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Ventura City Manager Rick Cole to California Real Estate Industry: ‘Get Real!’
The Planning Report ^ | March 2009 | Rick Cole

Posted on 04/05/2009 11:45:16 AM PDT by Lorianne

Looking back three years ago, it is hard to fathom how much has changed from the frenzied pace of development then going forward. Land and housing prices were still rising, ever-larger development projects were being launched, and growth debates were raging across Southern California.

That’s all gone now.

As key real estate players suddenly find themselves without jobs, as more developers file bankruptcy, and more projects bite the dust, the depth of this “downturn” is sinking in.

Many, of course, have “been through this before.” By that they mean, they’ve weathered the cyclical postwar busts that have intermittently interrupted the long boom, including the deep downturn that followed the collapse of the local aerospace industry and the Rodney King riots. But it is becoming increasingly clear that this is different.

How different?

It is too soon to tell. But for the first time in my lifetime, the question is not “when” the market will come back, but “whether.”

Growing up in Pasadena, I was always struck by the Fish Building on Colorado Boulevard. It has gone through many changes since I first noticed the date on the cornerstone. At the time it was a thrift store. Now it is a trendy Urban Outfitters store. It was the last building in the city’s historic core constructed before the Great Crash, and the cornerstone reads: 1929. It was nearly sixty years before another building was built in that now-thriving neighborhood.

We all know other areas of our region that growth has bypassed for decades—and we all know other regions across America that have long been stagnant, like the factory towns in Bruce Springsteen’s haunting song, “My Hometown”:

Now Main Street’s whitewashed windows and vacant stores

Seems like there ain’t nobody wants to come down here no more

They’re closing down the textile mill across the railroad tracks

Foreman says these jobs are going boys and they ain’t coming back to your hometown

But with our booming population and unending influx of immigrants, it has never seemed conceivable that the Southern California region might confront such a gloomy prospect. Yet for the first time in 20 years, national magazines are again predicting our demise.

Contrarian Joel Kotkin, in a scathing Newsweek essay entitled “Death of the California Dream,” attacks familiar targets, including real estate speculators and our dysfunctional political class, with particular disdain aimed at elitist “green politics.” But the real problem isn’t with California. The problem is with our national approach to real estate—one pioneered in California, long the poster child for sprawl.

We are witnessing an historic sea change. It is no coincidence that the global economic crisis was triggered by the collapse of American sub-prime mortgages. Sprawl is now the poster child for our unsustainable way of life, starting with “real estate.”

In his brilliant analysis of the Great Depression, economist Karl Polanyi pinpointed the fallacy of what today we would call “free market fundamentalism” in mistaking land for a commodity. It is not, for the simple reason that his contemporary Will Rogers famously pointed out in his quip: “Buy land, they ain’t making that stuff anymore.” Treating land purely as a marketable commodity produces disastrous “externalities,” ranging from massive (but hidden) public subsidies of sprawl to environmental disasters like the Dust Bowl.

We seem to be belatedly rediscovering this inconvenient truth. Answering questions in Florida last week, President Obama talked about the need to invest in new transportation alternatives because, he stated: “The days where we’re just building sprawl forever, those days are over. I think that Republicans, Democrats, everybody... recognizes that’s not a smart way to design communities. So we should be using this money to help spur this sort of innovative thinking when it comes to transportation.”

It was a largely off-hand observation and the topic remains largely absent from the great debates in Washington. But more and more, voices are finally connecting the dots between our dependence on foreign oil, our appetite for carbon-based energy, our colossal infrastructure deficiencies, our eroding standards of living, and our structural public deficits. Sprawl isn’t the only cause of these crippling threats to the American Dream, but it is certainly one of the most important and undoubtedly the least examined.

Of course, I here use the word in its broad (and often abused) sense. By sprawl, I mean the whole pattern of auto-dependent, single-use real estate development that has spread across the American landscape in the last 60 years. Not solely development at the edge—but all the formula-driven churning-out of “product” from residential subdivisions to strip centers to business parks. That business model has produced billions in profits and put the public on the hook for trillions in bail outs, including “shovel-ready stimulus” highway projects aimed at reviving the real estate Ponzi scheme that got us in this predicament to begin with.

Economist Herb Stein is best remembered for his observation that “things that can’t go on forever, don’t.” So it is with sprawl, the real estate and development industry as we have known it, and the confusion of “economic development” with building shopping centers and auto malls.

I made a bet with my wife in 2007 that the Dow would fall below 9,000 before Bush left office (virtually inconceivable then, a no-brainer in retrospect). Yet I remain an optimist. I believe that out of the “creative destruction” of this global meltdown, Southern California can again be a pioneer. But not by hoping and planning for a return to an unsustainable “normal.” No, this time it is not just market demand that has gone missing. It is the economic, environmental, and social model on which we have based our growth policies, investment patterns and development practices.

For thousands of years, people have built increasingly sophisticated and prosperous cities and towns, long before the advent of zoning, autos, cheap oil, real estate investment trusts, and corporate development companies. In the tough times ahead, we will need to relearn from those timeless ways of building. That does not mean turning back the clock on progress. It means adapting modern technology to human scale, harnessing private investment to life cycle returns instead of quarterly profits, and shaping great places instead of chasing great deals.

For cities, it means reforming zoning with form-based codes to legalize a mix of complimentary uses at human scale. For regions, it means developing “blueprint” visions that form the foundation for a comprehensive and collaborative approach to coordinating land use and transportation polices and investments. For the federal and state governments, it means revising policies that promote sprawl and auto-dependency. For the real estate industry, it means retooling to create sustainable value.

There is money to be made in building places where people live and work—there always has been. But when local “real estate” investments get bundled and traded on anonymous global markets, making money has eclipsed the creation of lasting value.

It’s time for “real estate” to get real. It’s time to overhaul the broken system. If the Southern California market is to come back, it can’t be based on another round of sprawl. The time is now to begin building a new model.


TOPICS: Business/Economy; Government; US: California
KEYWORDS: agenda21; aliens; boom; bubble; bust; caleconomy; californiadream; carboncult; economy; housing; landuse; propertyrights; realestate; realestatebubble; sprawl; urbanplanning; utopianleft; ventura; zoning
Had to work Bush's name in there somehow, no mater how lamely, even though Bush had ZERO to do with California's sprawl development and mismanagement for the past 60 years.

Weasel.

Cole should 'get real' about who is really to blame for the problems he sees in California.

1 posted on 04/05/2009 11:45:17 AM PDT by Lorianne
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To: Lorianne

We gots ta get everyone back into the big blue cities where we can control them better............


2 posted on 04/05/2009 12:01:03 PM PDT by umgud (I'm really happy I wasn't aborted)
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To: umgud; Lorraine

Does anyone remember why we fled the cities? That situation hasn’t changed!


3 posted on 04/05/2009 12:11:36 PM PDT by blam
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To: umgud

Actually, the more people move to cities, the better off the ‘country’ will be for people who prefer to live there.


4 posted on 04/05/2009 12:11:53 PM PDT by Lorianne
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To: Lorianne

I feel sorry for his parents. They spent all of that money on his education, and all they got in return was a “buzz” word vocabulary, and a defeatist mindset.

He lives in a City, in a “Planned Community Development”, I feel sure of that. Why? Because, as most everyone knows, misery loves company.


5 posted on 04/05/2009 12:13:53 PM PDT by papasmurf (Trow da' bum out!)
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To: Lorianne

Hey Cole, your entire county is chock full of illegal Mexicans whose voracious freeloading on our resource base is a far bigger issue than anything you write about here.


6 posted on 04/05/2009 12:14:43 PM PDT by raptor29
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To: Lorianne; SierraWasp
Contrarian Joel Kotkin, in a scathing Newsweek essay entitled “Death of the California Dream,” attacks familiar targets, including real estate speculators and our dysfunctional political class, with particular disdain aimed at elitist “green politics.”

Sounds about right.

But the real problem ... is with our national approach to real estate—one pioneered in California, long the poster child for sprawl. ... Sprawl is now the poster child for our unsustainable way of life, starting with “real estate.” ... massive (but hidden) public subsidies of sprawl ...

S-p-r-a-w-l is eeeeeeeeeeeevil! (Hear them whine!)

If only we had more urban planners. /s

7 posted on 04/05/2009 12:17:46 PM PDT by calcowgirl ("Liberalism is just Communism sold by the drink." P. J. O'Rourke)
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To: Lorianne
His wife should have bet him that the Dow would drop below eight thousand afer the democrats took control of Congress. The economy under Bush and the Republican Congress was at an all time high when the democrats took over and opened the sub-prime floodgates.
And never forget that it is the city planners who have created most of the mess our cities find themselves in; remember the ‘Cabrini Green’ style high rise public housing mess? - that was city planners. They don't like suburbs and they want to stuff people in urban boxes so they can engineer society. For them the East German workers paradise is the model for the future and to hell with what the people want.
8 posted on 04/05/2009 12:21:43 PM PDT by Old North State
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To: Lorianne

What a crock of puke.

Massively, upwardly dense cities like New York city are completely unsustainable without “subsidies”, for everything from housing to food, to trash disposal, to transportation. And, take a survey of a large southwestern city vs a place like Chicago or New York and you also find the distance in the average “wage gap” is greater in the dense, urban liberal cities.

As for zoning and planning, Houston has very little zoning and only minimal planning but has more “affordable” housing ON THE MARKET, per capita, than any liberal, dense, high-rise city in the nation.

The only thing high-rise dense cities do is turn people into sheep; and the group-think in such places can be noticeable to American visitors there.

While the particular housing markets that saw the largest rates of new building and excess in the last housing-market bubble are many in the southwest, the manner of building, the style, did not create the bubble; and transportation “subsidies” for southwestern highways are no greater per-capita, per-passenger-mile than the “public transportation” subsidies that keep Amtrac and ALL major-city transit systems running.

People who write these things have never traveled this country by car. They sit in their ivory towers reading statistics and making correlation try to equal causation, while ignoring the human factor.


9 posted on 04/05/2009 12:34:13 PM PDT by Wuli
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To: Lorianne

I love communities where I can walk or bike to the grocery store and drug store.

However, same eco-greenie-enviro-people who like rant against ‘sprawl’ never admit the reason for it. Families have flocked to developments on large lots in small communities far from urban centers to have the freedom and security to fashion their lives without being subjects of the urban political class. A little bit of land (even if it’s only a half acre) gives families some control over their own environs. In small communities, a single individual can still hope to influence the local government, without having to make payoffs in the form of campaign contributions to a permanent political elite. Low population density and distance from urban centers offers families hope of escaping violent crime.

The problem is that as suburban communiies grow, the same corrupt political bureacracies grow with them, with lots university-educated professionals voting democratic and eager to replicate all the ‘progressive’ policies of the urban areas they have fled.


10 posted on 04/05/2009 12:41:22 PM PDT by CaptainMorgantown
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To: Wuli
For perspective, this guy is in the city of Ventura. Very heavilly controlled growth. Most of the "troubles" are in Oxnard and other surrounding communities.

FYI

11 posted on 04/05/2009 12:46:38 PM PDT by nufsed (Release the birth certificate, passport and school records.)
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To: Lorianne
..and Bruce Springsteen keeps blaming Republicans and pushing the Democrat line - the damn fools hell-bent on destroying wealth and turning Springsteen's, hopeless, rust-belt hometown into EVERONE'S hopeless hometown.

Democrats don't spread the wealth around.

They spread the MISERY around!

12 posted on 04/05/2009 12:51:49 PM PDT by NoControllingLegalAuthority
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To: CaptainMorgantown

Well said.


13 posted on 04/05/2009 12:51:57 PM PDT by Lorianne
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To: nufsed

yes “heavily controlled growth”,

which like “rent control” in some liberal cities, and other forms of growth limitation,

is simply a form of “we were here first and want to keep things as they are”


14 posted on 04/05/2009 1:02:36 PM PDT by Wuli
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To: Wuli
It is indeed and its why Camarillo, Ventura and few of the smaller cities in that county are very desirable places to live.

Maybe they'll elect officials who can turn it into the Inland Empire and not be so snooty.

15 posted on 04/05/2009 1:05:22 PM PDT by nufsed (Release the birth certificate, passport and school records.)
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To: Wuli

“is simply a form of “we were here first and want to keep things as they are”

I am not disagreeing with you, but maybe you missed my point.

The actions of cities like Ventura do not oppose or prevent “sprawl”, they actually help create it, in “normal growth” times, by demanding that growth simply go somewhere else; bunching growth up in “undisturbed” places, instead of a little here and a little there in existing places. The NIMBY excuse is not a real solution to anything.


16 posted on 04/05/2009 1:58:48 PM PDT by Wuli
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To: Lorianne

Freedom and dense cities seem pretty incompatible to me. They want to pack them in like cord wood. How can I be free if everything I do impacts my neighbor? That’s why suburbs sell; people are trying to get a little freedom and privacy.

All these liberal elitist “sprawl” haters and central planners can go pound sand.


17 posted on 04/05/2009 4:03:55 PM PDT by ecomcon
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To: Lorianne
and we all know other regions across America that have long been stagnant, like the factory towns in Bruce Springsteen’s haunting song, “My Hometown”

Well, if Bruce WAS talking about HIS hometown, it's not exactly stagnant anymore, as least it wasn't 20 years when we left it. It had already turned around from it's stagnant period, and even with the loss of the horse track to a large fire, it STILL came back with many new businesses and a large mall.

My point is that if folks are willing to work at it, the economy CAN come back in places that look depressed now.

18 posted on 04/05/2009 6:29:06 PM PDT by SuziQ
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