Economics

In the popular media much of the blame for the current crisis lies with sub-prime mortgages. Yet the main culprit was not the gullible homebuyer in Stockton or the seedy mortgage company. The real problem lay on Wall Street, and it’s addiction to ever more arcane financial innovation. As we try to understand the current crisis, and figure ways out of it, we need to understand precisely what, in the main, went wrong.  read more »

There is more than enough blame to go around for the sub-prime mortgage crisis, and the unraveling financial disaster. But I believe the fundamental blame lies in two places: A purely American NIMBY myth about homeowners being the only genuine contributors to their communities and a capitalistic axiom, presumably started and perpetuated by a troika among realtors, homebuilders, and mortgage lenders, that the only way for middle-income Americans to truly create wealth is through homeownership.  read more »

Let’s look at general urban settlement and suburbia from a geographic and demographic, not a planning or ideological viewpoint. There’s really no point to the fruitless and unscientific harangues about how people ought to live or about allegedly better or poorer forms of settlement.  read more »

By Joel Kotkin and Mark Schill

Suburbs may not have cooked up the mortgage crisis, but they absorbed much of initial damage. Now that Wall Street and the big cities are also taking the fall, suburbanites might feel a bit better — but there’s still lots of room for anger out in the land of picket fences, decent schools and shopping malls.  read more »

There is much speculation among economists and others about how close we are to the bottom of the collapse of housing prices. This is, of course, an important question, and goes to the heart of the wisdom or folly of the proposed $700 billion government bailout of financial markets, which is a consequence of their own profligate lending practices.  read more »

The current discussion in Washington can either lead to a rapid processing and recovery at the local level or a long drawn out destruction of local economies. This is particularly true of regions – Las Vegas, Phoenix, San Bernardino-Riverside, much of Florida – that have been hardest hit by the foreclosure crisis.  read more »

A big going-out-of-business sign on the Rite-Aid store at 7th and Los Angeles streets tells a bigger tale—a story I’ll call “Hype Happens.”

The Rite-Aid opened a few years ago with fanfare, arriving at just about the high-point of the hype over the “Residential Renaissance” of Downtown. Rite-Aid set up shop in the Santee Village project, an ambitious effort that saw a developer get plenty of help from various government agencies in order to convert a collection of mid-rise buildings from garment shops to residential lofts.  read more »

It’s tempting to look at the current financial meltdown – and the proposed bailout – with a Bolshevik mentality. Let’s line up the investment bankers, hedge fund managers up against a wall and spray them with an odorous substance.
If it were only so easy. Rescuing Wall Street may not solve many problems but letting the investor class implode won’t help many people either.  read more »

One way to see the federal rescue of the home mortgage market is to call it “the smart growth bailout.” True, the proximate cause lay with profligate lending practices. The flood of mortgage money covered the entire country, irrespective of state, regional or local land use regulations. That’s where the similarity stopped.  read more »

In the spring of 2003, I chaired an Urban Land Institute Advisory Services Panel focused on strategies for continuing the revitalization of downtown Birmingham, Ala. As in many cities this was driven by the stock of historic downtown buildings slowly being converted to either new office buildings or loft condominiums, supported by a handful of downtown cultural assets and public spaces. Our tour host proudly invited to the panel’s attention that three of the four buildings anchoring downtown’s “100 percent corner” were the high-rise headquarters of three regional banks.  read more »