The Republic looks at a tale of three cities

The Arizona Republic's Chad Graham traveled to Austin and Seattle to report on some lessons recession-slammed Phoenix might learn. Numerous Rogue Columnist readers have asked for my reactions. Chad is a fine journalist and a friend. His story fits into a continuum of sometime efforts by the newspaper to educate the public and policy makers about the real world -- this goes back at least to the 1980s. These efforts are ignored as population growth resumes and the nation's last big factory town returns to churning out suburban tract houses.

The editors tip their hands by, I would assume, inserting this sentence to make defensive "Valley residents" feel better: "Phoenix will never have a gateway seaport to Asia that hums with activity. Seattle will never have the potential solar power of Phoenix." The sad reality is that the center of solar research, entrepreneurship and use is cloudy Germany. Phoenix literally started the solar power movement in the 1950s and let it get away -- therein lies the tale of the town.

Graham's important point is that Seattle and Austin "have learned the lesson that Phoenix is now being taught: Economic downturns hit harder when you are overly reliant on one industry."

Rather than go through the story, or even rehash my years of "controversial" efforts to raise these issues, I'd rather make a few key points among dozens that could be discussed. My perspective is as a Phoenician who has lived in Seattle for nearly a year and has seen both close up.

1. Seattle is so different from Phoenix in every way that I can't think of many lessons that can be transplanted, especially in the dead Phoenix soil of an extremist Legislature and limited private sector. Examining best practices is important. But a better template would probably be found in the Southern states. Like Phoenix and Arizona, they had very limited economies, large numbers of poor people and little native industry aside from the textiles that migrated there in the late 19th and early 20th centuries. As a Charlotte banker drawled to me: "We were decapitalized after the War Between the States." (He went on to rectify that). Through targeted incentives, smart legislation, attracting foreign investment and aggressive economic development efforts, large areas of the South now have diverse, competitive economies. We can talk about this in a future column.

2. Let's deal with a few defensive reactions of Phoenicians.
"Yeah, well, Seattle just lucked out with Microsoft." Yes, somewhat. But Bill Gates came home because he was raised in a community and family with a deep tradition of stewardship, which has been lost in Phoenix. Also, Microsoft might be the next General Motors. Seattle has moved on and has an ever expanding universe of tech companies, especially software and biotech.
"Yeah, but, Phoenix is a new city..." It's true that Seattle was larger and more established as a city when Phoenix was just a farm town. But more often than not this works against places -- ask Pittsburgh -- because they become wedded to industries and closed to new ideas. In fact, by 1960, Phoenix and Seattle were the same size and after that Phoenix left Seattle in the dust, population-wise. But that magnitude of growth, without similar growth of a diverse economy, proved a curse. Phoenix is no longer young, is weighed down by the costs of rapid in-migration, and has little to show for decades of inaction. Seattle is young and energetic.
"Yeah....but it rains all the time." Yes. It rains all the time and it's cold as the outer moon of perdition. That's what we want you to think so you won't move here and ruin it. (Oh, outside my downtown window, the streets and sidewalks are filled with happy tourists).

3. The prime reason to examine other cities is not because they are doing better in this recession. Seattle, a tech city, was walloped in the 2002 tech downturn while, by its extremely limited metrics, Phoenix did better. But Phoenix had nothing to teach anybody. It was merely fortunate that the huge pool of capital pulled from stocks moved into housing. Now it's Phoenix's turn for a downturn. Most of the Phx elite, while mouthing the right thing about diversification and high-paid jobs, are just waiting for the housing market to turn up.

Seattle's biggest difference is its ability to keep reinventing itself at every downturn. This, in turn, is linked to its other characteristics: a smart, affluent population; deep commitment to community; a dense urban form that fosters creativity; urban amenities; stewardship; many major corporate headquarters and the ability to build new ones, and a beautiful environment with the ethic to protect it. Seattle is very outward looking and tolerant, while Phoenix has become parochial and mean. Another big one: a diverse, powerful private sector. Here, the governor, mayor and university president are bit players by comparison. For example, the reason South Lake Union, adjacent to booming downtown Seattle, is being turned into a biotech hub -- with Amazon.com's headquarters to boot -- is because of Paul Allen, not some initiative out of city hall.

4. One reason outside lessons are difficult to apply to Phoenix is that it is almost sui generis in its problems: so populous, so sprawling, so few corporate leaders who can write checks and knock heads, so little stewardship or sense of community, a vicious cycle of tax cutting that underfunds schools and ensures a permanent underclass. And the tension between a walled-off rich resort and a big, stressed urban area. Ironically, Phoenix remains the most government-dependent city in which I've ever lived. But the dependence is frozen in amber, with the CAP, freeways, flood control, etc -- stuff for 1960s-1970s suburbanization. It was unable to leverage the government largess into much beyond more sprawl and housing. Then, with the new radical "conservatives" it lost the ability to get the government money that counted, to build a research-based economy. (The region couldn't even get much federal highway money -- that's why a slam-the-poor sales tax funded freeways, as opposed to building interstate loops, as other cities have). Light rail is a start, but years late.

Phoenix misallocated its resources for sprawl. For example, the East Valley freeways were planned and built to make the land profitable for subdivision developers, not to respond to "growth." The land was citrus groves and cotton and alfalfa fields. There was no economic imperative to turn it into tract houses. But precious transportation funding was thrown into subsidizing those new "communities" -- which would prove so costly to the public, even now and into the future. Imagine how keeping the agriculture could have eased the heat island, diversified the economy and accurately priced growth (and channeled it into the existing 1980 urban footprint).

It wasn't supposed to turn out this way. Phoenix leaders from the 1940s until perhaps the late 1970s worked tirelessly to recruit industry and diversify the economy. The small islands of quality left are their legacy. But the torch was dropped. My heart aches for the city that might have been. But perhaps that was never to be. The Salt River Valley attracts folly. The ghosts of the Hohokam moan over the lost.

I have no brain cells to waste on the whiners: "Oh, you make it sound so depressing"..."That's such a downer"..."Can't you say something nice?"..."At least it's hot here!" Phoenix can change its fate. But it must follow the First Rule of Holes: When in a hole, stop digging.

Comments

[Bill]

Jon, Any thoughts as to why the unemployment rate in Phoenix has remained low during the current housing bust ? I would have expected double digit rates, but it just hasn't happened.

[Rogue Columnist]

First, I don't trust the state numbers; the agency has been underfunded for years and is under political pressure to make things be "positive."

Second, the construction workforce is highly mobile and can move; it's tough to track this churn.

Third, it's a trailing indicator; keep watching if things don't turn up.

Fourth, U.S. methodology has been criticized for years for undercounting and not counting those not "actively" seeking employment.

[Joe Schallan]

Tonight, it is 48 degrees F. in Phoenix, on May 23, due to an anomalistic weather system. As I commuted home on the 51 through the Phoenix Mountains Preserve, I had the vents open, and the cab of my truck was filled with the subtle, strangely sweet aroma of creosote bush in the rain, present because long ago someone had the foresight to preserve a huge tract of Sonoran Desert uplands in the middle of what would become a megacity. The desert smells like rain tonight, and reminds me of what might have been, had Phoenix played to its considerable strengths instead of trying to be something it isn't and can never be.

[Steven Bradford]

Intriguing piece. I also moved back to my birthplace in 03, after 12 years in Seattle and 12 years in LA before that. I was amazed to discover that nothing had really changed, it was just much bigger.

Moving back to Seattle last July, I had a new surprise-- Phoenix was ahead of Seattle on one thing-- Light rail. While I was gone the mass transit plans had actually shrunk. Light rail was shorter, the Monorail I (in a small volunteer way) and so many others had worked so hard to get going was canceled because it wasn't going to be a free lunch. I'd say that is one lesson that could be learned from Phoenix: Stop arguing about transit and just start building it.

OTOH hand maybe in 30 years, when Seattle doesn't have any more transit, we'll look back at a lucky accident. Light rail lines to suburbs encourage sprawl too. Perhaps Seattle will just get denser and people will choose to work where they live even more than they do now. I doubt it though.

Great column. I really enjoyed your columns when I lived in Phoenix, what a surprise to find you here when I got back. I detected a tone in your republic columns that you weren't saying nearly as much as you wanted to.