Tag Archives: Las Vegas

Why Are Developers Still Building Sprawl?

Boomers and Millennials say they want to live in compact, walkable developments, but builders are putting their money into suburban McMansions

There are communities that have successfully made the shift to building more compact, walkable developments, even in the most unlikely places. Some of the most excessive sprawl during the housing boom, for instance, occurred in the inland areas of Northern California, places like Brentwood, Antioch, Vacaville. But those areas are now rethinking what kind of building they want to allow, and what kind they don’t.

“There was, up until 2008, a profound overbuilding of single-family homes,” Jeremy Madsen, with the Greenbelt Alliance, a Bay Area smart-growth group, told me. “The ‘drive ’til you qualify’ syndrome ran rampant in the Bay Area.”

Now, many of these developments are half empty or unfinished, waiting for demand to come back—if it ever will. But cities in the Bay Area are starting to put in urban-growth boundaries, which prevent building from happening outside of that area. Voters handily defeated a proposal to allow developers to build on Doolan Canyon, an open space outside of the city of Dublin’s urban-growth boundary. In the city of Windsor, in Sonoma County, a new-urbanist developer decided to create a downtown and built a mixed-use combination of offices, retail, and homes near a transit station. And a planning commission in Stockton, another epicenter of the housing boom and bust, recently said no to developers who wanted approval to build 2,000 homes on what is currently farmland, the first-time observers could remember the commission doing so.

Even San Jose, once considered just a giant suburb of San Francisco, has shifted its mentality, Madsen said. The city’s newest general plan, adopted in 2011, emphasizes ‘smart growth’ and called for the growth of ‘urban villages’ located along current and future transit lines. It promotes infill development rather than sprawling out to open lands, aims to reduce the number of trips that have to be made by car, and rethinks street design to encourage walking and biking.

“I think we’ve moved into a different era in the Bay Area in term of how we’re going to grow in the future,” Madsen told me. “The consumer preference side of things appears to be changing.”

But, he said, even though leaders and consumers might be on the same page, it isn’t going to be easy, since a lot of the zoning and building layouts are from the old era.
“There’s going to be a major challenge when it comes to implementing this shift, but there’s a critical mass of opinion and market direction to get it going,” he said.
It’s easy to dismiss the Bay Area’s plans as another California anomaly. But California often leads the rest of the country when it comes to adopting environmentally-friendly policies that are sustainable for the long term.

Other areas may continue to eschew ‘smart growth,’ and just as America is divided politically, it could become a more divided country in the way its residents live. People in cities such as Washington D.C., Boston, and Seattle, will want more walkable developments, while consumers in what Leinberger calls “the laggards,” including Phoenix, Dallas, and Las Vegas, will continue to live in sprawling suburbs.

But it’s also possible that Boomers and Millennials in the laggard cities will come around. After all, even in Las Vegas and Atlanta, some builders are starting to shift their mentality. Zappos founder Tony Hsieh has poured $350 million into downtown Las Vegas, creating a shopping center built from shipping containers, mixed-use residential development, and a host of walkable amenities like a donut shop and a bookstore. And in Atlanta, a developer is in the midst of converting a former Sears building near downtown to a mixed-use community of apartments, restaurants, and retail.

Not everyone will want to live in downtown environments like these. But if they’re appealing to consumers, they could motivate a whole new segment of buying, even in cities such as Las Vegas and Atlanta. If consumers come around to “smart growth” in those areas, perhaps builders will too.

Could the southwest of the U.S. be in for a megadrought?

From Mother Jones

A new study by Cornell University, the University of Arizona, and the US Geological Survey researchers, looked at the deep-historical record (tree rings, etc.) and the latest climate change models to estimate the likelihood of major droughts in the Southwest over the next century. The results are as soothing as a thick wool sweater on mid-summer desert hike. 

The researchers concluded that odds of a decade-long drought are “at least 80 percent.” The chances of a “mega-drought,” one lasting 35 or more years, stands at somewhere between 20 percent and 50 percent, depending on how severe climate change turns out to be. And the prospects for an “unprecedented 50-year megadrought”—one “worse than anything seen during the last 2000 years”­—checks in at a non-trivial 5 percent to 10 percent.

It gets worse

his (paradoxically) chilling assessment comes on the heels of another study (study; my summary), this one released in early August by University of California-Irvine and NASA researchers, on the Colorado River, the lifeblood of a vast chunk of the Southwest. As many as 40 million people rely on the Colorado for drinking water, including residents of Las Vegas, Los Angeles, Phoenix, Tucson, and San Diego. It also irrigates the highly productive winter farms of California’s Imperial Valley and Arizona’s Yuma County, which produce upwards of 80 percent of the nation’s winter vegetables.

The researchers analyzed satellite measurements of the Earth’s mass and found that the region’s aquifers had undergone a much-larger-than-expected drawdown over the past decade—the region’s farms and municipalities responded to drought-reduced flows from the Colorado River by dropping wells and tapping almost 53 million acre-feet of underground water between December 2004 and November 2013—equal to about 1.5 full Lake Meads, drained off in just nine years, a rate the study’s lead researcher, Jay Famiglietti, calls “alarming.”

Considering how much of the Colorado River Basin, which encompasses swaths of Utah, Colorado, California, Arizona, and New Mexico, are desert, it’s probably not wise to rapidly drain aquifers, since there’s little prospect that they’ll refill anytime soon. And when you consider that that the region faces high odds of a coming mega-drought, the results are even more frightening. (Just before Labor Day, over fierce opposition from farm interests, the California legislature passed legislation that would regulate groundwater pumping—something that has never been done on a state-wide basis in California before. Gov. Jerry Brown is expected to sign it into law.)

It’s not the big cities that are the key to the United States recovery

It’s the Tampa Bay, Phoenix and 255 other cities that will determine the health of the United States economy

Collectively, large cities — which we define as metropolitan areas with a population of 150,000 plus — in the United States are the center of gravity of the economy, generating almost 85 percent of U.S. gross domestic product (GDP) and nearly 20 percent of global GDP today. While New York and Los Angeles, the two American megacities with populations of more than ten million, have continued to tower above all others among the 259 large U.S. metropolitan areas, it’s the 257 "middleweight" cities — with populations of between 150,000 and 10 million — that generate more than 70 percent of U.S. GDP today. The top 28 middleweights alone account for more than 35 percent of the nation’s GDP.

It is America’s large cities, and particularly the broad swath of middleweights, that will be the key to the U.S. recovery and a key contributor to global growth in the next 15 years. Large cities in the United States will contribute more to global growth than the large cities of all other developed countries combined. We expect the collective GDP of these large U.S. cities to rise by almost $5.7 trillion — generating more than 10 percent of global GDP growth — by 2025. While New York and Los Angeles together are expected to grow at a compound annual rate of 2.1 percent between 2010 and 2025, the top 30 middleweights (measured by GDP) are expected to outpace them with a growth rate of 2.6 percent.

What’s the formula for success?

Even when narrowing our focus to the strongest performing cities, again there is no single path to success — no unique blueprint that all urban leaders should pursue. The cities that outperform their peers simply find ways to make the most of the economic opportunities they face, get lucky, or both. Some cities have been able to reinvent themselves; many others make the most of their endowments or their location.

Even in these important middleweight cities, growing is going to be tough

The coming years are not going to be easy. As households and the government pay down debts built up before and during the recession, growth could be dampened for many years. Cities that have experienced real estate booms and busts will find recovery particularly hard going. In Orlando and Phoenix more than half of mortgage holders are in negative equity. In Las Vegas, it’s two out of three. And there are still pockets of stubbornly high unemployment — two-thirds of all the jobs lost during the downturn were in states that accounted for only 45 percent of the U.S. population.

What I learned

  • Local MPs performance don’t matter much : NDP’s Vegas candidate won, their English speaking candidate in a 98% francophone riding won, Ken Dryden and Lawrence Cannon lost.
  • Never bring down a minority government when you are behind.  Ignatieff thought it was because Canadians weren’t paying attention to him, in truth, we just didn’t like him that much.
  • Party platforms don’t matter.  I asked a lot of people who were out door knocking if people at the door had read the party platform and the answer was “not one”.  The NDP offer up $70 billion in new spending and they still get 100 seats.  The
  • You have to think that in Saskatchewan the big losers are the Saskatchewan Liberals.  The vote totals were appalling and I doubt and of the campaigns will even break even.  For Ryan Bater and the Saskatchewan Liberal Party, you have to wonder if they will be looking at the same kind of vote numbers in the next provincial election.  There isn’t a lot to build on and nothing that would attract high profile candidates to run for them provincially.
  • Along the same lines, I feel awfully bad for Darren Hill.  He ran a good campaign, is a good city councilor but even liberals in Saskatoon aren’t voting Liberal anymore.
  • Warren Kinsella says that the Liberal dysfunction goes beyond Ignatieff.
  • The city/province needs to put a ban on lawn and campaign signs on public property.  Boulevards, ditches, and parks don’t vote.  Keep the signs out of the Meewasin Valley and out of the highway ditches.  Lawn signs are supposed to be a measure of support and I am pretty sure that the ditches on Highway 16 is non partisan.
  • I would have more respect for those calling for electoral reform if they didn’t just do it when Harper won.  I didn’t hear anyone calling for it when Jean Chretien won a majority with 37% of the vote.  Of course I say this with apologies to James Bow who has been calling for electoral reform consistently for years.
  • You should be able to opt out of the campaign if you wanted to.  Nine robocalls on the Sunday from the Conservatives (that being said, I think because I kept hanging up, they kept calling).  We probably had 15 calls from the Conservative call centre’s in Manitoba and Nova Scotia during the campaign.  That is getting obscene and is bordering on harassment.  Every live phone call that I got, I asked to be taken off their database and I was either hung up on (Manitoba) or told politely that they could not do that (Nova Scotia).  Frustrating.  As I have said before, letting the politicians design privacy laws is like letting foxes install a security system inside a hen house.

When Irish Eyes are Crying

Michael Lewis on how Merrill Lynch stuck the Irish people with 106 billion euros in debt.

Ireland’s financial disaster shared some things with Iceland’s. It was created by the sort of men who ignore their wives’ suggestions that maybe they should stop and ask for directions, for instance. But while Icelandic males used foreign money to conquer foreign places—trophy companies in Britain, chunks of Scandinavia—the Irish male used foreign money to conquer Ireland. Left alone in a dark room with a pile of money, the Irish decided what they really wanted to do with it was to buy Ireland. From one another. An Irish economist named Morgan Kelly, whose estimates of Irish bank losses have been the most prescient, made a back-of-the-envelope calculation that puts the losses of all Irish banks at roughly 106 billion euros. (Think $10 trillion.) At the rate money currently flows into the Irish treasury, Irish bank losses alone would absorb every penny of Irish taxes for at least the next three years.

In recognition of the spectacular losses, the entire Irish economy has almost dutifully collapsed. When you fly into Dublin you are traveling, for the first time in 15 years, against the traffic. The Irish are once again leaving Ireland, along with hordes of migrant workers. In late 2006, the unemployment rate stood at a bit more than 4 percent; now it’s 14 percent and climbing toward rates not experienced since the mid-1980s. Just a few years ago, Ireland was able to borrow money more cheaply than Germany; now, if it can borrow at all, it will be charged interest rates nearly 6 percent higher than Germany, another echo of a distant past. The Irish budget deficit—which three years ago was a surplus—is now 32 percent of its G.D.P., the highest by far in the history of the Eurozone. One credit-analysis firm has judged Ireland the third-most-likely country to default. Not quite as risky for the global investor as Venezuela, but riskier than Iraq. Distinctly Third World, in any case.

There is an interesting part in the article that shows the role the Irish papers had in not exposing the problems and had been duped into playing a role of being a booster of Team Ireland.

Kelly wrote his second newspaper article, more or less predicting the collapse of the Irish banks. He pointed out that in the last decade they and the economy had fundamentally changed. In 1997 the Irish banks were funded entirely by Irish deposits. By 2005 they were getting most of their money from abroad. The small German savers who ultimately supplied the Irish banks with deposits to re-lend in Ireland could take their money back with the click of a computer mouse. Since 2000, lending to construction and real estate had risen from 8 percent of Irish bank lending (the European norm) to 28 percent. One hundred billion euros—or basically the sum total of all Irish public bank deposits—had been handed over to Irish property developers and speculators. By 2007, Irish banks were lending 40 percent more to property developers than they had to the entire Irish population seven years earlier. “You probably think that the fact that Irish banks have given speculators €100 billion to gamble with, safe in the knowledge that taxpayers will cover most losses, is a cause of concern to the Irish Central Bank,” Kelly wrote, “but you would be quite wrong.”

This time Kelly sent his piece to a newspaper with a far bigger circulation, the Irish Independent. The Independent’s editor wrote back to say he found the article offensive and wouldn’t publish it. Kelly next turned to The Sunday Business Post, but the editor there just sat on the piece. The journalists were following the bankers’ lead and conflating a positive outlook on real-estate prices with a love of country and a commitment to Team Ireland. (“They’d all use this same phrase, ‘You’re either for us or against us,’ ” says a prominent bank analyst in Dublin.) Kelly finally went back to The Irish Times, which ran his article in September 2007.

A quick look back at the role of media in all of these failures (and also the WMD debacle) was that the media moved from a role of rigorous scrutiny and was co-opted by the need to be on board with the mood of the people.  We saw it before in other booms and in the United States with the WMDs.  This seems simplistic but with the cuts in newsrooms, does anyone expect anything differently.  When was the last time your local paper broke a really big or complex story open?  It does happen but when reporters are supposed to write more articles, more blog posts, and waste more time on Twitter, there isn’t a lot of time for the traditional three martini lunch or long form journalism.  Those that want to do investigative pieces aren’t likely to stick around at a paper when they are just a word mill which accelerates the trend towards one source stories. (for the record, we get two copies of The StarPhoenix at work and two editions of our Kindles at home)  I am biased towards the media (there goes my FOX News career).  We never had a lot of money growing up and corners had to be cut to make ends meet but from the first day in our new house in 1984, there was a StarPhoenix there and every page was read.  We grew up with my mom always lecturing us that “you can watch the news but you won’t understand the issue until you have read the paper.”  When I first started to travel by myself when I was 15, mom always lectured me to pick up a local paper from a news stand.  Even now when I am travelling, I find some time to pick up a cities flagship paper, whether in Chicago for work or Las Vegas for a vacation because I am supporting someone looking for the truth.  It scares me when the media abdicates that roll, whether it is the local media not wanting upset a powerful football coach and losing access, when it’s not wanting to run an article because it goes against popular (and flawed) economic ideas or doesn’t want to come across as unpatriotic in the aftermath of 9/11 (anyone found any WMD’s lately?)

The papers were right, “he was either for or against us”.  Except Kelly was the one that was for Ireland and the papers were against it.  They just didn’t realize it.