Archive for October 30, 2007

El Paso and federal policy

October 30, 2007 / Wendy Waters / 2 comments

The governments, citizens and businesses of many cities around the world struggle against the policies and practices of higher levels of government. As I’ve written before, laws, taxes and philosophies often hamper city development and the everyday lives of citizens.

Some cities’ citizens and businesses have roots and daily lives connected to more than one country. Detroit and Windsor would be one example. But perhaps the most bi-national North American city is El-Paso / Ciudad Juarez. Many residents of the area have dual citizenship. They often commute across the border on a daily basis — that same border that is seeing travel impeded by growing levels of red tape in the name of national security.

The New York Times has a great article this week about El Paso (found via Planetizen). Here’s my favorite selection:

… [housing] demand was especially strong for Mexicans who own businesses in El Paso and live in Juárez.

But for dual citizens like Ms. Giner, which side of the border she lives on is a matter of personal choice. “Crossing the border is a normal part of life for us,” she said. “I want my kids to be bilingual and bicultural. It’s important for me that they know the Mexican holidays and culture, not just the language.” Her daughters Cassandra, 9, and Isabella, 4, go to a private Catholic school in Juárez while her youngest daughter, Sofia, 2, who has a rare genetic disorder, receives special care in El Paso.

The Giners have taken advantage of Mexico’s dual nationality law instituted in 1998. (Mexicans living in the United States, along with their American-born children, could acquire or reacquire rights as Mexican citizens.) Until recently, the family lived in Juárez and Ms. Giner commuted to her previous job in El Paso.

But after her husband sold their business, a restaurant in Juárez, and opened a new one in El Paso, they moved across the border to the lush Upper Valley neighborhood of El Paso. Three years ago they bought a 4,000-square-foot four-bedroom house for $250,000.

Policy made in Washington DC (often to score political points in places distant from El Paso) hardly seems relevant to the lives of everyday citizens and their businesses in this city. In fact, the whole region could suffer if the federal government succeeds in restricting the flow of people and goods across the border.

Category: communities, economic development, national politics /

Dubai – a microcosm of globalization?

October 29, 2007 / Wendy Waters / No comments

What does globalization really mean? It’s a loaded term with many meanings. Perhaps one way to understand what the shrinking distances between people, economies, cities and countries really means is to look at life in one city that exists in its current form because of global trade and travel – Dubai.

Dubai is a city in the United Arab Emirites that has long historic routes as a regional trading centre, but only recently has become well known internationally. The government has undertaken a bold scheme to use the income from the limited oil reserves of this emirite to build a global financial center as well as international shopping and tourist destination.

Most work is done by foreigners, imported for their particular skills. This is where Dubai seems to encapsulate a darker side of the global economy — the stratification of jobs, and incomes, sometimes along national lines. Creative, professional and management type jobs tend to go to North Americans and Europeans. Skilled and semi-skilled labor is typically done by people from the Indian sub-continent but also Africa and other parts of the world. Tourists are typically caucasion, and usually from Europe — or UN workers and non-profit development staff stationed in places like Afganinstan taking a break. The class/race stratification is shocking. The few who are true emirate citizens are either managers or live off the income from oil and investments.

I’m trying to decide if Dubai and its social stratification is a microcosm of the world, or just a unique place.
This week south-Asian workers staged a strike. According to CBC news, construction workers were protesting poor working conditions and wages.

Dubai is currently home to the world’s tallest building, the Burj Dubai expected to be completed in 2008 and home of the world’s first Armani luxury hotel, and authorities report an annual average growth rate of 12 per cent over the past decade, largely driven by construction.

The boom has been possible due to plentiful investment from oil rich neighbours and armies of non-unionized South Asian workers whose fear of deportation, until recently, kept them from voicing discontent over low wages.

“The cost of living here has increased so much in the past two years that I cannot survive with my salary,” said Rajesh Kumar, a 24-year-old worker from the south Indian state of Andhra Pradesh, earning $150 a month.

This weekend the workers ignored the threat of deportation and refused to go to work, staging protests at a labour camp in Dubai’s Jebel Ali Industrial Zone and on a construction site in Al Qusais residential neighbourhoodThey demanded pay increases, improved housing and better transportation services to construction sites. On Saturday workers threw stones at riot police and damaged their cars.

The government is threatening deportation for some (foreigners have few rights in Dubai), however the construction managers and business community are generally against this as there is a labor shortage. Indeed, because of good economic times in India, cheap labor is becoming harder to come by in Dubai, generating challenges for the ambitious construction schedule.

There is another question here for cities like Dubai: Can a city survive on imported, rather than home grown labor and talent? What if not only the poorly-paid construction workers left, but also what if the highly-paid foreign real estate development managers and financial market gurus left for home as well?

And yet, I hope that the contrast of rich and poor, of highly paid talent from North America and Europe set against poorly paid labor from South Asia, is not really a microcosm of the world.

***

Final, personal note: I did see the social stratification contrasted against ridiculous extravagance first hand three years ago. During a 24 hour layover in Dubai en route from Islamabad to London, my husband and I stashed our luggage at the giant glitzy airport and hopped on the bus to reach the old part of town. We were the only Caucasians using the spotless, brand new public transit system. The other passengers appeared to represent the multi-ethnic planet earth. The Indian-looking driver piloted the vehicle through major thoroughfares and onto narrower streets lined with industrial looking apartments, each with a balcony crammed with clotheslines displaying colourful laundry. They instantly reminded me of apartment blocks in working class neighborhoods of Latin America or Eastern Europe. On the roads, women in jewel encrusted black burka’s drove luxury automobiles (how they see to drive remains a mystery to me) while white men and women preferred SUVs, often white in colour. The modern shopping malls were more glitzy and grand than any I’d ever seen. A friend working there (managing a major development project) also took us on a tour. The strangest stop was a small high-rise neighborhood that looked — deliberately, by design — exactly like part of Yaletown in Vancouver.

Category: attracting talent, commercial development, diversity, economic development, poverty /

Risks for cities from investor-owned condos

October 28, 2007 / Wendy Waters / 7 comments

The popularity of downtown condominium living has generated a building and buying frenzy in many North American cities. There are tremendous benefits to metropolitan areas of having more people living in the inner core — less pollution, less congestion, more home ownership options (beyond the single family house). Concentrating more people in an area also supports great street-front retail and restaurant neighborhoods, which draw people to the city.

But, is the condo boom unwittingly leading to a further concentration of wealth — in this case real estate wealth — in the hands of the baby boomers (rather than helping younger people enter the housing market).

It makes sense that financially well-off individuals looking for new investment options have been buying downtown condominiums and renting them out. In Toronto and Vancouver, according to the Financial Post in an article by Gary Marr, an estimated 25% of downtown condominiums are investor owned. In some buildings, the figure is higher. A couple years ago in a casual conversation, a realtor working for Rennie Marketing Systems in Vancouver told me that at one particular tower approximately 60% of buyers were investors with no intention of living there, and that this was becoming the norm for buildings she had been involved with.

According to Gary Marr’s research, most investors are baby boomers between 45 and 55 who have a principal residence. In fact, he found evidence that 25% of people who have a principal residence valued at over $1 million own a second property.  Many are using the equity in their single family homes to buy a downtown condo and rent it out (and they increasingly want something special and less generic, hoping this will help with long term value).

My question: is the trend toward investor-owned condos further concentrating wealth? Or is it helping to diversify home ownership? And how would we measure this?

A couple other factors to consider:

Without the condo option, single family housing would likely be even more expensive than it is already in many major cities. Also, without the condo buildings, it’s possible that average apartment rents would be even higher (as investor condos are rental stock), since in places like Vancouver building rental accommodation does not typically make economic sense for a developer as they cannot break even let alone make a profit on such a project. At least the condos generate additional supply.

I’d love to hear your thoughts on this…

Category: downtowns, real estate, residential development /

Insider and outsider perspectives

October 28, 2007 / Wendy Waters / 4 comments

Urban residents including politicians and the business community as well as the media often fall into “group think” when considering their city or aspects of it. That is, they either praise the successes, all donning rose coloured glasses. Or, they all tend to nit pick at every last problem, assuming the city is going to hell in a handbasket. No city is problem free, and no city is without it’s charms and successes. Sometimes it takes an outsider’s view to shake things up and get people thinking differently.

A great example is Richard Florida’s observations of Toronto compared to the many cities he has studied, visited and lived in, summarized in an essay in the Globe and Mail (Canada’s equivalent of the NY Times). Torontonians he meets cannot understand why someone like him — who could probably have written his own career ticket into at least a dozen North American cities — selected Toronto. Here’s my favorite part of his response:

We’re now calling home a lovely family-friendly neighbourhood that is in easy walking distance of the city’s core. The streets are safe, schools are good, immigrants are welcome and neighbourhoods allow for a mix of people by income, work, ethnicity, sexual orientation and lifestyle. The cultural life is buzzing, the restaurants are world-class, and there are beautiful lakes to escape to just a short drive away. On top of everything else, I’ve been given the opportunity to run a pioneering think tank at a renowned business school.

And yet everywhere we go we are met by Torontonians who either seem mystified that we would move to what they imply is a second-rate city, or seem to be seeking some kind of validation in our answer.

Here’s all the validation you need, Toronto: Our city is on the leading edge of a critical change in the global economy.

And it seems he is waking up Torontonians, as judged by reactions posted on his blog. Perhaps he’s been talking to Sherry Cooper (Chief Economist at BMO/Nesbit Burns) as well, who also praised Toronto’s successes last week.

As I’m sure Florida would agree, all of his praise is not to say Toronto does not have challenges and problems. But, some of these are issues other cities would love to have: transit is too popular and therefore crowded; too many people want to live in the area, driving up housing prices and creating the need for more infrastructure, etc. And other challenges are somewhat universal, or at least North-America wide in their occurrence such as crime, homelessness, etc.

One possible reason Torontonians think less highly of their city is that within Canada, it is currently often compared to Calgary and Vancouver, which are doing better financially right now because of the global oil and resource prices around which those cities’ economies are partially based. Also, Vancouver has attracted more world attention and accolades from being named to host the Olympics, to being labeled among the world’s most liveable cities by organizations such as The Economist and Mercer Consulting. But there is a downside to the constant rosy picture of Vancouver painted by outsiders.
Vancouver’s writers, politicians and other business and civic leaders have tended to believe the international press as well as their own economic development marketing promotions, allowing them to ignore some of the real problems the city has (which, are not that different than other cities’ problems, but need attention nonetheless) such as crime, homelessness, and drug addiction.

Hopefully, Toronto’s economic and social leaders will use Florida’s comments to take the gloomy blinders off and celebrate what the city does well (and try to ensure this will continue). But the danger is then dawning rose coloured glasses and not addressing the challenges the city faces if it is to continue to be a key component or even the centre of one of the world’s leading economic regions.

Category: city hall, economic development, planning policy, resident attitudes, urban history /

Home renovations and urban sustainability

October 26, 2007 / Wendy Waters / 4 comments

Ecological responsibility has not reached the home renovation trend — or so it would appear.

Earlier this year the city of Victoria BC reported that it’s Hartland Landfill was experience a significant increase in demand caused by home renovations.  Deposits of old flooring, carpets, furniture, etc. had increased.  As a percentage, only 36% of recyclable waste was being diverted in 2007, down from 42% in 1998.  And that is the story behind the stuff being removed in the name of renovations.

What about the replacements?

Choices of flooring in new and renovated homes provide a further example of unsustainable choices.  As detailed in the Minnesota Real Estate Blog, many people are choosing Brazilian hardwoods.  These choices encourage the destruction of the Brazilian forests.  While the author, Kermit Johnson, focuses on the twin abuses of rainforest destruction and coerced labor involved in harvesting the product, as significant is the fact that these products then have to be transported to North America to become a hardwood floor.  This generates carbon monoxide and other pollution.

Yet in most cities other flooring options are available.

First, locally made products exist from locally-made tiles to local forest products.

Second, there are often recycled flooring options available.  This can allow for a really unique floor, or the option of matching the vintage of a home. (We had the fir beams and planks from an old barn in Chilliwack (100 km east of Vancouver) converted into a new floor for our 1911 home. )

Third, there is bamboo.  While I’m not sure how much is locally grown versus harvested in China, it is a grass product and regenerates in 5 years and thus is a renewable choice (even if it has to be transported).

As many city governments announce plans to reduce their carbon footprints, they not only need to focus on transportation issues, but also encouraging more sustainable building practices from everyday people in their renovations (not just pushing the real estate development community to do this).

Category: city hall, ecological issues, real estate, residential development /

Fattest and fittest cities

October 24, 2007 / Wendy Waters / No comments

Why do some cities tend to have overweight residents and others fit ones?

A recent study uncovered that New York residents tended to live longer than the average American; why? some have speculated that certain personality types who like to exercise and are high achievers in whatever they do are drawn to New York; others suggest it is the fact that people in New York walk more because driving is so inefficient. There is probably some truth in both of these explanations.

Following up on a Planetizen posting about Philadelphia being the fattest and Ugliest City in America (their story not mine), I searched the internet for the list of fat cities and found a copy of a list published 2 years ago by Men’s Fitness magazine.

These are the top 10 Americas Fattest Cities:

1. Houston
2. Philadelphia
3. Detroit
4. Memphis
5. Chicago
6. Dallas
7. New Orleans
8. New York
9. Las Vegas
10. San Antonio

And top 10 Fittest Cities

1. Seattle
2. Honolulu
3. Colorado Springs
4. San Francisco
5. Denver
6. Portland
7. Sacramento
8. Tucson
9. San Diego
10. Albuquerque

I’m not sure of the criteria used to assess each as Mens Fitness does not have this article on their website. Most surveys of “fat” or “obesity” levels tend to rely on people self reporting their weight and height. I’m not sure if the “fit” cities list are simply the “least fat” or if some other measure of fitness is involved.

Intriguingly, New York is on the “fat” category and not the fit category.

What’s also interesting is that there may be no correlation between transit use or commute times and being fat or fit. Chicago and New York appear on the top 10 fat cities list, and also have among the longest average commutes and highest uses of transit. Meanwhile Seattle ranks as the fittest city and also has one of the longest commuting times and highest rates of transit use; the story is similar for San Francisco.

If it is “built in” factors that help residents be fat or fit, it’s not time spent commuting or using transit (which often implies walking to and from transit stops).

Category: transportation, urban lifestyles /

Toronto on the rise?

October 23, 2007 / Wendy Waters / 7 comments

Toronto is changing fast. No longer is it just Canada’s financial and business hub, but it’s becoming a world centre as well, with many of the spin off benefits and challenges.

This is the argument or observation of Dr. Sherry Cooper, the Chief Economist at BMO Capital Markets and BMO Nesbitt Burns in an essay she penned last week.

In my view, Toronto is becoming a world-class financial and commercial centre on the order of New York and London. While [new ultra-deluxe] condos are going for $1,300-to-$1,800 a square foot, they are cheap by international standards. Donald Trump—at the Toronto ground breaking of Trump Tower Toronto’s construction at Adelaide and Bay—recently declared that comparable property would sell for $5,000 a square foot in New York and even more in London.
…

No where is the new wave of foreign money more evident than on Bloor Street—Toronto’s version of the Big Apple’s Fifth Avenue with its mixed-use high-end residential, office and retail space. New designer stores are opening and existing ones are expanding. Canada’s-own Holt Renfrew’s flagship store has expanded and remodeled, becoming even more decidedly upscale; as well, designer boutiques such as Chanel, Gucci, and Escada have expanded. High-priced trendy restaurants are popping up city wide and the remodeling and expansion of the ROM, the Gardiner Museum and the Art Gallery of Ontario are enhancing this urban renewal. We are observing the gentrification of Bloor Street west of Avenue Road and east of Yonge Street as downscale commercial properties are replaced by upscale residences and boutiques. For example, the 16-storey ultra-luxury Museum House condominium development will take the place of the Pizza Hut opposite the ROM’s new Crystal and it will be accompanied by other luxury condos on that same strip of Bloor. Even the seamier side of Yonge St. south of Bloor will change with the coming (in 2011) 80-storey hotel/residential/retail tower of 1 Bloor, touted as the tallest residential tower in Canada by its Kazakhstan-based developer. This five-star boutique hotel will join the other five larger five-star hotels opening in Toronto in the next few years, taking us from not a single five-star hotel in all of Canada to six and counting in Toronto alone.

Bottom Line: this is a fascinating and important economic development, bearing with it enormous portent. On the positive side, it will be a boost to the revenue base of the beleaguered city government and certainly increase the economic growth of the city and no doubt encourage the rise of the Canadian dollar. On the negative side, it will reduce the affordability of the city for current residents, potentially displacing low-income residents. It puts additional strain on public services and adds to the de-industrialization of the inner city. Historical preservation has become an issue as we have seen with the saving of the old fire house and the frontage of the first site of Mt. Sinai hospital on Yorkville Avenue. We run the risk of creating concrete caverns that block the sun and increase gridlock on already-busy city streets. It is an opportunity and a challenge, and it is happening faster than most people realize.

Toronto is certainly changing. While I generally agree with Cooper, I think she may be over-stating the case for current change — although not Toronto’s potential. I’m not sure it is achieving the status of New York or London — at least not yet. But it may be securing a role as the number two financial centre in North America after New York. And Toronto has a lot of advantages in terms of growing in this area:

In particular, Toronto offers an attractiveness to potential foreign immigrants and an easier immigration process, in comparison to New York. With over 40% of the population foreign born in the Toronto area (know locally as the GTA), most immigrants can find an ex-pat community from their birth country, should this be important. And Canada has been easing immigration restrictions, particularly for young, educated professionals — talent — which is becoming scarce in some industries and cities.

Toronto as a city is more like New York and London than most North American places. Although automobile-centred sprawl has created some challenges in recent decades, the older districts in the core are more human centred and walkable — and well serviced by efficient public transportation options used by all levels of society (much like New York and London). As oil becomes expensive and more sustainable living desirable, Toronto like New York and London is better positioned.

Certainly, Toronto lacks the same history as a global hub that London and New York share. But has Dubai has shown, this can be overcome with ingenuity, determination, and boldness. Further growth in Toronto may, therefore, require some clever and brash steps from business and political leaders.

And, Cooper is correct in noting the challenges. One she doesn’t mention is that Toronto’s infrastructure is decaying. Roads, overpasses, sewers, etc. require upgrades. Moreover, the city is desperately short of funds and cutting back services to citizens. I’m not sure that new deluxe condos will bring in enough new revenue to really help.

Without good infrastructure, the city will start to decline under its own weight and become less livable, undermining its potential as a financial centre. It’s the federal government’s revenues that will really benefit from Toronto becoming a bolder, global city and financial hub. And its from Ottawa that more support will be needed in order for Toronto to continue on this path.

Category: attracting talent, commercial development, downtowns, economic development, national politics, real estate, urban history /

Purpose of large city squares

October 22, 2007 / Wendy Waters / 4 comments

Are large city squares a waste of good real estate?

Last week Brendan at the Where Blog posted a link to a new Wikipedia list of the largest city squares. I immediately scanned the list for squares I’ve visited and recognized about 20 of 80 on the list. Some were memorable. They served as cultural gathering points for the city and country and were often filled with commerce, cafes, or other activity.

For other squares situated in cities that I’ve visited, I had to find a photo on the internet to know if I’d been there or not. In these instances , usually the photo depicted a large open space filled sculptures and a lot of concrete — but no people. And, seeing the photos, I recognized the place –exactly as depicted. A huge space with no one there.

Good examples of large spaces with no one there: The Plaza of the Revolution in Havana; the Macroplaza in Monterrey Mexico; – In both cases these places were built relatively recently and perhaps lack a “historic gravity” that draws people in. The Cuban example is a place that can fit 100,000 people to listen to Fidel. But the rest of the time, no one seems to go there. When I was there, around the anniversary of the Revolution in fact, it was empty. By contrast other historic parts of Havana — such as in front of the Capitolo building — were bustling with Cubans as well as a few tourists. They were on regularly travelled routes, and surrounded by cafes and street food vendors. These less formal “squares” seemed to have much more activity.

In fact, in thinking about the squares I remember — like the Zocalo in Mexico City (called Plaza de la constitucion in the Wikipedia list)– they have two things in common.

First, that historic and centrally located aspect. The Zocalo in Mexico City is built on the ruins of the main Aztec pyramid, and was the centre of the Spanish city after the conquest. Thus it is either 486 years old or 682 years old depending upon whether you count from the Aztec origins or the Spanish conquest. The Spanish built their city in a grid, centred on this square that contained the main government building and largest cathedral. For centuries it has been a gathering point for politics, protest, and more. Protesting peasants from Veracruz mixed with aggrieved Indians from Oaxaca with their signs and literature looking for support.

Second, that some sort of commerce was happening on the square or all around it, whether cafes, street vendors, etc. In the case of the Zocalo I loved the variety of things one could purchase from street vendors: everything from pancakes to tacos to coca cola as well as subcomandate marcos dolls and Emiliano Zapata t-shirts and bootleged music from around Latin America and the world.

If squares are really owned by the public, and no one ever goes there, then what purpose do they serve? As cities fill up, perhaps planners and regulators need to rethink the rules around some squares (use them or lose them). Some try to outlaw vending (including in Mexico City, with limited success), for example. When there is no food and drink available, people don’t hang around too long, generally. And if there is nothing to do or look at, people also leave.

Category: city hall, public spaces /

Ending an era and new beginnings

October 18, 2007 / Wendy Waters / 2 comments

The rapid revitalization of downtowns and urban cores has driven up demand for housing in many North American (and especially Canadian) cities, raising property values and pushing some uses out. New townhouse and condominium developments often require long-standing businesses to close – as can new retail projects to serve the growing population.

Toronto Star columnist Tony Wong wrote a great piece a couple weeks ago about what is being lost.

The last customer in Tony Pontieri’s neighbourhood garage shop drove a black Honda Civic.

She had wanted a front licence plate put on her car, for which the dealer wanted to charge her an hourly rate. Pontieri did it free.

“I’m going to really miss you,” she told Pontieri, 49.

So will a lot of other customers. Independent garages in downtown Toronto are a rarity, and now one of the city’s oldest establishments is selling out for an undisclosed sum.

“It’s going to be tough leaving. I’ll really miss the customers,” said Pontieri, in shorts and a T-shirt, packing a skid as he prepared to move out by Monday. “This place is as old as I am.”

The Pontieri story is a familiar one. Toronto’s real estate boom has meant older, established businesses are cashing out to new development. Earlier this year, the iconic Addison on Bay Cadillac dealership closed its doors to make way for a condo.

…

The area has changed considerably from the time father Frank Pontieri opened the shop in 1958. “There were train tracks and hobos living in abandoned trains. Now I’m surrounded by million-dollar condos.”

Even the St. Lawrence Farmers’ Market next door has gone upscale. A sign outside advertises Organic Gourmet Tofu.

Pontieri figures at least half a dozen local garages have ceased to exist over the past decade.

Increasing population density in the city is generally a good thing for decreasing environmental impact and improving urban livability. But there is a cost.

Category: "back to the center", commercial development, downtowns, real estate, residential development, urban history /

Housing markets (and cities) quietly thriving

October 17, 2007 / Wendy Waters / 4 comments

What do the following metropolitan areas have in common:

  • Dallas-Fort Worth
  • Indianapolis
  • New Orleans
  • Atlanta
  • Montgomery
  • Memphis
  • Mobile
  • Austin
  • Houston
  • St. Louis

According to Business 2.0, they are cities where the housing market is poised for either a rebound or continued appreciation in 2008 and 2009. Article author Paul Kaihla writes that most of these cities did not see large housing bubbles in recent years, making them less susceptible to plummeting real estate values. Moreover, these cities seem to have economies that are quietly doing reasonably well with jobs growing along with consumer spending.

Assuming Kaihla (and Economy.com who did the research) is correct, there are several implications.

First, that so many US cities continue to provide provide further evidence that you can’t judge a city by its nation.

Second, it is select southerly and Texan cities that seem to be experiencing better than average economic growth combined with stable real estate markets. With a few exceptions, these cities did not seem to attract the speculative investment flurry that happened elsewhere. Slow and steady wins the (economic development) race?

Third, if memory serves me well (and readers correct me if I’m wrong) perhaps with the exception of Dallas-Ft. Worth, most of these cities struggled significantly at some point in the past 20 years and leaders had to make significant changes in economic development strategy. That is, their economies hit bottom a while ago, and they’ve been on a slow, steady upswing ever since. Take Montgomery, which has seen Kia motor cars invest over a billion dollars to create a manufacturing plant nearby. And Hyundai has also invested in the region. These companies are bringing high paying jobs and spin off opportunities for suppliers.

Category: economic development, real estate /
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