Canfei He earned his Ph.D. degree in geography from Arizona State University in 2001, and then moved to the University of Memphis, Tennessee, where he taught as an assistant professor. In August 2003, he returned to China as an associate professor in Peking University’s College of Urban and Environmental Sciences, and was promoted to full professor in 2009. In addition to his academic duties at Peking University, Dr. He has served as associate director of the Peking University–Lincoln Institute Center for Urban Development and Land Policy since 2007. He is also the associate director of the Economic Geography Specialty Group of the China Geographical Society.

Dr. He’s research interests include multinational corporations, industrial location and spatial clustering of firms, and energy and the environment in China. The World Bank invited him to write a background paper on industrial agglomeration in China for the World Development Report 2009: Reshaping Global Economic Geography.

Dr. He has authored four academic books and his work is published widely in English journals including Regional Studies, Urban Studies, Annals of Regional Science, International Migration Review, Eurasian Geography and Economics, Post-Communist Economies, and China & the World Economy. Dr. He also serves on the editorial board of three journals: Eurasian Geography and Economics, International Urban Planning, and China Regional Economics.

Land Lines: How did you become associated with the Lincoln Institute of Land Policy and its programs in China?

Canfei He: I learned about the activities of the Lincoln Institute of Land Policy’s recently established China Program from one of my colleagues at Peking University in 2003soon after I returned from the United States. At that time, the Lincoln Institute was working in China on a number of specific programs, and I became involved in several associated research projects.

My official relationship with the Institute began with the establishment of the Peking University–Lincoln Institute Center for Urban Development and Land Policy (PLC) in October 2007. The Institute had been exploring a more long-term partnership with Peking University for some time, and as those discussions progressed, my previous contacts offered opportunities for me to serve as a liaison between the two institutions. I was nominated by Peking University to serve as the associate director with its director, Joyce Yanyun Man, who is also a senior fellow of the Lincoln Institute and director of its Program on the People’s Republic of China. Over the past two years or more, I have been helping to develop the center and coordinate its work with other partners at Peking University, as well as serving as a research fellow of the center.

Land Lines: Why are urban development studies so important in China?

Canfei He: China’s urbanization during the past three decades has been remarkable. As an overwhelmingly rural population in 1978 when reforms began, China is now 45.7 percent urbanized, and the country is projected to be 60 percent urbanized by 2020. This means that China’s cities will need to accommodate more than 100 million new urban residents in this decade.

Market forces, local forces, and global forces are all conspiring to influence the pattern of China’s urbanization and development. Accompanying large-scale and rapid urbanization are revolutionary spatial, structural, industrial, institutional, and environmental changes in an incredibly brief span of time. The multiplicity of these driving forces makes the study of urban development in China both complex and challenging. The next wave of urbanization will have far-reaching implications for the country’s future development, and thus there is a critical need for more high-quality, objective research on the subject.

Land Lines: What are some of the most unusual aspects of urban development in China?

Canfei He: China’s current urban development is quite different institutionally from that of most Western countries. Urbanization in China has occurred at the same time that its economy has become market-oriented, globalized, and decentralized. Whereas most Western urbanization occurred in a period of greater economic isolation, China’s urban development has been directly influenced by international investment and global economic trends.

A second factor is China’s hukou system of personal registration that limits the mobility of its people in part by linking their access to social services to the location of their registration. This system thus presents an institutional barrier that inhibits rural-urban migration despite ongoing reforms.

Regional decentralization is another important aspect that, combined with the state and collective ownership of land, has allowed local governments to play a distinct role in China’s urban development. Land acquisition fees resulting from the sale of multi-decade leases for the use and development of state-owned lands have generated enormous revenues, and have been a critical source of municipal financial resources for urban infrastructure investment. This fee-based revenue, in turn, creates incentives that have promoted even more intense urbanization. On the other hand, the major planning role afforded to local governments in China means that urban planning practice lacks consistency across the country’s diverse regions, and is often hostage to local interest groups.

China is facing increasing global challenges and pressures from many sources including multinational corporations, nongovernmental organizations, global environmental standards, and rising energy prices. These challenges may increase the costs of urban development, but at the same time they may encourage a more sustainable process of urbanization.

Land Lines: How do you approach urban development studies in China through your own research?

Canfei He: China’s urbanization goes hand in hand with its industrialization, and foreign investment has played a significant role in the country’s growth. Urbanization demands labor, land, capital, and technology, as well as supporting institutions. Consequently, there are myriad approaches to studying urban development in China that focus on a particular factor or set of factors.

My own research interests fall within the capital and institutional approaches. Specifically, I investigate industrial agglomeration and foreign direct investment in Chinese cities by highlighting the institutional environment of economic transition. Investigating the elements driving industrial agglomeration in different cities and understanding the locational preferences of foreign and domestic firms are crucial for designing coherent and focused urban planning policies.

For instance, my research on foreign direct investment in real estate development and the locational preferences of international banks found that local market conditions and regional institutions largely determine the locational preferences of multinational services. This type of observation can be of use to planners and politicians in China seeking to foster the growth of the service industry.

With the increasing emphasis on global climate change and acknowledgement of the environmental impacts of China’s first 30 years of reform and development, I am also becoming more involved in research on the environmental impacts of urbanization, including energy consumption and carbon emissions. China has made a commitment to reduce its CO₂ emission by 40–45 percent per unit of GDP by 2020, relative to 2005. This means that building low-carbon and energy-efficient cities is another goal on the already lengthy list of challenges that includes servicing, housing, and employing the country’s millions of future urban dwellers.

Land Lines: Given this ongoing international dialogue, how can China best learn from Western urbanization experiences?

Canfei He: We recognize that there is much to learn from the West, including alternative approaches to land policy, housing policy, transportation policy, environmental policy, suburbanization, and the development and planning of megacity regions. China has the benefit of using the West’s experience as a roadmap to help it avoid many of the problems that have arisen in Western cities, such as urban sprawl and gridlock. That economic, political, and geographic diversity offers a wealth of reference points for China’s cities that should not be ignored and can help China avoid problems that have plagued many Western metropolises.

However, it is necessary to research the applicability of particular international experiences, considering the uniqueness of China’s history and culture. Too often analyses of Western urbanization are presented as a blueprint for China, when in fact institutional, economic, and political differences mean that, for one reason or another, those solutions are impractical or unfeasible.

Land Lines: Why is China’s urbanization and urban development so important to the West?

Canfei He: China’s urbanization will be one of the most important dynamics of the twenty-first century, not only for China but also for the West and the rest of the world. Millions of newly affluent consumers and empowered global citizens will exert significant new demands on the world’s finite natural resources in several ways.

First, with the United Nations Millennium Development Goals, China and the world committed themselves to halving the number of people living on less than $1 per day by 2015. Given China’s large number of rural poor, the country’s urbanization and economic development will be instrumental in meeting this important goal, as well as in achieving other goals such as those related to education and improving children’s health. Only cities have the institutional reach and financial capacity to meet these goals on a large scale.

Second, much has been made of the gulf in understanding between China and the West in recent years. Urbanization and urban development will help to integrate China further into the global community, but it may also create more opportunities for cultural friction. The West has a vested interest in seeing that China urbanizes in an atmosphere that encourages openness and intercultural exchange.

Third, history demonstrates that urbanization entails a much greater demand for energy and other resources as living standards rise and as consumption and dietary patterns change. It has become a cliché to say that “as China goes, so goes the world,” but China’s urbanization and its related environmental impacts will have direct implications for the West and the rest of the world.

The recent memory of $150 per barrel of oil shows that this future demand is likely to put great stress on international energy markets and the global economy. This latent demand also has broad implications for China’s CO₂ emissions and for global climate change. The United States and China are key to any real hope of keeping the increase in average global temperatures less than 2 degrees Celsius warmer than preindustrial levels, as proposed at the recent climate conference in Copenhagen. Whereas the high level of development in Western countries means that changes happen incrementally, China’s rapid urbanization offers hope to limit the world’s future emissions by making significant changes now as the country develops.

Sustaining local communities will require mechanisms to envision and plan for the future and to engage residents in the process. Scenario planning is an increasingly effective way to address these efforts, and Western Lands and Communities, the Lincoln Institute of Land Policy’s joint venture with the Sonoran Institute, is working to advance the necessary tools.

Scenario Planning to Address Uncertainty

Land use decisions and planning efforts are critical as communities look 20 to 50 years into the future to guide policy choices and public investments that are sustainable across economic, social, and environmental dimensions. As uncertainty increases and available resources decrease, it becomes ever more important to consider the full range of emerging conditions and to strive to ensure our ability to respond to those changes, adopt policies, and pursue investments that will be resilient across a variety of potential futures.

Key areas of uncertainty include population and demographic changes, economic trends, climatic variability and change, resource costs and availability, land markets, housing preferences, housing affordability, and the fiscal health of local governments. Simultaneous with increasing uncertainty and decreasing resources, or perhaps in part because of them, decision makers face conflicting perspectives on desired futures and on the role of government in providing services and infrastructure as well as regulation and planning.

Increased polarization means that more civic engagement and an informed and supportive public are needed to ensure stable policies and adequate investments in a community’s future. Scenario planning offers a mechanism to address these needs and issues of potential uncertainty and conflict. Fortunately, as the scope and complexity of planning and the demand for broader engagement have increased, advances in computing power and public access to technology are making new and more powerful tools available.

The Lincoln Institute has a long history of supporting the development of planning tools and publishing the results (Hopkins and Zapata 2007; Campoli and MacLean 2007; Brail 2008; Kwartler and Longo 2008; Condon, Cavens, and Miller 2009). This article covers lessons learned from the use of scenario planning tools in several projects undertaken by Western Lands and Communities (WLC), as well as mechanisms to expand their application.

Superstition Vistas

Superstition Vistas is a 275-square-mile expanse of vacant state-owned trust land on the urbanizing edge of the Phoenix metropolitan area (figure 1). State trust lands such as this site in Arizona are key to future growth patterns because the state owns 60 percent of the available land in the path of development. Colorado and New Mexico to a lesser degree face similar opportunities with their state trust lands (Culp, Laurenzi, and Tuell 2006). Creative thinking about the future of Superstition Vistas began to gain momentum in 2003, and the Lincoln Institute, through the WLC joint venture, was an early proponent of these efforts (Propst 2008).

Initial WLC objectives for Superstition Vistas scenario planning included capacity building, tool development, and opportunities to catalyze a planning process. More specifically, we sought to:

• look at the land in a bold, holistic, and comprehensive manner;
• advance the Arizona State Land Department’s capacity to conduct large-scale planning and establish an example for other state land agencies facing urban growth opportunities;
• design a model sustainable development;
• advance scenario planning tools and illustrate their use;
• catalyze and inform debates about modernizing state trust land planning and development management; and
• stimulate a larger discussion about the Arizona Sun Corridor megaregion.

WLC, along with regional partnerships, neighboring jurisdictions, the regional electric and water utility, two private hospital providers, and a local mining company, formed the Superstition Vistas (SV) Steering Committee to advance the planning effort, secure funding, and hire a consulting team. The consultants, working with the committee over a three-year period, conducted extensive public outreach and values research, assembled data on Superstition Vistas, developed and refined a series of alternative land use scenarios for the development of a community of 1 million residents, evaluated the impacts of the different scenarios, and produced a composite scenario for the site.

The Arizona State Land Department (the landowner) adapted the consultants’ work to prepare a draft conceptual plan for Superstition Vistas in May 2011 and submitted a proposed comprehensive plan amendment to Pinal County. The county is now considering the proposed amendment and its Board of Supervisors is expected to act in late 2011.

Sustainability Lessons

The scenario analysis, utilizing enhancements supported by WLC, identified the most important factors in shaping development patterns and potential conflicts among desired outcomes (figure 2). The inclusion of individual building and infrastructure costs for the alternative scenarios facilitated examining the sensitivity of varying these key factors and the cost effectiveness of four increasing levels of energy and water efficiency in each building type.

The scenarios also examined the impact of urban form on vehicle miles traveled (VMT). Scenario model outputs included land use indicators, energy and water use, VMT, carbon emissions, and construction costs. This analysis revealed the “low-hanging fruit” for sustainability improvements. The consulting team, working with the Steering Committee, identified a number of lessons that illustrate the value of scenario planning tools and can be applied to other efforts to design more sustainable and efficient urban areas (Superstition Vistas Consulting Team 2011).

1. Create mixed-use centers to reduce travel times, energy use, and the carbon footprint. Mixed-use centers along public transportation routes and close to homes and neighborhoods are one of the most effective ways to reduce travel times, energy use, and the resulting carbon footprint. Smaller homes, more compact forms of urban development, and multimodal transportation systems all create similar benefits (figure 3). However, the scenario modeling for Superstition Vistas demonstrated that mixed-use centers would be substantially more important than increased density in affecting transportation choices, energy use, and the carbon footprint.

2. Foster upfront investments and high-quality jobs to catalyze economic success. A strong local economy and a diverse balance of nearby jobs, housing, and shops are critical for a sustainable community, especially when high-quality jobs are provided at the beginning of development. Significant upfront public investment and public-private partnerships can supply critical infrastructure and have an enormous impact on shaping development and increasing the value of state trust land. State owned trust land could also provide unique opportunities for patient capital, with enhanced trust land management authorities providing access to resources for upfront capital investment and the ability to recapture these investments when the land is sold or leased later at a higher value.

3. Provide multimodal transportation infrastructure and regional connections to facilitate efficient growth. Another critical step is determining how to phase transportation improvements as the region grows and the market can support increased services. Phased components may include buses first, then Bus Rapid Transit (BRT), with rights-of-way set aside for eventual commuter or light-rail corridors. Identifying and building multimodal transportation corridors and infrastructure prior to sales for residential and commercial development should establish the cohesiveness of the entire area and enable the evolution to more capital-intensive transportation infrastructure as the community matures.

4. Design efficient buildings that save water and energy resources and reduce the community’s carbon footprint. Incorporating construction costs and return on investment (ROI) data in resource planning allows for financial feasibility and cost-benefit calculations. The consulting team modeled four levels of water and energy use (baseline, good, better, best) for each scenario and building type. Results demonstrated that investments in energy efficiency would be better spent on residential than commercial and industrial buildings. An additional finding showed that building centralized renewable power generation may be a better investment than extreme conservation.

5. Offer housing choices that meet the needs of a diverse population. Ensuring a viable community means meeting the needs of all potential residents with a broad variety of development types and prices that local workers can afford and that allow for adjustments under future market conditions.

6. Incorporate flexibility to respond to changing circumstances. A challenge for large-scale master plans that will take shape in multiple phases over 50 years or more is how to plan so the development itself can evolve and even redevelop over time. Plan implementation needs to include mechanisms to limit future NIMBY (not in my back yard) problems for necessary infill and redevelopment projects.

Procedural Lessons

The visioning process for Superstition Vistas involved planning a completely new city or region of communities in a vacant area with a single public landowner and no existing population. Given the recent economic downturn, as well as the limited capacity of the state agency to bring land to market, development of this area will likely be postponed for a number of years. Despite these particular conditions, procedural lessons learned in the project to date are relevant to other long-term and large-scale efforts, and to the expanded use of scenario planning for community decision making in general.

Agreed-upon procedures and planning processes become increasingly important as the planning and development time period grows and the number of stakeholders increases. Significant changes in participants, perspectives, and external factors, such as the recent collapse of the development economy, should be expected in any long-term, multiparty project. Such challenges need to be considered and incorporated into project tasks.

1. Design for change. Long-term projects need to accommodate changes in stakeholders, decision makers, and even political perspectives during the course of planning and implementation. Projects would benefit enormously from anticipating such changes, agreeing on mechanisms to transfer knowledge to new participants, establishing certain criteria and decisions that new stakeholders would be expected to follow, understanding how to deal with political or market conditions that will change, and building resiliency for such factors into the alternative scenarios themselves.

2. Consider governance. This is an issue for planning and implementation efforts and for the political decision-making structure of a new community. In building a new city it is important to consider how to create a governance system capable of implementing a consistent, comprehensive vision for a community that does not yet exist.

3. Incorporate new community designs into local and regional comprehensive plans. It is also critical to consider how a project at the scale of Superstition Vistas, with up to 1 million residents and a buildout plan of 50 years or more, can be incorporated into the framework of a typical county comprehensive plan. Scenarios and visions must reflect ideas and plans that local jurisdictions will be politically willing and administratively able to incorporate into their planning processes.

4. Phase development. Communities need to establish mechanisms that allow the adoption of a long-term buildout vision and then incorporate a series of flexible and adaptable phased plans to implement that vision in appropriate stages.

5. Plan for market changes. Market conditions, housing preferences, and employment opportunities will evolve, and large-scale projects with creative and compelling visions may even create their own demand. No one knows what future markets may offer, so consideration of alternative markets and adaptable community designs are critical. Projected housing mixes and estimates of development absorption need to be flexible and not based only on current preferences and trends.

6. Connect to common values. Demonstrating how development proposals connect to common visions and values that are shared and stable over time is also important. For Superstition Vistas, values such as an opportunity for healthy lifestyles and choices for residents across the socioeconomic spectrum were found to be broadly accepted. Planners also need to recognize values that are more controversial or may be transient and likely to change.

Challenges and Opportunities

The WLC experience in planning for Superstition Vistas has been successful in several respects. The community came together through the Steering Committee to develop a consensus vision that represented multijurisdictional cooperation around sustainable “smart” growth. Neighboring communities, at the request of the state land commissioner, deferred any consideration of annexation. In addition, the Arizona State Land Department developed a plan for a geographic scale, time horizon, and level of comprehensiveness well beyond anything attempted previously. However, the proposed comprehensive plan amendment for Superstition Vistas is at best a first step toward a vision for a community of up to 1 million people.

The Arizona State Land Department has been unable, at least so far, to push the envelope very far on new and more creative ways to conceptualize large-scale developments that could enhance the economic value of state trust lands and improve regional urban form. The recent collapse of land and housing markets throughout the country has also impacted this project and local perceptions of future growth potential. Since the overall effort to conceptualize and implement development plans for Superstition Vistas is just beginning, initial on-the-ground development is not expected for at least a decade. There will be multiple opportunities to build on these planning efforts to bring bolder and more comprehensive visions forward as the real estate economy recovers and the land becomes ripe for development.

Scenario planning and effective visualizations become both more important and more challenging to achieve when conducting larger and longer-term visioning exercises. Visualizations that provide compelling depictions of activity centers and higher-density, mixed-use neighborhoods can help to gain public acceptance. Effective mechanisms are also needed to convey to current participants that the planning process is imagining community characteristics and housing and lifestyle preferences for their grandchildren or great-grandchildren many years in the future.

As noted earlier, upfront investments in transportation, economic development, education, and utility services can significantly shape a community, serve as a catalyst for higher-level employment, and earn high returns. To achieve this potential, mechanisms are needed to facilitate these investments, whether on private lands or state trust lands. Continued work on the contributory value of land conservation, infrastructure investment, planning, and ecosystem services, as well as the integration of this information into scenario planning, would greatly aid efforts to address uncertainty and advance community sustainability.

Other Projects and Lessons Learned

WLC conducted three additional demonstration projects to further enhance scenario planning tools and apply them in different situations.

Gallatin County, Montana

Sonoran Institute staff worked with Montana State University (MSU) to engage local stakeholders in a workshop where each of four teams produced scenarios for concentrating projected growth within the currently developed “triangle” region of Bozeman, Belgrade, and Four Corners. This effort successfully integrated Envision Tomorrow scenario planning with housing unit projections from the Sonoran Institute’s Growth Model and demonstrated the value of ROI tools as a reality check on proposed land use and building types. The project also demonstrated the value of scenario planning to local experts.

Lessons learned include recognizing that (1) for many participants working with paper maps was more intuitive that the touch screen technology we had employed; (2) additional information on land characteristics, such as soil productivity and habitat values, should be used in preparing growth scenarios; and (3) more effective techniques are needed to visualize the density and design of different land use types, as well as to incorporate political and market realities that are not typically captured with scenario planning tools.

Products from this Montana project will include the creation of a library of regionally appropriate building types for use with ROI and scenario modeling and a report examining the costs and benefits, including sustainability impacts, of directing future growth to the triangle area of Gallatin Valley. With WLC support MSU has been able to incorporate the use of scenario planning tools in its graduate program.

Garfield County, Colorado

Sonoran Institute’s Western Colorado Legacy Area office, with support from the Lincoln Institute, U.S. Environmental Protection Agency, and other local contributors, utilized the Envision Tomorrow tool in a new way to advance implementation of previously adopted plans calling for mixed-use infill and redevelopment in target growth areas. This project focused on stakeholder education regarding the mechanisms necessary to implement recently adopted comprehensive plans calling for town-centered development, rather than on scenario generation for a comprehensive plan.

Examination of policy and market feasibility for redevelopment in downtown Rifle, Colorado, was one of three separate efforts undertaken. The City of Rifle project successfully utilized an ROI tool to identify financial and regulatory factors that could impact revitalization efforts and engaged the key parties necessary for implementation, including property owners, developers, realtors, planning commissioners, local officials, state transportation representatives, and local staff.

Among the lessons learned from this project was the importance of grounding bold visions with market reality. For example, previous planning efforts in Rifle had focused on six-to-eight-story mixed-use buildings, but in the current market even three-to-four-story projects are not considered feasible (figure 4c). Most attention now is given to two-story mixed-use projects and townhomes. Visualizations for an underutilized parcel in the center of town illustrated the type of one-story option that may be most feasible for initial commercial development (figure 4b). Constraints related to parking requirements and high minimum lot coverage requirements were also identified as limits on investment. In addition to pinpointing changes in Rifle’s building code, these findings spurred discussion about the role of public-private partnerships in catalyzing downtown development.

Morongo Basin, California

This area of high open space and wildlife habitat values between Joshua Tree National Park and the Marine Corps Air Ground Combat Center in Southern California may be impacted by spillover from regional growth. This project with the Morongo Basin Open Space Group involves an innovative effort to link results from the ongoing conservation priority-setting efforts with both a GIS tool to analyze and predict how land use patterns impact wildlife habitat and the scenario planning capability of Envision Tomorrow.

We are evaluating the environmental impacts of the current and potential alternative development patterns and location-specific planning and land use options. The tools being developed for this effort will be useful to land trusts throughout the country that are interested in engaging partners on local and regional planning issues and incorporating larger landscape conservation and wildlife habitat goals into their projects.

Open Source Planning Tools

Western Lands and Communities has recently been focusing on efforts to develop open source planning tools as a mechanism to increase the use of scenario planning. Key factors that hinder their use include: (1) the cost and complexity of the tools themselves; (2) the cost and availability of data; (3) a lack of standardization, making integration of tools and data difficult; and (4) proprietary tools that may be difficult to adapt to local conditions and may impede innovation.

Proponents of open source modeling tools believe open and standardized coding will facilitate increased transparency and interoperability between models, ultimately resulting in faster innovation and greater utilization. As a result of our work with Envision Tomorrow on the Superstition Vistas project, WLC and other members of an open source planning tools group are continuing to advance scenario planning tools and pursue the promise of open source tools that can foster sustainable communities in many more locations.

About the Author

Jim Holway directs Western Lands and Communities, the Lincoln Institute’s joint venture with the Sonoran Institute, based in Phoenix, Arizona. He was previously assistant director of the Arizona Department of Water Resources and a professor of practice at Arizona State University.

References

Propst, Luther. 2008. A model for sustainable development in Arizona’s Sun Corridor. Land Lines 20(3).

Superstition Vistas Consulting Team. 2011. Superstition Vistas: Final report and strategic actions. www.superstition-vistas.org

Lincoln Institute Publications

Brail, Richard K. 2008. Planning support systems for cities and regions.

Campoli, Julie, and Alex S. MacLean. 2007. Visualizing density.

Condon, Patrick M., Duncan Cavens, and Nicole Miller. 2009. Urban planning tools for climate change mitigation.

Culp, Peter W., Andy Laurenzi, and Cynthia C. Tuell. 2006. State trust lands in the West: Fiduciary duty in a changing landscape.

Hopkins, Lewis D., and Marisa A. Zapata. 2007. Engaging the future: Forecasts, scenarios, plans, and projects.

Kwartler, Michael, and Gianni Longo. 2008. Visioning and visualization: People, pixels, and plans.

Over the past several decades, the structure of the U.S. economy has changed as it experienced a continuing reduction of overall employment in manufacturing and ongoing growth in the service sector, especially services involving knowledge workers. The geographic distribution of activity has also changed as population has continued to shift from the seasonal Northeast and Midwest to the warmer South and West. Finally, within metropolitan areas, populations and employment moved from cities to the suburbs as trucking and automobile travel became ubiquitous. These three trends have left many cities in the Northeast and Midwest with much smaller populations, weaker economies, fewer manufacturing jobs, and an inability to offset lost employment opportunities with gains from sectors that are expanding nationally. These are today’s legacy cities, which often have excess infrastructure capacity, underutilized housing stocks, and fiscal stress related to past obligations from public sectors now greatly diminished in size. A recent Lincoln Institute policy focus report, Regenerating America’s Legacy Cities, by Alan Mallach and Lavea Brachman, reviews the performance of a sample of these urban areas and identifies steps the more successful cities have taken to produce stronger outcomes.

While the declines of legacy cities have common causes, their economic performance has become quite diverse in recent decades, as some have delivered much stronger economic, institutional, and fiscal results than others. All legacy cities have an array of assets including infrastructure, neighborhoods, institutions, populations, and ongoing economic activity. Differences in their comparative performance are related to how local policies and leadership have leveraged existing inventories of these assets. In particular, recovering legacy cities have built upon and expanded existing institutions in research, medicine, health, and education. They have also exploited the growing interest in urban neighborhoods where it is easy to walk to stores and restaurants, and where residential densities are higher than those in most suburban communities. Recovering cities also typically have maintained or attracted more educated residents and have seen growth in knowledge-related activities.

Legacy cities that have seen their economies begin to transform and grow again have not necessarily experienced population increases. The population of most legacy cities peaked in the mid-20th century and then declined. Buffalo and St. Louis, for example, had lower populations in 2000 than in 1900. Sometimes the decline in city populations is offset by suburban growth, so that metropolitan populations do not decline. But some successful legacy cities, such as Pittsburgh, have experienced modest population declines even at the metropolitan level. Changing the composition of city populations and economic activity is more important for success than population growth alone.

The successful recovery of legacy cities normally has not resulted from megaprojects that focus on redevelopment, but on the accretion of many small steps with a large cumulative impact—an approach Mallach and Brachman have dubbed “strategic incrementalism.” Their research shows that successful legacy cities have pursued such an approach continually and relentlessly. The key elements of strategic incrementalism require the evolution of new forms for a city’s physical organization, economic components, governance, and linkages to its surrounding region. Physically, the practice involves focusing on the city’s central core, its key neighborhoods, and the management of vacant land. Economically, it involves restoring the economic role of the city based on its comparative advantages and existing assets, sharing the benefits of growth with its population, and strengthening connections to the city’s region. Cities also must strengthen their governance and address the flow of services and fiscal resources between the city and the municipalities in the greater metropolitan area.

Legacy cities have declined over many decades, and recovery will take time and require patience. While the performance of some, such as Camden, NJ, continues to deteriorate, others show signs of progress. In Pittsburgh, Philadelphia, Milwaukee, and other legacy cities on the rebound, economic performance has improved, and the rates of unemployment, crime, and poverty have fallen below national averages despite the fact that populations remain well below their peak 60 years ago.

For additional information on the determinants of legacy city success, see http://www.lincolninst.edu/pubs/2215_Regenerating-America-s-Legacy-Cities.

Cómo definir el futuro del oeste norteamericano

Summer Waters es la tercera directora de Western Lands and Communities, un programa conjunto creado en el año 2003 por el Instituto Lincoln de Políticas de Suelo y el Sonoran Institute con el fin de promover políticas relacionadas con el uso del suelo y los recursos naturales en la región intermontañosa del oeste de los Estados Unidos. Summer tiene un título de grado en Biología de la Universidad del Sur de Florida, así como una maestría en Ingeniería civil –especializada en ingeniería ambiental y de recursos de agua– de la Universidad de Colorado en Boulder. Antes de sumarse al Sonoran Institute, Summer trabajó durante 15 años en los sectores de planificación urbana y recursos naturales para distintas entidades gubernamentales, tales como la Extensión Cooperativa de la Universidad de Arizona y el condado de San Diego, donde ganó un premio Emmy como coproductora de un video educativo.

LAND LINES: ¿Qué fue lo que la llevó a aceptar el desafío de dirigir este programa conjunto entre el Instituto Lincoln y el Sonoran Institute?

SUMMER WATERS: La oportunidad de ayudar a dar forma al futuro del oeste norteamericano. El Instituto Lincoln de Políticas de Suelo es un referente en este campo y el Sonoran Institute es reconocido en toda la región por su dedicación al trabajo en colaboración con las comunidades locales y otras organizaciones. Nuestra misión conjunta es ambiciosa, pero cada organización posee atributos complementarios que hacen que dicha misión tenga éxito. Nuestro compromiso mutuo desde hace tiempo le otorga a este programa conjunto tanto profundidad como flexibilidad.

LL: ¿Por qué este trabajo es la tarea justa en el momento justo para usted?

SW: Mi interés en el mundo natural me llevó a estudiar Biología como carrera de grado, y mi deseo de desarrollarme en una carrera orientada a las soluciones me llevó nuevamente a la universidad para estudiar Ingeniería. Después de graduarme, me interesó el tema de la planificación, ya que me permitía trabajar tanto con los entornos naturales como con los construidos. Al ir obteniendo experiencia profesional, comencé a reconocer de qué manera el uso del suelo, el agua y la energía se interconecta con la economía y el desarrollo de las comunidades. Además, valoré el abordaje holístico de Western Lands and Communities referente a los desafíos que enfrenta la región.

LL: Tanto el Instituto Lincoln como el Sonoran Institute han experimentado recientemente ciertos cambios en su liderazgo. ¿Qué desafíos y oportunidades se presentan ante usted durante esta transición?

SW: Tanto Stephanie Sklar, la nueva directora ejecutiva del Sonoran Institute, como George McCarthy, el presidente y director ejecutivo del Instituto Lincoln, son líderes motivados que me inspiran, tanto en lo personal como en lo profesional. Stephanie ha iniciado, en forma ambiciosa, un proceso de planificación estratégica que acompañará al Sonoran Institute en su 25º aniversario como organización. Con su amplio y profundo caudal de conocimientos, Stephanie sustenta el proceso y garantiza que no sólo celebremos sino también evaluemos nuestro trabajo. George McCarthy es un líder visionario y valiente, que está guiando al Instituto Lincoln en una transición similar. Su aprecio por la región del oeste del país fue notorio cuando visitó, recientemente, nuestra oficina en Phoenix. George comprende los desafíos que estamos enfrentando y la importancia que tienen los proyectos de demostración, como nuestro proyecto de restauración del delta del río Colorado, a la hora de definir el futuro de esta región.

LL: ¿De qué manera contribuye Western Lands and Communities a los esfuerzos del Sonoran Institute para restaurar la ecología y la economía del delta del río Colorado?

SW: Western Lands and Communities apoya la implementación de Minute 319, el acuerdo binacional firmado entre los Estados Unidos y México, con vigencia hasta el año 2017, a modo de guía para que ambos países sepan cómo compartir y gestionar el caudal de agua del río Colorado según el tratado de 1944. El evento más significativo derivado de este acuerdo tal vez haya sido la liberación de un “caudal por pulsos” de 130 millones de metros cúbicos de agua hacia México en la primavera de 2014. Dicha intervención se diseñó de tal manera que imitase los ciclos naturales del caudal del río Colorado en condiciones climatológicas de primavera, cuando el agua del deshielo de las montañas solía correr por donde actualmente se encuentran siete estados de los Estados Unidos y dos países, para llegar, finalmente, al mar de Cortés. Este esfuerzo histórico dio nueva vida al delta que se encontraba seco y, en mayo de 2014, el río llegó al mar por primera vez en muchos años. En la primavera de 2015, convocaremos a un grupo de representantes de ONG, profesionales académicos y científicos de distintas agencias para el primer aniversario de este evento. Los participantes analizarán el impacto que tienen los flujos de agua renovados en las funciones más importantes del ecosistema dentro de la región y evaluarán las implicaciones de este acuerdo temporal entre los Estados Unidos y México. Mediante este proceso, esperamos poder dar forma a las políticas del futuro relacionadas con la asignación de este precioso recurso al entorno natural.

LL: Entiendo que este proyecto está relacionado con sus objetivos más amplios sobre la conservación de los grandes paisajes. ¿Podría comentarnos más acerca de ello?

SW: La propiedad pública de tierras en la región intermontañosa del oeste de nuestro país es de enormes proporciones. A primera vista, un mapa de la región muestra un patrón desconectado de varias agencias y administradores de suelo con misiones y enfoques muy diferentes. Las tierras de trabajo y las tierras pertenecientes a las tribus complican aún más la situación. La conservación a nivel de paisajes se fundamenta en gran manera en la amplia gama de personas que viven en estas áreas. Para evitar la proliferación de “actos de conservación aislados”, y a fin de alcanzar resultados más coordinados y significativos, resulta esencial lograr la colaboración entre las entidades públicas, los propietarios de tierras y las tribus. Afortunadamente, los residentes de la región oeste –independientemente de sus puntos de vista políticos, su educación o su situación económica– generalmente coinciden en el objetivo común de preservar una forma de vida que está íntimamente relacionada con el paisaje en el que habitan. El camino a seguir implica capitalizar esta visión común, atraer a las comunidades para participar en la conformación de su futuro y conectar a los profesionales con las partes interesadas de manera significativa.

LL: ¿De qué manera ayuda Western Lands and Communities a las comunidades para responder mejor a los principales desafíos del futuro de la región intermontañosa del oeste?

SW: La región oeste enfrenta, básicamente, los mismos desafíos que otras regiones de los Estados Unidos, aunque sus circunstancias son singulares. Tenemos una población en crecimiento, que genera una economía y una demografía cambiantes. Tanto las áreas urbanas como las rurales intentan con mucho esfuerzo equilibrar el crecimiento y la protección de los recursos naturales. Debido a la magnitud e inmensidad del entorno natural en el oeste, resulta fácil pensar que nuestros vastos recursos naturales son infinitos, lo que es una percepción errónea que puede derivar en una expansión urbana descontrolada y otros problemas asociados con la extracción de los recursos naturales. Nuestros extensos paisajes también generan desafíos específicos relacionados con el transporte, lo que contribuye al cambio climático, una fuerza que exacerba los demás problemas. El programa conjunto ayuda a las comunidades mediante el desarrollo de herramientas de planificación, seminarios en Internet sobre crecimiento inteligente y temas relacionados con el desarrollo sostenible, y compilaciones de casos de estudio con resultados positivos en diferentes comunidades de toda la región oeste.

LL: Western Lands and Communities participa en la planificación analítica de escenarios, un enfoque único en cuanto a la planificación a largo plazo que desafía explícitamente a las comunidades a evaluar sus propuestas ante un futuro incierto. ¿En qué difiere la planificación analítica de escenarios de la planificación tradicional y cómo se aplica en la región oeste?

SW: La planificación analítica de escenarios es un proceso que fomenta la imaginación en el proceso de planificación. Mediante la participación de las partes interesadas, los miembros de la comunidad y los expertos, desarrollamos una serie de escenarios posibles y reconocemos las fuerzas complejas, tal como el cambio climático, que podrían dar como resultado un futuro muy diferente. Ayudamos a los participantes a ver sus problemas particulares desde el punto de vista de las fuerzas sociales, políticas, económicas y naturales más amplias que suelen dar forma a las comunidades. Aunque algunos escenarios actualmente parecen más probables o deseables que otros, cada uno de ellos recibe el mismo nivel de consideración durante todo el taller. Y lo que es más importante, este proceso es más flexible, participativo y dinámico que la planificación tradicional, ya que requiere de los participantes que desarrollen diversas estrategias en respuesta a una gama de incertidumbres en el futuro. Western Lands and Communities ha ayudado a diferentes comunidades en toda la región oeste a aplicar este enfoque en las actualizaciones del Plan General, en el desarrollo del plan de cuencas hidrográficas y en la preparación ante el impacto económico de las condiciones climáticas y meteorológicas cambiantes. Finalmente, la planificación analítica de escenarios está diseñada para ayudar a las comunidades a adaptarse mejor a los cambios, mediante el abordaje de problemas complejos que se encuentran inmersos en grandes incertidumbres. Las previsiones y estrategias generadas mediante este proceso preparan a los líderes para guiar a sus comunidades hacia un futuro más sostenible.

LL: ¿Cuáles son los desafíos especiales de planificar para el cambio climático en la región intermontañosa del oeste? ¿De qué manera los enfoques de Western Lands and Communities han reconocido estos problemas?

SW: En la región del oeste de los Estados Unidos, el cambio climático afecta los ecosistemas que son predominantemente áridos y, por lo general, muestran múltiples problemas con un gran nivel de variabilidad. En el pasado, construimos grandes embalses con el fin de abordar el problema de la provisión fluctuante de agua causada por los ciclos de sequía. No obstante, dicha solución ya no es suficiente, pues estamos experimentando sequías de una gravedad sin precedentes, seguidas de inundaciones extremas. Ahora las comunidades deben enfrentar problemas que, anteriormente, podían dejar en manos del gobierno federal. Las comunidades deben determinar por sí mismas cómo enfrentar la reducción de los recursos de agua, el aumento de las temperaturas, la migración de ecosistemas y el clima extremo. El enfoque de Western Lands and Communities es ayudar a las comunidades a identificar las prioridades y desarrollar políticas a fin de generar resiliencia.

Debemos ser muy conscientes del hecho de que las comunidades vecinas pueden estar muy polarizadas en lo referente al cambio climático. Aunque algunas comunidades han reconocido esta realidad, otras se aferran a un modo de vida pasado que resulta esencial al carácter de la región lo que deja muy poco espacio para la adaptación. La región del oeste posee grandes poblaciones de indígenas americanos y latinos, que son particularmente vulnerables al impacto del cambio climático. Hace poco hemos comenzado a trabajar con comunidades urbanas de latinos en Arizona a fin de abordar el problema de su exposición desproporcionada a los efectos del calentamiento global. Nuestra tarea consiste en convocar a los líderes, elaborar mensajes que sean significativos para las comunidades de latinos y trabajar con las organizaciones con el fin de capacitar a los miembros de la comunidad para que, a su vez, formen a otros sobre este tema. Todas las comunidades son diferentes, por lo que combinamos los métodos replicables con una gestión adaptativa.

LL: El abordaje del trabajo de Western Lands and Communities se ha ampliado considerablemente desde que comenzó con un enfoque exclusivo sobre las necesidades, los desafíos y las oportunidades relacionadas con las tierras de fideicomisos estatales. ¿Cuál es la importancia de esa misión original y la consecuente relación, desarrollada a lo largo del tiempo, con los administradores de las tierras de fideicomisos estatales?

SW: Históricamente, tanto el público en general como los profesionales dedicados a los recursos naturales no han comprendido bien el concepto de tierras de fideicomisos estatales, en particular en lo que respecta a sus responsabilidades fiduciarias. Las personas dependen de las tierras de fideicomisos estatales para su sustento, al igual que los niños y adultos jóvenes que necesitan un acceso a la educación pública de calidad. Aquí en Arizona, en los últimos años, hemos observado cortes sin precedentes en los fondos destinados a las escuelas y universidades públicas. Nuestro trabajo ha posibilitado una mayor comprensión del concepto de tierras de fideicomisos estatales como fuentes de financiamiento para las escuelas públicas y como sistemas naturales que tienen importantes funciones biológicas que deben protegerse. Los bancos de mitigación y la permuta de tierras ayudan a integrar las tierras de fideicomisos estatales al contexto más amplio de la conservación de grandes paisajes y desarrollo sostenible. Sin embargo, la mayoría de los administradores de tierras de fideicomisos estatales enfrentan desafíos regulatorios cuando intentan implementar las prácticas de conservación. Resulta necesario lograr una reforma para eliminar los obstáculos que dificultan la implementación de todas las prácticas que apuntan tanto a la conservación como a la rentabilidad.

Los beneficios económicos y ambientales de las tierras de fideicomisos estatales seguirán siendo significativos. Finalmente, nuestro compromiso hacia las comunidades de la región oeste a través de nuestro trabajo con las tierras de fideicomisos estatales permanecerá intacto. Aunque el enfoque del programa vaya cambiando a medida que los estados enfrentan desafíos nuevos y diferentes, la necesidad de educar a las personas en la premisa de que las tierras de fideicomisos estatales de generar valor para los beneficiarios de los fideicomisos permanecerá constante en los próximos años.

Researchers from the Lincoln Institute are working with the Group for the Integrated Development of the Capital (GDIC) in Havana to better understand how land and increments in land value can be utilized to facilitate the physical rehabilitation and economic development of Cuba.

During the Soviet era, Cuba’s economic environment was characterized by a top-down model in which state agencies were the principal economic and development actors. Planning was autocratic and inflexible; trade depended primarily on the socialist bloc countries; financial capacity was centralized in the national budget; and there was no tax system. Legal, financial and economic reforms implemented since 1990 have helped to create an institutional environment more conducive to economic efficiency and to allow Cuba’s participation in the global market (see Figure 1).

However, the Cuban economy still faces tremendous difficulties that have seriously affected the country’s capacity to maintain living standards, the quality of social and public services, and economic development programs in general. For example, Cuba’s GDP in 1995 was only one-half its 1989 level and its import capacity has fallen from roughly 8 billion to 2 billion US$ annually.

Figure 1: Summary of Key Reforms

1990 Opening of the economy to foreign investors

1991 Reinstatement of Cuban international trade

1992 Introduction of modifications to the 1976 Constitution

Introduction of new forms of non-state property Elimination of the state monopoly on international trade Expansion of foreign-owned private market enterprises 1993 Transfer of formerly state-owned rural land to workers

1994 Restructuring of the central state administration Opening of agricultural markets based on supply and demand mechanisms

1995 Reestablishment of indicative planning and introduction of financial indicators Beginning of state business restructuring Regularization of the circulation of hard currency in the banking system Enactment of new laws on foreign investments Gradual introduction of components of a tax system Enactment of the law restructuring the banking system

1997 Enactment of the law on free trade zones

The Cuban government has tried to promote tourism as its primary means to generate much-needed hard currency quickly. As a Caribbean island, Cuba offers substantial tourist attractions, ranging from magnificent beaches to the architectural heritage of Old Havana, which has been recognized on UNESCO’s World Heritage List, as well as other natural, historical and cultural sites around the country. However, stimulation of the tourist industry requires international partners to undertake the development of hotels, shops, restaurants and airport expansion. The fact that the state owns most of the land available for development is a critical element in Cuba’s strategy to attract foreign developers and tourists.

The government’s plan to build its tourist industry has shown some success. In 1967 there were about 2,000 tourists to the island annually, whereas in 1998 over 1.4 million visitors traveled to Cuba. During the last five years alone, foreign investors have increased their operations in Cuba in several economic sectors, particularly in tourism. As a result 2,000 new hotel rooms have been added in Havana, with a total capacity now surpassing 10,700 rooms. Nationwide there are 31,600 hotel rooms, and the target is to increase capacity to 40,000 over the next two years. About 80 percent of recent construction activity in Cuba is related, directly or indirectly, to the tourist sector. Some estimates indicate that state-owned land and buildings already committed to these new projects represent around 500 million US$. Significantly, this development has been achieved without the existence of a formal land market.

Land-based Policies to Stimulate Development

Land has been used in various ways to help stimulate development and to generate public revenues. First, the Cuban government has used land as its capital contribution in joint ventures with international developers. For example, VanCuba Holdings, S.A., a Canadian company, is a 50-percent partner with the Cuban government in a project to build 11 hotels. Cuba contributed the land as its 50-percent share and the Canadian company is expected to invest 400 million US$. Many such joint venture arrangements, particularly real estate and tourism projects, have been made with development companies from Canada, Spain, Italy and Israel.

Since land is Cuba’s principal contribution to these international ventures, a key issue is to assure that the financial value of the land represents 50 percent of the project’s social capital. In cases where the monetary value of the contributed land is less than 50 percent, the foreign partner has often been instrumental in helping its Cuban counterpart apply for credit from international banks or financial institutions to make up the difference. More recently, the credit to assure 50-percent Cuban participation is obtained at low interest rates directly from the Central Bank of Cuba rather than from international entities.

A second mechanism to stimulate development is the increased use of land leasing agreements for commercial and office projects. Leasing is preferred since the direct sale of state-owned land is possible only in very special situations. The leasing terms are negotiated on the basis of the specific land value, and if accepted by all parties are established for 25 years. The lease may be reviewed and extended for an additional 25 years if the parties involved in the renegotiations agree upon the new criteria. In Havana, several projects with foreign investors are currently operating under such an agreement, and the estimated area under development in the city surpasses 100 hectares.

Third, the Cuban government has entered into direct rental agreements for state-owned land in free trade zones, which in some cases generate significant revenues. About 120 foreign private and public-private enterprises have been established already in two trade zones in Havana.

Both the leasing and direct rental agreements for state-owned land provide important new funds to the national budget. These resources are then used to improve the standard of living in local communities by providing social services (education and health), developing economic projects, upgrading and enlarging major infrastructure and other amenities, and generating jobs. Some examples of city and community benefits that have been supported largely by these revenues are the new Havana International Airport, the creation and improvement of a digital telephone system, and the metropolitan park projects in the Almendares River area.

A different but very interesting set of instruments to mobilize land value increments resulting from public investment has been developed by the Office of the Historian, the public agency responsible for promoting, financing and developing the revitalization program in Old Havana. This Office has begun to collect both indirect and direct taxes totaling 35 percent of revenues from private enterprises not related to the Office, such as hotels, commercial businesses and restaurants that have benefited from the Office’s efforts to rehabilitate the historic district. These external revenues, as well as revenues generated by projects initiated by the Office itself, are used in a kind of revolving fund to support further investments in the built environment. They also fund a variety of social programs, including housing, nursing homes, and educational and cultural activities in Old Havana. The Office’s total revenues surpassed 40 million US$ in 1998 and 50 million US$ in 1999. The government is also negotiating other kinds of revenue-generating programs to capture land value increments to support the rehabilitation of the Paseo del Prado and the Rampa areas of Havana, as well as the Boca de la Chorrera redevelopment project at the mouth of the Almendares River.

Difficulties with Implementation

Cuba’s implementation of these various tools for capturing land value increments has not occurred without problems. In the case of the indirect and direct taxes on revenues introduced in Old Havana, several businesses have claimed that their revenue sources are not a result of the efforts by the Office of the Historian to improve the district, and therefore should be exempt from the tax. For example, the headquarters of the Cuban Fuel Distribution Company (CUPET) is located in a valuable area in the heart of the historic center but does not pay the tax. The company argues that its revenue sources (i.e., its facilities and distribution networks) are located outside the center and therefore do not benefit from the rehabilitation process.

The 25-year leasing agreements illustrate a different problem arising from the implicit dilemma between short-run vs. long-run goals, because the agreements do not include a periodic updating of lease payments. On one hand, if the payments are set on the basis of existing use and value, the public authorities may lose significant financial resources that could accrue from the impacts of these investments and other changes in land value over the 25-year lease. However, if the authorities attempt to capture the anticipated higher value immediately, they will have more difficulty making such expensive deals with wary investors.

The lack of an adequate legal system for real estate development and mortgage lending in Cuba is a major obstacle to implementation of all these instruments. Proposed new real estate laws have been drafted but legislation expected to be introduced last year has not yet been adopted. This uncertain and unpredictable legal situation can prevent the formation of serious business partnerships, which normally require long-term vision, stability and transparency. Furthermore, this lack of legal protection may scare away the highest quality developers who would be most able to carry out sophisticated larger projects. As a result, the Cuban government has had fewer strong proposals to evaluate and has been accepting smaller projects with less established international developers.

These smaller projects are sometimes problematic for several reasons. First, they are often located in the most desirable parts of Havana, although such developments are not necessarily appropriate for those neighborhoods. Second, they must rely on existing infrastructure since they are not large enough to provide that additional investment. Third, the aesthetic quality and even the basic service standards of these new hotels or apartments are sometimes questionable. Since these buildings affect the overall image of the city, they may even have a negative impact and contribute to the devaluation of their neighborhood.

A related problem is the uncertainty that developers experience in having to deal with new institutions and policy tools that are being negotiated within the Cuban government at the same time they are being implemented in the field. While these policies are under review, the government has introduced a moratorium on new development in certain areas of Havana and has slowed the real estate negotiation process in general. Without stability and trust in the relevant government agencies and policies, private investors for commercial or residential projects are discouraged by the risks inherent in making long-term development decisions. This has an obvious effect on the costs of development and the expected internal rates of return.

Finally, there are the difficulties of assessing land values in the absence of formal markets, let alone transparent land transactions. Government agencies involved in development have two choices. One is to use administrative prices in determining the value of leases or contributions, even though the basis for these prices may not reflect the actual value of land attributes. Alternatively, the agencies must negotiate the price with foreign developers based on the dynamics of the particular site. Both options are limited by the lack of ongoing independent land market transactions on which to evaluate actual prices.

Land Policy Dilemmas

Although Cuba has made substantial progress, it faces many challenges and dilemmas in using land efficiently to stimulate development and generate revenues. For example, the smaller, more expedient projects may result in faster development and revenue flows, but they are not able to create a broader vision for future land uses, and they frequently cause damage to the historic fabric and natural environment. The larger, better-financed projects can create such a vision and enhance the environment, but are much more difficult to negotiate and take longer to build.

Furthermore, the larger projects may require a substantial investment in basic infrastructure because of the poor quality of existing conditions. The government has not had the resources to make these investments, thus threatening the economic sustainability of new urban interventions. Small projects cannot support such investment burdens. While the large projects may be able to finance infrastructure investment, they run the risk of becoming exclusive enclaves separated from the surrounding community when they provide infrastructure only as part of their own project. The question, then, is how to finance the infrastructure in a non-exclusionary manner to encourage other small-scale development. Three alternatives are being pursued simultaneously, but are subject to continuing debate:

• small, individualized interventions using leases to occupy infill areas in the city that are already well-endowed with infrastructure;
• enclaves of large resorts and gated communities that can support infrastructure through exactions and development fees, with other controls built into the negotiation to prevent exclusionary access; or
• broader value capture policies to use real estate as an asset to generate revenues in a way that preserves the historical heritage and community solidarity, and prevents social segregation, sprawl and other negative implications.

Another aspect of the debate among Cuban planning and development experts concerns the pros and cons of introducing open land markets with a strong tax system vs. maintaining the existing public management of state-owned land. Those who advocate for introducing open land markets feel it is a necessary step to encourage development so that Cuba can benefit from linkages with the global economy and different types of foreign investments. These experts also argue that Cuba must continue to develop mechanisms for capturing publicly created land value.

Those who argue for continuing the current system point to Cuba’s success in reducing spatial segregation, promoting balance in social and urban services, preserving historic and other patrimony values in the city, and reserving enough land for future development projects. These advocates point to the recent Latin American experience with free markets, which has resulted in increased segregation between rich and poor areas, a lack of social services in poorer areas, increases in urban violence, speculation, and growing environmental problems.

In summary, some of the priority issues on Cuba’s land development agenda are the establishment of a legal system with clear parameters and the introduction of more rigorous and transparent mechanisms for valuing land and buildings. In addition, diversification of the types of Cuba-based partners available to participate in international development projects will help establish criteria for a longer-term planning perspective that will encourage large-scale infrastructure projects and support the continuing provision of benefits to the community. These concerns are not so different from land policy challenges in other developing countries. The continued study of land value as an instrument for development in Cuba offers important lessons for researchers and public officials throughout Latin America.

Ricardo Núñez is researcher at the Group for the Integrated Development of the Capital (GDIC) in Havana, Cuba. H. James Brown is president and CEO of the Lincoln Institute, and Martim Smolka is senior fellow and director of the Institute’s Latin American and Caribbean Program. Laura Mullahy, research assistant for the Latin American and Caribbean Program, also contributed to this article.

Una versión más actualizada de este artículo está disponible como parte del capítulo 5 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

Los cambios en la economía global, las telecomunicaciones y los sistemas de transporte obligan a las ciudades de todo el mundo a pensar en proyectos de desarrollo urbano a gran escala como una manera de reestructurar el uso de la tierra y de estimular la economía local. Por ejemplo, extensas áreas con buena ubicación que anteriormente han estado ocupadas por instalaciones ferroviarias y otros usos industriales o relacionados con el transporte han quedado abandonadas en muchas ciudades de medianas dimensiones a medida que el transporte de bienes se hace cada vez más en contenedores desde un número reducido de puertos principales y terminales.

Las restricciones reglamentarias sobre las empresas del estado han limitado las opciones para abrir estas tierras subutilizadas al mercado privado o para desarrollarlas como proyectos públicos. Con una mayor privatización y la eliminación de restricciones, estas propiedades se convertirían en la ubicación ideal para exitosas asociaciones públicas y privadas de desarrollo urbano. Sin embargo, aunque los desarrollos urbanos monumentales tal vez parezcan una panacea, también plantean numerosas inquietudes sobre la implementación y los efectos imprevistos en otros barrios de la ciudad, así como la competencia con otras ciudades.

Córdoba es un ejemplo representativo de las ciudades que han adoptado la planificación estratégica a fin de reestructurar los usos de las tierras locales en un contexto macroeconómico e institucional cambiante. Una de las preguntas clave que se hacen estas ciudades es hasta qué punto puede un nuevo desarrollo de gran magnitud, en este caso un telepuerto, estimular efectivamente la diversidad económica y reactivar una zona marginada.

Condiciones en Córdoba

La ciudad de Córdoba, con una población aproximada de 1,3 millones de habitantes, está estratégicamente ubicada en el centro geográfico de Argentina y tiene vínculos bien establecidos con la capital Buenos Aires y ciudades importantes de Chile, Brasil y Uruguay. Por mucho tiempo Córdoba ha sido un centro industrial donde se concentraba la producción de automóviles, aviones, trenes y maquinaria, al igual que de bienes de consumo como alimentos, calzado, ropa y artículos de cuero. Más recientemente, la ciudad ha extendido su sector de servicios para cubrir necesidades locales y regionales.

Puesto que Argentina ha pasado por una estabilización y reestructuración de su economía, Córdoba ha adquirido un mayor potencial para convertirse en un núcleo floreciente del Mercosur, el distrito de negocios de la región centro-sur de Suramérica. No obstante, uno de los obstáculos más perturbadores para la ciudad sigue siendo la competencia con Buenos Aires.

Al igual que muchas otras ciudades de América Latina, Córdoba está atravesando por un período de mayor descentralización, de transición hacia una estructura urbana multipolar y de otros problemas socioeconómicos. Hace varios años la ciudad emprendió un proceso de planificación estratégica que incorporaba un grupo muy representativo de circunscripciones y que desembocó en un plan en 1996 en el cual se identificaban algunas necesidades inmediatas de desarrollo económico y otros aspectos que exigían mayor análisis e implementación.

Como parte de la colaboración continua entre los funcionarios municipales y el Instituto Lincoln, en un seminario realizado en Córdoba en abril de 1997 se examinó la regulación y promoción del mercado inmobiliario. (1) Una idea de gran prioridad que surgió de aquellas discusiones se refería al desarrollo de un telepuerto en terrenos urbanos subutilizados en el centro de la ciudad. Se creó un comité para abordar la planificación y la implementación de dicha obra, el cual estaba integrado por funcionarios municipales, representantes del sector empresarial privado y miembros de la comunidad universitaria local.

El telepuerto concebido para Córdoba es una obra para usos combinados que ofrecerá edificios de oficinas, centros de convenciones y hoteles, además de otros usos secundarios de la tierra. La oferta de edificios de oficinas con tecnología de punta es considerada un objetivo clave para satisfacer las necesidades que tiene la ciudad como centro regional y sede nacional para algunas empresas. Estas instalaciones tendrán una sofisticada infraestructura de telecomunicaciones y se construirán con una inversión combinada de los sectores público y privado. Uno de los primeros proyectos es un hotel que la municipalidad construirá dentro de una edificación histórica.

La ubicación propuesta para el telepuerto es un terreno de 40 hectáreas en el centro de la ciudad, en las márgenes del río Suquía. El terreno incluye antiguas líneas ferroviarias y tiene buen acceso a las principales carreteras que comunican la región de Mercosur. Actualmente los predios están en manos de propietarios públicos y privados y se prevé que serán necesarios algunos traspasos de tierras para poder emprender el proyecto.

Observaciones y recomendaciones

Para ayudar al comité a terminar sus planes del telepuerto, la ciudad de Córdoba y el Instituto Lincoln organizaron un segundo seminario en abril de 1998 para discutir las inquietudes acerca de la implementación del proyecto. Los estudios comparativos de casos de proyectos de desarrollo a gran escala de entidades públicas y privadas en Toronto, Canadá y en Sao Paulo, Brasil sirvieron como valiosas referencias de los problemas y desafíos enfrentados por esas ciudades y aportaron una base para analizar el diseño y las posibles perspectivas para la propuesta del telepuerto.

Una consideración fundamental es la dimensión a gran escala del telepuerto en relación con el mercado local existente, lo que supone que, como mínimo, el proyecto debe realizarse por etapas para garantizar que el desarrollo urbano sea ordenado. Igualmente tienen que ver con la dimensión los efectos que tendrá el proyecto sobre otros terrenos de la ciudad, entre los que se encuentran predios con un potencial para obras de desarrollo de carácter similar. El atractivo relativo de los terrenos escogidos puede traer consecuencias negativas para el desarrollo de tierras no residenciales en otras zonas específicas de crecimiento de la ciudad. Paralelamente es importante entender la intensidad y fuerza del mercado para los usos específicos que tendría el terreno propuesto para el telepuerto.

Otra preocupación es el posible efecto negativo del proyecto sobre los barrios residenciales existentes y en crecimiento de la zona. Por otra parte, el éxito del telepuerto podría beneficiar a los barrios si los residentes se integran al proceso de planificación e implementación.

Entre las lecciones que faltan por aprender de la experiencia que han tenido otras ciudades está la importancia de fijar objetivos manejables; algunos participantes del seminario expresaron su temor de que el comité de Córdoba estuviese siendo demasiado ambicioso. Una segunda lección se refiere a la necesidad de actuar con sumo cuidado al seleccionar la ubicación de una nueva obra de desarrollo de gran magnitud. Si bien la ubicación propuesta para el telepuerto no se consideraba desfavorable en ningún sentido, su selección no había sido el resultado de un análisis sistemático. Más bien se trata de un caso en que la ciudad busca aprovechar una oportunidad para llevar a cabo un plan de desarrollo en un terreno disponible que urge reutilizar.

Una tercera observación la hizo el sector privado, que tiene necesidades especiales en cuanto al acceso, infraestructura y costos. Mediante un estudio de mercado idóneo se podrá identificar un sinnúmero de aspectos por considerar, incluida la capacidad que tendría Córdoba para competir con Buenos Aires como sede local o regional de empresas nacionales e internacionales. Está claro que los supuestos beneficiarios del sector privado deben participar directamente en el desarrollo conceptual y la planificación del proyecto.

Varias semanas después del seminario, la ciudad encargó un estudio para facilitar la estrategia de implementación del telepuerto con base en estas inquietudes y recomendaciones. El estudio también investigará posibles instrumentos para efectuar la captura de plusvalías que permitan obtener el financiamiento necesario para la infraestructura y los mecanismos para formular los tipos de asociaciones entre los sectores público y privado que parecen indispensables para el éxito del proyecto del telepuerto.

Como observación general de cierre hay que agregar que los funcionarios de Córdoba, o cualquier otra ciudad que esté considerando obras de desarrollo urbano a gran escala, precisan actuar con celeridad más allá de la fase de estudio y brindar capacitación y otros mecanismos de apoyo para que los dirigentes locales y los profesionales puedan mejorar su capacidad para manejar el proyecto. Se requieren destrezas y experiencia para evaluar el funcionamiento de los mercados inmobiliarios, definir la competencia técnica requerida, negociar con el sector privado y vigilar la gestión financiera, la regulación de los servicios públicos, el impuesto a la propiedad, las regulaciones de la tierra y la compleja interacción de todos estos elementos. El desafío de una tarea así es lograr el equilibrio entre una cuota suficiente de planificación e investigación y la necesidad de aprovechar las oportunidades de desarrollo a medida que surgen y de aprender con la evolución del proceso.

David Amborski es profesor de la Escuela de Planificación Urbana y Regional en la Universidad Politécnica de Ryerson en Toronto. Douglas Keare, miembro principal del Instituto Lincoln, cuenta con experiencia en planificación estratégica en grandes ciudades de países en vías de desarrollo.

Una versión más actualizada de este artículo está disponible como parte del capítulo 1 del libro Perspectivas urbanas: Temas críticos en políticas de suelo de América Latina.

El proceso de globalización de las inversiones, las nuevas tecnologías de comunicación y la generalizada movilidad corporativa y personal están provocando una verdadera transformación de las “ciudades-región” del mundo entero. Desde hace muchos años los estudiosos de asuntos urbanos han advertido sobre la emergencia de una nueva clase de asentamiento humano, con estructuras económicas y sociales particulares y sus formas físicas asociadas.

Estas fuerzas globales fueron el tema central de la Conferencia realizada en el Instituto Lincoln, Cambridge, en septiembre de 1995. Este consorcio estuvo organizado por los investigadores David Barkin, Gary Hack y Roger Simmonds, quienes estudiaron doce grandes ciudades-región de Europa, Asia y las Américas. Si bien cada una de las ciudades del estudio exhibe sus propias características y patrones exclusivos, todas cumplen con los siguientes criterios:

• Una gran población, pero no necesariamente de la categoría de mega ciudad;
• Una economía de mercado diversificada, más que una economía planificada
• Una dominada por una sola industria;
• Patrones particulares de crecimiento y cambio desde 1960; y
• Antecedentes de intentos gubernamentales (exitosos o no) de moldear la forma regional.

Las doce ciudades del estudio son:

Ankara, Turquía
Bangkok, Tailandia
Yakarta, Indonesia
Lyon, Francia
Madrid, España
Randstad, Países Bajos
San Diego, Estados Unidos
Santiago, Chile
São Paulo, Brasil
Taipei, Taiwan
Tokio, Japón
Toronto, Canadá

Tomando las doce ciudades anteriores como casos de estudio, se diseño una investigación en varios niveles a fin de construir un modelo que representara a las ciudades-región y los motivos de sus características. El primer objetivo fue examinar los efectos de la economía política global en el crecimiento y desarrollo de las ciudades a lo largo del tiempo. ¿Qué efecto ha tenido la pérdida de la agricultura tradicional o han tenido las economías industriales y la introducción de nuevos capitales de inversión en el funcionamiento de las ciudades? ¿Cómo han respondido las ciudades ante estas poderosas fuerzas externas?

Un segundo objetivo de la investigación fue entender las relaciones entre la cambiante forma urbana y las inversiones en infraestructuras regionales tales como sistemas de transporte y nuevos centros tecnológicos. ¿Cómo se ha distribuido la población en torno a los nuevos centros económicos y redes de transporte? ¿Qué influencia tienen las labores de planificación regional en los cambios de la forma espacial y en el efecto sobre el medio ambiente?

En tercer lugar se exploraron las consecuencias de la dinámica de la globalización sobre la calidad de la vida urbana. ¿Qué problemas sociales y económicos enfrenta hoy la población urbana? ¿Qué están haciendo los gobiernos municipales y nacionales para resolverlos?

Previo a la conferencia, los equipos de investigación de todas las ciudades-región recopilaron datos para mapear el crecimiento y el movimiento de la población, los cambios en la infraestructura y el desarrollo económico e industrial a lo largo de las últimas tres décadas. A fin de que los datos fueran comparables más alláa de las fronteras nacionales, elaboraron planos de la evolución física de las doce ciudades-región en 1960, 1970, 1980 y 1990, y correlacionaron estos planos con cambios en los indicadores económicos y sociales fundamentales durante el mismo período. Asimismo, cada grupo elaboró un informe sobre los problemas especiales que enfrentan sus gobiernos y las acciones de los legisladores para conformar la forma espacial cambiante de la región.

Un retrato de las ciudades-región

Si bien las doce ciudades-región estudiadas presentan variaciones sustanciales, también tienen muchos patrones comunes en cuanto a crecimiento y cambio. Sus poblaciones oscilan entre unos 2 millones de habitantes, en Lyon, más de 32 millones en Tokio, la ciudad más grande del mundo y también una de las más ricas.

En todas estas ciudades el modelo predominante de crecimiento físico ha sido la dispersión desde el centro histórico y los anillos interiores adyacentes hacia espacios abiertos distantes y tierra agrícola. Esta dispersión implica desarrollo residencial y comercial —aunque a veces en direcciones diferentes— y se ha facilitado gracias al vertiginoso aumento en el uso y la disponibilidad del automóvil en todo el mundo. El ejemplo más notable es el de Taipei, en donde el número de automóviles aumentó desde aproximadamente 11 mil en 1960 a más de 1 millón en 1990; en ese mismo periodo, el número de personas por automóvil disminuyó de 127 a 5. Por otra parte, las ciudades de Ankara y Santiago, con 13 personas por automóvil en 1990, han sido las menos afectadas por el “síndrome automotor” hasta la fecha.

Incluso al mismo tiempo en que la mayoría de las ciudades se están dispersando hacia las afueras, ciertos núcleos interiores han visto aumentar su población gracias a la migración de clases adineradas y de empleos del sector de servicios hacia los centros nuevamente pujantes. La construcción de obras monumentales como estadios deportivos, centros de convenciones, hoteles de lujo y condominios residenciales han contribuido a avivar el turismo y la vida cultural de estos núcleos urbanos. La otra cara de la moneda, sin embargo, es el creciente deterioro que se observa fuera de los centros debido al desplazamiento de grandes números de pobres urbanos a zonas carentes de servicios.

Excepciones notables de este patrón son los centros urbanos deprimidos y los opulentos suburbios de baja densidad poblacional de los Estados Unidos. Ciudades como Bangkok y Taipei exhiben mayor integración vecinal de ricos y pobres que otras, pero su patrón predominante continúa mostrando zonas opulentas segmentadas y mayor definición de pobreza con el paso del tiempo.

Irónicamente, en esta nueva era de globalización los patrones residenciales están perdiendo importancia frente a los patrones de interacción, conforme los participantes de la economía global se comunican más a menudo con sus semejantes de otras ciudades u otros países —bien sea electrónicamente o en persona— que con sus propios vecinos.

Los cambiantes patrones demográficos han disminuido las tasas de crecimiento urbano a un 3 por ciento, en comparación con 6 a 8 por ciento en la década de 1960. La mayoría de las ciudades han experimentado una reducción en sus tasas de natalidad y de migración desde zonas rurales del interior del país o de las regiones inmediatas. No obstante, la turbulencia política y las cambiantes oportunidades laborales también están dando pie a nuevas olas de migración transnacional. Muchos nuevos inmigrantes se asientan en áreas de la ciudad separadas del sector pobre indígena, y presentan un nuevo grupo de problemas sociales y económicos para los gobiernos nacionales y municipales. En San Diego, por ejemplo, inmigrantes de México y Centroamérica contribuyen al crecimiento poblacional y a la mayor segmentación dentro de la región. Por otra parte, São Paulo ha experimentado una emigración neta, dado que las nuevas políticas y programas brasileños fomentan la descentralización hacia nuevas comunidades de ese vasto país.

Según los datos de 1990, los sectores económicos tienen una composición similar entre países. Por lo general, menos del 5 por ciento de la fuerza laboral se dedica a la agricultura y a la extracción de recursos, mientras que el 20 al 30 por ciento trabaja en el sector manufacturero y el 65 al 75 por ciento en el sector de servicios. Como interesantes excepciones en estas tendencias laborales son los casos de Yakarta, con una tasa de participación en el sector agrícola de casi el 16 por ciento en 1990, y San Diego, con un 83 por ciento de tasa actual en el sector de servicios. Bangkok y Taipei muestran los mayores declives en agricultura, desde un 20 por ciento en 1960 a menos del 2 por ciento en 1990. En ese mismo año, ambas ciudades mantenían tasas relativamente altas en el sector manufacturero; 32 y 36 por ciento respectivamente.

En cuanto a la distribución del ingreso en las regiones, se observan patrones similares: el 20 por ciento más pobre de la población suele recibir apenas un 5 a 7 por ciento de los ingresos totales, en comparación con un 40 a 50 por ciento de dichos ingresos que llega al 20 por ciento más rico de la población. Santiago, São Paulo y Yakarta exhiben las mayores concentraciones de riqueza en los niveles superiores, mientras que Tokio y Taipei, seguidos cercanamente por Randstad y Madrid, exhiben la menor desigualdad entre los niveles de ingresos. San Diego, a pesar de su ingreso per cápita relativamente alto, muestra una distribución de ingreso de rango medio del 44 por ciento para el extremo superior, pero apenas un 4 por ciento del ingreso ganado para el 20 por ciento más pobre de su población.

Una economía mundial llena de cambios y contradicciones

Durante la conferencia se revelaron varias realidades nuevas sobre el mundo en que vivimos. Quizás la más importante sea la dificultad que enfrentan las autoridades municipales y nacionales para diseñar políticas eficaces que modifiquen las poderosas fuerzas económicas que moldean las nuevas estructuras productivas de sus regiones.

Un tema recurrente en los análisis regionales fue la contradicción existente entre las inversiones privadas altamente centralizadas y los cambios arrolladores que surgen con la inserción de la ciudad-región en la economía internacional. En la mayoría de las regiones, los “corredores de élite” de la globalización presentan un agudo contraste con la precaria “ciudad residual”. Dichos enclaves adinerados, receptores de las inversiones de corporaciones transnacionales productoras para mercados mundiales, están redicadas cerca de las zonas donde viven y compran los participantes de esta economía. En estos centros financieros y comerciales, prósperas empresas de profesionales capacitados realizan operaciones de producción y marketing mundial para garantizar retornos atractivos a los inversionistas internacionales, casi siempre haciendo caso omiso de la economía local.

Paralelamente con el declive poblacional, las oportunidades de empleo también se han estancado. En cada una de las ciudades-región se observa el desplazamiento acelerado de la fuerza laboral hacia empleos a tiempo parcial de baja paga en el sector de servicios, con un concomitante desequilibrio de oportunidades económicas que condena a un segmento creciente de la población a la pobreza.

Esta amenaza está acompañada por cambios en el sector agrícola. Gran parte de los productores rurales de pequeña escala no pueden competir en los mercados internacionales con productores agrícolas de gran escala, quienes tienen acceso a un capital que les permite equiparse con las más modernas maquinarias para aumentar su producción. El proceso inexorable de expansión global también está provocando la salida del mercado de plantas manufactureras de pequeña y mediana escala.

La mayoría de los participantes de la conferencia aceptaron y adoptaron de buena gana la nueva dinámica de la globalización. Sus gobiernos trabajan activamente para reposicionar sus regiones a fin de atraer inversionistas extranjeros y promotores de bienes raíces que prometen la modernización, esperando poder convertir sus ciudades en guías que conduzcan a sus naciones hacia el proceso de integración mundial. Casi todos consideran que su tarea principal será la de desenmarañar los obstáculos —normativos y otros— de las épocas anteriores, y facilitar la iniciativa privada mediante el ofrecimiento, a veces gratuito, del suelo y de la infraestructura requeridos para las nuevas instalaciones.

Muchas de las ciudades están específicamente orientando sus estrategias de inversión en infraestructura para expandir la economía de servicios. Bangkok, Taipei y Tokio están esforzándose para convertirse en los centros financieros de Asia, esperando la caída de Hong Kong como primer competidor. Bangkok, en particular, está invirtiendo en redes sustanciales de transporte y comunicaciones y en la capacitación de su fuerza laboral. En Europa, Madrid está aprovechando su papel como centro mundial de la cultura española para mejorar sus servicios de comunicación; Randstad está promoviendo sus instalaciones de soporte aeroportuario; y Lyon se está convirtiendo en un novedoso centro de industrias tecnológicas emergentes.

Impactos en el desarrollo regional

Los casos estudiados y las discusiones durante la conferencia pusieron en evidencia numerosos problemas de ese entusiasmo por la globalización. El complejo y preocupante fenómeno de la expansión urbana se está generalizando en el mundo entero conforme el automóvil facilita la distribución de la población a centros de empleo satélites y suele reducir la densidad de las ciudades regionales. Dos excepciones interesantes de este patrón son Tokio, cuyo sistema de tránsito masivo contribuye a mantener centralizada la actividad económica, y Taipei, donde la geografía montañosa restringe el desarrollo hacia las afueras. Por otra parte, en Randstad se está observando el desarrollo acelerado de espacios vacantes que existían entre antiguos asentamientos, aun cuando la tasa de crecimiento general ha sido bastante lenta.

Parte de esta descentralización proviene de los esfuerzos gubernamentales para hacer frente a asuntos como el alto precio del suelo, el congestionamiento vehicular o la protección ambiental. En las afueras de Santiago, Lyon, Randstad, Taipei, Tokio y Yakarta se están construyendo nuevos pueblos o “tecnópolis”, mientras que en Bangkok se está construyendo un nuevo puerto a unos cuantos kilómetros del centro de la ciudad. En São Paulo, estrictos reglamentos de protección de las zonas de cuenca están forzando el desplazamiento de nuevos desarrollos a sitios distantes.

Más que moldear el desarrollo, la infraestructura suele seguirle los pasos a éste. Los inversionistas privados tienen capacidad de responder con mayor rapidez a planes de crecimiento dentro de sus regiones, de lo que pueden las agencias públicas responsabilizarse por implementar grandes proyectos de infraestructura. De esa manera el desarrollo privado presiona al sector público para que dote de servicios a zonas que ya están siendo urbanizadas. Este proceso tiene serias implicaciones para la planificación regional a largo plazo, si ésta continúa siendo impulsada por el desarrollo mientras que el gobierno le sigue los pasos para no quedarse atrás.

Otro tema que emergió durante la conferencia fue el de una mayor conciencia sobre los problemas ambientales. En la mayoría de las ciudades-región, la acumulación de riqueza y el consiguiente aumento de consumo están imponiendo enormes presiones sobre el medio ambiente. Con el paso acelerado de la integración regional y la desregulación de la economía, las corporaciones transnacionales pueden funcionar como les plazca en la economía internacional. Los participantes señalaron repetidamente las dificultades de controlar estos retos de manera constructiva en cada una de sus ciudades-región. Así y todo, la preocupación por el ambiente fue vista también como el principal factor de motivación de la planificación regional estratégica considerada.

Calidad de vida

La globalización promete un mundo de mayor prosperidad. La mayoría de las ciudades representadas en la conferencia experimentaron aumentos relativos en varios índices promedio de calidad de vida entre 1960 y 1990: ingreso per cápita, esperanza de vida y nivel de educación. Estas entradas crecientes, junto con los avances tecnológicos que incrementan la productividad y la mayor diseminación de información sobre bienes disponibles en los mercados mundiales, han permitido que habitantes urbanos de todas partes satisfagan sus necesidades con nuevos productos. No obstante, modelos globales poderosos de organización y producción están también imponiendo nuevos patrones homogéneos de consumo que amenazan con acabar la extraordinaria variedad de estilos de vida que caracteriza a la mayoría de las regiones urbanas.

El aumento en movilidad física resultante del automóvil particular ha abierto las puertas a un mundo de lugares donde vivir, comprar y trabajar. Al mismo tiempo, los viajes diarios entre la casa y el trabajo duran unos 45 minutos en promedio, desde menos de 30 minutos en San Diego a más de hora y media en Bangkok.

Los participantes de la conferencia estuvieron de acuerdo en que este aumento de movilidad ha minado el sentido de comunidad del pasado, conforme los seres humanos comienzan a identificarse con lugares urbanos más dispersos o a desarrollar identidades “sin tierra”. Prácticamente todos los representantes de las ciudades hicieron mención de la “McDonaldnización” de la cultura mundial, que abarca expresiones como la música, la ropa, la arquitectura y la comida. Igualmente, a medida que los mercados de bienes de consumo se globalizan, los habitantes de muchas ciudades-región están comenzando a depender de esos mercados para que suministren servicios que solían ser semipúblicos, tales como educación y recreación.

Los cambios en la función económica de grandes ciudades —de manufactura y transporte a finanzas y turismo— han causado también pérdidas importantes. Muchos centros históricos han sido modificados para fines de turismo cultural. Edificios o ciudades que en el pasado fueron fábricas o almacenes son ahora tiendas o museos. Los trabajadores u obreros portuarios de antaño que solían vivir cerca de sus trabajos, han desaparecido para dar lugar a visitantes que se desplazan por automóvil o avión desde otras ciudades o incluso otros países para admirar edificios que han sido restaurados en forma, pero cuya función ha sido completamente transformada. Nuevos rascacielos, centros de convención, estadios y hoteles de lujo son impuestos sobre el paisaje urbano, generalmente sin tomar en cuenta el contexto espacial y social.

Ciertos puntos del proceso de globalización son alentadores, especialmente si se consideran las contribuciones de la ciencia médica y aspectos básicos de educación y sanidad que pueden ofrecerse con inversiones públicas de relativo bajo costo. Sin embargo, el estándar de vida y las oportunidades de empleo se están deteriorando para números crecientes de la población mundial.

La mayoría de los nuevos trabajadores urbanos viven en un mundo de mercados laborales más flexibles y menos seguridad laboral, diferente al mundo en que laboraron sus padres como granjeros u obreros de plantaciones. Las nuevas tecnologías informáticas y financieras globales facilitan a las empresas buscar los sitios y mano de obra más baratos del mundo y cambiar los empleos de un país a otro en cuestión de semanas, de ser necesario.

Los mismos nuevos medios de información y de transporte, que permiten a consumidores y trabajadores elegir entre una amplia variedad de artículos o empleos, también permiten que los criminales elijan de entre una amplia variedad de potenciales blancos. Algunos participantes de la conferencia argumentaron que la actual percepción de menor seguridad física es algo más imaginario que real, especialmente en los Estados Unidos. Lo cierto es que la percepción de por sí está claramente alentando la demanda mundial de urbanizaciones enrejadas o viviendas más seguras.

Los efectos positivos y negativos de la globalización en la calidad de vida, más que concesiones, son las dos caras de la moneda. Las mismas tecnologías de información y organización de mercados que difunden nuevos bienes de consumo alrededor del mundo en cuestión de semanas, también transmiten malas noticias, como el sida. Los mismos automóviles que facilitan el acceso a oportunidades de recreación en el campo para los habitantes urbanos, también dan lugar a ciudades que se expanden y ocupan tierras de la periferia que se convierten en patios privados en vez de vistas escénicas de granjas o bosques.

Debido a estas contradicciones, es de menester buscar otros modelos de producción y consumo, modelos que permitan a los habitantes fortalecer sus comunidades y proteger sus ambientes, que ofrezcan la posibilidad de crear empleos productivos para toda la población, y que restrinja el acelerado proceso de polarización.

El papel del gobierno

¿Hasta qué punto los ciudadanos de las ciudades-región piden a sus gobiernos municipales, metropolitanos o nacionales encontrar formas de eliminar los efectos negativos de la globalización? Como un ejemplo, los representantes de San Diego, Ankara y Tokio apuntaron al hecho de que las elecciones municipales se centran ahora en torno a quién se beneficia de la globalización. Los ciudadanos que se identifican más con la economía global que con la municipal exigen que los gobiernos inviertan en infraestructura de alta tecnología, construyan centros de convención o estadios y fomenten las oportunidades de educación con el fin de atraer empleos futuros.

En contraste, la mayoría de los peones y trabajadores de poca formación educativa ven la globalización como una amenaza más que una oportunidad, y les interesa más invertir los limitados recursos municipales en servicios públicos como escuelas y clínicas comunitarias. En cualquier caso, es posible que aquellos gobiernos que se concentran en los servicios municipales para no tener que tomar decisiones políticas impopulares, están únicamente postergando los impactos inevitables de la globalización, entre ellos sus efectos potencialmente beneficiosos a largo plazo.

A la larga, quizás la capacidad de gobiernos de cualquier nivel para manejar las fuerzas globales sea limitada. Existe una discrepancia inherente entre la economía global y el gobierno, no sólo en el sentido espacial de gobiernos municipales o fragmentados que están luchando para dominar las fuerzas económicas regionales o globales, sino en los modos operativos contrastantes de los mercados y los gobiernos.

La globalización ha dificultado cada vez más definir tanto “la región” que debería planificarse como “la comunidad” que debería participar en dichos planes. Los gobiernos municipales —e incluso la mayoría de los gobiernos nacionales— no tienen muchos recursos para proteger los negocios locales contra la competencia global. En casi todas las ciudades-región representadas en la conferencia se han multiplicado los grupos de interés especializados y las organizaciones no gubernamentales, al mismo tiempo que los gobiernos omnipresentes han comenzado a dar pasos hacia la fragmentación y descentralización. La devolución política, bastante avanzada en los Estados Unidos, está comenzando a sonar fuerte en otras partes.

La tendencia actual de los gobiernos de las ciudades-región es prescindir de técnicas de planificación espacial complicadas, y en cambio ajustarse a lo que uno de los planificadores de la conferencia denominó como “las nuevas reglas de la propiedad y la política”. Sin embargo, esta filosofía deja una herencia de muchas contradicciones: entre las oportunidades para las élites y los pobres; entre los defensores de una mayor autonomía municipal y aquellos comprometidos a patrones regionales emergentes de interdependencia; y entre políticas que favorecen el crecimiento en vez de la redistribución de recursos. Sin un sistema gubernamental eficaz, todas estas dicotomías tienen gran potencial para la confrontación.

Francisco Sabatini, a sociologist and urban planner, is a professor at the Catholic University of Chile in Santiago, where he lectures on urban studies and planning and conducts research on residential segregation, value capture and environmental conflicts. He combines his academic work with involvement in NGO-based research and action projects in low-income neighborhoods and villages. He served as an advisor to the Chilean Minister of Housing and Urban Affairs after democracy was restored in 1990, and as a member of the National Advisory Committee on the Environment in the subsequent democratic governments. Sabatini has published extensively in books and journals, and has taught in several countries, mainly in Latin America. He is a long-standing collaborator in the Lincoln Institute’s Program on Latin America and the Caribbean, as a course developer, instructor and researcher.

Land Lines: Why is the topic of residential segregation so important for land policy and urban planning in general?

Francisco Sabatini: Zoning, the centerpiece of urban planning, consists of segregating or separating activities and consolidating homogeneous urban areas, for either exclusionary or inclusionary purposes. At the city level, this planning tool was introduced in Frankfurt, Germany, in 1891 and was adopted elsewhere to address environmental and social problems due to rapid urbanization and industrialization. In modern cities the widespread practice of zoning to separate different activities and groups has aggravated these and other problems. It affects traffic and air pollution because more car trips are needed to move around the city, and it contributes to environmental decay and urban ghettos characterized by symptoms of social disintegration, such as increasing rates of school dropouts, teenage pregnancy and drug addiction.

It is indisputable that the desire for social segregation has long been a component of exclusionary zoning, along with concerns related to the environment and health. The influx of working-class families and immigrants is often considered undesirable and politically threatening, and zoning has been used to segregate such groups. Ethnic and religious discrimination are the most negative forms of social segregation. When a national government defines itself in religious, ethnic or racial terms, residential segregation usually remains entrenched as a severe form of discrimination, intolerance and human exploitation, as in Ireland, South Africa and Israel. Segregation can be positive, however, as in many cities around the world that become socially enriched with the proliferation of ethnic enclaves.

LL: What are the economic impacts of segregation?

FS: Besides its urban and social effects, residential segregation is an important aspect of land policy because it is closely connected to the functioning of land markets and is a factor in motivating households to pursue economic security and the formation of intergenerational assets. Fast-growing cities in unstable and historically inflationary economies convert land price increments into an opportunity for households at every social level to achieve their goals. It is no coincidence that the percentage of home ownership is comparatively high in Latin American cities, including among its poor groups. Land valuation seems to be an important motivation behind the self-segregating processes of the upper and middle classes. And, the increase in land prices is a factor in limiting access to serviced land and contributing to spatial segregation. In fact, the scarcity of serviced land at affordable prices, rather than the absolute scarcity of land, is considered the main land problem in Latin American cities, according to research conducted at the Lincoln Institute.

LL: What makes residential segregation so important in Latin America?

FS: Two of the most salient features of Latin America are its socioeconomic inequality and its urban residential segregation. There is an obvious connection between the two phenomena, though one is not a simple reflection of the other. For example, changes in income inequality in Brazilian cities are not necessarily accompanied by equivalent changes in spatial segregation. Residential segregation is closely related to the processes of social differentiation, however, and in that sense is deeply entrenched in the region’s economically diverse cities.

The rapidly increasing rate of crime and related social problems in spatially segregated low-income neighborhoods makes segregation a critical policy issue. These areas seem to be devolving from the “hopeful poverty” that predominated before the economic reforms of the 1980s to an atmosphere of hopelessness distinctive of urban ghettos. How much of this change can be attributed to residential segregation is an open question, on which little research is being done. I believe that in the current context of “flexible” labor regimes (no contracts, no enforcement of labor regulations, etc.) and alienation of civil society from formal politics, residential segregation adds a new component to social exclusion and desolation. In the past, spatial agglomeration of the poor tended to support grassroots organizations and empower them within a predominantly elitist political system.

LL: What features are characteristic of residential segregation in Latin America, as contrasted to the rest of the world?

FS: Compared to societies with strong social mobility, such as the United States, spatial segregation as a means of asserting social and ethnic identities is used less frequently in Latin America. Brazil shares with the U.S. a history of slavery and high levels of immigration, and it is one of the most unequal societies in the world; however, there is apparently much less ethnic or income segregation in residential neighborhoods in Brazil than in the U.S.

At the same time, there is a high degree of spatial concentration of elites and the rising middle class in wealthy areas of Latin American cities, although in many cases these areas are also the most socially diverse. Lower-income groups easily move into these neighborhoods, in contrast with the tradition of the wealthy Anglo-American suburb, which tends to remain socially and economically homogeneous over time.

Another noteworthy spatial pattern is that the segregated poor neighborhoods in Latin America are located predominantly on the periphery of cities, more like the pattern of continental Europe than that of many Anglo-American cities, where high concentrations of poverty are found in the center. The powerful upper classes in Latin America have crafted urban rules and regulations and influenced public investment in order to exclude the “informal” poor from some of the more modern zones, thus making the underdevelopment of their cities and countries less visible.

Finally, the existence of a civic culture of social integration in Latin America is manifested in a socially mixed physical environment. This widespread social mingling could be linked to the Catholic cultural ethos and the phenomenon of a cultural mestizo, or melting pot. The mestizo is an important figure in Latin American history, and it is telling that in English there is no word for mestizo. Anglo-American, Protestant cities seem to demonstrate more reluctance to encourage social and spatial mixing. Expanding this Latin American cultural heritage should be a basic goal of land policies aiming to deter the formation of poor urban ghettos, and it could influence residential segregation elsewhere.

LL: What trends do you perceive in residential segregation in Latin America?

FS: Two trends are relevant, both stimulated by the economic reforms of the 1980s: the spatial dispersal of upper-class gated communities and other mega-projects into low-income fringe areas; and the proliferation of the ghetto effect in deprived neighborhoods. The invasion of the urban periphery by large real estate projects triggers the gentrification of areas otherwise likely to become low-income settlements, giving way to huge profits for some. It also shortens the physical distance between the poor and other social groups, despite the fact that this new form of residential segregation is more intense because gated communities are highly homogeneous and walls or fences reinforce exclusion. Due to the peripheral location of these new developments, the processes of gentrification must be supported by modern regional infrastructures, mainly roads. Widespread private land ownership by the poor residents could help to prevent their complete expulsion from these gentrified areas and achieve a greater degree of social diversity.

The second trend consists of the social disintegration in those low-income neighborhoods where economic and political exclusion have been added to traditional spatial segregation, as mentioned earlier.

LL: What should land policy officials, in Latin America and elsewhere, know about residential segregation, and why?

FS: Residential segregation is not a necessary by-product of public housing programs or of the functioning of land markets, nor is it a necessary spatial reflection of social inequality. Thus, land policies aimed at controlling residential segregation could contribute to deterring the current expansion of the ghetto effect. In addition, officials should consider measures aimed at democratizing the city, most notably with regard to the distribution of investments in urban infrastructure. Policies such as participatory budgeting, as implemented in Porto Alegre and other Brazilian cities, could be indispensable in helping to undermine one of the mainstays of residential segregation in Latin American cities: public investments biased toward affluent areas.

LL: How is your work with the Lincoln Institute addressing these problems?

FS: Residential segregation is widely recognized as a relevant urban topic, but it has been scarcely researched by academics and to a large extent has been neglected by land policy officials. With the Institute’s support I have been lecturing on the topic in several Latin American universities over the past year, to promote discussion among faculty and students in urban planning and land development departments. I also lead a network of scholars that has recently prepared an eight-session course on residential segregation and land markets in Latin America cities. It is available in CD-ROM format for public officials and educators to support teaching, research and debate on the topic.

LL: Please expand on your new role as a Lincoln Institute partner in Chile.

FS: This year we inaugurated the Program on Support for the Design of Urban Policies at the Catholic University of Chile in Santiago. The program’s advisory board includes members of parliament, senior public officials, business leaders, researchers, consultants and NGO representatives. With its focus on land policy, particularly actions related to the financing of urban development and residential social integration, this board will identify relevant national land policy objectives and adequate strategies to reach them, including activities in the areas of training, applied policy research and dissemination of the results.

The board’s first task is to promote broad discussion of the draft reform of major urban laws and policies that the government recently sent to the Chilean Parliament. Since the late 1970s, when the urban and land market liberalization policies were applied under the military dictatorship, the debate on urban policies has fallen nearly silent, and Chile has lost its regional leadership position on these issues. Overly simplistic notions about the operation and potential of land markets, and especially about the origins of residential segregation (due in part to ideological bias), have contributed to this lack of discussion. Both land markets and the processes of residential segregation must be seen as arenas of critical social and urban importance. We want to reintroduce Chile into this debate, which has been facilitated by the Lincoln Institute’s Program on Latin America and the Caribbean and its networks of experts over the past 10 years.

References and Resources

Sabatini, Francisco, and Gonzalo Cáceres. 2004. Barrios cerrados: Entre la exclusión y la integración residencial (Gated communities: Between exclusion and residential integration). Santiago: Instituto de Geografía, Pontificia Universidad Católica de Chile.

———. Forthcoming. Recuperación de plusvalías en Santiago de Chile: Experiencias del Siglo XX. (Value capture in Santiago, Chile: Experiences from the 20th century). Santiago: Instituto de Geografía, Pontificia Universidad Católica de Chile.

Sabatini, Francisco, Gonzalo Cáceres and Gabriela Muñoz. 2004. Segregación residencial y mercados de suelo en la ciudad latinoamericana. (Residential segregation and land markets in Latin American cities). CD-ROM.

Espaço e debates. 2004. Segregações urbanas 24(45).

In October 2007 Peking University Provost Lin Jianhua and I signed an agreement to establish the joint Lincoln Institute of Land Policy–Peking University Center for Urban Developmentand Land Policy. Lincoln Institute and Peking University established this joint center to provide support for education, training, and research in urban economics, land policy and management, property taxation, local government finance, and urban and regional planning. The mission of the center is to study land, urban, and fiscal policies; to disseminate results from its studies and research; and to facilitate education, training, policy analysis, and research involving scholars, policy makers, and practitioners.

Daniel McMillen has a joint appointment in the Department of Economics and the Institute of Government and Public Affairs at the University of Illinois. He is also a visiting fellow in the Department of Valuation and Taxation at the Lincoln Institute of Land Policy. Before moving to Urbana-Champaign, he was a member of the economics departments at the University of Illinois at Chicago, University of Oregon, Santa Clara University, and Tulane University. McMillen received his Ph.D. in economics from Northwestern University in 1987.

Since 2005, McMillen has worked on a number of Lincoln Institute projects, including two David C. Lincoln Fellowships with Rachel Weber, a member of the Urban Planning and Policy Department at the University of Illinois at Chicago. He has also collaborated with Richard F. Dye of the University of Illinois on a series of Lincoln-sponsored projects on land valuation and assessment limitation measures.

McMillen has been co-editor of Regional Science and Urban Economics since 2007. He also serves on the editorial boards of other leading journals in urban economics, real estate, and regional science, and as a consultant for the Federal Reserve Bank of Chicago. He directed the Center for Urban Real Estate at the University of Illinois at Chicago from 1999 to 2005, and has served on the board of the American Real Estate and Urban Economics Association.

Land Lines: How did you become associated with the Lincoln Institute of Land Policy?

Daniel McMillen: I first came to the Lincoln Institute in 1989 for a conference on “Growth Management and Land Use Controls.” It was an honor to be invited there as a relatively new assistant professor and to have the chance to meet many leading urban and public finance economists. I returned for another conference in 1996. I was impressed by the quality of the research being conducted by and for the Lincoln Institute on land use, land and property taxation, and the regulation of land markets. When I had a sabbatical in 2005–2006, the Lincoln Institute seemed like an ideal place to work. I spent much of that year in Cambridge, and have been involved regularly ever since.

Land Lines: What was the first project you conducted for the Lincoln Institute?

Daniel McMillen: I began working with Richard F. Dye on a study of teardowns and land values in the Chicago metropolitan area. A teardown is a property that is purchased solely to replace the existing structure with a new one. Teardowns have been remarkably controversial because they drastically alter the character of long-established neighborhoods. In 2006 the National Trust for Historic Preservation declared Chicago to be the “epicenter” of teardown activity, so the city offered an ideal setting for such a study.

We collected data on sales and demolition permits for homes in Chicago and several suburbs. An assessment file including the structural characteristics of each home allowed us to test a key prediction of theoretical models of demolitions—that is, when a home is purchased as a teardown, it is valued only for the land on which it rests. Our results supported this theory by showing that structural characteristics did not influence the sale prices of teardown properties.

This study has important practical implications because it suggests that teardowns can be used to estimate land values in areas where many homes are being demolished and replaced by new structures. One of the impediments to a land tax is the difficulty of estimating land values in built-up areas where there are few sales of vacant land. Teardowns may help make land taxation feasible in large urban areas that are undergoing redevelopment.

Land Lines: What other research topics have you investigated?

Dan McMillen: I have worked on a series of projects with Rachel Weber analyzing property assessments in Chicago. In a paper published in the National Tax Journal, titled Thin Markets and Property Tax Inequities: A Multinomial Logit Approach, we developed a new approach for determining whether property assessments are regressive in the sense that assessment ratios tend to be lower for higher-priced properties. We use a statistical (logit) model to estimate the probability that a property will have an assessment ratio in the upper or lower end of the distribution rather than in the middle. Although we do find evidence of regressivity, we also find that assessments tend to be much more accurate in neighborhoods with a large number of sales. Thin markets—areas with few sales—have a much higher probability of both unusually high and unusually low assessment ratios.

In subsequent work to be published in the Public Finance Review, titled Ask and Ye Shall Receive? Predicting the Successful Appeal of Property Tax Assessments, we develop an empirical model of the appeals process for property assessments. We find that thin markets have many more appeals and a higher proportion of successful appeals than areas with many sales. Taxpayers who appeal their assessments tend to live in moderate-income neighborhoods in newer, larger homes with assessments that increased significantly since the previous reassessment year. In contrast, successful applicants tend to live in smaller, older homes and in neighborhoods that have experienced relatively slower rates of property appreciation.

Land Lines: What conferences have you organized for the Lincoln Institute?

Daniel McMillen: For several years, I have helped organize the conference “Recent Advances in Urban Economics and Public Finance,” at which many of the leading researchers in urban economics and public finance present new work. The conference provides the opportunity for authors to summarize their papers and receive useful feedback from an enthusiastic, knowledgeable audience.

The conference includes both established and emerging scholars. It was very important to me to meet recognized scholars when I was an assistant professor at the University of Oregon, and I want to return the favor by using these conferences to help junior scholars meet more established researchers.

This year Daphne Kenyon, another Lincoln Institute visiting fellow, and I formalized this mentoring goal by introducing a junior scholars program that matched young assistant professors with the editors of key urban economics and public finance journals, including Regional Science and Urban Economics, Public Finance Review, the Journal of Regional Science, Real Estate Economics, and the National Tax Journal. After a session with the full panel of editors, each junior scholar met individually with one of the editors, who provided comments on a working paper the scholar had prepared. The junior scholars came from a variety of universities and organizations, including the University of Michigan, the University of Southern California, the University of Oklahoma, Georgia State University, the University of Georgia, Winthrop University, Washington University, and the Federal Reserve Board.

Land Lines: How has your association with the Lincoln Institute influenced your research?

Daniel McMillen: I have published many papers that deal directly with issues of land use, land and property taxation, and land policies. My association with the Lincoln Institute has encouraged me to think more about the policy implications of my research and to expand its potential audience beyond academic economists.

For example, I wrote a paper on the costs and benefits of teardowns for Land Lines (July 2006) as a direct result of a presentation for the Lincoln Lecture Series. A surprising number of people in the audience were convinced that teardowns should be heavily regulated because they could never generate any benefits. However, teardowns may also offer new tax revenues, an improved housing stock, and perhaps even reduced urban sprawl. Economists become so used to thinking in terms of costs and benefits that they tend to take it for granted that others use the same framework to analyze issues. Although I think a strong case can be made for regulating teardowns, this kind of experience helps me realize how vital an economist’s perspective can be in shaping policies that lead to good outcomes.

The Lincoln Institute has also encouraged me to think about the implications of my research for assessment practices. When I presented my work on teardowns in an Institute-sponsored session at the International Association of Assessing Officers (IAAO) conference in 2005, the participants were very interested in using teardowns to improve land assessments. They wanted to know what data would be required and what statistical procedures to use. This conference and subsequent contact with IAAO members provided inspiration and background for my work on assessment regressivity and assessment appeals.

My Lincoln Institute affiliation has also led to contacts with legislators and other policy makers. Richard Dye, David Merriman, and I produced a study for the Illinois Department of Revenue that analyzed the effects of Cook County’s cap on the growth rate of residential property assessments. This work motivated a 2007 conference on assessment limits held at the Institute where academics, local government officials, and state legislators heard presentations about the experience with assessment limits in Colorado, Idaho, Illinois, and Minnesota.

One lesson from the conference was that assessment limits have important distributional effects that transfer taxes from fast-growing areas to those with low rates of appreciation, or from residences to commercial or industrial properties. This conclusion surprised many people who thought that assessment limits simply lowered property taxes for everyone. To share this work with a broader audience, Richard Dye and I wrote a Land Lines article (July 2007), titled Surprise! An Unintended Consequence of Assessment Limitations, in which we presented the algebra and explanations behind such policies.

Land Lines: What are your current projects for the Lincoln Institute?

Daniel McMillen: I am returning to my work on teardowns. I am working with Arthur O’Sullivan, professor of economics at Lewis & Clark College, to develop the implications of an options model of teardown investments. The basic implication is that the sales price of a property can be decomposed into the value of the land and the value of the structure, with the weights to each component depending on the probability that the structure will be demolished. Whereas land accounts for the entire value of a property when the structure will be demolished immediately, structural characteristics have more influence on the sales price when the owner is likely to live in the home for some time. We are now testing these implications using updated data on property sales in the Chicago area.

I am also extending my work on assessment practices by developing new statistical procedures to analyze the distribution of assessment ratios. My preliminary results suggest that the variance of assessment ratios is much higher at very low sales prices and that assessments tend to be more accurate for relatively high-priced properties. I am working to develop a set of computer programs that will make the analysis of assessment ratio distributions readily accessible to assessors and other practitioners.

We plan to continue our junior scholars program as a companion to the Urban Economics and Public Finance conference. These conferences play an important role in mentoring young scholars and in helping to introduce the Lincoln Institute to academic researchers, which my own experience shows can be a formative intellectual experience.