Alex at WorldChanging has a post pondering how cities can be transformed to sustainable models during a credit drought - How Can Bright Green Cities Thrive Without Capital ?.
What do you do when things are booming but your credit's dried up? Perhaps you begin to invent new ways of doing business.
U.N. Habitat recently released a report showing that the pace of urbanization is increasing, with "200,000 new dwellers flooding into the world cities and towns each day." That's like a new city the size of Seattle, Washington D.C. or Copenhagen springing up every three days. And while it is true that in the Global North, some industrial areas have become home to shrinking cities and others are in line for massive climate troubles, the trends suggest that most cities that are growing today are going to see long sustained booms in population.
But our cities are not only growing quickly, they're getting younger. We live on a young planet, with two billion people under the age of 15 and a median age of only about 27, worldwide. Already there is a massive unmet demand for jobs, housing and services. Youth unemployment is at its highest level ever in many countries, but that doesn't mean young people stop living. Indeed, while some of their energy is channeled into destructive outlets, from gangs to terrorism, evidence suggests that there's been a much larger explosion of activity in the so-called "informal economy" -- everything from "gray market" trading to casual labor to microbusinesses and community efforts. A faltering economy doesn't mean an end to enterprise.
Bright green innovations are generating all sorts of new business frontiers as well. Green building and design innovations spur new possibilities for development and renovation. Smart technologies drive new ways of looking at shared goods and spaces. Attention to foodsheds and footprints enable new models of feeding and clothing ourselves. The list goes on.
So on the one hand, we have the material for a remarkable boom: rapidly growing cities full of energetic, young people with unmet needs but access to a wave of bright green innovations.
On the other hand, we have a worsening credit drought. An increasing number of stories warn that we should not expect much available credit at all in the short term:Most banks expect their lending standards to remain tighter than the levels of the last decade until at least the middle of 2010, according to a survey of senior loan officers conducted by the Federal Reserve Board.
The disturbing possibility presents itself that credit may not begin to flow again for years. A growing number of pretty credible observers already warn that, Wall Street talking heads aside, several big problems may dry up credit for some time to come. The biggest immediate problem seems to be that commercial real estate loans (for building apartments, offices, stores and warehouses -- $1.7 trillion in just U.S. loans) may be following residential lending off the cliff. In addition, while it's true that "green-technology firms attracted the largest share of venture capital in the third quarter," what hasn't generally been mentioned in green business stories on that news is that venture capital funds have shrunk to a 15-year low. Then there's the planet: other factors may cause investors to be even more skittish -- from the anticipated losses caused by climate change and ecosystem service degradation to the rising costs associated with constricting supplies of fossil fuels and virgin materials.
So, what does it mean to have an expansion, in a time when capital is extremely difficult to get? What does a "dry" boom look like?