A new Environics Poll (July 28) shows a narrowing between the Liberals and Conservatives. I don’t find Environics polling to be as reliable as Ipsos-Reid, so you should take their numbers with some skepticism (for example, how can the Bloc have only 11% nationally with 51% support in Quebec when they had 12.4% nationally with 48.8% support in Quebec in 2004 — shows that their Quebec sample is not proportional to its share of the overall sample). But as per usual, I have entered this data into my election model to forecast the corresponding seat counts — see my 2005-06 Election Forecast page for full details. You can also compare this to my July 1 update. The nationwide summary is as follows (you can see a riding-by-riding breakdown at the above webpage):

	2005 PREDICTED RESULTS – 7/28/05
	LIB	CPC	NDP	GRN	BQ	OTH
TOTAL SEATS	119	93	29	0	67	0
% OF SEATS	38.6%	30.2%	9.4%	0%	21.8%	0%

There is a rabid debate out there about whether we are in a ‘Housing Bubble’. According to the Economist, “The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops.” But is the bubble real? Mike Whitney certainly believes it — he sold his house before the market collapses. The bubble believers say that historically low interest rates, combined with creative financing, the growth of mortgage-backed securities and increased speculation (i.e. buying houses as investments with the hope they will rise in value) has created a unsustainable scenario.

While it is easy to believe in grand theories, I think reality is rarely so black-and-white as it is many shades of gray. For people buying up generic houses on the urban fringe as investments, yes, there might be something to the bubble. But for people buying up houses, land and condos in central urban places, I think talk of a bubble is overstated. In case you’ve been living in your own bubble for the past decade, people (especially those < 35 years old and those >65) are increasingly wanting to live in urban places. I include myself in that category. I would rather rent in a central location (which I do) than own in the ‘burbs, where I would have to drive to get everything, spent countless hours commuting and generally live in a place with typically has nothing but houses (no amenities!). With people working longer hours and taking less vacation, time is more valuable than ever. The growth of higher-density urban living, including live-work places, mixed-use development, transit-oriented development, urban villages and loft conversions all speaks to this trend. And housing prices are about supply (the availability of land) and demand (where people want to live). If you buy this argument, investing in central urban places is a safe bet.

Urban planners have their own language. It’s not as obtuse as architect-speak, but it has its moments. Ric Stephens gives a funny take on some the terms for us. Some of the ones I like are:

BANANA: Build Absolutely Nothing Anywhere Near Anything
DUDE: Developer Under Delusions of Entitlement
LULUs: Locally Unacceptable (or Unwanted) Land Uses
AICP: Any Idiot Can Plan (actually, American Institute of Certified Planners)
CAVEmen: Citizens Against Virtually Everything
SLAPP: Strategic Lawsuit Against Public Participation

The other day, I was pleased to hear Bill O’Reilly – the notorious Fox News commentator and a former teacher – say “if society really cared about [school] kids, it would double the pay of teachers in these [struggling] districts”. For once, I agree with him. Teachers are not valued in the United States. Public education is the foundation of a prosperous and just society. So a weak public system hurts everyone: if it is struggling, then private schools don’t have to be that much better to “out-perform” public schools. And there’s no question that U.S. school kids are under-performing. For example, in a 31-country OECD study, Canadian 15-yr-olds ranked #2 in reading, #6 in math and #5 in science (only Korea, Japan and Finland performed better overall). By contrast, American 15-yr-olds ranked #15 in reading, #19 in math and #14 in science. The range of scores for Canadian students were also much narrower, while the U.S. students had a large range of scores, indicating more inequality in the system (presumably illustrating the difference between public and private schools). Worse: the best-performing American students (typically from private schools) still fell well short of the worst-performing Canadian students.

Canada and the U.S. are not that different culturally so as to cause this tremendous difference. And contrary to what many Canadians think, Canadians are not innately more intelligent. Canada has a mixed system of funding: locally-generated from property taxes, topped up by the Provinces to ensure a level playing field. The Federal Government has little direct role in education in Canada – it is a Provincial matter. To the extent the Feds get involved, it is to ensure that smaller and poorer provinces have similar funding to the ‘have’ provinces.

In the U.S., however, the Feds are intimately involved, using the punitive measures in the No Child Left Behind (NCLB) reform package to penalize under-performing schools. Top-down one-size-fits-all solutions like NCLB are not the answer. There exist disparities in the funding of school boards both between municipalities and within municipalities. Following Canada, States need to address this disparity.

Education is fundamental to the way cities function because good schools raise land value and bad school lower land value. A more even quality and funding of schools in American cities would go a long way to bringing necessary reinvestment to struggling neighborhoods. Cities would become less polarized by class (and by association, race). It’s really a no-brainer.

I will have more to say about education in the coming weeks.

Over two years ago, I organized an urban design studio with my colleague Michael Dennis that asked students to devise plans for the re-development of Toronto’s Portlands. It was thought that the area – the subject of debate for 25 years – was finally about to be transformed. It seemed like everyone was on board: the public, the City, the Province and the Feds. Yet, there is still nothing happening to this day. Nothing illustrates the dysfunctional state of intergovernmental relations in Canada like the Portlands. Since the three levels of government each own much of the land there, political bickering has stalled the process.

Is there such a dearth of leadership in Canada that the waterfront of the country’s main economic engine can sit idle for over 25 years? The problem is that the Portlands is seen as a canvas upon which various politicians can paint their pet projects – whether it be the Olympics or a production center for the film industry. It appears they see economic development as achievable only on the grand scale. Other locals – architect Jack Diamond and urban designer Ken Greenberg, for example – see the area, quite correctly, as an opportunity to extend the fabric of the city and over time, build several new neighborhoods that will mix housing, employment, retail, and all the good things that make a city what it is. It is mind-boggling to think of the tax revenue that the City would have received if the political machine could actually put the public good ahead of personal profit.

By our estimates, between 40,000 and 100,000 people could be housed in new neighborhoods build on Toronto’s waterfront, if developed in a mid-rise reasonably-scale pattern of growth. It would be a fabulous place to live – close to downtown, with access to nature and the water. It is well past due for the City of Toronto, Ontario and the Federal government to act.

Here’s a website for you: privatization.org. These fine folks are dedicated to making everything, everywhere private (think: libertarian). The Fraser Institute must do them proud! Geoffrey Segal’s reaction to the Kelo/New London ruling is a classic libertarian scare tactic: because of Kelo, if cities are in trouble financially they are going to take your home in order to raise tax dollars. Now I don’t agree with Kelo either (see my response – probably the very few times I would agree with Segal), but to use this case as a justification for why we need ‘smaller’ government is pure politicking.

I continue to detest how such rhetoric – driven by sound bites rather than careful consideration of the issues – has polarized the debate about most things these days. We all know that any reasonable and civilized society will have a mixed economy and a sharing of responsibility between various actors: 1) individuals (first and foremost), 2) governments (the public sector at all levels), 3) the market (the private sector – both large and small, local and global) and 4) non-profits (charitable organizations, religious groups, advocacy groups etc). It is reasonable to debate what share of responsibility each actor should play. And surely, the share must be different depending on which problem or issue you are considering.

You have to be suspicious of anyone who advocates that any one of the four above actors should be entirely responsible for everything, all the time. Certain things are best dealt with by the public sector and others by the market, but there are no universal solutions to problems. As a scholar, one is often confronted with the task of setting aside your own predilections in order to conduct research. Not that research can be purely objective, but if your task is simply to go out and prove what you think is true, then you inevitably ignore facts that refute those positions. I think a better methodology is to frame a set of issues, establish a methodology that allows for looking at those issues from multiple perspectives, do some digging and let what you discover guide you. Unfortunately, the good folks at privatization.org and the Fraser Institute have too much of an agenda for their research to be taken seriously.

As we know, U.S. Social Security faces a situation of declining revenues and increasing payouts. The system will begin paying out more than it takes in by 2018, after which it must borrow from the fund to pay benefits. The Bush administration views this as a ‘crisis’ and has called for partially privatizing the system.

There is no crisis. Canada faced this exact situation several years ago with its Social Security counterpart, the Canada Pension Plan (CPP). Rejecting privatization, Canada implemented several measures that has fixed the system for generations. Want to fix Social Security? Here are a few suggestions (based on a modified version of what Canada did in the late 1990s):

1) Do NOT raise payroll taxes. U.S. payroll taxes are 12.4% (split between employer and employee) — much higher than Canada’s at the time (7.8%, split evenly). Part of Canada’s solution was to raise payroll taxes to 9.8% (split evenly). 12.4% is already high – raising taxes does not make sense.

2) Invest the fund surplus in equities. Establish an independent social security investment board (run just like a regular fund management co.) Invest the current surplus, partially in stock index funds (70% domestic, 30% foreign), partially in actively managed investments.

3) Index taxable maximum earnings to inflation (this means the maximum earnings will go up each year with inflation, putting more $ into the system).

4) Raise employment eligibility for disability from the current range of 1.5-5 years to 3-5 years, depending on age.

5) Limit extent to which one can receive two benefits (survivor + disability, or disability + retirement).

6) Drop additional spouse/divorced spouse benefit of 50% (but permit credit splitting between divorced spouses).

7) Benefits fully taxable (up from 85%) for those with income over $25,000.

Here’s a comparison of the U.S. and Canadian social security systems.

As the L.A. Times tells us, Frank O. Gehry, bless his soul, is set to design a 40-to-50 story highrise in downtown L.A., opposite his Disney Concert Hall. It’s not that Gehry’s work isn’t fun – it is. It’s just that of late his office is in the business of churning out ‘mini Bilbaos’ all over the place as though context doesn’t matter. Gehry is a classic ‘object’ architect – dedicated to creating interesting shapes, not necessarily interesting urban places. The Disney Concert Hall is fantastic – from the front (and the front corners) – but it is essentially anti-urban on the other three sides, set upon a plinth that offers nothing but blanks surfaces and loading docks on three sides. While it has OK (not great) outdoor spaces on the plinth, it is inward-looking and not exactly meant for public consumption. I say give Gehry the tower, but please, please bring a good urban designer on board to ensure the interface with the public realm is decent.

The thing I find the most interesting is that L.A. is actually going to build a ‘central park’ as part of this project. In this age of increasingly private spaces (particularly in L.A.), someone has deemed it necessary to install a genuine public space in the downtown core. That person deserves a medal. Downtown L.A. isn’t there yet, but it is transforming in positive ways and, if done right, this development could yield very positive things. The author (Martin Kaplan), of course, wants something new – because new is always better than old – not just some plain ol’ amenities for the folks living downtown. Instead he wants a 21st century space. So do I, but one that people can use daily. If you have ever listened to Bill Mitchell and I have had him as a guest lecturer in a couple classes I taught at MIT – he will tell you that the most technological place would be where the technology disappears. Wi-fi access in the park is a given – and it is invisible. Yes, we could put plaster some digital displays around the park and call it new, but would it be as amenable to daily use? I am not yet convinced.

I just received my copy of Private Neighborhoods and the Transformation of Local Government by Robert H. Nelson. It’s definitely worth looking at if you are even remotely involved with urban planning. It documents the rise of private neighborhood associations (of which gated communities are a subset) and their social significance – a topic central to my own work. I just started reading it, so more to say on it later. A couple weeks ago, Neil Peirce’s commentary on the book reminds us that despite the recent Kelo/eminent domain case, the powers of local government are receding (due to privatization). The National Center for Policy Analysis is so excited it has asked if such neighborhoods are a replacement for zoning. I’m all for replacing zoning, but clearly we need to know more about the impacts of private communities before championing them as a panacea for the troubles of local government.

In contrast to the resolution of the beef issue, the softwood lumber issue drags on (talks end badly last week). You will recall, Canada and the U.S. have been arguing about this since 2001 when, at the request of the powerful U.S. lumber lobby, the Bush administration demanded that Canadian lumber companies pay a 31.88% tariff on lumber imports (note: Canada and the U.S. have had a free trade agreement since 1994!). This is a $7.5 billion/year industry, so the tariff has cost Canadian companies over $9.5 billion (never mind the thousands of people in Canada – entire towns – who have lost their jobs). For the past four years, Canada has challenged this tariff at the WTO and NAFTA and was won pretty much every single time.

Despite being ordered to stop the tariff by the legally-binding NAFTA panel, the U.S. refuses to do so. The story gets worse: in 2000, the U.S. passed the ‘Byrd Amendment’, which allows companies to lobby the commerce department to place tariffs on their foreign competitors’ products. Moreover, the members of the lobby get to keep the proceeds of those tariffs. So, foreign producers are required to pay money directly to U.S. producers. The WTO has ruled this is illegal and has granted Canada, the E.U, Japan, etc permission to retaliate, which they are – a global trade war is about to begin, in case you haven’t been following. Congress refuses to remove the Byrd Amendment. A congressman from Montana has introduced legislation that expressly authorizes the $9.5 billion in illegal tariffs be given illegally to U.S. lumber producers (it is currently being held in the form of bonds). The tariff has raised construction costs and, moreover, lowered demand by Canadian lumber producers for U.S. logging equipment. The result? More people in the heavy machinery industry (10% of U.S. exports) and in the construction industry are out of work in the U.S. because of their own protectionist policies. This is yet another example of politics trumping logic.