Too Far Gone to be Saved?

I had an interesting juxtaposition tonight.

As I listened tonight to the sound of bricks, plaster and concrete from North Intermediate School being loaded into dump trucks, I was reading an article in Preservation magazine, published by the National Trust for Historic Preservation. And it got me thinking.

What we heard from the owner of North, of course, was that, upon inspection, the building was too far gone to be saved.

Over the years, we’ve heard that a lot in Saginaw. The Feige’s building was too far gone to be saved. The old LaSalle Lounge is too far gone to be saved. Most of our downtown was too far gone to be saved. Even several of the buildings that have been or are being saved.

So let’s take a look at a picture.

BookCadillac2

All the copper has been looted. The leaky ceiling has left the plaster completely destroyed. It’s infested with vermin.

Clearly, as any lay person can see, this building is too far gone to be saved. About two years ago, I took a tour, with City Council members and members of Saginaw’s Downtown Development Authority board, through buildings on the 200 block of East Genesee. This is the kind of thing we saw. Some city officials and several members of the DDA board said “these buildings are too far gone to be saved.”

Now, let’s take a look at the room pictured above … as it looks today.

BookCadillac3

This was, and is, the Venetian Ballroom in the Book Cadillac Hotel in Detroit.

Now, let’s take a look at a another building, an industrial structure. Been vacant for many years. It, too, had all the scrappable metal removed, had been badly damaged by water infiltration, wildlife and vandals.

BaltimoreDesign1

To Saginaw, definitely too far gone to be saved, right?

This building is in Baltimore, and the complete derelict state it was in made it an appropriate setting for occasional scenes of the HBO drama series The Wire. Today, though, it’s a featured story in Preservation:

BaltimoreDesign2

Let’s think about this. In Baltimore, they took a seriously compromised industrial building and, being creative with the financing, turned it into a school.

In Saginaw, we can’t take a school building that’s in far better condition and turn it into anything except a pile of rubble.

Why?

Because we’ve always done it this way. We got on the urban renewal, if-it’s-old-get-rid-of-it bandwagon in the ’50s. But unlike nearly every other city that has successfully launched a rebirth, we’ve stayed on that bandwagon.

Despite evidence before our very own eyes that it’s foolish. The Temple Theatre (which came perilously close to being razed), the Bancroft/Eddy buildings, the Strouse-Hopkins apartments, most of the bars in Old Saginaw City, Jake’s, the Cathedral District … if you look at some of the most important projects in Saginaw, “old” buildings are at the center of them.

Maybe we’ll learn someday. Hopefully, we’ll still have a few historic buildings left when we do.

But in the meantime, when you hear people around here say, “it’s too far gone to be saved,” understand that they’re probably not talking about the building.  They’re talking about their attitude.

Photos of the Book Cadillac from The Morning News and the Book Cadillac Westin. Baltimore School of Design photos from Preservation. 
Advertisements

Stop Subsidizing Surplus Construction

National Initiative 1

Who pays for all this "growth?" Why, we all do ... in more ways than one.

Who pays for all this “growth?” Why, we all do … in more ways than one.

According to the 2010 u.s. Census, America has 115 million households. But it has 132 million houses. Which means just under 13 percent of America’s housing stock – 17 million units – is vacant.

Now, this would make perfect sense if the American population had declined by anywhere near 17 percent over the last 40 or 50 years. But it hasn’t; in fact, it’s grown by that much.

And it would make perfect sense if there were some mechanism in place to help correct this.

But there isn’t.

In fact, there’s a huge mechanism in place to make it worse. And it costs the U.S. government between $60 billion and $100 billion a year.

It’s the home mortgage interest deduction. By making the entire value of interest you pay on the mortgage for your residence, it encourages you to go big when you go home.

The program was designed to encourage home ownership. This is because it’s an article of faith in American public policy that home ownership is a vital part of healthy communities.

I wouldn’t necessarily disagree with that premise; people who own their homes are more likely to keep them up and improve them than landlords are. They become stakeholders of some degree of permanence, investing their own equity in the community.

What’s disputable, though, is whether the home mortgage interest deduction actually increases the rate of home ownership. Canada and the United States have almost the same rate of owner-occupied housing. Yet Canada offers no mortgage tax deduction.

What’s indisputable is that the U.S. home mortgage deduction encourages people to buy more expensive housing. It’s also indisputable that it provided most of the air that filled the real estate bubble from 1996 to 2007. It’s important to realize that the law of supply and demand is actually the law of supply, demand and price. By instituting an incentive that influenced price, the government encouraged oversupply.

This was promoted by the fact that, somewhere along the line, we began to look at “new housing starts” as a key economic indicator. I’m of the belief that this is partially the result of advocacy by the home building and real estate development industries. After all, it’s intuitive to think that if we’re developing new property, building and buying new homes, it’s a sign of a robust economy.

But it’s actually a sign that the economic strength of other industries – most notably agribusiness – have declined to the point that their real estate can no longer generate income; that we’re spending billions of dollars to create excess and redundant infrastructure while the roads, bridges and sewers we have are crumbling, and … well, follow the money to see who really benefits.

In 2008, we all saw the result – and we saw who bears the brunt of the effects most sharply. Our cities.

In America’s urban core cities – the industrial heartland in places such as Saginaw, Flint, Pontiac, Detroit, Lansing, Grand Rapids, Jackson, Bay City – housing stock is, on average, at least 75 years old or older. These are cities that were built up during the growth in American industry from 1900 up through the 1960s and ’70s. And they are cities that were increasingly abandoned from the ’70s on.

Many Republicans (and most Libertarians) want to completely eliminate the home mortgage interest deduction, if for no other reason than it helps simplify the U.S. tax code. It is currently on the chopping block of the House Ways and Means Committee’s draft tax reform legislation.

And if I had to choose between getting rid of the deduction altogether or changing nothing at all, I would say eliminating the credit will do more to help urban America.

However, if we are serious about reinvesting in our cities, we should consider an alternative: tie the deductibility of the mortgage interest to the age of the house.

For example:

  • Joe builds a brand-new house in a suburb. His mortgage interest is not deductible at all.
  • Bill buys a 110-year-old house in the city. His mortgage interest is 100-percent deductible.
  • Dave buys a 75-year-old farmhouse in the country. His mortgage interest is, let’s say, 75-percent deductible.

There are many ways to establish a formula for deductibility; each would use the age as recorded in the municipal government’s assessor’s records.

This shift would accomplish four important goals:

  1. It would reduce, by more than half, the actual dollar cost of the deduction to the U.S. Treasury. It’s not as good as completely removing it, but it’s a start.
  2. It would slow the growth of surplus housing. Needless to say, home builders, among others, are heavily invested in creating that surplus. But it’s important to remember that rehabilitation and remodeling of existing buildings is more labor-intensive, and new construction is more material-intensive. Dollar for dollar, rehabbing and remodeling creates more jobs and keeps more money in the local economy.
  3. It would reflect the higher investment necessary to maintain older homes (and create those jobs for builders). Absent a federal historic preservation tax credit on owner-occupied residential properties, there is no financial incentive for homeowners to invest in buildings that are already here. And while the construction industry may dispute this, there are significant economic and environmental benefits in investing in buildings that already exist This would help provide a greater incentive to do it.
  4. Our cities will not survive without a reversal of the disinvestment of the last four decades. No one single activity would spur urban homesteading like this one. It would create a wave of urban residential reinvestment that we have not seen since the 1920s.

 

Educate Better, More Prepared Citizens

Statewide Initiative 5

Music education

What subjects make them better citizens? Why, the ones we cut first, of course.

Entire books have been written about ways to reform our educational system, and they offer a wide variety of diverse – and often opposing – solutions. But this piece is about fixing cities … which, as frightening as it is to admit, is easier than fixing our educational system.

If we were to focus on three actions that would be a) impactful, b) achievable and c) (at least theoretically) simple to make a positive impact on our urban centers, they would be:

Stop Trying to Prepare Every Kid for College

We’ve been sold a vision of America in which every person has at least a baccalaureate degree, and it’s created an environment in which we see any child who’s not “college material” as an utter failure destined for a lifetime of minimum-wage hell.

For the smart inner-city minority kid who knows his family can’t afford a four-year degree, we’re telling her pretty early that the “normal,” accepted route to the top is blocked. We’ve not only created a sheepskin ceiling, but we beat kids to death with it.

In the meantime, the skilled trades – in construction, machining, patternmaking – are crying for candidates, and our cities are crying for jobs.

The educational establishment will say our jobless rate is the result of kids who “aren’t prepared for the jobs of the 21st century” (which simply whaps those kids with that sheepskin one more time). But it’s really a matter of allowing children to be exposed to career paths that don’t require a four-year degree – and helping their parents understand the nature of today’s skilled trade occupations.

Running a five-axis CNC mill isn’t the gritty, greasy job we think of when we hear “machining.” It can be rewarding and fulfilling, and has more in common with a computer operator than it does with the picture in our mind of the guy in oil-soaked overalls standing knee-deep in swarf.

Best of all, a kid who takes the skilled trades path still has other options open. He can go to college while he’s earning decent money and eventually move on to something else. Which seems a little smarter than graduating from college – with tens of thousands of dollars of student loan debt hanging over his head – and, in many cases, no guarantee that he’ll be able to find a decent-paying job in his field.

Our k-12 education system needs to expose children to a wide variety of career paths instead of herding them, like cattle, into one of two pens: college, or failure.

We seem to be making inroads in this direction. The Snyder administration has made STEM education a priority. But as a society – and more importantly, as teachers and parents – we need to recognize that $30k in student loan debt might not be the best way to launch a career.

Make Arts Education a Priority

When a school district gets in financial trouble, what’s the first thing that gets cut?

The arts, of course. When resources are scarce, we can’t waste them on foo-foo la-la frills like music and pretty pictures. We need to concentrate on readin’, ritin’ and ’rithmetic.

Now, we can easily see the first problem here just from the standpoint of elementary motivational psychology. It’s like telling a toddler that, yes, she has to eat her vegetables, but we can’t afford any pudding.

But there’s a deeper and far more sinister result from this.

The Research Institute has developed what it calls “developmental assets” – characteristics or qualities that are markers of a child’s social, intellectual and emotional development. Which assets children have – or don’t have – at certain age levels can help predict, among other things, whether or not a child will end up practicing high-risk behavior: alcohol, drugs, crime.

Most longitudinal studies consistently note one developmental asset in particular that appears to get grade school children off to a stronger academic start and steer them away from high-risk behavior: creative activities.

The arts.

The first thing that gets cut when money gets tight is the one thing that most likely will make that child a successful student and productive citizen.

The creative expression and challenges offered by the arts enhance problem-solving skills and create a more rounded individual – one better equipped for, as they say, the jobs of 21st-century “creative economy.”

Yet as I write this, schools are laying off most of their “arts” teachers. Why?

Because while the arts might be the best preparation for the important test we call “life,” they don’t figure much in the be-all and end-all, the alpha and the omega of our educational system and the political system that provides its funding: the MEAP.

Which leads us to …

Stop Teaching to the Test

As we have attempted to take a more “businesslike” approach to “managing” education we’ve developed programs such as No Child Left Behind and Race to the Top. They’re well-intended programs that make an effort to fix an educational system that is, if not exactly broken, certainly not, as teachers often said about me, “performing to his potential.”

The biggest flaw with these programs, though, is their most onerous and malignant reliance upon “metrics.” Because the metrics, in this case, are standardized achievement tests.

The flaws in such testing, such as cultural bias, have been well documented. But those aren’t even the biggest problems here.

Perhaps the largest problem with our over-reliance upon standardized tests to measure the performance of children, their schools and their teachers is that it has created a system that teaches to the test. School is no longer a place where young minds explore the world, discover new ideas and shape their passions.

It’s a place where they commit to rote memory a set of facts that are on a test. This treats music, the visual arts, literature, history and philosophy as unnecessary “extras.” But in fact, they are how we create well-rounded, thoughtful, curious people – people who have the capacity to become wise, instead of just smart.

We have a lot of smart people in the world. We don’t always have enough wise ones.

Standardized tests don’t measure the most important things school should impart upon a child: the love of learning. And the irony is that the children who do, indeed, most love to learn – who are the children who become the inventors and statesmen and entrepreneurs – often don’t perform as well on standardized tests. Because their minds aren’t standardized.

Worse, standardized test scores become a yardstick that measures not the object that needs measuring, but the shadow it casts in a particular kind of light.

I’ve often said that using a school system’s MEAP scores to predict how well my child will perform is a little like predicting my heart attack risk based on the statewide average cholesterol level.

Yet at the first sign of lowered achievement test scores, websites such as citydata.com make their lists, politicians pontificate and parents panic. The most involved parents pull the best students from that school or district to somewhere “they’ll do better” – even though, in all likelihood, those children would do well in anywhere.

Our submissiveness to test scores then has the bizarre side effect of drawing the best children and the most involved parents out of the schools – and away from the peers – that most need them.

Standardized tests have their place. But their place should not be the supreme arbiter of every aspect of our educational system.

Introduce Municipal Fiefdoms To The 21st Century

 

Statewide Initiative 4

Michigan's EVIP: A stick cleverly disguised as a carrot

Michigan’s EVIP: A stick cleverly disguised as a carrot

As the history of nearly every township will tell you, the township government is the oldest form of government still operating in the United States. It follows the pattern of the 17th-century settlers in the New England colonies, who organized into “towns” by geographic proximity. The township offered a simple and effective form of local home rule.

As states joined the United States union, they each had, of course, a state government. To efficiently administer government services down the line, those states were subdivided into – in most states – counties. But counties were still pretty large in the days when roads were ruts of dirt and the main means of transportation was horseback. So to ensure a more direct line of local service – and to make sure everyone could get to his or her local government office, transact any necessary business and still get home that same day, county governments in most states were further subdivided into townships.

For the expediency of travel, they were generally restricted in size: most Michigan townships are 36 square miles. That way, when you went to pay your taxes, vote or speak up at the town meeting, you didn’t have to travel more than eight to 10 miles to do it.

Where population became a little more dense, new subdivisions broke off – as villages and cities, each with their own local government structure. And, as years went on, the range of services local units of government were expected to provide grew.

Today, Saginaw County, Michigan has 815 square miles and just under 200,000 people – making it just a hair smaller in area than Jacksonville, Fla. … and with just a quarter of its population.

Yet we have 35 local units of government: 27 townships, five villages and three cities. At least eight police departments (not including the county Sheriff), more than a dozen fire departments, 35 elected bodies and nearly that many paid elected or appointed (or both) officials.

In a time when resources grow more and more scarce, we have neighboring municipal governments competing for them – often to provide services that are, essentially, redundant.

Why?

Because we’ve always done it this way. We set it up so Farmer Brown could get to the township hall to pay his taxes and cast his vote and still get home in time for supper.

In many cases – Saginaw is a good example, as are most distressed industrial-age cities – there’s a secondary reason. The surrounding suburbanized townships are, by and large, heavily populated with people who left the core city. And they will tell you they got out to get away from a litany of urban problems –  crime, blight, rising taxes, declining property values,  congestion (and, if they’re completely honest, people of color.) They don’t want any part of “the city’s problems” and they will put up stiff resistance to the very idea of regional consolidation.

Of course, this is like your liver saying, “screw that colon cancer; it’s not going to affect me.” And we’ve already seen many “urban” problems metastasize, particularly to inner-ring suburbs.

But I’ve heard countless township officials say something very much like this: “I think consolidation would be a great idea … but my voters would kill me.”

In the meantime, core cities are cutting police and fire personnel. Urban firefighters struggle with aging trucks, while, often less that five miles away, brand-new firefighting vehicles sit largely unused.

I don’t draw these parallels because I think this is “unfair” – although the conditions that led us to this point haven’t always been fair. I draw them because they simply do not serve the best interest of a region – any region – as a whole.

The attempt by Gov. Snyder and the Michigan legislature to incentivize voluntary consolidation of services is interesting, but ineffective. Statutory revenue-sharing formulas are now tied to an Economic Vitality Incentive Program (EVIP), and one of the key scoring criteria of that system is consolidation of services.

It has two main flaws.

First, the bulk of the incentive goes to the wrong party. If you want to encourage a city and several surrounding townships to form, say, a metropolitan police and fire district, the parties most likely to resist will generally be the townships. See “we got out of the city” above, but they will argue that they have the most to lose from the merger. And in many ways, they do.

On the other hand, townships will argue, the city involved has the most to gain. And in some ways, it does. But the greater incentive goes not to the party that will resist the move, but the one that will more likely welcome it with open arms – and, for all practical purposes, shouldn’t even need an incentive.

After all, a two- or three-percent bump in revenue sharing is negligible for a suburb that has a smaller budget, gets a smaller share and has a more stable (and probably growing) tax base and far lower legacy costs. As we have seen, suburban and rural townships took a 10-percent hit on property values while cities lost 23 percent. Most townships remained relatively unscathed. Cities haven’t.

The second flaw is more fundamental. Gov. Snyder is  trying to turn a stick into a carrot. It takes revenue that was, through the original intent of the legislation, intended to be the cities’, and transmogrifies it into an incentive. “I’m screwing you, but if you do this, I’ll give you back some of what I screwed you out of.”

If the legislature and governor truly understood the difference between a carrot and a stick, revenue sharing would have been left in place, and EVIP would incentivize new money.

Saginaw, like many other cities in Michigan that straddle rivers, was once two cities: Saginaw City on the west side of the river, and East Saginaw on the other. An act of the Michigan legislature forced them to consolidate into one city in 1889.

So why are we taking such a passive-aggressive approach to consolidation and shared services now?

When Saginaw and several other cities were consolidated in 1889, it was controversial. As we have seen recently as schools have consolidated, people hold on hard to the past, and giving up your municipality’s identity is a bitter pill.

We know what happens to elected officials who force voters to swallow bitter pills.

Lansing has the ultimate hammer in forcing municipal consolidation and shared services. It doesn’t have the courage to use it.

Instead, it opts for an “incentive” that really isn’t … one that allows the state’s legislative and executive branches to wring their hands over all they’re doing to help cities if only the elected officials would do what’s right.

The only way we’ll see real regional consolidation of municipal services into a far more sensible and efficient delivery system is through acts of legislators who are elected to represent those entire regions. Forcing might not be the best approach, but they could better encourage it through an incentive that is as attractive to the townships as it is to the cities – and one that is more carrot than stick.

But that takes a brand of political courage I don’t believe exists in Lansing today.

 

Stop Me-Too-ing Urban Incentives

eastwood

“Downtown” Lansing Township

Statewide Initiative 3

Once upon a time, the cities were our centers of commerce and residential density. But then, helped by the interstate highway system, Michigan’s subdivision law, higher crop yields due to factory farming, the home mortgage income tax credit, fear of living with “those people” and a real estate market built not upon demand but “the deal,” people began moving to ever-expanding suburbs.

We were foolish enough to call it “growth” when, in fact, it was simply movement. And it led to a decline in population and real estate values in our cities.

Some well-meaning legislators, recognizing the importance of incentives, came up with programs designed to help encourage redevelopment in the inner cities. These generally consisted of special tax capture districts – in which the property taxes generated by improvements (there’s that negative incentive again!) could be captured and reinvested in the district, rather than paid out to the taxing entity.

One of the earliest was the downtown development Authority. It was soon joined by other programs, such as a brownfield development credit, used to mitigate costs of cleaning up former urban industrial sites.

And then a funny thing happened.

I have three children, ages 12, 10 and 7. If the 12-year-old gets a treat, the 7-year-old demands one, too: “Grace got one; I should get one, too.”

Michigan legislators haven’t shown much more maturity than my pre-teens.

“Hey, Detroit gets a DDA,” said legislators from suburban districts. “We should, too.”

So we are treated to the great irony of a law enacted to help level the playing field for aging core cities used to further tilt the field against them.

At the intersection of US-10 and Mackinaw Road in Bay County is an area that, when I attended Delta College in the 1970s, was farmland. In the 1990s, it became, in order to satisfy the requirements of the legislation, the “downtown” of Monitor Township. And a rather massive industrial park grew up around it. Most of the businesses located in that industrial park today were formerly in the core cities of Saginaw and Bay City the law was originally intended to help.

Similarly, Eastwood Towne Center stands at the intersection of US-127 and Lake Lansing Road. It, too, was built thanks to a DDA capture district that declared farmland a “downtown.”

Now, it’s a solid cornerstone of Republican dogma that an unfettered free market is the ultimate level playing field. That’s why most Michigan Republicans – and Governor Snyder’s administration – would like to do away with development incentives altogether: they believe that would level the playing field.

It would actually tilt it more.

The playing field hasn’t been level since we built I-675, I-475, I-696, I-496, I-675 and every other gash that tore neighborhoods asunder, causing urban real estate values to nosedive for blocks around them. It hasn’t been level since we started looking at “new housing starts” as an economic indicator. It hasn’t been level since the FHA and the VA worked together during the post-war boom to make low-income loans readily available for people (well, white people) to move to highly segregated, low-density suburban houses built around federally subsidized infrastructure development.

You can build a new concrete-block box and re-sell it for two to three times the margin than you can retrofit a turn-of-the-20th-century commercial building in a downtown district, and have far less time and trouble involved in assembling land for parking.

You can buy a vacant 10-year-old vacant big-box store and make it ready for retail or commercial space at about half the cost of bringing a 1920s building up to code – even with Michigan’s rehab subcode.

It’s because real estate development isn’t really concerned about financial sustainability of a project, any more than a Hollywood movie is about the quality of the story. It’s all about “the deal.” That’s why we continue to develop new suburban big boxes even though there are millions of square feet of big-box space lying vacant. In what other industry can a “producer” knowingly create a twofold surplus – and still make money on it?

Let’s come close to making the playing field somewhat level again, by making urban reinvestment incentives what they were intended to be: tools to help our urban centers rebuild.