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Wednesday
May112011

CNU Open Source Congress

Guest contributor Edward Erfurt is a member of CNU's NextGen. He blogs at Restless Urbanist and can be followed on Twitter. This blog entry contains two posts from his website and is published here with his permission.

This blog post is dedicated to introducing you to Open Source so you will be inspired to bring a topic to Madison. CNU 19 is hosting an en masse Open Source Congress. Bring your thoughts and topics to discuss with other urbanists from across the globe.

The concept is simple; share a topic or idea during the Thursday morning Plenary, find like-minded participants, and host a discussion on your topic. The Open Source Congress will bring together small groups of enthusiastic people to work with you to tackle your challenge. This is an opportunity to use the broad resources of the Congress attendees. Use the day to develop these ideas.

These topics could be simple in nature, or you could prepare a more elaborate presentation to share. Several topics have been developed during previous Congresses such as Light Imprint UrbanismSprawl Retrofit, and Tactical Urbanism. These topics started with small groups and have expanded in a national discourse and publications. 

The annual Congress has always had intelligent and challenging presentations from some of the best minds in the business, but the schedule is tight and not every topic has the opportunity to have a plenary session. At the same time, the Congress is full of smart, talented, committed urbanists. Open Source is the opportunity to discuss and explore additional topics and for all of us to interact and engage. Best of all, what happens during Open Space is entirely up to you.

I will be sharing several blog posts over the next few days explaining the simplicity of the process and the CNU venue, which I assure you takes longer to write then it does to explain. Now is the time to start sharing your ideas. Begin putting together your thoughts, and share on the CNU webpage, various list-serves, Facebook accounts or blogs. 

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Open Source Format

What is the simplest way to share an idea: Open Source. The Congress for the New Urbanism’s National Conference is hosting a venue for Open Source. Open Source has been a growing trend during the Congress, and this year the first day of the Congress has been dedicated to the ideas of the broad membership.

For those of you new to Open Source or to the annual Congress gathering, I wanted to share with you the process. I was able to get a preview of Jennifer Hurley’s notes, so she deserves all the credit for this. I will be sharing the history of Open Source at CNU in an upcoming post. There are no surprises to Open Source -- it is really simple. 

Technique: To help the participants at the Congress in Madison engage with each other, a full day has been dedicated a technique called “Open Space Technology”.  It’s been used for more than 20 years, all over the world, with groups as small as 5 people and as large as 2000.  It was created by a guy named Harrison Owen who wanted to combine the interaction and energy that happens in a good coffee break, with the substance and content of traditional conference sessions. 

Mechanics: The first step in the process is for anyone in the audience who wants to come to the front of the room, write a topic you care about and your name on a piece of paper, and read out your topic and name to the group.  You will then choose a time slot and location for your discussion by selecting one of the sticky notes.

A main wall in the Ballroom becomes our community bulletin board with the schedule of the “insta-Congress”.  Once everyone has named their topics, we will open up the “village marketplace” so that people can find which sessions they want to join. Sessions and presentations may inspire additional topics, which can be added to the marketplace throughout the Congress. 

There is one session Thursday morning in the main ballroom room, and then there are sessions concurrent with other breakout sessions throughout the Congress.  Topic leaders choose when and where your discussion takes place. 

Passion & Responsibility: Open Space Technology is based on the twin pair of passion and responsibility.  Things only get done when someone takes responsibility for it, and people really only take responsibility for the things they are passionate about.

When you put your topic and name down, you are taking responsibility for (1) showing up at the appointed time and place, (2) getting the conversation started, and (3) finding someone in your group to take notes. 

OST works based on 4 principles, and 1 law.

  •  4 principles:
    •  Whoever comes are the right people
    •  Whatever happens is the only thing that could
    •  Whenever it starts is the right time
    •  When it’s over, it’s over
  •  The Law of Two Feet:
    • If you find yourself neither learning nor contributing, it’s your responsibility to take yourself somewhere else.
    • Your experience here today is entirely up to you.

Setting the Agenda: The agenda is simple. You are invited write your topic and name on a paper, and read out the topic and your name to the group.  As stated before, Open Space Technology is based on Passion and Responsibility. You do not have to hold onto your passions until you walk into the Convention Center in Madison. Take advantage of social networking to start posting your ideas and find other like minded individuals before the Congress.

Opening the Marketplace: Once all of the topics are placed at the Village Market Place, you will see the full schedule of topics. You are free to go to any session that interests you. If you want to go to two sessions at the same time, you can try to convince one of the conveners to change their time slot, or you can bounce between the two sessions.  If you think two sessions ought to merge, talk to the conveners.  As soon as you’ve decided which session you want to join, please go and get started.  The marketplace is now open.

During the sessions, you have 4 principles, and 1 law. Some of you will be pollinators. You may take advantage of the law of two feet and move between groups. During this process you may share ideas from one group and pass them onto another.

The other exciting part of Open Source is that when it is over, it is over. In previous Congresses, I have participated in sessions that moved onto dinner, and even late into the night. I am not sure if I can attest to the best note taking as the night went on, but I built some of the best friendships during these sessions. 

CLOSING

The closing has a couple of purposes. First, it is an opportunity to share the notes from your session with other participants. Secondly, it is an opportunity to share with the entire group your thoughts of the event. The entire group will return and join in a big circle for the closing. As we go around the circle, you are invited you to share any reflection you wish about your experience. This is simply a time for sharing, not for dialogue. 

If you are a first time attendee to the Congress for the New Urbanism, this is the best way to make 500 new friends on the first day.

 

Strong Towns will be at CNU 19. Over the coming weeks we will be previewing Congress events and activities. If you have something you would like to share here relating to CNU 19, please contact Charles Marohn at marohn@strongtowns.org. We thank Edward Erfurt for sharing his material here today and encourage everyone to follow his blog, Restless Urbanist.

Tuesday
May102011

Figuring us out

On our Tuesday off day here (we typically publish here on Monday, Wednesday and Friday), I wanted to draw your attention to an important comment left last Friday by one of our long-time, active readers. Hopefully the revelation will help our readers understand exactly what we are doing here (and then help us out).

I finally figured Strong Towns out this morning!

I've been following you guys for several months now, and have really enjoyed the discussions here. I especially enjoy challenging status quo, and what appears to be common sense.

Often when I read what is said and written here, I get frustrated as you don't give us the answers, which you responded to a while ago when someone raised this point.

Sometime after that, I realized Strong Towns is, in part, trying to be a teacher who has given the class an open ended assignment. Some students (or readers like myself) complain with the lack of parameters and want more assistance with the answers.

This morning I realized that Strong Towns isn't a teacher, and they don't have the answers. They are taking part in the discussion, facilitating it really.

Perhaps I should have realized this a long time ago, but this epiphany has been building in me a long time. I look forward to more, and perhaps even participating more now that I think I understand it.

Thank you for your great work!

-George

This was a great insight. Thank you, George. Here is part of my response:

George,

Amen to you, I say.

You have made my day. Yes, we're not being coy when we say that we do not have the answers or know a magical solution. We're not trying to be cryptic so that you figure it out on your own. The reality is that there are things that we can do -- rational responses as JHK would say -- but no real solutions.

You get in a car accident, total out your car and suffer critical injuries in the process. There is no solution to that, just a set of rational and irrational responses. America is kind of in a slow motion car accident right now. I kind of feel like our role at Strong Towns is to help explain it so that we can start identifying and putting in place those rational responses.

-Chuck

Strong Towns is more than just the three of us. The strength of what we are doing here is only going to be realized when it brings others - like you - into the discussion and we can collectively figure out what to do about the situation we now find ourselves in. And this is not a one-size-fits-all type of deliberation either. America today needs the innovation and experimentation we discussed here last Monday (more on that tomorrow).

So consider this a call to rational thinkers everywhere.

Join us.

 

We're just three guys trying to make our cities stronger. Please consider supporting our blog and podcast with a monthly supporting donation of just $5 or $10. Every supporter we sign up gives us the resources and the credibility we need to reach more people with the Strong Towns message.

Monday
May092011

How do we fix the housing problem?

The downward pressures on the housing market continue. The opposing force - inflation brought about by Federal Reserve policy - is a blunt instrument that has potentially explosive side effects. How do we unwind six decades of malinvestment in a development pattern that cannot financially sustain itself?

Last month we started collecting donations to cover the cost of producing a DVD version of the Curbside Chat. Our goal was to connect with 100 of our readers that would be willing to donate $25 each. We've taken quite a bite out of this so far -- we've signed up 31 -- but we still have a ways to go. If you value what you read here or what we produce in our podcast, please do what you can to help us spread this message. We thank you, especially if you are one of our 850+ Facebook connections! It was only a year ago we were still below 200. Thanks for spreading the word. 

Last week, Rob Steuteville of the New Urban Network published a series on the coming housing calamity. (Part 1Part 2) Yes, that is coming, as in yet to happen. The posts were inspired by a presentation from Arthur C. Nelson at the Forum on Land and the Built Environment in Cambridge, Massachusetts, and they describe how the baby boom generation selling their homes combined with shifting preferences and economics amongst potential buyers are going to drive down home ownership rates and the demand for new homes, especially within the current development pattern.

This is a powerful narrative that adds to the growing body of evidence suggesting (a) we have massively overbuilt the number of single-family housing units in this country and (b) housing prices are more likely to move dramatically downward than dramatically upward. When you combine this with the Strong Towns insight that our pattern of development cannot be maintained using the excess wealth it generates, you have a toxic mix.

That should not suggest that we've started to come to grips with reality yet. Our first attempt was to try and prop up housing with first-time homebuyer credits and other gimmicks to artificially create demand. Currently our collective delusion is nowhere more clear than with the talking heads on CNBC and the wishful thinking over the Federal Reserve's ability to solve our problems.

There is a sense in some important circles that we can, through Federal Reserve monetary policy, gently adjust our way out of this problem. Continued low interest rates is one aspect of this strategy. The lower the interest rates we maintain, the greater the buying power of a set housing payment. Historically-low interest rates have certainly kept housing prices from falling faster than they have.

Another aspect of this is the loosening of the money supply and the higher acceptable rate of inflation. The Federal Reserve is tasked with maintaining the stability of the currency and, at least in theory, tries to keep the inflation rate as close to zero as possible. An inflation rate of zero means that prices are stable and are not being artificially driven upward by an excessive amount of money in the system (resulting in cheap or easy credit and a financial boom or bubble).

The Federal Reserve has raised inflation expectations and has actually suggested, as part of their quantitative easing program, a target inflation rate of 2%. In other words, they are adding money to the economy (largely by giving it to banks, which largely give it to the U.S. Treasury) in the hopes that it will get things moving again, get people spending and "kick start" the economy.

Let's look at how this might impact the housing market. Take a homeowner who purchased a $300,000 home at the height of the bubble with just 10% down payment. That house has dropped in value for three years in a row and is now probably worth around half of its peak value. If the house now started to inflate in value by the target rate of 2% per year, here is how that would impact the ability of the homeowner to get out from underneath their underwater mortgage.

Assuming a static economy (no further housing correction) with inflation driving "growth", in twelve years, this home owner would be solvent again. If you ramped inflation up to 4%, you could get there in nine years.

Of, if we had a much higher rate of 10%, we could cut that to 5 years.

So why not just print money, inflate this debt problem away, restore mobility and let's just get on with it? We could get back to building homes, adding new highway lanes, selling cars, employing all of those people in the construction-related industries and basically get our American mojo back again. We can just reset right back to 1990 and do this thing all over again (but we'll be smarter this time and not allow subprime CDO's).

First, there is no evidence that a higher inflation rate would actually wind up reflecting in the housing sector. Steuteville's post of Nelson's research shows that there are so many downward forces on housing right now that it is not clear that a higher overall inflation rate could save the housing market. There is a strong chance we would get lower housing prices anyway, but after a long bout of inflation everything else would cost more too. That is not a good combination.

Second, instead of housing, higher inflation is likely to show up in other sectors of the economy, particularly commodities and imported products. Here is our theoretical inflation rates as applied to gas prices at the pump.

You can see that with 10% inflation we could help homeowners get out of their bad mortgages, but we would also be paying over $6 a gallon for gas (and that assumes we stay in the same spot on the supply/demand curve, which we won't). Again, what do high gas prices do to the value of our suburban and exurban housing stock? That's right: it drives it downward. So inflation likely creates this downward feedback loop because of the energy-reliant nature of our development pattern.

Third, it is important to understand that inflation is a tax on savings and investment. Any inflation-based bailout of the housing sector is simply a tax on people who have saved prudently and did not buy the McMansion they could not afford. How strong of a society would we create by bailing out all of the wasteful decision-makers and their malinvestment at the expense of the prudent and the wise?

Finally, there is nothing to suggest that we can fine tune such a complex economy in this way. While the Federal Reserve and many economists are confident they can add just the right amount of money in the system to get it sloshing around at a 2% inflation rate, others suspect the flow of money might be like water building up behind a dam. You can add and add and add and see no impact to the downstream flow, but once the dam breaks, the money spills out everywhere and you have a flood of hyperinflation. 

For me, I am not sure what is going to happen, but the risks of really high inflation do not seem to be justified by the potential that we just might be able to bail out bad housing investments, paying much higher prices for everything from gas to groceries in return. I think most people would agree with that in theory, but it is not like the opposite is a great scenario either. Massive housing default, bank failures, a drying up of credit and capital and likely much higher unemployment for a significant amount of time.

How do we unwind six decades of malinvestment in an American development pattern that cannot be financially sustained? That seems to be the question of our time. While we are trying to figure it out, we have huge segments of the work force sitting idle waiting for a recovery in construction that is not going to happen. Most of the rest of us worry about the impact high gas prices will have on our commutes and our trips to Wal-Mart. It seems as if we collectively acknowledge that massive change is necessary, but seem intentionally oblivious to the extent it is going to impact what we have come to know as the American way of life.

None of this is more evident than in the leadership of our cities and towns. We've stripped these places of any substantive ability to innovate and respond to stress. And now, in what has to be considered the best case scenario, they will have their tax base - which has been effectively cut in half - recover to 2008 levels by 2023 while their cost of doing business increases by 30%. It is time to focus on building Strong Towns.

 

Additional Reading 

 

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