Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, February 06, 2013

The Urbanophile on "Washington" "DC"

Aaron Renn, the Urbanophile blogger, who also writes for the Manhattan Institute's City Journal, has an interesting take, "Hail Columbia! Welcome to America’s New Second City," on Washington now taking on the role of the nation's "Second City," because of the rise in importance and dominance of the federal government over more and more of the nation's economy.

From the piece:

1. Washington has developed a unique prosperity in the modern economy that goes well beyond its traditional recession-proof nature. Cities like Dallas boast “horizontal” success in adding people and jobs. Places like San Francisco boast of “vertical” success in raising per capita GDP and income. But Washington alone among big cities combines the stunning wealth and productivity of a New York with the volumetric growth of a Houston. It is a city simply without peer in America.

2. The scale of Washington now enables it to play with the big boys. In 2000, Chicago’s economy was about 50% bigger than Washington’s. Now it is only 25% bigger. Washington has more people with graduate degrees than Chicago and is on the verge of passing Los Angeles. At current growth rates, the combined Washington-Baltimore region will pass the 10 million population threshold in about 15 years to join the ranks of the world’s megacities.

3. Washington’s wealth extraction model has evolved from simply profiting from federal spending to a form of economic hegemony based on the regulatory superstate. The region may actually take a blow in the near term from fiscal retrenchment at the federal level, but the increasingly intrusive, fine grained control of the federal government over every aspect of American life ensures that the country will continue to pay tribute to Washington no matter what, and means you basically have to play in Washington to make it as an industry in America today.

It's tough with this kind of article in terms of distinguishing between Washington the city and the Washington metropolitan region, which is comprised of not just Washington DC but  also multiple suburban cities and counties. That was a problem also in the recent NYT Sunday Magazine piece on the same general subject "Washington Versus America").

The military and health sectors are two of the most significant economic drivers in the nation. And increase in the federal role in these areas has economic return to the Washington Metropolitan Region.

We don't realize how much this is the case. See "America’s staggering defense budget, in charts" from the Post. 20% of the federal budget is spent on the military.

As the NYT piece pointed out (as did a series in the Washington Post, see the blog entry "Montgomery County's real jobs problem is that it is an adjunct, not a full-fledged, member of the military-industrial complex") much of the metropolitan area's success in the last decade has been driven by the escalation of federal spending on the military generally and "homeland security" specifically--and this largesse by the way has mostly bypassed Washington the city and is spent in the suburbs and elsewhere in Maryland and Virginia.

The military spending tends to be much greater and has more immediate impact. This accounts for the relatively greater success of Northern Virginia vis-a-vis Suburban Maryland.  As this spending falls off (see "Charleston's economy girds for leaner defense budgets" and "Defense budget cuts hit businesses, localities" from USA Today), there is a greater likelihood of economic decline in Northern Virginia especially.

While all that Aaron writes is true, at the same time the primary economic development priority for the "local" Washington is to work to develop a local economy that is not fully dependent on the "federal government" for success. Right now it mostly is--the real estate market is hot because of the law firms, trade associations, contractors, and federal government agencies needing to be housed.

Eventually (post-grand jury duty), I plan to write a kind of review essay on this subject, in the context of the city's recent economic development "plan."  (Also see "One of the stupidest ideas of all time: "trading" the Washington Redskins for the FBI headquarters.")

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At 10:10 AM, Anonymous charlie said...

Let's be clear -- the residential real estate market is hot.

The commercial real estate has eye-watering rates but record amount of real estate is moving OFF the market -- what we used to call manipulation. Lots of reasons for that, some good, some bad.

I'd focus on another factor on "second city" status is the number of intellectuals. Now, I'm not talking about graduate degrees. I am talking think tanks and journalists, which have to be the largest amount in the county.

If we are looking at alternate histories of dc (outside the old story there was nothing here until federal workers arrived civil war/ww1/ww2/post 911 DC has gone through being a Miami (post civil war) and Silicon Valley (also post civil war-- telephone, IBM, etc).

The problem with modern "wonks' is they aren't generating multipliers; outside of Advisory Board/CEB I can't think of a "wonk" business that has scaled up.

Now we have "modern urban hipster living city" and the only business scaling up for that is Living Social, and that isn't going to end well…

Again, goes back to something I read in the Detroit business magazine about how Detroit got screwed in the Great Depression/ww2 era (20 years) by growing too quickly, which only meant people wanted to flee soon as they could.

At 12:23 PM, Anonymous Anonymous said...

one thing all of these so-called pundits miss - glaringly- while it is true that the DC gov't unfairly and over taxes businesses- especially small businesses- the residential property taxes in DC are the BEST deal in the entire region by far. Maryland and Virginia both tax the hell out of homeowners and anyone with a second home- just look at the decline of Baltimore City- it is chiefly due to super high real estate taxes that little has been done to revive that once vital city- while DC managed to keep our real estate [ residential] taxes basically low - at least until the other factors combined with the federal incentive to new homeowners to move here made us incredibly attractive. Go to the border areas of DC - the houusing prices are often triple for the same property inside the city line and outside in Maryland the prices drop- but then again- the taxes go WAY UP. Anyone wanting to fork out less for taxes should move to DC. There is no excuse to raise our taxes either as we now have a large surplus.

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