Category Archives: economics

Wayfinding And Preservation In A Small Town

Over the weekend I visited Price for work. While I was there saw some interesting examples of urban development in a small town.

Perhaps most notably, Price has some wayfinding in its downtown:

A map of downtown Price, in downtown Price.

A map of downtown Price, in downtown Price.

This map isn’t fancy or professionally sourced, but it’s better than what many cities have — including currently Provo, for some reason.

This isn’t to say Price is a walkability or tourist paradise. In reality, I saw almost no one walking around while I was there. But it’s nice to see the city make the effort, and this map really was all I needed to orient myself. In the end something is always better than nothing.

Another thing that stood out from Price was this ornate building:

A building in downtown Price.

A building in downtown Price.

This building is fancier and more interesting than most, maybe even all, of Provo’s comparable historic structures. It needs some new paint in a few places (ironically) but the faces in particular are quite impressive.

From this I glean two lessons: first, that small towns sometimes have the most impressive old buildings and, second, that growing towns experiencing relative prosperity (e.g. Provo) are often the ones that lose their historic buildings.

As I’ve written many times before, European tourist towns are a good example of this phenomenon; the old medieval villages we all love to visit today stayed the same for centuries because they experienced hundreds of years of decline, even poverty. During that time there was low demand for land and new development, so the old buildings remained untouched. On the other hand, a place like Manhattan — which was filled with smaller but still substantial historic structures before Provo even existed — prospered and eventually replaced most of it’s little buildings from 18th and early 19th century.

Comparing Price and Provo offers a similar, if accelerated and smaller example. In terms of infrastructure and architecture, Price’s downtown is very similar to Provo’s but more complete and unified. Despite it’s considerably small size, it has nearly as many old buildings and fewer appear to have been torn down. There are no big, ugly newer buildings in the mix, as there are in Provo.

But Price is smaller and not experiencing the kind of growth Provo gets. Hence, the better preserved downtown.

There are ways make sure historic preservation and growth don’t become mutually exclusive, but in the end greater prosperity almost always means changes to the built environment.


Filed under Downtown, economics, travel, utah

How To Buy A Home That Grows in Value

Continuing the transit theme from the past few days, here’s one way to ensure your house increases in value: make sure it’s located near a transit station.

That’s according to a study commissioned by the American Public Transportation Association. The study argues that people are willing to pay more for housing located near public transit:

Moving beyond the traditional arguments that good schools and neighborhood amenities impact hous- ing prices, emerging research has indicated that urban form and transportation options have played a key role in the ability of residential properties to maintain their value since the onset of the recession.

Studies have shown that consumers are willing to pay more for housing located in areas that exemplify new urbanist principles or are “traditional neighborhood developments.” These neighborhoods are walkable, higher density, and have a mix of uses as well as access to jobs and amenities such as transit.

I’m an example of this.

People, including me, are willing to pay more for housing located near transit.

People, including me, are willing to pay more for housing located near transit.

As I mentioned earlier this week, I just moved to Salt Lake to be closer to my job. I chose the location of my new home based on proximity to my office, but equally important was proximity to Frontrunner. We pay considerably more per square foot for housing in Salt Lake than we did in Provo and we’re willing to do that because it’s located three blocks from the Frontrunner station and one block from a TRAX stop.

The study goes on to mention that housing near transit was more resilient during the recession. (I haven’t finished reading the study yet but if I didn’t blog it now, I’d never get around to it. I’ll finish it Friday after work.)

On the other end of the spectrum, Grist reported earlier this year that there are 40 million McMansions that no one wants because they’re not located in walkable, transit-oriented neighborhoods:

Only 43 percent of Americans prefer big suburban homes, says Chris Nelson, head of the Metropolitan Research Center at the University of Utah. That mean demand for “large-lot” homes is currently 40 million short of the available stock — and not only that, but the U.S. is short 10 million attached homes and 30 million small homes, which are what people really want.

Taken together, then, it’s pretty clear what kinds of housing will retain and increase in value: transit oriented ones. That should be helpful for people with a home purchase somewhere in their future; they just need to check potential sites’ proximity to public transit.

Homes without access to public transit don't retain value well. In some cases no one even wants them.

Homes without access to public transit don’t retain value well. In some cases no one even wants them.

For those already in a home, being along the Wasatch Front, and particularly in Provo, happens to be a good place because we have an expanding transit system and a growing population. However, it’s important to keep in mind that supporting transit — as well as transit-promoting development like density, mixed uses, low or no parking, etc. — is also a reliable way to improve home values.

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Filed under commuting, Development, economics

Cars Are Parking Machines, Not Mobility Machines

Over the past few days several different friends have shared with me a post about how cars are parked 95 percent of the time. So, I guess I better get blogging on this topic!

Parked cars in Provo. Note how what should be a sidewalk here is actually a parking lot. So this spot is particularly awful.

Parked cars in Provo. Note how what should be a sidewalk here is actually a parking lot. So this spot is particularly awful.

The post offers three different methods for testing how much of the time cars are parked. They’re all pretty easy to do, and the author ulimately concludes that Donald Shoup — author of The High Cost of Free Parking, among other things — is correct when he argues that cars are parked most of the time.

So, yeah, that’s basically a waste of resources.

But what I really like is where the author goes from there:

One reason to talk about this is to highlight the importance of parking. It is what cars do the vast majority of the time.

It highlights a crucial inefficiency of mass private car ownership. It points towards huge parking space savings (an enormous land bank) that shifts away from mass car ownership might open up, if only we could massively improve the alternatives including making car-sharing and other ‘metered access to shared cars’ (MASC) more of a mass market phenomenon. – See more at:

In other words, it would be much more efficient, almost mind-bogglingly so, if we only had the number of cars in a city that were needed at any given moment.

So, I might need a car for 30 minutes at 9 am and you might need one for an hour at noon. Right now, we both probably have our own cars, but it would really make more sense for us to have just one car between us. On both individual and city-wide scales this would translate into huge savings, greater efficiency, and generally prettier spaces.

Parked cars on Center Street.

Parked cars on Center Street.

Its also worth mentioning that if cars are parked nearly all the time they’re not really “mobility” machines so much as they are space-wasting devices. In other words, though we think about cars as a means of transportation, that’s almost incidental when compared to their “primary” role, which is sitting around. There are a lot of implications to this reasoning, but if nothing else presenting and discussing the situation more honestly would probably help us tackle problems like too much parking and too many cars.

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Filed under driving, economics

Cities Should Oppose The Prison Relocation

Lawmakers are currently considering a proposal to begin moving the Utah State Prison, which sits prominently on the west side of I15 in Draper. The idea is that the prison occupies valuable space along the Wasatch Front that would be better used for new development. More specifically, some people want to create a tech hub in Draper.

Everyone would benefit from more high tech companies in region, but suggesting that the prison needs to move to bring them in is a fallacious argument. Indeed, it would be vastly better to encourage tech companies to locate inside existing development. As a result, cities like Salt Lake and Provo should be doing everything they can to make sure new jobs aren’t lost to future sprawl. That means opposing the prison relocation.

The arrow points to the approximate location of the Utah State Prison. Lawmakers want to move the prison to make room for tech development, but it makes more sense to create tech hubs in existing urban centers.

The arrow points to the approximate location of the Utah State Prison. Lawmakers want to move the prison to make room for tech development, but it makes more sense to create tech hubs in existing urban centers.

Relocating the prison creates a variety of shorter-term problems. For one, it means more new development even as most cities along the Wasatch Front already have very low densities and plenty of room for more infill. In other words, there is absolutely no need for more massive new subdivisions.

Moving the prison also creates more distant development that requires more driving; Draper isn’t proximate to anything, so new development will require long trips to get anywhere. Historically, Draper has also been filled with car-oriented development, meaning residents have to drive short distances for everyday errands as well. It’s a lose-lose situation, and is particularly baffling at a time when we’re trying to clean up our worst-in-the-nation air.

But city governments should particularly oppose the prison relocation because it effectively stacks the decks against their efforts to win talent and jobs. Why would a tech company move to Provo or Salt Lake, for example, when they can get cheap land from the government in the middle of nowhere?

In other words, moving the prison is a government subsidy for sprawl. It would involve spending hundreds of millions of dollars to just make it less appealing to develop a tech hub in an urban center.

Relatedly, last year I contrasted the new campuses of Amazon and Apple. Basically, Apple is building a huge new building out in the suburbs, while Amazon is investing in the urban core of Seattle.

Lawmakers who want to move the prison are effectively trying to create Apple-style development, even though analysts have said the Amazon version is actually the one that is benefiting its surroundings the most.

Ultimately, there’s no reason cities like Salt Lake and Provo couldn’t, or shouldn’t, create internal tech hubs. Moving the prison, however, makes that harder because it uses government money to pick winners and losers.


Filed under Development, economics

Density May Have Saved Saturday Postal Delivery

Everyone knows why the United States Post Office has floundered: the internet. It’s an excuse that has been dragged through the media so often in recent years that it seems irrefutable. And certainly it’s true to a large extent.

The post office in downtown Provo.

The post office in downtown Provo.

But this week’s announcement that USPS was cutting Saturday delivery is illuminative because it shows that the organization can’t meet its physical obligations. To save money, it’s trying to cut the amount it spends on fuel, labor and physical infrastructure. USPS was spread too thin.

Or in other words, low density sprawl is killing the post office.

The problem is that USPS charges the same rates to deliver to a low density Arizona suburb as it charges to deliver to a high density Manhattan neighborhood. However, the cost to deliver to these locations is vastly different; in Manhattan the time and fuel spent per delivery is low because one carrier can make one trip and turn over a lot of parcels.

In Arizona, however, a mail carrier spends considerably more time and fuel going from house to house. Over large distances, these costs add up. Not coincidentally, USPS is now hoping to save money by reducing the amount of time and fuel it spends making deliveries.

Or said another way, density clusters destinations together, reducing the expense of getting to them. It’s also worth mentioning that the USPS business model was developed before our modern, wildly inefficient form of sprawl — or Suburban Hell — existed.

Here’s a clip (that only sort of illustrates these ideas but is funny anyway):

A recent post from Slate touched on this idea while arguing that the problem is the USPS’s legal monopoly:

Private carriers charge substantially more to deliver parcels to rural locations. According to the UPS website, the lowest rate to deliver a four-pound package from New York City to White Owl, S.D., is $20.51. The Postal Service, which is under pressure from the federal government to provide affordable service to remote locations, charges just $12.07 to deliver the same box.

Though the author calls for USPS to respond to the market with greater agility, the solution it suggests — and which is already working for other carriers — is essentially density-based pricing. Send a carrier to a lower density place where productivity falls, and you’ll have to pay more.

Distance as a factor in pricing is an intuitive idea and it works in basically every other industry. Flying from Salt Lake City to Singapore, for example, is more expensive than flying from Salt Lake to Denver. A papaya, which probably comes from overseas, usually costs more than an apple, which may have been grown domestically.

Sometimes other factors change these dynamics — an economy of scale and other things allow H&M to sell cheaper clothes than most local designers — but generally shipping an item further makes it more expensive. And it always raises the prices. (An H&M shirt purchased directly from the H&M factory would be very cheap indeed.)

Sprawl increases shipping distances. And when you’re delivering to every single house in the U.S. every single day, those distances add up quickly. USPS failed to respond.

In other words, USPS charges high or medium density prices even for deliveries to low density areas. If USPS were profitable, it would mean that high density customers were subsidizing low density customers. But in reality no one is subsidizing low density customers, hence the lack of profitability.

In this regard, USPS is a victim of inefficient development patterns; it couldn’t solve its problems by forcing America to stop building sprawl.

But the situation vividly illustrates how sprawl erodes quality of life and the amenities we may previously have taken for granted. We’re overextended and if we don’t change the end of Saturday mail will be the least of our problems. Hopefully, the USPS announcement serves as the canary in the coal mine that prepares us for more sprawl-induced social cutbacks.

Delivering mail to these homes is relatively expensive compared to the cost of delivering to the (still not very high density) apartments in the next picture.

These five addresses cost USPS less than five address in sprawling neighborhoods.

A postal carrier can reach all five of these residences in the same time it takes to reach one or two of the homes in the picture above.

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Filed under driving, economics

Maps and Income: More on Why Provo Feels Less Vibrant

I recently discovered an incredible website that shows you the income levels of different neighborhoods. Called “Rich Blocks, Poor Blocks,” the website uses a heat map overlaid on a Google map and in this case visually represents the income disparity issues I mentioned in this post — i.e. Provo is poorer than the cities to which it is most often compared.

Here’s what Provo looks like:

The city is red because it's on the lowest end of the spectrum.

The city is red because it’s on the lowest end of the spectrum.

Hopefully this image helps disabuse people of the idea that Provo’s low income stats are the result of students or other unique factors. As the map shows, lower-than-average incomes are common throughout the city.

By way of comparison, here’s Boulder, Colorado:

Boulder, Colorado.

Boulder, Colorado.

Boulder clearly has it’s own area with a high concentration of lower income earners, but its map also includes bigger swaths of more colors. Tellingly, the peripheries are darker, indicating higher incomes. As I argued throughout the series on income and poverty, this is one the biggest differences between Provo and Boulder and is a major reason why the Colorado city may seem more vibrant.

And just for fun, here’s Orem:

Orem, Utah.

Orem, Utah.

Obviously the physical makeup of these cities influences income distribution; Orem is more uniformly filled with single family homes so there are fewer places for low income people to live there. And long term Provo’s more diverse housing and demographics will surely be an asset.

But based on this map Orem has a lot going for it; there’s simply more money there.

No one map or statistic (or blog post) paints a full picture of how income shapes a city’s physical and economic environment. But as I’ve argued before, it will be difficult or nearly impossible for Provo to feel more like Boulder or Ann Arbor when it’s poorer.


Filed under Development, economics

Buy Low Closes, Surprises No One

Buy Low, a grocery store near Movies 8, is closing, according to an article by my former colleague Genelle Pugmire. Honestly I was surprised to hear it hadn’t closed already.

The article states that the store never had the support it needed.

“There was not enough business to support the store,” Afsari said. Buy Low managers also had complained about losing business by not being open on Sunday when other grocery stores in the area were open seven days a week.

“It was also kind of hard to support it in Utah,” Afsari added. The Provo Buy Low was the only one in Utah. The Buy Low chain has 25 stores in Southern California and Nevada.

What’s odd is that the owners attribute the difficulties to the store’s hours of operation when really it was in just about the worst spot imaginable for a grocery store, or for anything at all:

The Buy Low grocery store was surrounded by a massive parking lot.

The Buy Low grocery store was surrounded by a massive parking lot.

Even by conventional suburban standards this isn’t a good location for a grocery store. It’s not located near any residences and, more importantly, it’s not visible from the street:

Incredibly, Google Street view is actually available inside the Buy Low parking lot. This is the view from the most distant parking spaces.

Incredibly, Google Street view is actually available inside the Buy Low parking lot. This is the view from the most distant parking spaces.

And this is the view from the street, where the potential customers are passing.

And this is the view from the street, where the potential customers are passing.

By more human-oriented standards this location is even worse, with its massive — and massively underused — parking lot that feels less like a sea than a desert of pavement. It’s ugly, uncalled for, and clearly a bad spot. The fact that Buy Low corporate honchos chose it suggests that they probably just looked at demographic information and never really understood the situation on the street.

I occasionally visited this store and its predecessors while waiting for movies to start. Tellingly, it felt like a very long walk from the theater — just out of view in the top left of the first picture — to the Buy Low. In other words, it wasn’t even easy to walk from one side of the parking lot to the other; the environment is so antagonistic it’s no surprise people generally don’t go there.

As Genelle’s article points out, this situation has doomed several other businesses:

Buy Low, located at 2250 N. University Parkway, is one of a number of grocery stores that have gone in and out of business over the past decade at the location, including Food 4 Less and Reams.

After three failed grocery stores it seems like it’s time to address the structural problems with this location rather than throwing money at it and futilely hoping it’ll work. Or at least, that’s what I’d do if I owned this spot and wanted to attract a tenant. Ultimately landlocked Provo can’t afford to have these huge, wasted spaces that underperform at best and more often drive businesses to ruin.

But in any case, this is a perfect example of poor design costing business owners, property owners and the city money. Or said another way, building or allowing these types of environments impoverishes a city.

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Filed under Development, economics, parking

Growing Startups, Spanish Style

Back when Mayor Curtis was on TV to talk about Provo’s top Forbes ranking for business, he emphasized Provo’s entrepreneurial culture. At least to me, it seemed like the host was trying to find out why existing businesses should move to Provo and Mayor Curtis was telling her that actually it’s all about generating new companies.

In any case, the fact is that Provo’s recent success is due at least in part to new companies starting up in the city. It also seems reasonable to say that the nearby universities play a vital role in creating a startup-friendly environment.

So are there things Provo, as a city, could do to create an even greater business environment? Could the city generate even more jobs, more growth, and more innovation?

Spain appears to think that governments can do all of those things, as evidenced by a new program designed to incubate new businesses. As reported by NPR, the Spanish government is offering new startups free rent, tutorials and networking events in an effort to bolster a lagging economy.

Want more startups in a city? Trying giving them free rent. That should be especially easy in Provo because there are many vacant spaces like this one.

And the effort apparently is working:

On average, half of Spanish start-ups never make it. But those who get this public help have a 95 percent chance of surviving five years. So amid budget cuts, this kind of public investment makes sense, says economist Gonzalo Garland, at Madrid’s IE Business School.

Spain is obviously doing this in response to a massive recession, and it has a much larger economy than Provo. But the lesson still applies and there’s no reason this type of program couldn’t be adapted for municipalities looking to make themselves hubs of innovation and economic development. And in Spain at least, the culture evidently is flourishing:

De La Espada and his friends are amateur musicians from Panama and Argentina but decided to start their company in Spain, partly because of this fledgling startup culture.

That’s exactly what needs to happen in Provo: offer incentives to lure innovators who might otherwise choose another city. Those incentives could benefit locals, college students, or anyone else, but the point is that they’d generate economic growth that would enrich everyone.

As it turns out, this is more or less the idea that I previously argued would have been superior to City Creek. My feeling was that rather than build a $2 billion dollar mall — which exports the vast majority of it’s economic impact to out-of-state corporate headquarters — a city would be wiser to take that money and seed thousands of startups. Within a matter of years, the investment would pay off and generate new retail opportunities at a more organic pace.

Spain shows that this idea basically works. Though the retail part of the equation is still down the road, the Spanish program shows that governments can invest money in startups, help those startups succeed, and reap the rewards. There are few things that Provo would be better off investing in.

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Filed under Development, economics

What Will We Do With Our Dying Malls?

City Creek in Salt Lake City.

City Creek in Salt Lake City.

The holiday shopping season is just wrapping up and that means a lot of people headed to the mall. But as is no surprise, fewer and fewer people are actually visiting America’s malls.

I’ve written before about malls, but The Atlantic Cities recently provided a useful, if gloomy, article about the future of brick and mortar retailers generally and malls in particular. The article basically states what everyone already knows: that people are shopping more and more online and less and less at malls. In other words, demand for mall space is evaporating and it won’t come back.

These mall and shopping center stalwarts are closing stores by the thousands, and there are few large physical chains opening stores to take their place. Yet the quantity of commercial real estate targeting retail continues to grow, albeit slowly. Rapidly declining demand for real estate amid growing supply is a recipe for financial disaster.

That pretty much describes the situation in Utah, where there are too many malls and high vacancy rates at older centers. And bafflingly, Utah is adding new malls all the time, with the Outlets in Lehi opening this year on the heels of City Creek in Salt Lake City. It boggles the mind. It’s especially odd that certain media outlets are basically running free PR for these places even as shopping centers down the street crumble and fail.

The Gateway Mall in Salt Lake City. When the City Creek mall opened down the street in 2012, the Gateway lost a bunch of major tenants.

The Gateway Mall in Salt Lake City. When the City Creek mall opened down the street in 2012, the Gateway lost a bunch of major tenants.

The Atlantic Cities article provides a more detailed analysis, stating among other things that 10 percent or more of the 1,000 largest malls in the U.S. will likely fail in the next decade. Many will be demolished. Others will be repurposed. It’s a bleak situation:

These malls are becoming ghost towns. They are not viable now and will only get less so as online continues to steal retail sales from brick-and-mortar stores. Continued bankruptcies among historic mall anchors will increase the pressure on these marginal malls, as will store closures from retailers working to optimize their business. Hundreds of malls will soon need to be repurposed or demolished. Strong malls will stay strong for a while, as retailers are willing to pay for traffic and customers from failed malls seek offline alternatives, but even they stand in the path of the shift of retail spending from offline to online.

Utah’s population growth will help stem the tide for a while. And a mall like City Creek could survive for a very long time because it’s propped up by the LDS Church and doesn’t actually have to make any money.

Provo's Towne Center Mall. This malls days are numbered, and that number is not very big.

Provo’s Towne Center Mall. This mall’s days are numbered, and that number is not very big.

But in the end the data — not to mention many people’s intuition — clearly indicates that malls are not going to be epicenters of vitality and prosperity in communities of the future. The cities that succeed will be the ones that figure out what to do with their malls so the transition to something different is smooth.

The mall-ish Riverwoods in Provo. The managers of this development are battling falling demand by hosting more and more events to draw people in. Many of the events are successful, but in between the area remains conspicuously underused. This development is also plagued by major design issues that almost completely undermine its attempts at mixed uses.

The mall-ish Riverwoods in Provo. The managers of this development are battling falling demand by hosting more and more events to draw people in. Many of the events are successful, but in between the area remains conspicuously underused. This development is also plagued by major design issues that almost completely undermine its attempts at mixed uses.


Filed under Development, economics

Taxes on Food or Gas?

Locally produced food in a grocery store.

Locally produced food in a grocery store.

With tight budgets abounding, Utah lawmakers are considering increasing taxes on food. That article doesn’t go into great detail about what the increased revenue would be used for, but it does quote state senator John Valentine as saying that it’s needed to provide services for low income individuals.

Those individuals would also get a tax credit to avoid suffering from the tax hike:

Sen. John Valentine, R-Orem, is proposing targeted relief for low-income Utahns through a refundable credit to help defray the cost of groceries for the state’s poor and a refundable income tax credit for its low-income workers.

The article has more information on the credit, though it sounds sufficiently convoluted from the quote that a lot of people probably wouldn’t take advantage of it.

But in any case, it’s a curious situation because food is far from the only thing that could be subjected to higher taxes. For example, this Atlantic Cities article explores the possibility of increasing fuel taxes.

Rather than raise taxes on food, why not raise them on gas?

Rather than raise taxes on food, why not raise them on gas?

The article notes that increasing fuel taxes can be “political poison.” It also argues that rather than framing the issue as a tax increase, it should be framed as an end of the gas sale:

[…] instead of framing the gas tax discussion as a sudden “increase,” it seems just as accurate to say that the big sale on gasoline that’s been going on for years is finally ending. For sure, lawmakers must address the regressive impact of new fuel charges; the I.T.E.P. recommends low-income tax credits as one mitigating tool. They might also do well to address the view that what they’re asking for isn’t to raise taxes on transportation at all — it’s to finally collect them.

The interesting thing here is that these articles offer two possibilities for raising revenues. One option would raise money while de-incentivizing driving — an environmentally destructive activity for which there are alternatives — while the other would simply make food more expensive. The situation in Utah isn’t an “either-or” right now, but the point is just that it’d be better to raise taxes on harmful activities like driving than directly on food.


Filed under economics, Food