Ventana software support forum

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