Wednesday, November 30, 2005

Canada's Mayors Brace for Election

Paul Martin's government officially collapsed yesterday, paving the way for an election scheduled for January 23, 2006. While the issue of the Liberal party's corruption prompted the latest collapse of the minority government and "clean governance" promises to be a consistent campaign theme over the next few weeks, the mayors of Canada's largest cities are taking a proactive approach to make sure that urban interests are served by the next government.

One of Martin's accomplishments was the New Deal for Cities which funnels gas tax money back to cities for use on "sustainable infrastructure" projects--such as public transportation.

Most of the major cities have already signed agreements with the federal government to insure that the gas tax money continues to flow regardless of the party in charge. The mayors are broadening their view--in yesterday's meeting they agreed that the next government should provide them with a slice of the income and sales taxes, as well.

Whether that will happen is uncertain at this point. But it is a positive development that the New Deal will continue. Moderate environmentalists have welcomed it in light of Canada's continuing problems meeting its obligations under the Kyoto Protocol--a particularly embarrassing disclosure given this week's meeting in Montreal to discuss the post-Kyoto climate change agreements.

China's Cities: A Living Hell?

Given the recent tragedy in Harbin, Heilongjiang Province where, for five days, the city's water supply has been shut off due to an upstream toxic chemical spill, it might be an important time to point people in the direction of two recent excellent articles on China, environmentalism, and urbanism.

As a result of a decade and a half of extensive industrial growth, China's cities are among the most polluted in the world. The lack of strong enforcement of environmental protection, massive urban migration, and the centrality of polluting industries to the country's economic growth have all merged to create a pretty dire situation in many of the country's cities.

Bill McKibben, in the December 2005 issue of Harper's, has an excellent article detailing his recent trip to some of the industrial areas of the country. Download his article here (it's a very large .pdf file).

Also worth reading is a lengthy article on China's economy by Robert Skidelsky in the Dec. 1 issue of the New York Review of Books. Among the books he addresses is John Friedmann's China's Urban Transition.

China's balance of new prosperity and dire poverty is having varied and contradictory manifestations with regard to urban space. Home of the world's largest mall and cities of 4 million people with a water supply contaminated by Benzene, it certainly is rife with competing tendencies.

Of course, European and US cities of the nineteenth century exhibited these same contradictions in urban space. One of the ways in which these contradictions were "resolved" (if one argues that they are, indeed, resolved) has been through both the expansion of democratic accountability and the more recent offshoring of pollutive industries. Given China's totalitarian regime and the lack of options for offshoring industries--China is, more or less, the global "bottom of the barrel" in terms of labor costs--it seems that the China will likely have a different pattern of negotiating these contradictions.

Monday, November 28, 2005

When Corporations Build the City "Public-Private Partnerships" are all the rage these days. Municipal governments, strapped for cash and facing crumbling public infrastructure are increasingly looking to private companies to inject much-needed cash into re-development of roads, public transit and sewers.

While these arrangements may be convenient--or even unavoidable--for many municipalities, they demand intense public scrutiny given the fact that the financiers have their own interests to look after.

Australian MP Malcolm Turnbull has an interesting op-ed piece in the Sydney newspaper, The Age that mentions the new 2.1km Cross City Tunnel that runs under Sydney's central business district. The Tunnel was built and financed by CrossCity Motorway which will own and operate the tunnel for 30 years. Apparently, in negotiating the deal, the government of New South Wales may have struck an unpublicized agreement with the developer to insure that they receive a healthy return on their investment.

Turnbull alleges that the government is ignoring other remedies for reducing congestion and increasing mobility in order to guarantee that people's only option for getting around Sydney's CBD is to take the Cross City Tunnel, giving CrossCity Motorway a good chance for reaping large profits at the public's expense.

The New South Wales Independent Commission Against Corruption is set to investigate emerging claims of wrongdoing, so the story is far from over. For urbanists, this example should make us extremely skeptical about private involvement in providing essential components of the public infrastructure.

Many Sydney bloggers offer more information on the situation: The Pigs Are Flying, Modia Miontaur, Spleenie's Rant.


Sunday, November 20, 2005

Exploring Chicago's Alleys

The Chicago Tribune had a great series of articles a couple of weeks ago on the culture of alleys in the city. It was an excellent series that actually explored these spaces as important cultural and economic sites in the social geography of the city. Alleys are one of the most under-appreciated spaces in urban life, and its great to see a mainstream media outlet give them their due!

Redlining Returns to New Orleans??

The Dallas Morning News has an interesting article on the rebuilding of New Orleans. From the early days of settlement in the city, the Lower Ninth Ward was a cypress swamp that was subject to frequent flooding. Thus, its value as desirable real estate was minimal and it became the most affordable place for the city's historically marginalized populations. The levee projects of the past one hundred years kept it from total destruction--until Katrina.

Now, as New Orleans contemplates rebuilding a city that promises to be half its previous size in population, the question of which areas to concentrate rebuilding is a major issue. Apparently the old techniques of redlining are being considered. This technique has traditionally been used as a way to identify neighborhoods that do not have great potential for maintaining property values. If a neighborhood was redlined, people who wanted to purchase property in the area would have difficulty obtaining a mortgage. In the past, the racial makeup of neighborhoods was used as a prime indicator of maintenance of property values: more African Americans, less likelihood for maintenance of property values.

Of course, these determinations were based on racist assumptions that permeated the political culture of the United States until the emergence of the modern civil rights movement in the 1950s. It would be extremely problematic if these techniques were brought back to justify the lack of investment in a predominantly African American neighborhood following the worst natural disaster in the nation's history.

Thursday, November 03, 2005

Tax Reform and Urbanism

Earlier this year the US President appointed an advisory panel to offer recommendations for "simplifying" the federal tax structure. On Tuesday, the panel presented its report to Treasury Secretary John Snow.

Usually when conservatives like Bush speak of "simplifying" the tax system, it means finding ways to continue to expand income inequality in this country by decreasing the tax burden on the rich and increasing the tax burden on the middle class.

In conservative circles there was great hope that the Presidential commission would recommend a "flat tax" percentage or a national sales tax whose regressive nature would decrease the tax burden on the wealthy. Great conservative economic minds like that of former high school wrestling coach, Speaker of the House Dennis Hastert, have been advocating such schemes for years.

Rather surprisingly, the commission did not embrace a flat tax scheme but did recommend capping the mortgage interest tax deduction, home equity loan deductions, and eliminating deductions of local and state taxes.

This is pretty remarkable since the tax breaks--as they are currently structured--benefit those at the higher ends of the socio-economic spectrum significantly. Curiously, this is one of the reasons given by the commission in their recommendation. For more on the economic aspects of the proposals, check out David Burnori's op-ed from the Washington Post, Daniel Gross' commentary in Slate, and this article from today's New York Times.

Let me touch briefly on the portents for urbanization should these deductions be abolished. First, it is important to remember that metropolitan and suburban development in the US over the past 60 years has been largely shaped by federal tax and spending policies. Ken Jackson's seminal work, Crabgrass Frontier, gives a great background on this. Mortgage and tax deductions subsidize home owners and are largely responsible for the spawning the sprawling residential sub-divisions that are a fixture of the suburban landscape.

Private capital is attracted to these projects since the subsidy schemes artificially lower the market value of housing. Aided by compliant municipal governments who see the promise of higher property taxes, developers at the exurban fringe generally are given a green light for large-scale projects. These artificially low prices are one of the reasons for the much-publicized "housing boom" and the concominant affordable housing crisis which affects those low-income earners who cannot afford to buy a house.

Similarly, the ability for homeowners to deduct local property taxes is one of the reasons many suburban municipalities have superior public safety amenities and public schools. The fact that homeowners in affluent suburbs can write off their property taxes makes it more politically palatable to increase those taxes for quality public services.

Clearly the government involvement in these indirect housing subsidies benefits wealthier communities at the expense of poorer ones. But what would be the impacts on urban development should these deductions be reduced?

One of the arguments leveled by the commission is that the mortgage subsidy unnaturally attracts capital that would otherwise be invested in different sectors and the result is inefficiencies. They are probably correct in this assumption--however, they downplay the implications of shifting capital investment to other economic sectors.

One characteristic of the housing industry that differs from other sectors is that investment is, generally, tied to particular places. Construction creates many jobs that can not be outsourced. With the end of mortgage subsidies, capital would be invested in other sectors. Due to the increasing globalization of information technologies and manufacturing, it would not be unreasonable to expect large scale investment to pour into these non place-bound industries, continuing to improve corporate bottom lines, but doing little for the thousands employed in the housing industry.

Getting rid of the subsidy, however, would probably have an appreciable impact on suburban development. Housing value would diminish at first in order to adjust to the dictates of the market. There may be less incentive to build large, new developments at the urban fringe, however. Municipalities may be able to guide planning more efficiently without having to worry about satisfying the wills of corporate "mega-developers."

It is probably not even worth seriously discussing the commission's recommendations since they would be extremely difficult to adopt given the current political climate. Needless to say, Bush has shown no interest in making the tax system more equitable given his dastardly tax cuts for the wealthy at the beginning of his first term and his idiotic and misconceived plan to offer tax rebates to "jump start" the economy.

Furthermore, to challenge the mortgage subsidy would require substantial political courage--something hard to conceive coming from the most cowardly president since Warren Harding. Also, given the fact that suburban voters would be particularly hit by these changes, it is extremely unlikely that a Republican Congress would do anything to alienate this voting block.

There are also actually very good reasons to maintain these subsidies, which I'll take up in a future posting.

Of course, one of the main reasons for the commission in the first place was to deal with issues of economic growth in an era marked by wreckless spending deficits. Perhaps an alternative way to deal with this would be to hold Bush accountable for his miserable failure in foreign policy?