New York City strives to diversify its economy out of finance – focusing on incubation and “garage” spaces for creatives and entrepreneurs. The New York Times:
Rather than write them off as losers in the casinos of capitalism, city officials are encouraging them to start over, the Silicon Valley way. As part of a $45 million program, the city will subsidize garage-size offices as hatcheries for their most promising ideas for new businesses in finance or other fields.
Ryan Avent sees the crisis as an opportunity for the Big Apple, but hard choices must be made:
New York should also come to grips with the fact that high real estate prices may have cost it some economic vitality. The expense of homes and business space no doubt led to a loss of talent to other metropolitan areas. It’s difficult to take a professional risk when one has to work all out to pay the rent.
In one sense, then, the crisis creates a direct opportunity for the city. Assuming that basic public services can be maintained, the decline of real estate prices in New York could help new industries to flourish. It’s impossible to overstate the advantages the city has available in terms of talent and institutions. But New York leaders should learn from their heavy dependence on Wall Street, the wealth of which crowded out other industries — an unbalanced income distribution is risky for a city. To prevent this from happening in the future, New York needs to focus on affordable housing, and should work to make it easier to build a lot of new housing. It should also stay focused on services that make middle-class city life possible: good public schools, good public transit, good public safety, and good public amenities, like parks and museums.
Cities in the sand sink deeper, according to the Wall Street Journal.
Builders rushed into this one-time agricultural crossroads during the housing boom. They put up beige stucco houses on winding streets, with names like Heavenly Place and Good Vibrations Lane. They lured young people who couldn’t afford homes in nearby Phoenix or its costly suburbs. The population soared to 37,000 last year from 1,400 a decade ago, making Maricopa one of the nation’s fastest-growing towns. Now, it’s become a dead end for some of those people. “We’re trapped,” says Tracy Campbell ..
Housing prices nosedive again according to the new Case-Shiller Index: Phoenix and Las Vegas remain hardest hit.
It’s impossible to get mortgages above the conforming limit – that means the market is virtually frozen in regions like New York, San Francisco, and D.C. The Wall Street Journal:
The lack of financing is particularly acute in markets where rising home prices have made jumbo loans a necessity for even middle-class borrowers, such as New York City, coastal California and Washington, D.C. “If you own a $650,000 home in many parts of this country, you’re not a wealthy person by any stretch, and you’re being cut out of any relief,” says Guy Cecala, publisher of Inside Mortgage Finance. Around 4% of all borrowers have loans that exceed conforming limits, according to an estimate by First American CoreLogic. But that share rises in high-cost states such as California, at 17%, and New York, at 8%. condos – with high rates.
Wired Magazine on the need to shift from cars to people/ pedestrians.