Kunstler on Atlanta & CNU 18

FOR THE FULL TEXT of James Howard Kunstler's Out of Darkness click here.

MY HOMEYS, the New Urbanists, held their annual meeting at the "downtown" Hilton there this past week -- a most mysterious selection, perhaps due to an x-treme discount on room rates in a time of austerity. The New Urbanists first came together about twenty years ago as a campaign to reform the tragic fiasco of suburbia. By taking this on they were often labeled as enemies of the American Way Of Life and Christian Decency, but they are a valiant band. I'd guess that architects composed about two-thirds of the org and the rest included developers, planning officials, a few college professors and journalists. They were all out of the mainstream, especially of architecture, whose stock-in-trade had become the emperors new clothes.

...The New Urbanists were fiercely opposed, usually for stupid reasons by stupid people, but also by the mandarin architecture establishment, especially in the grad schools, where mysticism supported a set of theological rackets in the service of celebrity cults divorced from the public nature of things that get built. In the local planning boards, the New Urbanists were accused of being communists; in the ivory towers they were accused of being slaves to worn-out traditions -- like walking from home to work. They certainly proved one principle of the human condition: that even the best ideas will generate opposition.

The New Urbanists had to work within this system. They had to find allies among developers who aspired to create better places, and they had to get under the hood of regulatory system to rewrite the laws in thousands of municipalities. They got a lot of projects built, new neighborhoods and even whole new towns. Many of these places came out beautifully. Some of them were badly compromised in the fight to get them built. Some of them were rip-offs that amounted to little more than the usual suburban schlock with a little window-dressing.

It's a bitter irony that the most ambitious New Urbanist projects were made possible within the context of the housing bubble economy. For about a decade money seemed to grow on trees. Most of that money went into conventional suburban crapola and a small percentage of it went into New Urbanist projects, but when the bubble burst, it crushed all the players, regardless of the ultimate social value of what they produced.

I heard a lot of stories during the meeting in Atlanta last week but one really stood out. It was about the money and revealed a lot about what is going on in our banking system these days. A New Urbanist developer had gotten a small project going for a traditional neighborhood. Despite the global financial clusterfuck, the developer was able to meet the payments of his commercial loan. But the FDIC sent bank examiners around America and they told the small regional banks that if they had more than twenty percent of their loans in commercial real estate (CRE) they would be put out of business. The banks were ordered to reduce their loads of CRE by calling in the loans and liquidating the assets. Ironically, the banks only called in their "performing" loans, the ones that were being regularly paid off, because they were ignoring and even concealing the ones that weren't being paid.

The developer in question had his loan called in when the FDIC descended on his bank. He couldn't pay off the $3 million in one lump, of course. The FDIC's agents are going to seize and sell off his project if he can't get it refinanced in short order. He can't get it refinanced because there is now such a shortage of capital in the banking system that no one can get a loan for anything. Also, since it is now well-known that the bank failed, the vultures are circling above his project hoping to buy it for a discount, so even the few private investors who have money won't throw him a lifeline. By the way, the FDIC agents told him they are doing this because they now expect that virtually all commercial real estate loans in the USA will fail in the months ahead. Pretty scary story, huh? And he was one of the good guys.

I suppose it was a tragic thing that the New Urbanists made themselves hostage to the same banking system that was behind suburban sprawl. Apart from the personal stories of misfortune among them, the movement is still alive. In fact, they have emerged the victors in the long contest over how America will build itself, because it is now self-evident that suburban sprawl is an epic failure. Whether Americans like it or not, whether their identity is tied up in the suburban fantasy or not, we are faced with circumstances that now compel us to live differently.