May 5, 2009 City Council packet - Laserfiche WebLink

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Will people wash out of these places as fast as they washed in, leaving empty sprawl and all the ills that accompany it? Will these cities gradually attract more businesses and industries, allowing them to build more -diverse and more -resilient economies? Or will they subsist on tourism —which may be meager for quite some time —and on the Social Security checks of their retirees? No matter what, their character and atmosphere are likely to change radically. 1'iIE lAmr s of .SUBURBAN GROWTH Every phase or epoch of capitalism has its own distinct geography, or what economic geographers tali the "spatial fix" for the era. The physical character of the economy —the way land is used, the location of homes and businesses, the physical infrastructure that ties everything together —shapes consumption, production, and innovation. As the economy grows and evolves, so too must the landscape. To a surprising degree, the causes of this crash are geographic in nature, and they point out a whole system of economic organization and growth that has reached its limit. Positioning the economy to grow strongly in the coming decades will require not just fiscal stimulus or industrial reform; it will require a new kind of geography as well, a new spatial fix for the next chapter of American economic history-. Suburbanization was the spatial fix for the industrial age —the geographic expression of mass production and the early credit economy. Henry Ford's automobiles had been rolling off assembly lines since 1913, but "Fordism," the combination of mass production and mass consumption to create national prosperity, didn't emerge as a full-blown economic and social model until the r93os and the advent of Roosevelt's New Deal programs. Before the Great Depression, only a minority of Americans owned a home. But in the 1930s and'40s, government policies brought about Ionger-term mortgages, which lowered payments and enabled more people to buy a house. Fannie Mae was created to purchase those mortgages and lubricate the system. And of course the tax deduction on mortgage - interest payments (which had existed since 1913, when the federal income-tax system was created) privileged house purchases over other types of spending. Between 1940 and r96o, the homeownership rate rose from a4 percent to 62 percent. Demand for houses was symbiotic with demand for cars, and both were helped along by federal highway construction, among other infrastructure projects that subsidized a new suburban lifestyle and in turn fueled demand for all manner of household goods. More recently, innovations in finance like adjustable -rate mortgages and securitized subprime 14