Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

In Defense of Chicago

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First of all, I should start out by saying that I’ve only ever been to Chicago once, and I really don’t remember anything but the inside of my aunt’s house. I remember asking them if there was good mass transit, and they said Metra is good, but the L, which is near them, is not something they’d ride. My aunt, who led the family, was a financial services executive in Chicago, but they moved to the Research Triangle in North Carolina when she went into tech/healthcare. I imagine just the people Aaron Renn has in mind when he wrote “The Second-Rate City?” for City Journal.

That anecdote aside, I think Aaron Renn is being a little too hard on Chicago. I’m sure my view of the city unduly weights its land use and transportation policies, but I do think it’s got more potential than Aaron gives it credit for.

A lot of his article is based on this grim demographic observation, which I admit, is hard to stomach:

Begin with Chicago’s population decline during the 2000s, an exodus of more than 200,000 people that wiped out the previous decade’s gains. Of the 15 largest cities in the United States in 2010, Chicago was the only one that lost population; indeed, it suffered the second-highest total loss of any city, sandwiched between first-place Detroit and third-place, hurricane-wrecked New Orleans. While New York’s and L.A.’s populations clocked in at record highs in 2010, Chicago’s dropped to a level not seen since 1910. Chicago is also being “Europeanized,” with poorer minorities leaving the center of the city and forced to its inner suburbs: 175,000 of those 200,000 lost people were black.

Poor minorities abandoning the center to wealthy whites, while it has a lot of unfortunate aspects, doesn’t seem to me to be an altogether bad thing. Aaron says “Europeanized,” but the idea that the wealthy, not the poor, poor live in the center of the city isn’t a European thing, it’s an urban thing! It happens in Tokyo and Hong Kong, Cairo and Beirut, New York and São Paulo. To say nothing of Chicago before urban decline!

Landlords walking away from properties in the South Bronx isn’t supposed to be the norm. There’s much that I think could be done to mitigate the effects of gentrification – such as letting cities grow in already-gentrified areas, where demand and prices are highest, which I’ve written about before – but short of solving the problem of racial inequity or rent controls (which are illegal in Illinois anyway), I don’t see how cities are supposed to retain minorities in close-in urban neighborhoods whose ornate buildings belie the fact that they were built for much richer people.

Aaron does, however, have a point when it comes to municipal government – at least, most parts of it. Illinois and Chicago’s pension and budget woes are legendary, as is its corruption. And while I don’t know much about small business regulation in Chicago, I’ve heard that it’s no walk in the park, either.

However, I’m not sure how much I agree with his criticism of Chicago’s land use regime:

It also hurts small businesses that Chicago operates under a system called “aldermanic privilege.” Matters handled administratively in many cities require a special ordinance in Chicago, and ordinances affecting a specific council district—called a “ward” in Chicago—can’t be passed unless the city council member for that ward, its “alderman,” signs off. One downside of the system is that, as the Chicago Reader reported, over 95 percent of city council legislation is consumed by “ward housekeeping” tasks. More important is that it hands the 50 aldermen nearly dictatorial control over what happens in their wards, from zoning changes to sidewalk café permits. This dumps political risk onto the shoulders of every would-be entrepreneur, who knows that he must stay on the alderman’s good side to be in business. It’s also a recipe for sleaze: 31 aldermen have been convicted of corruption since 1970.

I’ve heard this criticism many times before, but how do you square that with the fact that Chicago is also the most (urban) developer-friendly big city in America?

A totally as-of-right regime under a reasonably liberal code would probably be preferable to Chicago’s aldermanic privilege system, but the aldermen’s choices seem to be manifestly better than those made by planners and citywide politics in every other large city in America. Chicago has been going through an apartment boom for at least a year now, and the commercial property market is showing surprising signs of life – the 45-story City Point office tower will be the first delivered on spec in downtown Chicago since 1998, and tight class-A vacancies mean another large tower is likely coming soon, as well.

Other than ubiquitous parking podiums that the city’s not-so-progressive minimum parking requirements foist on developers and architects, Chicago’s quite tolerant of density and growth. At least so far, supply has been allowed to keep up enough that housing is shockingly cheap to this East Coaster.

Chicago may be hemorrhaging population everywhere else, but the ring of wealth around the Loop is getting bigger and bigger. It’ll be a long time before it’s large enough that its growth will compensate for the post-crash exodus from the exurbs and slow trickle from the suburbs. But if Chicago post-urban decline is anything like Chicago pre-urban decline, the city’s got a ways to go, whereas its ‘burbs can only fall so far.

Speaking of which, being the unofficial capital of the Midwest ain’t half bad. With 65 million people, it’s about as large as France or the United Kingdom, and there isn’t a city in the region that even comes close to matching Chicago’s cultural and economic opportunities. If indeed there is going to be a massive migration from the exurbs and suburbs on the scale of immigration around the turn of the last century, Chicago’s in a pretty good position to pick up a lot of refugees from America’s vast, auto-bound interior.

And hey, with the Onion coming to town, maybe Chicago will soon be able to add comedy to the list of things it’s the center of, along with derivatives, supertalls, and corn-fed folk?

  • Eric

    with poorer minorities leaving the center of the city and forced to its
    inner suburbs: 175,000 of those 200,000 lost people were black.

    *Forced* to the suburbs? To me it sounds more like they *chose* to leave the slums and move to the suburbs. Which is what pretty much every slum resident does if they ever find the money to do so. In the last few decades, a large fraction of the African-American population – more than half I believe – has moved from the “ghetto” to the suburbs. But these millions of people are generally ignored since they fit nobody’s stereotype. Gentrification in recently years has taken place in only a small part of the city, particularly near downtown, UChicago, and parts of the north side. If blacks are leaving other parts of the city (which I suspect is where most of them lived – I’d like to see the statistics though), it is probably due to their wealth increasing rather than the character of their neighborhoods changing.

  • Pingback: Fwd: In Defense of Chicago « sittin' on the stoop()

  • Stephen, 

    On demographics, I don’t think the whitening of the city is really Renn’s focus.  The far more important note is that the city hasn’t really grown at all.  And not just the city, but all of Cook County.  That’s not a good sign, particularly considering the growth that other peer cities are seeing. 

    On regulation, I’d be careful about extrapolating too much from the development sector: http://www.forbes.com/sites/joshbarro/2012/02/29/homeowners-the-cartel-next-door/2/

    Yet Chicago has a planning process that looks, at first, like it ought to be a nightmare. The city is divided into 50 wards, each of which elects an Alderman to the City Council. In practice, the Alderman has enormous control over what developments get approved within his ward. Yet, despite these fiefdoms, projects tend to get approved.
    This is partly because Chicago also liberally uses Tax Increment Financing districts, which now cover huge swathes of the city. When a TIF district is created, the amount of property tax revenue that the district sends to the city is frozen for 23 years. Increases in property tax receipts are instead directed into a special fund that can only be used for projects within the TIF district boundaries—and new developments tend to mean significant increases in property tax collections. When you create a TIF, you create an incentive for residents and their Aldermen to approve new development, as that means more money for local goodies.

    Chicago’s reliance on TIF revenues, combined with aldermanic privilege make for relatively easy approvals in this sector, but that doesn’t mean it applies to other businesses, nor does it mean you can do business without the approval of your alderman.  Without the TIF incentive to approve projects, you can easily see how this process would be a nightmare. 

  • Stephen, 

    On demographics, I don’t think the whitening of the city is really Renn’s focus.  The far more important note is that the city hasn’t really grown at all.  And not just the city, but all of Cook County.  That’s not a good sign, particularly considering the growth that other peer cities are seeing. 

    On regulation, I’d be careful about extrapolating too much from the development sector: http://www.forbes.com/sites/joshbarro/2012/02/29/homeowners-the-cartel-next-door/2/

    Yet Chicago has a planning process that looks, at first, like it ought to be a nightmare. The city is divided into 50 wards, each of which elects an Alderman to the City Council. In practice, the Alderman has enormous control over what developments get approved within his ward. Yet, despite these fiefdoms, projects tend to get approved.
    This is partly because Chicago also liberally uses Tax Increment Financing districts, which now cover huge swathes of the city. When a TIF district is created, the amount of property tax revenue that the district sends to the city is frozen for 23 years. Increases in property tax receipts are instead directed into a special fund that can only be used for projects within the TIF district boundaries—and new developments tend to mean significant increases in property tax collections. When you create a TIF, you create an incentive for residents and their Aldermen to approve new development, as that means more money for local goodies.

    Chicago’s reliance on TIF revenues, combined with aldermanic privilege make for relatively easy approvals in this sector, but that doesn’t mean it applies to other businesses, nor does it mean you can do business without the approval of your alderman.  Without the TIF incentive to approve projects, you can easily see how this process would be a nightmare. 

  • A couple notes:  
    –  As I understand, “aldermanic privilege” is mostly customary in that the zoning board usually green lights projects for upzoning, variances, etc if the Alderman gives his approval. It’s very rare for the zoning board to dissent from the alderman.
    –  What ends up happening is that if you want to build something that isn’t as-of-right, all it usually takes to get the alderman on board is a few carefully made campaign contributions by the developer, architect, and lawyers.  If there is community opposition, the price goes up…  You can see the job attracts sleaze, but at least stuff can get built.
    – The TIFs are an aspect of the development story, but more of a mechanism of pilfering in favor of the more connected developers and rewarding aldermen who cooperate with the Machine.  TIF districts are only a fraction of the where development happens.
    – Fortunately, many Chicagoans are proud of their skyline and architecture, and cheer on bigger and taller buildings.  Though nimby factions come from the old Lincoln park liberals, and the new empty nesters who spent their adult lives in the suburbs.
    – As much as downtown has grown, exurban Chicago has grown even more rapidly.  Chicago proper has lost significant population in the outer neighborhoods, which provide neither access to jobs or suburban convenience.  But the metropolitan area has grown, overall.
    – Finally, in some ways, Chicago has been a “center of comedy” with all of the famous comedians who came out of Chicago through the Second City improv.

  • In the worst of the housing projects that were demolished in the past couple decades, the average income was below $3,000.  For them, this isn’t a story of living the American dream in the suburbs because their wealth increased.  The inner suburbs is where their replacement housing was provided.  

    Aside from Oak Park and a few others, the inner suburbs are no step up from the outer neighborhoods.  They are just as poor, and even farther from the jobs and transportation.  Moving to the inner suburbs of Chicago is rarely a story of new wealth – most of them suck worse than the city.

  • Benjamin Hemric

    PART ONE

    I thought the Aaron Renn article about Chicago in the “City Journal” was very interesting — an eye opener.  Since I’m not that knowledgeable about Chicago, I don’t know whether Renn is exagerating the magnitude of the city’s problems or not;  if he is correctly analyzing the origins of whatever problems do exist;  and if he is indeed suggesting the correct solutions to these problems.  But, if I’m understanding him correctly, the situation that he describes in today’s Chicago seems to me to have some simiilarities to the situation that existed in pre-Giuliani NYC, and for this reason and others his arguments, generally speaking, seem to me to be plausible and worth paying attention to.
     
    One problem I have with the article though, is what I see as an over reliance on generalities and aggregated statistics.  If I’ve understood Renn correctly, though, his arguments would have been clearer and stronger if he were more specific and if he had focused a bit more on concrete examples.  I’ll address this a bit more, later in my comment.
     
    – – – – – – – – – – – –
     
    Stephen Smith wrote [numbering within brackets
    is mine – BH]:
     
    [1] Poor minorities abandoning the center to
    wealthy whites, [2] while it has a lot of unfortunate aspects, doesn’t seem to
    me to be an altogether bad thing.  [3] Aaron
    says “Europeanized,” but the idea that the wealthy, not the poor, poor live in
    the center of the city isn’t a European thing, it’s an urban thing!  It happens in Tokyo and Hong Kong, Cairo and
    Beirut, [4] New York and São Paulo.  To
    say nothing of Chicago before urban decline!
     
    Benjamin Hemric writes:
     
    If I’m understanding Renn correctly, I think these comments illustrate where Renn might have been better off by being less general and more specific and by mentioning specific neighborhoods in the Chicago area by name. 
     
    To use NYC as an example, as it’s a city with which I’m more familiar, it seems to me that Renn is saying that the more upwardly mobile minority residents of the Bronx, Queens and Brooklyn are leaving the worst neighborhoods in these boroughs for the nicer, further out parts of these boroughs (and for Staten Island), and for the older suburbs of Westchester County, Nassau County, etc. (and also for Atlanta, etc.).  This then leaves mostly the very poor left in the areas they’ve abandoned — along with some affluent whites in a few neighborhoods of Manhattan and brownstone Brooklyn.  This was, more or less, the case in New York City in the 1960s, 1970s, 1980s and 1990s, until basically the resurgence that occurred with, in my opinion, the Giuliani administration.
     
    So the point here with regard to [1] and [2]  is that during this time, the relatively small amount of gentrification that was occurring in Manhattan (e.g., the Village, the Upper West Side, etc.) and in brownstone Brooklyn was not making up for the vast amount of abandonment and decay (and stagnation) that was occurring in parts of upper Manhattan, the Bronx and Brooklyn.
     
    With regard to [3] and [4], I believe that it’s correct to characterize a wealthy center with poorer suburbs as “Europeanized” as this hasn’t really been the case with American cities — even New York — until relatively recently (in the post-Giuliani era).  (Although it also may, or may not, have also
    been true in Asia, the Middle East and South America, in terms of American
    discussions of urbanism, the discussion has traditionally been a limited comparison
    of American cities with European cities as other cultures have been seen as being too different to offer a relevant comparison.)
     
    – – – – – – – – – – – – – – 
     
    Stephen Smith wrote:
     
    Landlords walking away from properties in the
    South Bronx isn’t supposed to be the norm. There’s much that I think could be
    done to mitigate the effects of gentrification – such as letting cities grow in
    already-gentrified areas, where demand and prices are highest, which I’ve written about before — but short of solving the problem of racial
    inequity or rent controls (which are illegal in Illinois anyway), I don’t see
    how cities are supposed to retain minorities in close-in urban neighborhoods
    whose ornate buildings belie the fact that they were built for much richer
    people.

    Benjamin Hemric writes:

    If I’m understanding the Renn arguement correctly (see directly above), the concern isn’t so much about the poor being displaced by the rich in Chicago’s equivalents of Greenwich Village, etc. (and the mitigation of the effects of such gentrification), but by the abandonment of the outer boroughs (or Chicago’s equivalent of the outer boroughs) by upwardly mobile minorities.  (It seems to me, by the way, that a number of comments to the Renn article on the “City Journal” website and also a recent internet article about high crime in Chicago would seem to lend credence to such an interpretation.)

    Also, although Renn himself may not be saying it, it seems to me that Jane Jacobs addresses the above issues as follows: [1] it’s important for cities to retain the upwardly mobile poor as they are  an important resource not to be wasted (rather than jumping through hoops to “import” the middle class from other cities, cities should instead be focusing on the relatively economical approach of retaining the middle class that they’ve themselves created); and [2] the solution is not to further densify already gentrified neighborhoods that are likely already dense (as further densifying such neighborhoods is likely to hurt, rather than help them) but to instead use the opportunity of growth to densify outer borough neighborhoods (or their equivalents elsewhere) which are likely to be neighborhoods that would greatly benefit from increased densities (as they are likely older suburbs that suffer from densities that are too low).

    Benjamin Hemric
    Wednesday, June 13, 2012, 9:35 p.m.

  • Michael Lewyn

    How you look at Chicago depends on what cities you are comparing it to.  If you compare it to other national capitals like NYC, SF, it looks bad.  If you compare it to other Midwestern cities (with the exception of annexation-happy Columbus and Indianapolis)  it looks pretty good.

  • Charlie

    Hi Benjamin — if you’re looking for more detailed statistics, the NY Times Census 2010 website (which you may have come across) breaks things down visually from the state level all the way down to census tracts. The contrasts in Chicago are striking:

    http://projects.nytimes.com/census/2010/map

  • Benjamin Hemric

    Charlie,

    Hi!  Thanks for the very interesting link, which I wasn’t aware of. 

    The contrasts in the census maps of Chicago are, indeed, striking — just as you say.  And they seem to illustrate, at least to some degree, Renn’s point about Chicago’s population decline.    (For someone like me, who is not that knowledgeable about Chicago, it would have helped even more to have been able to easily see the actual political boundaries of Chicago and its various suburbs, which I have only a rough idea of.  But that’s being “greedy.”) 

    That being said, though, in terms of my comments about Renn’s mostly good article, I was actually thinking of something else.  Basically my feeling is that Renn’s arguements would likely have been more focused, clearer and more useful if he had adopted more of Jane Jacobs’ methodology, as she outlines it in the last chapter of “Death and Life . . . “: 1) to work inductively, reasoning from particulars to the general, rather than the reverse;  2) to think about processes;  3) to seek for “unaverage” clues involving very small quantities, which reveal the way larger and more ‘average’ quantities are operating.

    For instance, I think some of the numbers he throws out aren’t particularly helpful in understanding the processes that should be the real focus of a genuinely helpful analysis.  Also, I think there would have been less ambiguity and confusion about some of his points too.

    But basically I think it’s a good article and, if I have time, I hope to make another comment about it a bit later.

    Thanks again for the very interesting link — and I also had fun looking up New York City on the same website. 

    By the way, perhaps you may know this already (as I first found out about it a few days ago on the “Market Urbanism on Twitter” column on the lefthand side of this blog), but you can now access on line a series of demographic maps of New York City that was done in 1943 of the 1940 census.  It was published by four local newspapers and it has been put on line by the City University of New York’s (CUNY’s) Center for Urban Research.

    I don’t know if this will work, but here’s a link / URL:

    http://tinyurl.com/7yq3twc

    If the link/url doesn’t work, you can use “1940 census New York City CUNY” in a search engine to find the site.   

    Benjamin Hemric
    Thursday, June 14, 2012, 8:40 p.m.

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