Financing the Evolution of the Built Environment

Mary Vogel's picture
Mary Vogel

Financing the Evolution of the Built Environment
MaryVogel | June 21, 2010 originally posted to Sustainable Industries blog where it has photos and links

"I suppose it was a tragic thing that the New Urbanists made themselves hostage to the same banking system that was behind suburban sprawl."

James Howard Kunstler

One of the stories that came out of the Congress for New Urbanism’s annual meeting this year was about a developer who had had the loan on his small New Urbanist project pulled. The reason: His bank was ordered by the FDIC to scale down its commercial loan portfolio to less than 20 percent of its entire loan portfolio. This happened despite the fact that he was able to meet his payments. FDIC agents told the developer they were making this requirement because they now expect that virtually all commercial real estate loans in the United States will fail in the months ahead.

The above story underscores why so many of us in built environment professions are out of work or underemployed. But what are the alternatives to “the same banking system that was behind suburban sprawl”? How do we take on the banking system at the same time we work to shift away from a dependency on fossil fuels and a land use system that makes us dependent on them? Isn’t it enough to limit our public advocacy to changing local building codes and local zoning ordinances or maybe a climate action plan that integrates both reforms?

Because we realize that our issues go beyond the local or even the regional level, many of us work to get a federal energy bill or transportation bill. To do this, we might join our professional association’s advocacy network or a national organization working on a specific area of federal legislation like Transportation For America (T4A).

But how do we change the banking system? Is it enough to move our money to credit unions and community banks? I recently went to hear the CEO of Oregon’s most successful community bank, Ray Davis, talk on Banking, Bailouts and Business: the New Financial Landscape. Despite the fact that his bank was able to raise $600 million in new capital, pay back its TARP loan and maintain excellent liquidity, Davis stated emphatically that he will not make loans for residential development—not even mixed-use infill projects. So this rapidly expanding “community bank” is not yet part of the solution for our professions as it is also subject to the financial elite that controls the entire banking system.

Moving our money to serve more local needs is necessary, but by no means is it sufficient to get us out of the credit stranglehold. If we are to retrofit our communities in the way I wrote about in my last post, I am realizing that we must get behind thought leaders like David Korten. Korten is author of the book Agenda for a New Economy and a shorter article called Why This Crisis May Be Our Best Chance to Build a New Economy. “In the world we want, the organization of economic life mimics healthy ecosystems that are locally rooted, highly adaptive, and self-reliant in food and energy,” he says.

Korten proposes five essential areas of action:

1. Government-issued money as opposed to the current system of money issued by commercial banks is needed. “This money will flow to community-based enterprises and help revitalize Main Street market economies engaged in the production of real wealth.” [James Robertson wrote an excellent short article on this point titled Money from Nothing.]

2. Community banks chartered to serve Main Street needs, lending to “local manufacturers, merchants, farmers, and homeowners within a strong regulatory framework.” Alas, he doesn’t mention developers.

3. Real wealth investment with a first step making it “illegal to sell, insure, or borrow against an asset you do not own, or to issue a financial security not backed by a real asset… We can begin by eliminating subsidies for carbon fuels and putting a price on greenhouse gas emissions,” he says.

4. A fiscal policy focused on supporting the middle class by restoring a progressive income tax with a top rate of 90 percent and using the estate tax to restore social balance at the end of each lifetime.

5. Responsible enterprise that does not create concentrations of monopoly power or encourage absentee ownership. Such enterprise includes the many forms of worker, cooperative and community ownership and cooperative alliances among locally rooted firms. “Competition is for excellence, not domination.”

Korten himself is active in two groups working on the issues: the New Economy Working Group (NEWGroup) and Business Alliance for Local Living Economies (BALLE). These groups are positioning as think tanks and alliances to help create the movement for long term reform.

But there are some important reform efforts going on in Congress right NOW.

Americans for Financial Reform is a coalition of more than 250 national, state and local consumer, labor, investor, civil rights, community, small business and senior citizen organizations that have come together to spearhead a campaign for real reform in our banking and financial system. Campaign for America’s Future, ( is also playing a leading role in mobilizing on banking reform along with CREDO and MoveOn. NOW is the time to get involved with what these groups are doing.

Mary Vogel

Mary Vogel is a Portland-based Congress for the New Urbanism-Accredited planning and urban design consultant offering sustainability services to local governments and private organizations. She is a problem-solver who is helping communities become more efficient and resilient, more compact and walkable, more connected to nature’s services and more prosperous and self-reliant—better prepared for the challenges of the 21st Century.


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