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Adsm

I see your point, but isn't Baltimore sort-of a strange case? Hasn't a lot of the strong demand for housing in Baltimore been largely driven by the high prices in the Washington area? If Baltimore is overbuilt, then won't prices stay down and eventually the units will sell to Washingtonians? And if Washingtonians aren't buying them up, that suggests that the Washington market is cooling.

You might say that this only makes your argument about Pittsburgh stronger since we don't have the DC jobs generator here. But it makes me dubious about the whole Baltimore-Pittsburgh comparison to begin with.
I've heard a lot of people (including you) make the comparison but it seems to me that Baltimore's proximity to DC (the Census considers them one CMSA anyway) and its presence on the East Coast puts it into a different comparison set even if there are superficial similarities like population size, funny local speech patterns, and storied but now mediocre baseball franchises.

Adam

My name is actually Adam, not Adsm. Can't type in this heat.

Sam M

Adam,

Agreed, there are important differences. But as you mention, all of the important ones seem to argue that Baltimore should see LESS of an impact from the addition of thousands of condos. But it has seen an impact. Which I think raises serious questions about whether Pittsburgh can simply put in a few thousand high-end units downtown without the slightest bit of impact on landlords in Shadyside, Squirrel Hill and other places currently home to the Creative Class cohort.

Jonathan Potts

Let's not forget all the units coming online in East Liberty and the South Side.

John Morris

There are so many implied falacies and assumptions built in here that one doesn't no where to start.

First of all one is making comparisons between the demand for very different lifestyles so comparison is going to be very tough. Second of all one is making an evaluation that putting some competitive pressure on existing prices is bad. Both the South side and shadyside could more price competition. In fact both areas are likely being damaged pretty badly by prices that are driving out a lot of people.

The biggest falacy built in here is about the desires of two very different groups. I will have to make some generalizations here and divide people into two categories.

1) is the "suburban/ rural buyer" who to a large extent is motivated by a dsire to " get away" from it all. If one had that motivation ,then any new development or addition of people would be a subtraction from ones desired lifestyle.

2) Is the urban/ buyer/ renter. What motivates this person is pretty much the opposite. While they may want a large place or even some grass if they can get it, they are willing to exchange some of that for the higher convenience level ands all the intagible benefits of urban life. For this buyer the opposite factor is at work. Each additional apartment building nearby is likely to add to the shopping and exitement of the neighborhood. In fact it's the first people in an urban setting that are the hard sells since there is likely not too much life going on yet.To me, the main problem with the downtown is that the small number of units is not likely to bring enough life into the area.

At it's most extreeme level one get's markets like NY or Hong Kong in which tiny spaces in prime locations are almost priceless.

The choice for urban life is about making a trade off. The city has to offer enough benefits to offset a likely loss of space and perhaps privacy.

John Morris

One more comment,

Using a static projection on jobs for for the Baltimore region is not wise even with a major captive employer like the federal government. Other non captive employers may find the rising housing shortage in the area to be a major reason not to grow there. I think that Mass, is really getting that problem.

I want to be honest about Pittsburgh,s current attraction. Almost everyone you here about hyping the place or every article hyping puts price as the number 1 appeal here. IF and when Pittburgh loses that it will have a big problem. ( hopefully by then it will offer more benefits/ jobs etc.. )
So making more urban living opportunities available and a creating new urban neighborhoods will be very important.

A few scattered and overpriced neighborhoods in a depressed region just are not going to draw people here.

Sam M

JM,

Back to your first post: Yes, there will be a price impact. But that is different than a lot of the comments I have seen in the past, which said, for this reason or for that, there would be no impact.

But there will be an impact. You seem to think it will be a price correction. But I don't think the landlords in those sections are interested in seeing a correction.

And regarding market: I don't think you can separate them so neatly. We don't have "Cranberry people" and "Fifth Forbes people." We have a lot of people who can see the benefits of each way of life. We have a lot of people who are "Shadyside people" who could go either way. We have a lot of people who are one kind of person at heart but for one reason or another (schools, jobs) choose the other.

Honestly, I think a lot of the people eyeing up "downtown" living are currently in the upscale condos in Shadyside, etc. And I think that is probably more pronounced in Pittsburgh than elsewhere. Because, as you point out, Pittsburgh has had so little downtown residential. So those people, given the opportunity, are going to head out of Shadyside. Which is what I have been saying all along.

I think that would be an excellent thing if Mr. Piatt lured them away with his own money.

Look, Shadyside people are not the same as Cranberry people. And hsadyside is not Cranberry. Its existence does not depend on highways, etc. I consider them "city" dwellers. It's just a different neighborhood within the city. If they want to move to the cultural district, that's great.

But not with Mayor O'Connor picking the winners and losers.
That's all I have been saying all along: You can't expect to build housing in a city that is losing population and not expect it to impact the market.

John Morris

Hopefully a trend towards city living will create more value for both neighborhoods. This sort of gets back to the whole purpose of cities thing which I can see is a pretty tough sell here. That is basically what you are saying is that you don't understand why people would want to live in a city.

If I am sort of right about the fact that urban life is a compounding value then adding more people into any of these neighborhoods will enhance the value of living in all of them. One can expect a higher level of convenience; more shopping;more restauraunts and a greater density that can support public transit. The chances for more informal networking etc compound with the number and variety of people.

One of the main reasons is that I am not too bullish on much developing now is that i can see that most people here are highly sceptical of the whole idea.

The value of downtown living as a new and very high value housing type will only work if a lot of people live in and near the downtown. I think there are a lot of delusions that a few wealthy people will be enough.

Of course, I have to generalize here, but that is the basic trade off of living in a city and one has to understand how it works. Lifestyles are not comparable between densities. One of the opportunities here is to create a new neighborhood with a level of density and convenience that is in a new class for Pittsburgh. A neighborhood stacked with 20 story residential buildings mixed with 20 and 30 story office buildings and hotels woul be an entirely new thing and not comparable on any level.

Sam M

John,

I think I am not making myself clear.

I do, in fact, understand why people would want to experience downtown living. I have leanings in that direction myself (although not nearly enough money to act on those leanings, nor a family situation conducive to living on the 20th floor).

If we were experiencing the kind of job growth that other regions are experiencing, then by all means, I could see how housing for an extra 10,000 people downtown might add that element of density to the region. And it would be a welcome ADDITION to the local scene.

Or if Pittsburgh were the only urban area building this kind of housing, and offered the only experience of its kind, I could see all kinds of people moving here from Columbus and Cleveland and Indianapolis and Erie to take advantage of it.

But neither of these scenarios is playing out. The fact of the matter is that even real optimists about the region see it holding its population about steady over the next generation.

And the fact of the matter is that this kind of living experience is not going to draw people from Columbus and Cleveland and Indianapolis and Erie because those places are building the same exact housing units. So are hartford and New Haven and Charlotte and Dallas and Houston, etc.

So if every urban area in the country is adding tens of thousands of housing units, and none of those people who fill them are going to move in from other urban areas and they are not going to come from areas "culturally opposed" to urban living (such as Cranberry), my question remains, where are they going to come from?

I do understand your point that amenities beget amenities and that the flight to the city center might generate the kind of momentum that the flight to the suburbs did 50 years ago. But I just can't see it working unless a whole lot of what happens is a shift within neighborhoods and from one neighborhood to another. People who really do want urban living but have not been able to get it in the past, etc.

Now, I think you can argue that this would be a good thing. A correction, maybe. But it's there. And I think that in the end you have to address the fact that these projects are not, in fact, drawing people in from Cranberry to the Fifth Forbes Corridor. Or from Herndon in NoVA to downtown Washington, DC.

Instead, the Herndons and Cranberrys of the world will be just fine.

It's the Shadysides that are going to pay the price.

And like I said, that might be a good trade. As long as you are not a property owner in Shadyside. But what the hell? Every social shift has consequences. And if someone has to pay the price, maybe it should be the upper-middle-class property owner. I don't know.

I just think it needs to be said that not all of the consequences of these building projects are good consequences. And that the major suburban "wastelands" that urban activists hope to target probably aren't the communities really in the crosshairs.

OK. That is strong rhetoric. Shadyside is going to be fine, I predict. But still, when you add subsidies into the mix, I think those landlords have a lot of room to gripe. Because, as you mention, the new downtown condos, a lot of which which will be funded by public dollars, are going to put real price pressure on the market.

They are doing that right now in communities that are growing. Pittsburgh is shrinking. And the laws of economics dictate that in such a scenario, the price pressure will be even greater.

Right now, I think you agree that as far as "sprawl" and its impact, places like Squirrel Hill are a lot less "negative" than places Cranberry. And in many ways, Squirrel Hill is "good." I am just saying, in the words of a previous commentor on a previous post, that subsidies, in addition to encouraging the "perfect," can also have the effect of harming the "good" places.

Because, like I said, this isn't going to impact Cranberry or herndon one way or another.

John Morris

I think we both agree that the subsidy route is really bad although I am trying to get somebody here to admit that the suburbs are pretty heavily subsidised to say the least.

I sort of feel that there is as you say a rush to sort of resurect cities. But one get's the impression that it's largely being run by people who don't know much about them. One of the most frustating things on ths particular blog is that one just seems to be comparing one failed city against the next. When one tries to bring in examples of successfull cities- you get a knee jerk - this does not apply answer. The first think one would logically start doing is looking at actual working cities around the world and in America and also at the reasoably successfull areas of Pittsburgh many of which are sort of mixed use and fairly high density.

The Millcraft thing is interesting in that you have a developer with no real experience working in cities to my knowledge. So that is not too good.

As far as who is going to "pay the price". The issue is more likely to be one of relative benefits. If Pittsburgh can create a solid urban core that would be good for the whole region.

But, If one insists on picking losers or relative losers, they would likely be the mid- range, mid priced near suburbs of Pittsburgh- Dormont, etc... These places are not really doing too well at providing either a suburban or an urban lifestyle. They kind of resemble Nassau county in NY and a lot of the near suburbs of New Jersey. they have a lot of aging infrastructure and a poor tax base. A lot of NY's near suburbs are now in pretty big trouble.

John Morris

This is a pretty big issue and i am not too sure how it play out. One extreeme negative as you said is that Pittsburgh has never had this type of lifestyle and it has a history in terms of government with some bad in-breading problems, that is unlikely to want to look at successfull models.

It seems what is happening in a lot of mid tier cities like Pittsburgh is that they are trying this stuff in a totally half assed and half hearted way. I think what has happened is that a lot of the previous policies are such an obvious joke now that they have to act like they get it. So they put up a few apartment buildings or lofts and expect an instant NY to appear.

You are right that this recent fad of the one symbolic apartment building downtown model is likely a joke.

I just want to make one more point which is that failure to create an even halfassed semi- fuctional downtown is likely to create a situation in which Pittsburgh will find it hard to just retain it's existing job base.
I would imagine that given the current situation tht employers will want a lot of subsidies just to keep jobs in the downtown.

One major possitive effect that NY has gotten by the exploding popularity and revival in urban living is a very "sticky" labor pool of people who do not want to leave the city. This has helped to offset the cities very high costs. Without that you are just in a price war against the suburbs and ultimately places like India.


Jonathan Potts

A couple of thoughts:

The big mistake that Pittsburgh continues to make is to try to control development from the top-down. This is the thread that connects yesterday's slum clearance projects to today's condo-building projects. This is a challenge in a lot of cities--getting local officials to surrender control. Sometimes it means surrendering control to the market; other times it means surrendering control to neighborhood groups that have a good plan with grass-roots support. (Not applicable to Downtown, but our previous mayor pretty much told the cities' neighborhood organizations to get bent.)

And to build on Sam's point, it's not only the city that has a declining population, but the entire metro region as well. (With a few isolated exceptions.) That doesn't mean Downtown Pittsburgh is competing with Cranberry, a vastly different kind of community. But it is competing with places like Aspinwall, Oakmont, Mt. Lebanon and others that offer many of the benefits of an urban lifestyle. Many people have argued that Pittsburgh is held back by its lack of new housing; that argument would hold more water if Pittsburgh were an island of population loss in the midst of booming growth.

sean mcdaniel

Sam says or quotes:

"Home sales in Baltimore and the five surrounding counties have fallen each month since October from year-earlier levels, and the number of unsold properties has been piling up"

sounds like the end of urban sprawl to me. because if you look at new homes sales and construction, the city isn't fueling the market. to make that clear, aside from downtown construction, most new housing seems to be going on in the the suburbs. so it seems as though the baltimore condo movement is working to the effect that promotes a higher density population in the city. isn't that high urban density population a core belief of this post and others?

as for J. Potts worrying about aspinwall, oakmont and poor mt. lebo losing residents to downtown condos, so what? maybe when gentrification of downtown raises real estate prices in other "choice" neighborhoods even higher (shadyside, sq. hill, southside, bloomfield, mex war sts., etc.) all the poorer residents can take advantage of the real estate deals in those suburban towns.

seriously folks, it's going to shift population around...and people who can't afford the rent once slumlords start to sell property in the areas around downtown (ever notice those few blocks of rowhouses in the strip. if downtown living talks off, you won't be seeing little black kids playing on sidewalks anymore.) will have to move farther afield...but chances are, it won't be aspinwall or mt. lebo, but more likely sharpsburg or beechview. those little enclaves of the affluent (or at least well-off) will remain safe...but the places already sliding downhill will do so even faster. i can see a population boom happening in hazelwood soon...with a crime rate increase to match.

Jonathan Potts

I'm less worried about those places losing residents than I am about luxury condos throughout the city--many of them partially underwritten by taxpayers--sitting empty because the region has no net population growth. I do not think the construction of new housing is going to spur that growth.

sean mcdaniel

the condos may sit empty for a while. the trimont on mt. washington wallowed for years...until prices came down. i didn't mean to say that new housing would spur any kind of population growth, anywhere. it will re-shuffle it. but when more city neighborhoods get pricier (who knows, maybe even oakland landlords who rent to students will start to go upscale), the poor will have to find somewhere else to live.

and back to the original point about baltimore, it seems as the condos are working...especially if housing sales in the suburbs are declining. any discussion about that being a good thing (yeah, i mean you john morris)

John Morris

If people on these blogs would try to focus on some real issues. Like the some of the real reasons that people in the Pittsburgh region have chosen to live in the suburbs it would help. Bad government/ big government/ corruption/ tax issue/ poor schools/ Eminent Domain- it would help a lot.

As to the issue of housing sales in the Baltimore region. I would imagine that rising prices and higher interest rates have started to bite into the market along with perhaps rising fuel prices.

It seems like a lot of the game that is being played in the Baltimore suburbs may start to bite back. From what I could read, governments are actively recruiting employers while restricting housing. At some point the employers will see how much they have to pay employees so that they can afford housing and decide to look elsewhere.

John Morris

As far as the market for condos ( and the market for everything ) it's likely to be a bumpy ride.

I forgot about the Mount Washington Stuff. The downtown properties will definately compete with those things on some level. I would imagine that the big seller there is the view, but when people have the option of gret views with a much higher level of convenience it will put some presure on those prices.

Getting to Sean's comment's. They seem a little too senseless to make me mad. I think that it's pretty clear now that I am pretty pro growth about urban construction so I can see people questioning my bullishness or worried about the effects of a flooded market that will perhaps lower some housing prices. But, Sean,s stuff about gentrification just doesn't make much sense here at all. The key factor in Gentrifacation as we know it today relates to places with limited supply. It's a huge factor in places like San Francisco because they have limited the supply of housing.

The construction of new stuff should help to limit some of the gentrification effects one is now seeing in Bloomfield, Friendship,Lawrenceville and similar places.

"O"

Geez, there's a lot here to read; I only came in for two points:

(1) The City's official housing strategy (and yes, there is one) is a housing replacement strategy, not an increasing supply strategy.

(2) The CMU Center for Economic Development has some interesting research on migration patterns for Dowtown, which indicate that people 24-54 and people from out of town are interested in living there.

Now I have to go back and read all of the comments.

John Morris

Thanks Mr, O

You don't seem too drunk. I came across that study by CMU which said that 38% of all recent migrants to the Downtown and North Shore were new to the region. The numbers fit about what I had heard by word of mouth.

As someone who came from NY, I tried to ask around in NY about what people knew about and thought about Pittsburgh. First of all out of a relatively small group of artist friends, I knew 4 people from the region. Out of the other people, about one third of all the people I asked had been to Pittsburgh usually on a business or cultural trip. The areas that most of these people had visited were usually, the downtown and the North shore.
A very high percent of hard core art types ( dealers/collectors ) came at least once every few years, often on a short trip of 1 or 2 days. They all flew in. The rest of the people were here on some kind of business trip.

Anyway, when i asked those people if they were to move to Pittsburgh which areas they would choose to live in, most picked the downtown or the North Side. The overt resemblence to Downtown Manhattan struck everyone. The Mexican War Streets resemblence to areas of brooklyn like Park slope, Brooklyn Heights, Cobble Hill or some other totally unaffordable part of Brooklyn also stood out.

So for better or worse people her should see that the Downtown is the part of Pittsburgh that out of towners are most likely to see first.


Sam M

"O" knows such things. So let us consider:

John has one take, but I have another. First of all, I focus on this:

"The City's official housing strategy (and yes, there is one) is a housing replacement strategy, not an increasing supply strategy."

So doesn't this put to rest the notion that downtown housing is going to add people to the region? That is, if you have more people you need more housing. But no one is proposing new housing. Only replacement housing. That is, the people will come from a shift. This is not some kind of unfortunate by-product or a failure in the policy. It IS the policy.

John's data showing that 38 percent of new residents downtown are new to the region would seem to counter that point, but I am not so sure. All cities have a natural turnover. The 300,000 people here are not the same 300,000 who were here last year. And I suspect that the presence of a large number of universities leads to a larger turnover. And the people living downtown--young and single--are probably the most volatile group.

But back to the policy: So all of those thousands of new condos are "replacement." I think this gives even more reason for concern. Because they have to be replacing something, right? So which 5,000 currently occupied units in which neighborhoods are going to come down? If I live next to one, or if I own a rental unit next to one, I am going to be pretty pissed off. Because that means that not only is the city effectively subsidizing people to move away from my neighborhood--it is also overseeing the collapse of my neighborhood.

But which neighborhoods? I don't know. Drive through Lawrenceville or Garfield or Wilkinsburg. A lot of hip, young creative people are refurbing those old rowhouses in those neighborhods. Which is why coffeeshops like the Quiet Storm seem to be doing well. But will they continue to do that if they have a subsidized apartment waiting for them in the Cultural District?

And what would be better for Pittsburgh? Subsidizing the continued refurb of these old neighborhoods, or subsidize a new neighborhood?

Because the numbers just don't add up. The city's strategy is to replace housing, meaning that they expect the population to remain relatively the same. Which means that if you put in 5,000 condos, those 5,000-10,000 people are going to have to come from somewhere in the city. IN THE CITY.

So again, WHERE in the city?

And I don't think anyone can accuse the city of being pessimistic about its own redevelopment plans. And even they admit, this is basically a zero-sum game.

So which neighborhood is going to hit the shits?

Last: John, I don't think I have been clear enough on at least one issue: I am right with you on the notion that government policies contributed to the flight to the suburbs. But so did other factors, such as a cultural preference for open spaces.

A lot of American cities weren't the height of urban chic in 1945. Pittsburgh was one of them. So yeah, people left because of racism and highways and car culture. But they also left because for a lot of people, city living really sucked.

And once again, policy took what was natural and accelerated it to absurd proportions.

Sam M

And a last point: I DO think it is valid for John to mention "functioning" cities like NYC. But you have to take the good with the bad.

And in this case, to reiterate, I think the bad news for people who insist that "downtown" housing is essential to urbanity should remember that NYC doesn't really have a whole lot of it. Maybe they are getting more. But it has existed as the prototypical city for more than a century without it.

In my mind, NYC's urbanity has resided, over the years, in places like the Village. Which, architecturally, looks a whole lot more like some of Pittsburgh's "old" neighborhoods than the new one planned for Fifth-Forbes.

I have known people who have lived in huge apartment towers Manhattan, but most of those were in Midtown. Which they considered "dead." To get to the action you headed to the rowhouses. And paid dearly for it. Because that's where people wanted to live.

And nobody lived on Wall Street. Not because it wasn't cool. But because there was no housing there. It was dead at night. People commuted to work and back out at night.

Like Pittsburgh.

Now, that is not to say that things could not be better. Apparently there is some residential going in down there. Great. All I am saying is that if you insist on downtown residential to be included in your definition of a functioning city, NYC has not been a functioning city for a long time. Maybe ever.

Sam M

Talk about timing. I just came across this excellent example of "replacement housing" in today's Post-Gazette.

http://www.postgazette.com/pg/06217/711386-56.stm

See, to "replace" the housing for these low-income people you tear down their old housing and build new housing. If you expected more people, you might refurb the old and add new stuff. But when you expect a steady population, if some goes up some comes down.

Which is just as true with high-income housing as it is with low-income housing.

So the question remains: If 5,000 high income people are going to move downtown, which 5,000 currently occupied units are going to be empty?

It might not be that even of a trade, of course. Some people who cannot currently afford the current high-end places might move in. Which means less rent for those landlords. Which takes me back to the point that started this whole thread: If I were one of those landlords I'd be pissed.

And it keeps going. The 5,000 middle-income unites that go empty: Someone is going to have to fill those.

Etc.

But they are also building new houses for the people at the bottom of the economic ladder. So those people aren't going to shift up. So somewhere, 5,000 landlords are not only going to lose some rent. They are going to see empty houses.

How can it be otherwise? And doesn't that add to an existing problem?

John Morris

First of all Sam. Any true libertarian would understand the fundamental rub here which is that the subsidies and "mixed economy" policies of governments make it imposible to determine what true demad is or what people really want. That was the problem with the soviet union and with all comand and control economies. So speculating as to what true demand was is just silly. We are never going to know what people would have decided to do with thier own money in a free market in 1945 because there wasn't one.

Let's face it the whole spin of this blog is not libertarian. If you were libertarian you would be spending time disecting all the flawed aspects of planning from top to bottom and you would be talking a lot about the region's bad governments. Instead one gets the same kind of armchair speculation about what is best for people that planners love.

I think that it has also been hashed over that technology, sewage treatment and a host of improvements in life have complely changed the conditions that made urban life unattractive in 1945.

As far as not looking at the actual figures on who is actually moving in and where. That's the only thing you can do. I would imagine, that the numbers in the study were very small but just ignoring a number close to 40% just makes you look like you have made up your mind and are just not interested in the facts.

The general refusal to have any interest in looking at successfull urban markets and what drives demand in them is also pretty instructive.

Sam M

But I am willing to look at successful models. And New York appears to be a functioning city. As you mention. In fact, it is a fabulous city. But let's look at the whole thing. And learn all the lessons we can from it.

And as for not knowing what people in 1945 really wanted, again, I don;t really understand where we disagree. I am right with you. I think that government policies, as always, skewed the market. Or what was left of the market. All I am saying is that government subsidies and policies of all sorts were not the ONLY factors that led people to stream out of the cities. Just like subsidies are not the only factors that have people streaming back today. There are real benefits in city living. People seem to be "relearning" that. I think that is positive and I hope it continues. Only I hope that development boosters don't continue making the same shabby mistakes they have been making for the past 60 years.

John Morris

Sam,

Is there anyway that the discussion could just get back to just the issue of planning and subsidies related to downtown development. Bringinging in the idea that you think that there is no true market for this stuff is just silly speculation on your part.

I do have to admit however that even as a pretty committed libertarian, that the playing field is totally unfair today. One seem to have anything connected to urban life like mass transit called a government racket while there is just no mention of the huge free infrastructure that suppoerts the suburbs as beeing socialistic or anti-market.

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