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Sam M

Joe,

Then perhaps you can exlain it to me. As Chris B. Has pointed out, almost all assumptions about the city's future population point to zero or negative population growth.

And the new residences being built downtown are going to draw thousands of people.

So... The ciy's population overall is going to stay the same or shrink.

But one of the preferred neighborhoods is going to grow.

If you can explain how that can happen without at least one of the neighborhoods shrinking, I would be much obliged. Because no one else can explain it to me.

Like I said, maybe I am being dense. But it seems to me that if you currently have 330,000 people spread across 88 neighborhoods, and that projections call for 330,000 people acros 89 neighborhoods in the future, then the people in the new neighborhood have to come from somewhere.

Of course, now the mayor is saying that the new neighborhood will result in population growth. While optimistic, at least tht makes sense.

But if you build a neighborhood without adding people, then that means some of the existing neighborhoods have to shrink. They just do. Unless that's just my Catholic school math talking.

C. Briem

Ok one more time.. How to not repeat myself? let’s try this. How to interpret city (or county or regional) population forecasts may be the first issue that is getting confused. For the sake of argument let’s say we all agree that the city population is projected to decline by 1% a year. That is what I would call a baseline forecast, which tells you where the city will be in the future given current trends and there is no fundamental change in the competitiveness of the city as a place to live. The ‘no change’ assumption is the key thing not to forget.

If you accept as a goal the need to prevent the city from continuing to shrink you try and fix the competitiveness of living in the city. There is a working assumption you are free to disagree with that there is some unmet demand for living in very high density downtown-like neighborhoods, a demand that is not being met by the housing stock in other city neighborhoods or elsewhere in the region. If this market can be tapped then the city would be able to attract residents into living downtown who would not otherwise live in the city. By doing so you are attempting to change in some minor way the competitiveness of the city as it ‘sells’ living in the city (its product essentially) to the public. You are essentially trying to alter that baseline forecast.

So you can’t just keep the assumption that the baseline forecast holds no matter what changes are made. By your logic there is no policy that will abate the city’s decline and everything is irrelevant. In fact if you are so locked into that forecast and believe it to be true no matter what, you might as well give up entirely and move out of the city now.. Soon nobody will be around to pay off the city’s debt and finances will be that much worse. Thus by voting with your feet and living in the city currently you must not believe that forecast anyway right? Alas, I digress.

You seem to disagree, but I am really quite sure that everything you argue is based on an implicit premise that the market for downtown housing is a perfect substitute for living elsewhere in the city. Why? That assumption is tied to your insistence that you must subtract out additional downtown residents from the same population forecast. If new housing downtown is no better than living in Shadyside then the fundamental (un)competitiveness of the city stays the same and you are stuck with the same dire forecast. If however the housing downtown is something that even a small segment of population wants yet can’t get now, then the creation of this new housing stock has the potential to either attract more people to live in the city or retain some who would move otherwise move out.

Lets put it as concisely as I can. If downtown housing is not a perfect substitute for housing in some other city neighborhood you can’t keep assuming the same top line forecast for the city in your example. Those two assumptions are exclusive in this case..

Now ,it may be that downtown housing will not attract any new residents and just shuffle people around within the city. It gets to the basic question of whether there is some unmet demand for high density downtown living. Everything else you throw out there is confusing the issue.. the entire question comes down to whether there is or whether there is or isn’t some unsatiated demand for living downtown. That is a question I think worthy of debate. Many say yes, I say maybe, you seem to say no.

There will never be a resolution to this question I suspect. One sad truth is that all this new downtown housing it is a drop in the bucket considering the rate of population loss across the city. It will be quite possible these downtown units fill up and everyone declares it a success yet still have declining population elsewhere in the city. At most success in attracting residents downtown can do is blunt the rate of decline in the city. Downtown alone is just too small to ever make up for losses elsewhere. I would emphasize that this can’t be the be the only solution in itself.. you have to address city-wide residential competitiveness. (now there is a future oped). Could it be a start is a question I defer to others.

best I can do..

Sam M

Chris,

Exactly. Exactly. EXACTLY.

Planners are indeed changing proposing and enacting these changes in order the CHANGE THINGS. I absolutely, completely agree with you.

But my problem is that no one is saying, if we don;t change things, this is how things will be in 10 years. If we do change them, this is how things will be better.

Yes, that is a fools game. But refusing to insist that people play is far, far worse. because no matter what happens, no matter how bad things get, everyone declares success and pats on another on the back.

As an example, I give you the Renaissance. Renaissance II. And anything that has ever happened in Baltimore. I have mentioned that city many times, but it is worth repeating the score there: People are fond of talking about how GREAT the Inner Harbor is. What a success it is. Our won mayor just went there. And came back talking up the success story.

That seems odd to me. Because I bet that if you told the citizens of Baltimore that after 30 years of success, the government would still be pumping hundreds and hundreds of millions of dollars into the same neighborhood in order to continue proiming the pump, they might ask a few questions.

Now, I am not saying they would not still build it. It might have made sense just a s a clean-up project.

But it was not sold as a clean-up project. It was sold as redevelopment. Which would draw even more investment. Which it did. If you are talking about tax-payer financed investment. (Two stadiums, a convention center, to amphitheaters, a new $300 million hotel...) And even with all those public redevelopment dollars, you still have the strip clubs two blocks away.

But still, mayor Ravenstahl goes there and sees it as a model.

So back to Pittsburgh. I said it before. And I will say it again: I am GLAD that Ravenstahl has said that the goal is to boost the opulation back. Because now these plans make sense. But he needs to do more than that. He needs to define what he means by "boost."

HOW MAY PEOPLE NEED TO MOVE DOWNTOWN TO JUSTIFY THE INVESTMENT? HOW MUCH SHOULD WE EXPECT THEM TO PAY? AND WHERE SHOULD THEY COME FROM?

Like I said, that is reall yhard to predict. But it is also hard to predict what impact a new press is going to have on my metal stamping business. But when I go to the bank asking for funding, the loan officer is going to expect me to have some projections. And he will not just accept them. He will take a big piss all over my numbers. And he will act like a real jerk. Because at this stage, that money belongs to him. And he wants to make sure that it's a good investment.

So shouldn't we expect as much from our elected officials? Shouldn;t we demand some kind of projections about how these projects will impact the city? And shouldn't they be accountable, at least in terms of public opinion.

It seems like it took people a really long time to come to terms with the damage done by the Renaissance. It wasn;t all bad, of course. A lot of it was great. But a lot of it was just miserable. And so far we appear to have gotten an "Oops."

Maybe I am expecting way too much. And maybe politicians are never going to paint themselves into a corner. But when people in charge of the money in a city that is both shrinking and in dire financial straits start talking about financing granite countertops for the richest people within a three-hour drive, I think it makes sense for someone to say, "OK. So what am I going to get for my $18 million? Why do you want to do this? Broadly speaking, what is your goal, and when do you expect to achieve it?"

The mayor has said that he sees this as a larger effort to bring population back into the city. Great. Because if it doesn't, building downtown housing IS ONLY GOING TO SHIFT PEOPLE AROUND IN THE CITY. And that doesn't make sense.

So again... how many people do we need to move back to justify the public money being spent on downtown housing?

C. Briem

I want to cry.

Sam M

I see no reason for tears. I basically agree with you.

I guess the only difference is that I would like to see someone--anyone--explain exactly what they hope to achieve by building these things, other than simply getting them built.

Are projections hard to make? Certainly. But we force people to make them all the time. When someone proposed using Elk County's elk herd as a tourist attraction, they had to project who would come. How much they would spend per day. Where they would come from. What impact it would have on traffic.

We make Isle of Capri predict exaclty how many dollars each one of its proposed slot machines will generate. We base enormous decisions on whether the average gambler will arrive in 1.4 vehicle trips or 1.6 vehicle trips, or whatever.

When a city like Baltimore proposes building a government financed hotel, other hotel owners expect them to do an analysis of what impact that hotel will have on the overall market. because there are in fact other hotels in the market.

Almost all of these things are impossible to do . But they are useful exercises nonetheheless.

And unless I am mistaken, no one has done it in this case. As you said, it would be very helpful if someone would sit in front of the new buildings and ask people moving in where there came from.

But you know what would be helpful before that? Someone saying where they HOPE the people come from.

Someone saying where they EXPECT them to come from.

Is this impossible to do? I don't see why. Maybe residential is especially hard to predict. But we manage to do it for elk tourists. And gamblers. And people staying in hotels at the Inner Harbor.

Why is it impossible to do it for people who might live in high end-condos in Pittsburgh? Why is that such a RIDICULOUS question to ask? Why is it so hard-headed to expect people in charge of the money to ask it?

sean mcdaniel

hey, c.briem. i agree. i don't think the squirrel hill or shadyside will become ghost towns because of people moving downtown. but it's a thought that prevails here.

Jonathan Potts

I don't think either of those neighborhoods will become ghost towns. What I think is possible is that we will find that there is less demand for Downtown housing than our leaders are leading us to believe. Just like we found there was less demand for Downtown retail than we were lead to believe. (Now of course we are told that the retail needs the housing, which makes sense, but like Chris I wonder if, even if all the units fill up, whether there be enough to bring the vitality that is supposedly needed Downtown.) And like Sam I would like someone to try to quantify, roughly, what success will look like. I'd like to know what justifies the public investment. And while I'm happy to concede that Downtown housing is not a perfect substitute for other housing in the city, I think there is considerable overlap in the market for this housing and other projects throughout the city, some of which have received public finds.

My personal opinion, and this is just a gut feeling, is that the presence of new housing Downtown is not going to arrest our population loss. I happen to think that if there are state funds to throw around (it doesn't look like there's going to be local subsidies, from what I've read) than I'd rather see it go towards other needs.

Sam M

"Squirrel hill or shadyside will become ghost towns because of people moving downtown."

Well, if that is the thought that prevails around here, it ought to be easy for you to cut such a sentiment out of the text I have written and paste it below.

Waiting...

Sam M

Of all things, I think the casino situation offers a good example of what I am talking about. Here is a detailed look at what the first casino is generating:

http://www.postgazette.com/pg/06349/746341-336.stm

Now, I use this example because I think tte casinos are a sham. But even as shams, the people who supported them took the step of predicting how much money they will raise. And we are now able to measure the performance versus the predictions.

That does not guarantee accurate predictions. And no matter what the idea in question--be it a casino or a convention center or a hotel--bad numbers hardly ever prompt anyone to say, "Know what? That idea sucked." You can see that when convention centers fail and supporters demand a hotel so the center can live up to its "potential." Or when slots supporters start clamoring for table games before anyone even starts playing the slots.

But the projections do, I hope, enforce at least some tiny, tiny measure of discipline. In how people pitch the projects. They tweak people to provide at least some kind of performance. They provide at least some kind of accountability.

I think some of that would have been nice in that recent story about the housing downtown, the one in which Mr. Falbo said 60 percent of the condo buyers so far have been from in (or around) town.

Well, is that a good percentage? Ask anyone involved. I am almost certain that they will say, "Yes." Why wouldn't they? No one ever said that they hoped a higher proportion would come from out of town. In fact, no one ever said anything at all. They didn't even say, "If you build it, they will come." Because then maybe someone would have asked, "Who's they?" Or "Come from where?"

They just said, "Build it."

Look, I am not sure where these new places come down in terms of their "substitutability" for existing condos and apartments. But as Jonathan Potts suggest, I think there is at least SOME kind of overlap with current markets. In fact, we KNOW there is some overlap. Because some of the people quoted in recent stories have come from within the city.

I am equally sure that some people who do not currently live in Pittsburgh will eventually live in some of these places. But I don't think that, alone, is enough to justify public investment. Look, if the Piatt's only had their own money at stake, it wouldn't matter where the people come from. The Piatts would be competing on even ground with landlords in Shadyside, landlords in Topeka, landlords in Moscow. Whatever. And they could compete for whatever segment of the market they want to compete for.

But when public dollars start rolling in, I think it is important to ask, what't the public benefit? I cannot see that there is ANY if this just amounts to shifting people from one Pittsburgh zip code into another. Now, is there any benefit to the city if we manage to shift some people from Cranberry and Carnegie and Monroeville and Chicago and NYC into those condos? Sure. I can see that maybe.

But are these people that would have moved here anyway? Did they come for the condo? Did they move here for work and select downtown over Mt. Lebanon because of the granite countertops? And most importantly, how many of them are there? If each one of them provides XXX benefits, we can calculate at least some kind of rough analysis of costs versus benefits. It will be imperfect, sure. But how could it be any worse than no measure at all? Short of the buildings actually falling over into a heap, at this stage, what might it take for people to say, "Ah hell, that plan stunk"? Or even, "Hey, it did what we said!"

Yes. Hard things to measure. But not impossible. Just like it is not impossible to measure, or at least try to measure, recreational use of a national forest that has not gates, no entrance fee and no front door. You do some polling. Take some surveys. Measure traffic. Whatever. But before you do a major investment, you try to get the baseline and see how your proposal might change things. Then after you enact that proposal you measure again to see if you can track the results. No. It's not perfect. And it is not as easy as measuring the number of quarters sliding into a computerized slot machine.

But you can try. If you are interested in trying.

Last, I was happy to see this comment from Ravenstahl the other day in the Post-Gazette:

"We obviously have seen that we failed miserably, for example, when we did the Lazarus building because it was a concept that just didn't work."

And you know, that was an easy call to make. The store is closed. Which makes it a miserable failure.

My question is, five or ten years from now, how do we judge the Piatt buidlings? PNC? They will surely have people in them. But does anyone care who they are or where they came from?

I guess not.

The PNC skyscraper is a great case in point. Is there "latent demand" for downtown office space? I suppose. Might this draw some new businesses to Pittsburgh? It's possible. At the same time, one of the first tenants to sign on was a law firm from where? Pittsburgh. I get the sneaking suspicion that at least some of the residential shifts are gone a look a bit like that, too. How many? I guess we'll never know.

JoeP

Older residents are dying or moving to FL... more than new residents are moving in. Of course some younger residents are moving as well. However (even if smaller numbers) some people moving in will move to whatever preference area if there are options. Some people don't want to buy an old house in Bloomfield and would like a condo downtown or a newer property somewhere else in the city, but not one of the older homes. You assume that everything is =, when indpendent situations are happening.

sean mcdaniel

sam,

i'll just repeat the previous statement...shadyside and squirrell hill and regent square will never suffer much loss from people moving to downtown...unless you count people like Tim and Audrey Fisher (she's Elsie Hillman's daughter). They moved to the lofts on 29th and Smallman from the East End. Oh, the people who bought the former Fisher home...they're from Fox Chapel...and maybe the people who bought that place were from Cranberry. Eventually, Cranberry and other suburbs are going to get so dense and heavily trafficked that people will see the city as an escape.

As for reshufffling the population deck, I wouldn't minds seeing the suburban cards ending up in the city's hand.

Sam M

Sean,

Yes, by all means, shuffle the population deck. But before anyone spends any public money on that kind of effort, I would like to see someone define the rules of the game.

To keep the metaphor going, I feel like a rube in one of those old movies. You know the ones. The crafty old codgers convince a greenhorn to play cards with them, and keep winning by continually changing the rules.

So fine. You say we are doing this to reshuffle the deck. But who else is saying that? I saw Mayor Ravenstahl mention that finally. OK. Great. So...

How do we know when and if we won? And to quote Kenny Rodgers--when do we know when to walk away, and when to run?

Look, I never said 1,500 condos would make Shadyside and Squirrel Hill look like ghost towns. There are a lot of people in those places. So even if every single resident in the new condos came from those two neighborhoods, they wouldn't be empty. But take a look at this site for some interesting info:

http://www.city.pittsburgh.pa.us/cp/assets/census/2000_census_pgh_jan06.pdf

It's old data, but it will do.

Note that Shadyside, for instance, has a population of 13,754. That's 7,962 housholds. So even if the 1,500 households moving into the new condos came from Shadyside, Shadyside would still exist.

But as I have been saying, not all of those people--not even in Shadyside--are candidates for the downtown condos. Because they don't have enough money. Mayor Ravenstahl and his wife, who make something north of $100,000 annually, can't even begin to afford one of the low-end offerinngs in the Forbes-Fifth corridor. So let's say we move up an income class and think about how many households in Shadyside make more than $150,000 a year. Answer: 610.

Now, of these, we know some have large families and are not prime candidates for downtown living. Some of them just like Shadyside. Etc. Etc. Etc.

So all I am saying is that as far as Pittsburgh is concerned, 1,500 residential units aimed at the $150,000+ income market amounts to a pretty big splash in that particular market. That is NOT to say that the condos are exact substitutes for digs in Shadyside. But I think it is obvious that if these new condos are supposed to attract wealthy young people interested in urban living, some of those people curently reside in Shadyside. Like I said, we are about to see a big splash in that market.

And it seems to me like no one has bothered to ask how big. Which seems really, really odd.

Maybe, like you mention, the working assumption is that these condos will lead to a net inflow of wealthy people from Cranberry and San Francisco. Outstanding. That would be a good development.

But do you really believe anyone has thought it through? If they have, have you seen anyone explain it? If not, doesn't that strike you as odd? People in Tionesta building the Pennsylvania Hunting and Fishing Museum with loads of public dollars had to come up with all sorts of projections about how many people might come, from where, and how much money they might spend. In Baltimore, the city had to trot out painfully detailed analyses to explain how a new publicly financed hotel next to the convention center might impact other hotels in the city. And when Isle of Capri wants to build a casino, the company has to show exactly how many people will shovel exactly how much change into exactly how many machines, and exactly how many cars they will bring with them at what time of day.

But when someone throws up 1,500 high-end housing units in the middle of a city that has been shrinking for 50 years, we're happy with a vague notions about reshuffling population decks?

I don't know. I guess I am splitting hairs. Or something like that. Because I think the lack of specificity in this case is glaring. And it makes me wonder about a lot of things.

And everyone else just says, "Well, maybe some people will move here." No one cares that the city is taking a HUGE loss on the properties is bought to make these projects possible. No one seems to care that the state is tossing in millions in subsidies. The feds millions in tax abatements.

What the hell. I guess it's Renaissance IV.

sean mcdaniel

Sam,

As I said somewhere else on your site, I don't think the powers that be know what they want downtown to be when it grows up. One possibilty is a vibrant neighborhood with businesses that cater to the population. The other train of thinking is a giant entertainment center, with casinos, theater, sports venues, etc. I just don't think Downtown can be both.

At least the first Renaissance had a goal of literally cleaning up downtown. What people called Renaissance II was nothing more than a mini-building boom. That's like calling every outdoor festival another Woodstock, even the ones that were called Woodstock II and III. As the Eagles crooned, the spirit hadn't been there since 1969.

Pundits (that's including you) love to slap labels on everything, even when they don't apply. It's too easy. And you don't seem like the kind of guy to take the easy way. And I hope you take that as a compliment.

As for mayor Luke not buying downtown, he might just understand the condo mortgage might stick around long after his tenure as mayor expires. I'll give him credit for being fiscally wise on a personal level. You think many other 23-year-olds making his kind of salary would be as smart moneywise?

I have to admit that the number of households in Shadyside making more than $150,000 seems surprisingly low. That must mean that many, many people there are living close to the edge financially. Unless property there is cheaper than we all think it is.

C. Briem

I was going to reply to the odd statement about latent demand for the PNC tower and Reed Smith being the first tenant.. but we will leave that be. My head still hurts from banging it against the wall earlier.

but on the comment about Shadyside and high income households.. Realize that Shadyside is made up of a lot of students.. more graduate students than undergrad of course. and also recent grads who will someday earn in that bracket, but are far from it today. In fact Shadside ranks high among all city neighborhoods in terms of the number that live near poverty as a result. A result of that student base that is itself indicative of population trends in the city overall. See the stat for the number under 200% of the poverty level, a level most still consider fairly poor, on page 60 of:

http://www.ucsur.pitt.edu/benchmarks/Soc%20Econ%20Neighborhood%20ProfilesOct2002.pdf

so even in Shadyside over 4,500 people or around 35% of everyone in live under 200% of the poverty level.. no downtown condo in their future for sure. There are even 2,500 people or 20% of people in Shadyside who live in households below the poverty line. This is all the more to the point that it just isnt a city demoraphic that will ever fill these downtown condos. again I point out (why I do not know) that whether he realizes it or not everything Sam is arguing is based on an assumption that the market sees downtown housing as nearly identical to housing elsewhere in the city. Yes, he disagrees and we will have to leave it at that but it makes this argument very different.

Sam M

Talk about banging your head against the wall...

I just don't understand how my questions assumes that the market sees housing downtown as identical to housing everywhere else. It doesn't matter. Take it to an absurd extreme: assume that of the 1,500 condos being build downtown, 500 will hang from hot-air balloons tethered to the convention center. Another 500 will be flooded, requiring resident to live in scuba gear. The other five hundered will be on fire. Perpetually.

There is no competition for this kind of housing anywhere in the city.

But if the new housing is going to get public funding, I would expect someone to ask around a bit to see how that housing would affect the current housing stock. because some people currently living in the city might just choose to shift. That is, even if it is not a perfect substitute, there might be some overlap.

It's really common to ask such a question. I think that you can always go back to the Baltimore hotel example.

You can SAY that the convention center hotel will be a different sort of thing. And it will be. Sure as hell, it will be. In a different spot. Specifically geared to convention goers. More upscale. So don't worry, Marriot. Don't worry, Day's Inn. The new hotel is not a perfect substitute for the current offerings. Go about your business.

Think they buy that response? No. Of course not. While it is true that there are some differences, it is also true that there are some similarities.

And I think that it it obvious that there are some similarities between the market for downtown housing and the market currently being served by certain landlords in other parts of the city.

You can reassure those landlords if you do what the people in Baltimore did. You make some sort of promise about a rising tide lifting all ships. And our mayor appears to be starting to make that promise. At least in that off the cuff remark to the PG about reversing the population slide.

I would like to seem him explain that a bit more.

And explain what he expects to happen if all the other projections about the city hold true and the population holds steady, at best. And how he is defining success.

That's all. It doesn't seem to me lke I am asking for all that much. The government is investing millions of public dollars into housing in shrinking city. And I would like to see what they are planning to achieve with that investment.

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