What City Observatory did this week

1. Which cities and metros shop most at small retail firms? A new “big data” set from the JPMorganChase Institute offers some answers. It uses 16 billion transactions from the bank’s customers in 15 metro areas to estimate the share of retail spending that goes to businesses of different sizes — as defined by the share of the local market they control in their product category. Since developers and politicians often speak of the value of small businesses, we mined the data to find out which metro areas spend more of their money at small firms. In a separate finding, the Institute itself found that residents of urban centers spend more at small businesses than residents of suburbs.

2. The variable value of walkability. Living in a walkable neighborhood is more prized in some cities than others. A new Redfin study found that each point on a house’s Walk Score adds $4,000 to its value in San Francisco, Washington or Los Angeles, but only $100 to $200 in Orange County or Phoenix. We’ve got qualms about the analysis (it didn’t control for the fact that walkable neighborhoods also tend to be closer to downtowns) but it adds nuance to the truth that people place value on proximity.

3. The politics of grand housing bargains. Interested in housing politics but lost track of the details of New York City’s affordability battle? We’ve got the one-pager for you, including a brief summary of Mayor Bill de Blasio’s two-pronged attack on high rents; a short update on the zoning battles since his bills passed; and some lessons for similar bargains in other cities. Here’s one: it can be helpful to bundle low-payoff, high-visibility affordability measures with high-payoff, low-visibility ones.

4. British lessons for American cities. Two months after Brexit, we look at a recent report from the UK think tank Centre for Cities, “A Century of Cities: Urban Economic Change Since 1911.” Stateside readers will find a useful mirror of the U.S. experience. Cities with high-skill workers have thrived, while those that remained dependent on physical work have not. For every job created in the industrial North, Midlands and Wales, 2.3 jobs were created in the services-dominated South. Even in the world’s first superpower, nostalgia is not a valid economic strategy.

The week’s must reads

1. The futility of economic development metrics. What gets measured gets improved — unless you can’t actually measure it to begin with. Municipal economic development organizations should stop fooling themselves that they can calculate precise economic payoffs for their investments, argue Ryan Donahue and Brad McDearman of the Brookings Institution. Tax incentives and other short-term job-attraction strategies can nudge firm location decisions from “maybe” to “yes,” but they can’t turn “no” to “maybe” — which makes attempts to calculate the ROI for any particular initiative ridiculous.

2. White flight from a developing “ethnoburb.” “Asians are only ‘model minorities’ when they are small in number with minimal influence,” writes Anjali Enjeti in Pacific Standard. In her Atlanta suburb of Johns Creek, 23 percent of the relatively prosperous population identifies as Asian — and it’s spurring all-too-familiar reactions from white people who fail to see anti-Asian behavior as racist. “Race, not education, is the fuel for white flight,” she writes.

essers flickr
Photo: Charlie Essers/Flickr.

3. A communitarian case for exclusionary zoning. It may be “gratifying” to suggest that “zoning conflicts are strictly class-based conflicts about assets between owners and newcomers,” writes USC planning professor Lisa Schweitzer, but it’s not that simple. Plenty of renters oppose new development, and for strongly held reasons, including “the desire that individuals have to maintain a specific culture.” YIMBYist progressives may believe in the righteousness of their goals, but pretending conflict doesn’t exist makes it harder to build coalitions for change.

4. “Peak Car,” revisited. Economic growth, low gas prices and easy auto credit have driven “blistering growth” in driving over the last two years, but is it permanent? The Frontier Group, one of the first observers to call the 2004-2014 slowdown in driving growth as more than a blip, takes a hard look at recent numbers and argues that though some assumptions (like continued expensive gasoline) have been dashed, others (like the sensitivity of consumers to gasoline prices or the impact of autonomous cars) are apparently in flux or hugely unpredictable.

New knowledge

1. Housing markets don’t seem to be self-correcting. The U.S. housing markets that were the most expensive in 1986 are mostly the still the most expensive, according to a Trulia analysis by Ralph McLoughlin. What’s changing fast, though, is the yawning gap between the priciest tier and the rest of the country. What’s driving this “great divergence” in housing prices? McLoughlin finds two strongly predictive factors: income growth and housing supply. Some lower-construction metros (like Miami) saw prices spike without much income growth, and some faster-construction metros (like Austin) added income but didn’t join the price spiral.

2. Incomes rise faster in integrated cities. Urban economies work better when high-skill and low-skill workers, and in some cases workers of different races, live relatively close together. Cities that were highly segregated by race and skill level in 1980 were less likely to see worker incomes rise over the next 25 years, according to a 2013 study by Huiping Li, Harrison Campbell, and Steven Fernandez revisited this week by the Chicago Policy Review. They also found that big income gaps between suburbs and central cities were associated with slower long-term income growth in the suburbs.

3. Exploring the city/suburb “regime change.” A paper from Penn’s Institute for Urban Research, authored by Arthur Acolin, Richard Voith & Susan Wachter offers a crisp, readable summary of the literature and some of the key data on the shifting economic and population balance between cities and suburbs. They conclude that the shift to a knowledge economy, the growing importance of education and the importance of place-based consumption amenities is likely to continue to drive growth toward the center. Whether cities can realize this potential opportunity hinges critically on fiscal, policy and governance questions.

The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.

Our goal is to help you keep up with—and participate in—the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.

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