Reality vs. Chic in the City

A friend of mine asked recently, “why don’t they develop the new ‘downtowns’ like the old ones that worked?” His particular example was a border community where the destination for shopping and commerce was still the center city (I’m assuming of the railroad city pattern,) and still vibrant and well trafficked. This is a good question indeed. What he was specifically responding to were several examples here in North Texas of unitary development projects that mix housing with high-end retail and entirely leave out the humdrum kinds of uses that normal people interact with on a daily basis. (What I would call the dangers of only looking urban ) Short of getting into the dollars and cents of the calculations that drive this kind of thing, it seems to be a product of trying to fill an entire community with high-margin business. The Gaps, the Victoria’s Secrets, the Urban Outfitters may all do very of themselves from a retail standpoint, (Dallasites by now know exactly where I’m thinking,) but these things do not a community make. While enterprises like these may benefit from the cachet of a locations that gives off the vibe of “urban” and “hip,” the vibe is by no means real. Looking at the lessons learned from a real city done well, you can see the false premise in their calculations. Each of these high-margin outlets rely on a quite large catchment area (I think the economic term is “hinterland”,) and as such are not actually neighborhood stores. Only retail based on repeat business within the neighborhood thrives over the long term.

Here then is the crux of the economic problem: For a neighborhood to be a healthy, viable economic entity, it must accommodate low-margin retail and service for use by the residents. (Especially when the margins get lower every day) Yet, to justify building at beyond the bare minimum of suburban schlock, (unless you actually are in Manhattan, where both available catchment area and difficulty of going elsewhere are amazingly high,) the margins of each individual tenant must be so high that a high-margin business is practically required. This is one of those unintended consequences of individual decisions. The only way to justify a pleasant lifestyle seems to be to add a substantial cost premium to everything in town.

Added choice means added locations. Added locations mean reduced concentration. Reduced concentration means inhuman and unpleasant surroundings.

Or so it would seem.

Collage: Chaos

and from the greatest hits: Out With Friends

Circling the Wagons: A Poll

Density in housing has a lot to be said for it. That said, much of the reason for the suburbanization of our cities is that the single-family house grants a great deal of control. Living densely involves living in close proximity with others which can create problems of noise, crowding, odor, and a general reduction of the control one has over their own life. There’s still a big streak in the American psyche of the independent landowner, and with it an accompanying desire for control of self and territory. This echoes in areas as varied and home schooling and large cars, but is nowhere more important than housing.

Those of you out there that have experiences living densely, what’s the secret? Are there better patterns than others?

Reexamining Exploitation

I’m coming to the realization that many of the political debates in the U.S., and much of the resonance of characters like John Edwards, springs from different experiences of the economy at a day-to-day level. Free marketers, like myself, tend to view the whole enterprise on a Smithian theoretical level: the exchange of one thing for another, with benefit to all. This, unfortunately, is not a universal experience. Any good attorney will tell you that any bargain should be based on informed consent; any good economist will tell you that if the terms of a deal are not ideal homo econimus will renegotiate the deal to harmonize with their interests. There are, I remain convinced, sectors of society where this is actually true. Unfortunately they are by no means universal.

I seem to see a gradient running through the world – as socioeconomic status increases the world looks more and more like the economists’ ideal. Interlineation, negotiation, comparison of terms, total inspection of the “fine print,”: these are things that can occur if one has the time, freedom, education, and access to alternatives (what the Harvard project calls BATNA,) but not otherwise. The more one slides down the scale, the fewer and fewer choices one has. Oddly, this seems to be not due to the lack of actual money to negotiate with, but more terminology and expectation. Buying a, say, 2 Million dollar house (or apartment, for you Manhattanites,) you’re fully expected to have a series of expert inspections, contracts reviewed and revised by attorneys on both sides, and a slow, careful transaction. Renting an apartment for $350 a month none of this is accepted as normal. However, from an economic and political standpoint the two are identical. In fact, the portion-of-income number for the buyer in the latter is often greater than the buyer in the former.

As a general rule, the less you are spending the less time you are given and the less information you’re provided. This might be justifiable if everyone had the same resources to dispose of, but as for some it represents an enormous portion of their worldly goods, the whole thing is totally suspect. As a personal anecdote, a few years ago I had the displeasure to buy a car at an establishment in an, how to put this, less-than-fashionable suburb of our glorious metroplex: the idea that a customer could both a) calculate exponential functions and b) was not intimidated by a page of legal terminology was a whole new world to the sales staff. Considering that both of these skills are assumed in the defense of every predatory lender and corporate policy-maker, (“they signed the contract,”) my eyes were further opened to the assumptions these people actually make.

The bottom line is that the market can not actually function efficiently unless its participants actually have the information needed to make a measured decision. This can only happen if the institutionalized fraud is removed from the parts of the economy that prey on the weak and desperate. If man is to be free to choose, he must have real recourse against the swindler.

But how to root it out?