My 10 predictions for Lex in 2010: how’d I do?

In January of 2010, I posted these predictions on my site and they were later published in Business Lexington – seems like a good idea to check out how I did

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1. Lexington will see an increase in refugees from three primary areas and causes:

 Mexico – peak oil: The Mexican government is being challenged like never before, both with drug-fueled lawlessness and an absolute free-fall in oil revenues, as their fields have peaked. Lexington has a large and established Mexican community – expect more friends, relatives, and fellow citizens to join them here.

 2010 Result: From the Boston Globe 11/26/10: “Those who think immigration pressures are bad today are in for a real shock: The combination of climate change and declining Mexican oil production — both of which will strain the personal and public treasuries in Mexico — are likely to magnify the northward pressure.”

 Africa – climate: We have already seen an influx of people from Africa landing in Lexington. As food shortages and prices increase due to both a ravaged climate and peak-caused higher oil prices we should expect more.

 2010 result: Lexington experienced a record number of refugees officially settled here. Yet it is unknown how much global warming and peak oil played in that. Scary times caused by climate change and imbalances in oil based economies often result in brutal repression among minorities in African countries. My gut says that climate and oil have something to do with that.

 Central USA – globalism: Lexington has fared better than most cities in this part of the country. Our housing stock is in decent shape, we still have a diverse retail mix, our urban and natural environment isn’t devastated – all in all we will look like a good place to ride out the storm. People in this group include college students (kids, young adults, and even middle age folks who cant find work) and people from cities like Wilmington, Ohio that have been destroyed by globalism.

 2010 result:  I have a feeling that we have picked up quite a few folks, but it’s just too early to tell from Census numbers – I’ll keep tracking it.

 Nationally, anti-immigrant sentiment will spread rapidly.

 2010 result: Arizona Senate Bill 1077 – enough said. And now, courtesy of David Williams, we will get a dose of that crazy here in 2011.

2. Lexington will get more dense. This influx of people – and continuing economic deterioration – will cause Lexington to get more dense. These refugees will not be in the market for new housing of any sort, thus there won’t be a need for new development. Rather, we’ll see increases in people per unit. More people will squeeze into houses and apartments across the city.

 2010 result: The US Census 2009 American Community Survey reports that Lexington indeed is getting denser. Persons per household has increased 11% since 2005 from 2.2 to 2.45 pph. Housing permits fell 72% between the 2005 peak and the end of 2010. Our population is estimated to have increased by 17,540 people between 2005 and 2010. Bottom line is this – fewer new residences but more people in the city. This trend is now showing up in our local public schools, which are seeing record enrollment rates 

3. Unemployment in Lexington will hit a new peak. More people plus less jobs equals higher unemployment. The percentage of unemployed and underemployed in Lexington now is at least 13% – higher than anytime since 1930s. Basically 1 out of 7 people in Lex.

 2010 result: U-3 unemployment in Lexington hit a yearly high of 8.6% in February, which is only slightly below the all time post Great Depression high of 8.7% set in June of 2009. Unemployment did fall to 7.2% in October. This could be the result of long term unemployed falling off the rolls, as well as a tremendous upswing in “students.” UK saw 2010 enrollment increase by 4% from 2009 and BCTC’s local enrollment surged over 13% over 2009.

 Declines in employment and wages will continue to severely stress local government. Our city’s funding is nearly entirely based on payroll taxes.

 2010 result: In early December, the Lexington Herald Leader reported: “Lexington faces potential $25 million hole in next year’s budget.” Enough said.

 Employment declines will force wages down for those who remain employed. This will combine with an increase in inflation due to reckless Federal spending and an increase in costs due to higher commodity prices. Taxes at all levels can be counted on to rise. Bottom line: less money in our pockets, at the exact same time that gas and everything related to it – like food – will get more expensive.

 2010 result: The Bureau of Economic Analysis reported in late December that employee compensation in Fayette County fell by as much as 2.7% in 2010 from 2009. Gasoline increased 27% in price from 2009. Food prices are up 25%. Kentucky Utilities, Kentucky American and Delta Gas all raised their rates.

4. Survivalism will become a real topic . An equal counterpoint to personal social responsibility will be the “every man for himself mentality.” And not just in rural areas. Suburban anger and fear will go mainstream and suburban neighborhoods will become ever more loaded with guns and dried food. In a place like Lexington which is comprised nearly exclusively of suburbs, this is a real problem. As we have seen, Lexington is becoming more diverse than ever and the suburbs are where it’s happening. This isn’t an inner city vs suburbs vs rural divide – this is true discord in our midst.

 2010 result: Thanks to our friend Rand Paul, for really exposing what a whole lotta people are thinking: things are getting bad. “A revolution. Last man standing.” This video is one you just gotta watch – sums up quite nicely what a large minority really thinks.

5. No new private development in downtown Lexington. The fate of downtown engages so many people and compels them to spend huge amounts of intellectual and emotional energy on it. Yet beyond the completion of the fine streetscape project and the improvement of Cheapside, no private development will occur in downtown in 2010. This is due to a perfect storm of reasons: lack of credit for both developers and buyers, high land prices translating into high rents and sales prices, higher commodity prices, lack of potential residential buyers in the young professional and empty nester demographics, and a general decline in retail activity nationally.

 2010 result: Nada. Zip. Zilch.

The main cause for concern for downtown will be the suburbanization of the urban core. The community must be alert to arguments that offer “something is better than nothing.” Single story, single use buildings surrounded by parking lots will kill whatever energy is left downtown.

 2010 result: Still an issue – witness the debacle over the proposed Rite Aid.

6. Lexington will begin to truly value the next generation. Lexington has always had what is now called the creative class. In 2010, the city will benefit from their ideas, passions, and energy more than ever. Fears of brain drain will be eased as our best and brightest stay here, in known, safe surroundings and we draw bright people in from around the world. This is the beginning of a talent and leadership revolution in “ole” Lexington. A good beginning: the Creative Cities Summit to the held here in April and fostered by the leadership of Anthony Wright of the Mayor’s Office of Economic Development and Phil Holoubek among many others.

 2010 result: Jim Gray’s campaign for mayor brought out more youth in politics than I have witnessed in the 29 years I’ve lived here.

 The Creative Cities summit did seem to galvanize young professionals, for a time. They need more constructive outlets in our community.

7. 2010 will mark the beginning of the “local” era of Lexington. Local food and business will move even more to the forefront of community consciousness. Whether due to health concerns or a devotion to social and environmental justice, or just simply because it is the right thing to do economically, more and more Lexingtonians will eat and live local. Cheap shit brought from half a world away will be disdained even more. The new local era will open up a myriad of micro business opportunities, ways to make a meaningful living here while at the same time helping our city become an even better place.

 2010 result: I’m not partisan at all, but again Jim Gray’s Fresh Start Plan did have a strong local component, from local food to having the city do more business with local contractors. Local First Lexington seems to be growing in impact.

8. Grass roots are growing. City government is likely to be even less of a leader in 2010 than it has been in 2009 – through no fault of the fine people who run it. Entitlement spending and debt service eat up most of the budget, leaving little room for discretionary projects and funding support for programs. Falling payroll tax receipts will decrease funding availability even more. The next generation is already taking charge, not waiting to be told, or asked. Witness the great things that SeedLeaf is doing to reintroduce agriculture to our lives, and Debra Hensley’s “social stimulus, “ a fun way to gather people to share ideas and fellowship, or Kid’s Café at the East Seventh Street Center among many others.

 2010 result: This really wasn’t a prediction, just a continuation of a growing trend. The Blue Grass Community Foundation’s goodgiving.net campaign will help this more than ever. Check it out if you haven’t.

9. The “North-Side Renaissance” will continue. The renaissance north of Main Street, and in the East End particularly, will continue to reflect the rise of the new Lexington – a place where race, birth, wealth, origin, and class don’t matter as much as humanity and possibility. For far too long, Lexington viewed itself by what happened south of Main Street. Now we are becoming a more balanced city, for everyone’s benefit. Local business, creative, caring people, and investments of sweat as much as capital are changing the area into what almost seems like a quaint small town. Limestone is now becoming the true main street of this town, a street that connects, unlike the old Main Street, which was one that divided.

 2010 result: So many good things going on North of Main. Presto the People Powered Piano Bike was built by neighbors at Third Street Stuff. The guys at Broke Spoke helping to grow a bike culture. The great summer events at Duncan Park. The Lyric and Isaac Murphy Memorial Art Garden and other great improvements in the East End. We’re witnessing a historic transformation of not only our physical city, but our city’s mindset.

10. In 2010, we will gain a head start on the transition that is beginning to occur worldwide. Lexington has a lot going for it as we enter a new world. 51 years ago, city leaders had the foresight to create the urban service boundary as a way to protect our beautiful countryside. Because of this, the Thoroughbred industry flourished. But even if that industry falters – which is likely with peak oil – we still have a huge swath of protected land, some of the best agricultural soils in the world, with which we can feed ourselves. I cannot overstate the importance this will have to us over the coming years! (We did hurt ourselves by sacrificing our ability to control our own water supply – let us hope that this is not a fatal mistake.)

(2010 result:  Ky Am raised our water rates by nearly 50% over the last 18 months.  They are guaranteed a profit of 9% on their service rates here.  That’s 9% of our money that goes to investors around the world, instead of staying here and helping this community.  And now we have a shiny new water plant that is several hundred feet BELOW Lexington and over 30 miles away, meaning lots of energy is required to get that water here.  And as we know, the era of really expensive energy is upon us. )

Because of the urban service boundary, we have a very compact city for our size. Most of the neighborhoods in the city are accessible by bike within a 30 minute ride. Very few other cities can say that. This compactness will also make it easier to manage our waste, provide basic services, and keep essential infrastructure as well maintained as possible. This compactness will also make local businesses, services, and food distribution much more efficient.

We have many rooted institutions that will give us a sense of stability over the coming years. We are well educated. We are personally healthier than most places. Our city hasn’t been as divided by race and class as many others – it hasn’t been perfect, especially for those among us who have been invisible or even expendable to the rulers – but we don’t have scores of square miles of burnt out and abandoned land like many, many cities.

(Of course in 2010, the World Equestrian Games will come and go and I think Lexington will be well received. We will gain at least our Legacy Projects out of it: the Legacy Trail and the Revitalization of the East End, including the Lyric Theatre and the Isaac Murphy Memorial Art Garden. So yeah for us! )

 2010 result: Yeah the WEG came and went, and I think most people really had a great impression of our city. I doubt if there was any real economic impact beyond restaurants and hotels. We may never know, as there is no plan to study the economic impact. Real good for transparency and honesty. All the other observations will remain as true in 2011 as they were in 2010. And continue to grow in importance.

So there you have it. 10 predictions. You’ve noticed that I stayed away from national and international predictions. You can get those in detail elsewhere, but I’ll summarize. A bubble is again growing on Wall Street as interest free money is invested in an attempt to get the last few crumbs off the table. Once interest rates increase, the market will again drop precipitously, perhaps as early as summer 2010. All hopes for a sustained “recovery” will die with this last bubble.

 2010 result: Missed this one. The FED did not raise interest rates, and does not look likely to for some time. When they do, the market bubble will burst. Bet on it. I am.

Oil prices will rise with the market, and when it bursts, so will demand in the US, which will drive prices down some. But expansion of industrial growth in China and India will combine to send prices back up. This will add costs to everything we do, and eat, here, making us poorer even as our wages decline and our taxes increase. Peak oil will be finally acknowledged by those in power in the U.S.

 2010 result: Oil prices have risen across the entire year. Stagflation is setting in. The US military did acknowledge peak oil, at least. No politician has dared do so.

Israel will very likely launch a strike on Iran. This has far more important consequences to world stability than do our wars in Iraq and Afghanistan. All bets are off if this happens.

 2010 result: thankfully this didn’t happen. Yet.

The climate has changed already, and it is unlikely that humans will do anything to stop further changes. Adaptation will become ever more urgent, as will dealing with climate refugees, even in the U.S. Interior cities in the U.S. need growth plans to deal with an influx of people escaping rising sea levels, strong storms, and droughts.

 2010 result: The Economist reported in November that: “The fight to limit global warming to easily tolerated levels is thus over.” Perhaps this was the most fateful sentence written all year. That doesn’t mean that we mustn’t try to continue mitigating our carbon footprint. We must work harder than ever, to try and keep the earth habitable for humans. But now we also must begin making adaptation plans. Especially as cleaning up from frequent storms will cost the income starved city ever more money.

2010 will become our “reality” year. A year when it finally dawns on us that we cannot go on as we have. As I’ve said, we here in Lexington have a lot of advantages in facing the new world. Let us not squander them trying to retain the old one.

 2010 result: I was WAY too optimistic on this one. The Republican tide that is sweeping the country is proof that many people have no desire at all for reality. It won’t get any better between now and 2012 either, I’m afraid. All we can do here is continue to work on keeping our sanity, and making this a better place.

We’ll see if I can cook up some predictions for 2011 later. Thanks for reading and HAPPY NEW YEAR!

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