the nation’s founding, had a powerful impact on cities both for good and ill. Perhaps the most beneficial federal contribution to cities is the U.S. Constitution, and especially the Bill of Rights. Individual freedom is important to the culture and economy of cities. Another great federal contribution to U.S. cities is the guarantee of free commerce among the states without restrictions or tariffs. In many other ways, the federal government has undermined cities. Changing these anti-urban rules and policies to allow or even encourage urbanism would only help cities.
More successful cities will, in turn, also help America. More compact, complete, and well-connected development will save energy and add efficiency to the American economy. Urbanism also brings social benefits to communities. As it says in the preamble to the Charter of the Congress for New Urbanism, “The Congress for the New Urbanism views disinvestment in central cities, the spread of placeless sprawl, increasing separation by race and income, environmental deterioration, loss of agricultural lands and wilderness, and the erosion of society’s built heritage as one interrelated community-building challenge.”
For cities, states, and certainly the federal government, it’s the right time to address that challenge. Michigan has begun that process. The Michigan Municipal League, the states’ universities, and foundations, are searching and finding ways to make progress. The Woodward Avenue project connecting downtown with Detroit’s northwest side, the downtown revitalization in Grand Rapids, and many other efforts show promise. But efforts in Michigan need to be supported by removing federal obstacles like anti-urban rules for mortgage markets and anti-urban design requirements for federally supported pavement projects. With federal, state, and local governments strapped for cash, now is the time to change the rules so that federal regulations and investments add value to cities and the economy.