Why Local Banking is More Effective than Political Whining

It's always fun, and sometimes funny, to bust on atrocious real estate developments. But moaning and writing letters to local planning & zoning doesn't usually change things. Ultimately, in a capitalist economy, pols and planners must respond to the owners of capital. The real estate developer whose building will house 800 new jobs and create a few hundred more during construction is going to get greater weight than some random, angry letter.

Political activism can be very effective, but usually works best when the project is going to be owned by the public. Jane Jacobs helped kill the Lower Manhattan Expressway, but there was little she could do about the megablock, boxy office buildings that were popping up in NY at the time.

If we want to impact privately-owned developments positively, working through the political system simply won't be that effective. A developer employing hundreds of people is going to get his call returned faster than you will. A better way to impact our neighborhoods is to put ourselves in the position developers do, and use our personal financial capital to influence our communities. And one of the most effective ways to do this is to open accounts at community banks and other local institutions.

The Federal Reserve requires that banks hold 10% of deposits in excess of $44 million in vault cash or in accounts with the Fed. The other 90% gets loaned out. This means if you keep a balance of $5,000 at a bank, they can loan $45,000 into your area. So if you bank locally, you're now creating that amount of capital for your community. Moreover, many commercial loans made by local banks are often for amounts between $100,000 and $500,000, much of which goes to locally-owned retail. So a $45,000 contribution can finance nearly half of a new store. And if you don't like what the bank is financing, the customer service reps there will listen to you, because they don't want their sources of capital running back to BofA.

Another aspect of local banking that's important is the resumes of the loan officers. Check these out. I took a look at some of these for some banks here in the DC area and saw a lot of Maryland and George Mason grads, which was remarkable for a transient region. They are also the sort of people who can evaluate a project based on their personal knowledge and experience with a neighborhood, and don't need to follow guidelines set by a distant executive who might know the demographics of a neighborhood, but not its unique characteristics.

I often here people complain that there's not enough character in their neighborhood or city. Well, it's not that hard to help create some unique qualities in your town, as long as you don't think you'll get there by trying to influence elected officials.

New Orleans Looking to Knock Down Part of I-10

Not looking good these days for elevated highways. Boston put its underground, Seattle is considering not replacing the Alaskan Way viaduct as it reaches the end of its useful life, and few people want San Francisco's Embarcadero Highway back. Now New Orleans is considering demolition of its 50 year old Claiborne Expressway.

Typical concerns about traffic are being raised, but the Infrastructurist has a good article on how tearing down elevateds can actually improve traffic flow.

New Urbanism - Worse than Strip Malls

Outside of Chuck E. Cheese, few things are as vomit-inducing in the suburbs as "New Urbanist" developments. They're built by well-known architects and praised by James Kunstler-type critics and academics, none of whom ever have to shop or live there.

Rather than holding award ceremonies, the American Institute of Architects should actually visit the areas around these New Suburban outdoor malls. In the DC area, we have the heavily-praised Reston Town Center. It's got apartments and offices and is not enclosed, so it makes distant academics happy because people can live close to their jobs and walk outside. Yet in this "Town Center", there is a multiplex showing chick flicks, car chase movies, and standard mass market Hollywood crap, as well as a Panera Bread, a Starbucks, and some chain restaurants. Its nightlife begins with guys going to the chain restaurant bars to talk about their jobs, which is followed up by fake ID-less teeny boppers congregating around the entrances to these bars, all under the watchful eye of some mall cops.

Go 1 mile from the "Town Center" and you come to a K-Mart strip mall with a large surface parking lot, the kind you usually see in the "before" picture in an urban planning book. If you want something to eat in this place, you can choose from Indian, Afghan, Central American, and something other than the tasteless grilled chicken sandwiches available throughout Reston Town Center. Moreover, these K-Mart center dives are locally owned, and their menus are inspired by the owners' lives in their native countries, not by a marketing department in a corporate office park.

While the academic-urban planner-critic circle jerk can't stop hyping Seaside, Reston, Kentlands, and other generic nonsense, a sidewalk or an apartment over a store is not enough to make a place worth visiting twice. Meanwhile, not much is written about where locally-owned shops and restaurants actually are, because the AIA is not going to start handing out awards to a K-Mart anchored strip mall with an ocean of parking spots.

Whole thing is unsettling to New Suburbanists, because they can't cover their development costs or obtain financing if they lease to mom and pop's Moroccan restaurant, and those places thrive in many car friendly developments. Chain restaurant paradises like Reston are not even "victims of their own success" in a Jane Jacobs way, becoming too expensive because they're popular, rather they're just a re-configuration of the same suburban junk that's been around forever, down to the mall cops.

If you look at where you get both local merchants and local pedestrians, you almost always have local capital. Adams Morgan, the Marina, Fremont, Society Hill, the Pearl District, Uptown Minneapolis, Wrigleyville, Newbury Street, etc. do not owe their existence to one big bank loan, but a series of owners obtaining financing in small increments over a period of time. Moreover, they're not "mixed-use". Not many office towers in these places, yet they have a lot more going on at night than many of the skyscraper neighborhoods in their downtowns.

Parts of San Francisco, Seattle, New York, and DC are proving that there are minivan drivers willing to come out to dinner in neighborhoods where they're likely to run across a few, or more, homeless people. But none of these places have been replicated in the suburbs because of light rail, bike lanes, or new office/retail developments. You need local citizens to change neighborhoods, not distant academics.

Nine Days to Seattle Light Rail

Seattle light rail opens in 9 days, with an initial line connecting downtown to Tukwila. An additional extension to Sea-Tac airport is scheduled to open in December, ahead of the 2010 winter Olympics just to the north in BC.

Great that Seattle's finally getting a train, but it's already created Queen Anne, Ballard, West Seattle, Capitol Hill, U-District, and Fremont - all lively, walkable neighborhoods filled with local merchants - without any type of rail transit. Moreover, these places are authentic, not the P.F. Changs and Whole Foods-filled "Transit Oriented Developments" that have popped up here in the DC area as well as in Portland.

Seattle will become more convenient as its light rail line gets built out, but I doubt it will get any more interesting as a city.