Great Inversion – But Not Monolithic Inversion

Alan Ehrenhalt’s latest book, “The Great Inversion,” is valuable reading for nearly anyone in my professional practices: In particular, private and public organizations involved in redevelopment and city building.

The author’s premise argues that the comparative value of proximity to core cities – their economic and cultural assets, diverse building stock, and ease of transit access – is rising. As that shift in value unfolds, says Ehrenhalt, many U.S. metro areas will invert, assuming a pattern where core city neighborhoods typically are among the most desired, while suburban areas offer values accessible to more residents.

Ehrenhalt writes a compelling narrative, observing dynamics that can be observed in cities across the country. In interviews he’s described the shift as “an entire metropolitan area rearranging itself…a true inversion of demographic groups.” Still, at times the premise does not allow full exploration of variation within regions. He stresses the importance of transit in reshaping regions, for example, but does not organize his argument to reflect how effective transit service can itself reshape the city/suburb relationship. If in one area of a metro, transit can move people from city to suburb (and vice versa) more effectively than in other areas, how might they invert differently? Job growth on a transit corridor, for example, may affect residents living elsewhere along that corridor, more than it does other residents living nearer by, even if it’s occurring within the same municipal boundary.

That caveat aside, it’s clear that fiscal scarcity, changing pricing caused by climate change (essentially unaddressed to date), shrinking households and shifting cultural attitudes about cities are converging powerfully to reshape metro areas, and increasingly channel investment toward the center. For public agencies and firms involved in redevelopment, such as Donjek clients, this return to a pattern based on proximity will produce a whole universe of new opportunities.

The news narrative around these issues is usually simplified in an unhelpful way (see this critique of coverage of recent demographic data released for the Minneapolis Saint Paul region), presenting these trends as “core cities up, suburbs down.” None of the ingredients here are so simple: The physical geography and amenities of regions, job location criteria, and the politics that shape transportation investments are just a few examples. Instead, shifts like the Great Inversion will create opportunities and troubles which are different than the recent past, but very familiar in history. Creativity is required for good redevelopment, now more so with these dramatic demographic shifts underway.

Donjek Project: Minneapolis’ Lowry Avenue Strategic Plan

Lowj Less than two miles north of downtown Minneapolis is Lowry Avenue, the focus of a project recently initiated for the City’s Community Planning and Economic Development (CPED) department. Partnering with Cuningham Group and Biko and Associates, Donjek is contributing economic development, market and finance perspective to the development of a Lowry Avenue Strategic Plan. Three nodes along Lowry Avenue hold particular significance as transportation access points and potential commercial hubs: Those at Penn Avenue, Emerson/Fremont Avenues, and Lyndale Avenue.

At a recent community meeting, Cindy Harper from the Cuningham Group organized an exercise where participants reviewed images of various building types and designs, and selected those best (and worst) suited to Lowry Avenue. Three groups of people undertook this process at once, and (with the exception of one image) each group selected the same five photos for ideal redevelopment types, and the same five photos to represent redevelopment they wished to avoid.

The consensus was interesting. Even more striking was the response I received when I asked a participant why she thought the five favored images had been chosen by each group. “They look like they’re going to last,” she said, and turned her attention elsewhere. Building materials can present evidence of commitment by investors and developers, or they can convey a short horizon and lack of interest in a structure’s relationship to its surroundings. 

Several of the preferred images reminded me of the scale of streetcar nodes still traceable in both Minneapolis and St. Paul. Along the many streets served by the streetcar system, observers can identify street-facing buildings of two to three stories centered around intersection points or other higher-traffic streetcar service areas. In part because the real cost of materials and labor was lower in the early 20th century, many of these buildings have proven durable and flexible to reuse. The future appears bright for such commercial space integrated into primarily residential areas.

Some suggest that fixed-rail transportation represents a similar kind of physical and financial commitment to a series of places strung together. But unless the marketplace shifts substantially – and private capital leads – I don’t see the streetcar network replicated by a 21st century fixed-rail version soon. So in lieu of fixed rail and affordable stone and brick materials, how do neighbors, developers and investors effectively signify that places are built to last?

An Interactive Calculator for Business Improvement Districts

One of the reasons that the business improvement district is an increasingly popular mechanism to finance essentially public activity is its flexibility, which I discussed in late August here.  In Minnesota, State statute allows a district to assess charges to finance capital or operating activities on the basis of “a reasonable classification of the types of premises to which service is furnished, or on any other equitable basis” [emphasis added].  For business and property owners, and for local stakeholders generally, language this broad provides the material to create a structure that serves an area’s unique needs.

Minnesota Statutes, Chapter 428A spells out the terms for establishment and operation of a special service district (this state’s incarnation of the business improvement district).  Regardless of whether the most vocal advocates of a special services district are business owners, elected officials or other community leaders, they are ordinarily asked right away what will be the basis for assessing fees. 

The Donjek worksheet available here gives a user the ability to “rough out” your own special services district.  The tool allows you to choose an annual budget, select a basis for assigning fees (remember that these four alternatives are just a sample), and add information for up to twenty parcels if you choose.  Or use the data and assumptions already on the worksheet, and note how changing the basis affects the level of fees assessed.

If your community or business association is interested in exploring how a business improvement district could enhance your efforts to support retail and office activity, contact me about how this type of tool can be expanded and made even more dynamic for your key audiences.