Chicago

What the Blues Brothers and Ferris Bueller’s Day Off Tell Us About Gentrification

Aaron M. Renn — Sun, 11 Sep 2016 09:49:26 -0400

The Blues Brothers and Ferris Bueller’s Day Off are two of the seminal films set in Chicago. Indeed, Chicago itself is a character in both films.

The films are radically different even though released only six years apart. There are many ways to slice this. Some have said that one is the South Side movie (The Blues Brothers) and the other the North Side movie (Ferris Bueller). Some see one as more urban, one more suburban.

One other way to look at it is to see how the films portray an urban transition in progress. The Blues Brothers is a look backward at a fading industrial, working class metropolis. Ferris Bueller looks forward to an upscale, gentrified city.

I explore the parallels and contrasts in my new article in the Summer issue of City Journal, “Gentrification on the Big Screen“:

Florida might regard some of Ferris Bueller’s traditional settings for diversion—the Art Institute and Chez Quis, a fictional fancy French restaurant—as stodgy relics from the city’s older, pre–knowledge economy era. But the scene in which Ferris bluffs his way into Chez Quis for lunch, claiming to be Abe Froman, “Sausage King of Chicago,” is perhaps the most revealing one in the film—and it marks another contrast with The Blues Brothers, in which a French restaurant also figures prominently. In the earlier movie, when Jake and Elwood show up at the legendary Chez Paul, they behave boorishly on purpose, to compel a former bandmate now working a legit job as the maître d’ to quit and rejoin them. By contrast, when Ferris and friends crash Chez Quis, they foreshadow a changing of the social guard. The hip young friends are destined to become Chicago’s new proprietors. They will soon be remolding the city, and its restaurants, in their own image. Chez Paul closed in 1995. Today, the city’s highest-end restaurants—like Alinea, a sleek, uber-hip purveyor of innovative cuisine—represent the culmination of this transition. A 48-year-old Ferris might well be eating at Alinea today.

…

Watching these films today, viewers under the age of, say, 45 would be struck by how alien Jake and Elwood’s Chicago seems and how familiar Ferris’s Chicago has become. The vibrant working-class culture, tough old nuns, SROs, and Maxwell Street Market of The Blues Brothers have all either disappeared or survive only as shadows of what they once were. With a bit of cultural updating to cars, hairstyles, fashion, music, and phones, however,Ferris Bueller’s Day Off could be remade today, virtually shot for shot. Modern proto-hipsters might well still skip school to visit Wrigley Field, the lakefront, the Sears Tower Skydeck, or the Art Institute. Three decades after Ferris Bueller played hooky from the suburbs, the triumph of the gentrified city is complete.

Click through to read the whole thing.

Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

Photo: Aretha Franklin singing in a diner in The Blues Brothers. Image via City Journal

UberPool & LyftLine: How the New Carpools Will Change Travel

Joseph Schwieterman — Thu, 28 Jul 2016 08:35:38 -0400

How will new carpool options like LyftLine and UberPool affect the marketplace of transit services? When mobility conversations turn to Lyft, Uber and other ridesourcing — or ridesharing — companies, the discussion typically centers on their effects on the taxicab business. Here in Chicago, Lyft and Uber recently survived a turbo-charged regulatory battle with cabbies that could have forced them to entirely withdraw from our city.

Ridesharing carpools add a new dimension to the extraordinary rise of these companies. Many users have not until recently begun experimenting with carpooling options, but by all indications their popularity is accelerating. Both LyftLine and UberPool were unveiled in summer of 2014, and then rolled out gradually.

To use LyftLine or UberPool, a rider inputs his or her location and destination on a smartphone, which then displays two options — a traditional rate, and a discounted rate for those who choose to 'pool'. The driver of a pool may make other pickups and drop-offs. A four-mile trip on UberPool may cost around $6, whereas on UberX (the standard Uber service) it might cost $10; a taxi ride would run much higher.

In communities with lackluster public transit, carpooling fills an enormous void by giving millions without a private vehicle a new, lower cost travel option. Even in areas saturated with public transit, however, this new option promises to reshuffle how people move about.

The opportunity raises critical questions. Will significant numbers of time-sensitive travelers, including commuters, opt to use public transit less, in favor of rideshare service carpools? How much time can they expect to save? To what extent do the additional stops negate the benefits of this option, compared to using transit?

I created a controlled experiment involving 50 one-way trips between various urban locations in a transit-rich part of Chicago. Data collectors measured the differing costs, time, and conveniences associated with UberPool, trains, and buses. One person used Chicago Transit Authority (CTA) services while the other hailed an UberPool (Figure 1).

We evaluated only weekday trips during daytime hours to and from the north and northwest sides of the city, in order to focus on a transit-rich environment. Our trips, which linked the centroids of community areas, averaged about six miles long.

UberPool did not disappoint. Regardless of the type of trip involved, our study found that carpooling tended to get you there faster than public transit, although often not by enough for to justify — for many passengers — the cost difference. The average elapsed time for all UberPool trips was about 36 minutes, besting transit by about 12 minutes. UberPool was faster on 39 trips, while the CTA was faster on 11 (Table 1). The carpooling costs averaged $9.66, compared to transit’s $2.29.

Stops to pick up other passengers were not as prevalent as many might expect, with UberPool trips averaging just under one extra stop. Still, one fifth of all trips made at least two extra stops, while two out of the 50 trips involved three extra stops

The appeal of carpooling may depend on the type of travel involved. On downtown-oriented trips, the time savings averaged a mere six minutes. UberPool was faster on eleven of these, and the CTA on seven.

Moreover, UberPool can be challenging during rush hour, when it is slowed by traffic congestion and taking rapid transit is often faster due to the heightened schedule frequency.

We suspect that primarily people in a hurry, those carrying heavy or bulky items, or those uncomfortable with transit would be inclined to regularly carpool to work downtown. The level of exertion is also greater on public transit. Our transit passengers were unable to find seats on about one-fifth of trips, and walked more often. UberPool involves minimal walking, whereas the average transit trip involved about a half-mile trek. Eleven transit trips required passengers to hoof it for at least two-thirds of a mile, while three involved doing so for more than a mile.

On trips from the peripheral 'outer downtown' to the neighborhoods, though, UberPool outpaced transit by ten minutes. Carpooling starts to look more tempting to the transit rider in this scenario.

The most dramatic benefits from carpooling, however, involve neighborhood-to-neighborhood travel (Figure 2). Such trips can be painful to transit users in Chicago, in part due to our slow pace of getting bus rapid transit off the ground and our 'legacy' rail system, with its radial design that focuses primarily on travel to and from downtown. And busses on some routes stop every few blocks.

On these trips, UberPool dominates, averaging 28 minutes per trip, almost 19 minutes faster (about 40 percent) than transit. Carpooling was more than 10 minutes faster on all but four of our 23 trips, and more than an hour faster on one.

A notable negative aspect of using UberPool is, of course, the variability in pricing. Six of the 50 trips involved 'surge' pricing (premium fares due to heavy demand), resulting in prices as much as 60 percent above the normal fare. We did not study the price and speed of UberPool during the evening and late-night hours, when demand is reportedly heaviest, and when surge pricing appears to be more prevalent.

The inescapable conclusion is that carpooling services are appealing to far more than transit-averse and extremely time-conscious travelers, although perhaps not as an option that many commuters would use daily. UberPool tends to perform best precisely where transit is at its worst, e.g., on trips between the neighborhoods, especially during the off-peak periods when traffic is lighter.

On one level, our results support the conclusions of a new Shared Use Mobility Center/American Public Transit Association report showing that such mobility innovations tend to be complementary to public transit. Shared-use services like Lyft and Uber fill the gaps that exist in urban bus and rail operations, and encourage people to pursue lifestyles that do not center on private cars.

Still, carpooling should also be regarded as a potential game-changer. Federal guidelines recommend that analysts assume the average urban traveler values time savings at $24 per hour. An average traveler on an UberPool making a neighborhood-to-neighborhood trip may, therefore, by arriving about 20 minute earlier than a transit rider, derive a benefit from carpooling of around $8 per trip, which would be a far greater amount than the extra cost. The most time-sensitive travelers and groups of travellers would derive an even higher benefit.

Even though rideshare carpools represent a mobility breakthrough, it unfortunately continues to take a backseat in the taxi-centric debate over Lyft and Uber. It is certainly going to pose an increasing challenge to public transit agencies. Heightened competition in urban transit markets appears here to stay, and is now poised to bring dramatic changes to the way we travel.

Joseph P. Schwieterman is director of the Chaddick Institute for Metropolitan Development and Professor of Public Service at DePaul University in Chicago.

Flickr photo of the S2 smartwatch from Samsung Newsroom: Travel NYC with the Gear S2 and Uber

Chicago's Advantages

Aaron M. Renn — Mon, 11 Jul 2016 01:38:28 -0400

When I wrote that Chicago is the duck-billed platypus of American cities, I noted that there were a lot things about Chicago that were unique – both good and bad – putting it in a class of its own and making it hard to compare Chicago with other cities.

Today I want to put together a starter list of some of the positive distinguishing factors about Chicago. This doesn’t include things like a downtown construction boom because lots of places have one of those. If Chicago’s boom is big, well, it’s a big city. I only want to put something on the list if it is truly distinguishing, or perhaps something limited to only one or two other places.

I’ll create a starter list. Feel free to share yours in the comments.

Cheap – least expensive major urban center in America. A middle management level couple can afford a very nice condo in Chicago.
Only globally important financial exchange in America outside NYC (the CME Group)
Only full slate of globally renowned cultural institutions outside NYC
Only large scale, transit oriented central business district outside NYC – and with a skyline to match
Fantastic architecture
Not only does Chicago have great skyline, it’s got great vistas of the skyline even from within the city (something missing in NYC inside Manhattan)
It’s the alley capital of America
Improv capital of the world, and one of only three major training locations for comedy in the US (with NYC and LA)
Incredible lakefront park system
Most car friendly urban big city in America (traffic is bad, but much of housing stock comes with a parking spot, and there are plenty of stores you can drive to – great for families)

There are probably some things like food and music scene were you can rate Chicago as in a league above most cities, but it’s tougher to make that case since you can get great food everywhere now, etc.

Share your thoughts in the comments because I don’t want to leave anything out.

Photo by Doug Siefken

Chicago Is the Duck-Billed Platypus of American Cities

Aaron M. Renn — Mon, 30 May 2016 01:38:30 -0400

Census results last week show Chicago as the only one of the twenty largest cities in America to lose population. The freaking out over a tiny loss isn’t really warranted. The comparison to Houston is bogus. Etc, etc. Yet Chicago’s leaders have refused to grapple with the real and severe structural and cultural challenges that face the city. That’s something they need to do if they want it to succeed over the longer term.

I wrote about this in my latest City Journal web piece, “The Duck-Billed Platypus of Cities“:

When it comes to population estimates, municipal-level data is largely irrelevant, especially when comparing cities with one another. That Houston may soon outpace Chicago in municipal population doesn’t mean that much—the city of Houston includes vast tracts of suburbia, making for an apples-to-oranges comparison. Chicago’s metro area is much larger than Houston’s and will remain the third-largest in the country for years to come. Similarly, while Chicago has the most murders in America, its murder rate is lower than other major cities like St. Louis, Baltimore, and Detroit. Comparisons with Detroit, with its hollowed-out economy, particularly infuriate Chicagoans, who reside in what remains a major economic center. And Detroit’s population loss far exceeds Chicago’s.

But just because Chicago shouldn’t be compared to Detroit doesn’t mean that it should be compared with San Francisco.

Click through to read the whole thing.

Chicago photo by Bigstock.

Chicago Is Winning the Battle for the Executive Headquarters

Aaron M. Renn — Wed, 03 Feb 2016 00:38:45 -0500

The corporate headquarters used to be the primary measure of a city’s economic clout. Saskia Sassen, while not ignoring headquarters, documented how in the age of globalization, the resurgence of the global city was driven by demand for financial and producer services, not more and bigger HQs. As she pointed out in her seminal book The Global City, “Major cities such as London, New York, and Chicago have been losing top ranked headquarters for at least three decades.” Yet despite this they were coming back strong.

Back in 2008, I started observing a shift in the marketplace in which corporate HQs were relocating back to the city. But this wasn’t a traditional monolithic HQ, but rather a reconstituted, smaller version consisting of only the most senior people that I call the “executive headquarters.”

Crain’s Chicago Business has a major feature this week investigating the executive headquarters trend as it is playing out there. They point out that these HQs make for great headlines, but they don’t necessarily result in that many jobs.

ADM is Exhibit A in the rise of a new type of corporate headquarters, one that arrives from afar but packs light. These headquarters represent the pinnacle of the corporate pyramid, snapped off and relocated, free of jobs tied to operations and often midlevel HQ functions such as payroll, human resources or purchasing. To be sure, migrating headquarters offer benefits to the city: They boost demand for business services, their executives join the philanthropic scene and, of course, they confer bragging rights. But in terms of jobs, the farther a company travels to set up shop in Chicago, the fewer people come with it.

“The notion of the corporate headquarters in the ‘Mad Men’ world when there were hundreds or thousands of people in a building with the company logo . . . those days are gone,” says David Collis, a professor at Harvard Business School who studies corporate headquarters.

Click through to read the whole thing, which features me and my work on the topic. This is an important trend to grapple with.

The bad news, which the Crain’s piece highlights, is that the headquarters ain’t what it used to be. On the other hand, Chicago is winning the battle for them. These smaller executive headquarters, particularly for major global businesses, benefit from being in a global city. Chicago has lured a number of these from out of town. In line with Sassen’s findings that the “deep economic history of a place” matters, note that we see a lot of agro-industrial firms choosing Chicago: ADM, Con Agra, Mead Johnson Nutrionals, Oscar Mayer. This industry space is where Chicago has a major advantage over New York and other coastal cities.

A trend I see playing out, and which I am currently researching in more detail, is the bifurcation of HQ attraction. For executive headquarters of global firms, and for companies that are looking for an urban location, Chicago is reasserting its dominance as the interior business capital. But for those who prefer a suburban environment, or which maintain a mass employment HQ, the Sunbelt remains strong, especially Dallas, where Toyota is a building its North American campus. Dallas replicates many of Chicago’s non-urban advantages at lower cost and with a more suburban feel: central location and time zone, a major airport, a diverse economy, and scale. Increasingly it looks like Chicago is the urban interior capital, Dallas the suburban interior one. Stay tuned for more on this in the future.

Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.

Chicago photo by Bigstock.

The Fall of Rahm Emanuel

Aaron M. Renn — Thu, 17 Dec 2015 00:38:08 -0500

Rahm Emanuel, a man of obvious talent, drive, and leadership capacity, should have been an ideal person to run a big city like Chicago. Unfortunately, because of his stubborn unwillingness to admit and compensate for his flaws, that was not to be. After barely limping across the finish line in his re-election bid and tamping down the fallout from Moody’s downgrading the city’s debt to junk status, Emanuel has now been rocked by a truly huge scandal. The Chicago Police Department shot 17 year old Laquan McDonald 16 times, killing him, then did not release a video of it for over a year – including sitting on it during the entire election season. And that’s just the start of it.

My latest piece in City Journal, The Fall of Rahm Emanuel, looks at Rahm’s tragic trajectory:

Emanuel’s leadership style came with fatal flaws. A political streetfighter by inclination, he lacks an operational orientation. He didn’t appear to grasp the scope of the city’s financial problems until four years after he was first elected, when Chicago’s bond rating was cut to junk. His infrastructure trust fizzled. The schools went from bad to worse, with his first CPS leader forced out and his secondpleading guilty to corruption. He didn’t get it that Chicago’s police department hadn’t been fundamentally reformed the way New York’s and Los Angeles’s had been.

Emanuel’s governing style has been all tactics, no strategy. He’ll pick up the phone to twist the arm of a CEO or fight to win the day’s media cycle. But what’s his vision for the city? He has no idea how to make Chicago as a whole work over the long term. Nobody is great at everything, but Emanuel’s arrogance seemingly won’t allow him to address his own shortcomings. Famously vindictive, he alienated the local press and others, turning those who might have helped him into enemies. He also brought a Washington-style spin-control mindset to Chicago. In Washington, an army of apparatchiks and a compliant media lets politicians like Obama create a reality bubble. In national politics, perception is often is reality. But in local government, reality is reality. The West Side isn’t Benghazi. The people who live in Chicago can walk out their front doors and see for themselves what’s going on.

Click through to read the whole thing.

Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.

Photo: Chicago Mayor Rahm Emanuel, left, greets U.S. Defense Secretary Leon E. Panetta upon his arrival at a CEO roundtable in Chicago, May 20, 2012, courtesy of the Department of Defense.

How Chicago’s 606 Trail Fell Short of Expectations

Aaron M. Renn — Thu, 05 Nov 2015 00:38:49 -0500

When I was back in Chicago over Labor Day, I had to check out the “big three” new public space projects there: the Riverwalk, Maggie Daley Park, and the 606 Trail. The Riverwalk is a spectacular project I already wrote about. Maggie Daley Park, a new playground just across Columbus Dr. from Millennium Park’s Frank Gehry designed band shell, has been controversial and got mixed reviews. But I really liked it. More importantly, kids seem to love it. The place was jammed, and it appeared to be mostly locals. My cousin tells me her young daughter can’t get enough of the place. I’m not doing a post on this, but it looks like another big win.

The 606 Trail, a 2.7 mile biking and walking trail built on the embankment of an abandoned rail line, is a different story, however.

The problem with the 606 is not that it’s bad. In fact, it’s a nice, eminently serviceable rail trail. I won’t do a full writeup since Edward Keegan had a good review in Crain’s in which he asks, “Is that all there is?” that I think gets it basically right. Numerous other reviews are also available.

What I will do is highlight three areas that I think contribute to Keegan being underwhelmed: inflated expectations, financing problems, and an odd lack of attention to design detail.

Inflated Expectations

The fact that the 606 is an elevated trail on an abandoned rail line creates an almost inevitable comparison to New York’s High Line. The city did nothing to downplay those comparisons, and in fact suggested Chicago’s trail would actually be considered superior. For example, in national urbanist web site Next City, Deputy Mayor Steve Koch said, “A lot of people are familiar with the High Line — this is a concept far beyond that truly transformative project.” Frances Whitehead, lead artist for the project, told WBEZ regarding the High Line, “I think we’re gonna smoke them.”

It’s very clear the city wanted this to be considered a project worthy of national, not just local attention. Back to Koch, he said, “Someone will call you up and say, ‘I want to see the city’ Thisis where you’ll go; this is the way you’ll do it. And I think people are going to come from all over the globe.”

The very name speaks to the ambition level. Originally it was known as the Bloomingdale Trail, a name that technically still exists but which has been replaced for most purposes by “the 606.” The new name was taken from the first three digits of zip codes in the city of Chicago. Thus by using 606, the name itself suggests a project of citywide, not neighborhood, significance. The city also pushed for national media – and got it.

The problem is that the 606 is not even remotely another High Line, nor a project of citywide significance, nor a bona fide tourist attraction for the masses. It’s a neighborhood serving rail-trail that is elevated above the streets with some nicer features like lighting that you don’t see often. Like many other rail trails around the country, I expect it to have a significant positive development affect in the neighborhood, as well as being a great recreational amenity. All great things – if the trail had been sold that way originally.

To be fair, some like the Trust for Public Land, which was involved in the project design, were more realistic. Their CEO Will Rogers told Next City, “The High Line really reshaped the whole Meatpacking District. The Bloomingdale is going to provide parks and green space for neighborhoods that desperately need it, and bicycle access for people going downtown. It’s a different kind of investment.” But this isn’t the message that won out in shaping perceptions. The city would have been better off setting expectations much differently.

Insufficient Funds

The 606 Trail was primarily paid for using federal CMAQ transportation funds. According to DNA Chicago, the total price of the 606 is $95 million, with $50 million in CMAQ funds, $20 million privately raised, $5 million from the city, and $20 million to fill (for what purposes I am not sure, though see below).

The use of a CMAQ funding had key implications. One is that it more or less required the project to be primarily a bicycle trail. The entire edifice of obnoxious federal transport regs are in play here. Two is that it made this a CDOT project, not a Parks District one (though I believe the Parks District is now in charge of it). I believe many of the things that contribute to Keegan’s feelings come from the funding strings and a budget that was too low. In fact, this project to me brought back echoes of the CTA’s Brown Line expansion project in the way that various parts of it give off the vibe of being value engineered.

One of the things that got whacked in the Brown Line project, for example, was paint. Except for a handful of places such as over Armitage Ave, metal on the project was simply left in a raw galvanized state. I previously noted the austere results of that project give off an homage to prison yard feel. The same look is present on the 606. Consider these photos:

Mesh galvanized metal railing at the CTA Fullerton station.

Mesh galvanized railings along the 606.

There’s nothing wrong with using an industrial motif, which is very appropriate in Chicago. And obviously security for adjacent property owners is important. It’s also possible that these had to be over-engineered to meet DOT/federal standards, much like the Brown Line station railings for passengers that could stop a Mack truck. The designers may well have felt these were the best choices. But my gut tells me that, like with the Brown Line, this may have been a money issue.

A lot of people have noted the fact that the landscaping has not yet been fully planted or grown to maturity as a reason for the trail’s feel. That surely plays a role. But the preponderance of galvanized metal through much of it plays a big role in giving the 606 an austere feel.

This also demonstrates how the city’s financial problems have practical consequences. Because the city’s budget is in such bad shape, it had to turn to CMAQ, which imposed strings you’d rather not have in an ideal world. And you may not have the cash to do it right. (The Riverwalk doesn’t suffer from this, possibly because its commercial spaces generate revenues to bond against).

Design Oddities

The 606 also has some odd design misses. For example, here is what the Trail physically looks like. It’s a concrete biking path with a soft blue rubberized running path on either side.

Let’s see, where have I seen this design pattern before?

Fullerton L platform.

The CTA uses a similar blue shoulder area on its platforms. But in its case, the design pattern is used to indicate the edge of the platform and thus an unsafe area to stand. You are supposed to stand behind the blue line. Using a similar width blue area, even if a different shade, for a jogging path on the 606 violates a local design affordance, like putting a handle on a door and labeling it “Push.”

Then there’s this arch bridge:

The 606 Trail over Milwaukee Ave.

This design is dimensionally awkward, something Keegan points out too. Given that this is a rail trail, it’s also notable that the designers chose a steel arch pattern that is not idiomatic of rail bridge design, certainly not in Chicago anyway. This also makes me again wonder about the role of CDOT in the project. This arch structure is the same pattern they used for the Halsted St. bridge over the north branch of the Chicago River that Blair Kamin similarly labeled, “less than graceful.” (The Damen Ave arch bridge works much better, probably because the span is longer and higher, lending itself to more elegant design proportions).

The name “606” itself is also a bit off. Inside Chicago the reference may be obvious, but outside of its this name is likely to be parsed as an area code, particularly with the “0” middle digit from the original North American Numbering Plan. Today you frequently see people sporting their city’s main area code on shirts and such as a bit of local pride, particularly as area codes have shrunk down to city scale size in many places. The 606 area code is Appalachian Kentucky, however, not Chicago. Few people without a connection to Chicago will know that its zip codes start with 606.

These aren’t huge items, but cumulatively they add up. The little things separate great design from good, and the 606 missed some opportunities.

On the whole, this trail will be a great amenity for the neighborhoods it passes through, and also be legitimately functional for transportation given its elevated nature and the transportation lines it connects to such as Metra’s Clybourn station. It was fairly well patronized when I was on it, but with no sense of crowding. And this was on a nice Labor Day afternoon, suggesting that that chaos and safety issues of the lakefront path won’t be repeated here.

If only it had originally been sold for what it was instead of a High Line beater, had raised that last $20 million (plus a bit more, perhaps), and had a little more attention to detail in some design elements, the 606 would be probably be seen as something that significantly exceeded expectations instead of something that did not live up to the hype.

Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.

Techno Fixing the Urban Zone

Roger Weber — Fri, 16 Oct 2015 01:38:32 -0400

In 2008, when Chicago inked a deal to privatize its parking meters, a chorus of groans ensued. To say that the deal was widely panned is putting it mildly. Its detractors say the city accepted too little in exchange for turning over the operations of its parking meters for a near-eternal 75 years to a private company that promptly raised the prices and sued the city. To many, the deal appeared desperate and irresponsible; a prime instance of a city in the red buckling to the ambitions of a private operator and getting little in return except for a pittance of one-time cash.

The case of Chicago is not unique. While several other cities have flirted with privatizing large-scale city services, politicians who support even many of the best-constructed of these measures have been rejected at the ballot box.

The argument against privatization has primarily been a financial one. In most cases, it appeared that transferring the development and management of large city networks into private hands would at best yield equally adequate services, but for a much higher price to residents, while creating a barrier to cities’ long-term flexibility. Not long ago the verdict on urban privatization read more like an epitaph. Common sense dictated that city services could best be cared for in public hands. Major movements in city management like New Urbanism’s burgeoning lean urbanism would optimize choices about government decision-making. Public-sector and populist ideas like widespread bike lanes, traffic calming design features, urban farming, and streetcars appeared the best options available for driving future city development, and as the seminal techniques for optimizing livability and resources while eliminating congestion.

The shame about the damage that the perceived failure of the Chicago deal has inflicted on the reputation of urban privatization is that few have noticed the increasingly obvious relationships between privatization, data, and city services in the period since. Many planners continue to present “livability” and “placemaking” as topics best solved through traditional planning approaches, well removed from the explosion of privately developed data technologies. While keeping their eyes on the ever-coveted fractional percentage gains in bicycle ridership in the cores of the largest cities, they’ve largely missed the more significant transformations around us. The public-sector response to the failed privatization ploys of a few years ago has in many cases been to write off privatization forever.

But today, the private sector is offering better products. The Smart Cities Week conference in Washington, DC recently highlighted some of these advances, which range from programs to optimize transit systems (in order to speed up services and reduce the need for investment in hard infrastructure), to Uber-style trash pick-up that allows private waste management companies to electronically compete over who will empty a just-filled dumpster quickest and cheapest. Far from the expensive and resource-intensive pipe dreams that many have ascribed to these kinds of technological innovations (thus writing them off as impractical for the coming post-fossil fuel economy), most of these new products seem designed to reduce inefficiencies, lower costs, and minimize resource usage through precision monitoring and optimization.

Rather than making a key fiscal offering to cities in the form of large, up-front payments in exchange for the rights to take over ordinary city services (a useful tool for paying off debt, but a tough political sell given the high consumer payments needed to make the undertaking worthwhile to the private vendor), the private sector appears to have shifted its commitment towards making the case that technological advances can generate value on both sides of the equation. While the parking vendors in the initial privatization cases were hard-pressed to prove that they were able to offer services even on par with those of the cities’ existing systems, a commitment to research and development in urban scale technology is now allowing private vendors to offer services that are overwhelmingly more user-friendly, more efficient, and more advanced than municipal services.

Because so much of the private-sector focus has been on optimizing network operations, the notion that private management is inevitably more expensive than city management is fast-becoming obsolete. The question has shifted away from whether a city that receives an up-front payment ends up with a greater rate of return than it otherwise would have, and more toward asking how much value the privatization of a service will create for the city’s residents. While up-front payments may still be juicy bait, the real meat lies in across-the-board cost savings and noticeably better service options quickly coming on line.

The answer to many of these questions seems clear. Who is going to accept coin-operated parking meters and confusing, impersonal signage instead of interactive, clear, and usable ones? Who will be satisfied with a 10-minute walk to an inefficient transit system if a self-driving car would come to his or her door for a similar price? Why would a city install conventional street lights if a private operator could more cheaply operate energy-efficient sensor-activated lighting that can simultaneously forestall crime through remote monitoring? And who wants to live in a city where conservation objectives are primarily pursued through inconvenient regulations, parking restrictions, and limits on plastic bag usage, when hyper-local smart grid technology can achieve the same savings by automatically optimizing load storage, green roofs, solar, and wind power block by block, all while lowering prices, eliminating losses, and hedging risk through variable city and local networks? Nearly all of these products are already on the market.

Once city governments and voters realize that the private sector is beginning to offer services that are more efficient, more affordable, more sustainable, and more convenient than even the best conventional optimization practices being pushed today, it’s hard to believe that they will tolerate doing without them. If the newness of such systems also helps attract millennials wooed by ever-fancier gadgetry, then the case becomes even stronger.

The blind spot the planning profession has often shown to this kind of thinking is understandable and justified. Getting a good description of a 'smart city' from the technology industry is an exercise in tooth-pulling. And who really believes that corporate technology firms can make places as livable as those planners that are dedicated to designing for livability? The private sector hasn’t helped itself with years of offerings that seemed designed to bilk bureaucrats out of public money. Luckily, the technological advances are now being paired with better, more creative, and fairer financing mechanisms.

Hesitation by planners may be a good thing, because it has forced the private sector to begin to integrate the livability principles of urban design. Past perceived failures may give cities added pause, allowing a more thoughtful merge between planning objectives and privately-developed data capabilities.

But planners best not wait too long. Popular urban advances are increasingly being forged by technologists with little input (or even sometimes with disdain) from planners. Writing off technology and divorcing big data is not a winning formula. As Silicon Valley continues to boom with large-scale, cost-effective advances, the planning profession may increasingly lose power. Enter cities designed by corporate private-sector technologists, and city budgets rescued by the ever-resilient engines of private capital.

Roger Weber is a city planner specializing in global urban and industrial strategy, urban design, zoning, and real estate. He holds a Master’s degree from the Harvard Graduate School of Design. Research interests include fiscal policy, demographics, architecture, housing, and land use.

Flickr photo by Mark Turnauckas: a smart parking meter in Akron, Ohio.

Chicago’s Great Financial Fire

Aaron M. Renn — Fri, 17 Jul 2015 01:38:37 -0400

My latest piece is online in City Journal and is called “Chicago’s Financial Fire.” It’s a look at the ongoing financial crisis in that city, which has all of a sudden gotten very real thanks to a downgrade of the city’s credit rating to junk by Moody’s. Here’s an excerpt:

While some sort of refinancing may be required, the proposed debt issue contains maneuvers similar to those that helped get Chicago into trouble in the first place—including more scoop and toss deferrals, $75 million for police back pay, $62 million to pay a judgment related to the city’s lakefront parking-garage lease, and $35 million to pay debt on the acquisition of the former Michael Reese Hospital site (an architecturally significant complex Daley acquired and razed for an ill-fated Olympic bid). The debt-issue proposal also includes $170 million in so-called “capitalized interest” for the first two years. That is, Chicago is actually borrowing the money to pay the first two years of interest payments on these bonds. In true Chicago style, the proposal passed the city council on a 45-3 vote. Hey, at least the city is getting out of the swaps business.

Even with no further gimmicks, Emanuel will be six years into his mayoralty before the city can stop borrowing just to pay the interest on its debt. And without accounting for pensions, it will take the full eight years of both his terms to get the city to a balanced budget, where it can pay for the regular debt it has already accumulated.

Click through to read the whole thing.

Rahm donned a sweater during his reelection campaign and told the public he recognized he needed to change his ways, saying that he knows he “can rub people the wrong way.” The title of that ad was “Chicago’s Future.”

I decided to take him up on his new approach. When I was working on this piece, I tried to get some information of the mayor’s press office. I asked them such extremely hard hitting questions as, “Is there a consolidated location where all of the mayor’s most recent financial proposals can be seen in their current form?” I emailed them and got no response. So I followed up with a phone call. I was put on hold for a while then told the person I needed to talk to was away from her desk, but I should email her at a XYZ address. So I did. No response. This is the same pattern all previous inquiries I’ve made have followed, though I believe on occasion I’ve been put through to a voice mail from which I got no callback. Now, it’s not like I try to get stuff from these guys every day, but the message is pretty clear. I gather that this experience is not at all unusual when dealing with Rahm.

Having his press office simply refuse to respond at all to even basic inquiries from (the apparently many) people on his blacklist is naught put pettiness. Rahm takes people who could be friends and does his best to turn them into enemies. No wonder the Sun-Times titled a recent about him, “Rahm’s troubles plentiful, allies scarce.”

Thus it is that Chicago, a city of grand and expansive history and ambition, a city so big it overflows the page, comes to have a mayor with a certain smallness of spirit.

Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal . He writes at The Urbanophile, where this piece first appeared.

Chicago photo by Bigstock.

Global Cities in the 21st Century: a Chicago Model?

Kris Hartley — Tue, 28 Apr 2015 01:38:31 -0400

As America’s “third” city, Chicago competes for international attention against the usual rivals: New York and Los Angeles. Even San Francisco, next to Silicon Valley, claims prominence for its cutting-edge industries and progressive culture. Ultimately, though, Chicago’s domestic peers have global status through definitive leadership in industries with visibility and impact (New York in finance, Los Angeles in entertainment, Houston in energy, and San Francisco in technology and innovation). Chicago has dim prospects of replicating such undisputable competitive advantages, but it may not need to.

Global status in the 21st century favors international collaboration over industry dominance, for three reasons. First, the innovative nature of emerging industries and modernizing traditional industries shifts competitive determinants from resources to ideas. This equalizes the international knowledge race, with companies seeking ideas regardless of geographical origin. Second, technology-enabled connectivity integrates previously isolated regions into the global economy, creating what a recent Foreign Affairs article labels a “unified global marketplace for labor.” Third, the dynamic knowledge sector rewards flexibility over size; footloose over big and rigid. Accordingly, local workforce size loses relevance, good news for small cities. The digital revolution enables geographic dispersal of talent through “internet-based globalization.” In short, collaboration enables flexible capacity, while international collaboration taps a vastly more diverse and hungry talent pool.

Is Chicago prepared to abandon pursuit of industry dominance and seek global status in the hyper-connected knowledge economy? The city already boasts corporate prominence and diverse lifestyle amenities, and has even seen post-recession growth in emerging creative industries like high-tech and film. Chicago also has a lively private sector, and visionary, pro-developmental planning from both its recent and distant past. In 2013 the city committed US$ 3 billion to revive urban neighborhoods, through a public-private initiative that Mayor Rahm Emanuel insists will help Chicago “live up to its potential as the global city that it should be.” Such factors make a city great, but do they make it global?

Despite being a paragon of economic diversification, Chicago lacks an undisputed position in any transformative and globally relevant industry, as enjoyed by its coastal rivals. The city is even perceived by some as a striver whose influence is more regional than global. For example, in a 2012 New York Times article, a relocation expert stated that global business and political leaders “have an idea of Chicago that is 20 or 30 years out of date.” Indeed, Chicago has a development history that is steady but not exceptional. Before its recent struggles, the city’s plodding, linear economic progress was a product of the typical determinants: population growth and path-dependent agglomeration. Outdated theories recommend that Chicago aim for inimitable dominance in an emerging industry. However, such efforts would be misplaced in the current global economy.

In practice, a growth approach favoring industry dominance has two problems. First, it ignores the fact that the most elite global cities acquired prominence the hard way: through gradual institutional evolution. Dominance across multiple industrial eras is only the shiny product of underlying economic, social, and political circumstances that generated structural flexibility. These circumstances, rather than industry prominence itself, should be the focus of urban growth strategies prioritizing prepared opportunism over industrial roulette.

Second, the industry dominance approach unduly emphasizes competition, with a zero-sum philosophy that marginalizes collaboration. No industrial windfall or shock-opportunity has fundamentally transformed Chicago’s competitive position since the 19th century, when connectivity through railroads, canals, and westward expansion made the city a trading and logistics hub. Chicago can now develop global status through connectivity of a new sort, as a collaborative leader in emerging global networks for trade and production. It can even anchor an inter-governmental urban network addressing economic challenges in large inland cities lacking inimitable competitive advantages.

Historically, an unchallenged advantage in trending industries generates global visibility and relevance. However, modern embodiments of the dominance model are fundamentally unstable, in particular due to sector cyclicality. Only three cities have historically maintained near-permanent global status: Tokyo, London, and New York. Their type of competitive advantage is institutionally entrenched and therefore largely inimitable, although Tokyo has struggled throughout Japan’s multi-decade economic slump. Aside from these mega-cities, Chicago’s global aspirations face significant competition from ambitious secondary cities. Rapid economic growth in Asia has attracted capital to places whose names were just decades ago scarcely recognizable in the West (e.g. Wuhan and Guangzhou, both with populations comparable to New York’s).

A 21st century growth strategy should not assume zero-sum economic competition, but instead emphasize membership in the right “clubs.” Inter-urban cooperative networks are increasingly common; for example, Singapore is collaborating with Indian cities on “smart” development. This type of soft-diplomatic relationship is a form economic symbiosis that emerges from a “flattening” world. Networks also emerge around industry complementarity (e.g. Los Angeles-Nashville-Austin in entertainment, Oklahoma City-Dallas-Houston in energy, and Singapore-New York-Frankfurt in finance). Chicago must contemplate what it offers as a network partner, and move early in establishing inter-urban relationships to jointly capture global opportunities.

Recent history is littered with failed urban growth strategies derived from outdated models. For example, to quickly garner status many cities have made grandiose commitments such as Olympic bids, sports stadiums, and ambitious megaprojects. Such efforts are cheap and politically expedient to announce, but drain municipal coffers during implementation. Chicago can alternatively stake its future on the more sustainable and farsighted growth model of networked interdependence. An internationally connected economy may not be glamorous, but it is certainly “global” and can also be diverse and stable, as quietly proven by some of the world’s more creative secondary cities (e.g. Toronto, Sydney, Amsterdam, and Bangalore). Chicago must decide first what kind of status is wants, and ultimately whose company to keep.

Kris Hartley is a Visiting Researcher at Seoul National University and PhD Candidate at the National University of Singapore. He focuses on economic policy, urban planning, and governance innovation, and has a decade of experience with government agencies, community development corporations, and research institutes. His book Can Government Think? Flexible Economic Opportunism and the Pursuit of Global Competitiveness proposes a model for urban economic growth through the alignment of institutional structures and administrative processes supporting evidence-based policy. His work is available at www.krishartley.com.