Urban Dynamics Question

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Dseville@aol.com
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Posts: 7
Joined: Fri Mar 29, 2002 3:39 am

Urban Dynamics Question

Post by Dseville@aol.com »

Dear System Dynamics Community:

When urban areas fill their land area, why do some tip towards decay and
others towards gentrified "wealthy enclaves"?

Forrester, Alfeld and other modelers have offered a compelling theory
explaining the first reference mode. Many of you have already read the
"Urban Dynamics" books - they hypothesize that declining land availability,
aging of business and housing infrastructure, and several other factors lead
to an overshoot in population and long-term dominance of underemployed people
living in low-quality housing.

In contrast, we are currently working on a modeling project with an urban
area in coastal California that, as it reaches build-out, seems to be tipping
in an opposite direction towards what we are calling a "wealthy enclave."
The data show skyrocketing housing prices, continued job growth, long
commutes for workers, and environmental pressures. You hear similar stories
in Aspen, Santa Barbara, (to some degree Concord, Massachusetts, as described
in the SD Review case study by Alfeld), and other highly attractive towns.

What is different here? Here are three of our current theories and questions
to you all.

1. Housing growth limited before business growth
As our client community approached build-out, housing construction was
limited BEFORE business construction (the opposite of what happens in Urban
Dynamics), resulting in a high jobs/housing ratio and a high level of
attractiveness. In our community, this happened because anti-growth
sentiments mixed with pro-business politics and produced a limit on new
housing but not on new business structures. Was this just a "policy" that
we could not have predicted or is there a more structural dynamic at work?
Could there be characteristics of a region that we could use to anticipate
that housing growth would be limited before business growth?

2. Gentrification overwhelming housing aging
In Urban Dynamics, as the housing infrastructure ages it becomes less
valuable and therefore moves from upper to middle to lower income housing.
High demand for newer housing slows the aging rates somewhat. But in our
client community we are seeing GENTRIFICATION, where, without rebuilding,
lower income housing is becoming middle income housing, and middle becoming
upper. It seems that gentrification could actually be overwhelming the aging
effect. Again, have any of you explored this theory? What might lead it to
happen here and not other places?

3. Higher base "quality of life" attractiveness
The effect of the climate setting, and environmental health seem to
supplement the attractiveness of housing and job availability. Has anyone
experimented with adding such structure to the model?

Any wisdom about the theories we have described above or the more general
question of what could tip a region toward a "wealthy enclave" as opposed to
toward urban decay would be welcome.

Thanks,

Don Seville (dseville@aol.com) and Drew Jones (apjones@cheta.net)

-------------------------------------
Don Seville
85 Brattle Street
Arlington, MA 02474
781 648 3563
781 658 2010 (fax)
dseville@aol.com
GBHirsch@aol.com
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Urban Dynamics Question

Post by GBHirsch@aol.com »

The wealthy enclave dynamics that you describe in the California community
seem to be present in the Boston area as a whole, not just the wealthier
suburbs. The additional feedback loops that seem to be contributing to the
creation of a wealthy enclave in Boston are the positive loops through the
growth of particular industries such as biotech and Internet software and
media. Initial activities spun off from academic institutions attract pools
of talented people, some of whom start their own companies, seeding further
growth. Once a critical mass is reached, growth may accelerate and related
industries such as venture capital grow as well. This explosive growth of
particular industries takes on a life of its own, out of proportion to the
general attractiveness of the area for people and employers. The higher paid
people attracted by these industries can afford the increasingly expensive
housing, causing more of the less-expensive housing stock to be gentrified
and driving out poorer folks.

Could this high-tech growth be part of the story in the California community
as well?

Gary Hirsch
GBHirsch@aol.com
Cheryl and Bill Harris
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Urban Dynamics Question

Post by Cheryl and Bill Harris »

Don, Drew,

You wrote:

>Any wisdom about the theories we have described above or the more general
>question of what could tip a region toward a "wealthy enclave" as
opposed to
>toward urban decay would be welcome.

Youve posed an interesting problem. I see analogies in other areas:
what makes things that were formerly unseemly (new styles in music,
clothes, or the like) "cool" for a new generation of people? At the
event level, it appears as if a new, small and persistent group has
arrived on the scene, seen a possibility where others have seen only
decay, and entered into the "if you cant fix it, feature it"
archetype (not one to be found in the standard systems thinking
archives :-). That is, if I want to be cool or have the external
trappings of affluence or importance but cant afford the traditional
means, I may choose to invent my own means and market it well.

It costs serious money to go into an upscale clothier and buy nice
suits or dresses. If thats difficult for me, I may go into a
thrift shop, buy recycled clothes, put them together in different
ways that have a style of their own, and try to make a new trend.
If Im successful, I have been able to become stylish at a far lower
financial cost.

If I want to buy a really nice house, it may cost me, both in
acquisition cost and in transportation cost to get to work. If I
can find a suitable but less expensive place, spiffy it up, and get
others to do the same, I may end up in a neighborhood that has value
because Ive helped redefine style. (A small Craftsman house may
have more value in the end than a large, new, less distinctive house
in the suburbs.)

Thats an actor-based view: a "mover & shaker" comes along, sets a new
tone, and persists until the culture is changed. It doesnt explain
possible causes.

I think there may be a viable dynamic explanation.

Consider 4 "sectors" in a 2x2 grid with "dimensions" or attributes of
residential/business and urban/suburban. Each sector has the standard
3-level model of properties: high, medium, and low (HML). People move
from one sector to the other (somewhat independently for business and
residential) based on relative attractiveness of urban vs. suburban
offerings.

The attractiveness of staying in ones current geography is a function
of its HML attributes (caused at least partially by aging) and by the
attractiveness of the matching sector in the same geography.

That is, there is attraction to staying in the city if good jobs are
also in the city (and vice versa). There is also attraction to
staying if Im living in an H house instead of an L house.

The attractiveness of moving to the other geography is a function of
the attractiveness of being there (the same function mentioned in the
last paragraph, applied to the other geographic sector), plus the cost
of acquiring the new property.

That cost is a function of relative sales prices and of
transportation costs, should one work in one geography and live in
the other.

Sales prices are a function of the number of people already there
and the HML status of the property, as demand and quality drive
prices.

Transportation costs may also be a function of the number already
there. As the suburbs become more built up, the commute from the
suburbs to the city for work will get longer (the available suburban
land being further out, although I note in your description that
commutes are long in your wealthy enclaves).

Certainly some cities do decay and some create such enclaves. What
would make people decide to gentrify their urban residences?

If their residences were in the M category -- low enough to be not
too pricey, but high enough to be seen as having promise (my
proposed enabler for gentrification),

AND

If the other sector in the geography (urban business, in this case)
were sufficiently attractive (enough in the H or M categories) (in
your example, business seemed strong),

AND

Cost of moving to the other geography (suburbs) was high enough and
an increasing function of population in that geography (decreasing
returns) (Im not sure if this matches your example well, but it
might if you are saying people didnt choose to move over the
coastal mountains to find cheaper land with less view and longer
commute),

THEN

It might be more attractive to stay than to move.

It depends, in this formuation, on a decreasing returns costing for
the suburbs that is sufficiently high while the city has property in
the M category, coupled with a draw from the other (business) sector
in the same geography.

Note that this is a symmetrical situation. It could explain the
enclaves in the residential or business sectors, and it could
explain (potentially) unexpected inertia as people stay in either
the city or the suburbs.

Base geographical attractiveness is another possible factor. If the
original city were built where it was due to factors that are still
relevant for its attractiveness (riverfront, seacoast, etc.), then
that could bias future developments into this mode. OTOH, if the
surrounding area were intrinsically more attractive (say, foothills
surrounding a plain cityscape), then there could be an underlying bias
towards the suburbs.

Some other examples I have heard of, although I dont have great data
on them:

Belltown, a business/arts district near downtown Seattle, that
reputedly declined and is now undergoing a resurgence

Lemon Avenue area of Dallas, a residential area experiencing
gentrification

The Park Cities (Highland Park and University Park), surrounded by
Dallas, where house pricing for older, smaller houses has been high
for decades.

Does this seem plausible? Of course, the initial proof is in the
simulation. If I get time, Ill try to put together a small model to
see what it shows.

Regards,

Bill
--
Bill Harris 3217 102nd Place SE
mailto:
harris6@halcyon.com Everett, WA 98208
phone:(425) 338-0512 USA
JHomer609@cs.com
Junior Member
Posts: 6
Joined: Fri Mar 29, 2002 3:39 am

Urban Dynamics Question

Post by JHomer609@cs.com »

Don Seville and Drew Jones ask an intriguing question:
> When urban areas fill their land area, why do some tip towards decay and
> others towards gentrified "wealthy enclaves"?

As a grad student many years ago, I spent some time thinking about and
modeling the issue of urban renewal. I believe its not hard to get a model
of a stagnant urban area (city, town, or neighborhood) to demonstrate
gentrification following an exogenous increase in upper-class housing
demand--a result of the areas suddenly becoming attractive (for whatever
reason) to the young and well-to-do. Whats not clear is whether there are
systematic factors that may predispose one area to gentrification and another
to continued stagnation.

My guess is that such factors do exist, but that they describe an area as it
relates to its (possibly changing) surroundings, rather than the area in
isolation. Thus, we see gentrification in NYC move from one downtown
neighborhood to another, a continually shifting situation. Of course, there
may be some necessary conditions internal to the area: low-cost housing and
retail space, lower population and traffic density, and perhaps other
intrinsic attractors (ex., fine old architecture). But many neighborhoods
meet these criteria. Which neighborhood gentrifies next is likely also
affected by its proximity to other desirable neighborhoods, with their art
galleries, clubs, restaurants, and social services.

Forresters central concept of "relative attractiveness" in Urban Dynamics
leads one to look beyond the specific urban area to ask questions about its
surroundings. Maybe this concept can also help to predict the conditions
that make an area more amenable to gentrification.

Hope this helps,
Jack Homer
Voorhees, New Jersey
From: JHomer609@cs.com
MacovL@aol.com
Junior Member
Posts: 6
Joined: Fri Mar 29, 2002 3:39 am

Urban Dynamics Question

Post by MacovL@aol.com »

Bill Harris has described the ecological/landscape modelling of population
dynamics for migration between habitat patches. My question is along
technical lines. Can he or others give references for modelling movement
between neighborhoods or habitats of different and dynamic qualities. My
problem has been modelling spatial AND temporal dynamics.

Louis Macovsky
MacovL@aol.com
Dseville@aol.com
Junior Member
Posts: 7
Joined: Fri Mar 29, 2002 3:39 am

Urban Dynamics Question

Post by Dseville@aol.com »

In a message dated 10/28/99 6:47:23 AM Eastern Daylight Time,
GBHirsch@aol.com writes:

<< The higher paid
people attracted by these industries can afford the increasingly expensive
housing, causing more of the less-expensive housing stock to be gentrified
and driving out poorer folks. >>

Gary -

An interesting dynamics. This suggests a further refinement of the jobs
attractiveness, where certainly highly paid industries can create a
reinforcing growth process and basically overwhelm the lack of attractiveness
from the housing.

thanks for the ideas!

don
From: Dseville@AOL.COM
"Jay W. Forrester"
Senior Member
Posts: 63
Joined: Fri Mar 29, 2002 3:39 am

Urban Dynamics Question

Post by "Jay W. Forrester" »

>Don Seville and Drew Jones ask an intriguing question:
>> When urban areas fill their land area, why do some tip towards decay and
>> others towards gentrified "wealthy enclaves"?
>
Jack Homer wrote:
>As a grad student many years ago, I spent some time thinking about and
>modeling the issue of urban renewal. I believe its not hard to get a model
>of a stagnant urban area (city, town, or neighborhood) to demonstrate
>gentrification following an exogenous increase in upper-class housing
>demand--a result of the areas suddenly becoming attractive (for whatever
>reason) to the young and well-to-do. Whats not clear is whether there are
>systematic factors that may predispose one area to gentrification and another
>to continued stagnation.
>

With an appropriate choice of policies, the model in "Urban Dynamics" will
fall into deeper decline after the growth phase. The area originally
occupied by the city has inherent advantages and, if the central decay goes
far enough, the decayed core becomes available for a new growth phase. In
this mode, the model will cycle repeatedly through growth and stagnation
with a long period of some 200 years. I am giving these comments from
memory. Do not ask for the policies that give such behavior because I do
not have them.

---------------------------------------------------------
Jay W. Forrester
Professor of Management, Emeritus
and Senior Lecturer, Sloan School
Massachusetts Institute of Technology
Room E60-389
Cambridge, MA 02139
tel: 617-253-1571
fax: 617-258-9405
From: "Jay W. Forrester" <
jforestr@MIT.EDU>
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