Sunday, March 29, 2015

Pittsburgh's Pickle

There was an article out recently about how cities suffer a persistence of memory. (NextCity: How a City's Collective Memory May Predict Its Future) You have to wonder about that given the glaring example of the great Ketchup story this week past.

Of course the big business news of last week was the announcement that the food conglomerates Heinz and Kraft were merging. The news sent everyone in Pittsburgh into a tizzy, with both city and county struggling to respond to the publicity, though I wonder if any local politicians were consulted before any of this happened, or what local policies really have any impact on big business decisions like this.

Times change, dude!

The reaction to the news really is curious.  Given all the talk of new Pittsburgh and all the various catalysts talked about: eds and meds, high tech, Marcellus (and related) Shale... etc, etc, there rarely is ever any mention of food manufacturing.  Granted it was a big part of history here, but we are talking some ancient history at this point. Pittsburgh's Heinz roots date back long into the 19th century (talk about memory) and for a long time ketchup has been.. well, just ketchup.  In fact some say Ketchup has suffered from an innovation problem for years (New Yorker: The Ketchup Conundrum).

Even Big news jumped into the fray over what this all means for Pittsburgh.  No less than the WSJ asked: In Kraft Deal, Will Pittsburgh or Chicago lose more jobs? But how many jobs are here? WSJ mentioned a number that 800 Heinz jobs remain in Pittsburgh.  I wonder if the number is that high?  To start, the venerable producer of Ketchup has not actually produced any condiment, or any other product for that matter, locally in at least a dozen years. (as noted by the NYT years ago: Pittsburgh's Time of Transition) So really no manufacturing employment at all. Saving jobs at Heinz is mostly about whether the remaining headquarters staff will remain here in Pittsburgh. But again, has anyone asked what is remaining?

Seems like a recurring story in that just two years ago we went through this all when Warren Buffet and his Brazilian partners bought Heinz outright. Everyone wondered what would happen to what was left of Heinz back then. One of the stories that followed that transaction was some layoffs and focused buyout offers the new management apparently offered just to its Pittsburgh employees. Those past stories said that Pittsburgh based employment at Heinz was coming down pretty drastically from 1,200 to 800 workers here. That # I am guessing is the source of the 800 number recently quoted in the WSJ article this week. Is that # still valid given all the changes going on down there? Sure sounds like a lot of staff has been leaving from those news stories. I really have to believe the current employment numbers, at least in the city, are really more like half the lower number.

There are also some folks working at Heinz's Food Innovation Center in Warrendale, jobs that they have also been cutting back on in recent years according to the news. Though outside the city of Pittsburgh proper, I presume there still are test batches of ketchup made there, so yes, Heinz still does make Ketchup here. Kraft has it's own research programs as well, which they appear to have been focusing on improving in recent years, so there will be an impact there of this merger for sure. Hopefully this link is not a premonition of the division's future.

Whether the current employment count is 400, 800 or something in between, how big is that to Pittsburgh? Are all of those jobs at risk? Of course, every job matters to the person employed, but how much is at stake in any future reorganizations at the new Kraft/Heinz. The current numbers are that roughly 40,000 folks in Pittsburgh are employed in industry categorized as Management of Companies and Enterprises. That in itself is just over 3% of all jobs in the MSA. Then the entirety of Heinz's footprint here works out to maybe 1% -2%, at the very most, of that.

But whether the merger of the two firms brings more jobs to Pittsburgh, or further eviscerates what was once here, only time will tell.  To quote the great Carly Simon, and tomorrow we might not be together.


Thursday, March 26, 2015

Pittsburgh's Seven Year Demographic Itch

So this is worth noting.   Some will see the wonkish news stories trying to decompile the latest dump of population estimates from the friendly gnomes at the Census Bureau.  The summary is that I was kind of expecting the net migration trend to dip negative a small bit in the latest year of data (July 2013 to July 2014,) but Pittsburgh just squeaked by for a 7th straight year of positive net migration. But we will put a * on that positive number. More later.

The news stories will mostly look at the overall population change, which I guess they have to, but the recurring story here is that the Pittsburgh region stands out as a place experiencing natural population decline (more deaths than births).  Since natural population decline is really a demographic legacy of changes literally decades ago, you need to think about it differently from what is happening today in the regional economy.  A big topic I've been talking about for a long time.

Here is total net migration for the Pittsburgh MSA since 2000. The historical trends before this were pretty much all negative every year (with one possible exception around 1991) going back pretty much to the end of WWII.  So the break in trend in mid-decade, with net migration turning positive for the region, was a big deal IMHO.

That the positive trend has extended for seven years is pretty remarkable.  For a region that experienced net migration losses on the order of 50K per year in the early 1980s, just being net even is an accomplishment, but still, the recent trend appears to be contracting.   It likely reflects that in early 2013 you saw the closest convergence of regional and national unemployment rates in the last 8 years. If that convergence had continued I would have really expected this net migration trend to turn negative.  But that trend did not converge more, so we will see how it all plays out next year.

What's the * in the positive net migration story, even if small.  I've graphed total net migration, which is the sum of net domestic migration and net international migration.  In this data, net international is almost always (there are rare exceptions) a positive number by definition.   Domestic migration is the number of people who move within the US each year.  Domestic migration has turned negative for the Pittsburgh MSA (-2,806 for the 2013-2014 period), again probably reflecting the past contraction of regional and national labor force trends.  So the only reason there was an, albeit small, positive net migration (+411) was due to the net international immigration number (+3,217 for 2013-2014). That number is still pretty small relative to most any other metro region in the country, but still responsible for offsetting most of the natural population decline and keeping the population stable. There is the headline.  (if you waited for it).

Addendum.. here is the by county super summary of population change over the most recent year of data:

1-Jul-13 1-Jul-14 Change
Allegheny 1,232,953 1,231,255 -1,698
Armstrong 68,110 67,785 -325
Beaver 170,060 169,392 -668
Butler 185,369 185,943 574
Fayette 134,799 134,086 -713
Washington 208,194 208,187 -7
Westmoreland 361,080 359,320 -1,760
Pittsburgh MSA 2,360,565 2,355,968 -4,597


Monday, March 23, 2015

There (could be) an app for that - Pittsburgh Parking

Wonky news buzz over talk that the Pittsburgh Parking Authority (PPA) will pursue an app to pay for Parking. PG: App could be used to pay for Pittsburgh Parking

People forget, but it is something the PPA said would be in limited operation last year actually, following the model of...  Latrobe, PA. See the last paragraph in (Feb 2014): New App Lets You Pay for Parking on your Phone.  But hey, progress is progress.  How about the bigger question and imagine what might be possible if the Parking Authority actually made a live feed of some of its parking utilization data. I'll just point back to this post: Free our (parking) data. 

But this all could enable the real innovation in parking economics here...  resident discounts!!! or in the great duality of all things economic: non-resident surcharges.   Ponder that for a second and when it comes to pass remember where you heard it first.

Addendum...  what was the final story on the great missing parking meter story?  Remember: Audit can't trace missing parking meters.  What's a few tons of scrap steel anyway.  


Monday, March 16, 2015

Who needs (Braddock)?

To use a particular vernacular, here is the bottom line up front: A law journal article just out will be of interest to most (of the remaining) readers here. Stanford law professor Michelle Anderson authored this just published in the Widener Law Review: WHO NEEDS LOCAL GOVERNMENT ANYWAY? DISSOLUTION IN PENNSYLVANIA'S DISTRESSED CITIES.

What is the foil for the article? The geography known to the Commonwealth of Pennsylvania as the borough of Braddock, PA. While you may not quite catch it in all the legal verbiage, it really is a provocative thesis all but arguing that Braddock should cease to exist.

Braddock Films
Never mentioned, but I couldn't help thinking about the recent Kevin Sousa meme when reading it and maybe not for the reasons you may think. Hard to see any mention of Braddock in the popular press these days without a de rigueur mention of Sousa and his latest project: Superior Motors.  The recent PG article (Kevin Sousa, a visionary chef with fiscal issues on his plate) has sparked a new look at the project. The blowback on the article includes commentary out there such as this blog post: Everything is (Not) Awesome or “Is This Good Enough For Pittsburgh?

IMHO, I think both angles, or virtually all angles I see debated on this, miss the far more important story. I take for granted that Sousa himself is a positive change agent, but what happens if the project is successful? Or even wildly successful? A wave of prosperity comes to Braddock and spills over into neighboring communities? Some believe that has already happened.  I really do get routine queries from the media or other interested parties from all over the country asking some question about the dramatic turnaround that has already happened in Braddock.I think local folks get the difference between the vision and reality, but folks from afar don't get that message. It is a premise that I've pointed out belies some stark statistics including some of the steepest vacancy and poverty rates across Pennsylvania that have yet to show any signs at all of improving to date. If you think a restaurant is the solution to the problem, you are probably underestimating the structural problems Braddock and nearby municipalities have to deal with. 

1994! - see Lucchino referenced below.
I really think that the obsession on how big or impactful the new restaurant project can be for Braddock has a side impact of distracting the powers that be from the harder questions about the future of the borough and environs.  The more talk of the restaurant, the less talk of what it will take to address harder problems.  The problem is that the restaurant is really just the latest iteration of a recurring story of how Braddock has turned the corner,. You can't recall so many previous versions, including the earlier restaurant project in Braddock, because they have all been for naught. The redevelopment of the Mon Valley has been the county's primary economic development focus for decades, with plenty of headlines to show for it along the way. As a result we have had decades of folks talking about how much positive change is taking place in Braddock. I once was yelled at by a long since deposed County Commissioner for merely questioning the premise.  

What are those harder questions being overlooked? Well, there we come back to the law article just out that looks at just how dysfunctional some local governments are in Pennsylvania. The very first sentence of the article: "Pennsylvania is home to an exceptionally high number of small, fiscally troubled local governments—each one a monument to the decline of American manufacturing and its middle class jobs."

I'll be the first to quibble with the economic history embedded in that.  Braddock's decline started long before the decline of the steel industry, but the cause is not as important as the reality of today. Braddock, by most metrics of distress, has only continued downward over the last decade. Why is that?

Let's talk beyond Braddock to desensitize this all. Braddock in a sense is not the worst off place for its residents. Children in Braddock actually get to attend a functioning school district in the form of Woodland Hills. That is a result of the General Braddock school district being one of the original districts that were combined to form Woodland Hills as the result of a Federal consent decree three decades ago. The children of the neighboring Duquesne School District have no such luxury and have seen their schools literally deconstructed, with students unwanted by any other school district in the county, only to forcibly assigned by state fiat into nearby school districts. If you think Duquesne is an anomaly then go read the recent research showing Pennsylvania having the most unequal school funding in the nation.

School Districts, and municipalities such as Duquesne, or Rankin, or Braddock, all are forced to exist despite having no fiscal capacity to maintain minimal public services. I remain perplexed that there is no greater hue and cry over what is an ongoing miasma in Duquesne. Hence again, the law article focused on the hyper sensitive topic of municipal disincorporation and the greater failings of the Act 47 process in Pennsylvania which may have a counterproductive goal of keeping low functioning governments extant. Maybe they shouldn't be strung along.

If you read the footnotes to the article, and law authors do like their footnotes, there is a reference (warning, pseudo vanity alert) to a report completed long ago by former County Controller Frank Lucchino. His report titled Reclaiming Hope - Voluntary Disincorporation in Allegheny Countybrought up the topic that is like political kryptonite in Pennsylvania. Just coming out with that report was an act of political courage since similar talk has brought political careers to an end before and since. The article actually concludes by pointing out that if they were looking for new legislation to address municipal distress  then "state legislators should go back to the drawing board—the one that Frank Lucchino drafted for them years ago." Easier to talk about menus.

The Luccino article, and other sundry ephemera on this whole topic of fragmentation in local government in Pennsylvania is on my web page on the topic (minimally updated in a decade at this point).  To end I'll just throw out this illustration I put together years ago showing just how much local government there is in Pennsylvania:


Saturday, March 14, 2015

All things Larryville - long past inflection

I'm kind of fascinated by the media's newfound interest in the changes taking place in the City of Pittsburgh's Lawrenceville Neighborhood.   One is this on some micro-development in this story last week: How much should this building worth?.   But also the piece last week: When did Pittsburgh's Lawrenceville become Larryville.  You might thing there is a new story somewhere.  But are any of these new stories?  Not really.  Just to begin, here is the Financial Times of all papers from a few years ago (2009):  Diamond in the Rust.

But the answer to the Larryville question goes back much further if you don't want to be superficial about it.  If you have any doubt see the map of real estate assessment changes that had already taken place between 2002 and 2012. I'd argue that the property appreciation represented in this map is most concentrated across a wide areas throughout Lawrenceville and emanating into its environs. Parsing that is a long long post, so hold that thought.  But that map looks like this which probably only captures a fraction of the appreciation that has been accelerating in the neighborhood since the assessment (making future current affordability in the neighborhood another topic altogether):


But that is only the beginning of the answer.  The most dramatic change in Lawrenceville has been its demographics.  I will tell you that as late as 2000, folks who think about these things would find me to ask me what was up with the census tracts in Lawrenceville because they were so old.  Many, many local elders lived in Lawrenceville, and not elders institutionalized into  Nursing Homes or similar locations that might alter the demographics exogenously.   Lawrenceville has one of the highest concentrations of elders living in their homes compared to most anywhere in the entire nation, thus giving rise to the concept of Naturally Occurring Retirement Communities (NORCs).

How and when then the demographics of the census tracts in Lawrenceville changed:

So again, the answer is not recently, or really not recently.   The inflection point (i.e. when the 2nd derivative, not the first = zero) in the time series for each of those trend lines is not even in the last decade, but well into the 1990s I would argue.   So then who and what is responsible?  You might want to go back into the 1990s to see some of the very focused and grassroots efforts. Try this from the PG in 1993: Sprucing up the neighborhood. Those efforts are what folks ought to be writing more on now if you want to give credit where due.

Those efforts probably aided in large part, by the lack of a large empty hospital in the neighborhood. I think I myself once wrote on Lawrenceville that "the real estate speculation must have already begun" as far back as 2002 in Goodbye, St. Francis.  The current story of Lawrenceville may have as much to do with just how low real estate prices were until very recently.  That distorts all these stories (and that map for the record) in the percentage change in real estate values.

Sort of a Pittsburgh story writ large in that even solid price appreciation has not really raised a lot of local real estate to levels that might be considered normal elsewhere.  Thus the stories of late (long after the real estate price collapses elsewhere) that Pittsburgh is still one of the most affordable real estate markets anywhere.  Lawrenceville prices were going unsold even to the "We Buy Homes" folks not long ago. As unbelievable that may seem at the moment, it fostered a wave of rehab, some truly stunning in what was done, but also some truly depressing in how quickly folks flipped homes after doing only basic work, often destroying more than improving.  Look up the modern use of the term "remuddling" which really must have been a term re-coined to describe some of what has been happening here.

But all that only touches the surface of a big topic, but nobody should think for a second that the Lawrenceville story, whatever that story is, is a story of now. It has been a long time coming.  If you want a more recent qualitative look at the changes going on within Lawrenceville, which is not just one universal answer, see the report and survey:  Who moves to Lawrenceville and Why?

If you are still reading this post, or even the blog I probably owe you a beer.   The lack of daily posts appears to have dropped the number daily unique readers from something like 500 to under 50.  Probably better that way.


Wednesday, March 11, 2015

Uncle Martin asks.....

This is something a bit off-script.  The chair of the City of Pittsburgh Planning Commission has some issues with the proposed headquarters for U.S. Steel, the first major development in the works for the rebuilding of the Lower Hill District. Trib: Pittsburgh Planning official pans U.S. Steel headquarters proposal.  PG: Pittsburgh Official Does not Like proposed design of new U.S. Steel headquarters.

It is not like U.S. Steel and local government have never been at odds with one another.  It was more Big Steel's anger at some new Allegheny County (Pittsburgh, Allegheny County... whatevs) regulations over some pesky new air regulations that prompted the corporation to run these full page advertisements in 1976. Different context, but the sentiment may be in play again.

If that comes to pass, the doomsaying over development in the Lower Hill has also been in play for some time.  Recall that everyone thought the plan for a Penguins-linked casino was thought to be a sure thing once before being pre-empted, surprisingly, by the late Don Barden. Why was that? In part because it was linked to development of the Lower Hill and keeping the Penguins in town.  When it didn't come to pass, there resulted lots of gnashing over whether the Penguins themselves would leave the city.  Yes, that unthinkable was on everyone's mind, see Washington Post: Penguins' Future in Pittsburgh in Doubt.  But if the will is there, there is always a Plan B.

But back to the here and now.  There actually is an expensively-developed (and completed just last fall) Preliminary Land
Original caption reads:This illustration indicates the scale and
density that can be achieved by following the regulating plans
described on subsequent pages
Development Plan for the Lower Hill District
. I will leave it to the land use planners and architects to debate the finer points of what the plan intended vice what USS wants to build.

What I wonder about more is that if the finances do not allow for something more grand, for lack of an adjective, for this one parcel, how is it that the plan for a not-cheap multi-level park/bridge will be feasible not far away. That is a big part of the plan right? See last fall: @brotheroneill: Building Park over I-579 could cap rebirth of the Hill.  That has actually been part of the 'plan,' as far back as the Isle of Capri's vision for the Lower Hill District (see Pittsburgh City Paper 12/2/20016: For Hill Residents, Requests from Casino Developers May Be Too Much, Too Late )  Goes back to the difference between things proposed vice things that actually happen around here. Why am I thinking of the promised Intermodal Grant Street Transportation Center? ("It's as close to an intermodal transportation center as we'll get,")   But save that for later.

And yes, I know this was also in the the most recent post, but again this one advertisement just reminds us just how wide a gap there is between vision and reality for the Lower Hill.  Uncle Martin might be asking this question anew.....


Monday, March 02, 2015

Downtown Pittsburgh is Dead; Long Live Downtown Pittsburgh

Just a passing note that Downtown Pittsburgh has been ranked #1 for 'livability.' See Trib: Pittsburgh's Downtown tops ranking of small to midsized cities.  One of those stories I bet everyone covers, and I'll add links when more coverage comes online.

But a decade ago there was so much talk of how quickly Downtown Pittsburgh was dying that I was prompted to write:  Is Downtown Dead? Hardly.

What a difference a decade makes?  Of course there have been a lot of changes Downtown, but a decade ago the talk that all things Downtown were imploding was so pervasive, and so unsupported by data, that someone had to point out the incredibly persistent strength of the job concentration in the city's core.  For slightly more recent parsing of Downtown employment numbers: Nullspace August 12, 2012 .

Of course the new ranking is about the 'livability' of Downtown, and  the sheer number of people living Downtown is a story unto itself.   Downtown Pittsburgh, i.e. the Golden Triangle, was once a place almost devoid of a residential population outside of a small handful (or less) of large high rise residential buildings.  A Downtown 'neighborhood' would have been hard to describe the non-incarcerated population was so small. I actually think the true Downtown 'neighborhood' was that which was once called the "Lower Hill District" (for more see "The Downtowners" in the last issue
of Pulp Magazine from 2004) which was as many know was unceremoniously quite ceremoniously leveled in the 1950s.  But that is another story, though a story coming up more and more often of late.

Nonetheless, the current numbers living within the Golden Triangle, whether that be the Census 2010 count of 3,629, or higher numbers others have estimated, is an achievement.  Probably worth keeping in mind that the population jump Downtown was highly subsidized achievement with a lot of construction supported by various forms of public or public-private investment.  Expensive, but a determined strategy and in large part it worked.  Note it is a somewhat different causal story in Pittsburgh than some similar population growth in Center City Philadelphia which has (arguably) been driven by a comprehensive tax abatement program on residential construction there.  

But how did we get here from there, or there from here? It might be interesting to look at the Downtown Pittsburgh plan from the mid-Murphy years.  Yes, it does include the vision for the maligned and abandoned Fifth and Forbes retail development (I'll point out there is a big skyscraper going in where the hat shop everyone was trying to save used to be), but there is a bit more there and quite a range of participants in the process. Read closely and find the small illustration for the plan to reintroduce a street grid across the Strip District, which is still my preferred plan, if the least likely to be implemented comprehensively.

On one last note. Recall that in 2000, the hope for Downtown living was so hard to defend that folks jumped any anything, any sliver of data, even if completely misconstrued, to believe. Below was a page 1 headline and story about the big jump of downtown residential population that appeared to show up in the 2000 census.  What was completely overlooked was that the expansion of the county jail had generated new population that exactly matched the net population growth Downtown.  So a lot of new, mostly young, people were indeed living Downtown, but I am just not quite sure that is what anyone really meant.