This is not a Gateway

 

 

 

 

 

 

I was in the Economist last week talking about the Thames Gateway. As New Labour’s flagship regeneration programme, the Gateway has not surprisingly been dropped by the Coalition. It hasn’t vanished completely though. Later this year, the Centre for London is publishing a collection of pieces on prospects for the area (for a flavour see this post and discussion). What we might call ‘Gateway Thinking’ also periodically reappears, for example in legacy planning for the Olympics, and in the proposed  Thames Estuary Airport.  And the place retains a strong hold over a certain kind of urbanist, especially in the dystopian excursioneering pioneered by Iain Sinclair and Laura Oldfield Ford.

I spent some time working on Gateway policy while in DCLG, and all of this got me looking back through old notes and papers. Some rough thoughts follow.

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First, the Gateway concept now feels madly ambitious – especially compared to today’s minimalist development environment. Remember that the 70km Gateway was one of four ‘growth areas’ set out in the 2003 Sustainable Communities Plan.  The Plan proposed around  550,000 new homes in these zones by 2016 (42,000 a year, when current annual housing starts for the whole country are now around 98,000), and envisaged ‘delivery’ of  430,000 additional jobs.

In practice, the other three growth areas – Milton Keynes, Ashford, and the ‘Peterborough-Stansted-Cambridge’ corridor – involve building in popular areas where developers are happy to operate. The Gateway was always going to be a much more challenging environment.

Second, there was (and is) a strong social argument for public investment along the Thames Estuary. Some communities along the river are deeply deprived , with residents held back by low incomes, low skills and thin local labour markets.  However, the economic case is rather weaker. It was never clear whether the Gateway programme was intended  as a response to economic pressures in the Greater South East (in particular, high house prices and low building), or a much bolder attempt to restructure the deeper regional economy. Neither was it clear why these communities merited public spending ahead of (say) those in Manchester, Liverpool or Leeds.

The Greater South East economic ‘system’ is heavily weighted towards the North and West of London, where there is a polycentric system of smaller cities (Milton Keynes, Oxford, Cambridge, Reading) around the capital. East of London, towns and cities tend to be smaller and local economies are heavily commuter-powered.

As the Economist notes, parts of London’s economy have been moving Eastwards for years. But the Gateway attempts to shift the entire urban system  towards the East – and to shift activity away from commuting towards self-contained communities. The evidence tells us that urban economies are highly path-dependent (e.g. here, here and here), and  that this kind of rebalancing takes decades if it happens at all. By contrast, the Gateway strategy promised 160,000 net new homes and 180,000 net new jobs over 15 years.

Third, this terraforming aspect is integral to the Gateway’s staying power. As a classic grand projet, the programme was highly appealing to a certain kind of politician (Michael Heseltine, John Prescott, Gordon Brown) and urban planner (Richard Rogers, Terry Farrell). Brown actually raised the jobs target to 225,000 in 2007, just as the credit crunch was kicking in.

Such visioning also gets in the way of getting things done. An obvious but important example: the Gateway isn’t a single zone, but a collection of very disparate communities. This matters. Treating the Gateway as a kind of continuous policy space made for convenient shorthand in speeches, but obscures the huge differences between key economic sites like Canary Wharf and Shellhaven, versus smaller towns like Thurrock, and struggling former resorts like Southend.  Arguably, it also made it harder to think about economic development, since policy had to be retrofitted into a high-level planning concept rather than based on local circumstances.

Fourth, Gateway delivery systems were pretty badly designed. Governance somehow managed to be both too top-down, as explained above, and not dirigiste enough at a local level. Notably, detailed policy development was generally left to Urban Development Corporations, who lacked a democratic mandate, had no statutory powers and held no assets. By contrast, New Town Development Corporations could set long term planning goals, and leverage a substantial public land portfolio. The trade-off was the lack of accountability, but land holdings eventually transferred to local authorities.

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None of this is to call time on the policy or the area. As I said earlier, the kind of deep structure change envisaged by Heseltine and others take decades to take shape. Developments like the London Gateway Port are potentially transformational, and London’s eastern boroughs will continue to evolve. By starting with economic fundamentals rather than grand planning, and placing help for individuals alongside physical regeneration,  a simpler, more effective approach might begin to emerge.

[apologies to TINAG for stealing the title.]

That’s not my name

Last week I was at LSE for a seminar on place and neighbourhood branding, ably organised by CityDiplo. Also on the panel were Suzi Hall (LSE Cities) and Ian Stephens (Saffron). It was a great evening, with a sharp and highly engaged audience.

I ran through some new work on the politics of naming in East London’s digital economy, and how the competing brands of Silicon Roundabout and Tech City are playing out on the ground (which I’m writing with Emma Vandore and Georgina Voss).

Suzi gave a great run-down of her work on ordinary streets and vernacular spaces in South London, and Ian delivered a nice overview of official branding strategies for Nine Elms.

The CityDiplo team have now put up a podcast of the session. Presentations should follow shortly.

Olympic Economics

Back in the spring – remember? – a lot of people were getting annoyed by the Olympics.

For Londoners, Dan Hancox wrote, “it’s as if someone else is throwing a party in our house, with a huge entry fee, and we’re all locked in the basement.” Roll forward to September and it feels as if a gigantic, city-wide, four-week bender has finally petered out. Everyone had a good time, and nobody fired any missiles.

As the weather turns, though, more sober assessments of the Games are appearing. The Centre for Cities has published a careful five-point legacy plan. And the Economist Intelligence Unit has put out Legacy 2012, a collection of essays on the summer’s economic and social repercussions.

You can download it here. I’ve got the lead piece, written pre-Games, which (post-Games) now seems a bit grumpy.

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Here are the headlines, and some reflections with the benefit of hindsight:

First, the direct economic benefits of 2012 to London are pretty small. This is the overwhelming message from the economic evidence, and the experience of past Games. Predictions of a hit to local retail and tourism also turned out to be correct.

Second, the major hard gain is the physical regeneration of the Olympic site. We can argue about whether winning the Games ‘created’ this, or just accelerated it. But some Londoners (homeowners, certainly) got more out of it than others.

It’s telling that the Centre for Cities suggests a ‘separate’ employment and skills strategy is needed for East London – so what positive effect did the Games have on local people’s employment chances?

Third, the indirect economic effects on the UK may be pretty big – as they have been for Korea, China and Spain. Hosting the Olympics is a massively powerful policy signal, and the Games are a platform from which to tell a story about the UK’s place in the world.

Work by Rose and Spiegel, published in the Economic Journal, suggests that on average, Olympic host countries get a whopping 20% trade boost. (Amazingly, even losing bidders pick up some positive trade effect.) The host city stands in for the nation at Games time, so that London effectively was the UK for foreign viewers. Boris clearly understood this before David Cameron.

More prescient than he knew, Tony Blair is fumbling for the political economy argument in this Vanity Fair interview (thanks to Will Davies for the spot):

For a country like Britain, it’s a great thing for us to have the Olympics here. We can afford to do the Olympics. We’re Britain. We’re not some Third World country.

For countries like Korea and China the story is ‘we’re arrived’. For Britain, perhaps – ‘we’ve still got it’?

So perhaps we’ve all been looking in the wrong place. If the message is the legacy, the biggest economic impacts of 2012 may be the long term boost to British soft power.

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The other takeaway  is that economists vastly under-estimated the intangible benefits from the Games. Pre-Games analysis suggested the ‘willingness to pay’ was dwarfed by the £9.3bn budget, but our medal hauls in both Games have clearly changed the calculus.

Perhaps we should have spotted this coming – Goldman Sachs suggest that host countries typically win 54% more medals than usual. That sporting success doesn’t come for free, as Will points out here. But Team GB’s glorious performances are likely worth several billions in – fleeting? – goodwill.

The book of SERC

I’m happy to say that LSE’s Spatial Economics Research Centre (where I’m a Research Fellow) has been asked to write a new book. From Urban Economics to Urban Policy will be published by Edward Elgar in 2013. Paul Cheshire, Henry Overman and I are the editors.

The book is essentially SERC’s Greatest Hits Part 1. We’re putting together a number of chapters based on the Centre’s first phase of research, under four broad themes: the nature and drivers of spatial disparities, labour markets, housing markets and planning, and policy / governance responses.

You can get a flavour by looking at some of SERC’s policy papers imprint. Many of these authors will also be contributing book chapters. But we’re also commissioning brand new material (some of which I’ve been working on today).

More news when we have it. Academic publishers don’t move at great speed …

Shrink to fit

My last post talked about the principles of dealing with shrinking cities. This one concentrates on the practice. In DC a few weeks back, I had an informal chat on shrinkage with some of the Brookings Metro team (helpfully organised by Dermot, whose writeup is here).

For me, there were four big points from the discussion:

First, US cities are mainly ‘shrunk’, not ‘shrinking’. With a more mobile population, and severe contraction in the 1980s and 2000s, people voted with their feet. In the UK the picture’s mixed: historical data suggests that Liverpool’s population has fallen by over 300,000 since the 1960s, while Stoke’s has only dropped by 25,000.

That means the challenges are different. In the US, the big issues are repairing the physical fabric for remaining residents, and pooling jurisdictions so local tax bases can cover cash for public services. In the UK, tasks include promoting individual mobility, raising human capital and doing physical repair.

Second, the US approach is bottom up, not top down. This is partly historical: people have bad memories of government Urban Renewal programmes in the 1960s, which had a disproportionate impact on African-American communities. It’s largely institutional – the US system gives cities strong local leaders, typically Mayors, who in cities like Youngstown (est pop 73,000) and Flint (113,000) have led the public conversation and put forward new strategies.

The Obama administration has dipped a toe in the water, talking about ‘auto regions’ like Detroit, and ‘cities in transition’, but none of this has yet translated into action. By contrast, UK efforts like HMR have been Whitehall-led initiatives, essentially aimed at ‘doing something about those inner cities’.

Third, US programmes are less radical, and more micro, than you might imagine. In practice, policymakers focus on struggling neighbourhoods, more than whole cities. Empty houses and land are bought up, and there is selective demolition and rebuilding. Often areas are simply returned to meadows, or turned into parks and bikeways. Rather than actually ‘shrinking the city’, the aim is to improve the city that’s left – making it nicer and greener.

In the UK, however, many  HMR pilots have tried to use housing market remodelling to stimulate area population and economic growth. Adding net housing when populations are shrinking does not feel wise.

Finally, finance differs. In the UK, Whitehall provides upfront funding to HMR, which leverages private sector borrowing – a funding model that’s now collapsed.  By contrast, US improvements are often funded via county-wide property taxes or fixes like TIF – as I’ve pointed out, tools that UK city leaders don’t yet have at their disposal.

Closer to home, Leipzig’s story is instructive too. The second-largest city in Eastern Germany, it lost 100,000 people after re-unification (20% of its current population). In 2000 an expert commission on the city was established, led by Leipzig’s Mayor. The resulting strategy involved some demolition and remodelling of inner urban housing, plus a range of quality of life measures (e.g. allowing artists to take over derelict properties).

Leipzig’s population is about the same size as Greater Manchester, so the city also developed its market potential, with a modernised train station and airport. Overall, it has stopped shrinkage: the population has stablised, and there has been slight employment growth (largely driven by high-tech manufacturing investment, such as a new BMW plant).

Lessons

So what are the lessons for the UK? First, cities – not Whitehall – need to be in control of policy and process, proposing ideas and getting local buy-in. Often, the pitch will need to be about a better, greener place to live – not ‘renewal’ or ‘shrinkage’.

Second, the policy mix should combine place elements (remodelling neighbourhoods) with people elements (improving skills, helping residential mobility). My post last year suggested ‘removing overcapacity in local housing; improving the local environment (which could include some US-style ‘greening’); levelling VAT rates on refurb and new build; developing local skills, access to employment and transport links to stronger labour markets; new funding tools; and some honest repositioning’.

That still feels about right. Although compared with Flint and Youngstown, big cities like Liverpool have far larger domestic markets, and thus potential for further jobs growth. Leipzig’s story suggests there’s a role for demand-side measures in bigger places: Liverpool’s recent economic and population growth confirms this.

The proposed Decentralisation Bill therefore looks quite promising. Big city Mayors and Local Economic Partnerships, more open local planning, and proposals to build local social action are all useful; uniform local incentives for housebuilding less so. More seriously, local leaders will still lack the financial tools to deliver the kind of programmes carried out in the US and in Europe. The forthcoming review of local government finance should look to broaden councils’ toolkit, and widen their tax-raising base.

One final point. CLG and bodies like the HCA have critical system designer and enabler functions, supporting and advising local leaders and communities – if not dictating to them. Whitehall will need to lead on promoting any ‘right to move’ in the social housing system; and will still be providing direct funds for skills and education. Despite the Secretary of State‘s emphasis on ‘localism, localism, localism’ ‘localisation, localisation and  localisation’ (thanks Grant!), I suspect central government will still end up with useful roles to play.

Geography and social justice

This is the first of two posts on ‘shrinking cities’, or as civil servants might put it, ‘places with a long history of economic underperformance’. In the UK, this means cities like Hull or Stoke-on-Trent with low average incomes and higher-than-average deprivation rates; abroad, places like Leipzig, Cleveland or Detroit.

The politics of improving life for people in under-performing places is extremely sensitive, as Policy Exchange discovered when they appeared to suggest moving people out of ‘failing’ Northern cities. Recently there’s been more interest, via LSE’s ‘Phoenix Cities’ book, Julien Temple’s ‘Requiem for Detroit?’ and from the Centre for Cities (see Dermot’s helpful summary, and my thoughts from last summer).

Why now? First, during the 2000s a lot of economic development funding went into cities. But this has not always improved residents’ overall welfare. As the business cycle turns, city leaders are looking for new ways forward. Second, there’s now less regeneration money around. Between 2011 and 2015, central government departments like CLG may face 20-25% spending cuts. So Whitehall policymakers are looking hard at if, where and how to spend.

At the recent AAG Conference in Washington DC, Michael Storper offered some helpful thoughts on all of this.

Spatial disparities exist, Storper argues, because there are benefits of clustering economic activity, and these persist over time. Agglomeration economies help explain why cities exist, and why they still matter. Theory and real world experience also suggest that long term convergence is unlikely.

So agglomeration leads to disparities between places. At the same time, increasing returns to skills lead to disparities between people. And because higher-skilled people tend to sort into more successful cities, we often get poorer people concentrated in poorer places.

The question for policymakers is what, if anything, we should do about this? Storper outlines three responses.

We could aim for ‘spatial equity’, compensating people and places who lose out. This feels appealing – but what does it really mean? Is holding successful places back fair to their residents? And how do we actually equalise outcomes? Even the UK’s very centralised public services haven’t got rid of postcode lotteries.

Another view is that we invest in poorer places. This is the traditional regeneration perspective. Structural economic change has long term impacts that markets won’t deal with – physical decay, poverty, crime. And there are efficiency costs to this – not least higher spending on benefits. Area-based policies tackle these externalities, get markets working again and places back on their feet.

This has been pretty much the UK approach for the past two decades. It’s given many cities a public makeover – and has made them nicer places to live. But most evidence suggests that improving places doesn’t easily translate into improving outcomes for people. Trickle-down regeneration works about as well as trickle-down economics.

People can move, and it’s hard to assess area-based initiatives if some recipients leave the area. ‘Regeneration thinking’ also doesn’t say how to balance limited resources between helping poor places recover, and helping growing places do better. CLG’s Regeneration Framework has a go, but isn’t completely convincing.

A third view comes from urban economics, especially Ed Glaeser (and now, Richard Florida). In its simplest form, this says we should focus on people, not places. People are mobile; investing in their mobility and human capital improves their economic prospects. Investing in immobile places does not, especially as convergence is unlikely.

To me, this feels like the right starting point for policy. This view is also increasingly fashionable in UK policy circles, and partly explains the bad press traditional regeneration has been getting. But as Storper points out, it’s more complicated than it looks to implement. There are three big policy points.  

First, it’s not clear everyone is truly ‘mobile’. People are free to move; but less skilled people have less information or resources to migrate between cities. Policy interventions might improve mobility, although we don’t have strong evidence here – increasing choice in the social housing system could help, also expanding housing supply in more successful places. Research and experiments should look to fill this gap.

Second, it implies we maximise economic welfare. But we know people think beyond money. Some local responses to Policy Exchange’s report reveal people happy to live in ‘failing’ Newcastle and Liverpool – because they like being there. At an LSE screening, critics of Julien Temple’s film similarly pointed out that nearly a million people still live in ‘failed’ Detroit.

Urban economists explain this in terms of spatial equilibrium. People sort by economic prospects, and prefer different kinds of communities. Low wages get traded off against low cost of living and/or better amenities. In spatial equilibrium local labour, housing and ‘quality of life’ markets all clear, so that real wages equalise across all places. Ongoing SERC research finds some UK evidence for this.

The spatial equilibrium approach implies we don’t need to worry so much about disparities in nominal income. But in some poorer places, especially given mobility barriers, we may want to adopt measures (better quality housing, tackling crime) which will improve residents’ wider wellbeing – and thus raise real incomes.

Finally, national politics and local delivery are both critical. The UK is generally less tolerant of inequality than the US. Our politics is steeped in notions of fair play and universal standards: we’re a long way from accepting apparently large income disparities on the basis of hard-to-explain equilibrium concepts.

British over-centralisation also makes it politically difficult to do anything about managing decline: London policy apparatchiks seem to be telling other cities what to do (which they are). This is one reason why the Housing Market Renewal programme has often been so painful, why Policy Exchange got in trouble, and why the Coalition’s emphasis on localism is important. In future, devolution and actually doing managed decline need to go hand in hand. I’ll explore these ideas further in the next post, and take a look at some international experiences along the way.

High Speed Two: what’s in it for cities?

Originally posted March 2010, updates Jan 2012 and Jan 2013.

It won’t be here for another 15 years, but HS2 has triggered a mass outbreak of trainspottery enthusiasm. The Guardian even live-blogged Andrew Adonis and Sadiq Khan’s announcements, for goodness’ sake.   The big issues last week were route, timing and cost – so I want to focus on impacts, particularly for cities. I’m not sure these will be all they’re cracked to be.

Dermot has helpfully summarised HS2 and the Conservatives’ plans, and R&R round up the reaction here. It’s all fairly positive (although the headline numbers don’t add up – £30bn over 20 years is £1.5bn per year, not the £2bn quoted by DfT). All the positivity explains why the Conservatives feel they need separate proposals – more on those later.

Let’s take environmental impacts first. HS2 is being pushed as green infrastructure. But as Henry points out, the CO2 impact of the line isn’t at all clear: it could take reduce emissions by -0.41m tonnes, or raise them by about the same amount. This is a pretty small fraction of total UK emissions, and doesn’t seem to significantly change the overall cost-benefit ratio. However, the lack of certainty is a worry – and dents the line’s green image.

There’s more detail on the economic impacts (summarised above). The bulk of the benefits accrue to individual travellers and firms via time savings, which feed into productivity gains at the national level. Time savings also help increase competition between firms.  Labour market impacts are much smaller – it’s unlikely HS2 will dramatically change commuting patterns, for example.

In theory transport improvements boost urban agglomeration – and thus productivity – by improving linkages between firms, and between firms and workers. By bringing agents closer together, we improve cities’ ‘effective density’. HS2 modelling suggests that for North-South high speed rail, these impacts are pretty small – £3.6bn over 60 years, just over 10% of the overall benefits of the line.

This is partly because HS2 doesn’t connect anywhere that’s not already on the rail network. By contrast, SERC’s research suggests that plugging new cities into high-speed infrastructure delivers a bigger charge to output.

So what does HS2 mean for cities? Urban firms and travellers are the big winners, which is good news for cities if more productive businesses raise wages or employment. Some cities get the kudos of being on the line, and may get a regeneration boost from new stations – although that could turn into a windfall gain for developers. But fairly few firms will relocate, and agglomeration impacts will be pretty small.

On this basis, HS2 isn’t likely to fundamentally change the UK’s economic geography. Rather, it will speed up the economic geography we already have.

Two final points. First, for Northern cities, the big agglomeration gains will come from speeding up links into urban cores, or bntter connections between nearby cities like Manchester and Leeds. This is the message of the Eddington Report, and it’s important it doesn’t get lost.

Second, the final shape of HS2 may look quite different. Last week’s report also did some preliminary modelling of high speed lines to Scotland – much closer to the Conservative proposals. While there’s a ‘good case’ for a high speed link to Manchester, the early numbers suggest a ‘particularly strong’ case for lines to Leeds and the East Coast of Scotland. That implies a cash-strapped future government might want to choose between two halves of the Y – a very tough political choice indeed.

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Update, Jan 2012: the Coalition has now given HS2 the green light. It’s also published some updated cost-benefit modelling. Three things stand out from this.

First, my analysis holds. The overall shape of benefits and costs is the same, although the recession and higher building costs have changed some of the numbers slightly. See page 10 for the new figures.

Second, the modelling almost perfectly explains the politics. Those who gain from HS2 (business, core cities, those in ‘the North’) are strongly in favour; those who lose (communities and homeowners along the line) are vehemently against. Local opponents of HS2 are hardly irrational – quite the opposite. This also suggests that rather than handing a windfall gain to business by pegging HS2 fares to conventional fares, HS2 tickets should be pricier – at least in first class.  That provides another way for taxpayers to recoup some of the initial outlay.

Third, the agglomeration benefits for Phase 2 (Manchester and Leeds) seem much larger than Phase 1 (London to Birmingham). Why? Rather than connecting two relatively distant cities, Phase 2 links a lot of nearby places (e.g. Sheffield/Meadowhall to Leeds in 20 mins), and provides indirect access to big cities not on the line (e.g. from Manchester to Liverpool). The fact of HS2 thus strengthens the case for complementary investments like the Northern Hub, which will bring Liverpool, Manchester, Sheffield and Leeds closer together.

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Update, Jan 2013: we now have the detailed route maps for the full Y network. Note that these are ‘preferred routes’ – a lot of other cities (e.g. Liverpool, Warrington) are now going to push hard to be included. And it’s still possible that the two legal challenges may change the network shape, as well as slow down implementation.

Charter Cities

To Prospect last Monday morning for a breakfast seminar with economists Paul Romer and Paul Collier. We were there to discuss Romer’s idea of ‘charter cities’: a new form of aid in which a poor country invites a rich country to set up a city-size development zone, which it runs according to rich-country rules.

This might sound slightly eccentric – what’s wrong with just giving money? But both Romer and charter cities are worth taking seriously. In the 1990s, Romer was one of the originators of endogenous growth theory, which is now the basic framework for thinking about how economies evolve. He’d spent the past week in Davos, pushing the charter cities idea around. And during breakfast Paul Collier, one of the best development economists in the world, also gave it a qualified thumbs up.

Romer’s basic idea is simple. Strong rules and institutions help economic growth; so do cities. The world is urbanising: but in the global south, most people are packed into chaotic cities, often in slum neighbourhoods, which lack good governance and basic infrastructure. So poor countries need to set up new, city-size special economic zones with robust rules and institutions. Charter cities would allow partner countries to come in and run these cities for the common good, in theory accelerating economic growth and providing the basic housing and infrstructure citizens in poor countries need.

Collier gave the idea cautious support, although he warned it was ‘three leaps in one’ – running against development orthodoxy, and not easy to implement. Most people will live in cities in the future. In the south, coastal megacities will thrive because they have both scale and physical access to the global economy. Equally, good governance is critical to long term growth. There is already an international market in rules: in African partner countries, China typically uses dispute resolution agreements that refer to English law.

Much of the discussion focused on politics, and the need to set rules and local buy-in. I made three more urban points. First, if successful charter cities are coastal (like Hong Kong or Shenzhen Special Economic Zone), what can landlocked countries do? Romer suggested that a third country could as a ‘host’ – which works in theory but makes implementation very complex.

Second, would extending existing cities be a better solution? We know that agglomeration economies are basically non-linear. So if we accelerate the growth of successful cities, we get bigger economic returns than growing new ones from scratch. Romer thought both options would work: Lagos is currently masterplanning a new city alongside the existing one, potentially doubling its population.

Third, how long would it take for new cities to grow? Brasilia was founded in the mid-Sixties and is still under-developed, with big tracts of empty space. There was some discussion about this: Paul Collier pointing to very rapid urbanisation in the UK and US during the late 19th century.

I left feeling at least partly convinced the charter cities idea could work. Chinese cities like Shenzhen or (in theory) Dongtan show what might be achieved within a single country with top-down (and non-democratic) government. However, in the rest of the world implementation is probably going to be a lot messier, and the results less clear cut. However, it’s probably worth a shot. As Haiti begins post-earthquake reconstruction, Dominican Republic (or French)-sponsored charter cities might be a useful tool in the box.

Read all about it

New book chapter alert …

During the 2006 Liverpool Biennial, light and sound artist Hans Peter Kuhn projected a gigantic question mark over the Wirral suburbs (above). Everybody hated it. But in fact it’s an (accidental) artistic masterstroke asking the big questions about suburbia. What is it? What is it for? And if there are problems in suburban areas – and parts of Wirral are pretty deprived – how can we fix them?

The Smith Institute, the  Homes and Communities Agency and CABE have just published a new collection of essays that aims to answer these questions. Housing and Growth in Suburbia is edited by Peter Hall and includes contributions by Nick Falk, Vesna Goldsworthy, Yolande Barnes, Will McKee, Sarah Ganventa, Jim Bennett and Ben Kochan, as well as yours truly.

My chapter, ‘Fixing Broken Suburbs’, looks at suburban deprivation and the prospects for renewal through the downturn and beyond. It’s worth reading this alongside Jim’s essay on ‘suburban renaissance’, which sets out some of the HCA’s early strategic thinking.

For the moment you can download the whole collection here.

Update: Tristram Hunt – who chaired the launch event last week – has done a nice piece on suburbia in today’s Observer.

Flat earth thinking

It’s intuitive that the architecture and layout of a city make a difference to our everyday lives: how easy it is to get about, and whether it feels like a nice place to live. In 1961 Jane Jacobs laid out the template for mixed-use neighbourhoods. We now know that well-designed buildings and public spaces contribute to wellbeing and social capital.

But what are the economic impacts of ‘quality of place’? Last week CABE and the RDAs organised a seminar to try and find out. The morning session had excellent presentations from my colleague Ben Rogers at CLG, Jim Bennett at the Homes and Communities Agency and Paul Hildreth from SURF. More on these in a moment.

Does ‘quality of place’ have anything to do with urban economic performance? Many superstar cities are bad places to live – like Hong Kong, LA or much of Silicon Valley. Equally, when cities like Liverpool and Manchester lost up to half their manufacturing jobs in the 1970s and 1980s, it’s unlikely that poor design values were to blame.

But these cities’ recovery in the 1990s was clearly helped by the remodelling of their city centres. This has attracted investors and new residents – although it’s been no substitute for good fundamentals. The ‘place offer’ is part of the story here – but how much?

The evidence tells us that human capital, innovation by firms, urban critical mass and economic diversity have the single biggest impacts on cities’ economic performance. And they are linked: cities make innovation easier, and have bigger, more diverse labour markets. The physical environment helps all this along (and lack of decent housing raises the local cost of living). But the evidence does not suggest it’s an active driver of growth.

‘Quality of place’-based regeneration also has winners and losers. Investing in design can help raise local house prices. This is good news for land and property owners – but not if you’re renting and get priced out, or if your home is demolished and replaced by somewhere more expensive. These are real risks in some Housing Market Renewal areas. Pathfinders are needing to deal with the problem by offering guaranteed homes, or cheap finance to buy a new one.

Fundamentally, I think the jury is still out on quality of place. Its importance often comes down to definition. CLG define quality of place as ‘built environment environment factors affecting life chances’. This involves only a small set of policy levers – design, planning, construction, space management.

By contrast, Paul defined quality of place as ‘what makes places work’ – ideas flow, infrastructure, big markets, skills, business-to-business links and so on. At a stretch, we could label this ‘quality of place’. But we now have an official definition that is much tighter.

Paul also highlights a bigger challenge, which is to get Government as a whole to improve its spatial awareness. Thomas Friedman was wrong: the world is spiky, not flat. Now that the Nobel Prize in Economics has gone to Paul Krugman, for his work explaining why place matters, it’s increasingly hard to pretend that it doesn’t.

But many Whitehall departments still take a flat earth view. There is little understanding of what makes different places work. Too many services are still delivered in silos, with little joining up. There is good evidence that investing in city-regions could help achieve national goals.  And more urgently, it is already clear that the recession is having very different effects in different areas. That underlines the need to junk flat-earth perspectives.