On the Reshaping of America

Richard Florida has a piece in the March 2009 Atlantic, How the Crash Will Reshape America. Readers will not be surprised to hear that there’s a lot to disagree with in the piece, particularly Florida’s continued support of his notion of the creative class, then again, the idea his bread and butter so of course he’s going to tout it. 

Florida suggests that the creative class® is still going to be a mainstay for cities, but we’ll see otherwise. I am now predicting a major newspaper closing within months, not by the end of the year and I think there’s a very strong likelihood that the Times itself won’t stay in print for long, except maybe as some kind of Sunday morning rip-off of Monocle: news subsidized by fashion and style (this is actually the Times now, but think of the whole paper in the magazine). The music industry has been bleeding like a stuck pig for years and there’s only so much blood left. Hollywood is going to continue its dance of death, surviving for the moment, although worse off that before. I expect that the next economic crisis will take it down as well. Hipsters have managed the illusion of living without any means of financial sustenance for a while. Now we get to see them do it for real. Florida’s creative class is hardly well. For all of the excitement about amateur-generated content, it is hard to see how it can be monetized. Between the crisis in overproduction of cultural goods that marks network culture and the free availability of amateur-generated content, the creative industries are set for a Detroit-style tailspin. Make no mistake, this economic crisis is their first round. 

Similarly, Florida’s prediction that financial centers will continue to dominate is questionable. I won’t outrightly say that he’s wrong, since my research doesn’t confirm this yet, but the financial collapse is also a transition. Nobody is going to trust the friendly face of their doe-eyed real estate broker, banker, or financial advisor anymore. These jobs, along with a similar array of positions in the financial sector, will be streamlined out of existence. Over 50,000 jobs in lower Manhattan are history and I suspect we’ll see double that before the crisis is over. Where will these freshly-minted MBAs go? Here Florida is right: there were plenty of financial industry jobs in peripheral places in Middle America and as those have evaporated, the MBAs won’t be able to find easy jobs back home, unless they are good with the topless dancing

This is a central problem with the creative class: it doesn’t really exist and it never did. On the contrary, the creative class was a place in which the financial sector could hide itself. Take a look at Kevin Phillips’s Bad Money for the real story. It was finance, e.g. the bubble economy, that dominated the American economy since the 1980s. Like Patrick Bateman in American Psycho, the financial sector liked to surround itself with the trappings of the creative class and saw itself as creative. Moreover, with the massive cuts in taxes at the top brackets over the last thirty years, living in cities and consuming culture like mad was something the financial industry did, but this is hardly the same as suggesting, as Florida does, that creative professionals have much say in the economy.

When I was growing up in rural Western Massachusetts, the local General Electric plant was shedding jobs. My friends in high school saw themselves as "burnouts," understanding that before they even held a job, any dreams of a well-paying life in industry were gone. Finance and the creative class will now follow in their wake. Sadly there isn’t a whole lot left to replace them and as I’ve already stated, infrastructure is hardly being funded in Obama’s stimulus plan. Why do people continue to think it is? It baffles me.   

I’ll agree with Florida when he observes that the early predictions this crisis would undo the United States were self-serving. On the contrary, other countries are suffering much harder and will continue to suffer much harder. For all the blather about the problems in the United States, the country has massive resources and Americans work harder and absorb immigration (and thereby cheap labor, new talent, and global connections) more readily than any other country. Speculation was as crazy, if not crazier, in the EU and Asia than in the US. Americans didn’t build Dubai or CCTV. A quick check: is real estate in your city more expensive than in New York? If you aren’t in a global city (I’d include London, Tokyo, and Hong Kong), then you’re doomed. This is not to say that real estate in those cities isn’t going to collapse, but it is to say that real estate in countries on the periphery of Europe will likely never recover to its pre-bust levels. 

Florida is also right that we should give up homeownership in favor of rentals. Obama needs to roll back laws, enacted decades ago, that favor new rental construction and encourage landlords to find ways to profit with existing apartment buildings while maintaining them in good condition. Nurturing an older housing stock in cities would keep labor costs down by making it easier for employees to live near their workplaces, encourage economic and ethnic diversity, and discourage commuting long distances. These are all vital things and they have been lost in the reshaping of American cities to serve Florida’s creative class (e.g. the financial sector in hipster clothes). I am not referring to section 8 housing here. There is room for that, but there is also a need for housing for the working class and we have abandoned that wholesale in search of easy profits.      

He’s also right about foreclosures. We need to find gentle ways to reduce the prices of real estate by another 20 to 30% and not prop it up artificially. I don’t like the idea of subsidizing housing for former homeowners (this also undoes the support for landlords I mention above), but prices need to drop and drop fast.  

I have problems with even the cautious optimism at the end of the article. We’ve reached a heat-death within capitalism. The ponzi scheme shuffled around for so long and took so many people’s money that we’ve exhausted any possible economic growth that the biggest technological advance in this generation, network convergence, offered us. Finding ways to make a profit in this economy may be possible on an individual level, but I am not confident that growth can be stimulated again on a worldwide level. Both in this country and elsewhere, a lot of people who made poor job choices are going to have to find other ways to make a living besides finance and they’ll have to do it back home, in the same places that have been depopulating for years since that is where housing is cheapest. Am I optimistic? No, not at all. Too bad Starbucks isn’t hiring much these days.    

®creative class is a registered trademark of the Creative Class Group LTD, global services advisory firm founded by Richard Florida.

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Last One Out Turn Out the Lights

Back in 2006, I questioned the reality behind the skyscraper boom in places like Dubai. In 2007 I suggested that there was a coming storm in Dubai, while as late as last spring the New York Times was confident that it was time to party in Dubai like it was 1999 (or perhaps 1929).

Now, feeling a bit hung over not to mention behind other media outlets, the Times is realizing they can’t perpetuate the building boom anymore, not even in Dubai. Sobering up, they are forced to deal with the cold reality and so the Times coughed up the following today: Laid-off Foreigners Flee as Dubai Spirals Down.

I’m not sure where the lights should go off first: in the Arabian nights wonderland of Dubai, rapidly turning into a debtor’s prison or at the Foster building located across the street from the Port Authority station? Both are parodies: the first of capitalism and architecture, the second of responsible journalism. It’s a bad year for both of them, perhaps only to be outdone by the bad year to come in China, which has managed to combine both into one at the CCTV complex and is off to a great start for the year of the Ox, as I’m sure you know by now, a story that not only broke but was reported best not via traditional media outlets, but via Twitter.

Soon Dubai will abandoned to sink back into the sands. I think it’ll be much more interesting that way, with feral animals running wild, Chernobyl-style, in the ruins. As for the Times, at a symposium last Saturday at Columbia someone said "What if the Times closed, they have dozens of reporters in the Baghdad bureau… How could bloggers replace them?" Yochai Benkler stated "But they are responsible for the war! Remember Judith Miller?" He is so right. What if our news from Baghdad came from actual Iraqs, people who understand the context and speak the language?

Oh tired, old Grey Lady, maybe it’s time to shut the doors on the Piano building and call it a day? The face-lift didn’t work, it just made things worse. Your structural function as an enabler for the growth machine has been a non-stop embarrassment for all involved and now its time to pay the price.

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Wrong About Architecture

I was wrong.

Previously, I’ve suggested that the architecture of the last decade (the decade of the Bilbao-effect) did little to embody network culture and I thought it peculiar that the best examples of architecture that fits network culture are from the 1990s.

Over at Strangeharvest, Sam Jacob suggests otherwise and he is right.

I was wrong. The emptiness of the last decade perfectly embodies the period.

The punch-line (but do read the article):

Tomorrows visitors to todays (or yesterdays) iconic buildings will feel the swoosh of volumes, the cranked out impossibility of structure, the lightheadedness of refection and translucencies. They will marvel at buildings that hardly touch the ground, which swoop into the air as though drawn up by the jet stream. They will feel stretched by elongated angles that seem sucked into vanishing points that confound perspective, and will be seduced by curves of such overblown sensuality. And in this litany of affects they will find the most permanent record of the heady liquid state of mind of millennial abstract-boom economics. We might rechristen these freakish sites as museums of late capitalist experience, monuments to a never to be repeated faith in the global market.

Well said.

This is going to take a lot of unpleasant work to unpack from a historical perspective, but it’s part of this year’s book project.

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champagne in the bathub

I fail to understand opinions such as those expressed in this article with regard to the real estate bubble. Did this come as a surprise to anyone? Maybe it’s because I’ve had an education in economics as well as architecture but how could anyone have failed to see the bubble coming? I remember doe-eyed realtors telling me that house prices could never go down. Really? I’d lived in California so I’d seen the after-effects of the 80s bust. Who were they kidding? Me or themselves? I’m sure they had back-up jobs or at least a lot of savings, right? 

House prices more than double in most global markets while populations effectively stay steady (and even decline in cases). The price of houses in areas in which families make, say, $150,000 rises to $650,000. There’s no way to get a 20% deposit on a house in that sort of climate. Clearly something was wrong (and continues to be wrong with the market—it is far from corrected yet, I expect another 40% fall in places like the New York and Los Angeles metro areas). Seriously, what is there not to understand? I’d rather believe the Fed, the Bush administration, and my doe-eyed realtor friends were all cynical fiends than bone stupid. Did anybody really think the bubble wasn’t going to burst? 

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Trouble in Dubai

You didn’t really think that Dubai was immune, did you? 

CBS observes that Once Booming Dubai Goes Bust.  

In my prediction for 2009, I suggested that Dubai would be lucky not to have the Burj go the way of Ryungyong and so it is. I’ll expand on my prediction to say that this is only the start. Dubai will not only go bust, it will go bust in a spectacular way, its collapse as rapid as its rise.  



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architecture against itself

The ponzi scheme created to sell real estate at preposterously inflated levels during the last eight years is now having a new feedback effect. Just as it drove rampant construction, producing far more housing than anybody will need any time in the near future, it is now undoing that housing. Once foreclosures happen, houses and apartments are not only neglected, they become the focus of their occupants’ rage.

CNN explains.

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architecture that burns

After the collapse of Bear Stearns and the desperate bailout by JP Morgan and the Federal Reserve Board, it seems like the media is finally waking up to the mass collapse of the American housing market. See this video on people burning their homes or this one on tent cities springing up in Los Angeles to house the newly dispossesed. If, in the 1960s, architecture was damaged by the alliance of modernism with a failing business culture, what will it mean to the discipline when architecture is at the very core of a failed economy? What will does it mean that architecture’s overindulgence in lifestyle culture has proven, quite literally, bankrupt? 


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on the city as growth machine and its enablers

A couple of days ago, I mentioned that the New York Times expressed deep confusion that a real estate bubble had taken place. I wondered aloud why the Times didn’t see the real estate bubble for what it was when, in contrast, the Economist had expressed concern years earlier? Is it that the Times hires reporters straight out of college or is there something more? Maybe it’s that the population of Manhattan has always increased?*

Well, the answer came this week when I gave the students in my spring Network City course Harvey Molotch‘s seminal essay "The City as Growth Machine." Molotch’s analysis is of the way that certain industries—primarily the finance and real estate industries—dominate urban politics with the intention of expanding their businesses. These interests promote a naturalized view of growth in which we are simply not to question that cities will always get bigger or that they should always get bigger.

But Molotch also points out that newspapers encourage the growth machine as a way of expanding their subscription base. Moreover, foreshadowing the argument of the rather naïve creative cities movement, arts organizations such as the symphony, opera, and art museums are also beholden to the model of the city as growth machine. I’ll leave it to you to imagine where architects are in all this. 

So much for objectivity then. I suppose that we can forgive the Times for playing its structural role (not having a single urban base, the Economist would find little benefit in playing urban booster) if we really have to, but in rereading Molotch’s essay (and it is available at that link above) it seems crucial to me to ask what the broader consequences of such allegiances are and what architects might do to be critical of them. Certainly not things like this (e.g. OMA in Dubai…note that Delirious New York was written at the lowest point in that table below). 

*Heavy sarcasm intended. Sure, Manhattan’s population has gone up lately, but like most American cities, this is only a small uptick after a sustained decline. New York City has continually expanded. Not so for Manhattan.

See the following figures, borrowed form Wikipedia. note that Manhattan was 1/3 more populous in 1910! 


1890 1,515,301
1900 1,850,093
1910 2,331,542 
1920 2,284,103
1930 1,867,312
1940 1,889,924
1950 1,960,101
1960 1,698,281
1970 1,539,233
1980 1,428,285
1990 1,487,536
2000 1,537,195




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on the press catching up

Yesterday, within the space of five minutes two stories from the major media outlets struck me as hilarious.

The first was from Wired. Some five years after the first show I had at CLUI about One Wilshire, they have a gallery of photographs of the place at Wired.com. Seems like little has changed. Seems like they didn’t bother to do anything with the copy of Blue Monday we sent them except get a good idea or two for a somewhat belated photo piece. Seems like they couldn’t get any better shots even with their professional team. Wired’s looking tired. What’s up with that, Chris? I mean really, at least they could have asked Nicholas Carr and me to talk about One Wilshire and the future of such data hotels. THAT would have been interesting. Ah, but you have to love the media. That’s why we academics do believe in searching for prior art on a topic and citing it. Even if it means we have to try harder to be original, it makes what we do write about so more interesting.  

Here’s a standing offer to Chris and other editors of major technology magazines: give me a theme issue to edit and I’ll give you something worth grabbing off the newsstands, not a rehash of five year old work. 

The second was from the New York Times and was entitled "How the Bubble Stayed Under the Radar." In trying to account for the longevity of the bubble, this piece had a bit more content, but its first premise—that nobody saw the bubble coming—was strange. I think I’ve been talking about it since 2003 or so. Has nobody else noticed? I guess this blog’s readership is only in the thousands…

Anyway, this was a classic bubble: only the very deluded believed otherwise (or the very calculating—on a foreign exchange basis, there is no bubble…an American house that has doubled in price since 2002 has seen no gain vs. its value in Euros…but if then that leads you to think of what happened to salaries in the US under GWB). Everyone else (and this means you, real estate agents and bankers) knew it would collapse, they just wanted to cash out first. (financial disclaimer: I got rid of all the REITs in our 401k’s a couple of years ago and put them into global equities).

It’s still rather surprising to me that Manhattan continues its bubbley behavior. Maybe when the Europeans realize just how little their fabulous investment is netting them given the falling dollar, they’ll wise up. Maybe when the most interesting and talented Manhattanites begin to flee in droves to other cities (but where? not many candidates in this country? probably to Europe), it’ll begin to happen. 

Most of all, however, I’m amazed by architects. Due to the time involved in making buildings and the heaviness of the capital needed, architecture is traditionally a slow profession. Still, can it really be that architects haven’t noticed that the boom is over? Sure, China and Dubai have kept the system on life support, but construction in the former is going to cease the moment the Olympics start and the latter is merely another mad boom economy, entirely fueled by debt (see here). When collapse comes it will be grim and sustained. All too well I remember the recession of the 90s (or that of the 80s) when architects had great opportunities to work at the local café.  

But those of us who have been diligently working in the field of the expanded architect will still be here, welcoming your new ideas with open arms. Now more than ever, working on the periphery to expand what architecture is and what architecture can do is critical for the future of the profession.   



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hollow city, empty suburbs

Over at the Atlantic Monthly, Christopher B. Leinberger suggests that suburbs are "the next slum." In his article for the March issue, he observes a massive oversupply in housing and suggests that Americans are moving, en masse, back to the city. The result, he concludes, is that the suburbs will be as eviscerated as cities were in the 1950s. 

Not so fast. Suburbs may have an oversupply of housing and older, inner ring suburbs are increasingly the first destination for immigrants, but cities have their own problems, not the least of which is a huge amount of purchasing by investors and global travelers who want an pied-à-terre in every major city.

See this harrowing article from the New York Times on life at the Plaza Hotel, recently converted to condos. In this scenario, reminiscent of Hollow City, the history of late 1990s San Francisco by Rebecca Solnit, cities become impossibly expensive playgrounds for a global élite with more ordinary individuals such as cooks, nurses, lawyers, dentists, doctors living on the periphery wearing T-shirts that say "Bring Back the Real NY."


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