Sunday, October 16, 2011

Sunday, October 9, 2011

Why Distance Is Not Dead Yet: New York’s Tech Start-up Scene

The belief continues to persist that the internet is rendering compact cities obsolete. The Cato Institute’s Randal O’Toole recently contributed to a discussion in The American Conservative on the fiftieth anniversary of Jane Jacobs’ The Death and Life of Great American Cities with the assertion that “in the age of the automobile and internet...the value of living in close proximity to other people and businesses is steadily declining.” This may be true for some places and some industries, but I argue that New York City’s currently thriving software start-up economy is still benefiting from the advantages of proximity to other people and businesses. In fact, this is what will set it apart from Silicon Valley.

The software industry thrives on the generation of new ideas, investment and willingness to take risks. While both New York and Silicon Vally have lots of investment and deep talent pools, where New York excels is in the ease of face-to-face encounters. People who have not been to Silicon Valley often do not realize that it is a sprawl of low-slung office parks along an approximately thirty-mile-long stretch of Highway 101. Meeting someone who works at another company can involve an hour’s trip or longer along this highly congested road, so it is not something most people are going to be willing to do every day or even every week. In New York City, it is relatively quick to get together with other people by walking or taking the subway. Not only is this beneficial for the sharing of ideas and knowledge among fellow software engineers, but it makes it much easier for engineers to meet with those who hold what they refer to as “domain knowledge,” that is, expertise in some other field. In New York, a couple of examples of such domain knowledge might be banking or advertising. Thus, one edge that compact New York has over sprawling Silicon Valley is the ability of start-ups to cater to specialized business needs, rather than the more generic consumer-oriented companies (shopping and social media) that can flourish in greater isolation. If a company only relies on an idea and an ability to execute it, it can locate anywhere, so long as it has the talent to build its product. If, on the other hand, it relies on access to specialized knowledge outside its own employees’ expertise, it will be advantageous to locate near people who have that knowledge.

In July, Mayor Bloomberg announced a Request for Proposals to build a technology-oriented campus in New York, as a means to support the burgeoning software industry. A few days later, the New York Times published one of its “Room For Debate” discussions on the topic, and I was amazed at most of the contributors’ lack of understanding of New York’s unique advantage. Most of the contributors focused on Silicon Valley’s head start, and why that would continue to make the Valley a mecca for graduates of Bloomberg’s new campus. I agree that a school is not the key to creating a thriving local software economy. However, I disagree that New York will never provide significant competition for the best talent in the industry. It is a shame that even a prominent New York-based venture capitalist like Fred Wilson of Union Square Ventures, Inc., fails to understand his city’s unique advantage. He is right that that the internet will make us “see Apples and Facebooks get built in China, India, Brazil, Eastern Europe, Western Europe, the Middle East, Africa, and plenty of other places.” I think there is a good chance that the next Facebook could come out New York - the city’s ability to attract talent and facilitate idea generation is unsurpassed. But there is also more to software than mass-appeal companies like Facebook. Many of the companies that come out of New York may not be the industry’s household names; their strength will likely come from being highly targeted to New York-specific businesses. New York’s software economy is uniquely poised to benefit from its proximity to other New York  industries, which themselves have grown up over the centuries by reaping the benefits of density and proximity.

Thursday, October 6, 2011

The Future of New York City: Community-Based vs. Comprehensive Planning

On Thursday, October 6, the New School’s Center for Community Affairs hosted a panel entitled “Community-Based Planning: The Future of Development in New York.” The discussion brought together a number of people with an interest in community-based planning in New York City, including Manhattan’s Borough President Scott Stringer, Vice Chair of New York City’s Planning Commission Richard W. Eaddy, and the Regional Plan Association’s Julia Vitullo-Martin. While all the panelists spoke strongly in favor of the importance neighborhood self-determination, the major focus of the discussion was the tension between such local self-determination and the need for comprehensive planning that considers the needs of the borough, the city and the region.

New York City has 59 community boards, each of which is authorized to present the city with a charmingly-named “197-A Plan,” (named for the section of the New York City Charter authorizing them), which is a neighborhood-level (occasionally borough-level) comprehensive plan. At the same time, New York is the only major U.S. city with no city-level comprehensive plan; even Houston, TX, famous for eschewing zoning, has one. The Bloomberg administration’s PlaNYC cannot be considered a comprehensive plan, as it was never officially adopted by the City Council. With no comprehensive plan and 59 community boards (not all of which receive input from trained urban planners), there is understandably a challenge to make sure that a neighborhood’s goals are balanced with the city's vision for its future.

Panel member and land use consultant Paul Graziano, who has advocated for lower-density zoning in several Queens neighborhoods, provided a glimpse into the complexity of this conflict. At first, such “down-zoning” (i.e., lowering of the maximum allowed density) might seem to be selfish NIMBYism. Keeping density low in Queens pushes development pressure into other neighborhoods and contributes to keeping many would-be New Yorkers priced out of the city. But a deeper look at the residents’ experience with development reveals a more nuanced story: the neighborhoods Graziano has worked for were zoned for higher-intensity development under the 1961 zoning resolution. These were areas in far northeast Queens, far from subways, and already built as single-family neighborhoods. The higher-density zoning did not include plans for any new transit or schools. Residents who wanted down-zoning were to some extent resisting change in the neighborhood’s character. But they were also responding to the burden that higher-density building placed on the neighborhood’s infrastructure and its impact on quality of life.

Julia Vitullo-Martin of the Regional Plan Association agreed that the 1961 zoning resolution did not make sense for certain low-density neighborhoods, but stressed that the reality is that some of those neighborhoods are simply going to have to be developed more intensely if New York is going to address what Manhattan Borough President Scott Stringer referred to as the city’s “two million dollar entrance fee.”

This is of course the fundamental challenge to the city’s future: how can it continue to be the city that attracts the most creative and energetic people from around the world if housing stays so exorbitantly priced? How can it continue to grow without breaking the already-strained transit, education and sanitation infrastructure? How can it grow without destroying precisely that which people value about it? Obviously, it is easy to say that a comprehensive plan should be implemented that is flexible enough to evolve along with the evolving needs of the city, and that balances the city’s collective goals with those of its individual neighborhoods. How can this be done? First, the comprehensive plan should not be a rigid set of dictates. It must be subject to review and revision at determined intervals. The issue of balancing a neighborhood’s goals with the larger city’s is a little tougher, since neither is likely to enthusiastic about relinquishing planning authority. Julia Vitullo-Martin and Scott Stringer both talked about “Fair Share,” a provision of the 1989 New York City Charter that seeks to achieve environmental justice in placement and modification of facilities like waste treatment plants or bus-servicing depots. Expanded to account for other types of infrastructure like transit and schools, something like Fair Share should be part of a comprehensive plan. In fact, the equitable distribution of infrastructure makes the need for comprehensive planning even more urgent, since a neighborhood’s interests often end at its own borders. The planning process needs to involve players other than just the Planning Commission and the Department of City Planning.* In order to avoid the problems of infrastructure lagging behind zoning changes, the planning process needs to include other city agencies so as to be able to plan for schools and transportation improvements.

If you ask people what they value about New York or any other great city, they will likely mention the range of neighborhoods, each with a distinct character. Protecting that character, while allowing for change (a neighborhood is generally stagnant only as a prelude to deterioration) is an important and laudable goal of the community board system and its counterparts in other cities. Empowering neighborhoods with a say in their future is a great thing. But the larger city must also be allowed to determine how it will grow and change. A comprehensive plan should outline general goals, but it must make clear how specific neighborhoods will be part of implementing those larger goals. A city comprehensive plan needs to incorporate some of the provisions of the “197-A Plans.”

Failure to plan comprehensively could make New York less competitive in the future if it is unable - due to high costs, or quality-of-life concerns - to attract smart, creative people. The New School’s panel discussion today highlighted the necessity of reconciling community-based planning with city-level and regional planning, if New York City is going to continue to be the place that attracts people from all over the world.

*The Department of City Planning is the city agency responsible for planning, while the Planning Commission is the Mayor’s appointed commission on planning, whose chair is also the Director of City Planning.