Feb 26, 2020

Axios Cities

By Kim Hart
Kim Hart

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Situational awareness: Catch a new season of "Axios on HBO" Sundays at 6 pm ET/PT, starting March 1!

Let's dive in...

1 big thing: This year's census may be the toughest count yet

Illustration: Eniola Odetunde/Axios

Community leaders are concerned that historically hard-to-count residents will be even harder to count in this year's census, thanks to technological hurdles and increased distrust in government.

Why it matters: Inaccurate counts mean that communities don't get their fair share of $1.5 trillion in federal money allocated to cities and states.

By the numbers: Nearly all adults (95%) have heard of the census, and 78% say they'll definitely or probably submit a census form, per a recent Pew survey.

Yes, but: A sizable number of people aren't sure how to participate (i.e., they don't know it can be completed online), or they're mistaken about what information will be collected.

  • For example, only 17% of adults answered correctly that a citizenship question is not on the 2020 census.
  • 40% of adults under 30 say they don't know much about it, per Pew — not a surprise as it's the first time they'll be completing it as an adult.

Factors complicating this year's count:

  1. Distrust in government: About one-third say they may not respond because the census asks for too much personal information, per Pew. Another third say they don't trust the government to use their information properly.
  2. Rise of disinformation: Fears could be stoked by the spread of disinformation meant to reduce response rates among certain groups, per a report by Harvard's Shorenstein Center.
  3. Digital deserts: The biggest change this year is the ability to fill out census forms online. While convenient for some, it adds a hurdle for others who do not have internet access or who are not proficient online.
  4. Limited resources: Census Bureau budget constraints mean there are fewer on-the-ground workers knocking on doors. This leaves it up to cities and towns to encourage participation.

New York City, which had low response rates in the past two surveys, is spending $40 million on outreach and education materials and has provided $19 million in grants to combat disinformation, NYC census director Julie Menin said.

  • The top undercounted segment of the city's population is children under 5, along with African Americans and the Orthodox Jewish population, she said.

The National League of Cities is providing materials that local officials can customize, and it's working with the Robert Wood Johnson Foundation to provide $1.6 million in grants to help cities with the process.

The good news: "I've never seen elected officials taking the census so seriously," said Clarence Anthony, CEO of the National League of Cities. "It seems like there’s a greater commitment to reach the historically hard-to-count residents."

What's next: Most households will receive mailings in March asking them to respond online, by phone or mail.

2. The rise of "granny flats"

Illustration: Eniola Odetunde/Axios

Tiny cottages in backyards and apartments above garages — also known as granny flats or in-law suites — are gaining popularity in cities desperate for more, smaller housing options.

Why it matters: About 75% of the land in U.S. cities is zoned for single-family housing only. Proposals to build multifamily housing often run up against stiff NIMBY-ist opposition.

  • "Accessory dwelling units," or ADUs, are small and typically built in or near existing homes, so they don't face as much resistance from neighbors — and may get people more comfortable with adding density.

"A lot of homeowners can see themselves wanting to build an ADU, whether it's for a family member to stay in or for guests or a short-term rental, or they may see it as a tool to make the mortgage more affordable," said Emily Hamilton, research fellow and director of the Urbanity Project at George Mason University's Mercatus Center.

What's happening: Seattle, Portland, Minneapolis, Los Angeles, Austin, San Francisco and Washington, D.C., have made it easier to get permits for granny flats.

  • While California and Oregon have OK'd upzoning, other statewide proposals face steeper climbs. A Virginia bill to allow one ADU per single-family dwelling was tabled last month and won't be considered again until next year.

The other side: Critics say these units allow development too close to property lines and reduce street parking.

  • It's also expensive to convert a basement or garage attic into space that meets building code requirements, or squeeze a detached structure in the back yard.

What they're saying: Jenny Schuetz, a fellow with Brookings' Metropolitan Policy Program, said, "gentle upzoning" — allowing for ADUs, duplexes and triplexes in neighborhoods currently zoned only for single-family housing — is only part of the solution.

"ADUs are like the scooters of housing policy — they're flashy and cute and everyone loves them. Scooters are good at getting people thinking about other ways to get around, but inherently they don't scale. Even if we put an ADU on every single-family lot the U.S. — which of course won't happen — we wouldn't solve the problem."
— Jenny Schuetz
3. Why Amazon's bigger Go grocery stores matter

With the opening of its first large-format cashier-less grocery store in Seattle on Tuesday, Amazon is on its way to further expanding its physical footprint across U.S. cities, Axios' Erica Pandey writes.

The big picture: With its own network of stores, Amazon could attract shoppers looking for cheaper prices than Whole Foods and dramatically grow its brick-and-mortar reach.

Background: Walmart has long been the dominant player in the grocery business, with 50% of greater market share in 203 American cities and towns.

  • And while Amazon has made recent moves in the industry — buying Whole Foods' 470 stores and opening a handful of Go stores in big metros — its footprint doesn't come close to rivaling Walmart's network of 4,700 stores.

Now, Amazon has figured out how to scale its cashier-less technology to work in a new Seattle location that — at over 10,000 square feet — is five times the size of a typical Go store.

  • The stores will help Amazon get even further ahead of its competitors on speedy delivery, as they can serve as warehouses for fresh food.
  • The bigger, tech-infused stores will also be data collection machines for Amazon, feeding the tech giant information on how different neighborhoods shop and what they eat.

The bottom line: Grocery stores are essential in every city. Walmart's ubiquitousness in American life is thanks to the relationship it has built with its shoppers through groceries — and now Amazon may begin to shake that dominance.

Meanwhile, other tech headlines worth noting today:

1. Google pledged to spend $10 billion this year on top of the $13 billion in 2019 it spent expanding its footprint across the country, targeted to operations in 11 of the 26 states in which Google has a facility. (Axios)

2. San Jose approved the first batch of community grants as part of the city's Digital Inclusion Fund — formed during negotiations with 5G providers —intended to connect unserved residents to broadband. (Axios)

4. Rural America's meager business growth
Expand chart
Reproduced from Center for American Progress; Chart: Axios Visuals

The growth of small businesses has been concentrated in big cities and urban suburbs since the Great Recession, while nearly all rural areas have lost businesses in the past decade.

Why it matters: "Firm growth is a crucial part of economic development, and business creation has been critical in the aftermath of previous recessions. But policies geared toward encouraging startups have not been effective in rural areas, leading to a growing regional divide," per a new report by the Center for American Progress.

  • Southern rural areas have seen the highest levels of business deaths, with African American communities bearing the brunt of economic decline.
  • Small businesses in the South and rural middle America have been battered by growing consolidation in the agriculture industry, leading to communities being dominated by a single company.

Yes, but: Some pockets of rural America are seeing business growth, even though it pales in comparison to larger cities.

  • Graying America communities are generally recreation-dependent. These communities are located in large states such as Florida, Texas and California.
  • Many Hispanic centers are mining-dependent, especially in the oil and gas industry.
  • Latter-day Saint enclaves in Utah have large youth populations and less population loss than other rural communities.

What's needed: Policymakers should consider expanding business-development corporations or co-ops to support rural towns, which are also dealing with other problems including opioid use, hospital closures and unemployment, per CAP.

  • "Instead of federal government parachuting in and saying, 'Here’s what you need to do,' they should come and say, 'What are you doing and how can we help you do it better?'" said CAP senior economist Olugbenga Ajilore, the author of the report.

Go deeper: The disappearing startup

5. What we're reading

Axios' Felix Salmon reviewed "Golden Gates," the new book by New York Times economics reporter Conor Dougherty examining the housing crisis:

"Golden Gates" is not a book of policy recommendations with a tidy if improbable solutions chapter at the end. Instead, it's a messy yet deeply human story of how our democracy has evolved — so very imperfectly — to create a massive shortfall of housing, especially in and around San Francisco, and how a varied cast of characters are seeking to address that crisis.

  • No matter where you stand in the housing debate, Dougherty will persuade you that, looked at through someone else's eyes — someone very sympathetic, at that — your prescriptions are the problem, rather than the solution.

The book's conclusion: "There's no way to rectify a housing shortage other than to build housing, and there's no way to take care of people whom the private market won't take care of other than subsidies or rent control, or both. The details are democracy."

Go deeper: Dougherty was a guest on Felix's podcast this week for a special housing edition.

6. Urban files

Illustration: Sarah Grillo/Axios

America's rundown roads add to farmers' struggles (Axios)

As Seattleites and their money flow south, Tacoma residents grapple with changing neighborhoods (Seattle Times)

Investors see value in urban parking lots — as future multifamily buildings (National Real Estate Investor)

Why black businesses and homeownership won't close the wealth gap (CityLab)

Cracking the city code (Exponential View)

7. 1 😷 thing: Coronavirus cancellations

A tourist wears a protective mask at a Milan restaurant amid coronavirus fears. Photo: Valeria Ferraro/Echoes WIre/Barcroft Media via Getty Images

The spread of the novel coronavirus has prompted the cancellations of conferences, local events and vacations, putting big dents into some cities' tourism revenue.

Why it matters: The lost revenue is a blow to cities that count on the spending at local hotels and restaurants.

  • Mobile World Congress, the wireless industry's primary annual event in Barcelona, was canceled, Axios' Ina Fried has reported.
  • Italian officials canceled events due to the outbreak, causing Venice to end its Carnival early and Fashion Week in Milan to restrict public access, Bloomberg reported.
  • AT&T and Verizon are joining IBM in skipping this week's RSA security conference — one of the biggest security conferences in the world — in San Francisco. Meanwhile, Sony and Facebook both pulled out of next month's Game Developer Conference there.
  • EmTech Asia, slated to take place in Singapore next month, has been postponed until August.

Skittish vacationers are postponing trips, particularly cruises, the Washington Post reports.

The big picture, per MarketWatch's Jon Swartz: "Facebook’s canceled marketing conference typically brings about $11 million in spending to San Francisco, with about 5,000 attendees expected to stay at 10 hotels, according to San Francisco Travel Association, which also lamented other losses. Mobile World Congress, by comparison, is estimated to be worth about $540 million to Barcelona and provides 14,000 part-time jobs for local workers."

Kim Hart

Have a great week!