What City Observatory Did this Week

The Interstate Bridge: Spending $273 million to design “basically the same project” as the failed Columbia River Crossing. Over the past 20 years, the states of Oregon and Washington have spent nearly half a billion dollars on consultants to design a bridge and freeway expansion across the Columbia River that it increasingly looks like they will never build. The two state DOTs don’t publish spending data, but we obtained it via a public records request. Since restarting the project a little over five years ago, the DOTs have signed $273 million in consulting contracts.

More than 40 percent of that money has gone to a single firm, WSP. And for the past five years, IBR has been run by a former WSP employee, Greg Johnson–who has recently announced he is resigning from the post at the end of this year. In addition, more than ten percent of the total cost of the project has gone to communications and public relations firms, who have raked in almost $29 million to help sell the mega-project.

Must Read

The New York Times weighs in on the ethics of gentrification. Neighborhood change is a fraught topic, and people rightly question whether their personal decisions about where to live might affect others. People moving into a new neighborhood, especially a lower income neighborhood, are often castigated as causing gentrification. A recent letter to the New York Times’ ethicist asked “Is It Bad to Buy Into a Gentrified Neighborhood? Kwame Anthony Appiah, the Times’ ethicist, took a strongly empirical view of the question, writing:

Philosophers have the sometimes-annoying habit of asking what words mean. And “gentrification” is a big one. . . . It’s diagnosis disguised as description. Many economists and demographers have come to question the diagnosis. Rising property values do raise rents and insecurity for tenants; longtime owners gain equity but may struggle with higher taxes. Yet studies in Philadelphia and elsewhere found that low-income residents of appreciating neighborhoods weren’t more likely to move than those elsewhere, and when they did, they didn’t necessarily end up in poorer or more distant areas. Nor do eviction rates seem to be higher. Increasingly, researchers see “gentrification” less as a cause than a symptom of housing scarcity and the lag between wages and housing costs.

It’s often difficult to disentangle the actions of individuals from the larger conditions of a neighborhood or the entire city. The strong evidence is that gentrification, and displacement, when they do occur are symptoms of a housing shortage, which is more of a policy issue than a personal one.

A proposal for reforming inclusionary zoning. Writing at the Substack Building Abundance, Michael Wiebe has a thoughtful review and an interesting proposal for reforming inclusionary zoning. Inclusionary Zoning (or IZ), is a requirement that developers (almost always of apartment buildings) rent some portion of newly constructed units at discounted prices. Most IZ programs are “un-funded”–the idea of sticking the developer with the cost of subsidized units has considerable political appeal. But these IZ requirements act as de facto tax on new construction, and there is strong evidence that they reduce housing starts, constrain housing supply and tend to drive up rents, which worsens affordability problems.

Some have proposed “funded” IZ programs that attempt to compensate developers for the added costs of providing discounted rents. Wiebe argues that we should undertake “funded” IZ with density bonuses rather than property tax exemptions.

In contrast, when IZ is funded by a property tax exemption (with no density bonus), we have to give up tax revenue to get subsidized homes. But when we allow more density, we actually benefit from higher market-rate supply and lower prices (and more property tax revenue). Housing is a benefit, not a cost. It would be one thing if we had to increase market-rate prices in order to get subsidized homes. But through density bonuses we can get both: lower market-rate prices and more subsidized housing (funded by surplus land value). There’s no tradeoff, relative to the baseline of suboptimal restrictive zoning.

Of course, the “relative to suboptimal zoning” is the key assumption here. The point is that housing is expensive and in short supply because zoning isn’t optimal; that limits on density make it impossible to provide enough housing to meet demand. The density bonus has value only because the existing zoning artificially constrains supply. Wiebe concedes that a land value tax would obviate many of the practical difficulties of using a density bonus to fund IZ, still the density bonus may be a practical, if second-best policy solution.

Earl Blumenauer on the civic commons, protests and Portland’s renewal. Earl Blumenauer, who retired this year after decades in the US House of Representatives–sat down with The Planning Report to reflect on his long career and the current state of cities, including Portland, which he represented in Congress (as well as being a City Councilor). Blumenauer highlighted citizen participation and the civic commons, especially in light of the recent Trump Administration efforts to brand Portland as “war-ravaged.”

You justsaw some 40,000 people show up in downtown Portland, and it was in a lighthearted but determined effort. Frog suits and naked bike rides notwithstanding, my community demonstrated an interest in showing solidarity, being cooperative, and encouraging one another. You just can’t make that up in terms of that show of support. We’ve seen this around the country, but these are the kinds of things we needed here to reinvigorate downtown. I think we’re watching people be determined to build on our strengths.

Demonstrations that bring people back downtown in huge numbers are a key part of revitalizing our center cities and capitalizing on the traditional role of urban streets as civic spaces where democracy shows itself.