Tuesday, October 29, 2019

Spooky at HarborPlace

In 2011 I wrote an article titled "Perpetual Halloween at the Inner Harbor". Back then I was referring to the "carnivalization" of the Inner Harbor with its sometimes already gaudy attractions. Some concepts in a recent idea competition tried to top this with rides and a Ferris Wheel. Of course, there is already "Believe it or Not", the Ripley pavilion with the decorations  of a spooky carnival ride.
Perpetual Halloween at HarborPlace?

Eight years later, HarborPlace has become truly spooky. The halls of the pavilions are eerily empty, boarded stores, just ghosts of the past haunting the halls. The uncertainties of the retail world at large have gripped the retail microcosm of the Inner Harbor.

From "Festival MarketPlace to chain stores, to gaudy attractions, HarborPlace went through a steady spiral of stupefication and decline. And this isn't just an elitist intellectual take of a Birkenstock sandal wearing muesli-eater that looks down on what the masses want. The masses have spoken, and they don't want HarborPlace any longer.

Reproduced the world over, the mini-mall on the water's edge has now run its course, it is deflated, tired and obsolete. It's state mirrors its big sisters, the failing big malls and festival market-places across the nation. Most of them are sad shadows of their glorious past, withered by online shopping, cool new urban places and a younger generation in search of authenticity and tired of generic consumption.
Jim Rouse on the cover of TIME

With the luster off a clearer view emerges of what was wrong with the famed Inner Harbor redevelopment all along: It makes obvious that the successful conversion of the once working waterfront was only a thin veneer of glitz surrounded by roadways on steroids separating it from downtown and the nearby neighborhoods. Neither the historic communities of Little Italy and Federal Hill nor the retrofitted rehab community of Otterbein engage with the Harbor, neither functionally nor visually. In the case of Federal Hill this is mostly due to geography and the steep park side blocking direct connections. But with Otterbein and Little Italy the separation is merely manmade: 7 or more lanes of highway and the ungainly broadsides of Scarlett Place and Harbor Court.

Massive buildings of the kind that the original 1964 Wallace McHarg masterplan tried to avoid, block neighborhoods off. They slipped through during a time when developers began to safely ignore carefully crafted planning documents, namely the Harbor Masterplan of Wallace Roberts, Todd. Contrary to urban lore, plans to make the harbor an attractive recreational waterfront date back to at least 1951, much further back than the era of Mayor Schaefer and developer Jim Rouse which get most of the credit today.
1951 rendering by Edward S. Black (Beggar or Chooser?)
To me, the most significant area of downtown Baltimore for potential development from the standpoint of civic design and fine architectural setting, is the inner harbor area I have been inspired by the possibilities of this area from the very time I arrived in Baltimore to become the Director of Planning eight years ago.11 …the entire Inner Harbor can be surrounded by beautiful buildings with a fine, direct relationship to the water itself. Properly planned, waterfront-orientated hotels, office buildings, restaurants, and clubs can produce a much higher taxable base and much better use of the land than is now the case. If we can add cultural and recreational facilities, possibly some of them using the water, we can make Baltimore a city which its citizens can point to with pride as truly one of the most exciting cities in the world. Baltimore Planning Director Arthur D. McVoy (1956

A maybe more egregious flaw is that HarborPlace's programming became increasingly tourist oriented. "Cities are fun", the Time Magazine had proclaimed on a title page showing HarborPlace developer Jim Rouse. But the inventor of the "festival marketplace" didn't have a cheap waterfront carnival of the kind we see in Coney Island or Ocean City in mind. The focus on visitors alineted the locals who began staying away.
Vacancy in the once lively pavilions. The ghosts of failing retail
(Photo: Khadija Smith)

The current calamity of the failing pavilions languishing in receivership cannot be solved without some drastic reversals. Plans to rethink the Inner Harbor are plentiful. One careful has to separate the good ideas from the bad ones. Cooper Robertson's plan of 2003 took up the issue of the wide highways that replace the once planned overhead freeways between I-95 and I-83. It was that plan which suggested to close the traffic "dogleg" between Light and Calvert Streets which Ayers Saint Gross repeated in "Harbor 2.0".

Both firms ran into the buzzaw of traffic engineering concerns. Now with a Mayor who is a man of neighborhoods, an ardent proponent of "complete streets" as the chair of the transportation committee in the City Council, and a new Director of DOT trying to clean up the failed department, it is time to finally connect the Inner Harbor to its city by giving the barrier roadways a series of "road-diets" until they become connectors instead of dividers. A good time to test a closure of the "dogleg" roadway would be "Light City".
An architectural sin added later, now fenced off (Photo: Khadija Smith)

Central Baltimore is the city's fastest growing neighborhood, but it is woefully short of open space: The Inner Harbor must become again the area's premier park, for which it was beloved in the early stages of its transformation. This would benefit the residents of Little Italy, Harbor East, Federal Hill, Otterbein and the new neighborhood that used to be downtown.

The latest Rash Field redevelopment plan is a good start after it thankfully dropped the idea of an underground garage (also a Cooper Robertson idea). The failed pavilions need to go and make room for carefully designed open space which connects the island that used to be the McKeldin Plaza with its walkable fountain designed by Mr. Todd. As has been proved from New York to Seattle, well designed central parkland can add so much value, that the loss of those two mostly vacant pavilions should cause no heartburn at all.
When HarborPlace was a blank slate in 1957
Most importantly, perhaps, HarborPlace needs to return to water based themes that reflect its history, boats, boat tours, ferries and maybe a fish market. Also the fantastic 5 mile Baltimore waterfront promenade needs to get its spot as a top attraction. It also has fallen into state of being forgotten, just like HarborPlace.
With just a few fixes, it could easily be Baltimore's largest attraction, not just for visitors but for every community within walking distance of this wonderful amenity from Locust Point all the way to Brewers Hill.
Wrestling Harborplace out of private hands and back into the public domaine where it belongs shouldn't be overly expensive. The Waterfront Partnership just needs all the support it can get to expand the renewal of Rash Field all the way to Pier Six.

The spooky harbor may be fine for Halloween. But only a day later this week Baltimore is gearing up for its annual Light City, this year combined with the Book Festival. Light City, the Book festival, tall ships and a refurbished Rash Field need to be assets for all of Baltimore. Harborplace once thought to be an asset has now turned into a liability. This isn't good for anybody, not even for neighborhoods far away from the water.

Klaus Philipsen, FAIA

If you are interested in discussing this matter or the issues of Baltimore neighborhoods with me and a panel of experts, come this Saturday to the Book Festival event.

Investment, Disinvestment and Neighborhood Change in Baltimore

 · Hosted by Strong City Baltimore
  • Saturday at 2 PM – 3 PM

  • World Trade Center Baltimore, Observation level
    Baltimore, Maryland
    As part of our 50th anniversary celebration, Strong City presents a discussion panel on “Investment, Disinvestment, and Neighborhood Change in Baltimore” at Brilliant Baltimore - union of two marquee events: Baltimore Book Festival and Light City. Panelists include Dr. Marisela Gomez, author of “Race, Class, Power, and Organizing in East Baltimore”; Klaus Philipsen, author of “Baltimore: Reinventing a Legacy City”; Professor Betsy Nix, editor of “Baltimore ‘68”; and Lisa Snowden-McCray, editor of the Baltimore Beat. Moderator is China Boak Terrell, Executive Director of American Communities Trust.

    Held at the Inspire Stage – Top of the World Observation Level, World Trade Center.

  • Tickets

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Monday, October 28, 2019

How congestion on the Bay Bridge can be a good thing

Facts are facts, the saying goes. The implication is that facts stand on neutral territory, high above the swamps of political debate and dispute. The congestion and the back-ups resulting from the closure of a lane on the Bay Bridge are such facts. Number of cars backed up, length of the queue, hours lost. Facts.  But as we will see, even these facts can mean different things to different people. A full hog political battle is already unfolding.
Record back ups on both sides of the Bay Bridge
due to decking repairs
Bridge repairs bring unprecedented traffic misery to both sides of Chesapeake Bay. Washington Post
Unsurprisingly, our fearless Comptroller battled-proofed in matters of school air conditioning and an expert in just about anything, was the first to ride into the conflict, flags waving, sword blazing. Others soon joined: Congestion, in the age of the automobile is like the plague, it has to be avoided, no matter the cost. Franchot thinks even for the price of disrepair.

Aside from Franchot's foolish position, though, two opposite lines of thinking begin to take shape: Those for whom the back-ups prove that a new bay bridge is needed, a seemingly impeccable conclusion that should convince the last doubter still afraid of the huge cost of another bridge. But then there also those who think that the lane closure is a godsend which illustrates, how wrong our past land use and transportation policies have been. In that thinking the 2 years of lane closures will prove that a new bridge isn't needed at all. A seemingly hopelessly illogical position.

Since I confess to belonging to the second camp, I will have some explaining to do. Here you go:

For years population on the Eastern Shore has grown faster than on the "mainland", especially in Chester  and Kent Counties, near the bridge. The reason is simple: Every time the "reach the beach" frenzy of road construction and widening has pushed the envelope of a tolerable commute further out, more people wanted to take advantage of it. Deleting the westbound toll booths during the Schaefer era immediately opened up another 5 miles or so the the plausible commute shed, the time saved by not having to inch up to a toll booth. The EZ pass did a similar thing. So did the elimination of the Kent Narrows draw bridge. And so on, down the entire arsenal of those anti congestion apostles which have all the power at SHA and local planning offices.

Every time the gains were absorbed by new demand. Every minute shaved off the trip to Ocean City brought additional people who wanted to do the journey. Good for bead and breakfasts in OC, but bad for the Bay Bridge, for transportation, for land conservation and for the entire lifestyle of the Eastern Shore. Transportation planners call this induced demand. In short: Any improvement eats its own children. Fighting traffic with more lanes is like combating alcoholism with schnaps or obesity with donuts. Never was the Eastern Shore a designated growth area. No planner ever thought it makes a lot of sense to live across a huge body of water from their work.

So how would the lane closure help? If one accepts the law of induced demand that says that if you build for cars you get more cars, one can easily see that the reverse should be true as well: Take capacity away and fewer cars will come. This isn't just a theory. For example, once San Francisco's traffic planners decided not to rebuild the elevated Embarcadero freeway which had collapsed in an earthquake, the traffic volumes disappeared. People, streetcars, bicycles and electric scooters have taken over the space and San Francisco has become better for it. Businesses along the waterfront multiplied their profits.
Queenstown Outlet Mall: Ritchie Highway on the Eastern Shore

So how can reduced bridge traffic not result in an economic development disaster on the Eastern Shore? To understand the answer, we need to understand the difference between quantity and quality. A topic, admittedly leading away from from transportation: The very reason why the Eastern Shore is attractive in the first place are all qualitative: its wide open landscapes, it marshes and waterfronts, its calm and soothing atmosphere, its quaint towns to name just a few. Quantity destroys this attractiveness. Shopping centers, outlet malls, gas stations and endless subdivisions have turned miles of previously beautiful landscape into a copy of Ritchie Highway. The very reasons why people come disappear when too many come. It is obvious that a sustainable value proposition needs a happy medium. 

The optimal economic development of the Eastern Shore is not to cheapen every aspect down to the lowest common denominator until the whole place looks at best like the mainland or at worst like the State Fair in Timonium. Instead the lasting perspective must preserve what is authentic, natural and cherished. This isn't an elitist position but one of survival even before one talks about critical areas, land erosion, flooding, climate change or fertile soils.

So if fewer people can drive in a jiffy to the Eastern Shore, this could be a good thing. If fewer people decide to live in Stevensville and work in DC, it is a good thing in the same way as it is a good thing if fewer people live in zones of high risk of forest fires around LA. It was never a smart decision to rely on two 4.3 mile long aging bridge spans for a daily commute and assume that there never would be a problem.

The two years of lane closures for urgent maintenance will entice people to make smarter decisions, fewer trips. Maybe share a ride with a neighbor. Maybe, yes, maybe the local transit agency and the MTA could even work out a plan in which local buses take Eastern Shore residents to a park and ride near the bridge from where frequent MTA buses shuttle them to major transit hubs in the Annapolis, Baltimore and DC metro areas. Imagine that, a bus that has a priority lane to reach the bridge and that whisks 40 people over the bridge instead of creating congestion with 40 individuals each in a car.

After two years all kinds of reasonable solutions will have been found and the long quees will long have been forgotten. At the end, nobody will remember why the closed lane was ever needed, let alone another bridge. Wouldn't that be nice?

Klaus Philipsen, FAIA

Monday, October 21, 2019

Why Baltimore County needs to pass the HOME bill

Right on the heels of a week in which the passing of congressman Elijah Cummings put the spotlight on his civil rights and social justice legacy, Baltimore County will stand at the crossroads of an important housing anti discrimination law.  A portion of Baltimore County sits in Cummings' district. There is no doubt where the late congressman stood when it came to fair and affordable housing and equity. For example, H.R. 1737, the American Housing and Economic Mobility Act of 2019 intended told help provide people with access to affordable housing, lift them out of poverty, and begin to create generational cycles of wealth, is cosponsored by Cummings. The bill that also addresses vouchers and access limitations is still before Congress.
Fair Housing remains elusive, 51 years after the Fair Housing Act of 1968

County Executive Johnny Olsziewksi initiated County Bill 49-19, dubbed the HOME act. The bill, which was introduced by Council Chair Tom Quirk on the Exec's behalf , aims to end landlord discrimination against housing voucher holders. The bill stipulates under the title "Property values; change in nature of neighborhood":
 Whether the person is acting  for monetary gain or not, a person may not engage in discrimination by representing that the existing or potential proximity of real property owned, used, or occupied by persons of a  particular race, creed, religion, physical or mental disability, color, sex, national origin, age,  sexual orientation, gender identity or expression, status as a veteran, SOURCE OF INCOME, or marital status will or may result in: (1) The lowering of property values; (2) A change in the racial, religious, or ethnic character of the block, neighborhood, or area in which the property is located; or (3) A decline in quality of the schools and institutions serving the area.
A second run for a Housing Non Discrimination bill in
Baltimore County
Preventing discrimination against housing voucher holders seems a simple enough goal in 2019, but not obvious enough that not several  County Council members already registered opposition.

The bill will be heard in a public County Council "Work Session" on 10-29-19. At this point, it is entirely unclear whether the bill has a chance to pass. A similar bill introduced under Kevin Kamenetz did was defeated with only one yes vote. The Citizen Planning and Housing Association (CPHA) explains the matter of vouchers on their website:
Formerly known as Section 8 Vouchers, the Housing Choice Voucher program is a federal program developed in the 1970s. They are distributed to low income individuals and families who qualify by local housing authorities. Many times recipients do not receive their voucher until they have been on the waiting list for a very long time. In Baltimore County, the average wait time for a voucher is nine years. A voucher can only be used in the jurisdiction it is issued in.

Add caption
 After recipients are awarded their voucher, they may take it to any property that accepts it and charges the amount of rent that is within the guidelines set by the Department of Housing and Urban Development (HUD). The voucher does not necessarily pay for all of their rent. Recipients are required to pay 30% of their income towards the rent. Those portions of the rent not paid by the tenant are paid by the local housing authority with funds provided by HUD to the landlord through direct deposit. The only requirement for landlords is that they pass a basic housing inspection in order to receive payment.
Problem is, many landlords tell potential renters flat-out that they don't accept vouchers. Because this kind of discrimination is so common, the federal government’s largest housing program for the poor doesn’t work like it should. Families with vouchers designed for the private market find much of the private market closed to them. A policy that was supposed to disperse the concentrated poverty of public housing projects now creates new concentrated poverty in private apartments and in neighborhoods where certain landlords have specialized in voucher tenants.

When voucher holders are considered "second class renters" based on the fact that their income is low enough to qualify for rent support, it is discrimination based on income and continues a long and torturous history of segregation by class and race in America that some like to still apply:
"There isn't any question that affordable housing and the transference of poverty from Baltimore City to Baltimore County has had an impact on our taxpayers and the quality of life in our neighborhoods, there's no question; I stand by that. Other candidates do not have the nerve or guts to say that, but I will." Then Delegate Pat McDonough as candidate for County Executive
It’s un-American and I think there’s a lot of unintended consequences that will arise out of this. Mark Baskervill, Campaign for Liberty
The push towards more equity and justice in housing in Baltimore County isn't entirely voluntary; in fact, it is mandated by the the Conciliation and Voluntary Compliance Agreement (VCA),consent decree of the federal Department of Housing and Urban Development (HUD) imposed on Baltimore County as a result of law suits brought against the County for violations of the 1968 Fair Housing Act. In the suit the County was accused of perpetuating segregation, discriminating against African-Americans, families with children, and residents with disabilities through the county’s zoning policies which restricted the development of affordable housing. The plaintiffs also alleged that the county spent most of its housing money on programs mostly benefiting white residents  while demolishing thousands of subsidized low income housing units for families in the name of revitalization programs.
Concentration of black residents in Baltimore County
BMC Report

The consent agreement requires Baltimore County to build or rehabilitate 1,000 affordable rental units by 2027 in more prosperous neighborhoods through private development of rent restricted housing units. This summer Baltimore County officials stated that more than half of the required 1,000 affordable homes are built or in the pipeline. Required is also legislation to prohibit voucher discrimination.
“We have both a legal and moral obligation to expand access to affordable housing in Baltimore County, and the HOME Act is a critical piece of the puzzle. Discrimination of any kind is wrong, and we have to do everything in our power to expand economic opportunity, improve equity, and eliminate pockets of poverty in our communities.” (Olszewski)
One of the proposed developments in East Towson, Red Maple Place, will have a community input meeting on the 29th of October, a day after the bill workshop. The proposed development by Homes For America would create 56 affordable housing units on a 2.5-acre parcel of land at 413 E. Pennsylvania Ave.
“I believe it is important for Baltimore County to address the housing needs of our older adults, veterans, people with disabilities and all families. It is a matter of fairness and dignity” Councilman Patoka)
Placing affordable housing has met with acrimony and hostility in a County that is still the most segregated County in Maryland by some diversity measures. Baltimore County has a history of discrimination against poor people and people of color that goes  hand in hand with segregation and discrimination in Baltimore City. Race segregation was the motive behind a Baltimore County instigated state law that essentially prevented Baltimore City from annexing any land beyond its current boundaries since 1948. Dale Anderson, a Democratic county executive from 1966 to 1974, campaigned on a promise to keep public housing out of the county. He was later convicted and served time in a federal penitentiary but still got elected afterwards as a County Delegate.  The county has never had any public housing. It has a long racially charged history of obstructing fair housing (in 1970, after the Fair Housing Act of 1968, HUD withheld sewer funding from Baltimore County because of its support for residential segregation).
BMC Report

Like American suburbs in general, Baltimore County suburbs benefited from the effects of redlining and block-busting in the City and was gladly accommodating the white families leaving the City. Thanks to urban flight and general growth of the region Baltimore County has overtaken the City in size and has now over 832,000 residents, with only a bit more than a quarter of the population black and a poverty rate less than a 1/3 of that in the City.
Arguably, the emptying of the City’s White population into the County began as
early as 1910, when racial tension in the City of Baltimore caused the City to
codify segregation “to compel by law the separation of the white and black races in their places of residence; to prohibit the negro from intruding himself and his
family as permanent residents in a district already dedicated to the white race, and equally, to prevent the white man from forcing himself upon a district given over to the negro.” (Baltimore County Metropolitan Council report about "Impediments to Fair Housing Choices" in Baltimore County)
Listening to some of the objections against the HOME bill (or similar legislation passed earlier this year in the City), one has to wonder if 1966 isn't still just around the corner. The SUN reported recently that only two of the seven council members, Democratic Councilmen Julian Jones of Woodstock and Izzy Patoka of Pikesville, have publicly announced support for the anti discrimination bill. In 2016 a similar bill failed 6:1 with the only African American Council member being the single supporter of the bill.
Concentrations of existing affordable housing
A 1970 hearing of the U.S. Commission on Human Rights examined the use of“discontinuous street patterns” in Baltimore County, concluding that the layout of roads had the effect of isolating Blacks from their surroundings, particularly from adjacent White residential areas. The County has also been accused of expulsive zoning practices from the 1950s to the 1980s. This refers to the rezoning of residential Black neighborhoods such as Turner Station as commercial areas, while nearby White neighborhoods are left untouched. Expulsive zoning also refers to the rezoning of areas surrounding Black neighborhoods to lower densities to create a buffer that effectively prevents expansion. As a result of zoning changes, Turner Station’s population dropped from over 9,000 to 3,557 during the 1950s. Overall, arguably due to such policies and practices, the County’s Black population fell from 18,026 to 17,535 between 1950 and 1960, despite the County’s overall population increase during those years from 270,273 to 492,418 (82%). (BMC report).
According to information on Baltimore County's Office of Housing website per the 2016 Q4 Picture of Subsidized Households data, the average voucher household contains 2.2 persons and has a household income of $15,836 per year. 96% of households were very low income (VLI) and 77% were extremely low income (ELI). 26% of households had wages as a major source of income, 3% of households had welfare (TANF, General Assistance or Public Assistance) as their primary source of income, and 68% of households had other income (Social Security, Disability or Pension) as their major source of income.

Of all households participating in the Baltimore County Office of Housing Housing Choice Voucher program, 31% include at least one person with a disability. 46% of households with a head of household 61 years or less were headed by a person with a disability. 72% of households headed by someone 62 or older were headed by a person with a disability.
Affordable housing (SUN photo)

72% of all voucher households were headed by minorities with 69% of all heads of households being Black and 0% being Hispanic. More than 25,000 families are on the county’s voucher waiting list, according to Marsha Parham-Green, Director of the county housing office. Most people face a wait time of more than a dozen years.
“I don’t believe that we should be forcing property owners into contracts with the federal government. I think there’s something wholly un-American about it.” (Councilman Crandell) 
“in my opinion, spreading poverty around does not eliminate poverty.” (Councilman Marks)
 The distribution of voucher households in Baltimore County communities shows a concentration of voucher holders on the east and west sides of the County. The full population is given in parentheses, showing the relatively small number of vouchers even in areas of concentration (With an average of 2.2. persons per household the total voucher population in Dundalk is 3.2 %):
Randallstown (32,430) : 533 HCVs
Dundalk (63,597) : 934 HCVs
Essex (39,262) : 558 HCVs
Middle River (25,191) : 462 HCVs
Montgomery County MPDU regulations
Milford Mill (29,042): 568 (HCVs)
Pikesville (30,794) : 395 HCVs
Reisterstown (25,968) : 329 HCVs
Woodlawn (37,879) : 355 HCVs
Towson (55,197) : 242 HCVs
Perry Hall (28,474) : 118 HCVs
Lutherville (6,504) : 1 HCV
Timonium (9,925) : 3 HCVs
A Statewide anti voucher discrimination law failed several times. In Maryland Howard and Montgomery County, the City of Frederick, and the City of Annapolis have passed anti voucher discrimination laws. Such a law also exists for certain properties within Baltimore City and in the following states across the nation: Utah, Oklahoma, Connecticut, Maine, Massachusetts, Minnesota, North Dakota, New Jersey, Oregon, Vermont, Wisconsin and Washington, DC.

Banning rejecting of tenants solely because they are using vouchers alone will not solve the problem of discrimination. Landlords can come up with all kinds of other reasons to select their preferred tenant. The HOME bill would need to be embedded into a set of other policies, such as inclusionary zoning which has been very effective in Montgomery County where all larger developments need to have affordable housing units. Also effective is a requirement that rental units need to be licensed and will be regularly inspected. Baltimore City has those requirements now in place for all rental apartments, market rate or not. This takes away part of the objection against vouchers, that they make renting more "cumbersome" because of the required HUD inspection.

If the HOME bill would  get defeated once again, it would make Baltimore County look really bad just when the new County Exec is trying to reinvent the County's image as innovative, creative, transparent and equitable. 
Klaus Philipsen, FAIA

see also my blog

Sunday, October 13, 2019

Overcome the banking deserts with a public option?

The fact that nearly 8 million homes went into foreclosure in the Great Recession did not only significantly reduce the homeownership rate in the US, it also redirected billions of dollars from local communities in the hands of corporations which vacuumed the cheaply available real estate up and directed teir value and the cash generated from rents or resales into their pockets. Many of these LLCs still operate nationally or regionally, continuing the money drain away from the local economy and contributing to the lopsided wealth distribution that has become the new normal. No wonder, then, that some look at ways how to keep the money in the community.
West Baltimore banking and funding desert:
Can local banks change this?

It is all about the money. Even an architect and urban designer who usually wants to shape physical things has to submit to that. Without it nothing happens. The uneven distribution of money, be it as accumulated wealth, or as investment and spending is a big burden on Baltimore. Many efforts are underway to even out investment through private and public reinvestment funds, social impact funds, funds from community benefits agreements or community development financial institutions. (CDFIs). It is in this context, then, that the Baltimore based Abell foundation has devoted a recent report to heart of finance, banking. Ever since the financial crisis the usual assumption that public problems can best be solved through private enterprise has taken a hit. Once highly regarded financial institutions such as Goldman Sachs or Deutsche Bank have taken a big hit and rank in their reputation closed to the proverbial used car salesmen.
Banking is a privilege, a public trust. Advocates of public banking argue that it should be in public hands. (The Municipal Banking Movement: An Opportunity for Baltimore Abell Report #32)
It isn't that the financial crisis has changed anything other than public opinion about banks.  As if it were the goal of the American financial world to keep the general public fiscally and financially illiterate, the industry itself has remained an unjustifiably bloated part of the economy and bank consolidations ("too big too fail") continue unabated as much as the greediness of the sector. It has become an infamous fact that the income of the top 25 hedge fund managers exceeds the income of all US kindergarten teachers combined. It also remains true that many parts of Baltimore remain banking deserts, devoid of brick and mortar banking facilities and devoid of meaningful loans made in the community.
In the long wake of the 2008 financial crisis, communities continue to watch scandal-ridden Wall Street banks gamble in opaque financial markets, while promising local projects go unrealized for lack of funding.(Abell Report)
All the [investment] banking has not made the broader population or for the country itself any wiser in matters of money. No comparable country has lower savings rates, more debt on credit cards, more student debt, or a higher rate on foreclosures on private homes, not to mention the  ballooning federal deficit which, in spite of its record size, can barely elicit a yawn among citizens. So used are we to debt as the path to the good life. Debt, though pushes many over the edge when it can't be served. Maryland sits on rank #3 in the US when it comes to foreclosures. At the same time banks continue to "redline" dis-invested areas by simply not maintaining any branches there. The fact that brick and mortar bank branches are disappearing at record rates has further exacerbated the lack of access. The Community Reinvestment Act of  1977, focused mostly on lending, has done little to change that.
Baltimore, like many American cities, has not been well-served by the recent transformation of commercial banking markets. In the years leading up to the 2008 financial crisis, large national lenders contributed to a real estate boom that swelled with the national market and crashed locally with devastating force. Wells Fargo in particular steered many minority Baltimoreans toward predatory mortgages that were more expensive than the borrowers’ credit warranted. As these mortgages predictably defaulted, foreclosed homes blighted many
of the city’s predominantly African American neighborhoods. (Abell report)
The idea of buying on debt is such a popular American method of doing things that a lack of access to loans, credit or banking is a huge disadvantage. The matter is by no way partisan. In recent memory,  supposedly fiscally conservative Republican presidents regularly bloated the federal deficit.  Maryland's Governor Hogan who talks a lot about prudent expenditure of State money, still sells the notion of buying beltway widenings or the DC area Purple Line via a giant credit card called "P3" as in private-public-partnership. In this model the famed private sector funds, builds and manages the projects and the taxpayer will pay in the end far more than the actual construction cost due to interest and profit going to the private partner. But back to banking and the idea that public local banking could bring more investment into under-served communities.
Before the 1980s, robust federal banking regulation ensured that a diverse archipelago of small and medium-sized banks provided community financial services within tightly bounded geographic markets. But in the years since, financial deregulation enabled a wave of bank consolidation, generating a
few, continent-spanning banking firms.
 (Abell report)
Abell's report about the possible advantages of public banking feels like a call in the desert in a time when everything trends towards privatization. Bob Embry,  still the President of the Abell Foundation, is no self described socialist like Bernie Sanders and neither is the author of the study, Sean Vanatta, an assistant professor  of the history of modern political economy in New York. Increasingly, though, privatization shows its ugly sides. Cool facts increasingly point to the advantages of public options, whether it is in municipal energy (example Hagerstown), transit, water service, parking garages, schools, universities, health care or banking.
The local Sparkasse (Savings Bank), often owned by the
municipality:  beloved but endangered in Europe
In the Baltimore Metropolitan Statistical Area (MSA) the Federal Deposit Insurance Corp. (FDIC) found that 6 percent of residents were “unbanked,” lacking any relationship with a federally insured financial institution. Another 21 percent were“underbanked,” maintaining some relationship with a federally insured bank, but also continuing to rely on fringe financial service providers, like check cashers and payday lenders, for their financial needs. In 2013, the last year for which data are available, 41 percent of African Americans in the MSA were underbanked, while 13 percent were fully unbanked.  (Abell report)
Public intervention where the private sector fails is no new idea. In health care it is Medicare and Medicaid which cut out the middleman, in banking it can be done through reinvestment funds, banking co-ops and municipal banks.  In Europe municipal savings banks used to be as popular as credit unions here until several of them tried to be like the big banks and experimented with subprime mortgages and derivatives, often losing spectacularly in the process, just like the evil big banks.
[The public banking proposal] in cities and states around the country, is a bold call to reinvigorate public purpose in banking. Having long been subject to the power and caprice of finance, local governments now wish to control it—to reclaim ownership of their community assets from distant financial firms.
Government-led public banking, promoted by organizations l[...] emphasizes using state or municipal funds to establish publicly owned banks that then provide local governments with low-cost financial services. Government-led public banks, in turn, enable local governments to end their reliance on what advocates characterize as unethical Wall Street banks, which charge local governments expensive fees to invest community resources in distant financial markets. (Abell report)
Abell refers to the Public Banking Institute, an organization formed to promote public banks.
“Public banks can help us create the communities we want. We want parks, good roads, safe bridges, clean energy, and housing we can afford. We want lower interest rates for local small-business loans, local control of our tax dollars, investment in our local communities, and ethical and transparent financial institutions managing our public funds. Public banks can be the financial engine that makes this happen for our communities.” (PBI)
Abell also refers to the example of German local banks that are frequently owned by municipalities (Sparkassen). Their function isn't a bit like US credit unions, local and oriented on a smaller pool of customers. Several of heir bigger siblings, the State Landesbanken, however, wanted to be like the big banks and dabbled with derivatives and bad loans so that several had to be bailed out as well and also lost their better reputation just as US local savings and loan banks had even before the last financial crisis. 
Reinvestment in West Baltimore:
Bakerview homes for first time homebuyers. Subsidized and hard to finance.

The Abell report discusses the many forms funds take to adress the lack of investment in disinvested areas but argues that funds are not banks and that the difference between them is "like addition and multiplication" pointing to the many more options a bank has to grow their assets and "create money". The report acknowledges that small public banks are seen as too difficult and that no one wants to be the first to try.  It muses that the lesson from history "may be that public banking's moment passed long ago". A very uncertain conclusion of the report, for sure. In the end the report suggests a more thorough feasibility analysis to "test the idea" (again).

The next real estate crisis may be right around the corner. Time to think about differently about a rescue: Instead of buying out the culprits give the money to local community banks.

Klaus Philipsen, FAIA

Abell summary
Abell Report