InBerkeley

This is kind of grim. Lately the city is patting its back about tax growth, planning for “more of the same” in West Berkeley big-firm industrialization, counting on continuing growth of the university. In terms of household revenue sources, I don’t have numbers but “by eye” it looks like we also rely on a fairly substantial amount of government assistance to help stabilize neighborhoods (hence keeping down police and other first responder costs). We try to zone retail for little “destination neighborhoods” of small, premium retail. Against all that, we have an unusually large government for our size with some expensive pockets of questionable management (e.g., the fiasco of the library RFID system). We’re downright foot-dragging and passive aggressive against sensible public transportation reform, food security reforms, and so forth. We’re beginning to have a serious problem with long-term vacant homes and at least one work-stopped unfinished condo site I know of.

So, what could possibly go wrong?

As the depression deepens, consumer spending will fall even further both locally, affecting our shopping districts and sales tax revenues, and globally, further trashing industrial production.

Our main corporate employers are betting on things like massive scale biofuel production and expensive pharmaceuticals. Biofuel research in Berkeley faces two problems: doubts that any large-scale approach is worth much and stiff scientific competition from outside our region. The bad economy softens demand and helps keep oil prices down, to boot.

http://www.bloomberg.com/apps/news?pid=20601102&sid=a2e75bA8i47k&refer=uk

http://www.renewableenergyworld.com/rea/news/article/2009/06/is-the-future-of-biofuels-in-algae

The University, meanwhile, is already aggressively shrinking its payroll expenses and it is quite unclear, now, where financing for major new construction downtown might come from, if at all.

The upshot of all of these things: vacant homes, a sketchy future for retail, negative growth in UCB’s payroll, questionable research directions at the energy system, revenue-challenged energy and pharma firms likely foreshadowing labor cost reductions and suspended inessential projects:

Berkeley’s balance sheet and development activity can easily collapse, quite quickly.

If (when) that happens, our large government and its questionable priorities and in some areas, questionable competence is not likely to react swiftly and well. The overall tenor of politics in Berkeley at large will certainly not help.

Add to that the collapse of surrounding cities and we’re likely to see large growth in crime, hastening the downward spiral.

And this has already begun. For example, see:

http://www.berkeleydailyplanet.com/issue/2009-06-11/article/33124?headline=UC-s-Downtown-Hotel-Project-Stalls

Ok, so, let’s suppose we suddenly had the political will to give up on the pipe dreams (or at least table them for now) what can we do that’s more useful than mucking with zoning for inappropriate projects that likely won’t much happen anyway?

The small number of big employers, and the particular industries of those employers, would seem to be a weak linchpin. Augmenting it with “quaint retail” is a questionable idea in a period of weak consumer spending. Maybe we should become aggressive in our policies (and spending) in terms of trying to attract small, independent, light industrial to, well, our light industrial district. Maybe we should start trying to get creative about “faster, cheaper, better” large improvements to public transportation. Maybe, painful though it will be, we need to seriously reform a lot of the city’s management processes. Maybe, instead of zoning away urban fruit trees and such we should look into subsidizing authentic steps towards city-based food security. On the state level, we should be united in efforts to reform the state’s incarceration practices, budgetary process, and limits on property taxes.

As for housing density downtown: *really*? Where is demand supposed to come front? I can’t find any data on vacancy rates but there’s no shortage of “berkeley downtown” ads on Craigslist. Meanwhile, it’s not exactly a commuter or child-friendly environment compared to places elsewhere in Berkeley or elsewhere in the East Bay. The big “call for” more housing density downtown seems to be based entirely on vague theories about “transit villages”. I’d much rather see improved intra-city public transportation that makes the many vacancies elsewhere in Berkeley more attractive.

If you want to revitalize downtown’s business climate, finding ways to lower the cost of doing business certainly won’t hurt. Rents are simply too damn high and they have been for a very long time. Nobody can obtain financing premised on projections of sky-high revenues that everyone can see are unlikely to emerge anytime soon.

-t