Tuesday, 27 September 2016

Regeneration and networks in the Arts District (Los Angeles). Rethinking governance models in the production of urbanity

Dr. Sébastien Darchen, University of Queensland, Australia

http://usj.sagepub.com/content/early/2016/09/22/0042098016669917.abstract

Cities are more and more analysed as being part of broader urban networks. But does the context of a network society – as defined by Manuel Castells – have an influence on local planning processes? The literature on networks is rapidly expanding; yet urban scholars know very little about the influence of this context on the micro-politics of planning. More research is needed on the ways urban stakeholders use specific networks to influence the evolution of a given urban area. Associated with this challenge of rethinking governance models, is the need to answer the following question: Who is in charge of the production of urbanity in the contemporary city? Conventional top-down planning has become difficult to achieve and interactive forms of governance supplement traditional government institutions and representative democracy (Sehested, 2009). This context broadens opportunities for new non-institutionalised social actors to play an active role in current planning processes.

This research studies the regeneration strategies of a group of non-institutionalised stakeholders in the Arts District in the downtown area of Los Angeles. In the absence of real engagement from institutionalised actors, this group of new entrepreneurs (e.g., Creative Spaces, Linear City, business owners) has developed an innovative regeneration process based on the adaptive re-use of industrial buildings. Adaptive re-use can be defined as “a process to ameliorate the financial, environmental and social performance of buildings...that changes a disused or ineffective item into a new item that can be used for a different purpose” (Bullen and Love, 2010: 215).

This process involves the creation of socially responsible new businesses and work spaces for artists (see picture below), as well as for companies from the creative sector. 

An abandoned industrial building transformed into an exhibition space for artists
Source: The author

The regeneration process relies very much on professional networks; the group of new entrepreneurs is active in enrolling actors outside the District in the regeneration process. They use their professional networks at the national scale to attract residents and businesses from the creative sector in the Arts District. This enables them to retain an element of creativity in the neighbourhood and to promote an innovative regeneration process based on the adaptive re-use of industrial buildings. The research highlights the use of social networks and “spaceless” interactions active in the production of contemporary urbanity. Furthermore, this research encourages urban scholars to look beyond endogenous interactions to consider the external networks that contribute to the transformation of a given urban area.

References

Bullen PA and Love PD (2010) The rhetoric of adaptive reuse or reality of demolition: views from the field. Cities 27: 215-224.

Castells M (2009) Communication Power. Oxford: Oxford University Press.

Sehested K (2009) Urban Planners as Network Managers and Metagovernors. Planning Theory and Practice 10(2): 245-263.

The local distribution of endowments matters: Modelling tax competition with heterogeneous local residents



Dae Jin Kim - University of Seoul, Korea
In Kwon Park - University of Seoul, Korea


http://usj.sagepub.com/content/early/2016/09/08/0042098016665941.abstract


The Korean central government introduced a property tax hike in 2004 as a redistributive policy, bringing as high as a 200% increase in the property tax. This action brought about dynamic interactions between the central and local governments and between local governments, particularly in Seoul Metropolitan Area (SMA). We found that in these interactions the SMA residents were very sensitive to the tax policy of the progressive central government, and acted as home-voters as Fischel (2001) argued. The owners of highly valued home especially opposed the policy and supported the property tax cuts by their local governments, because the residential estate asset was the most valuable one of only a few assets they owned. Local governments competitively responded to their constituents in the form of property tax cuts for the pre-electoral competition (Downs, 1957).


What attracts our attention in this occasion is that the local distribution of home values matters in the race of tax cuts. Home owners’ movements against the property tax hike were observed more frequently in the communities with relatively left skewed distributions of home values. Since the proportion of relatively upscale homes is larger in those communities than in others, more home owners there prefer a low property tax rate. The existing literature on tax competition, however, does not take into account the distribution of resource endowments, but assumes that local residents are homogeneous in endowments. Given this gap between the reality and the literature, we approach the tax competition of the SMA with the viewpoint of public choice, constructing a model with heterogeneous individuals in resource endowments. 


This study bases inter-local tax competition on local governments’ behaviours of maximising the utilities of tax payers with different economic conditions. The difference in labour and capital endowments of individuals brings the pre-electoral competition about the property tax rate or political actions by home owners, which in turn affects the tax competition. The median voter theory suggests that the local government in this case responds to the median voter’s preference to gain a majority of constituents’ supports as the median represents the majority. Our theoretical model incorporates this theory into the tax competition framework, and predicts that the local distribution of resource endowments affects not only a municipality’s decision on the tax rate but also the sensitivity to its neighbours’ tax cut. We employed the spatial panel analysis to test the theoretical model. A panel dataset for the SMA municipalities in 2004-2006 are used for the empirical analysis. The empirical analysis verifies the two main expectations as follows.


First, the results of spatial econometric analyses consistently indicate a positive interdependence of the property tax rates among municipalities. This implies that positive-sum tax competition in the SMA occurs: holding all other things constant, if one local government cuts the tax rate, others also cut the tax rate strategically. Also, this reaction pattern is stronger as local jurisdictions are closer to each other. These results confirm that the Tiebout’s (1956) tax competition theory is valid for analysing the strategic tax interaction among local governments. It is meaningful in that despite abundance of discussion on this topic, there are not many empirical studies supporting the theory with rigorous methods as in this study (Brueckner and Saavedra, 2001).


Second, the local distribution of resource endowments, as measured by skewness of home value, affects the property tax rate and the spatial dependence of tax rates respectively. In a municipality where a majority of constituents are relatively highly endowed, the local government is more likely to adopt a lower tax rate (choosing a higher tax cut) to gain the majority’s supports. As high-priced home owners, they prefer a low property tax rate, making the local government cut the tax rate in response. This confirms the theoretical prediction of the previous studies of pre-electoral competition (Downs, 1957; Persson and Tabellini, 2000; Borck, 2003). The municipality is also more sensitive to its neighbouring municipalities in the race of tax cut. Because the majority of its constituents watching tax cut dominoes of the metropolitan area push the local government to cut its tax rate, it is more likely to participate in the tax cut race. These findings support that the pre-electoral competition of the property tax has an impact on the spatial dependence of tax rate choices by local governments as well as the local government’s internal decision making on the tax rate. 


In sum, this study theoretically elaborates that the local distribution of resource endowments affects both the level of tax rate and the degree of sensitivity in tax competition, and empirically confirms the theory using a panel dataset for the SMA municipalities. The novelty lies in the fact that we incorporated the heterogeneity of individuals’ resource endowments into the tax competition framework both in the theoretical and empirical models. The results also underpin the median voter theory which has been rarely tested with reliable statistical methods despite its reputation as the most widely known theory of public choice.


References

Borck R (2003) Tax competition and the choice of tax structure in a majority voting model. Journal of Urban Economics 54:173–180.

Brueckner JK and Saavedra LA (2001) Do local governments engage in strategic property-tax competition? NationalTax Journal 54(3): 231-253.

Downs A (1957) An economic theory of political action in a democracy. The Journal of Political Economy 65(2): 135-150.

Fischel WA (2001) The Homevoter Hypothesis: How Home Values Influence Local Government Taxation, School Finance, and Land-Use Policies. Cambridge, MA: Harvard University Press

Persson T and Tabellini G (2000) Political Economics: Explaining Economic Policy. Cambridge, MA: MIT Press.

Tiebout C (1956) A pure theory of local expenditures. The Journal of Political Economy 64(5):416-24.

A hyperbolic paraboloid interpretation of residential relocations in U.S. metropolitan regions

Hossein Estiri, Harvard Medical School, USA

http://usj.sagepub.com/content/early/2016/09/14/0042098016668783.abstract


Hyperbolic paraboloids (Figure 1) have always been the most fascinating geometric forms to me. They are simply quadratic surfaces from cross-section of a hyperboloid and a paraboloid. Not so simple? They are often called “saddles” and have been widely used in architecture – Sagrada Família nave roof by Antoni Gaudí, a well-known Spanish Catalan architect, is an illustrious example of the use of hyperbolic paraboloid forms in architecture.



Figure 1: A hyperbolic paraboloid from two different angles


Have you seen a demographic theory described with a hyperbolic paraboloid? That’s what we did in this article (Figure 2)! The Cohort Location Model (CLM) is a simple approximation of how we distribute across metropolitan areas (in the U.S., at least), based on age of the household head.

Figure 2. The Cohort Location Model – for more details read the article in Urban Studies

For years, demographers have tried to explain why we live where we live – from now on let’s abbreviate the phrase to: [WWL]2. We tried to simplify [WWL]2 by combining 2 assumptions about our housing consumption and land use patterns. First, we assumed that as we become older, our expectations from (or needs for) where we live increases – e.g., we need more home space, more neighborhood amenities, etc.). There is, by the way, scientific evidence for this assumption. For example, Jake, an imaginary college student in his early 20s, can live in a shared 4-bedroom unit that was built in the 60s and is not conveniently located with respect to healthy grocery stores. Many of us have lived like Jake. It is fun, for Jake and his cohorts though.

But 10 years later, when Jake is out of school, has a spouse, and has just welcomed a new addition to his family (a kid), things change. Now he needs more space, and access to a lot of neighborhood services, all of a sudden matter to him. We found that age of 35 is about that time. Now this about 35-year-old former college student is seeking to relocate – probably to his first owned home in a decent neighborhood for his growing family.

The CLM says that the 35-year-old Jake most likely will end up going to the suburbs. This residential relocation pattern, according to our assumption number 2, is partially due to the land use patterns in the U.S. (i.e., the widespread suburbanization).

Those nice neighborhoods close to the city center(s) are way above Jake’s budget. This is probably the story of many young adults in the American metropolis these days. Our model follows Jake each 10 years until he is above 84. We think at some point Jake will either come back closer to the city center(s) – either will be able to afford to live in one of those nice central city neighborhoods or reduce his expectations to live closer to some important services – or will decide to go further out to get more natural amenities.

The pattern CLM presents will probably be different in other countries. But, I bet it will still be a hyperbolic paraboloid, if you do a linear approximation. We have made this research reproducible. Plug in your data into our code on GitHub (https://github.com/hestiri/hhLocation) and let’s see what kind of hyperbolic paraboloid you will get.