Creative Class

A new report by sports economists Dennis Coates and Bruce Humphreys shows once again how pro sports stadiums don’t add to economic development – they actually have a net negative effect on local income (University of Illinois News via the Street).

“Our conclusion, and that of nearly all academic economists studying  this issue, is that professional sports generally have little, if any, positive effect on a city’s economy,” Humphreys and Coates wrote … The professors based their report on new data as well as previously published research in which they analyzed economic indicators from 37 major metropolitan areas with major-league baseball, football and basketball  teams. “The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over  the entire metropolitan area,” Humphreys and Coates noted in the report. The researchers found other patterns consistent with the presence of pro sports teams. Among them:  • a statistically significant negative impact on the retail and
services sectors of the local economy, including an average net loss, • an increase in wages in the hotels and other lodgings sector  (about $10 per worker year), but a reduction in wages in bars and restaurants (about $162 per worker per year).

Those employed in the amusements and recreation sector appeared, at
first glance, to benefit significantly from the presence of a pro team, with an average annual salary increase of $490 per worker, Humphreys said. However, he added, “this sector includes the professional athletes whose annual salaries certainly raise the average salary in this sector by an enormous amount. As it turns out, those workers most closely connected with the sports environment who were not professional athletes saw little improvement in their earnings as a result of the local professional sports environment.

The full report is here. I am amazed at how cities continue to get away with such boondoggles in the face of such overwhelming evidence that they are a waste of taxpayer money. Think for a moment of what other, more positive things could be done with those funds – the opportunity costs. I am also amazed that the economic development profession continues to fall behind stadium building efforts. Imagine if doctors continue to practice in a way that flies directly in the face of medical science. As a group of professionals, it would seem that economic developers should be held to some standard of professional accountability here.  Is that expecting too much?

In a level of cluelessness I am not sure has ever been equaled in urban affairs commentary, we have this nugget:

Urban scholar Joel Kotkin says inevitably, the killing will spill over into the city’s core. “A lot of the Toronto establishment, if you want to put it that way,
sees itself as this hip cool thriving city doing so much better than
many American cities,” says Kotkin. Increasingly, Toronto is a domain
of the very rich and very poor, he says, as the middle class and the
jobs they create migrate to the suburbs. Violent crime is a major part
of that migration. “I mean, (crime in Toronto) hasn’t reached the level of New York in
the 1970s,” he said. “(But) people talk about crime when they talk
about Toronto now, where it was a non-issue not so long ago.”

By any meaningful standard of comparison Toronto, though more stratified than it once was, remains a city that is on another planet of economic diversity compared to US cities with a strong thriving urban middle class, a large urban working population, and much better conditions for the poor. Fortunately my colleague Kevin Stolarick who works with actual statistics and facts benchmarking North American cities puts the matter in perpsective.

Toronto’s numbers are “phenomenally wonderful” compared to equivalent
cities south of the border. The murder rate in Toronto this year will
be slightly more than three per 100,000 people. Detroit’s murder rate
in 2004 was 42, while Washington’s was 36.

Having lived in New York, Boston, DC, Pittsburgh and other US cities, I can confess Toronto is a world apart in terms of crime and violence. Several people were murdered in our neighborhood in Northwest DC. I would worry every time Rana went for a walk outside alone or with a friend in broad daylight. We locked down our house at night and put the security system on: If there was a rattle or noise in the middle of the night we jumped out of bed. In Toronto where we line a mile or so from the city core, people simply do not worry at all about violent crime. Kids – yes there are lots and lots of them from all class backgrounds in the city of Toronto – walk safely on the street and take the subway or bus unescorted to get around.

UPDATE: NYC is reporting a record low number of murders for 2007: 500.

I was surprised when single women we interviewed during the research for Rise said they  preferred gay neighborhoods because they were safe. Now USA Today reports American cities are finally waking up to the issue of women’s safety. The article notes that:

•There are 118.5 million women in the nation’s central cities and their suburbs, more than half the urban population.

•About 17 million women in those areas are age 65 and older — almost 60% of the total number of seniors in cities.

•Women 65 and older are three times as likely as their male counterparts to live alone.

•More than 14 million women live alone in cities.

•More than 23 million women are heads of households.

•More than 60% of those who care for an older person are women.

While Canada and the UK have been dealing with this issue for some time, according to the article, the U.S. is just now waking up to it.

A week or so ago someone wrote the creative class’s drug of choice is cocaine. Now this week, the folks at Dig say its absinthe, while these folks say its espresso.  I think the drug of choice is actually productive engagement and intrinsic reward, but who am I to talk.

It’s become increasingly clear that city-regions are becoming more stratified and polarized by income and class.  A fascinating new study by my colleagues at the Centre for Urban and Community Studies (CUCS) tracks these trends over the past several decades in Toronto, and argues that the “city of neighbourhoods” is becoming three separate “cities” defined by widening disparities.  I am very fortunate to work with the best collection of urbanist colleagues in the world. A press release on the report is here (I am trying to track down an electronic copy).  The Globe and Mail asked for my thoughts on the landmark study:

Toronto, despite its worsening economic polarization, or perhaps
because of it, is perhaps in the best position worldwide to lead here.
It should put aside its dream of becoming another New York, London or,
in some quarters, another high-tech Silicon Valley. Those are
yesterday’s models – thriving commercial cores and growing polarization
and poverty. Toronto must break the mould and strive to deal with the
spikiness and polarization that its improved position in the global
creative economy has brought with it.

Caught today between the twin pillars of economic growth and
widening social and economic polarization, Toronto has the opportunity
to become a model of the prosperous, sustainable and inclusive region -
one where each and every person can fully develop their talents, find
work that fufills their dreams, and connect the further development of
human creative capabilities to future economic prosperity. The three Torontos can become one Toronto. The time to act is now.

My full column is here.

Over at PSFK, Jeff Squires notes:

… the growing
trend of professionals stepping out of their cubicle to get work done. The idea
is that nobody actually gets anything done at their desk – the constant
distractions and mundane routines of sitting at one’s desk often prevent any
creative or introspective actions from surfacing. This frustrating aspect of
traditional office life is driving people to seek out “white space” – a term
that implies a place set apart, physically and mentally where the work actually
gets done. “White Space” is subjective – it’s different for everyone. Some seek out
solitude, while others flock to crowded coffee shops to hunker down and get it
done. The bottom line is, people perform better when they have options. While this may seem glaringly obvious to many, it can be a hard pill for
companies to swallow. However, it seems the technology and creative industries
have taken notice and are taking steps to nourish this Bedouin work style and
still keep employees in the office.

He points to this New York Times article titled ” You Won’t Find Me in the Office.”

Technology companies are eliminating assigned space for open floor plans.
Cisco Systems, Google and Sun Microsystems have already knocked down partitions.
This month, Intel began testing alternative floor plans at three locations —
creating open work areas with clusters of armchairs, library-style tables with
laptop plugs, electronic white boards where inspired doodles can be transferred
to e-mail, and a variety of conerence rooms when privacy is needed. It is not
just the high-tech firms that are becoming cozier.

The creative industries — such as advertising and design — are embracing the
approach, too. At ?What If! (yes, that is really the name, punctuation and all)
an “innovations company” (that seems to mean marketing) with a Manhattan
outpost, employees never sit in the same place two days in a row. This is known
as “hot desking,” said Nina Powell, the managing director of the United States
office, and the purpose is to give workers a perspective that changes with the
task. When the work requires collaboration and interaction, she said, the communal
tables are the place to be. When the work is more introspective, there are
cafe-style booths providing quiet and privacy.

Indeed!  These are some of the core concepts guiding the design of our new space for the Prosperity Institute – lots of interesting space for interaction, for visitors, for impromptu meetings, for connecting and catching up. And space that creatives and students as well as business and political types feel “at home” in.

In Rise, I said the organizational precursors of the creative company are Edison’s laboratory and Andy Warhol’s factory.  The traditional office is a place for control and for gossip and small talk. It is inefficiency and waste taken to a new level.  People visit with one another, chit-chat, and get little actual work done. Just watch any episode of “The Office” for crying out loud.  With the rise of electronic technology, like the stuff I’m using now, we can get focused work done more effectively at home, on the road, in a coffee shop  and other venues than at the office. Ar home I work on the couch – I’ve given up my home office. Right now I’m working on a rattan lounge chair.

The office – or what used to be the office – now becomes a venue for social interaction, for catching up, for discussing joint projects. The social function becomes less about killing time and more important as a way to connect, build relationships and keep up. One trend I’ve noticed in my own work-style  is that when I meet with colleagues and collaborators at the office, we spend a lot more time catching up on each other’s lives  and bonding so to speak then even talking about our actual work. We then go home and send e-mail to catch up on that.

In a moment of unusually blunt honesty, the Wall Street Journal reports that Chrysler CEO Bob Nardelli said this at a major meeting with employees:

“Someone asked me, ‘Are we bankrupt?’ … Technically, no. Operationally, yes. The only thing that
keeps us from going into bankruptcy is the $10 billion investors
entrusted us with.”

They’re not the only ones. Welcome to the iceberg’s tip.

UPDATE: Major melting in progress: Friday’s New York Times reports the U.S. auto supply chain is now also experiencing massive declines in stock prices.

The New York Times asks: Who’s Buying up NYC Real Estate?” The answer: Europeans.  The globalization of what Wharton real estate expert, Joseph Gyourko, has dubbed “superstar cities” is a significant bulwark against massive real estate price declines in these global hubs.

“The exchange rate is like a gift from God for Europeans,” said
Danielle Grossenbacher, the broker for Coldwell Banker Hunt Kennedy who
showed the Millers around. “Everybody is feeling they have an
opportunity to purchase a piece of Manhattan.” The number of foreign buyers has doubled in the last two years, according to data from the research firm Radar Logic. In
just the last 18 months, they have bought one-third of all new condos
that were up for sale, said Jonathan J. Miller, an executive vice
president at Radar Logic and its director of research. “We’d
have had difficulty absorbing the elevated level of new development
coming on the market without foreign buyers,” Mr. Miller said. “They
are a key source of demand for new development.”

Hmmm…. So the weak dollar ends up filling America’s global hubs with global elites. I can hear the right wing bloviators already: “We’ve sold off our once great cities to hordes of chardonnay-swilling, espresso-chugging, artsy-fartsy cosmopolitan global elites, dependent upon low skill (illegal) immigrants for services.”  You think it’s bad now: Just wait for even more fear, anger and fuming about the evils of cities and the demise of good old American family values.

A new study by the University of Alberta shows a link between the density of fast-food restaurants in a city and obesity rates (pointer via Planetizen).

Spacing Montreal picks up my earlier post and adds this important point:

This sort of redevelopment reminds me of how downtown & inner city
Detroit has been rebuilt over the years: pockets scattered here and
there like patches on a devastated urban quilt. The problem with these
new developments is they have a decidedly un-urban character: suburban
style townhouses with garages out front surrounded by big steel fences;
CVS drugstores with similarly fenced in parking lots and strip mall
architecture; and wide roads where no building meets the sidewalk — all
located in what was once dense urban neighbourhoods. In a city like New
Orleans that is desperate for any kind of investment, watching this
unfold is intensely interesting from a city-building (or un-building)
point of view, but rather hard to watch from a human perspective, where
the suffering of these Americans does not seem to end. Poor NOLA indeed.

But then again New Orleans has Brad Pitt injecting his architecture and design savvy. What’s next: Britney Spears moves back and Perez Hilton takes direction of the rebuilding effort. What in god’s name does this constellation of urban renewal, federal intrusion, local arrogance and celebrity culture have to say about today’s society?