Who doesn’t adore their own adolescent brain?

Eight years ago I wrote a blog with this title, to remind us that we often think our way past reality.   Despite our ongoing technological revolution the human mind still has a series of fallback postures that fail to perceive reality but instead distort it – simplify it, really – to make it fit into categories more satisfying to our adolescent brains.

As I have often said, categories are the problem. They are the boxes everyone wants to think outside of. They are the crutches that allow brains to grow from adolescence but if you are still using them later, maturity is forestalled.

This week I watched this video of a honking great 1950s American automobile – when they were still made out of metal – crashing into a moderately sized contemporary car in a controlled test. Take a look:  Of course, as my mother and every older adult I ever met explained, they needed a big car because it was safer. And your brain says: “Of course!”

I never knew how much danger I was in.

 Except the big old car crumbles to bits and the modern plastic car with snoozefest design survives reasonably well, forcing your brain to process the fact that a big sturdy steel car is NOT better in a crash than its modern polymer descendant because EVIDENCE.

In my last blog I riffed on the folly of thinkers left and right trying to blame historic districts for various “ills” of real estate economics.  What was the evidence?  Historic districts will make the prices go higher.  Except when they don’t.  Historic districts will help maintain value, which will make affordable housing more difficult.  Except when it doesn’t.  Part of the problem is politics, a bottom-feeding critter with a reptilian brain that never got beyond categories.

And yes, CityLab, they come in more flavors than single-family.

While their folly had several sources, one of the most important was the tendency to think of economics as a zero-sum game.

Remember Benchley’s hilarious column from mid-1930s where he explained economics? I do. Well, I can’t quote it verbatim, but it basically suggested that after you groped around in your pockets and under the couch cushions there was only about $10.87 in the world, along with several rubber bands and mint wrappers (probably Sen-sen – it was the 1930s after all) but then you get a piece of paper from another country saying we owe you ten billion dollars and you run home to mom and say “Lookee I got ten billion dollars!”

Imma so rich!  Get Victor Gruen to design my bank!!!

Which helps our adolescent brain begin to conceive of debt and finance.

But still we have that tween brain that worries about national debt because – why? Someone is going to come knocking on the door and ask for it? Are these the same imaginary people coming to get your guns? Don’t you realize that we borrowed millions (billions in present dollars) to gain our independence from Britain 230 years ago and NEVER PAID THE DEBT? That’s how it works.

Just ask Chaym Solomon – he’s the guy on the right – the one we never paid back.

Which brings us to the drop-dead-dumbest category dichotomy of all: government and the private sector. This is popular conceptual shorthand that might help us understand things, but given the political environment of the last 35 years[1], actively obscures how things work.

This is especially true when you look at the development of the United States, starting with canals, which were financed by the sale of government-granted land.

 Illinois and Michigan Canal, Aux Sable, Illinois

This was followed by railroads (financed by government land grants) and colleges (financed by government land grants).  There is of course the original government role in economic development – which is security.  You wanna trade?  You need a safe place from bandits.  That is the starting point of all economic development and the rationale for the single government expenditure that is larger than all the others put together.

These were used for those who refused to pay the tolls and the taxes.  Also, they were paid for by the tolls and taxes.  Neat, huh?  (Tustan, Ukraine, c. 1500)

Now in the 20th century we shifted to a consumer economy so the government rebuilt Europe and covered the U.S. with the most important subsidy the private “sector” has ever seen, a subsidy so massive it shifted how we shop, how we live, and how we move through space.  I’m talking highways.

Draw a grid on this photo and then count up the squares for “private sector” and “public sector”. 

These so-called “sectors” are especially vexing when you deal with the built environment because so much of the built environment is ostensibly “public” in the form of roads and canals and highways and railroad tracks and schools.  I know we have spent the last three decades privatizing things – like every parking place in the city of Chicago – but there are still parks and roads and even if we are paying private lawyers (like Richard M. Daley!) to use them, they are functioning as public space.

Our landscape is BOTH AND, not EITHER OR.  We call the University of Michigan a STATE school even though the state provides less than 3% of its budget, and we call real estate a PRIVATE enterprise even though ALL of its value comes from public roads, sewers, water, police and fire protection.  Not to mention land reclamation, drainage and harbor improvements.

Did you know that real estate provides twice as much of the U.S. GDP as Information?[2] In the Information Age! (Also three times as much as either Transportation or Construction.)

Oh, and zoning. I have written many times before about how zoning – a government regulation – gives property value.  That’s why we have teardowns.  And really wealthy zoning lawyers.

Indeed, most of the second generation big city zoning ordinance in the late 50s and early 60s were designed to impel development.  Chicago’s 1957 zoning ordinance basically doubled the land value in the city in the hope that people would build more.  New York’s (1961) planned for 16 million residents by the 21st century and similarly upzoned much of the city.

Except where the residents were organized to save their historic architecture.  And their investment.

Greenwich Village (pictured above) had been organized so early that they insured lower zoning in the original 1916 zoning ordinance, thus reducing the possibility of a new subsidy that would lead to teardowns.  They did it again in 1961, having just conserved a building that not only the city but even the architectural historians hated.

Jefferson Market Courthouse.  Unloved by all except THOSE WHO LIVED THERE.

Now, you might criticize this as NIMBYism, but that is yet another misleading category, like gentrification.  Some places can become “owners’ clubs” and some other places can become development firestorms, but there tends not to be a pattern that reinforces the category but a highly specific playing out of forces in each unique place.

In spite of everything.

I would always tell my students that there are two constant truths, which remain equally true despite their seeming contradiction:

1. No one wants to be told what to do with their property.
2. Everyone wants to tell their neighbor what to do with their property.

So, any attempt by a community to influence the disposition of the built environment will require actions that cross the artificial borders between public and private.

Madison, Indiana – one of the original Main Streets.

Main Street was a National Trust for Historic Preservation program that started in the 1970s to conserve historic commercial buildings.  The Four Points of Main Street, still used today, could be characterized as largely “private” sector initiatives involving Design, Organization, Events and Economic Restructuring.  In fact, these four points each cross the public/private category over and over.  Design might be seen as regulatory, and if Main Street was listed on the National Register of Historic Places, there were (and are) tax incentives for sensitive rehabilitation.  But there was also a recognition that the original design had a value, and that if everyone on the block could harness that externality, every property would add value.  Organization meant working together, in a way that the big shopping malls did because they were under one owner, so that falls toward the private sector (if we ignore the public roads and automobile subsidies that made the malls possible).  Events helped promote the area, so you could call it advertising, although depending on the event it might be more like a gathering of the public commons.  Economic Restructuring recognized that the market had changed (largely due to subsidized private transportation) and pushed formerly individuated businesspersons to work together to create a healthy mix of businesses.

Now, contrast this 40-year success story with the knuckle-dragging antics of the Michigan and Wisconsin state legislatures who are trying to ban historic districts because they are government overreach.  They are so focused on the “public” side of the equation that they will fail, because EVERY economic equation has both public and private in it.  Time for the mature minds to step in.

[1] Since 1981 incomes in the United States remain statistically flat while GDP grew 77%.

[2] U.S. Bureau of Economic Analysis, Gross Domestic Product by Industry, 2014.