Tuesday, January 04, 2011

Down(town) with numbers

Lots of numbers one could parse.. in a world of unlimited time.  This one I will have to get back to, but the Rivers Casino wants more table games.  In general the casino's slots revenues have been awfully flat over most of last year, which is better than declining, but still no real sign of a rebound induced by table games.  Table games in themselves must be doing ok if they want more, but what I would like to see is how the current revenue from table games compares to what was projected.  The question that follows is what tax revenue from table games is coming in for the library systems. Remember, at the last minute virtually all of the incremental tax from table games were earmarked directly for local library systems. Are they getting what they were expecting... or told they could expect?  I'll get to that.

Then there are far too many numbers in the latest study of all things Downtown.   Downtown is a complex topic, but it was not more than a few years ago that most everyone was writing off Downtown's future.  The common wisdom then was getting so ridiculously negative on the future of Downtown that I felt compelled to write: Is Downtown Dead? Hardly

So there.... Hardly.  That one oped may be the one I received the most negative email or other communications on ever... and I have written a fair bit of stuff that people didn't like.  Some folks really thought I was just plain nuts for seeing anything positive Downtown.  Some I think saw it as a metaphor for Pittsburgh the city, or for others the entire region, and the mere thought of anything positive rankled them to no end.   What? You mean all this bad stuff going on has not resulted in people voting with their feet and fleeing the city?  Residents yes, but not jobs.  Pittsburgh, the City proper has roughly 300K jobs located within its borders today, which is nearly identical to the number that were there in 1960.  Not even a slight trend down.   Go figure. 

I have not had a time to look through it, but the news summary says commuting costs are a concern:  So I wonder if the has any comment in there about the proposed parking lot privatization which would have a) guaranteed higher parking prices, but far more impactful b) would have contractually barred the city from developing new lots Downtown which would have virtually guaranteed excessively high parking costs for a few decades at the very least. At least a few months ago that seems to not have been as much a concern and the quote from them was "(PDP's Michael Edwards) believes motorists will pay higher rates to park in a vibrant Downtown.".   So I am unclear if the message is this is a problem, or not?

We are about to have an interesting natural experiment by the way.  Did the lower Pittsburgh Parking Authority rates put downward pressure on private sector parking rates.  We will get some data on that soon. 

Measuring who lives Downtown is a mess for a bunch of reasons and doing so over time is even worse.  In 2000 the Census Bureau made a mistake... actually several mistakes, specific to Downtown that screw up everyone to this day.   There was this little issue that the Allegheny County jail was rebuilt over the previous decade.  The Census Bureau had a problem with some of their group quarters data across the country and forgot to notice that the jail moved in the process.  So to this day, if you check the actual Census 2000 data for Pittsburgh, the entire population of the Downtown jail is located in the wrong place.  The new location is technically not Downtown at all according to the city's neighborhood definitions, but Uptown or Bluff as you wish.

Then there is this issue that the jail, as the result of rebuilding, gained capacity and went from a 1,500 person bedding to 2,500, and it pretty much jumped to that new capacity quickly after reopening.   So all sorts of comparison metrics are screwed up.    There were even news stories all about how great the jump in population was Downtown quoting the 1,000 or so new folks the census showed living there.  Unfortunately the jump over that decade was entirely correlated with the increased jail population, misplaced as it was.  The lesson is, and a lesson I use when teaching about this, is know your data and don't just take any number at face value... even the 'official' census data has quirks that impact analysis.

But if you look at those numbers in 2000, the Golden Triangle as defined as a neighborhood had a population of 5,222.  2,722 of which were institutionalized group quarters, and an additional 855 were non-institutionalized group quarters which was mostly, though not entirely, student housing of some form.  So I don't quite know what number you want to quote for living Downtown in 2000. (interesting looking back in it's own sake, but I had other Downtown residential numbers through history, and in comparison to a few other central busines districts in this article from almost a decade ago).  Or, it you are really into history, you can check out our 1977 profile of the "Downtown" neighborhood.  I'll add for the finance wonks, this graphic of where City property tax is generated which you will see has a big blob there from Downtown proper.

No doubt there are new folks living Downtown.  It's been a struggle for a lot of reasons.  I pointed out long ago that Pittsburgh's "Downtown" housing stock... comparable to say the Beacon Hill's of Boston, or Center City of Philadelphia... both neighborhoods that set the course for Downtown residential revitalization...  was really the Lower Hill District here in Pittsburgh. (and for Jonathan, here is a link to his article "The Downtowners" on the Lower Hill in the final issue of Pulp Magazine).  That would be a housing stock we not only obliterated in it's entirety, but add in a few roads and asphalt we pretty much made it undevelopable for half a century (at least?).  The real question is whether the Downtown residential development is sustainable. As others will explain, there is no Downtown residential housing that has been built without substantial subsidy. 

That's not a critique of subsidies which can be a tool to spur further investment.  The question it is time to ask is whether there has been, or will ever be, non-subsidized residential housing investment Downtown.  If there is some that I am unaware of, I will stand corrected.  The exception could be in the future the redevelopment of the state office building into condos (what is up with that btw?), though I suppose some would argue that the bare bones price the state is unloading it at is tantamount to a subsidy. You would think that if Downtown residential living was so valuable, and all this investment had increased the value of residential real estate in the triangle, then the building would have been worth more.  Great view down there.   Dare I mention...  Granite Building?

5 Comments:

Anonymous MH said...

After reading the PG article in your first link, you've missed the worst problem downtown faces. The article states, "The peak age of Downtown residents is 25 to 29." Even Logan's Run let people make it to 30.

Tuesday, January 04, 2011 9:10:00 AM  
Blogger fester said...

@ Rivers and statewide, table gaming tax revenue is about 13% less than the FY11 tax revenue projections using a straight monthly split allocation of revenue from August until December. The Rivers is proportionally doing about what should be expected given the number of tables its operates, maybe slightly underperforming, but the LQ is close to 1.00. It is neither over nor underperforming its Pennsylvania peers.

Tuesday, January 04, 2011 9:16:00 AM  
Blogger Infinonymous said...

Good point about subsidization. Within city limits, high-end properties get subsidies on grounds high-end properties are desirable while low-end properties get subsidies because they are undesirable. Has anything larger than a telephone booth been constructed in InsolvenCity without a subsidy recently (recently = since 1985)?

Subsidy = market rejection (or, just as bad, unjustifiable cronyism or corruption), particularly if every project requires a subsidy, and the subsidies involve hundreds of millions of dollars.

Even dopier: Subsidizing restaurants, beer distributors, bars, unremarkable retail strips and the like.

Until projects are undertaken on merit, it seems reasonable to conclude that the patient is still alive primarily because of artificial life-support systems.

Tuesday, January 04, 2011 10:02:00 AM  
Anonymous MH said...

They should subsidize beer, not beer distributors.

Tuesday, January 04, 2011 10:19:00 AM  
Anonymous BrianTH said...

I've got no inherent problem with subsidies for Downtown residential development at this stage. Downtown residents make possible a much better set of amenities for commuters and visitors (including local visitors). Downtown also has great potential as a gateway neighborhood for new residents, particularly those working Downtown, but also in general, since it sits right at the center of our transportation network with a nice cluster of walkable amenities. Speaking of transportation, Downtown residents take pressure off our congested highways and transit routes.

All these are sources of positive externalities, and so subsidies can be worth it. I particularly think they are worth it in this case where Downtown has really not yet reached critical mass as a residential area, and new units are a little expensive to bring to market (since for the most part they have to be converted from existing office/commercial spaces). And they shouldn't be too hard to recapture in the long run (see, e.g., the income statistics for Downtown residents).

Tuesday, January 04, 2011 11:03:00 AM  

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