Thursday, September 20, 2012

Feedback Loops

Earlier today I was reading the Atlantic Cities article on whether or not Millennials will stay in the cities they now call home, and through the comments, when I noticed:
What will happen when the baby boomers who are living in suburban mansions they've built over their lifetimes find that their home, which is their biggest if not only financial asset, doesn't have any appeal or demand to younger buyers who prefer city life? If they can't cash in on the value of their home because demand is down it means they can't access what they thought would have been their retirements savings... 
An unasked question? Perhaps, but in the answer we find the driver of a feedback loop: If (a) you can't access your retirement savings, (b) you can't retire, meaning (c) you have to stay in the workforce. Since the workforce isn't growing (in fact, it's shrinking) that means (e) you're taking a job away from a Millennial, which (f) deprives them of the opportunity to buy your home, thereby (g) preventing you from accessing your retirement savings (forcing you to keep working and so on)...

Feedback loops are compounding cyclical phenomena, and what I have just described is a compounding cyclical phenomenon--a feedback loop. Note that this feedback loop assumes the New Geography* status quo, that of continuing unhindered suburbanization (despite the considerable evidences to the contrary).

In the New Geography worldview, living choice is a function of affluence, and suburbanization a function of increasing wealth. But the ideal of increasing wealth assumes unlimited growth--a common tenet of economics, but one that is decreasingly justifiable. Even assuming economic stability (note: not stagnation, although there is no doubt we live in an economically stagnated era), we note that by the rather poor choice of storing your "savings" in your home** you have inadvertently triggered a feedback cycle whose ultimate effects are (a) a devaluing of your home and (b) a mismatch between your home's market and buyers' markets--because, in search of jobs, those who would ordinarily replace you have moved on: in this case, to the cities, because that's where the strongest economic engines are.

Multiply this thousands upon thousands of times and you go from a few people making bad choices to a macroeconomic trigger.

How stunningly naïve New Geography's worldview is! Their entire analytical framework is built on a single aberration in American history, a hopelessly linearized misunderstanding of the rise of American (autocentric) suburbia. To look deeper, which we must, we have to recall that from 1950 to 1990, American cities were locked in a negative feedback loop, one triggered long before their population peaks.

We must understand the Chicago School is a reasonably accurate understanding of prewar urban dynamics, and in all Chicago School models, immigration was the population dynamo. Can you imagine the effect of the Immigration Act of 1924, crowning glory of the nativists? Suddenly, cities stopped having a ready replacement supply for those leaving, as the immigration quota was (and continues to be) far too low for replacement. Worse, the quota failed to solve the problems it claimed to, and produced new ones--illegal immigration and visa fraud wouldn't exist if we didn't have a quota-based immigration system.

Of course, like all feedback loops, the effects wouldn't become apparent for decades. The Great Migration was initially able to hide the dynamo collapse, but it is no coincidence city populations plateaued 1920-1950; worse still, the Great Migration happened at the same time as the nadir of American race relations. Like all poorly-thought-out "solutions", this, unsurprisingly, increased the problems of the city.

The second major trigger of suburbanization was the automobile. Here was this absolutely amazing invention that could whisk you from skyscraper canyons to the Grand Canyon. And, once the opposition movement was quelled (thanks in no small part to astroturfing on a grand scale) it suddenly became--not only ubiquitous, but essential. Every new development after ca. 1930 had garage space--in the beginning, rear-loaded. But cars are the enemy of cities. Everywhere, they push things apart to their own scale, and their scale is gigantic, inhuman. At first, developers applied the living traditions to humanize their streets, their blocks--but to no avail. A pushing-apart is evident beginning in 1930s developments, culminating in exurbia. (There's a reason postwar suburbs are called autocentric.)

What happened is simple. After their fathers were defeated in the great car wars of the first third of this century, the Greatest Generation youth came to adulthood in a society re-forming around the car. And this wondrous new(ish) invention could do great things--but at a price. Worse, those people were all over the place in the places they grew up. What was a fellow of the Greatest Generation to do?

The Baby Boomers were not the first suburban generation--merely the first to grow up there. The Greatest Generation chose suburbia. They were the first "suburban" generation. And in that choice, they set in motion a feedback loop that would eviscerate cities.

In their wake, it wasn't just the middle class shriveling. The collapse of the immigration dynamo three decades previous reared its ugly head: there was no new middle class forming. Tax bases began to hollow out, while at the same time, as a greater percentage of residents remained in poverty, the need for services multiplied. The collapse of cities wasn't just a result of the formation of suburbia--it was as much a result of turning off the immigration spigot. It was the result of rampant social mores that wouldn't begin to change for two more decades. It was the result of an entire finance built around these mores...

And once those gears had begun to move, no matter how many well-intentioned people tried to stop them, they would not stop. The collapse of American cities that has been the defining urban reality for Boomers' lifetimes would further compound on itself by driving Boomers away, ever further away, and would drive their attitudes about the city, the way they viewed the thing.

The nadir of the American city occurred around 1990, and several factors led to the feedback loop stalling--most importantly, bringing the crime rate under control. The maturity of Gen Xers, who did not have the memories the Boomers did, also helped: it was under their purview that urban middle-class populations, particularly around downtowns, finally stabilized and, over time, began growing again. And this was both catalyzed by and further catalyzed the growing idea of downtown as destination: a place for nightlife, fine dining, and culturally important activities***. This middle-class stability, in turn, fuels the only long-term sustainable solution for dealing with what has today become the most pressing urban issue: schools.

It will be on the strength of how well Millennials deal with schools, how much they have the initiative to deal with them, and how much factors-at-large force them to deal with them, that the American city will be said to have stabilized--or will grow again, and explosively.

Schools are at the crux of the Millennial urban feedback loop.
* No, I will not link to that wretched hive stricto sensu.
** Or, more accurately, your land; the improvements are a constantly depreciating asset--like your car--while the proximity value of the land it's on increases slightly year-over-year; part of the inflation of the housing bubble was an overvaluing of suburban land (combined with a persistent undervaluing of city land).
*** It is also important to note that attempting to isolate elements within a feedback loop has the effect of short-circuiting the whole thing. Arts and entertainment districts fail because of this; "natural" arts and entertainment areas blossom and then are subsumed within the greater system. When they arise, they can be marketed, but they cannot be created out of whole cloth.

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