Tuesday, October 30, 2012

Strange Bedfellows

By Matt Tester, Project Manager.

If it is true that an enemy of an enemy is a friend, then it would appear that the chips are stacking up against sprawl. A small but energized group of place-thinkers (my term), are making waves with a fiscally conservative argument for efficient land development, relentlessly deconstructing the “Ponzi scheme” that has required more and more leverage to maintain the appearance of growth. In working to address the roots of our collective indebtedness, this group is coincidentally carving out a space for the conservative soul in the anti-sprawl camp – right alongside environmentalists, urbanists, big-government types, and other conservative bogeymen. The conservative makes the case for return on infrastructure investment and the environmentalist makes the case for resource protection; each describes one side of a shared coin: compact growth. And the alignment of these groups is indeed timely, as society faces unprecedented debt levels and threats to the environment.

Chuck Marohn has emerged as one of the most prominent figures calling for this value-driven approach to growth and development. A civil engineer by training, Marohn has become a coveted speaker on placemaking across the country. Through his non-profit organization, Strong Towns, he has developed an expansive platform via podcasts, blogs, books, and speaking engagements. Simultaneously, he’s become a fixture in the New Urbanist scene, which is where we start to see (perceived) opposites attract. While the Congress for the New Urbanism (CNU) certainly has detractors from both the left and the right, it has thus far been more familiar to progressive “planner types” than conservative “anti-regulation types.” The more influence Marohn and his contemporaries wield in the New Urbanist scene, the more it might become a place where politically viable solutions to the challenges of urbanization are born.

I particularly like Marohn’s conceptualization of the “Suburban Experiment” as being fueled by a “Growth Ponzi Scheme.” Without plagiarizing, the basic formulation is thus:

  1. Since WWII, cities and towns have experienced growth primarily using three mechanisms – transfer payments between governments, transportation spending, and (public and private) debt – that seduce them with short-term cash but hang them with long-term obligations.
  2. Revenue from suburban projects increased in the near term, creating the illusion of prosperity. With maintenance obligations a generation away, cities and town didn’t notice/care that the revenues from suburban development paled in comparison to the liabilities.
  3. At the end of the suburban infrastructure’s first life cycle (somewhere in the 70s), the city/town’s maintenance bill came due, and there was only one way to cover the cost: cash from new growth, achieved by borrowing huge sums of public and private money.
  4. The Ponzi scheme similarities became most evident by the time the third life cycle hit (2000s). Like a true Ponzi scheme, our development model would've collapsed without continual infusions of new cash. This required unbelievably risky and complex funding mechanisms.
  5. The collapse of these mechanisms, and the Great Recession that followed, revealed the scheme for what it is, and growth has stopped in many places.

The question is: Will we learn, or will we ride the same flawed model into a dubious recovery? Will we see that free-flowing credit and new housing starts are only good things if they’re supporting the kind of growth that has sustainable value? Listening to our national political discourse, I’m not so sure. In this election season, nobody’s talking about whether we've got the fundamentals of growth right. Aerial shots of abandoned housing developments over the last five years were certainly shocking, but they hardly led to a sophisticated discussion on the fundamentals of our growth model. Now, housing starts are surging again (up 15% in September), and it appears we’re unambiguously happy about it.

My hope is that the common ground discovered by those motivated by ROI and those motivated by other anti-sprawl objectives will help elevate concerns about unsustainable suburban development in the national discourse, and ultimately lead to transformative action at all levels of governance. The most effective case for traditional development, with budgetary and fiscal issues so prominent in the public mind, will be a financial case. The more urbanists embrace this, the more likely we’ll start unwinding allegiance to sprawl. I think we can all agree that building great places means building places that don’t bankrupt our posterity.

Monday, October 22, 2012

Market Street welcomes James G. Vaughan, Jr., CCE to the team

By J. Mac Holladay, founder and CEO.

As we announced earlier today in our e-newsletter, this month Market Street welcomes Jim Vaughan to our team. As Senior Fellow, Jim will help shape strategies for economic and community development with an emphasis on sustainability and place making and help integrate Market Street plans into the client's structure for successful implementation.

There are few people in the Chamber business who have the breadth and depth of experience that Jim Vaughan has. In Greenville, South Carolina; Chattanooga; Jacksonville; and Waco, he made a real difference. He believes that chambers of commerce have to take on the tough issues and find a way to move the community forward. Our work is about positive change and trying to create greater opportunity for all the citizens in a community. Jim has always gone about his work professionally and never sought the headlines for himself. He is an honest, forthright person who knows every facet of the Chamber world. We at Market Street are delighted to welcome Jim to our team. As the Waco Tribune called him, he is "Mr. Can Do."

To read more about the experience and skills Jim brings to our team, please see his full bio.  

Wednesday, October 17, 2012

Communities Go Undercover to Improve Their Appeal to Visitors and Newcomers

By Matt DeVeau, Project Associate.

This past June, two chambers of commerce in Kentucky sent delegations to visit each other’s cities. When the groups arrived at their destinations, they were not greeted with an official Chamber welcome or the usual pomp and circumstance that might be expected on an intercity exchange. Instead, they were left entirely to their own devices. But this wasn’t a terrible oversight – it was precisely the point.

The delegations were participating in an “undercover” scouting program designed to help the communities of Henderson and Hopkinsville assess the impression they make on visitors and newcomers. The Henderson-Henderson County Chamber of Commerce and the Christian County Chamber of Commerce organized the event using the “First Impressions” community improvement program. This model, first developed by the University of Wisconsin Cooperative Extension in the 1990s, provides communities with a method to gather feedback from objective, third-party sources.

The approach is essentially a modified version of “mystery shopping,” which retailers and other customer-centered businesses have been using for decades to evaluate their services. Since 1991, the First Impressions approach has been used by at least 200 communities in nine states. Most of these have been in Wisconsin, but the model holds universal promise.

Communities that actively pursue economic and community development frequently self-analyze their strengths, weaknesses, and progress toward goals. Often missing, however, are outside perspectives, and this can be problematic. As the First Impressions website puts it, “Too much self-evaluation and too little outside evaluation may mask real problems and opportunities.”

The process certainly yielded valuable insights for Henderson and Hopkinsville. The two Eastern Kentucky communities, located about an hour apart, are similar in many ways. Henderson is located just south of Evansville, Indiana, while Hopkinsville is positioned just north of Clarksville, Tennessee and the Fort Campbell Army base that straddles the border between the two states. Both communities have populations of less than 75,000 residents in their primary county. Hopkinsville, a high-capacity community, has partnered with Market Street Services on two economic development strategies, and the community has successfully come together to implement the recommendations. The fact that Hopkinsville and Henderson have pursued this exchange program further indicates that they are willing to critically look at potential areas for improvement – and act on them.

Each community assembled a volunteer contingent of 10 to 12 individuals who were tasked with going undercover to evaluate various aspects of the other community, including its aesthetic appeal, ease of navigation, customer service atmosphere, and overall friendliness. The teams presented their results at board meetings of the respective Chambers approximately two months after the visits. The Christian County Chamber published the Henderson team’s assessment of Hopkinsville on its website.

The Henderson group praised Hopkinsville’s “forward thinking” in developing major projects such as a convention center and a college campus, and found some area developments to be “attractive” and “cool.” But the group was surprised to find that some Hopkinsville residents with whom they interacted had less positive perceptions of their own community than did the visitors. In response, the group suggested that the area needs a central community anchor, or as they put it, a place that residents can point to and say, “That’s Hopkinsville.” The Henderson team suggested that this place could be downtown.

Revitalizing downtown and improving area residents’ perceptions of their community are key objectives in Hopkinsville’s most recent strategy, Christian County Cares Vision Plan – 2015, and the community has since worked hard in these areas. In downtown, buildings have been renovated, city offices have been re-centralized, and programmed activities such as a farmer’s market have been launched. But the feedback from the Henderson team indicates that additional work is needed to fully realize downtown Hopkinsville’s great potential and boost community pride.

This conclusion might have been difficult for an individual with deep roots in the community to see, and it illustrates the usefulness of the First Impressions approach. Whether the intention is to attract additional investment, talent, or tourists, all communities engaged in comprehensive economic development strive to provide a welcoming environment. Though it seems counterintuitive at first, a key first step to achieving this goal might just be not rolling out the red carpet.                

Friday, October 12, 2012

Seeing Is Believing

By Ranada Robinson, Senior Research Associate.

Two weeks ago, my colleague, Kathy Young, and I traveled to Decatur, Alabama to attend their annual Diversity Awards Banquet and to catch up with our good friends at the Chamber of Commerce in person. In its tenth year, this banquet recognizes the achievements of minority business enterprises and the programs developed by corporations that support minority business development. From recognizing the longevity of Mary Burke Florist, which has been in the community for 66 years, to celebrating the efforts of Daikin America Inc. (which include awarding minority scholarships annually and hosting students and teachers each year for two weeks in Japan), to a motivational keynote address by a dynamic woman who heads the Johns Hopkins Diversity Leadership Council, Dr. Gwendolyn Boyd, the banquet was extremely inspiring. This year, the banquet was held in conjunction with the community’s second Diversity Summit. The day-long event featured presentations such as “Thinking Outside the Box, Job Search Strategies for Veterans,” “Six Essential Elements to Ensure Entrepreneurship Business Success,” and “Cultural Competence in the Workplace.” The banquet had over 250 attendees of all backgrounds, and the summit had 200 attendees.

Decatur has cemented its standing as a best-practice community in recent years. Many successes stem from the community’s transformational One Vision – One Voice – One Morgan County strategic planning process, which Market Street was invited to facilitate in 2009. The Decatur-Morgan County Chamber of Commerce and its partners have truly spoken with “one voice” and have collectively made great progress in taking the process from planning to implementation success.

During the research phase of the One Vision – One Voice – One Morgan County process, we identified six key issues that the community needed to address:
  • Increasing Decatur – Morgan County’s level of economic diversification 
  • Embracing increasing diversity and welcoming new residents
  • Providing quality public education 
  • Retaining and attracting the community’s best and brightest
  • Lifting confidence in local government and leadership
  • Leveraging the community’s existing healthcare assets and ensuring quality services to residents
After completing our quantitative and qualitative research, we worked with the community to connect the dots between the identified issues and challenges and actionable steps and solutions. Just a few examples of strategic actions in the Community Action Plan are:
  • Optimizing the local business retention and expansion program
  • Promoting the development and approval of one or more TIF districts
  • Creating a dialogue on multi-cultural challenges and conducting annual educational workshops for employers
  • Leveraging opportunities to collaborate, innovate, and modernize K-12 education, including by expanding the reach and depth of career exploration and awareness programs
  • Increasing the quality of and access to early childhood and Pre-K education
  • Increasing the capacity of the Community Free Clinic of Decatur-Morgan County to serve economically disadvantaged residents
Since the 2009 process, Decatur-Morgan County has celebrated many wins. In addition to the well-attended Diversity Summit and Diversity Awards Banquet, implementation successes include:
  • All of Decatur City public elementary schools have instituted the Leader in Me program.
  • Attractive housing for young professionals is currently being developed.
  • The Summer Welding and Electrical Technology (SWeEty) camp has been so successful in providing high school girls hands-on exposure to technical skills that next year, the program will expand to two sessions.
  • The Calhoun/Athens State Fine Arts Center opened in Downtown Decatur last month, one of many additions to the community’s downtown, including a newly announced Mellow Mushroom restaurant.
  • Decatur’s first Early Childhood Education Summit, an effort of the community’s Workforce Development Coalition, was held last year.
  • Public entities and private schools joined together to create a Pre-K brochure that guides parents.
  • The Keeping Our Best and Brightest Committee attended five university career fairs last year to speak with students about the opportunities in Decatur-Morgan County.
Rather than languishing into obsolescence like many shopping centers around the nation, the community’s mall is being renovated and will open a state-of-the-art movie theater.

Decatur-Morgan County created a clear, actionable, and measurable vision and works every day to achieve that vision. It is amazing to witness, and this community just shows that with effective strategic planning, dreams can come true!  

SWeEty Participant

Wednesday, October 10, 2012

Clustering "Social" Justice in Southwest Georgia

By Christa Tinsley Spaht, Project Manager.

Over Labor Day weekend I ended up taking a last-minute trip to Americus, a small town in Sumter County of southwest Georgia. I spent the rest of September trying to figure out what I had just seen in that place—what was started there, what is growing there—and what it could mean for Americus and for small, rural towns in general.

Americus has a lot in common with its neighboring counties—agriculture as a huge share of the local economy, the challenges of its distance (about 30 miles) from a major interstate, stagnant population change, high child poverty rates, historically uneasy race relations that still linger, retail leakage to bigger cities, and the constant fear of losing the community’s best and brightest talent, never to return.

A few assets like a small university (Georgia Southwestern State University), a technical college, and a steady stream of tourists visiting Jimmy Carter’s hometown (nearby Plains) and the Andersonville Civil War prison make Americus stand out in the region and give it national recognition.

But there’s some even more unusual, overlapping economic and social activity if you can dig deeper than well-preserved Victorian architecture and the signage directing you to National Historic Sites.

Jimmy Carter—arguably (depending on how big a fan of George Washington Carver you are) the world’s most famous peanut farmer—was born and ran his family farm nearby in Plains. But really Americus’ catalyst—what put it on the map before President Carter’s political ascent—was Koinonia Farm, a social justice-driven Christian farming community which inspired the founding of Habitat for Humanity International. Americus is now home to the global headquarters of Habitat for Humanity (while the national headquarters have relocated to Atlanta) and its Global Village and Discovery Center, which teaches about poverty and housing issues around the world.

Beyond the pecans and peanuts Koinonia ships all over the world and the constant influx of individuals and groups coming to work on the farm, the agricultural roots of the region have also grown processed products for distribution, such as the spirits of Thirteenth Colony Distilleries (Georgia’s only craft distillery) and CafĂ© Campesino, a fair trade organic coffee roaster. All of these places are open for tours, exposing to visitors the craft and process of what they make.

In the midst of this socially-responsible coffee bean roasting and egalitarian pecan picking is an active social life in the community that defies the small town stereotype. This isn’t just kid-centered fun I’m talking about. For example, as a source of income, the very involved Sumter Historic Trust runs a members-only “all adult” pool where Americus’ grown-ups can go swimming and sunbathing in peace all summer long. This is a place where judges, business owners, homemakers, teachers, non-profit workers, and executives mingle between laps and over pool noodles.

What does this intersection of social justice organizations, farming and food, and a very social environment mean for a place like Americus? Could a specialty food cluster like Asheville’s or Boulder’s be birthed in southwest Georgia—but this time, with a heavy social justice bent? I can’t help but see the lively interactions of Americus—whether at a Christian farming commune or a strip of downtown bars—as part of the “social” in social justice, and the reason food and drink (which are always better when shared among friends and family) could make it known as an even more special place and ripe for true clustering activity. In the meantime, I’ll hope that maybe one of our hotshot social, economic, and urban theorists--Richard Florida? Robert Putnam?--will study whatever it is that’s going on in Americus.

Friday, October 5, 2012

Getting Ahead in Groups

By Matt DeVeau, Project Associate.

Last Wednesday, more than 100 community leaders from around the country gathered in Washington, D.C. to discuss “job clubs,” which are pretty much exactly what they sound like: clubs for unemployed people looking for jobs. But these groups can be more than just venues for sharing resume reviews and social media tips. In many instances, they provide participants with emotional support and confidence to help forge on through the nation’s painfully slow economic recovery.

While the clubs have been around since the 1970s, they have become more prevalent since the onset of the Great Recession. And while many clubs traditionally operated independently out of churches or community centers, the Department of Labor’s Center for Faith-based and Neighborhood Partnership launched an effort to coordinate clubs at the state and federal levels in May 2011. Last week’s conference was part of this campaign.

The Department of Labor estimates that there are approximately 3,000 job clubs in America, and their offerings are diverse. In West Warwick, Rhode Island, a vocational counselor volunteers his time to run a club at a public library. In Portland, Oregon, where Market Street has worked with economic development leaders, workforce development organization WorkSource Portland Metro East gained national attention in 2009 for its job club effort, and SE Works, Inc. has recently launched a club that focus on individuals with specific job re-entry barriers. But the common thread connecting the various types of clubs seems to be an emphasis on peer support. According to a 2011 Department of Labor memo:

“A central tenet of most Job Clubs is to act as a support group for unemployed people. In many (though not all) cases, Job Clubs view their work as more closely aligned with a grieving process model or 12-step treatment model rather than a workforce development model, where there are various stages of unemployment (grief, anger, denial, acceptance, etc.). The facilitator’s role is to help participants work through these various stages.”

This model is obviously not a one-size-fits-all solution. For instance, some individuals might not want to go through a job search and the accompanying emotions in a group setting. In California, where job club attendance is a mandatory component of the state’s welfare system, some participants certainly have their doubts. But there is plenty of anecdotal evidence to suggest that many individuals have benefitted from the approach.

It also seems that the mere process of working with a group of peers can help individuals overcome a variety of economic and social challenges. A July NPR segment highlighted a promising example in support of this claim: the Family Independence Initiative, a nonprofit group that “encourages low-income families to form small groups and help each other figure out how to get ahead.” Unlike job clubs, these groups tend to be focused on a variety of issues, not just employment. And instead of having a formal structure led by a facilitator, the groups are driven by the participants who set their own goals and steps for self-advancement. The NPR piece documented the actions of a group of low-income women in San Francisco who call themselves the “Fitness Five.” As its name would suggest, the group is primarily focused on promoting help among its members, but the women also discuss their children, finances, and past struggles with illness and substance abuse. The environment is completely unstructured – by design.

Such an informal approach might not seem like something that could generate immediate success, but the results are surprisingly good. FII carefully tracks the progress of its participants, who voluntarily provide the nonprofit with a wealth of information – from pay stubs and credit scores to children’s report cards – that is audited once a quarter by a FII liaison. At the end of the program’s first two years, 344 individuals in 86 households in Hawaii and California reported a 23 percent increase in income and a 240 percent increase in savings. Seventeen percent of the households bought a home, while 33 percent started or expanded a business.

FII’s results, which were achieved at a lower cost than other social programs, have generated interest from across the political spectrum – from the Obama Administration to the Heritage Foundation, according to NPR. But the FII approach, like job clubs, does not rely on top-down support from a state or federal entity – indeed, job clubs existed for decades before the Department of Labor took an interest. And to me, that’s the key advantage to these small support group models. They are something that communities can embrace right away, at a low cost, to help achieve community and economic development goals.                

Wednesday, October 3, 2012

The Experts Weigh In

By Matt Tester, Project Manager.

For those of us in the business of looking at charts and graphs about the economy, the last four years have made it hard to stay positive. Watching the recession take down our economic indicators one by one was tough enough, but it was perhaps even more difficult to see many of them start moving in the right direction while jobs remain stuck in neutral. And with businesses finding new efficiencies and technology threatening to replace an ever greater share of the workforce, we have wondered at times whether we’d ever start creating jobs at a rate that makes up any ground. Mix in our fiscal woes, Europe’s teetering, China’s slowdown, and the Middle East’s turmoil, and the future seems totally uncertain.
Into this uncertainty we warmly welcome…economists! Last Thursday, I had the pleasure of attending an executive briefing on the “U.S. Macro and Regional Outlook” put on by top economists from Moody’s Analytics, Mark Zandi and Steve Cochrane. I am happy to report that they who peer into the future have an optimistic outlook about the American economy in the near term and see great signs of life across many U.S. regions. While Mr. Zandi freely admitted that he was on the “optimistic” end of the consensus about where we are headed, I thought he made a convincing case. Or, perhaps, I just wanted to believe. You decide.
The following is a brief recap of the major points at the macro and regional levels.

Macro Outlook

Here’s the upshot from Mr. Zandi’s discussion of macro trends: The economic recovery is struggling, but will remain intact, and job growth will begin to rapidly accelerate in 2014, causing unemployment to fall back below 6% by 2016. This will happen because:
  • The Euro Zone is not going to fall apart. By capitalizing the European Central Bank so heavily, they have basically gone all-in on the EU concept and debt mutualization. Greece may be forced out, but the EU will be more prudent with Italy and Spain.
  • The slowdown in emerging markets is temporary, and places like India and Brazil that have over-reacted with policy controls and austerity will loosen up and begin to re-accelerate by 2013. They still have the resources to keep going forward…and will do so quickly.
  • American businesses are looking incredibly competitive. We have cleaned up our balance sheets at every level. Prior to the Recession, we were mess. Now, our balance sheets look better than they have since World War II. Businesses and financial institutions are in much better shape.
  • Credit is moving again. Households have reduced their debt service levels and are improving their credit quality, and banks are well-capitalized and profitable. Thus…
  • Pent-up demand in the consumer and commercial realm will be released. Automobiles, houses, and commercial development (which appears to have bottomed out) are poised to get moving again.

However, threats to recovery certainly remain. Some of the most potent include:

  • Failure to react quickly if we go over the fiscal cliff. If we do go over yet fail to resolve it immediately through policymaking, we will have a serious recession. This, says Mr. Zandi, is the greatest threat to an optimistic outlook.
  • Businesses are incredibly nervous about the political climate. While job openings are back to almost pre-Recession levels, hiring is flat; businesses aren’t filling openings. If our policymaking institutions fail to provide a stable environment, business investment may slow further.
  • Another round of brinksmanship over the debt ceiling, which will need to be raised again in March. Businesses have already shown signs of nervousness over how this will be handled.
  • China’s growth rate might have permanently slowed. Productivity gains will be harder to come by going forward; until now, they have gotten them by shifting people from the rural inland to the industrial (and productive) coast. Now that they’ve emptied out the inland regions, they’ll have to make gains the hard way.
Regional Notes

If there were two headlines from Steve Cochrane’s discussion of regional trends, they would be 1) The West Is Taking the Lead in Recovery and 2) The Northeast is Being Left Behind. It seems odd to think of the West taking the lead when it has higher unemployment rates and California’s finances are such a mess. However, the West has been adding jobs faster than any other region in 2012 and residential construction permits have been rapidly climbing since mid-2011. Meanwhile, in the Northeast, manufacturing employment growth lags every other region and exports have actually declined over the last year.

Their overall picture for the South looks pretty bright. The over-supply of distressed homes on the market in Florida and Georgia has been massively reduced in 2012 and residential construction permits issued across the South since January 2009 are leading every region except the West. While unemployment remains stalled, the South leads all regions in the job hires rate, and Moody’s expects employment to accelerate rapidly across all major Southern metros in 2013. A strong export sector should continue to help – the South has enjoyed the greatest growth in exports since 2008.

The game-changing impact of shale drilling was also heavily emphasized. While recent income growth has been concentrated in energy centers (see North Dakota’s 30 percent increase since 2007), employment related to oil and gas support has boomed in markets all over country, including the South. According to Mr. Zandi, the vastness of the deposits and the inevitability of continued fracking provide the strongest case for the competitiveness of American manufacturing (and most everything else) in the near and long term.