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Seeking to address housing affordability and transportation congestion issues, the executive directors of the 25 largest public-sector metropolitan regional councils gathered in Los Angeles in September 2003 for their second regional forum. The three-day conference was sponsored by the Lincoln Institute, the Fannie Mae Foundation and the National Association of Regional Councils (NARC).
Case Studies
The opening session featured presentations on three case studies that illustrate different approaches to growth and development: Atlanta, Chicago and Los Angeles.
The Atlanta region is home to 3.6 million people in 10 counties. Charles Krautler, of the Atlanta Regional Commission (ARC), noted that the commission was created in 1947 and in 1952 presented its first regional plan. “It proposed a tight development pattern with an urban growth boundary close to where I-285 circles our region,” he explained. “It was rejected outright. Instead, we adopted a plan with growth in concentric circles. We did not have unplanned sprawl, we planned for it and we got it.” However, he continued, “now we have two societies. Many people moved to the northern part of the region and took their wealth with them. We encouraged them to trade long drives for big houses. But poverty remains concentrated in Atlanta and Fulton County.”
No slowdown is forecasted for 2030, as the population is expected to grow to 5.4 million people and employment to 3.1 million jobs. That means more congestion, and Atlanta faces other constraints as well. The region is the largest metropolitan area with the smallest water supply, and there is no opportunity for significant expansion of the supply. “If we keep doing what we’re doing, then what we have today is the best its going to be,” Krautler stated. “We’re trying to encourage a movement back to the city. After losing population for the last 30 years, the city has grown by 16,000 since the 2000 census. In a further effort to rewind the sprawl clock, ARC has designated 44 activity/town centers as part of its regional development plan linking transportation and land use. Each center receives planning and, more important, infrastructure resources to concentrate development.”
The Chicago metropolitan area is the “hub of the Midwest,” according to Ron Thomas of the Northeast Illinois Planning Commission (NIPC). With more than 8 million residents in 6 counties with 272 incorporated municipalities, Chicago has built its strength around the waters of Lake Michigan. The NIPC region hosts almost 4.5 million jobs and 62 companies that are listed in the Fortune 1000. The 4,000-square-mile region stretches north to Wisconsin and east to Indiana. And yet, Thomas laments, “our urban growth ‘edge’ is beyond our region. That means that the people who are attempting to control this growth are not at our table.”
Building on the Burnham plan, the first regional plan in the country created in 1909, Chicago’s urban fabric is held together by a series of 200 town centers, an extensive rail network and an expansive highway system. The good news, Thomas said, is that “90 percent of the region’s population is within one mile of a transit line.” Three satellite cities, Elgin, Joliet and Aurora, create a polycentric region around Chicago’s western fringe. The net result is that the region still has the capacity to absorb the projected growth of more than 2 million new people in the next 30 years.
Like every metropolitan region, Chicago is experiencing immigration from all over the world, but especially an influx of Hispanic families. New immigrants enter a region with longstanding socioeconomic patterns of segregation, especially in the southern counties. Thomas explained there are pockets of diversity in some suburban communities, but exclusionary zoning keeps the barriers high. While NIPC has successfully brought together the mayors in the metropolitan area to discuss critical issues, “we suffer from a lack of major universities, most of which are either downtown or 100 miles out,” Thomas noted. “Our political leaders are organized, and so is our business community. However, we run on parallel tracks and talk in stereo.” To address this disconnect, NIPC has created a broad-scale civic leadership process to undertake community-based planning. “We have created a tool called ‘paint the town,’ which allows interactive meetings in local city and town halls,” he continued. “We have a future to plan and it needs to be grounded where the people live, work and raise their families.”
Los Angeles has more than twice as many people as Chicago and more than 4.5 times the population of the Atlanta region, and yet “the urban portion of our region is the densest in the country,” according to Mark Pisano of the Southern California Association of Governments (SCAG). “We have 187 municipalities in 6 counties. With 76 local officials in our structure, our congressional delegation comes to us for solutions to the tough issues we face. We do have a region that is large enough to cover the true regional economy, but the economic and social forces are relentless. Our economic bases are shifting faster than we can plan infrastructure to keep up with the changes.”
Like Chicago and Atlanta, Los Angeles is a polycentric region; it spreads across all of Southern California except San Diego County. “We were one of the first regions in the country to become a majority of minorities. Immigration drives development in our region,” said Pisano. Some of the trends are good. “Forty percent of our region is doing extremely well, but that means that 60 percent is not. We have been called the ‘new Appalachia’ by some, and we are banding together with other states along the border with Mexico to create the Southwest Authority. This, like other similar efforts around the country including the Appalachian Regional Commission, would create a federally supported multistate compact to address critical infrastructure needs required to support the economy of this large area.”
SCAG forecasts another 6 million people will arrive in the region by 2030, more than twice the population of the City of Chicago. As the new immigrants arrive, cities and towns already cramped by the constraints of Proposition 13 are beginning to close the door on new housing production. “Housing is the most undesirable land use in Southern California,” said Pisano. “We are seeing the fiscalization of land use. Our leaders tell me that they don’t want any more housing. They say this is sound fiscal policy. However, this approach just puts more pressure on places that already have housing. The net effect is that Los Angeles is three times more overcrowded than the rest of the region and eight times more crowded than New York City.”
To address these big-picture problems, SCAG is focusing on macro-level regional development patterns. “We can’t build our way out of the traffic congestion, but we have two scenarios under discussion,” Pisano continued. “The first focuses on infill development; the second proposes creation of the fifth ring of development in the high desert. Effective land use will generate three times more benefit than highway expansion.” Using a creative strategy of building truck lanes, paid for by the truckers, “we can create some relief and target key transportation logistics, i.e., moving freight out of the port of Los Angeles into the rest of the country. This strategy also addresses a key workforce issue, since you don’t need a college education to drive a truck. To fund such major infrastructure expansion, we are exploring how to create a tax credit that would allow significant private-sector investment in regional transportation projects.”
Discussion Sessions
Ruben Barrales, deputy assistant to President Bush and director of intergovernmental affairs for the White House, presented an overview of the executive branch’s current national priorities. During the discussion Krautler asked if a White House conference would be a possible response to the critical issues facing the largest metropolitan regions in the country. Barrales said the concept was worth discussing but would require considerable advance preparation to be effective. Pisano offered the resources of the group, working through NARC, to help with conference planning. Robert Yaro of the Regional Plan Association (RPA) suggested an interesting theme. “We’ve had several major eras of planning in this country,” he explained. “When Jefferson made the Louisiana Purchase in 1803, he spurred a major expansion in the nation’s land mass and then had to figure out what to do with it. One hundred years later Teddy Roosevelt appointed Gifford Pinchot to create the National Park Service. We’re due for another national planning initiative, but we now have many challenges that require a sophisticated response. We can’t build an economy based on people driving several hours to and from work each day. We need to focus on how we can create a place that is both pleasant and affordable.”
Armando Carbonell of the Lincoln Institute asked the group to expand on what national policies are needed to support the large metropolitan regions in the country. Comments included:
Dowell Myers, director of the Planning School in the University of Southern California School of Planning, Policy and Development, moderated a session focused on transforming regional actions into local implementation. As part of the program, representatives of three regions commented on their strategies.
“Seattle grew a lot over the last 20 years and we grew in different ways,” said Mary McCumber of the Puget Sound Regional Council (PSRC). “Our new growth was outside of our historic cities. We knew we needed to do something and we got lucky. We got ISTEA [Intermodal Surface Transportation Efficiency Act], a state growth management law and a new regional council at the same time.” Using these tools, PSRC created Destination 2030, which was honored as the best regional plan in the country by the American Planning Association (APA). “But we have planned enough. We are a land of process. Now we need to have the courage to act.”
Martin Tuttle of the Sacramento Area Council of Governments (SACOG) reported, “We used our federal transportation dollars to create land use incentives for community design and backed it up with $500 million. We asked people, ‘Is Atlanta what we want?’” Using the best data available and a sophisticated feedback planning process, SACOG brought the planning to the people and took the people’s plan back to the council.
Bob Yaro of RPA reminded the group that it takes “patience, persistence and perseverance.” He presented New York City as an urban success story, where 8 million people ride the transit system per day. “The Regional Plan Association, created in 1929, oversees a three-state region, and those states don’t like each other much. They have different DNA,” Yaro noted. Despite that history, RPA created the first strategy for a multi-centered region. Unlike the other regional councils, RPA is a private-sector organization. “The real power is in the civic community, if you can get people organized and move them in the right direction,” Yaro added.
Tom Bell, president and CEO of Cousins Properties in Atlanta, introduced a private-sector perspective on engaging in regional policy development: “I was surprised to read in Time magazine that the Atlanta region is the fastest growing settlement in human history. We are gobbling up 100 acres a day. There is no common ground. Democracy and land planning go together like oil and water. But you [planners] are the people who can make a change. Developers will do a lot of work if we can see a payoff. Visions are in short supply and the status quo is not an option.”
Addressing income distribution in the regions, Paul Ong, director of the Lewis Study Center at UCLA, reported that poverty rates among the elderly have declined at the same time that rates among children have increased. More distressing, poverty is higher and more concentrated in urban areas. “We are seeing a working underclass—not people on welfare but people who have jobs.” Rick Porth from Hartford and Howard Maier from Cleveland responded with case studies from their regions on income and social equity. In Hartford, Porth said, “the disparity is getting worse. More important, 20 percent of our future workforce is being educated in our worst schools.” Maier noted, “our economy is in transformation. The Cleveland area was a manufacturing center for steel and car production, but now we have more healthcare workers than steel or auto workers. As a region of 175 communities, we have 175 land use policies based on 175 zoning codes and maps. Each community’s plans may be rational, but together they project a future of sprawl without the ability for coordinated public services or facilities.”
In other sessions several regions that had developed assessment and benchmarking studies presented their current work, and the conference concluded with presentations by each of the councils on a best practice study, strategy or methodology that they have implemented.
The conference theme—confronting housing, transportation and regional growth—underscores the complexity of the metropolitan environment and the necessity for an integrated response to regional dynamics. Traditional regional councils are unique in their ability to link multiple regional systems to focus on specific regional questions. Housing affordability, a seemingly intractable problem overwhelming metropolitan regions, can only be understood against the backdrop of the local government fiscal policy. Transportation systems, often understood as infrastructure designed to service an existing regional settlement pattern, must be seen as a key determinant of economic development policy as well as a primary driver of land use change in regions. The metropolitan regions of this country are the economic engines of our states and the country as a whole. A new, enriched dialogue with the White House could stimulate a series of policy initiatives. As that conversation proceeds, regional councils are the key organizations to engage business and civic leaders with local elected officials around the regional table.
David Soule is senior research associate at the Center for Urban and Regional Policy at Northeastern University in Boston. He teaches political science and conducts research on urban economic development, tax policy and transportation systems. He is the former executive director of the Metropolitan Area Planning Council (MAPC), the regional planning agency representing 101 cities and towns in the Boston area.
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La infraestructura (que comprende energía, telecomunicaciones, transporte, abastecimiento de agua potable y alcantarillado) cumple un papel muy importante en el desarrollo del suelo urbano y ejerce una influencia en la productividad, tanto de las ciudades como del campo. Los datos acerca de la cantidad de obras de infraestructura a nivel nacional (aunque no a nivel metropolitano) se encuentran disponibles en relación con muchos países en vías de desarrollo y de altos ingresos. Dichos datos respaldan varios de los resultados que se resumen en el presente artículo.
La cantidad de obras de infraestructura per cápita en los diferentes países se encuentra estrechamente relacionada con los niveles de ingresos per cápita: en aquellos países en donde los ingresos se duplican, sucede casi lo mismo con las obras de infraestructura. Sin embargo, las obras de infraestructura de un país no se encuentran esencialmente relacionadas con su nivel de urbanización una vez que se han tomado en cuenta los ingresos de dicho país. Y esto resulta sorprendente, ya que las ciudades poseen grandes cantidades de obras de infraestructura. No obstante, las ciudades también presentan una gran densidad de población que utiliza la infraestructura de manera intensiva, por lo que los niveles de obras de infraestructura urbana per cápita son similares a los niveles nacionales.
La composición de las obras de infraestructura también varía sistemáticamente según los ingresos per cápita. Las carreteras representan la mayor proporción de obras de infraestructura en los países con menor cantidad de ingresos, seguidas de los sistemas de agua potable en segundo lugar y los sistemas de energía eléctrica en tercer lugar. A medida que los ingresos de un país se incrementan, la cantidad de obras de infraestructura relacionadas con los sistemas de energía eléctrica aumentan con más rapidez que los niveles de ingresos. La infraestructura correspondiente a los sistemas de agua potable y alcantarillado aumenta a una intensidad menor y, en el caso de las carreteras, el cambio se da en proporción a los ingresos. Como resultado, en los países con altos ingresos, los sistemas de energía eléctrica conforman el mayor componente de las obras de infraestructura, seguidos de las carreteras, mientras que los sistemas de agua potable, alcantarillado y telefonía representan sólo una pequeña proporción de la infraestructura.
Teniendo en cuenta las tasas de crecimiento económico recientes, y utilizando las relaciones existentes entre la infraestructura y los ingresos per cápita, los países en vías de desarrollo probablemente deben invertir alrededor del 5 por ciento de su PIB en infraestructura (3 por ciento en expansión y 2 por ciento en mantenimiento), que en la actualidad se aproxima a los US$750 mil millones anuales, para poder mantener la relación existente entre la infraestructura y el PIB. En los países con altos ingresos, el gasto total sería menor, es decir, un 1,7 por ciento del PIB (dividido equitativamente entre obras de expansión y de mantenimiento), que en la actualidad se aproxima a US$700 mil millones anuales. Aquellos países que crecen con más rapidez que el promedio deben invertir una proporción mayor de su PIB, con el fin de que las obras de infraestructura vayan a la par del crecimiento económico.
En algunos países, una alternativa a las nuevas inversiones consiste en mejorar la eficiencia de la producción de servicios a partir de la infraestructura existente. Por ejemplo, la pérdida promedio de energía eléctrica en los diferentes países llega a alcanzar hasta el 25 por ciento; por otro lado, el agua potable que no se factura y las filtraciones de agua pueden llegar a exceder el 30 por ciento. La reducción de estas pérdidas de gran magnitud puede evitar la necesidad de capacidades adicionales. No deja de ser sorprendente el hecho de que el rendimiento de los diferentes sectores dentro de un mismo país varíe en tan gran medida, pues el rendimiento eficiente que puede tener un país en un determinado sector de infraestructura no se condice con su rendimiento en otros sectores.
¿De dónde provendrán estos fondos de inversión, en particular para los países en vías de desarrollo? La asistencia internacional y el financiamiento brindado por los bancos de desarrollo para obras de infraestructura en los países en vías de desarrollo actualmente llegan a un total de aproximadamente US$40 mil millones anuales. Dicha cifra se ha triplicado (o más) desde el año 1990, en dólares en curso legal. La inversión privada en infraestructura en los países en vías de desarrollo alcanzó recientemente los US$160 mil millones anuales y ha crecido ocho veces más desde el año 1990, también en dólares de curso legal. La asistencia internacional está dirigida principalmente a los sistemas de energía, transporte, agua potable y alcantarillado, mientras que casi no se han destinado fondos a las telecomunicaciones.
Por el contrario, más de la mitad del financiamiento de origen privado se invierte en telecomunicaciones (en particular, telefonía móvil), seguidas por el sector energético. Las telecomunicaciones y la energía atraen más inversiones privadas en los países en vías de desarrollo debido a que los ingresos que obtienen por los aranceles cubren una gran parte de los costos operativos, mientras que los ingresos por aranceles y tarifas de usuarios cubren una menor parte de los costos de transporte, agua potable y alcantarillado. En la década de 1990, las inversiones privadas en infraestructura se concentraron en América Latina y en Asia Oriental; sin embargo, a partir del año 2000, se distribuyeron de forma más uniforme por diferentes regiones del mundo.
A pesar del crecimiento experimentado en cuanto al financiamiento internacional, existen grandes áreas metropolitanas en crecimiento en países en vías de desarrollo que aún deben recaudar importantes sumas de dinero para poder financiar las inversiones en infraestructura. Entre los métodos de recaudación podemos mencionar los siguientes: el aumento de los aranceles que se cobran a los usuarios, el aumento de los impuestos (en particular, los impuestos inmobiliarios) sobre aquellas propiedades cuyo valor se incrementa debido a las inversiones en infraestructura y el establecimiento de mercados municipales de bonos, tales como el que se está desarrollando en África del Sur.
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En mis tiempos de becario en la Universidad de Cambridge, durante la década de 1990, mi colega y amigo Wynne Godley, que ya no está entre nosotros, pasaba a buscarme los domingos para llevarme a una de las iglesias medievales de las que pueden verse en todo lugar en los pueblos de East Anglia. Wynne decía frecuentemente que “una iglesia es más un proceso que un edificio. Se desarrolla a lo largo de los siglos e involucra a generaciones de familias en su construcción y mantenimiento”. Wynne tenía buen ojo para los detalles arquitectónicos, por lo que podía señalar un contrafuerte o un campanario que ilustraba la práctica de una técnica específica, el uso de materiales fuera de lo común, o ambos. Una sola iglesia ofrecía un registro vivo y estratificado de la forma en que cada generación en una comunidad resolvía el desafío de construir y mantener grandes espacios cerrados y abiertos que posibilitaran la belleza del culto.
En este sentido, las ciudades tienen mucho de iglesias medievales. A medida que transcurre el tiempo, las ciudades ilustran la colaboración de generaciones de residentes, así como también la evolución de las herramientas económicas, técnicas e, incluso, sociales que se utilizaron para construirlas y mantenerlas. Las reliquias de mármol que encontramos en Roma son un testimonio vivo de la estética y los valores antiguos y de la ingenuidad en la construcción, mientras que la ciudad moderna florece a su alrededor. El icónico horizonte de Manhattan, en apariencia inmóvil, en realidad fluye constantemente y hoy en día evoluciona en forma radical a fin de responder a las demandas de sustentabilidad, resiliencia, desarrollos mixtos y otras cuestiones del siglo 21.
Los límites de las ciudades también evolucionan y narran otra historia de importancia crucial. Es posible que el futuro de nuestro planeta dependa de nuestra capacidad de comprender dicha historia y desarrollar las herramientas y la voluntad colectiva necesarias para gestionar el patrón y la progresión del crecimiento urbano. Shlomo (Solly) Angel documenta esta trayectoria en el Atlas of Urban Expansion (Lincoln Institute of Land Policy, 2012), en el que se utilizan imágenes satelitales captadas a lo largo de décadas con el fin de llevar un registro de la evolución espacial de 120 ciudades en todo el mundo, desde Bamako y Guadalajara hasta Shangai y Milán. El último medio siglo de crecimiento urbano ha proporcionado un cuento con moraleja sobre la seducción de la expansión urbana descontrolada, un camino sin mucha resistencia que genera beneficios económicos de forma rápida pero cuyo desarrollo es poco sustentable. Nuestra capacidad para controlar la huella ecológica que dejamos y minimizar nuestro impacto a nivel mundial estará estrechamente relacionada con nuestra capacidad para planificar y construir asentamientos humanos más densos y eficientes. En vista de la predicción de las Naciones Unidas en cuanto a una población urbana mundial que casi se duplicará para llegar a las 6 mil millones de personas en el año 2050, la suerte del planeta dependerá de si los humanos, como especie, podremos adoptar un paradigma de desarrollo más apropiado en este medio siglo por venir.
A medida que nos esforzamos en reinventar nuestros asentamientos urbanos, nos enfrentaremos a un viejo enemigo: el suelo que ya ha recibido mejoras y desarrollo pero que debe adaptarse a usos nuevos. Aunque no desconocemos este proceso tan polémico, podemos decir que todavía no hemos logrado descifrar el código para gestionarlo. En este número de Land Lines analizamos algunas de las necesidades impulsoras que requerirán enfoques creativos para el redesarrollo en diferentes ciudades y contextos: cómo cubrir la demanda insatisfecha de vivienda que lleva a millones de trabajadores en Beijing a habitar en viviendas subterráneas; cómo financiar la infraestructura para gestionar la presión de la población en Río de Janeiro y otras ciudades de Brasil; o cómo darle nuevos usos al suelo ante la agonía derivada de un completo ajuste industrial, demográfico y fiscal en Detroit. Estos lugares son diferentes entre sí, pero todos enfrentarán desafíos similares a medida que evolucionen en las décadas futuras.
En el Instituto Lincoln somos profundamente conscientes de la necesidad de nuevas ideas y nuevas prácticas que faciliten el redesarrollo sustentable del suelo que ya se ha desarrollado o ya se encuentra ocupado. Durante el próximo año, comenzaremos a generar un emprendimiento intelectual para tratar los múltiples desafíos de la regeneración urbana, extrayendo lecciones de las medidas tomadas tiempo atrás en los Estados Unidos y en otros países desarrollados después de la Segunda Guerra Mundial, buscando maneras nuevas y creativas de financiar la infraestructura para mejorar el suelo en asentamientos informales que ahogan a las ciudades en los países en vías de desarrollo, o reavivando la salud fiscal de ciudades tradicionales del acervo estadounidense, como Detroit, descubriendo las causas que provocaron la insolvencia y probando soluciones para remediarla.
Las iglesias medievales que visité durante la década de 1990 ofrecían lecciones en piedra: técnicas y materiales innovadores que permitían a los arquitectos medievales desafiar a la gravedad. Y tal vez lo que resulta más importante es el hecho de que eran monumentos al esfuerzo comunitario y al compromiso a largo plazo de las congregaciones que construyeron y sostuvieron estas iglesias durante siglos. Al fin y al cabo, la supervivencia humana podría depender de nuestra habilidad para superar, de forma similar, las fuerzas centrípetas que socavan la acción colectiva, y construir y mantener las estructuras sociales y los marcos normativos con el fin de desarrollar y redesarrollar nuestras ciudades para el bien mutuo y para la posteridad.
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Recent court decisions have made economic development and tax policy front-page news. The recent U.S. Supreme Court decision in Kelo v. City of New London raised a public outcry when it allowed local governments dramatic latitude in acquiring private property for economic development purposes. This case had a fiscal aspect as well, for it illustrated how financial pressures can lead local governments to seek alternatives to direct investment for economic revitalization and redevelopment.
Economic development was also the focus of a major lower court decision on state tax policy. In Cuno v. DaimlerChrysler, the 6th Circuit Court of Appeals found that Ohio’s investment tax credit, intended to attract businesses from other states, violated the Commerce Clause of the U.S. Constitution (Hellerstein 2005). These and other, similar cases raise many questions about the connections between economic development and tax policy.
Is there a relationship between economic development and infrastructure spending?
Infrastructure, that vast network of capital-intensive services including roads, water provision, sewer services, and electrical supply, is critical to current and future economic activity. However, serious economic examination of the link between infrastructure spending and economic productivity only began in the late 1980s. Aschauer (1989, 194–197) argued that declining infrastructure spending resulted in less economic growth. More recently, Bougheas et al. (2000, 520) reported findings that “highlight the importance of infrastructure accumulation” for productivity gains.
Other researchers have pointed out that the most significant recent changes in infrastructure spending have occurred at the state and local levels, rather than the federal level. Gramlich (1994, 1178) argued that federal infrastructure spending has been fairly consistent over time, but state and local spending has decreased. Holtz-Eakin (1993) cautioned that while public expenditures on infrastructure may be important, they may not directly affect economic productivity. He argued that differing state and local needs may account for many infrastructure spending disparities, and that maintenance of existing infrastructure assets may be more important than new spending for capital acquisition. Boarnet (1997) considered efficient pricing for infrastructure use as important as its actual provision.
Nevertheless, the American Society for Civil Engineers (ASCE) is sufficiently concerned about the condition of infrastructure in the U.S. to assign it a grade of “D.” ASCE (2005) argues that the country needs to spend about $1.6 trillion over the next five years to improve the situation.
What is the relationship between infrastructure spending and local tax systems?
The mechanisms for funding infrastructure and its role in state and local spending are complex. Research in this area deals with such topics as fiscal illusion (i.e., when the complexity of the revenue system obscures the true cost of public goods and services) and specific capital financing strategies used to fund infrastructure. However, there has been little research on the impact of local tax structures on infrastructure spending.
Economists have long argued that the value of publicly provided goods and services, such as infrastructure and its maintenance, are reflected in the value of the property served by those goods. Accordingly, a tax that captures the value of these public goods and services may be an important revenue source for funding them. However, in the last 30 years, local governments have moved away from such a tax, the property tax, to other sources of revenue. In many communities, this shift has produced an increased reliance on state aid, local sales tax revenues, and user fees.
In analyzing infrastructure spending in Utah, it is clear that the local revenue structure affects per capita operating and maintenance spending and new capital acquisition expenditures. Preliminary analysis indicates that communities are more likely to increase per capita infrastructure spending when it is financed by property taxes, all other funding sources held constant. It also appears that as per capita sales tax revenue increases, per capita spending for infrastructure services declines.
How constrained are local revenue systems?
One reason that local government revenue structures affect spending on infrastructure is that the states impose various constraints on local revenue sources. Although the past ten years have seen no dramatic changes in the roles of the property tax, intergovernmental aid, or the sales tax in overall local government revenues, the ratio of total revenues to personal income has fallen about 7.5 percent. This real decline highlights the increasing pressure on local governments to identify new revenue sources.
Yet, local governments face serious constraints when they seek to change their revenue systems. States impose intergovernmental restrictions, such as limits on sales tax rates that localities can impose. Less tangible but equally important is political opposition to tax increases. The third factor is the set of tax and expenditure limitations that many states have enacted, ranging from Proposition 13 in California in 1978 to the more recent taxpayer bill of rights enacted in Colorado, which drastically limited increases in government spending.
These constraints have forced local governments to become more innovative in their revenue-raising methods. An entire cottage industry of financial advisors, bond attorneys, and other public and private sector innovators has emerged to help local governments find ways of loosening or circumventing these limitations. Some strategies may have increased economic efficiency, although they give rise to equity concerns (for example, the movement toward the increased use of fees and charges); others are nearly invisible to the taxpayer. In nearly all cases, local governments have been seeking to use land as a revenue-generating device—a trend that shows no sign of abating.
What are alternative ways to finance capital infrastructure?
Two types of debt traditionally have financed infrastructure projects: general obligation (GO) bonds, backed by the full faith and credit of the issuing locality; and revenue bonds, backed by income from the capital project. Both types of debt have significant restrictions on their use, such as voter approval requirements and caps on maximum indebtedness. These debt limitations, the difficulty in raising property taxes, and the fear of political opposition have increased the use of alternative capital finance methods based on land use.
One longstanding method, tax increment financing (TIF), utilizes the increases in property value to help finance redevelopment projects. Originally designed as a financial instrument to eliminate blight and provide affordable housing, this instrument has become increasingly popular in many states for a variety of projects. Forty-seven states and the District of Columbia now allow this technique.
Capturing the property tax increment attributable to government-sponsored redevelopment in order to service this debt makes economic sense if the new development would not have occurred without the formation of the tax district. Moreover, this debt does not have to be approved by voters, but rather by a group designated by the city government. Not even these two factors explain the extraordinary recent growth in the number and size of TIF districts, however, raising suspicion that this tool may be used more often to attract and subsidize economic growth than to eliminate blight. For example, in 2003–2004, California had 33 TIF redevelopment projects, each of which covered more than 6,000 acres, a surprisingly large area to be declared “blighted” in any one jurisdiction (see Figure 1).
Another popular tool in several states is the community facilities district (CFD), which usually funds new development. Landowners within a region form a CFD to issue debt to finance the infrastructure needed to develop raw land. District members’ votes are typically a function of the amount of property each landowner holds. The local government must approve CFDs, although they are not a formal part of the government and their debt issuance is not subject to approval by the general public.
A lien for CFD assessments is placed on each lot in the district, and the CFD tax liability appears on the property tax bill of each district member as a separate line item. Variations of this technique may utilize sales taxes, impact fees, and user charges. Many rapidly growing local governments encourage the formation of these districts to help finance their community’s growth. Nevertheless, CFDs can be very complex, and may fail if anticipated growth does not occur (see Figure 2).
TIFs, CFDs, and other such techniques present an ethical dilemma to local government. Sometimes they are not fully understood by the political decision makers who authorize their use, let alone by members of the general public who will bear the burden of paying this debt in the future. Yet they remain a popular tool to finance crucial infrastructure that is basic to improving the economic well-being of the community.
Could a land tax help finance infrastructure for economic development?
The land component of property value is another potential source of revenue to encourage economic development. Since the supply of land is fixed in the short run, an increase in a land tax will not affect the tax base. However, it will encourage more intensive use of the land and may slow urban sprawl. Unfortunately, the lack of empirical data makes it difficult to determine if this theory is accurate. One example in the U.S. is the City of Pittsburgh, which in 1979–1980 restructured the tax on land to be five times that on improvements. Building activity showed a dramatic increase, although other factors may have contributed to the change as well (Oates and Schwab 1997). Pittsburgh later returned to a single-rate property tax system.
Increased use of a land tax poses significant problems. In particular, accurately assessing land can be challenging, although statistical and econometric techniques may help address this in the future. A second concern is that more intensive use of land value taxation will lead to denser development, exacerbating many of the problems associated with congestion. These effects must be weighed against the positive benefits of reducing long-distance commuting. A third problem concerns equity. Owners whose property has a high land/improvement ratio will face an increased tax liability. This shift might be mitigated by adjustments in the tax rate, special exemptions or targeted tax credits.
A land tax has the important advantages of transparency and accountability. In particular, if land value increases because of government activities, there is strong justification for recovering at least some of those costs through a tax on the land component. We would even propose a name for this additional tax—a positive externality tax (PET). We recognize that, like any proposed increase in the property tax, such a shift would be politically controversial.
Conclusions
Our current research analyzes relationships among economic development, infrastructure, and the tax system. The fiscal problems of local jurisdictions are made more complex by the use of intricate methods of infrastructure financing, such as TIFs and CFDs, to fund economic development. The use of financing mechanisms based on a land tax may be one part of a potential response to this challenge.
Jeffrey Chapman is professor and director of the School of Public Affairs at Arizona State University in Tempe. He specializes in state and local finance and administration of financial resources, and has recently published in the area of local land use responses to fiscal stress.
Rex L. Facer II is assistant professor of public management at the Romney Institute of Public Management of the Marriott School of Management at Brigham Young University in Provo, Utah. He specializes in city management, public finance, public management strategy, and public policy analysis.
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Infrastructure (comprising energy, telecommunications, transportation, water supply, and sanitation) plays an important role in urban land development, and it influences city and country productivity. Data on the amount of infrastructure stocks at the national (but, alas, not the metropolitan) level are available for many developing and high-income countries and support several results summarized here.
The amount of infrastructure stocks per capita across countries is strongly related to per capita income levels—when country incomes double, infrastructure stocks nearly double as well. However, country infrastructure stocks have essentially no association with a country’s level of urbanization once country income is taken into account. This seems surprising because cities have large amounts of infrastructure. But they also have dense populations that use the infrastructure intensively, so per capita urban infrastructure stocks are similar to national levels.
The composition of infrastructure stocks also varies systematically with per capita income. Roads have the largest share of infrastructure stocks in the lowest income countries, with water systems second and electric power systems a close third. As country incomes increase, the infrastructure related to electric power systems increases more rapidly than income levels. Infrastructure for water and sewer systems increases less rapidly, and for roads the change is in proportion to income. As a result, in high-income countries electric power systems are the largest component of infrastructure, followed by roads, whereas water, sanitation, and telephone systems comprise only a modest share of their infrastructure.
Based on recent rates of economic growth, and using the existing relations between infrastructure and per capita income, developing countries are likely to need to spend about 5 percent of their GDP on infrastructure (3 percent for expansion and 2 percent for maintenance)—currently about $750 billion annually—to maintain existing ratios between infrastructure and GDP. For high-income countries, total spending would be lower, at 1.7 percent of GDP (about evenly divided between investment and maintenance)—currently about $700 billion annually. Countries growing faster than average need to invest a higher share of their GDP so that infrastructure stocks can keep up with economic growth.
In some countries, improving the efficiency of service production from existing infrastructure is an alternative to new investment. For example, average electricity losses across countries range as high as 25 percent, and leakage and unbilled water can exceed 30 percent. Reducing such high losses can forestall the need for additional capacity. Somewhat surprisingly, performance within countries across sectors varies greatly—efficient performance by a country in one infrastructure sector is uncorrelated with performance in other sectors.
What sources will provide these investment funds, particularly for developing countries? Foreign assistance and development bank financing of infrastructure in developing countries currently total about $40 billion annually, and that figure has more than tripled since 1990 in current dollars. Private investment in infrastructure in developing countries has recently reached $160 billion annually and has grown eight-fold since 1990, also in current dollars. Foreign assistance is directed mainly at energy, transport, and water and sanitation systems, with virtually no funding for telecommunications. In contrast, more than half of private funding goes to telecommunications (particularly mobile telephony), followed by energy. Telecommunications and energy draw more private investment in developing countries because their tariff revenues cover a large share of operating costs, whereas tariff revenues and user fees cover a much smaller share of costs for transport and water and sanitation. Private investment in infrastructure was concentrated in Latin America and East Asia in the 1990s but has spread more evenly across global regions in the 2000s.
Despite the growth in international funding, large and growing metropolitan areas in developing countries still need to raise significant sums to finance infrastructure investments. This will involve raising tariffs charged to users, increasing taxes (particularly property taxes) on properties whose value is enhanced by infrastructure investments, and establishing municipal bond markets such as the one being developed in South Africa.
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When I was a scholar at Cambridge University in the 1990s, my now-departed colleague and friend Wynne Godley would drop by on Sundays to take me to visit one of the ubiquitous medieval churches in the villages of East Anglia. Wynne frequently noted that “a church is more a process than a building. It unfolds over centuries and involves generations of families in its construction and maintenance.” He had a keen eye for architectural detail and would point out a buttress or belfry that illustrated distinct technical practices, unusual materials, or both. A single church offered a living, layered record of how successive generations of a community solved the challenge of making and keeping large, enclosed, open spaces for worship feasible and beautiful.
In this way, cities are much like medieval churches. Over time, they illustrate the collaboration of generations of residents, as well as the evolution of economic, technical, and even social tools used to build and maintain them. Rome’s marble relics stand testament to ancient values, aesthetics, and building ingenuity, while a modern city thrives around them. Manhattan’s iconic skyline, seemingly fixed, is ever in flux, and is now evolving dramatically to respond to 21st-century demands for sustainability, resilience, mixed-use development, and other concerns.
The boundaries of cities evolve, too, and tell another critically important story. The future of the planet may depend on our capacity to understand that story and to develop the tools and collective will to manage the pattern and progression of urban growth. Shlomo (Solly) Angel documents this trajectory in the Atlas of Urban Expansion (Lincoln Institute of Land Policy, 2012), which uses satellite images collected over decades to track the spatial evolution of 120 cities around the world, from Bamako and Guadalajara to Shanghai and Milan. The last half-century of urban growth has provided a cautionary tale about the seduction of sprawl—a path of least resistance that generates quick profits but unsustainable development. Our ability to manage our ecological footprint and minimize our global impact will be tied inextricably to our ability to plan and construct more dense and efficient human settlements. Given the United Nations’ prediction that the global urban population will nearly double to 6 billion by 2050, the fortunes of the planet will depend on whether we, as a species, adopt a more appropriate development paradigm over this half-century.
As we endeavor to reinvent our urban settlements, we will confront an old foe—land that is already improved and developed, but needs to be adapted to new uses. While we are not unfamiliar with this highly contentious process, it is safe to say that we have not yet cracked the code on how to manage it. This issue of Land Lines considers some of the driving needs that will require creative approaches to redevelopment in different cities and contexts: satisfying the unmet demand for housing that leads millions of workers in Beijing to subterranean habitationfinancing infrastructure to manage population pressure in Rio and other Brazilian citiesrepurposing land in the throes of a complete industrial, demographic, and fiscal overhaul in Detroit. These places are quite distinct, but all will face similar challenges as they evolve in the coming decades.
At the Lincoln Institute, we are keenly aware of the need for new ideas and new practices to facilitate sustainable redevelopment of land that is already developed or occupied. Over the next year, we will begin to build an intellectual enterprise around addressing the manifold challenges of urban regeneration—extracting the lessons learned from earlier efforts in the United States and other developed countries since World War II, finding new and creative ways to finance infrastructure that improves the land under the informal settlements that choke cities in developing countries, or rekindling the fiscal health of legacy cities like Detroit by unpacking the causes of insolvency and testing remedies for it.
The medieval churches that I visited during the 1990s offered lessons in stone. These included innovative techniques and materials that permitted medieval architects to defy gravity. Perhaps more importantly, they were monuments to the communal efforts and long-term commitment of the congregations that built and sustained them over centuries. In the end, human survival might hinge on our ability to override similarly the centripetal forces that undermine collective action, and to build and maintain the social structures and policy frameworks to develop and redevelop our cities for mutual and long-term posterity.
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The sound of electricity hums deep inside the Tate Modern, the power plant turned art sanctuary on the south bank of London’s River Thames. Despite the 4 million visitors per year now streaming inside since the galleries opened in 2000, the switching plant is still generating 2 megawatts of power for its neighborhood, making the Tate one of the most unusual mixed-use urban redevelopments ever concocted.
But an even more far-reaching hum is reverberating all around the Tate—that of regeneration. Connected to central London by the arching spine of Lord Norman Foster’s Millennium Bridge and further magnetized by the whirling mega-folly of the London Eye Ferris wheel nearby, the Tate has catalyzed well over $200 million worth of other redevelopments to the area. Yet, even as it joins other high-end arts institutions in the “Bilbao effect” of high art sparking higher-end gentrification, the Tate is working hard to nurture an economically and ethnically diverse live/work/play urban neighborhood.
“We’ve had impacts,” says Donald Hyslop, head of education for the Tate and coordinator of its community initiatives. “We attract 4 million visitors a year, and 12 million now move between the Tate and the London Eye. The question for us became, ‘How do we spread that wealth?’”
Such models of urban regeneration lured the 2006 Loeb Fellows from Harvard University’s Graduate School of Design to London for their annual study trip abroad, cosponsored by the Lincoln Institute. Aided by Jody Tableporter’s connections as the former director of regeneration for London Mayor Ken Livingston, the group gained a first-hand look at the leaps, stumbles, and lessons to be learned from one of the world’s most rapidly redeveloping cities.
“London has proven the relationship between transportation planning and economic growth,” observed Luis Siqueiros, a planner who has worked in Juarez/El Paso, Guadalajara, and other Mexican cities. “They are mixing all kinds of activities together in their buildings. In North America, we talk about these things a lot, but they are showing us how to do it and why.”
The Beginnings of London’s Regeneration
The story of London’s regeneration is long and complicated. It begins in the Thatcher years with a bold refocusing of government aid to cities that created urban redevelopment agencies and enterprise zones to assemble land and better focus new development and transportation infrastructure projects. The most conspicuous early success was Canary Wharf, the sleek, steel-and-glass commercial new town that became the first major project in the Royal Docklands, and in the Thatcher government’s vision for a larger, regional corridor of redevelopment, dubbed the Thames Gateway, stretching all the way to the North Sea.
Despite the misfortunes of Canary Wharf’s original developer, Olympia & York, the larger Docklands redevelopment agency and enterprise zone resulted in the Jubilee Line tube extension and the first phase of the Docklands light rail line. Today, with more than 100,000 workers, Canary Wharf is competing with downtown London to be the center of the financial services sector, decidedly shifting the momentum of the city’s growth to the east.
While Margaret Thatcher’s free-market programs—particularly the release of huge tracts of government-owned land for redevelopment—broke a long freeze on urban redevelopment, subsequent Labor Party policies have guided recent successes. In the 1980s, forecasts of 4 million new households by 2020 led John Major’s government to create the Urban Task Force overseen by architect Richard Rogers. The resulting 2000 Urban White Paper made urban renaissance official national policy.
The reverberations have been widespread, stretching from Leeds to Norwich, but the epicenter is London. Projects like Canary Wharf and the Tate established momentum that gained further steam with the city’s election of its first mayor, Ken Livingston, to set policy for the metropolitan region’s 24 boroughs. Livingston has unleashed a panoply of internationally attention-getting initiatives, from the much-lauded “congestion pricing” of automobiles traveling into the core to a series of bold, new buildings and public spaces by top-rung architects like Rogers and Norman Foster. Now, with the Olympics scheduled for 2012, London has succeeded Barcelona as the “It girl” of European cities, while luring other English cities onto the dance floor.
“Having an architect like Richard Rogers involved in the destiny of cities was a major force,” Tableporter says. “His work with the Urban White Paper spawned a whole batch of English cities that all of a sudden are attuned to design standards and urban principles via master planning.”
But for all the excitement and the dozens of major projects underway, the Loeb Fellows agreed that London’s growth will live or die in the details. As Jair Lynch, a developer from Washington, DC, put it, “The question is, can they give these new places soul.”
Guiding Land Use Principles
While far more modest than some of the huge redevelopments that have been and are being completed, the Tate Modern offered the kind of careful instrumentality that attracted the Loeb Fellows, by both seeding major new development in the long-dormant south bank and spreading the benefits to the existing community.
Under Hyslop’s guidance, the Tate joined a national pilot program to create one of England’s first Business Improvement Districts (BIDs). This initiative developed an employment training program called START, helping to bring more than 40 percent of the museum’s employees from the nearby, and historically downtrodden, South London districts. It started a new community group now boasting 450 members who wanted more open space, meeting places, and a movie theater. Their efforts moved the Tate to open up rooms for public use, develop a community garden, and host a new neighborhood film club.
“The Tate is trying to create a dual function for an arts institution,” noted Lisa Richmond. A long-time arts administrator and activist who has worked on community development projects for the Atlanta Olympics and the Seattle Arts Commission, Richmond says most major U.S. cultural institutions focus solely on audience development. “On the one hand, the Tate has a major global impact, representing the U.K. to the world, but it is also taking responsibility for its immediate community,” she observed. “I don’t know of any U.S. arts institution trying anything like it.”
By combining a major attraction, top-notch architecture, public space, and transportation infrastructure, the Tate became an early standard setter. But, it is rapidly gaining many potential equals, from the centrally located King’s Cross, where a new Channel Tunnel station designed by Norman Foster is triggering a 50-acre redevelopment with 1,800 new homes plus retail and commercial uses, to the outlying Wembly Stadium, the building and master plan designed by Rogers, including a plaza and grand boulevard lined with shops, bars, and restaurants, as well as 4,200 homes.
The primacy of the pedestrian is another common denominator. With Michael Jones, a director at Foster and Partners, the Loeb Fellows toured the newly renovated British Museum. There, the breathtaking glass roof—gently domed in a Fibonacci sequence of diamond-patterned steel structure—covering the 2½-acre Queen Elizabeth II courtyard has garnered all the headlines. But the restoration of the museum’s forecourt—ripped out in the 1960s for a road—has transformed the area into a new magnet for lunching, lounging, and strolling tourists and locals alike.
Nearby, Jones pointed out the similarly transformed Trafalgar Square. This traffic-choked cameo player has set the scene of “busy London” in so many movies. But it is now costarring in Livingston’s remake of the city through a “World Squares for All” campaign that will link Trafalgar with Westminster Abbey and Parliament Square as a major pedestrian corridor.
“For too long London’s public realm has been neglected and ignored,” Livingston said in a 2005 speech, as he unveiled plans to build 100 new public spaces for the Olympics. “Now we have an opportunity to get things right by rebalancing the spaces of the city for people and cars. I believe that the street is the lifeblood of city life.”
The Loeb Fellows also saw some of the method behind Livingston’s Midas touch in the work of Space Syntax, a dynamic new studio pioneering techniques of measuring and shaping traffic—both on wheels and on foot. Growing out of research at University College London by Professor Bill Hillier in the 1970s, and now a four-year-old company with offices in Sydney, Tokyo, Brussels, and South Africa, Space Syntax has developed new software to algorithmically model impacts on congestion and movement. It is based on a simple principle: people’s urge to take the shortest route.
In early studies of the potential impact of the Millennium Bridge, for instance, the city’s planners guessed it would be crossed by 2 million pedestrians annually. Space Syntax’s formulas predicted at least 4.4 million, but already more than 9 million are crossing the bridge each year. Jones added that similar studies eased planners’ minds about the benefits and impacts of removing streets at the British Museum and Tralfalgar Square.
“Space Syntax is using the traffic engineer’s language for the urban designer’s goals,” noted Etty Padmodipoetro, a Boston urban designer who designed several key open spaces for the Big Dig highway project. “In the United States, we could learn a lot from how they have harvested academic research for use in the profession.”
Challenges to Redevelopment Goals
Such innovations, however, only mitigate some of the risks in London’s bold experiments in regeneration. So far, London’s greatest successes have been catalytic projects within the existing city fabric that humanize the public realm while generating new developments that attract new residents and jobs. On the horizon are dozens of larger-scale projects that will determine whether London’s mastery of regeneration is a moment or an era. Some are widely considered to be mirages, like the Battersea Power Station, where an all-star cast of designers—Cecil Balmond, Nicholas Grimshaw, Ron Arad, and Kathryn Gustafson among them—has teamed up for a Tate-like power station to arts remodel as part of a proposed $1.5 billion transformation of 40 acres into hotels, offices, retail spaces, and flats. But other projects, like the soon-to-break-ground Silvertown Quays, teeter precariously in the gusts of London’s transformation.
Land Ownership
As the Loeb Fellows learned from Timothy Brittain-Catlin, a historian and lecturer at the Architectural Association, enormous swaths of London’s land base are owned by a small number of families who first gained control when King Henry VIII abolished church land ownership, handing the land over to his cronies whose descendants, like the Duke of Marlborough, still control it. In short, most of central London’s land is leased rather than sold. Most of these areas are also protected under the city’s strict historic preservation policies. With Livingston’s hopes of building 120,000 new units of housing in the next 10 years, the success of projects like Silvertown Quays—outside the core, on government-owned land less bound by historic codes and neighborhood NIMBYs—is essential.
Partnering with the Government
But “developing in London is not for the faint-hearted,” even in partnership with the government, according to James Alexander of KUD International, the company codeveloping Silvertown Quays. Borrowing a page from its successful playbook in the United States, in which it has partnered with local governments to build aquariums and stadiums, KUD is working with the Docklands Redevelopment Agency to transform the now largely empty 60-acre Quays site. At the center will be the Terry Farrell-designed Biota!, Europe’s largest aquarium, along with 5,000 units of housing, 420,000 square meters of commercial space, and 73,000 square meters of retail and leisure facilities.
Mixed-use development is new to KUD, better known as a horizontal developer that leverages land values with large-scale infrastructure. But KUD’s techniques are new to London: sharing equity with the redevelopment agency and offering a guaranteed delivery price for infrastructure and the aquarium. Even in partnership with the agency, according to Alexander, getting to a final deal has taken four years—tracing deeds, completing archeological surveys, dealing with watchdog groups, and hopping other regulatory hurdles, not to mention negotiating against Livingston’s demand for 50-percent social housing (talked down to 30 percent).
KUD’s Alexander was candid about the firm’s worries. It will be betting $250 million up front on reclaiming the land and building the aquarium with no profit projected for seven years. The affordable housing goals remain aggressive, particularly with no guarantee that government grants, estimated at $20,000 per unit in the development agreement, will come through. Project delivery also will converge with the Olympics, which is guaranteed to trigger construction inflation and capacity issues. And, with many developers following the current boom and the government’s housing goals, Alexander adds, “an equal challenge will be to maintain value over time as the market inevitably drops off.”
Volatile Housing Markets
Indeed, with more than 90 percent of new housing permits in London’s pipeline designated for flats, a recent study, “New London,” by Knight Frank estate agency predicted a softening market for flats, signs of which are already appearing. More critical, the study suggested, is an already failing market for flats in other, less robust English housing markets that have followed the London model.
Citing a range of studies showing the dramatic tilt nationwide to brownfield/flat development over greenfield/single-family houses, historian Peter Hall also expressed concern in a recent paper presented at a Lincoln Institute conference that government and private developers are failing to meet a critical market for workforce housing, particularly single-family houses for young families. Several Loeb Fellows worried about the continued focus on large-scale, Bilbao-style attractors like Biota!. “The Tate’s BID model seemed potentially ground-breaking,” Lisa Richmond reflected, “while the aquarium (at Silvertown Quays) felt like a disaster in the making.”
Ambitious Plans for Olympic Village
On the 23rd floor of Barclay’s building overlooking the sleek Canary Wharf development and the future Olympic Village beyond, Tim Daniels of the London Olympic Delivery Authority offered the Loeb Fellows an overview of what will be London’s most ambitious attempt at regeneration. The Olympic Village dates to the Thatcher government’s launch of the Thames Gateway corridor, but it is finally sprouting under Livingston’s mix of go-go capitalism with a larger social agenda.
Livingston cannily separated the usual single Olympic authority into two separate agencies—one for building facilities, the other for marketing. Consequently, London is keeping one eye on the long game of what Daniels calls the “regeneration dividend.” In the short term, a new velodrome, stadium, tennis center, and the much-anticipated aquatics center by architect Zaha Hadid, along with a major new Euroline transit hub ushering in visitors from all over Europe, will anchor what will be the first village to fully integrate athletes’ housing with sports facilities. The goal, Daniels says, is to have more than 50 percent of the participants within walking distance. But long after the Olympic Games close, those facilities will anchor a mixed-use neighborhood in which the bedrooms originally built for 23,000 athletes and support staff will become 4,300 units of family housing.
Numerous speed bumps lie ahead, however, ranging from the tough deals still being negotiated for land assembly with owners looking to cash in, to finding new homes for “travelers”—gypsies who under British law have the right to squat on unused land. More than 6 kilometers of rivers and canals need to be dredged and remodeled, and 40 bridges either refurbished or built anew. Since the village site is cut off from any existing neighborhood by a major freeway and rail line, at least two major 50-meter “land bridges” are being proposed to make the awkward link to nearby Stratford.
But challenges aside, “it’s a great way to look at the Olympics,” noted Jair Lynch, a developer and former Olympic medalist who now sits on the U.S. Olympic Committee. “The whole thing can be taken over by the marketing people, but by splitting the authority, they can keep a strong focus beyond the event.” He and other Loeb Fellows concluded that the key for the village, along with all of London’s increasingly larger, bolder efforts at regeneration, will be keeping—and, in many cases, creating—a sense of local connection. As Lynch put it, “How do you create a real sense of neighborhood at those scales?”
Closing Observations
At the end of our study tour, most Loeb Fellows felt that Donald Hyslop of the Tate Modern offered the clearest, most hopeful, and most far-reaching aspirations for London’s bold, new brand of large-scale urban neighborhood building. With architects Herzog & de Meuron adding on to their celebrated first phase with an eye-catching, high-rise annex, the Tate will move out the electrical switching station and reclaim the huge, decommissioned fuel tanks beneath the building for a new 400-seat theater, more restaurants and shops, and more spaces for flexible programming.
Hyslop says the goal will be to develop a “life-long learning center” spawning a “16-hour-a-day” corridor along the 15-minute walk between the Tate and the rapidly regenerating Elephant & Castle neighborhood. Rather than being merely a catalyst for development, the Tate hopes to be an active agent in creating a neighborhood—a transformer, if you will, rechanneling financial and social wealth throughout the community.
Randy Gragg is the architecture and urban design critic for The Oregonian in Portland.
Loeb Fellows, 2005–2006
Teresa Brice-Hearnes, Program Director, LISC Phoenix (Local Initiatives Support Corporation), Phoenix, Arizona
Barbara Deutsch, Urban Greening and Green Roof Consultant, Washington, DC
Randy Gragg, Architecture and Urban Design Critic, The Oregonian, Portland, Oregon
Jair Lynch, CEO, Jair Lynch Companies, Washington, DC
Etty Padmodipoetro, Urban Design and Transportation Planning Consultant, Boston, Massachusetts
John Peterson, Architect, Peterson Architects, San Francisco, California
Lisa Richmond, Community Cultural Planning Consultant, Seattle, Washington
Luis Siqueiros, International Planning Consultant, Mexico City, Mexico
Kennedy Smith, Principal, The Community Land Use and Economics Group, LLC, Arlington, Virginia
Jody Tableporter, Chief Executive, Peterborough Urban Regeneration Company, Peterborough, United Kingdom
