economy

Biblio (122) Personal income and its distribution in Spain, France and the USA

Biblio122-desigualdad

After publishing the map on inequality in Spain, some comments have led me to think it could be interesting to show a comparative vision:

Spain: Renta personal de los municipios españoles y su distribución, Miriam Hortas Rico & Jorge Onrubia Fernández, FEDEA, 2014. Based on 2007 data

France: Les revenus et le patrimoine des menages, Cédric Houdré & Juliette Ponceau, edition 2014, INSEE. Based on 2011 data

Inequalities among European states, according to the INSEE publication

Inequalities among European states, according to the INSEE publication

USA: State of Disparity, a Project looking at the economic disparity in CT, WSHU radio (A view from Connecticut, but with a nationwide chapter). Based on data from 2006 to 2010.

Inequality is on the rise, but with different flavors in each country.

Maps 2015 (10) Inequality of personal revenue in Spain

Fedea (Fundación de Estudios de Economía Aplicada) is an economic think tank financed by a large set of big Spanish firms. In November 2014 it published “Personal revenue in Spanish municipalities and its distribution” (Miriam Hortas Rico and Jorge Onrubia Fernández). Fedea’s website includes two maps in which you can visualize, by municipality, revenue and inequality as expressed through the Gini index (the closer to 1, the most unequal). The results are based in micro data from the Personal Revenue Tax 2007, for the 1.109 municipalities over 5.000 residents, and the project would extend that series over time.

The original Fedea map on income distribution

The original Fedea map on income distribution (access the link, you can zoom and get detailed data for each municipality in the original website)

The use of a gradient of the same hue is not always helping reading the map; the most important thing is, as in any map, the underlying data, but I think there are better ways to visualize that worrying content (it is worth reminding that these are 2007 data, and the current crisis doesn’t seem to have improved the situation). That is what I have tried to do, using the database published on the web. Maps show quintiles.

Personal revenue. It is clear that Southern and Western Spain are worse off.

Personal revenue, average by municipality. It is clear that Southern and Western Spain are worse off.

Gini index by municipality. The mediterranean coast seems more unequal; suburbs seem more equal (this is just a first order analysis looking at the map)

Gini index by municipality. The mediterranean coast seems more unequal; suburbs seem more equal (this is just a first order analysis looking at the map)

Part of the total revenue corresponding to the higher 1%. In most municipalities they only get 10%, but there are many red spots.

Part of the total revenue corresponding to the higher 1%. In most municipalities they only get 10%, but there are many red spots.

Starters of urban change (9) Municipalities

Municipalities can be a powerful starter of urban change… or of inertia, depending on their ability to create positive dynamics on their territory. This is related to their accounts, and that is interesting in this year in which we will go vote for municipal councils in Spain and France. In the US the local administration system differs from state to state, so the only rational way to compare would be to take any given state in the US and compare to a given European country.

What follows is a (primary) analysis of data from the Virtual Office for the financial coordination with local entities (http://serviciosweb.meh.es/apps/EntidadesLocales/), which aggregates data from over 8.000 Spanish municipalities and Diputaciones and other organs classified as Local Entities. These are data from closed fiscal years with real accounting results, in a series running between 2003 and 2013 (last available year). Data are in thousands of euros for each year (inflation is not accounted for). For those out of Spain, most of urbanism and housing expenditure has been private for decades. Local administrations get resources in that field through taxation and a compulsory free cession that builders must deliver when they execute an operation, consisting in a percentage of building rights and the lots where it sits (the sale of these lots is often most of the “land lots sold” item).

As a result of that analysis, three charts show matters that are somehow linked to urban planning and related matters.

Income in Spanish local entities, selected items

Income in Spanish local entities, selected items

Income: local governments got to an all-time high for income in 2009; as of 2013 they were slightly under the 2006 level. The tax on urban real estate (data before 2009 make no difference between urban and non-urban) changes from 15% of total income in 2003 to 25% in 2013, while lot sales were reduced from 3,4% to 0,34% (in 2006 they reached 6%). The privative use of public domains went from 1,5% to 3,1%, as it is clearly apparent in the public space with sidewalk café and restaurant terraces, at least in part as a response to tobacco laws. The tax on urban land value increases has only grown from 2,9% to 3,6%, with quite reduced oscillations.

Investment in Spanish local entities, selected items

Investment in Spanish local entities, selected items

Investment: the investment on new infrastructure and general use goods was almost 7% in 2003, and it has gone down to 2,2% in 2013. When it comes to maintain these infrastructure and goods we have gone from 3,4 to 1,6% over the same period, and new/maintenance costs for operational services have followed a similar pattern.

Investment in Spanish local entities, selected items

Investment in Spanish local entities, selected items

Detailed investment: the real investment (not taking into account personnel costs and other elements) of the Spanish municipalities has followed a more complex curve. Up to 2010 this real investment was over 25% of the total expenditure, but since then they have lost weight (9,4% in 2013). Urbanism and housing were around a third of real investment up to 2010, and since they have increased to reach 44% in 2013, even if the absolute figure is half that of 2003. To give an order of magnitude, education (in which local administrations have a limited role) went down from 4% to 3% over that period, and its absolute value was reduced to a third of the 2003 figure.

Overall, the evolution of income and expenditure has been somewhat balanced (added figures for the whole period show more income than expenditure), but there have been relevant changes in relative weights. Land lots sold, whose expansion was related to the real estate bubble, have reduced substantially, while real estate taxes have increased. Investment in new infrastructure have reduced nearing those concerning infrastructure maintenance. Real investment in housing and urbanism has increased its weight in the overall real investment. But as in absolute terms this investment has been strongly reduced, today it is limited to solve previous deficits

Biblio (114) The formation of urban spatial structures : markets vs design

Biblio-114-the formation of urban spatial structures

This work by Alain Bertaud analyses the links between design (he is an urban planner- architect) and market, providing answers to why it is not advisable to have private streets or why some things work better as public goods. Taking examples from Hartford, CT, to China, he analyses the links between economy and urban planning. Interesting, and open to debate.

Biblio (98) Landscape and economics

Biblio 98 paisaje italia economia

According to the European Landscape Convention, landscape is “an area, as perceived by people, whose character is the result of the action and interaction of natural and/or human factors”. The convention mentions the links between economics and landscape, but the fact is that its implementation has often been more oriented towards environmental and perceptive issues, in part due to the difficulties to quantify and relate the multiple actions on landscapes with a concrete impact of each action overall. There are methods to compute the Gross Domestic Product, but it is complex to evaluate the worth of a landscape in a given configuration and by itself (and not just as a simple addition of the value of the present activities), which would be needed to evaluate the impact of a given project.

Sure, you can say that a sustainable development must focus on all three dimensions (social, environmental and economic), and that economic calculation by no means guarantees a better policy or a coherent portrayal of reality. You can even say that creating an algorithm is just a way to have people tamper it to their own benefit.

Despite all that, some have gone down that way. Tiziano Tempesta evaluates the Italian case: “the landscape policies in Italy are currently essentially based on landscape transformation control and on the payment of subsidies to farmers. Since the landscape policies have a cost for citizens, in both cases it is necessary to evaluate the benefits coming from public intervention”.  There are no definitive conclusions, or magic algorithms, but some interesting thoughts on the matter.

Centrality and periphery in Madrid since 2000 (11). Julián Camarillo and a final vision

juliancamarillo

The area around Julián Camarillo street was in 2009 the 13th census block in the region, 1.304 million euros. With 1.987 residents and 26.134 jobs (sixth value in the region), the ratio was 13 jobs by resident.

The original industrial area is in transition; industrial activity is no longer what it was, there are some housing units or lofts, and also many offices, architecture practices included. By location it seems difficult that this area will become a full fledged urban centrality, but it seems clear that in 20 years its identity will have changed.

Housing

Housing

Urban centrality is hard to define, but it seems clear that its is linked to activity. It is possible to do just the opposite of what has been done this week: which areas make up the “white” of the map, i.e., which census blocks had in 2009 a GDP under the regional average, and so would have more pain to become central?. The result on the following map… in white. The strength of the Castellana axis is clear, while some municipalities are almost entirely wiped out but for their industrial areas… even if they have their own local centralities. So, in the end, a single money figure does not end the conversation, and centrality is also a matter of the scale of analysis.

blanco

Offices

Offices

Centrality and periphery in Madrid since 2000 (11)

ciudad universitaria

The University City was in 2009 the 12th census block in the region by GDP, with 1.417 million euros. With a population of 1.514 and 27.089 jobs (4th census block by jobs number) the ratio was 18 jobs by resident.

The model of the American campus, implanted in Madrid at the dawn of the XXth century for what still today are mainly public universities, has produced a relevant GDP hub, but it remains to be seen if it will resist the crisis as well as other areas. The other relevant activity in the area is the Palacio de la Moncloa, the headquarters of the PM.

Overall the area has an average- high urban quality; there are some interesting buildings, but green is the most interesting feature, and you do not see the kind of spaces usually associated with north American campuses.

Again, a non-center, but a single function area which is important and really used. The transition to the existing city is not bad, but the pedestrian distance to the most central areas is too high.

Housing

Housing

Offices

Offices

Centrality and periphery in Madrid since 2000 (10) Banco
banco1

Circulo de Bellas Artes, as seen from Calle de Alcalá

The area around the Bank of Spain was in 2009 the ninth census block in the region in 2009, with a GDP of 1.819 million euros. With 1.543 residents and 19.549 jobs (9th census block by jobs number in the region), the ratio was 12 jobs per resident.

It is a clear urban core for many reasons, although with a slight “institutional” bias. The area has its “own” national bank, the lower house of the national Parliament (Congreso de los Diputados), an outstanding cultural center in the Círculo de Bellas Artes, the Thyssen- Bornemisza museum, a wide array of businesses, a good bunch of restaurants… The area is crossed by the initial part of the Calle de Alcalá, as iconic as a street can be in Madrid.

Up to the XIXth century it was rather a border zone, as all the area around the Paseo del Prado. By floor area, the current buildings where built in the XIXth century (6%), from 1900 to 1936 (22%), from 1940 to 1980 (22%), 1980 to 2000 (28%, it is good to remind that to the Spanish cadastre the integral refurbishment of a building resets its building date), and since 2000 (9%).

On slightly more than 24 hectares (streets included) and 167 lots there is a little more than 840.000 sq m of floor area (3,4 sq m/sq m FAR), of which 132.363 correspond to 1.211 dwellings (94 refurbished partially since 2000). 317.335 correspond to offices, 76.829 to hotels and restaurants, 71.825 to parking spaces and 37.797 to retail.

Banco-supof-nof

Offices

Banco-supviv-nviv

Housing

Banco-CBA

The sidewalk cafe of the Círculo de Bellas Artes

banco-metropolis

The angle between calle de Alcalá and Gran Vía

Banco-arr

The same intersection as seen by day form the rooftop terrace of the Círculo de Bellas Artes. This is where Antonio Lopez painted his well known picture on Gran Vía (an interesting video on the process can be seen on the Spanish TV site)

Centrality and periphery in Madrid since 2000 (7)

Which are the spatial conditions of the most productive zones? As productivity depends on the acts of persons in a given context of price, competition, regulation and technology, I am not sure that the spatial conditions are fully determinant; the urban tissue has an inertia that the economic flux has not. Do not take this as a vote for “anything goes”; it is rather a reason to provide as high an architectural and environmental quality as you can, as it will be tested by an economic environment that will no doubt evolve. Anyway, it seems relevant to see what happened in Madrid in 2009 (last year with available statistics).

pib2009-centr

The next articles will be about five of the census blocks with the highest GDP in 2009 in central Madrid and its surroundings:

 Azca (3)

Campo de las Naciones (6)

Banco de España (9)

Ciudad Universitaria (12)

Julián Camarillo (13)

Biblio (38) The spatial economy

In 2001 Masahisa Fujita, Paul Krugman and Anthony Venables published “The Spatial Economy. Cities, Regions and International Trade”; the book is on sale, and you can access the intro chapter on Paul Krugman’s website. As those following this blog know, I am no economist, but I am interested on how such economy influences cities; some of the issues raised in the book refer to economic theories that I simply do not know, or that I could not judge by lack of knowledge, or event some that could raise my skepticism, not so much about their intellectual construction as about their practical utility. Despite that, I find interesting the way in which the evolution of the discipline is described, as leaning progressively, at least for some, rather towards what can be modeled into equations and not the whole picture.