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L.A. Hanging on as a Top Global City

Sun, 08/31/2014 - 22:38

For more than a century, Southern Californians have dreamed of their region becoming host to a great global city. At the turn of the 20th century Henry Huntington, who built much of the area’s first mass-transit system, proclaimed that “Los Angeles is destined to become the most important city in the world.”

Of course, builders of other cities – St. Louis, New Orleans, Chicago and even Cincinnati, Ohio – have made similar predictions. But L.A.’s claim, unlike the others, had a significant resonance. Not only was the region growing rapidly throughout the previous century, and now stands as North America’s second-largest population center, but it dominated a host of fields, notably entertainment and aerospace, and was highly influential in energy, fashion and manufacturing.

But it was a connection to the Pacific Rim that made L.A.’s ascendency so global. This is something that Midwest rivals, such as Chicago, never enjoyed. By the 1980s, when I was writing my first book, “California Inc.,” faith in Southern California’s global ascendency was commonplace among its business leadership, who almost universally saw the city as rising above New York, London and Tokyo to become the new center of a Pacific-centered world economy.

This notion, and the region’s huge economy, has sustained its status among global cities. The 2014 A.T. Kearney global cities index ranked Los Angeles sixth, behind New York, London, Paris, Tokyo and Hong Kong.

However, a new study of global cities, just released by the Singapore Civil Service College and Chapman University, shifted ranking criteria away from the size of economies or number of business producer service firms and concentrated, instead, on unique factors such as industry domination, diversity and global connectivity.

Hooray for Hollywood

The good news: Los Angeles ranks 10th among global cities, using our new measurement. But L.A.’s also clearly not gaining ground on the top two global cities, New York and London, and now ranks below such rising competitors as Beijing and Dubai. L.A. also only shares 10th place, with its primary rival, the San Francisco Bay Area, as well as Toronto.

What is keeping Los Angeles in the top 10? For the most part, the Hollywood connection makes Southern California a “necessary” place for global business. Hollywood is nearly synonymous with the American entertainment industry and is by far the world’s largest in terms of revenue and influence. Last year, the industry enjoyed exports of almost $15 billion. Every major global movie studio is located in Los Angeles.

Yet this industry – growing both nationally and internationally – is also increasinglydispersing. Indeed, this region’s share of film and television production has been plummeting in recent years, according to the California Film Commission, largely the result of films and TV moving to Canada, Louisiana and other less-expensive locales.

This is troubling. Before 1980, Southern California’s global emergence rested on more than merely being “Tinsel Town.” It was once the hub of the global aerospace industry, but this former linchpin has declined as both industry headquarters and production have moved away. More than 90,000 aerospace jobs have left Southern California since the end of the Cold War, about 25 years ago.

The region also retains a foothold as the U.S. base in the global auto sector, particularly for design and marketing, for some Asian carmakers. However, Nissan, a few years back, relocated its U.S. headquarters to Nashville, Tenn., and Honda moved some of its top executives to Ohio in order to be nearer to its manufacturing plants.

More devastating is the departure this year from Torrance of the U.S. headquarters for Toyota, the world’s largest automobile firm and a consistent technological innovator.

Still, the picture is not totally bleak: Southern California remains the base for North American operations of the two fast-rising Korean firms, Hyundai and Kia, both in Orange County.

One bright spot is technology. Somewhat surprisingly, the Startup Genome project ranked Los Angeles as having the second strongest startup ecosystem in the United States, ahead of Seattle, Boston and New York. The entrepreneurial spirit is still here, although there’s a lack of capital and support from government or nonprofits, elements seen in other regions.

Overall, Southern California has been losing ground to other regions on employment. This was acknowledged even by a recent commission made up of many of the region’s top business and political leaders, which concluded that the region “is barely treading water while the rest of the world is moving forward.”

And some of these competitors are thriving on what used to be key Southern California industries. Los Angeles was once a center of the energy industry, with several major oil companies – Arco, Union Oil, Getty Oil and Occidental – anchored here. Today, all these firms have either disappeared or moved away. The big winner: Houston, No. 14 on our list, which now dominates energy in the same way L.A. once dominated aerospace and entertainment. Altogether, more than 5,000 energy-related companies call Houston home.

A more profound challenge comes from the Bay Area, which shares with Southern California both a Pacific Rim location and a pleasant climate. If Hollywood is synonymous with the global entertainment industry, Silicon Valley connotes the same for technology. It is home to companies that overwhelmingly dominate the list of technology leaders, including Intel, Apple, Oracle, Google and Facebook. Many firms, including some from Asia, come with an idea and, as one Malaysian entrepreneur put it, “source in Asia, incubate in the U.S.”

The Bay Area hosts the North American headquarters of such global tech firms as Samsung and Nokia. Top technology firms in other cities often have their key R&D functions in the Bay Area. Even a penny-pinching firm like Wal-Mart is growing its Silicon Valley presence.

Though Silicon Valley firms are growing their employment base in places like Salt Lake City and Austin, Texas, the Bay Area retains its dominance and control over the industry. This is similar to how the financial industry remains heavily centralized in New York despite the migration of many jobs elsewhere.

As it shifts emphasis more to media, the Bay Area’s tech sector increasingly threatens L.A.-oriented industries such as advertising and entertainment. Google and Yahoo already are ranked among the world’s largest media companies. (Yahoo refers to itself as a digital media company, rather than a technology company.) With the ubiquity of its iTunes platform, Apple exercises ever-greater control over consumer distribution of entertainment products like music and video; Netflix, Hulu and YouTube could become the movie and television studios of the future. This could shift global media decision-making from its familiar New York-Los Angeles axis to one centered on the Bay Area.

In the future, our region may face powerful competition from Washington, D.C., which has all but stolen the aerospace crown from Southern California. Further down the road, we may also face a challenge from Washington state. Never before a serious competitor, Seattle, with a strong technology sector and name-brand retailers such as Costco, Starbucks and Nordstrom, is growing its global footprint as Southern California’s appears to be shrinking. Its twin ports, Tacoma and Seattle, could present a long-term challenge to the still-dominant ports of Long Beach and Los Angeles.

What should be done to retain and improve Southern California’s global status? Does anyone still care? The entrepreneurs and promotors who built this region would probably support new infrastructure and regulatory reforms that might bolster the industrial, entertainment and trade sectors.

Sadly, it is dubious that the city’s current leadership – focused on trying to build a faux New York or an Ecotopia amid economic decline – even understands the nature of the challenge.

But adopting solutions from the 20th century will not be enough. Los Angeles’ greatest resource – its diverse, motivated population – has to be allowed to flourish as part of our globalization strategy. Our entrepreneurial ties to Vietnam, China, Mexico, the former Soviet Union and other places could prove critical to restoring our international status.

Great global cities, we need to remember, are created by the people who live there. What we need to do, more than anything, is show that Southern Californians can play a part in reigniting the momentum that once made this region the emerging superstar on the global stage.

This piece originally appeared at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Why Modern Architecture Struggles to Inspire Catholics

Fri, 08/29/2014 - 22:38

Inspired by a recent visit to a Le Corbusier-designed Dominican monastery near the French city of Lyon, I’ve been thinking a lot about the interaction between Catholicism and modernist aesthetics.   It has little to do with whether the Church affects what designers create beyond filling the program.   Instead, I’ve tried to examine how the architect’s religion influences the Church’s own self-image.  I’ve concluded that the Church, an institution that has been the guardian tradition and the patron artistic and architectural development in the West for almost two millennia, never could reconcile itself comfortably with Modernism.

I was reminded of this when I shared with my brother news on the opening of a new convent and Visitor Center buried into the hill on which sits Le Corbusier’s famous Notre Dame-du-Haut Chapel at Ronchamp.  The convent was but the latest creation of the contemporary master Renzo Piano, featuring architect’s trademark manipulation of natural light, spatial simplicity, open views of nature and elegant detailing.  My brother seemed to shrug at these qualities, writing:

Seems more like a fish tank with Ikea finishes than a cloister. I know natural light, rectangles, and windows are nice, but its openness and simplicity feel like some vapid unbearable lightness than a place of spiritual reflection. Zen monks might appreciate it more.

I replied that he seemed to have a very narrow idea of what constitutes a proper place for spiritual reflection, and that lightness and simplicity had a place Catholic doctrine.  I referred to him to a series of pictures  I had taken of Le Corbusier’s monastery, wondering what he thought of his more ‘Brutal’ approach.  My brother elaborated:

Ugh, these architects have no god. That thing (by Corbu) is hideous. Look, meditation takes place in the mind, but more in the soul. Christianity places the priority on man’s soul transcending his surroundings, not blending with it (a la Zen). Man is large, not small. Churches should be ornamented and highly symbolic, teeming with life, not stark and barren. It all has to do with Being not Nonbeing. The church is a foundation, it’s heavy, it imitates the eternal. It’s not some flimsy plates of glass and concrete garnished with random primary colors here and there.




Bedroom of Convent by Renzo Piano Workshop at Ronchamp, France

Though there are indeed gaps in his argument that can be exploited, I think his overall opinion is respectable and shared by many of the Catholic faithful who possess a sophisticated understanding of their beliefs and how to translate them into sacred art.  Often such views completely contrast from many members of the clergy, who have more of an interest in revitalizing the church by embracing contemporary artistic trends than by responding to wishes of their flock.  The Dominican monastic order prizes scholasticism above all else, and finds it fully consistent to hire a leader at the forefront of architectural progress like Le Corbusier.  The nuns were probably thinking along the same lines, wondering less about how sacred life can transform architecture, but rather how architecture can transform sacred life.

Outside a few rare examples such as Ronchamp,  I sense that Modernism has failed to deliver an architecture  that connects with most Catholics and other traditional Christians.  Much of this has to do with fact that Modernism as a cultural movement is inherently atheistic as it is based on a secular materialist philosophy.  Even Renzo Piano admits as much, describing his client from the convent: “She has a profound love of architecture, of landscape, of sacred space – and even of people without religion, like me.  She wanted a place of silence and prayer. I said: ‘I can’t help you with prayer, but perhaps I can help with silence and a little joy.”




Chapel at Convent by Renzo Piano Workshop, Ronchamp, France

And therein lies the crux of the problem: When one has done away with symbols, theology, and the act of worship, there’s little else to inspire a credible work of sacred art or architecture.  Piano, like any committed Modernist, is left with little more than a preference for abstraction, technology  and  some vague nostrums about nature and  space.  For a Modernist, the point of architecture is to convey an image of maximum clarity, in which all elements are related by function and little else.  As long as a space is adequately sheltered and functions for the use of its occupants, there is no need for decorative flourish.  Piano is reduced to checking off boxes for the client’s wish list, from the number of rooms, to furnishings, and to achieving a quality of ‘silence’.  There’s nothing all that particular about an architecture of silence–maybe  a dark room secluded from more socially active spaces.  Given the right palette of materials and details, any space can be turned into something contemplative.  But can this generic approach to design evoke much meaning beyond mere emotional states such as peace?

Sacred spaces achieve much of its effect by emphasizing mystery. This is at the core of any religion, in which divine truth is revealed beyond any logical or rational framework.  As is often said, God is revealed in mysterious ways, and the purpose of any sacred space is to embody this reality.  It is inherent that a secular space is completely  counter to this and thus adopts an architectural language devoid of mystery or even ambiguity.   Secular spaces instead embrace the language of the engineer, someone who works outside the world of art, poetry, and indeed of mystery, by solving problems with the most rational tools of math and science.  There is a lot of work that goes into making successful settings for secular activities, much of it having to do with the science of building, such as lighting, acoustics, and visibility.  There is also a tendency for generating phenomenological effect through technology, such as making walls highly transparent or reflective, surfaces either smooth or deliberately rough.  To the Modernist who puts its faith in technological progress, the more an effect can exceed what can be done by the human hand, the better.




La Tourette Monastery by Le Corbusier, Eveux, France

Such attention to a material’s effects point to Modernism’s essentially materialist philosophy on architecture. In sacred architecture, the building and the spaces within serve  to connect users to a deeper reality that transcends its walls. They function as a gateway from the material world to a spiritual realm–the focus is on the eternal, not the object that portends to represent it.  In a secular context like Modernism, the object is the thing itself, and all meaning is tied directly to that object.   Walking into a exemplary Modernist space, one is supposed to marvel at its lightness, smoothness and simplicity, attributes that are commonly summarized as ‘machine-like’.  If one desires a more ‘humanist’ look and feel, the designer can instill a quality of ‘roughness’ by texturizing concrete, oxidizing steel,  and inserting warmth by using  natural materials such as wood and stone.  Industrialization gives us that much more control to generate a precise effect, and empowers the designers unlimited opportunities in experimenting.  At the same time, it diminishes the role of the craftsman, who throughout most of human history was the guardian in generating material effects, and in  many ways assumed the role of architectural detailing.  Machines take the human factor out of the art of making, thus producing something devoid of passion, feeling that imbues every man-made object.

Piano singles himself better than most of his contemporaries by his ability to reinsert the human touch in his design process. His architectural details are truly works of art and are usually the result of a distinct craftsman-like approach in generating them.  The name of his firm, The Renzo Piano Workshop, harkens back to the time when architecture was realized by stone masons, who would accumulate specialized design knowledge in the development of style details and templates.  Where Piano departs is the end result of his craftsman-like approach: highly refined, ultra-precise, machine-polished building systems and parts.  The structural connections in his projects are beautiful  and poetic pieces of engineering, much like Apple products, but like most industrial artifacts, they cannot express the ancient, primordial aspects of our humanity.  Is that necessary to fully immerse oneself the Catholic experience?

I believe so.  A fundamental assumption in Catholicism is that history is linear and that God was incarnated in the human form of Jesus Christ at a precise point in history to the point that the period before and after this event are neatly divided (BC vs. AD).  Its doctrines and liturgy are part of an evolutionary process that have taken place in the world for two thousand years, and followers actively partake in this history by participating in the mass.  For most Catholics, weekly mass is the only time that they are reminded that they are tied to humanity in throughout the ages, both in the past and the future.  This goes against ‘modernity’, or the idea that the times are so new and different that prior truths or solutions are irrelevant.  In Christianity, Truth is eternal, and the problems that afflict humanity are no different during the time of Christ than they do now. There is no ‘new and improved’. Rather, the ideal was was established two-thousand years ago (the life of Christ) and no amount of social or technological advance (or regression) can change this. 




View of Crypt inside the La Tourette Monastery by Le Corbusier

In addition, Christianity relies on communicating its ideas through allegories conveyed verbally in the Bible, musically in its music and visually illustrated in its art and architecture.  These are designed to make the message accessible to all people, as opposed to keeping revelations close to a self-selected elite.  The message has to be clear, the context must be provided and the characters believable.  Visually, this requires the use of lines and recognizable figures placed in a narrative relationship. These demands don’t lend themselves well to abstraction, the modus operandi of the Modernist.   Abstraction is by nature open to individual interpretation; Christian revelation is not.  Abstraction is deliberately exercised by an individual, driven by their own desire to create original content; Christian subjects and themes are the content, with the artist sharing his visceral imaginings of truths he does not question (like most European art before the 19th Century).

This probably explains why many Catholics feel a certain frustration with the role played by modern music, art and design in today’s church.  The music uses irregular folk beats, vulgar melodies and harmonies, and seem composed to bring attention to the songs themselves rather than acquainting singers to a more transcendent reality.  In contemporary Christian art, Christ is portrayed as a non-descript figure, and often times and rendered in an abstracted archaic style that is flat and lacks feeling.  The cross is abstracted to emphasize its iconic nature as a symbol, detached from any literal representation of what actually happened on the cross.  In most modern churches, seating is arranged as a theater in the round, focusing the parishioners’ attention to the the priest, or the choir, rather than to God as manifested in an elaborately decorated apse wall or a ceiling pointed to heaven. This was vividly brought to my attention when watching the broadcast of Christmas mass from the Vatican–most of the camera shots showed details of the sanctuary’s glorious interior and symbolic art, with the occasional view of the Pope.  Catholic worship is not about the mere men (priests) who help conduct its rituals but is instead is about how God is revealed in them by means of humanity’s most outward expression of what lies within its soul: Art. When there is nothing meaningful or moving to look at, one is resigned to paying attention to a charismatic individual standing on a stage, transcendent beauty is loss, and the Christian message takes on a banal delivery.




Chapelle Notre Dame du Haut by Le Corbusier, Ronchamp, France

Architects, a growing number of whom fall into agnosticism and atheism, often seem to forget this when visiting sacred yet Modern masterpieces.  Just because Le Corbusier’s Ronchamp chapel makes some of my colleagues cry doesn’t mean it fulfills its ecclesiastical responsibilities particularly well.  They are likely overwhelmed by the chapel’s poetic mastery of form and light and how it provokes a profound yet undefinable emotional response.  I succumbed to this response myself when I went to Ronchamp as well when I toured  Le Corbusier’s monastery of La Tourette.  I was taken aback by his buildings’ abstract forms, its play with light, its vivid use of color, its sophisticated relationship to its site.  In the end, I didn’t develop a more profound appreciation of Christian revelation, but a greater respect for mathematical proportion, abstract formal metaphors, primary colors and geometries–transcendent things nonetheless, but a bit too esoteric for most people.  La Tourette was clearly a more regulated composition compared to Ronchamp, which is probably why is probably why the latter provokes a more emotional response.  In  a sense, the chapel is Le Corbusier at his least ‘modern’ and more archaic, while his monastery is likely intended to feel more academicized due to that typology’s tradition of being repositories for knowledge. Ronchamp’s form sweeps up to heaven, its dark sanctuary enclosed in thick walls reminds one of a cave evocative of early Christianity, while its rounded towers mimick Mary in her veil, sheltering the church below. Though these moves aren’t literal, there is just enough reference to the symbols and ideas of Catholic church that make this more approachable to average followers.




Church on the Water by Tadao Ando, Tomamu, Japan

This isn’t to suggest that modern architecture can’t achieve successful spaces for spriritual contemplation. Tadao Ando’s Church by the Water is especially powerful, manipulating natural light and framing views that heightens the senses and fuses nature into the act of worship. The church is stripped of traditional Christian decoration, illustrations of bibical stories or saints, or any other reference to the history of the church. It works for those who wish to understand God through nature’s primal elements and how they change through the passage of time. There is a sense of ignoring the human presence altogether, as it invites one to blend into the natural surrounding (as my brother’s comment on zen indicates), which may work in more minimalist strains of Christianity and even Catholicism, but will leave many believers hungering for a place rich in narrative objects and a more fully enclosed communal response among people.   There is no altar to focus on, only a highly abstracted cross standing in a reflecting pond, which could have all sorts of meanings, but not one that concentrates the mind of the believer on Christ and his passion.

A truly inspiring space that uses a modern architectural language for catholic worship is extremely difficult to find.  While many architects simply choose to employ a historicist style for even newest churches, it is possible to address the particular characteristics of a catholic church while maintaining a modernist sensibility.  I submit a Cistercian chapel located not far from where I live in Irving outside of Dallas designed by Gary Cunningham. Long an admired designer in the area, Cunningham’s work can be characterized as simple, straight-forward, and sensitive to materials. His award-winning residences follow a rather conventional contemporary style but he also is very accomplished in the art of adaptive reuse, in which he repurposes an existing building by carefully juxtaposing old and new elements.  This consciousness of how time plays a role in the way a building expresses itself is strongly manifested in the Cistercian chapel.  The space is enclosed in rough quaried limestone, cut in massive blocks and stacked in traditional running bond, which instantly strikes any visitor as reminiscent of the Catholic church’s earliest Romanesque sanctuaries with their thick walls and small windows. Its wood roof floating above the nave takes the shape of a traditional ceilings found in these churches, while also resembling the underside of a ship (which is where the word ‘nave’ comes from). Spans are short, further emphasizing the weight of the stone, even as they maintain familiar rhythm suggestive of the old ambulatory aisles with the repetitive row of vertical windows.  It follows more of a classic basilica typology than the popular theatre-in-the round, which indicates a desire to focus on the liturgy as opposed to the priest. But more than merely echoing the churches of the past, this chapel appears as a direct architectural metaphor for the creation of the church itself: “And I say also unto thee, That thou art Peter, and upon this rock I will build my church…(Matthew 16:18)”  While obviously an abstract design, Cunningham manages to endow the chapel with an important phrase from the Gospel and thus Christian revelation.  Sleek details and delicate connections between the roof and walls betray its contemporary origins, but the way it highlights the split-faced texture of the rock wed the chapel to the church’s long institutional history, and the countless number of people who dedicated their lives in building structures fitting to God’s glory.




Cistercian Chapel by Gary Cunningham, Irving, Texas

And that, to me, is what is necessary for a compelling Catholic worship space–a connection not only with the divine, but just as importantly with an institution comprised of people throughout the ages. Its walls should reveal human intent, either through a man-made texture or through an ornament that is the work of genuine human input. Machine-smooth de-personalizes this experience. As any human institution that is an essential part of catholic identity, it carries a rich artistic and architectural heritage that brings with it a kind of unassailable authority not found in Protestantism, which devalues the human institution in favor of interpreting directly from the Bible. The result of of relying on scripture, however justifiable from a theological standpoint, seems to lead towards a breaking down of a rich visual language and an embrace for abstraction. A small cultural vacuum subsequently takes root, which grows to consume what’s left of symbols, music, and eventually the walls. The ultimate result is either a television studio black-box with no windows preferred by evangelicals or a zen-like meditation space with no walls and a subtle symbolic indication that it’s even Christian (such as Ando’s church).

I’m sure that Piano’s and Le Corbusier’s clerical clients were pleased with the result, and fans of high-design with no opinion on proper Catholic aesthetics are moved by their examples, too. But I wonder if these exercises in abstraction, lightness, and trying to stay relevant in fast-changing contemporary culture win much in the way of converts. People who seek the church want their souls nourished by the church’s message in as many forms as possible. When many of these forms are abstracted or simplified to an incomprehensible level, it leaves such people feeling unfulfilled, and causes many of them to leave the church for a place that offer a richer, more visually arresting environment of the older historic sanctuaries.  At least these modern ecclesiastical masterpieces continue to open their arms to the perennial pilgrimage of people most interested in them: architecture students.

Julien Meyrat is an architect living in the Dallas area.

Lead photo La Tourette Monastery by Le Corbusier in Eveux, France.

Urbanist Goals Will Mean Fewer Children, more Seniors Needing Government Help

Thu, 08/28/2014 - 22:38

America’s cognitive elites and many media pundits believe high-density development will dominate the country’s future.

That could be so, but, if it is the case, also expect far fewer Americans — and far more rapid aging of the population.

This is a pattern seen throughout the world. In every major metropolitan area in the high-income world for which we found data — Tokyo, Seoul, London, Paris, Toronto, New York, Los Angeles, and the San Francisco Bay area — inner-core total fertility rates are much lower than those in outer areas.

For example, inner London, notes demographer Wendell Cox, has a fertility rate of 1.6 children per female, which is well below the replacement rate of 2.1.

The total fertility rate is the average number of children born to women between 15 and 44 years old. In the outer reaches of London, this rate hits 2.0, one-fourth higher.

In Sydney, Australia, where increasing population density is a sworn goal of planners, the inner city now has a fertility rate of 0.76, compared to 2.0 or more in the outer suburbs.

Nowhere is the confluence of high density and high prices more evident than East Asia. This region is now home to some of the lowest fertility rates on Earth.

Take Seoul, South Korea, a paragon of high-density development where high-rise buildings dominate even on the periphery.

Seoul’s fertility rate is about 1.2, similar to rates found in Tokyo, Singapore and Hong Kong. This is the kind of place urban planners often cite as a role model.

A recent glowing report in Smithsonian Magazine heralded Seoul as “the city of the future.” Architects, naturally, join the chorus. In 2010, the International Council of Societies of Industrial Design named Seoul the “world design capital.”

Yet the real frontier of ultra-low fertility may now be coastal China. Both Shanghai and Beijing have fertility rates of roughly 0.7, almost one-third of the replacement rate. Overall, China’s cities have a fertility rate under 0.9.

Gavin Jones, a leading demographer of Asia, suggests that despite recent easing of China’s one-child policy, the world’s second leading economic power is experiencing a dramatic slowdown in its birthrate.

In places such as Taiwan, Hong Kong, Tokyo and Singapore, more than one-quarter of women will never marry and even more will never have children.

The result, Jones suggests, will be a society made up increasingly of single people, one-child families and very old people.

In less than four decades, according to United Nations projections, Japan will have more people over 80 than under 15.

This may present more of a challenge to Japan in the future, one professor suggests, than the rise of China. Indeed, over time, notes Jones, the same process will be seen across East Asia, as well as parts of Europe, as the anti-marriage and post-familial trends accelerate.

“This won’t get better in the future,” he suggests. “The decline is just starting and it’s expanding to other areas, and the process seems inexorable.”

For now, America, with a fertility rate of 1.89, stands in somewhat less distress, but that could be changed by increasing urban density — the very policy widely adopted by pundits and planners and broadly endorsed by urban developers.

As Cox has shown, localities with higher densities and higher prices — the two are often coincident — have considerably lower birth rates than areas with lower prices.

This becomes even more evident when one considers the segment of the population between 5 and 14 years old, when children enter school.

In 2012, urban areas with the highest percentage of children are predominately lower density and lower cost, including Houston, Dallas-Fort Worth, Riverside-San Bernardino, Atlanta, and Phoenix.

Urban areas with the lowest percentage of people in these age groups were also the New Urbanist exemplars, such as Boston, San Francisco, New York, and Seattle.

The geographical nature of low fertility becomes even more clear in maps developed by demographer Ali Modarres.

These maps show the percentage of households without children present. In regions such as New York, San Francisco, Seattle, D.C. and Chicago, the message is clear: much lower fertility rates in the denser urban cores.

Maps Source: Demographer Ali Modarres, chair of urban studies at the University of Washington at Tacoma, using data from U.S. Census American Community Survey 2010

In virtually every case, family size expands the closer one gets to the periphery; in contrast, some of the inner rings show fertility rates that approximate those seen in the hyper-dense Asian regions.

What this suggests is that a continued focus on forcing Americans to abandon their suburban lifestyles will have a profound impact on the nation's future competitiveness.

An aging America will lose much of its current advantage in terms of vitality of our markets and labor force, and will be forced, like many East Asian and European countries, to invest ever more resources to take care of an aging population.

Yet don’t expect this to affect the planners, environmentalists and their allies in real estate development, who hope to harvest windfall profits by urging and even forcing people to embrace high-density living.

Their gain will not be to America’s advantage and will consign future generations to persistent slow growth, greater debt and a kind of societal malaise as the family fades in the face of ever greater emphasis on individualism.

At the same time, an expanded state will be needed to keep the old folks alive in the absence of traditional networks of children and relatives.

This piece originally appeared at The Washington Examiner.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Crossing the street photo by Bigstock.

Ranking America's Top Young Labor Forces: A Rust Belt Rising?

Wed, 08/27/2014 - 22:38

This is a new report brief from the Center for Population Dynamics at Cleveland State University, download the pdf version here. The report was authored by Richey Piiparinen, Charlie Post, and Jim Russell

Greater Cleveland ranks 8th nationally in the percentage of 25- to 34-year-olds in the labor force with a graduate or professional degree, ahead of such “brain hubs” as Chicago, Seattle, and Austin. The analysis speculates as to whether or not this is a leading indicator to broader economic growth. Comparisons are made with Boston and Pittsburgh—two metros further along in the economic restructuring process.

Ranking America’s Young Adult Labor Forces

A region’s economic prospects are tied to its levels of human capital. The most common proxy for human capital is the educational attainment rate, or the percent of a population that has completed a bachelor’s degree or higher. Figure 1 shows the nation’s largest 40 metros ranked by the percent of residents 18 and over who have completed at least a bachelor’s degree. The Rust Belt metros of Pittsburgh and Cleveland rank 23rd and 31st, respectively.

But there are issues with measuring educational attainment this way. Metros such as Cleveland and Pittsburgh have larger aging populations due to their settlement histories, and this significantly affects regional educational attainment rates. Why does this matter? Notes Pittsburgh economist Chris Briem1: “I argue all the time that such a metric says little about how well we are doing in recent decades at either educating the population, or on how we are doing at both attracting and retaining folks with higher education.”

A better way to analyze human capital is through age cohort. Measuring the educational attainment of a region’s 25- to 34-year-olds is a leading indicator when it comes to understanding where a region’s economy is headed. Figure 2 shows the educational attainment rates for the 25- to 34-year-old age cohort. Greater Pittsburgh ranks 7th, moving up 16 spots. Greater Cleveland moves up 6 spots to rank 25th.

An additional method of examining a region’s skill level is to look at the educational attainment within the labor force, as opposed to population. The rationale for doing so is simple. Regions with proportionally large student populations, like Columbus, Ohio, can have exaggerated talent pools, at least in terms of economic productivity. That is, a college student may live in a region to consume knowledge but not necessarily be employed to produce output.

To calculate educational attainment in the labor force, data were analyzed for the 25- to 34-year-old cohort from 2013 Current Population Survey2. Figure 3 details the results of this analysis. Pittsburgh ranks 4th, whereas Greater Cleveland moves up to rank 21st. Conversely, Columbus, Ohio drops 13 spots to rank 27th, perhaps suggesting that the region’s large college enrollment isn’t effectively translating into the regional labor market.

A final analysis examines the percentage of a region’s young adult labor force that is highly skilled, or those with a graduate or professional degree. Slicing the labor force data this way is important in that a region’s highest-skilled workers are drivers of economic growth. Specifically, a metro’s top talent—think engineers, scientists, and doctors—are key agents of knowledge production and transference3, which— when translated into the marketplace—mean new firms and the evolution of existing firms. Those metros that have a high concentration of highly-skilled young adult workers have a head start in the race toward the “next” new economy.

Figure 4 ranks the metros by the percentage of 25- to 34-year-olds in the labor force with a graduate or professional degree. Pittsburgh ranks 3rd nationally, whereas Greater Cleveland moves up 13 spots to rank 8th, ahead of Chicago, Seattle, and Austin. The implications of these findings are discussed below.

A Rust Belt Rising?

Economic restructuring from a labor- to a knowledge-based economy is no easy endeavor. Perhaps no other metro has made this transformation as successfully as Boston. What has driven the region’s evolution from a “dying factory town to a thriving information city”4 has been its gains in human capital. As shown in Figure 5, Boston ranks as an elite metro when it comes to educational attainment rates in both its population and labor force.

What metro is the “next Boston”? Pittsburgh is a likely candidate. The “Steel City” region is increasingly marrying its legacies of manufacturing and knowledge production, with the evolution of new industries and products to show for it5. Enabling Pittsburgh’s ascent is a highly-skilled young adult workforce that’s rivaling Boston in terms of concentration of human capital (See Figure 5 below).

here does that leave Cleveland? While the region is far from being the “next Boston”, one can make the case it is trending to be the “next Pittsburgh”. Specifically, a line of emerging thought—and one that will be developed by the Center for Population Dynamics in the coming months in two working papers—is that Cleveland’s 8th-placed ranking in its concentration of young workers with an advanced degree is a harbinger of broader economic growth. While this supposition is exactly that, there are several mechanisms by which this can occur.

First, it is important to note that there is an industry demand for workers with advanced degrees in Greater Cleveland, else its 8th-place ranking wouldn’t occur. Termed a “magnet city”6, Cleveland’s knowledge economy is forming world-class clusters of expertise that are attracting top talent in key industry sectors, particularly life sciences and advanced manufacturing. In other words, if you want to act, you go to Hollywood. If you want to practice cardiac care or make medical devices you come to Cleveland. The next step for the region is to scale up its emerging economies so that the amassing of knowledge and investment becomes multiplied into the creation of a “thicker, stickier” regional economy.

Part of this scaling up process relates to the effect that Cleveland’s concentration of highly-skilled workers can have on the local economic ecosystem. To wit, those with advanced degrees are most likely to migrate across state or international lines7. For instance, 29% of newly-arriving immigrants into Cleveland’s Cuyahoga County had a graduate or professional degree8. This means Cleveland’s burgeoning new economy demand is commonly fueled from outside the market. Why does this matter? For a historically insular region like Cleveland, this out-of-the-market knowledge migration brings a deepening of a region’s idea bank, as well as increasing global connectivity. The ability of a region to cross-pollinate ideas and get connected with global markets is crucial in the creation of new firms and emerging industries9.

Now, what does, for example, a new biotech firm in Cleveland’s Health Tech Corridor mean for the local mechanic, bartender, lawyer, or accountant? A lot actually. Specifically, economist Enrico Moretti found that for every high-skilled job created, an additional 5 jobs are created in the professional or service sector10. What’s more, the job creation goes beyond the local services and taps into semi-skilled professions in emerging industries. For example, a recent Brookings study found that the Cleveland metro ranked 20th out of the nation’s largest 100 metros in the number of workers without bachelor’s degrees employed in pre-baccalaureate health care occupations11.

Summary

Perhaps Cleveland is the next Pittsburgh, and Pittsburgh the next Boston. Clarifying this entails analyzing how human capital development and economic restructuring takes place. Simply, is Cleveland’s talent profile today similar to Pittsburgh’s a decade ago, and to Boston’s twenty years prior? Moreover, what policies have been proven effective in translating knowledge production to regional economic growth?

The Center for Population Dynamics is in the process of answering these questions. The information intends to help Cleveland speed up how quickly tomorrow gets here.

This is a new report brief from the Center for Population Dynamics at Cleveland State University, download the pdf version here.

Creative Commons photo "Cleveland Skyline from the Flats" by Flickr.com user Erik Drost.

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1 See: http://nullspace2.blogspot.com/2009/06/education-burgh.html

2 The Current Population Survey (CPS) is a monthly survey of households conducted by the Bureau of Census for the Bureau of Labor Statistics. The monthly workforce educational attainment rate estimates were aggregated for a 2013 annual estimate.

3 Waters, R. and Smith, H. 2013. High-technology local economies: Geographical mobility of the highly-skilled. In

Networking Regionalised Innovative Labour Markets; Eds. Hilpert, U and Smith. H. Routledge: New York.

4 See: http://www.csus.edu/indiv/c/chalmersk/ECON180FA08/GlaeserBoston.pdf

5 See:    http://www.politico.com/magazine/story/2014/02/pittsburgh-robots-technology-103062.html#.U-UXIU10zIU

6 See: http://www.kpmg.com/uk/en/topics/magnet-cities/pages/default.aspx

7 See:    http://www.economist.com/news/britain/21611102-some-5m-britons-live-abroad-country-could-do-far-more-  exploit-its-high-flying-expats-and

8 See: http://engagedscholarship.csuohio.edu/urban_facpub/1164/

9 Hilpert, U. 2008. Knowledge in the region: Development based on tradition, culture and change. European Planning Studies, 14, 5.

10 See: http://sloanreview.mit.edu/article/the-multiplier-effect-of-innovation-jobs/

11 See:    http://www.brookings.edu/research/interactives/2014/healthcare-workers#/M17460

Welcome to the Billion-Man Slum

Tue, 08/26/2014 - 22:38

When our urban pundit class speaks of the future of cities, we are offered glittering images of London, New York, Singapore, or Shanghai. In reality, the future for most of the world’s megacities—places with more than 10 million people—may look more like Dhaka, Mumbai, or Kinshasa: dirty, poverty- and disease-ridden, and environmentally disastrous.

Harvard’s Ed Glaeser suggests that megacities grow because “globalization” and “technological change have increased the returns to being smart.” And to be sure, megacities such as Jakarta, Kolkata (in India), Mumbai, Manila, Karachi, and Lagos—all among the top 25 most populous cities in the world—present a great opportunity for large corporate development firms and thrilling treasure troves for both journalists and academic researchers. But surely there’s a better alternative to celebrating misery, as one prominent author did recently in aForeign Policy article bizarrely entitled “In Praise of Slums.”

Bigger is no longer better.

Let’s start with the idea that, in an urbanizing world, bigger is no longer necessarily better. In a recent study I conducted with Ali Modarres, Aaron Renn, and Wendell Cox for Singapore’s Civil Service College and Chapman University, we ranked cities by importance as global centers. Of the world’s estimated 29 megacities, only a handful made into the top 20. Most leading megacities were either long-established Western cities—Tokyo, New York, London, Los Angeles—or located in booming East Asia, including Beijing, Shanghai, and Seoul.

Notably missing are fast-growing growing megacities such as Lagos, Karachi, and Dhaka, as well as the 16 additional megacities—mostly in developing countries in Africa and south Asia—that will pass the 10 million mark by 2030. Yet despite their girth, the majority of megacities are not particularly attractive for foreign investors or as locations for regional corporate offices. These firms tend to cluster instead in westernized cities such as Singapore, Hong Kong, or Dubai, and visit places like Jakarta, Manila, and Cairo only when necessary.

History drives some of this. The great global cities rose as centers of industry and trade, while developing from there an excellence in related services. They created pockets of a more advanced economy to serve the predominately rural hinterland, or in some cases colonial possessions. This imperial relationship spurred the rise of London, Paris, and New York in the early 20th century, and also that of Tokyo, still the world’s biggest city.

Some new megacities, some such as Guangzhou and Shenzhen (which in 1979 had roughly 30,000 people, compared to its 10.6 million today) have a real economic shot at becoming top global cities due to China’s emergence as the world’s workshop. But, as we explain in a recent paper from Chapman University, this is far less the case for most megacities in the developing world.

Unlike their Chinese counterparts, these megacities’ expansion has not been driven by economic growth but more by bringing people from their own impoverished countryside into the city. Critically, in contrast to the peasants who came to Tokyo in the ’50s or Shanghai in the ’90s, there is no huge demand for an industrial workforce in cities in South Asia, Africa, or Latin America, where manufacturing is far less prevalent—manufacturing’s share of India’s GDP, for example, is half that of China.

Here’s the difficult truth: Most emerging megacities, particularly outside of China, face bleak prospects. Emerging megacities like Kinshasa or Lima do not command important global niches. Their problems are often ignored or minimized by those who inhabit what commentator Rajiv Desai has described as “the VIP zone of cities,” where there is “reliable electric power, adequate water supply, and any sanitation at all.” Outside the zone, Desai notes, even much of the middle class have to “endure inhuman conditions” of congested, cratered roads, unreliable energy, and undrinkable water.

The slums of Bangladesh’s capital, Dhaka, swell by as many as 400,000 new migrants each year. Some argue that these migrants are better off than previous slum dwellers since they ride motorcycles and have cellphones. Yet access to the wonders of transportation and “information technology” don’t compensate for physical conditions demonstrably worse than those endured even by Depression-era poor New Yorkers. My mother’s generation at least could drink water out of a tap and expect consistent electricity, if the bill was paid, something not taken for granted by their modern-day counterparts (PDF) in the developing world.

More serious still, the slum dwellers face enormous risk from unsafely built environments. Traffic, as anyone who has spent time in these cities easily notices, poses particular threats to riders and pedestrian alike. According to researchers, developing countries now experience a “neglected epidemic” of road-related injuries accounting for 85 percent of the world’s traffic fatalities.

And don’t drink the water, please. Nearly two-thirds of the sewage in the megacity of Dhaka, with 15 million people, is untreated. As Dr. Marc Reidl, a specialist in respiratory disease at UCLA, puts it, “Megacity life is an unprecedented insult to the immune system.”

Cities of disappointment.

Over these environmental problems loom arguably greater social ones. Many of the megacities—including the fastest growing, Dhaka—are essentially conurbations dominated by very-low-income people; roughly 70 percent of Dhaka households earn less than $170 (U.S.) a month, and many of them far less. “The megacity of the poor,” is how the urban geographer Nazrul Islam describes his hometown.

Inequality is expanding in most of these places. A recent Euromonitor International study found that larger “city size remains the key explanatory factor for income inequalities across the world’s urban agglomerations.” Even megacities that we might refer to as “middle income,” such as Tehran and Istanbul, are becoming what geographer Ali Modarres calls “cities of disappointment.” In many cases, high housing prices and a lack of space have already reduced the birthrate to well below the replacement level. Increasingly, many women are choosing to remain single—heretofore something rare in these countries.

One scholar, Jan Nijman, suggests that most gains in recent years have accrued to the upper echelons of the middle class in Indian cities while “the ranks of the lower middle income classes have shrunk, and the ranks of the poor have expanded rapidly.” Much of the growth in a perceived middle class, Nijman argues, is based not on income but on consumption driven by credit. The informal sector—drivers, stall-owners, repair-people, household industries—account for much of Mumbai’s employment growth.

Housing costs are the key here. Researcher Vatsala Pant estimates a monthly total household “middle class income” in Mumbai at 40,000-50,000 rupees; equivalent to less than $1,000 U.S. dollars. Yet monthly salaries for teachers, police officers, and other mid-level jobs are often half that amount. Not surprisingly, even these workers often find themselves living in slum neighborhoods, which are also known as jhopad-patti, jhuggi-jhopadi or busties. “It’s the dream of an immigrant for a place in Mumbai … and ends up with a slum,” she notes.

Is there a better alternative?

Future urbanization does not need to pose a choice between rural hopelessness and urban despair. This is a critical issue, even for high-income countries. The rise of a mass of poor slum dwellers—estimated as high as 1 billion—threatens the social stability not only of the countries they inhabit, but the world, as they tend to generate high levels of both random violence and more organized forms ofthuggery, including terrorism.

Fortunately, an alternative structure of urbanization is beginning to emerge that emphasizes a spreading diversity of cities as opposed to gigantic agglomerations. In the coming decade, McKinsey predicts megacities will underperform economically and demographically, as growth shifts to “fast growing middleweights,” many of them in China and India.

There needs to be a far greater emphasis on these smaller cities, as well as working to develop a viable economy for the villages. In India, migration to large cities already is beginning to slow, as more potential migrants weigh the costs and opportunities of making such a move as opposed to staying closer to home. This phenomenon has been called “rurbanization” and was an important provision of the campaign of India’s new prime minister, Narendra Modi, who implemented such programs as chief minister of the state of Gujarat. Modi speaks of human settlements with the “heart of a village” and developing “the facilities of the city.”

A growing array of critics understand the need to break with the megacity mantraAshok R. Datar, chairman of the Mumbai Environmental Social Network and a longtime adviser to the Ambani corporate group, says the emerging megacities of the developing world need to stop emulating the Western model of rapid, dense urbanization. “We are copying the Western experience in our own stupid and silly way,” Datar says.

He suggests a policy focusing on more human-scale growth. One does not have to be a Gandhian idealist to suggest that Ebenezer Howard’s “garden city” concept—conceived as a response to miserable conditions in early 20th century urban Britain—may be a better guide to future urban growth than the current trend of relentless concentration.

The “garden city” alternative could help ameliorate the downsides of  mass urbanization in China as well, where the government is seeking to move 250 million more people from the countryside to urban areas over the next decade. “There’s this feeling that we have to modernize, we have to urbanize, and this is our national-development strategy,” said Gao Yu, China country director for the Landesa Rural Development Institute, based in Seattle. Referring to the disastrous Maoist campaign to industrialize overnight, he added, “it’s almost like another Great Leap Forward.”

As the world urbanizes, we need to start thinking about how to make cities better, not simply bigger. The primary goal of a city should not be to enrich already wealthy landlords and construction companies. It should not be to make politicians more powerful. And it certainly should not be mindless, pointless growth for its own sake. Urbanism should not be defined by the egos of planners, architects, politicians, or the über-rich but by what works best for the most people.

This piece originally appeared at The Daily Beast.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order atAmazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Dhaka photo by Wendell Cox.

A Typology of Gentrification

Mon, 08/25/2014 - 22:38

Patterns of gentrification vary by city, and the spread of gentrified areas is partly determined by the city’s predominant development form and the historic levels of African-American populations within them. Gentrification is a nuanced phenomenon along these characteristics, but most people engaged in any gentrification fail to acknowledge the nuances.

Spurred on by the recent debate on the impact of limited housing supply on home prices and rents, thereby “capping” gentrification, (taken on fantastically by geographer Jim Russell in posts like this), I decided to do a quick analysis of large cities and see how things added up. The analysis was premised on a couple observations of gentrification, one often spoken and one not. One, gentrification seems to be occurring most and most quickly in cities that have an older development form, offering the walkable orientation that is growing in favor. Two, gentrification seems to be occurring most and most quickly in areas that have lower levels of historic black populations. This less noted observation was the thrust of a study by Harvard sociology professor Robert Sampson and doctoral student Jackelyn Hwang, recently described here. Here’s what they said, after conducting an exhaustive study of gentrification patterns in Chicago:

After controlling for a host of other factors, they found that neighborhoods an earlier study had identified as showing early signs of gentrification continued the process only if they were at least 35 percent white. In neighborhoods that were 40 percent or more black, the process slowed or stopped altogether.

That prompted my quick study. I wanted to categorize cities by old and new development forms, and low and high historic levels of black population. To do that I came up with an arbitrary proxy for the age of development form. Using decennial Census data, if a city reached 50 percent of its peak population by 1940, it was deemed to have an old development form; if a city reached 50 percent of its peak population in 1950 or later, it was deemed to have a new development form. Here’s a quick example of how this works. Baltimore, currently with a population of a little over 600,000, reached its peak of 949,000 in 1950. Baltimore reached half its peak, or about 475,000, by 1890, a time at which it could be said that Baltimore’s form as a city had been firmly established. Similarly, Austin reached its peak of 790,000 in 2010. The fast-growing Texas city was half that size in only 1990, a year in which it could be said that its development form was established and the city began to see itself as a major city. Imprecise, yes, but a decent proxy for examining old and new city development forms.

The second piece of analysis was gathering Census data on central city black populations in 1970. This decade was chosen largely because it represents the end of the Great Migration, when millions of African-Americans left the rural South for cities across the nation. By that time the cities which are generally recognized as having large black populations had already been identified, and it’s possible to explore the impact of the migration on them. I arbitrarily said cities with black populations lower than 25 percent of the total in 1970 had a low black population, and those above 25 percent had a high black population.

Using those two factors, I put together this table of the 64 primary cities over 250,000 in the U.S.:



There are more than a few cities that are exceptions, largely because recent consolidations or large-scale annexations have boosted them into more unfamiliar boxes. But some patterns are evident, and if you think of these in terms of gentrification, you might be able to make the following general assumptions:

Old Form + Low Black Population = Expansive Gentrification (OFLB)

Old Form + High Black Population = Concentrated Gentrification (OFHB)

New Form + Low Black Population = Limited Gentrification (NFLB)

New Form + High Black Population = Nascent Gentrification (NFHB)

Identifying the examples might be the best way to explain what I mean. New York, San Francisco and Boston are the prototypical OFLB cities, and gentrification has made its widest impact in these three cities. Chicago, Washington and Atlanta are the classic OFHB cities, where gentrification is concentrated in certain areas of the city (or region), and eludes the heavily African-American parts of the city. Phoenix, San Diego and Las Vegas might be the prototypical NFLB cities, all of which came of age with the car as the dominant mode of transport and with few African-Americans. NFLB cities may also be the leaders and innovators in seeking ways to catalyze their inner cities, with greater tangible investments in public transit and mixed use development. The relatively few NFHB cities are a distinctly Southern phenomenon, and by all appearances gentrification activity lags behind other cities, with sprawl still the dominant development engine.




Cities by gentrification type. Special thanks to Adam Carstens for producing this map.

Why would any of this matter? Nationally, the gentrification debate is defined by the experiences of the OFLB types like New York, San Francisco and Boston. There, the issues are rapidly growing unaffordability, concerns with displacement and growing inequality. But the gentrification debate is quite different in OFHB cities like Philadelphia and Atlanta, where seeking ways to more equitably spread the positive benefits of revitalization might lead such discussions.

In other words, it’s not exactly correct to look at what’s happening in Los Angeles or San Diego, or Baltimore or St. Louis, in the New York-San Francisco-Boston context. Different forces and different experiences are creating different outcomes in each city, and if we want to understand how to look at gentrification’s impact, we need to understand its foundations.

This post originally appeared in Corner Side Yard on August 15, 2014.

Pete Saunders is a Detroit native who has worked as a public and private sector urban planner in the Chicago area for more than twenty years.  He is also the author of "The Corner Side Yard," an urban planning blog that focuses on the redevelopment and revitalization of Rust Belt cities.

The Problem With Being Global

Sat, 08/23/2014 - 08:47

The globalization of cities and their elites often comes at the expense of many of the people who live there. Forced to compete with foreign capital and immigrant workers, native-born residents of cities from Los Angeles and London to Singapore often feel displaced, becoming strangers in what they thought was their own place.

This phenomena is common for virtually all the leading lights on our list of The Most Influential Global Cities. Higher prices and greater labor force competition seem to be the natural result of global city status, posing enormous challenges to local populations and those that govern them.

Since the late Enlightenment, great cities, often built around markets, were typically places for the aspirational middle and lower classes. The ability to rise in cities from North America and Europe to Asia — through what historian Peter Hall calls “this unique creativity of great cities” — stands as one of the great social achievements of modern times.

But in this era of powerful oligarchs and growing inequality, these planetary centers are less places for upward mobility than most other cities. This is clearly true in the United States, where its premier global city, New York, as well as its prime competitors for international standing, Chicago, Los Angeles and the San Francisco Bay Area, rank among the 10 most unequal cities in the nation.

The property market has a distorting effect. Home prices in affordable markets tend to average three times household incomes. The ratio for the top 10 global cities tend to be much higher, often upward of 10 times incomes.

Pied a terre and investment purchases by wealthy residents of the former Soviet Union, China, the Indian diaspora and the Middle East play a role in this inflation, particularly in London, where an onslaught of Asian buyers, now, by one estimate, purchases 70% of the city’s newly built homes.For young people in London, the possibility of home ownership has begun to evaporate. Regulations that restrict new construction and raise development costs also play a substantial role in the diminishing amount of affordable housing in cities like London, New York and San Francisco.

The Disappearance Of The Middle Class

Rising home prices are among the impacts of globalization that tend to force out the middle class. Even in traditionally egalitarian Toronto, a study by the University of Toronto found that between 1970 and 2001 the proportion of middle-income neighborhoods in the core city had dropped from two thirds to a third, while poor districts had more than doubled to 40%. By 2020, according to the study, middle-class neighborhoods could fall below 10%, with the balance made up of affluent and poor residents.

This leads even usual urban booster to question the direction of their cities, as they lose their counter-culture gloss. As one green journalist laments: “But what are we getting when we throw away height limits and barriers to development, stop worrying about shadows and views, and let the developers loose? Also importantly, who are we getting?”

The impact of rising prices clearly reshapes societies. In Manhattan, half of households are single, according to the American Community Survey; in the city of San Francisco, there are now 80,000 more dogs than children. Similar trends can be seen in London, Paris, Tokyo, Hong Kong, Singapore and other top global cities. Due to high prices, some 45% of Hong Kong’s middle-class couples have abandoned the idea of having children anytime soon, according to a survey commissioned by Citibank.

The Jobs Dilemma

Property prices and development pressures represent just one aspect of how globalization impacts the native working and middle class. The globalized economy often favors the employment of the very skilled, and those who serve them. Many companies, such as in finance, move their middle management jobs to other, less pricey places, from Sioux Falls to India and virtually anywhere else, reducing global cities’ mid-income employment and middle-class populations.

At its apex, in places like New York and London, the new global economy creates what economist Ajay Kapur calls a “plutonomy,” an economy that revolves around serving the wealthiest. This leaves the primary global cities as centers for both concentrated wealth and the greatest poverty, as we have seen in London, New York and other major global cities.  In New York, over a third of workers labor in low wage, service jobs, a percentage that has increased steadily through the recovery, notes a recent study by the Center for an Urban Future.

Not surprisingly the luxury cities — the most affluent parts of certain metropolitan areas — tend to have the highest concentrations of inherited and other rentier wealth in the nation, as well as some of the greatest concentrations of poverty. An asset-based recovery, like America’s current one, favors places like Manhattan, but does little for the Bronx, just across the Harlem River, which ranks at the bottom among the nation’s large counties for the percentage of residents’ income that comes from investments, rents and dividends.

Increasingly, the cores, and often the suburbs, of global cities such as New York San Francisco, London, Paris and other cities where the cost of living has skyrocketed are no longer places where one goes to be someone; they are where you live when already successful or living on inherited largess. They are, as journalist Simon Kuper puts it, “the vast gated communities where the one percent reproduces itself.”

Political Consequences

These trends could shape the future of cities socially and politically. In New York, the election of a strong left-wing mayor, Bill de Blasio,reflected the concerns of working- and middle-class Gothamites that they were becoming superfluous in their own town. Similar leftward trends can be seen in Seattle, another city that has experienced widespread gentrification, and recently passed a $15 an hour minimum wage.

This shift represents, in part, a reaction to the fact that gentrification has done little to address the large and growing population of the poor in many global cities. London may, by recent accounts, have more billionaires than any city on the planet, but it also has the highest incidence of child poverty in the United Kingdom.

Even many of the lower-end service jobs in restaurants, construction and retail have not redounded to the benefit of the native-born in Britain; more than 70% of the jobs created between 1997 and 2007 in the United Kingdom went to foreigners, according to the OECD. Indeed, economist Tony Travers at the London School of Economics estimated that during the last decade London received more immigrants, many from the rest of the EU, than New York or Los Angeles.

Cultural Displacement

The combination of mass migration and the power of the city-hopping global wealthy makes many native-born residents in global cities worried, as one London writer put it, about losing “the soul” of their city.

This trend can be discerned in almost any global city. A Tommy Hilfiger or other chain store in Causeway Bay in Hong Kong, Fifth Avenue in New York, or Regent Street in London is pretty much like any other. Yet for independent merchants in global cities, the price of being there is often too much to bear. In the process many of the most unique shops and restaurants are displaced by the largely high-end chains that can handle the rent.

At the same time, globalization and migration have inspired dangerous reactions, notably nativism, and a growing chasm between guest workers and residents. This has become a political issue even in the most cosmopolitan cities such as London, Singapore and the Randstadt (Amsterdam-Rotterdam-the Hague-Utrecht ).

The fundamental challenge: the global city must accommodate two identities, a global and a local one. A great global city must serve its international role as well as its local economy and the needs of its local residents. A city must be more than a fancy theme park or a collection of elite headquarter towers. It needs a middle and working class, not just the global rich and their servants. It needs families and ordinary residents who may rarely leave town, not just globe-trotters. It needs to be true to itself and the people who, in the first place, created it.

This piece originally appeared at Forbes.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order atAmazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Hong Kong photo by BighStockphoto.com

Beyond Polycentricity: 2000s Job Growth (Continues to) Follow Population

Thu, 08/21/2014 - 22:38

The United States lost jobs between 2000 and 2010, the first loss between census years that has been recorded in the nation's history. The decline was attributable to two economic shocks, the contraction following the 9/11 attacks and the Great Recession, the worst financial crisis since the Great Depression. Yet, even in this moribund job market, employment continued to disperse in the nation's major metropolitan areas.

This is the conclusion of a small area analysis (zip code tabulation areas) of data from County Business Patterns, from the Census Bureau, which captures nearly all private sector employment and between 85 and 90 percent of all employment (Note 1). 

The small area analysis avoids the exaggeration of urban core data that necessarily occurs from reliance on the municipal boundaries of core cities (which are themselves nearly 60 percent suburban or exurban, ranging from as little as three percent to virtually 100 percent). This "City Sector Model" small area analysis method is described in greater detail in Note 2.

Distribution of Employment in Major Metropolitan Areas

County Business Pattern data indicates that employment dropped approximately 1,070,000 in the 52 major metropolitan areas (those with more than 1,000,000 population) between 2000 and 2010. The inner city sectors (the functional urban cores and earlier suburbs) were hard-hit. Together the inner sectors, the functional urban cores and the earlier suburbs, lost 3.74 million jobs. The outer sectors, the later suburbs and the exurbs, gained 2.67 million jobs (Figure 1).

There were job losses of more than 300,000 in the functional urban cores, and even larger losses (3.2 million) in the earlier suburbs. The functional urban cores are defined by the higher population densities that predominated before 1940 and a much higher dependence on transit, walking and cycling for work trips. The earlier suburbs have median house construction dates before 1980.

The share of major metropolitan area employment in the functional urban cores dropped from 16.4 percent in 2000 to 16.2 percent in 2010. This compares to the 8 percent of major metropolitan employment that is downtown (central business district) areas. The notion, however, that metropolitan areas are dominated by their downtowns is challenged by the fact that 84 percent of jobs are outside the functional urban cores.

The largest percentage of major metropolitan areas is clustered in the earlier suburbs, those with median house construction dates from 1946 to 1979. In 2010, 46.8 percent of the jobs were in the earlier suburbs, a decline from 51.4 percent in 2000.

These losses in employment shares in the two inner city sectors were balanced somewhat by increases in the outer sectors, the later suburbs (with median house construction dates of 1980 or later) and the exurbs, which are generally outside built-up urban areas. The increase was strongest in the later suburbs, where, where employment increased by 2.6 million. The share of employment in the later suburbs rose to 25.5 percent from 21.6 percent. There was also a 600,000 increase in exurban employment. The exurban share of employment rose to 11.5 percent from 10.6 percent (Figure 2).

The Balance of Residents and Jobs

There is a surprisingly strong balance between population and employment within the city sectors, which belies the popular perception by some press outlets and even some urban experts that as people who farther away from the urban core, they have to commute farther. In fact, 92 percent of employees do not commute to downtown, and as distances increase, the share of employees traveling to work downtown falls off substantially. As an example, only three percent of working residents in suburban Hunterdon County, New Jersey (in the New York metropolitan area), work in the central business district, Manhattan, while 80 percent work in relatively nearby areas of the outer combined metropolitan area.

It is to be expected that the functional urban core would have a larger share of employment than population. However the difference is not great, with 16.2 percent of employment in the functional urban core and 14.4 percent of the population. The earlier suburbs have by far the largest share of the population at 42.0 percent. They also have the largest share of employment, at 46.8 percent. The later suburbs have 26.8 percent of the population, slightly more than their 25.5 percent employment share. The largest difference is, as would be expected, is in the exurbs, with 16.8 percent of major metropolitan area residents and 11.5 percent of employment (Figure 3). It is notable, however, that the difference between the share of population and employment varies less than 15 percent in the three built-up urban area sectors (urban core, earlier suburbs and later suburbs), though the difference was greater in the exurbs.

How Employment Followed Population in the 2000s

The outward shifts of population and employment are between in the city sectors. In the earlier suburbs, where the population and employment is the greatest, the population share declined 4.3 percentage points, while the employment share declined a near lockstep 4.6 percentage points. The later suburbs had a 4.5 percentage point increase in population share, followed closely a near lockstep 3.9 percentage point increase in employment share. In the exurbs, a 1.5 percentage point increase in the population share was accompanied by a 0.9 percentage point increase in the employment share. The connection is less clear in the functional urban core, where a 1.6 percentage point drop in the population share was associated with a 0.2 percentage point reduction in the employment share (Figure 4).

The similarity in population and employment shares between the city sectors is an indication that employment growth has been geographically tracking population growth for decades, as cities have evolved from moncentricity to polycentricity and beyond.

"Job Following" by Relative Urban Core Size

Similar results are obtained when cities are categorized by the population of their urban cores relative to the total city population. Each category indicates an outward shift from the functional urban cores and earlier suburbs to the later suburbs and exurbs, in both the population share and the employment share. However, the shift is less pronounced in the cities with larger relative urban cores, which tend to be in the older urban regions  (Figure 5). Out of the 18 cities with functional urban cores amounting to more than 10 percent of the metropolitan area, 16 are in the Northeast (including the Northeastern corridor cities of Washington and Baltimore) and the Midwest, where strong population growth ended long ago.

As usual, New York is in a category by itself, New York, has a functional urban core with more than 50 percent of its population. New York experienced an outward shift of 1.1 percent in its population, and a 0.4 percent outward shift of its employment (the total shift in share, from the urban core and earlier suburbs to the later suburbs and exurbs, expressed in terms of percentage points).

Generally speaking, the stronger the functional urban core, the less the movement of jobs and people from the center. The actual percentages of functional urban core population by city are shown in From Jurisdictional to Functional Analysis of Urban Cores and Suburbs (Figure 6).

On average, there was a shift of nearly five percent from the inner sectors (functional urban cores and earlier suburbs) to the outer sectors (later suburbs and exurbs)

Commute Times: Less Outside the Urban Cores

The earlier suburbs are generally between the functional urban cores and the later suburbs geographically. As a result, jobs are particularly accessible to residents from all over the metropolitan area. A further consequence is that commute times are shortest (26.3 minutes) in the earlier suburbs, where approximately half of the people also live. Commute times are a bit higher in the later suburbs (27.7 minutes). The exurbs have the third longest commutes, at 29.2 minutes. Finally, commute times are longest in the functional urban cores (31.8 percent), both because traffic congestion is greater (to be expected, not least because of their higher densities), and more people take transit, which is slower (Figure 7).

The dispersed, and well coordinated location of jobs and residences is one reason that United States metropolitan areas have shorter commute times and less traffic congestion than its international competitors in Europe, Australia, and Canada. All this is testimony to the effectiveness with which people and the businesses established to serve them have produced effective labor markets, which are the most affluent in the world, in which the transaction related impacts of work trip travel time are less than elsewhere.

Beyond Polycentricity

These are not new concepts, despite the continuing tendency to imagine the city as a monocentric organism where everyone works in downtown skyscrapers and lives in suburban dormitories. The lower density US city has not descended into the illusion of suburban gridlock that some planners have declared so stridently. Indeed, traffic congestion is considerably less intense in US cities than it is in the other parts of the high income world for which there is data.

A quarter century ago, University of Southern California economists Peter Gordon and Harry Richardson said that "the co-location of firms and households at decentralized locations has reduced, not lengthened commuting times and distances. Decentralization reduces pressures on the CBD, relieves congestion and avoids 'gridlock.'"  In 1996 they Los Angeles as "beyond polycentricity" Both of these observations fit well as a description of trends in the 2000s. Most US major metropolitan areas are now "beyond polycentricity," not just Los Angeles.

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

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Note 1: The Census Bureau describes "County Business Pattern" data as follows: "Statistics are available on business establishments at the U.S. level and by State, County, Metropolitan area, and ZIP code levels. Data for Puerto Rico and the Island Areas are available at the State and county equivalent levels. County Business Patterns (CBP) covers most NAICS industries excluding crop and animal production; rail transportation; National Postal Service; pension, health, welfare, and vacation funds; trusts, estates, and agency accounts; private households; and public administration. CBP also excludes most establishments reporting government employees.

Note 2: The City Sector Model allows a more representative functional analysis of urban core, suburban and exurban areas, by the use of smaller areas, rather than municipal boundaries. The more than 30,000 zip code tabulation areas (ZCTA) of major metropolitan areas and the rest of the nation are categorized by functional characteristics, including urban form, density and travel behavior. There are four functional classifications, the urban core, earlier suburban areas, later suburban areas and exurban areas. The urban cores have higher densities, older housing and substantially greater reliance on transit, similar to the urban cores that preceded the great automobile oriented suburbanization that followed World War II. Exurban areas are beyond the built up urban areas. The suburban areas constitute the balance of the major metropolitan areas. Earlier suburbs include areas with a median house construction date before 1980. Later suburban areas have later median house construction dates.

Urban cores are defined as areas (ZCTAs) that have high population densities (7,500 or more per square mile or 2,900 per square kilometer or more) and high transit, walking and cycling work trip market shares (20 percent or more). Urban cores also include non-exurban sectors with median house construction dates of 1945 or before. All of these areas are defined at the zip code tabulation area (ZCTA) level.

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Photo: Beyond Polycentric Houston (by author)

Tracking America's 'Hidden Millennials'

Wed, 08/20/2014 - 22:38

When it comes to attracting the hip and cool, Southern California, long a cultural trendsetter, appears to be falling behind – at least in the view of the national media. Articles about where millennials are, or should be, going rarely mention anywhere in this region as a top choice.

Rather than hang out at the beach or enjoy poolside ambience, the conventional wisdom is that the millennial generation – those born after 1983 – would rather go anywhere else. Southern California is not on a list of the top 12 regions (although San Diego gets a mention) for millennials, published in the Huffington Post. Other “best” lists and similar compilations invariably highlight New York, San Francisco, Chicago, Austin, Texas, Raleigh, N.C., and Boston, but rarely SoCal.

What numbers tell us

But sometimes, before succumbing to conventional wisdom, one has to look at the numbers. We examined the percentages of millennials – we took the ages 20-29 – and their growth in all 52 major U.S. metropolitan areas. To our surprise, Los Angeles-Orange County scored very high – No. 5 – with a 15.5 percent share. That’s well above the 14 percent total nationally. San Bernardino-Riverside, at 15 percent, ranked ninth.

This research placed Southern California well ahead of such supposed youth magnets as Seattle, Boston, New York and San Francisco, whose population is actually under-represented in terms of millennials. Nor, despite the social media bubble, are things shifting to the denser “hip,” “cool” cities so widely celebrated in the media. In fact, with the exception of Seattle, the Los Angeles area’s rate of millennial growth far outstripped that of Austin, New York, Boston, Chicago and San Francisco.

Southern California turns out to be more of a youth magnet than one might think. In terms of millennials’ share of population growth, San Bernardino-Riverside ranked second of 52 metro areas, adding 50,000 millennials, an 8.3 percent increase since 2010. Los Angeles and Orange counties – older, settled areas with far lower population growth – together registered 18th, adding 90,000 twenty-somethings since 2010. That’s the most of any metropolitan area, including New York.

Reality and Perception

What accounts for this gap between perception and reality? One key factor lies with the media, which, outside Hollywood, has abandoned Southern California. Like many shrinking industries, news media is consolidating in a few strongholds – New York, Washington and, increasingly, San Francisco. Reporters from these cities tend to like (at least for now) dense, urban, transit-dependent places. Many of their friends do, too,rejecting “sprawling, car-dependent cities.” Like it or not, that sums up Southern California.

Yet, the common assertion that most millennials hate suburbs, cars and “sprawl” may be yet another urban myth promulgated by developers, planners and their handmaidens in the media. It turns out that the percentage of twenty-somethings nationally living in the denser core counties in 2013 is slightly lower than in 2010. The vast majority of millennials, roughly 70 percent, live well outside the core counties, and their numbers grew overall by three times as much over the past three years.

In fact, virtually all the densest core areas – New York, Chicago, San Francisco, Boston – lost millennials. Everybody’s favorite millennial destination, Portland, Ore., experienced the second-greatest loss of population ages 20-29 in its core county, surpassed only by St. Louis.

It appears that being part of a “sprawling area,” in fact, does not discourage millennial growth. The fastest-growing millennial regions – San Antonio, the Inland Empire, Orlando, Fla. – are all renowned for spreading out. Instead of living in high-density areas, these millennials reside in apartments and homes distant from the core; many, perhaps one in three, are still at their parents’ houses.

We refer to them as the “hidden millennials.” They are not the high-profile Brooklyn hipsters and their imitators nationally; nor are they attached to the social media oligarchy around San Francisco. They live far from the iPads of the reportorial class and the promotors of the “hip and cool” urban gospel. They are, for all intents and purposes, invisible in the minds of most media.

One last thing to keep in mind. Many of these hidden millennials are working-class and minorities. One possible explanation for Southern California’s millennial surge lies with large Hispanic communities, which for three decades have maintained a considerably higher birth rate than that of non-Hispanic whites. Nationally, Latinos constitute 20 percent of millennials, compared with 13 percent of U.S. residents over age 30. In Southern California, Latinos account for slightly over half of twenty-somethings and 37 percent of older cohorts.

Where do Southern California millennials Live?

The widely embraced “back to the city core” mantra attributed to millennials is partially true but definitely overstated, particularly in Southern California. To be sure, from 2000-10, Downtown Los Angeles gained more than 4,200 twenty-somethings, an impressive 25 percent increase. But these gains were essentially offset by losses of more than 17,000 in the areas bounded by the South Bay, Southeast L.A. County, West L.A. and the Santa Monica Mountains. As we have seen in many American regions, strong gains of millennials in the core have been counterbalanced by a loss of younger people in the surrounding areas.

In contrast, the big growth has occurred in places that are not usually associated with hip youth culture. The biggest percentage increases in millennial populations – far higher than for Downtown L.A. – have occurred in various Inland Empire communities, as well as Valencia, the Victor Valley, Irvine and Coachella. In actual numbers, the predominance of these outlying areas is overwhelming. Irvine’s and South Orange County’s gain of more than 19,000 millennials stands out, not to mention the Inland Empire’s gain of 95,000 or even the nearly 20,000 who have appeared in far-flung Valencia-Antelope Valley. Southwestern Riverside County (Temecula-Murrieta-Perris) gained nearly 50,000, the largest of any area subregion.

Overall, millennial growth in the urban core, with the exception of Downtown L.A., is very slow or even negative. It is also negligible in extra-expensive areas of the Westside and coastal Orange County; high rents and housing prices make these areas increasingly off-limits to all but the most well-heeled millennials. Policymakers, often obsessed with the urban core and its hipster denizens, need to recognize this varied millennial geography. Most of the next generation are not hanging out in cool Hollywood cafes but in malls in the outer periphery or in middle- and upper-middle-class, family-friendly enclaves such as Valencia or Irvine.

These millennials may be “hidden” but servicing their needs and desires deserves a far more concerted effort by policymakers. This means such things as looking to the periphery for expanding parks, cultural events and educational opportunities that may persuade these millennials to stay and help rebuild this region’s economy.

The demographic future of Southern California will not be determined primarily on Spring Street or Rodeo Drive but across, literally, hundreds of communities, often far-flung, where the bulk of our twenty-somethings reside.

This piece originally appeared at The Orange County Register.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order atAmazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Wendell Cox is principal of Demographia, a St. Louis public policy consultancy, and a former member of the Los Angeles County Transportation Commission.

A Look at College Degree Migration

Tue, 08/19/2014 - 22:38

Net migration of people to or from metro areas is reported annually by the Census Bureau and widely discussed.  Less well known is that their American Community Survey (ACS) provides migration figures broken down by characteristics such as race, age, income, and educational attainment. This lets us drill into finer grained details about who is moving where.

Here is a map of net migration of people with a bachelor’s degree or higher, based on data from the 2007-2011 ACS, with blue indicating net migration gains and red net migration losses:



Net domestic migration of adults age 25+ with a bachelor’s degree or higher by metropolitan area. Source: 2007-2011 ACS with rollups and mapping via Telestrian

Unsurprisingly, this data correlates with overall net migration. For example, at first glance it might seem odd that a metro area like New York would be a net loser of people with college degrees. It lost a net of nearly 29,000 of them, highest net outflow in the country. But the New York metro as a whole lost almost two million people to domestic migration during the 2000s.  Given that, it would be surprising indeed if the region didn’t lose people with degrees. It’s similar for runners-up in the loss department Los Angeles (-11,000) and Chicago (-9,500).

The list of leaders is unsurprisingly headed by Austin, Texas (+9,500), Dallas (+9,200) and Phoenix (+9,200) and other population boomtowns. But there are some areas that punch above their weight versus overall migration, such as #5 Portland (+7000) and #9 Washington, DC (+5000). These cities are known as talent magnets and this data points in that direction. Their net in-migration is disproportionately highly educated.

I have rounded the numbers above because this data is based on samples with a margin of area. Keep in mind when reviewing the tables below with detailed statistics not to read into this a false degree of precision.

Regions like New York, Los Angeles, and Chicago can take heart from the fact that they are still among the top destinations of in-migrants with college degrees.

Rank

Metro Area

In-Migrants

1

New York-Newark-Jersey City, NY-NJ-PA

79,156

2

Washington-Arlington-Alexandria, DC-VA-MD-WV

74,048

3

Los Angeles-Long Beach-Anaheim, CA

66,209

4

San Francisco-Oakland-Hayward, CA

49,980

5

Chicago-Naperville-Elgin, IL-IN-WI

49,016

6

Dallas-Fort Worth-Arlington, TX

47,198

7

Atlanta-Sandy Springs-Roswell, GA

44,892

8

Boston-Cambridge-Newton, MA-NH

42,006

9

Houston-The Woodlands-Sugar Land, TX

37,408

10

Phoenix-Mesa-Scottsdale, AZ

36,349

Domestic In-Migration, Adults 25+ with a bachelor’s degree or higher. Source: 2007-2011 ACS with rollups and analysis via Telestrian

Unfortunately for them, even higher numbers of people left.

Rank

Metro Area

Out-Migrants

1

New York-Newark-Jersey City, NY-NJ-PA

 108,118

2

Los Angeles-Long Beach-Anaheim, CA

 77,190

3

Washington-Arlington-Alexandria, DC-VA-MD-WV

 69,179

4

Chicago-Naperville-Elgin, IL-IN-WI

 58,680

5

San Francisco-Oakland-Hayward, CA

 47,201

6

Boston-Cambridge-Newton, MA-NH

 45,407

7

Atlanta-Sandy Springs-Roswell, GA

 40,363

8

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

 38,640

9

Dallas-Fort Worth-Arlington, TX

 37,958

10

Miami-Fort Lauderdale-West Palm Beach, FL

 34,191

Domestic Out-Migration, Adults 25+ with a bachelor’s degree or higher. Source: 2007-2011 ACS with rollups and analysis via Telestrian

This in part reflects the status of America’s tier one cities as talent refineries. People move there after school when young, but then leave after they get older and have been upskilled by their experiences – and when their life priorities change.  We should expect cities like New York to have a lot of churn.

A place like New York can also take solace in the fact that its migration loss of the college degreed was better than for those with lesser educational attainment.  Metro New York has 37% college degree attainment, but college grads only accounted for 28% of net migration losses. This is good news from the standpoint of retaining highly educated people, but raises the question of why New York is not so attractive to those without degrees.

While each metro area has its own nuanced story to tell in migration, on the whole this report shows that the migration of the educated overall appears to be following that of the population as a whole. This means increasing numbers of people with college degrees moving to lower-cost Sunbelt boomtowns and other metros with rapidly expanding populations.

Here is a complete ranking of net migration for adults with college degrees for all metro areas greater than one million people.

Rank

Metro Area

Net Migrants

1

Austin-Round Rock, TX

 9,384

2

Dallas-Fort Worth-Arlington, TX

 9,240

3

Phoenix-Mesa-Scottsdale, AZ

 9,208

4

Houston-The Woodlands-Sugar Land, TX

 8,015

5

Portland-Vancouver-Hillsboro, OR-WA

 6,933

6

Denver-Aurora-Lakewood, CO

 6,132

7

Seattle-Tacoma-Bellevue, WA

 5,935

8

Riverside-San Bernardino-Ontario, CA

 5,308

9

Washington-Arlington-Alexandria, DC-VA-MD-WV

 4,869

10

Raleigh, NC

 4,674

11

Tampa-St. Petersburg-Clearwater, FL

 4,665

12

San Antonio-New Braunfels, TX

 4,542

13

Atlanta-Sandy Springs-Roswell, GA

 4,529

14

Charlotte-Concord-Gastonia, NC-SC

 4,096

15

San Francisco-Oakland-Hayward, CA

 2,779

16

Jacksonville, FL

 2,113

17

Kansas City, MO-KS

 2,072

18

Nashville-Davidson--Murfreesboro--Franklin, TN

 2,069

19

Sacramento--Roseville--Arden-Arcade, CA

 1,816

20

Louisville/Jefferson County, KY-IN

 1,647

21

Oklahoma City, OK

 1,189

22

Baltimore-Columbia-Towson, MD

 1,157

23

New Orleans-Metairie, LA

 985

24

Richmond, VA

 931

25

Birmingham-Hoover, AL

 905

26

Salt Lake City, UT

 844

27

Las Vegas-Henderson-Paradise, NV

 745

28

Pittsburgh, PA

 179

29

Cincinnati, OH-KY-IN

 32

30

Indianapolis-Carmel-Anderson, IN

 2

31

Minneapolis-St. Paul-Bloomington, MN-WI

 (46)

32

Columbus, OH

 (343)

33

San Diego-Carlsbad, CA

 (476)

34

Virginia Beach-Norfolk-Newport News, VA-NC

 (610)

35

Milwaukee-Waukesha-West Allis, WI

 (723)

36

Hartford-West Hartford-East Hartford, CT

 (749)

37

Memphis, TN-MS-AR

 (928)

38

Buffalo-Cheektowaga-Niagara Falls, NY

 (1,139)

39

St. Louis, MO-IL

 (1,199)

40

Miami-Fort Lauderdale-West Palm Beach, FL

 (1,225)

41

Rochester, NY

 (1,295)

42

Providence-Warwick, RI-MA

 (1,366)

43

Cleveland-Elyria, OH

 (1,563)

44

San Jose-Sunnyvale-Santa Clara, CA

 (1,825)

45

Orlando-Kissimmee-Sanford, FL

 (2,603)

46

Boston-Cambridge-Newton, MA-NH

 (3,401)

47

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

 (4,127)

48

Detroit-Warren-Dearborn, MI

 (9,472)

49

Chicago-Naperville-Elgin, IL-IN-WI

 (9,664)

50

Los Angeles-Long Beach-Anaheim, CA

 (10,981)

51

New York-Newark-Jersey City, NY-NJ-PA

 (28,962)

 

Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile.

The Problem with Megacities

Mon, 08/18/2014 - 22:38

This is the introduction to a new report from the Center for Demographics and Policy at Chapman University. The report was authored by Joel Kotkin with contributions from Wendell Cox, Ali Modarres, and Aaron M. Renn. Download the full report here (pdf).

No phenomenon more reflects the sheer power and appeal of urbanism than the rise of megacities, which we define as an urban area with more than 10 million residents (defined as areas of continuous urban development). Until recent decades there were only three — Tokyo and New York, joined by a third, Mexico City, only in 1975. Now the megacity has become a global phenomenon that has dispersed around the planet. There were 29 such cities in 2014 and now account for roughly 13% of the world’s urban population and 7% of the world’s total population (Figure 1).

Urban boosters such as Harvard’s Ed Glaeser suggest that megacities grow because “globalization” and “technological change have increased the returns to being smart.” 2 And to be sure, megacities such Jakarta, Kolkata (in India), Mumbai, Manila, Karachi, and Lagos — all among the top 25 most populous cities in the world — present a great opportunity for large corporate development firms who pledge to fix their problems with ultra-expensive hardware. They also provide thrilling features for journalists and a rich trove for academic researchers.

Like Mr. Glaeser, many Western pundits find much to celebrate about the megacities mushrooming in low-income countries. To them, the growth of megacities is justified because it offers something more than unremitting rural poverty. But surely there’s a better alternative than celebrating slums, as one prominent author did recently in Foreign Policy bizarrely entitled “In Praise of Slums”3.

As demonstrated in our new paper on global cities developed with the Civil Service College of Singapore, many of these emergent megacities in Africa and elsewhere in the developing world lack of an economic basis sufficient to substantially compete beyond their national or nearby regional markets. As a result, the rise of megacities in the developing world may be laying the foundation for an emerging crisis of urbanity, where people crowd into giant cities that lack of the economic and political infrastructure to improve their lives. At the end of this paper, we try to suggest that they may be better solutions that steer growth to smaller cities and towns, and even seek out ways to improve the life in rural villages.

Download the full report here (pdf).

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order atAmazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

The People Designing Your Cities Don't Care What You Want

Sun, 08/17/2014 - 22:38

What is a city for?

It’s a crucial question, but one rarely asked by the pundits and developers who dominate the debate over the future of the American city.

Their current conventional wisdom embraces density, sky-high scrapers, vastly expanded mass transit and ever-smaller apartments. It reflects a desire to create an ideal locale for hipsters and older, sophisticated urban dwellers. It’s city as adult Disneyland or “entertainment machine,” chock-a-block with chic restaurants, shops and festivals.

Overlooked, or even disdained, is what most middle-class residents of the metropolis actually want: home ownership, rapid access to employment throughout the metropolitan area, good schools and “human scale” neighborhoods.

A vast majority of people — roughly 8o percent — prefer a single-family home, whether in the city or surrounding communities. And they may not get “creative” gigs at ad agencies or writers collectives, but look instead for decent-paying opportunities in fields such as construction, manufacturing or logistics. Over the past decade, these jobs have been declining rapidly in “luxury cities” like New York, Chicago and Los Angeles.

In contrast, such jobs, which pay $60,000 to $100,000 annually, have been growing — particularly as the industrial and energy sectors have recovered — in cities like Houston, Austin, Nashville and Salt Lake City. These locales also feature housing, relative to incomes, that is more affordable.

Of course, few urbanists wax poetic about Dallas or Des Moines. They lack Brooklyn’s hipster charm, and often maintain some of the trappings of the suburbs. But these “opportunity cities” offer what Descartes called “an inventory of the possible” — urbanity as an engine of upward mobility for the middle and working classes.

Ever since the Great Recession, many in America’s urban-focused pundit class have written off these cities, particularly in the Sunbelt, as places where the “American dream” has gone to die. Yet over the past 30 years, and now again, virtually all of the fastest-growing American metropolitan areas were located in the  West or the South. In 2012, nine of the ten fastest-growing large metropolitan areas were in the Sunbelt, including big Texas cities like Austin, Houston and Dallas-Fort Worth, along with Denver, Raleigh and Phoenix. In 2013, Houston alone had more housing starts than the entire state of California.

At the same time, immigrants — traditionally the most determined seekers of upward mobility — are now also flocking to places like low-cost Dallas-Fort Worth and Houston, which ranked second to New York in the last decade as a destination for the foreign-born. Immigrants are even heading in large numbers to locales such as Charlotte and Nashville, where foreign-born populations have doubled over the past decade. Finally, and perhaps most surprisingly given the prevailing tone of media coverage, these cities also have enjoyed generally faster growth in both college graduates and people ages 20 to 29  than New York, Chicago, Boston, San Francisco or Los Angeles.

These trends can also be seen in population projections. The U.S. Conference of Mayors study predicts that Dallas-Fort Worth and Houston will grow to be nearly as large as Chicago by 2042. If the same growth rate were to continue through 2050, both Dallas-Fort Worth and Houston would be ahead of Chicago by 2050.

To a large extent, this growth is fueled by middle-class movement to regions that offer both better economic prospects and more affordable housing prices. Before 1970, housing prices were largely even, relative to incomes, across the nation. Today, in large part due to regulatory and tax policies, they differ by as much as two to three times between  cities like Atlanta, Dallas-Fort Worth and Houston, on the one hand, and New York, Los Angeles or San Francisco.

Then there is the critical issue of employment. Since 2008, Houston has added more than 185,000 jobs and Dallas 115,000, more than New York, which is much larger. Los Angeles and Chicago still remain well below their 2008 employment levels.

It is also often alleged that these are primarily “crummy,” low-income jobs, but the opportunity cities have generally enjoyed strong mid-skilled growth and, over the past decade, also higher levels of STEM jobs. Since 2001, Houston has led the nation’s large metropolitan areas in the percentage growth of net STEM jobs; Dallas-Fort Worth and Phoenix have expanded these jobs more than San Francisco, even accounting for the current social media bubble. Los Angeles, Boston and Chicago have suffered a net loss since 2001.

Perhaps most important of all, these are overwhelmingly the places where people choose to start families and raise children. All 10 of the cities (metropolitan areas) with the largest shares of children 0-14 years of age are opportunity cities, with Salt Lake City, Dallas-Fort Worth, Houston, Riverside-San Bernardino and San Antonio taking the top five positions. On the other hand, luxury cities, such as San Francisco, New York, Boston, Seattle and Miami, tend to rank in the bottom third, according to American Community Survey data.

Meanwhile, cities like New York and San Francisco continue to reflect the media’s preferred form of urbanism, first articulated by former New York mayor Michael Bloomberg that, to survive, a city must be primarily “a luxury product,” a place that focuses on the very wealthy whose surplus can underwrite the rest of the population.

“If we can find a bunch of billionaires around the world to move here, that would be a godsend,” Bloomberg, himself a multibillionaire, suggests. “Because that’s where the revenue comes to take care of everybody else.”

This reliance on the rich, notes a Citigroup study, creates a “plutonomy,” an economy and society driven largely by the wealthy class’s investment and spending.

Luxury cities, increasingly, are less places of aspiration than geographies of inequality. New York, for example, is by some measurements the most unequal of major U.S. cities, with a level of inequality that approximates South Africa before apartheid. New York’s wealthiest 1 percent earn a third of the entire municipality’s personal income — almost twice the proportion for the rest of the country.

Other luxury cities exhibit somewhat similar patterns. A recent Brookings report found that virtually all the most unequal metropolitan areas – with the exception of Atlanta and Miami — are luxury regions, including San Francisco, Boston, Washington, D.C., New York, Chicago and Los Angeles.

Smaller luxury cities such as San Francisco are generally the ones gentrifying fastest, notes a recent Cleveland Fed study. They also tend to be, as urban analyst Aaron Renn has noted, “white cities,” with relatively small and often shrinking populations of historically disadvantaged minorities. San Francisco’s black population, for example, is roughly half of what it was in 1970. In the nation’s whitest major city, Portland, African Americans are being driven out of the urban core by gentrification, partly supported by city funding. Similar phenomena can be seen in Seattle and Boston, where long-existing black communities are gradually disappearing.

What this all suggests is that the future of American urbanism cannot follow the trajectory of luxury cities that, by their very nature, are difficult places for the vast majority of the population to live. Instead, the new role models — including for the hard-hit cities of the Rustbelt — will be found in those regions that have been able to provide the basic elements of middle-class aspiration: decent jobs, affordable housing and the chance to start a growing business.

For years, Rustbelt cities have pegged their aspirations on mimicking “luxury cities.” But now local scholars, like Cleveland State’s Richey Piiparinen, believe these areas need to follow the opportunity city model. He points out that lower costs and a more family-friendly appeal is allowing Cleveland to attract more young, educated people to their region than they now send to places like Chicago or New York

To achieve an urbanism that works for most Americans, cities need to develop a very different focus, emphasizing such things as affordability, middle-class jobs and opportunity. No doubt the luxury city model will continue to flourish in places, particularly for the well-heeled, but this paradigm is not applicable to most places, or most people.

This piece originally appeared at The Washington Post.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Photo by Mike Lee

Integrating Immigrants: Outcomes Not Attitudes Matter

Fri, 08/15/2014 - 22:38

Many modern economies struggle with integrating foreign-born into their labor markets. In particular, low-skilled immigrants from poor countries experience high unemployment and a range of related social problems. Much has been written about the extent of the problem. In many Western European cities, entire communities of migrants are living in social and economic exclusion. The state of poverty is often persists among their children.

But although the problem is widely acknowledged, the cause of it remains an issue of vivid debate. One line of reasoning is that modern job markets are increasingly knowledge-based. Technological changes have reduced the availability of simple jobs. The supply of the low‑skilled workforce often becomes higher than the demand for it. A limited number of jobs exist at the formal or informal minimum wage levels in various modern economies. Foreign‑born individuals, who often have weak social networks and language skills, find it particularly hard to obtain these jobs.

Another related explanation is that welfare states hinder integration. High taxes and generous public benefit systems reduce the incentives for work. Families with children can experience a situation where their actual incomes are only slightly, if at all, increased when a parent transitions to work. In addition, rigid labor market regulations can make it difficult for outsiders to enter the labor market.

A third view is that the problem is rooted mainly in discrimination and open racism. Immigrants are simply not given a chance to prove themselves since employers chose not to hire them. Direct and indirect racist structures hinder the success of immigrants and their children.

It is difficult to conclusively say which explanations are more relevant than the others. But we can look at the relation between discriminatory viewpoints and the labor market success of migrants. This is made possible by the World Value Survey, an ambitious project to map the prevalence of different attitudes around the world.

Recently the result of latest survey, conducted between the years 2010 and 2014, has been made available. One of the questions included in the survey was how many who would not like to have neighbors which were immigrants or foreign workers. Another was how many who thought that when jobs are scarce, employers should give priority to natives over immigrants.

As shown below, the prevalence of these answers vary greatly between seven modern economies for which data have been released so far. In Germany and the Netherlands for example a fifth of the population express that they would not like to have foreign-born neighbors. The same view is shared by less than four percent of the Swedish population. Likewise, about half of the public in the US, Australia, New Zealand and Spain believed that employers should give priority to natives over foreign-born when jobs are scarce. In Germany and the Netherlands about four in ten hold the same view, compared to 14 percent in Sweden.

Would not like foreign-born neighbors

Employers should give priority to natives

Unemployment difference low-educated foreign-born versus low-educated natives

Unemployment difference high-educated foreign-born versus high-educated natives

Germany

21

41

2.6

6.1

Netherlands

20

36

4.5

3.3

US

14

50

-8.9

1.4

Australia

11

51

-1.0

2.5

Spain

7.5

53

11

9.9

New Zealand

5.9

50

-0.96

1.9

Sweden

3.5

14

10

8.1

 Data from World Value Survey 2010-2014. Unemployment difference from OECD data over “Indicators of integration of immigrants and their children”, given for the years 2009-2010.  Rounded to two significant digits.

 

However, there is no clear link between tolerance for foreign-born as either neighbors or in the labor market on one hand, and actual labor market success on the other. Sweden, where the public expresses the most tolerant viewpoints, could be expected to be characterized by good labor market outcomes for immigrants. However, Sweden is next  to spain is  characterized with the biggest gap in employment between foreign-born and natives. This relation holds regardless if we look at the difference between low-educated or high-educated people with foreign-born and native backgrounds respectively.

The US on the other hand, has merely 1.4 percentage point higher unemployment amongst high-educated foreign-born compared to natives with similar educational background. Amongst the low-educated in the US the difference is 8.9 percentage points in favor of the foreign-born. At the same time, the share in the US who would not like to have foreign-born neighbors is almost twice as high as in Spain and fully four times as high as in Sweden.

Perhaps it is difficult to find a strong link since the number of countries included is so small. In order to broaden the sample, we can look at the 2005-2009 edition of the World Value Survey. In that survey the question relating to foreign-born neighbors, but not that of allocation of jobs, was asked. The graph below shows the relation between the share who would not like to have foreign-born neighbors on one hand, and the difference in unemployment on the other. 



Source for attitudes towards foreign-born neighbors: World Value Survey 2005-2009. Source for difference in unemployment: OECD data over “Indicators of integration of immigrants and their children”, given for the years 2009-2010. 

The relation between attitudes and employment prospects are not what one would expect. If anything, the countries in which fewest people do not want foreign-born neighbors are also those in which differences in unemployment are the highest. This does not necessarily mean that countries with the different attitude do better. Canada, Australia and New Zealand are nations where a relatively small share has anything against foreign-born neighbors. The same countries have good labor market outcomes for the foreign-born. In Australia and New Zealand, low-skilled individuals with a foreign-born background have slightly lower unemployment than similar natives. In Canada the difference is minute between the two groups.

Given these outcomes it is difficult to conclusively say what factors that favor integration and what obstacles that stand in the way of integration. It could, for example, be argued that the people in countries such as Sweden are giving politically correct responses. These responses do not necessarily have to translate to the discrimination actually faced by immigrants on a daily basis. At the same time, it is clear that the Anglo-Saxon countries are succeeding in integration. This could be attributed to having English as their main language. It could also be attributed to market-based systems with strong incentives for work and relatively free labor markets. In short, attitudes, at least as reported by the World Value Survey, do not seem to explain the differences in integration. Although all enlightened countries should strive for the tolerant views expressed in countries such as Sweden, this does not guarantee well‑functioning integration.

Dr. Nima sanandaji is a frequent writer for the New Geography. He is upcoming with the book "Renaissance for Reforms" for the Institute of Economic Affairs and Timbro, co-authored with Professor Stefan Fölster.

Photo from BigStockPhoto.com.

The World's Most Influential Cities

Thu, 08/14/2014 - 22:38

In the past century, the greatest global cities were generally the largest and centers of the world’s great empires: London, Paris, New York and Tokyo. Today size is not so important: Of the world’s 10 most populous cities, only Tokyo, New York and Beijing are in the top 10 of our ranking of the world’s most important cities. Instead, what matters today is influence.

To rank the world’s global cities, I worked with urban geographer Ali Modarres, former Accenture analyst Aaron Renn and demographer Wendell Cox. We have attempted to go beyond some of the standard methods of evaluating the global importance of cities, which include assessing the concentration of support services available for multinationals, such as financial and accounting firms, or the size of the overall economy. Efficiency and access to capital and information, we believe, is more critical to being an important global city than number of jobs, and regional GDP is a false measure, since it doesn’t reflect whether the source is domestic or global economic activity.

In order to quantify cities’ global influence, we looked at eight factors: the amount of foreign direct investment they have attracted; the concentration of corporate headquarters; how many particular business niches they dominate; air connectivity (ease of travel to other global cities); strength of producer services; financial services; technology and media power; and racial diversity. (Click here for a more detailed description of our methodology.) We found those factors particularly important in identifying rising stars that, someday, might challenge the current hegemony of our two top-ranked global cities, London and New York.

Inertia and smart use of it is a key theme that emerged in our evaluation of the top global cities. No city better exemplifies this than London, which after more than a century of imperial decline still ranks No. 1 in our survey. The United Kingdom may now be a second-rate power, but the City’s unparalleled legacy as a global financial capital still underpins its pre-eminence.

Ranked first in the world on the Z/Yen Group’s 2013 Global Financial Centres Index, which we used for our list, London not only has a long history as a dominant global financial hub, but its location outside the United States and the eurozone keeps it away from unfriendly regulators. Compared to New York, it is also time-zone advantaged for doing business in Asia, and has the second best global air connections of any city after Dubai, with nonstop flights at least three times a week to 89% of global cities outside of its home region of Europe.

A preferred domicile for the global rich, London is not only the historic capital of the English language, which contributes to its status as a powerful media hub and major advertising center, but it’s also the birthplace of the cultural, legal and business practices that define global capitalism.London hosts the headquarters of 68 companies on the 2012 Forbes Global 2000 list and is a popular location for the regional HQs of many multinationals. (Our HQ ranking component, in which London ranks third, is based on GaWC’s 2012 Command and Control Index, which factors in company size and financial performance, as well as total number of Forbes Global 2k HQs).

Beyond these traditional strengths, London has become Europe’s top technology startup center, according to the Startup Genome project. The city has upward of 3,000 tech startup sas well as Google’s largest office outside Silicon Valley.

nearly four times that of second place Tokyo New York, which comes in a close second in our study (40 points to London’s 42), is home to most of the world’s top investment banks and hedge funds, and the stock trading volume on the city’s exchanges is and more than 10 times that of London.

Like London, New York is a global leader in media and advertising, the music industry (home to two of the big three labels), and also one of the most important capitals of the fashion and luxury business. With iconic landmarks galore, international visitors spend more money in New York each year than in any other city in the world.

The Challengers And Those Slowly Fading

London and New York are clearly the leaders but they are not the hegemonic powers that they were throughout much of the 20thcentury, and their main competitors are now largely from outside Europe. Paris may rank third in our survey, but it is way below New York and London by virtually every critical measure, and the city’s future is not promising given that France, and much of the EU, are mired in relative economic stagnation.

Rather than a true indication of global reach, Paris’ high ranking is partly the product of the city’s utter domination of the still sizable French economy and the concentration of virtually all the country’s leading companies there (it ranks fifth on GaWC’s Command and Control Index with 60 HQs of Forbes Global 2K companies).

Elsewhere, Europe boast a veritable archipelago of globally competitive cities — Munich, Rome, Hamburg — but none is large enough, or unique enough, to break into the top 10 in the future. East Asia is likely to place more cities at the top of the list.

For most of the last century, Tokyo has been Asia’s leading city. It is still the world’s largest city, with the largest overall GDP. In her seminal work on world cities, Saskia Sassen placed it on the same level as London and New York. Tokyo’s limitations resemble those of Paris — its high ranking stems partly from the extreme concentration of domestic companies — and it will be handicapped in the future by a severe demographic crisis, a lack of ethnic diversity and very determined regional rivals.

China’s Global Cities

China’s share of the world economy has grown from 5% in 1994 to 14% in 2012.The combined volume of trading on the Shanghai and Shenzhen stock exchanges already exceeds that of Tokyo, and Shenzhen’s volume is approximately three times that of nearby Hong Kong.

Hong Kong still enjoys greater freedom than the rest of China and remains the largest financial center in the Asia-Pacific region, ranking third in the world after London and New York. The vast majority of the world’s major investment banks, asset managers, and insurance companies maintain their Asia-Pacific headquarters in the former British colony.

But its preeminence is being threatened by Shanghai, traditionally Hong Kong’s chief rival, and Beijing. We ranked China’s capital eighth, ahead of Shanghai (19th). With the advantage of being the country’s all-powerful political center, Beijing is the headquarters of most large state-owned companies and is home to the country’s elite educational institutions and its most innovative companies.

But right now the leading global city in East Asia is Singapore, which ranks fourth on our list. With a relatively small population of just over 5 million, Singapore’s basic infrastructure is among the best on the planet. Like Hong Kong, it also benefits from a tradition of British governance and law, one reason the World Bank ranked its business climate the world’s best; China ranked 96th. Singapore’s justice system is ranked 10th in the world in The Rule of Law Index.

That is all drawing in international business: Singapore places first among global cities in our ranking of foreign direct investment, with a five-year average of 359 greenfield transactions. It’s a favored location in many industries for Asia-Pacific headquarters; a study by the consultancy Roland Berger named Singapore the leading location for European companies to establish an Asia-Pacific HQs.

Singapore vies with Hong Kong as the financial center of Asia, ranking fourth in the world in that category.

Global Capital of the Middle East

Much of what we see in the media about Middle Eastern cities are scenes of destruction and chaos. Yet in a relatively quiet corner of the Arabian Peninsula, Dubai is ascending, ranked seventh on our list. Its globalization strategy hinges largely on its expanding airport, which includes the world’s largest terminal and an even larger airport under construction. It ranks first in the world in our air connectivity ranking, with nonstop flights at least three times a week to 93% of global cities outside of its home region.Its hub location and business-friendly climate have made it a favorite for companies looking to establish a Middle East headquarters or point of presence. As a crossroads of humanity, Dubai is unparalleled among global cities for its diversity: 86% of its residents are foreign born.

North America

Our rankings rewarded cities that are both ethnically diverse and, in some cases, dominate a critical industry. This is what we refer to as a “necessary city,” a place one must go to conduct business in a particular field, or to service a particular region of the world.

This focus on the “necessary” city led to what will no doubt be a controversial result: a 10th place ranking for the San Francisco Bay Area, on the strength of its central role in the tech industry, tied on our list with Los Angeles and Toronto. The Bay Area did not even make the top 20 in the 2014 A.T. Kearney rankings, which placed both Chicago and Los Angeles in the top 10.

Not long ago Los Angeles, North America’s second-largest metro area, saw itself as a potential rival to New York and a legitimate world city. Hollywood is nearly synonymous with the American entertainment industry and is by far the world’s largest in terms of revenue and influence. Last year the industry enjoyed exports of almost $15 billion.

But L.A.’s share of entertainment employment is shrinking and its former second industry, aerospace, has declined significantly, losing over 90,000 jobs since the end of the Cold War. Several key companies have decamped from the metro area in recent years — Nissan, Occidental Petroleum, Toyota — for more business-friendly places.

The situation is arguably worse in Chicago, which ties for 20th. The Windy City first rose to world prominence after overcoming rival St. Louis in the late 19th century. It boasts one of the world’s most diverse economies, but has not developed strong dominance in any industry. Chicago is an also ran in media and technology and, outside of commodities, is no longer a major global financial center.

The big winner today is the Bay Area, which overwhelmingly dominates the list of technology leaders; not only is the metro area home to a glittering array of tech standouts, companies based elsewhere in the U.S., and in other countries, feel compelled to site operations there. Even a penny pinching retailer like Wal-Mart is growing its Silicon Valley presence.

Other North American cities with a growing global footprint include 10th ranked Toronto, tied with Los Angeles and Bay Area. Toronto, as the economic capital of Canada, has becomes a focus for international investment into that stable and resource rich country. It is also among the most diverse cities on the planet — 46 % of its population is foreign born.

Rising Stars

In North America up and comers include No. 14 Houston, with its domination of the U.S. energy industry, a huge export sector and an increasingly diverse population. The Washington, D.C., metro area ranks 16th, a testament to the capital’s growth as an aerospace and technology center.

Overseas, other urban centers that could move up in the future include No. 16 Seoul, Shanghai and No. 20 (tie) Abu Dhabi. But outside of Dubai no other cities in our top 20 come from the developing world. The Indian megacities Delhi and Mumbai rank in the low 30s along with Johannesburg in South Africa. In Latin America, the place to watch is No. 23 Sao Paulo. But until these areas can develop adequate infrastructure — from roads, transit and bridges to relatively non-corrupt judicial systems — none can be expected to crack the top 10, or even 20, for at least a decade.

For the time being, the future of the global city belongs not to the biggest or fastest growing but the most efficient and savvy, and those with a strong historical pedigree. This raises the bar for all cities that wish to break into this elite club.

No. 1: London

FDI Transactions (5-Year Avg.): 328
Forbes Global 2000 HQs: 68<
Air Connectivity:  89%*
Global Financial Centres Index Rank: 1

* The air connectivity score is the percentage of other global cities outside the city’s region (e.g., for London, cities outside of Europe) that can be reached nonstop a minimum of three times per week.

No. 2: New York

FDI Transactions (5-Year Avg.): 143
Forbes Global 2000 HQs: 82
Air Connectivity:  70%
GFCI Rank: 2

No. 3: Paris

FDI Transactions (5-Year Avg.): 129
Forbes Global 2000 HQs: 60
Air Connectivity:  81%
GFCI Rank: 29

No. 4: Singapore

FDI Transactions (5-Year Avg.): 359
Forbes Global 2000 HQs: N/A
Air Connectivity:  46%
GFCI Rank: 4

No. 5: Tokyo

FDI Transactions (5-Year Avg.): 83
Forbes Global 2000 HQs: 154
Air Connectivity:  59%
GFCI Rank: 5

No. 6: Hong Kong

FDI Transactions (5-Year Avg.): 234
Forbes Global 2000 HQs: 48
Air Connectivity:  57%
GFCI Rank: 3

No. 7: Dubai

FDI Transactions (5-Year Avg.): 245
Forbes Global 2000 HQs: N/A
Air Connectivity:  93%
GFCI Rank: 25

No. 8 (TIE): Beijing

FDI Transactions (5-Year Avg.): 142
Forbes Global 2000 HQs: 45
Air Connectivity:  65%
GFCI Rank: 59

No. 8 (TIE): Sydney

FDI Transactions (5-Year Avg.): 111
Forbes Global 2000 HQs: 21
Air Connectivity:  43%
GFCI Rank: 15

No. 10 (TIE): Los Angeles

FDI Transactions (5-Year Avg.): 35
Forbes Global 2000 HQs: N/A
Air Connectivity:  46%
GFCI Rank: N/A

No. 10 (TIE): San Francisco Bay Area

FDI Transactions (5-Year Avg.): 49
Forbes Global 2000 HQs: 17
Air Connectivity:  38%
GFCI Rank: 12

No. 10 (TIE): Toronto

FDI Transactions (5-Year Avg.): 60
Forbes Global 2000 HQs: 23
Air Connectivity:  49%
GFCI Rank: 11

Remaining Cities City Region Rank

Zurich

Europe

13

Frankfurt

Europe

14

Houston

North America

14

Amsterdam/Randstad

Europe

16

Seoul

Asia-Pacific

16

Washington Metropolitan Area

North America

16

Shanghai

Asia-Pacific

19

Abu Dhabi

Middle East

20

Chicago

North America

20

Moscow

Europe

20

Boston

North America

23

Brussels

Europe

23

Dallas-Fort Worth

North America

23

Madrid

Europe

23

Melbourne

Asia-Pacific

23

São Paulo

South America

23

Istanbul

Middle East

29

Miami

North America

29

Johannesburg

Africa

31

Kuala Lumpur

Asia-Pacific

31

Mumbai

Asia-Pacific

31

Bangkok

Asia-Pacific

34

Delhi

Asia-Pacific

34

Geneva

Europe

34

Atlanta

North America

37

Berlin

Europe

37

Seattle

North America

37

Tel Aviv

Middle East

37

Mexico City

North America

41

Milan

Europe

41

Montreal

North America

41

Buenos Aires

South America

44

Jakarta

Asia-Pacific

44

Philadelphia

North America

44

Cairo

Middle East

47

Guangzhou

Asia-Pacific

47

Ho Chi Minh City

Asia-Pacific

47

Lagos

Africa

47

Osaka

Asia-Pacific

47

 

This piece originally appeared at Forbes.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order atAmazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Photo: "City of London skyline at dusk" by jikatu - Licensed under Creative Commons Attribution-Share Alike 2.0 via Wikimedia Commons

Boomers: Moving Further Out and Away

Wed, 08/13/2014 - 22:52

There have been frequent press reports that baby boomers, those born between 1945 and 1964, are abandoning the suburbs and moving "back" to the urban cores (actually most suburban residents did not move from urban cores). Virtually without exception such stories are based on anecdotes, often gathered by reporters stationed in Manhattan, downtown San Francisco or Washington or elsewhere in urban cores around the nation. Clearly, the anecdotes about boomers who move to suburbs, exurbs, or to outside major metropolitan areas are not readily accessible (and perhaps not as interesting) to the downtown media.

Yet there is a wide gulf between the perceived reality of the media stories and what is actually occurring on the ground, as is indicated by comprehensive sources. The latest available small area data shows that baby boomers continue to leave the urban cores in large numbers. They have also left the earlier suburbs in such large numbers that their population gains in the later suburbs and exurbs have been insufficient to stem boomer movement out of the major metropolitan areas to smaller cities and rural areas.

These conclusions are drawn from an analysis of population at the zip code tabulation area (ZCTA) among those 35 to 54 years of age in 2000 and the same cohort in 2010 (then 45 to 64 years of age). This small area analysis avoids the exaggeration of urban core data that necessarily occurs from reliance on the municipal boundaries of core cities (which are themselves nearly 60 percent suburban or exurban, ranging from as little as three percent to virtually 100 percent). This is described in further detail in the "City Sector Model" note below.

Overall Trend

The national population of the baby boomer generation declined 1.82 million between 2000 and 2010, a 2.2 percent loss (the result of an inevitably increasing death rate from the aging of cohorts). A small increase of 350,000 (1.0 percent) outside the largest cities was more than offset by a 2.17 million loss in the major metropolitan areas (over 1 million population), where the decline was of 4.7 percent.

Boomers and the Urban Core

The largest percentage loss occurred in the functional urban cores, which experienced a decline of 1.15 million baby boomers, a reduction of 16.7 percent. The functional urban cores are defined by the higher population densities that predominated before 1940 and a much higher dependence on transit, walking and cycling for work trips (further details are provided in the "City Sector Model" note below). In 2000, baby boomers accounted for 14.9 percent of the major metropolitan area population, a figure that declined to 13.0 percent by 2010 (Figure 1).

The losses were pervasive. Among the 24 major metropolitan areas with functional urban core populations above 100,000, all experienced reductions in their baby boomer population shares. The average share reduction was approximately 12 percent.

Not surprisingly, the leading urban core magnets of New York and San Francisco did the best, losing 4.3 percent and 5.8 percent of their boomer population share between 2000 and 2010. Providence, Los Angeles,and Boston rounded out the best five.

Among the 24 metropolitan areas with the largest functional urban cores, Detroit experienced the largest proportional boomer loss, at 21.2 percent. Kansas City, Washington, and Minneapolis-St. Paul lost from 17 percent to 19 percent, proportionally, of their boomer urban core populations. Despite its reputation for core renewal, Portland experienced an approximate 15 percent proportional loss of its urban core boomers, along with Milwaukee and Cleveland (Figure 2).

Boomers and the Earlier Suburbs

The reduction in baby boomer population was even greater in the earlier suburban areas (those with median house construction dates of 1979 or before). The 2.33 million earlier suburban population loss was double that of the functional urban core loss, but because of this population is much larger than the functional cores, the overall drop was a smaller 11.1 percent. Nonetheless, the earlier suburbs continue to house the largest share of major metropolitan boomers. This fell, however, from 45.3 percent in 2000 to 42.2 percent in 2010.

Combined, the urban cores and earlier suburbs lost 3.48 million boomers between 2000 and 2010.

Boomers and the Later Suburbs and Exurbs

In contrast, the later suburban areas (median house construction date 1980 or later) added approximately 750,000 baby boomers, for an increase of 6.8 percent. The later suburbs also experienced an increase in their share of major metropolitan boomers, rising from 24.0 percent in 2000 to 26.9 percent in 2010.

The exurban gain was greater than the later suburbs in percentage terms (7.7 percent) but less in population gain (560,000). This was enough to increase the exurban share of boomers from 15.8 percent in 2000 to 17.9 percent in 2010. Indeed, the exurban areas of the 24 major metropolitan areas with urban cores over 100,000 population all did better in attracting or retaining boomer populations than both the urban cores and the earlier suburbs.

Overall there was a 5.0 percentage point transfer of boomer share from the functional urban cores and earlier suburbs to the later suburbs and exurbs, reflecting their more than 1.3 million gain between 2000 and 2010.

Boomers and the Nation

Moreover, the data indicates that boomers are leaving the major metropolitan areas to move to smaller cities or even to rural areas. In contrast with the 2.17 million major metropolitan area loss, areas outside the major metropolitan areas added 350,000 boomers between 2000 and 2010. In 2000, smaller cities and rural areas housed 44.4 percent of the boomer population. By 2010, the smaller city and rural share had risen to 45.8 percent (Figure 3). By contrast, over the same period, the major metropolitan areas increased their proportion of the US population, from 54.5 percent in 2000 to 54.9 percent in 2010.

America's downtowns (generally a smaller area than the larger urban cores), have done much better in recent years, as they have become safer and as a "100 year flood" of economic retrenchment has reduced many to renting rather than buying. Yet, overall, urban cores have done less well, with Census Bureau data showing that the population gains within two miles of largest municipality city halls being more than offset by losses in the two to five mile radius between 2000 and 2010. These loses are not limited to the overall population, but extend to share losses among Millennials and population losses among the boomers.

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

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City Sector Model Note: The City Sector Model allows a more representative functional analysis of urban core, suburban and exurban areas, by the use of smaller areas, rather than municipal boundaries. The more than 30,000 zip code tabulation areas (ZCTA) of major metropolitan areas and the rest of the nation are categorized by functional characteristics, including urban form, density and travel behavior. There are four functional classifications, the urban core, earlier suburban areas, later suburban areas and exurban areas. The urban cores have higher densities, older housing and substantially greater reliance on transit, similar to the urban cores that preceded the great automobile oriented suburbanization that followed World War II. Exurban areas are beyond the built up urban areas. The suburban areas constitute the balance of the major metropolitan areas. Earlier suburbs include areas with a median house construction date before 1980. Later suburban areas have later median house construction dates.

Urban cores are defined as areas (ZCTAs) that have high population densities (7,500 or more per square mile or 2,900 per square kilometer or more) and high transit, walking and cycling work trip market shares (20 percent or more). Urban cores also include non-exurban sectors with median house construction dates of 1945 or before. All of these areas are defined at the zip code tabulation area (ZCTA) level.

California Drought: How To Share An Emergency

Wed, 08/13/2014 - 08:08

California has big troubles. It hasn’t rained for two years. Our reservoirs are almost depleted. Our aquifers are being overdrawn. Forecasts for next winter’s rain, which were optimistic not long ago, have become increasingly pessimistic.

Of course, everybody knows California is in a drought. So, California is doing things. We have education programs. We have shaming apps and neighbors reporting on neighbors. We have fines for water wasters. We have Water Cops. We have the Lawn Dude.

Still, Californians underestimate the drought’s total cost.

The drought’s environmental costs are especially underappreciated. It is an environmental disaster. When water gets tight, fish, birds, and other wildlife suffer. We see increasing numbers of confrontations between snakes and predators, like mountain lions and bears, and people. Animals l ose most of these confrontations. In some areas, we are losing entire riparian and wetland ecosystems.

Ocean water is intruding into coastal groundwater basins. Nitrate and sulfate levels in drinking water are rising, and in some areas exceed levels permitted by public health standards.

Even the land is changing. Persistent aquifer overdrafts are causing land to sink. Infrastructure and buildings, breaking under the strain of sinking land, will need to be rebuilt or repaired. All these factors increase the costs of the drought. Worse, once an aquifer is collapsed, it can never be restored. Our storage capacity is permanently reduced. Persistent aquifer overdrafts may even increase the frequency of earthquakes.

Over-drafting of aquifers needs to stop. Riparian and wetland habitats need to be maintained. The price that water users pay should reflect all costs.

California’s current response is increasing the drought’s costs. Education programs are expensive. So are water cops and the systems to prosecute and punish profligate water users. And yet, water usage has not significantly decreased.

Some costs are immeasurable. A society with water cops driving around looking for people watering their lawns, where neighbors shame each other on social media or report neighbors to authorities, starts to look oppressive. The mutual trust necessary for an efficient and well-ordered society starts to erode.

The damage could be far less. Nixon made the OPEC oil shocks worse by capping prices and using coercive government tools to reduce demand. This is exactly what California is doing with water. Demand exceeds supply. The price to users is too low.

It would be simpler to let water prices rise to a market-clearing price. This would quickly reduce aquifer overdrafts, while leaving sufficient water to support ecosystems and the species they support. It would also mean that most Californians would see prices increase a lot.

This proposal tends to drive people crazy, yet we allocate few resources the way we allocate water.

Consider that life-giving resource, coffee. Between January and April of 2014, coffee bean prices increased 72 percent on global markets. The United States retail price rose about 33 percent. The price increases reflected a drought in Brazil. Coffee consumers did not need to have detailed information about South American weather patterns. The price provided all they needed to know.

Consider gasoline, too. In a market where powerful cartels manipulate global supplies, the price of gasoline conveys detailed signals about the state of global supply. Whether a large refinery in California is temporarily shuttered, or political unrest roils a Middle East oil producer, consumers can stay abreast of changing conditions by observing price changes at the pump.

Why not with water?

Many people object on fairness grounds, arguing that water is a necessity, and market prices would deny that necessity to poor people. Others object on legal grounds, arguing that our water prices are a complex result of history, legal precedent, and sometimes contradictory laws. Still others object to leaving some water for animals and plants while people suffer.

The fairness argument is easy to dismiss. The price that matters is the price of the last gallon sold. We could easily give everyone some minimum allocation of water for free (or nearly-free) and then charge a market-clearing price for everything beyond that.

Voilà! Problem solved. No oppressive government measures.

This system is employed in Tucson, Arizona. There, steep block pricing has allowed the city to allocate scarce water to vitally important uses. One need only compare an image of Tucson homes to one of Phoenix homes to see the strategy’s effectiveness. In Phoenix, where flat-rate pricing is used, you occasionally see residential landscaping a Seattle home owner would envy. In Tucson, it’s all cactus and rock gardens.

The argument against leaving water for plants and animals relies on the concept that people are more important than other living things. We don’t need to debate that. It’s only important in a situation where human life is at stake, and California's water situation is not a threat to mankind. Twenty-first century America is fabulously wealthy. Leaving some water for the critters may cost us, but we can pay it and still have a standard of living that most of mankind throughout history would have envied.

The legal objection is also easy to challenge. Fortunately for all of us, California's water laws weren't brought down from Mount Sinai by Moses, and, like the Commandments, they are routinely violated. Most of California's water law, with the exception of transfer and resale legislation, is pretty good. The problem is that it isn't being enforced.

Assertion of the existing laws can improve the situation. Only 23 of California’s approximately 400 groundwater basins have undergone "adjudication". Generally, adjudicated basins are models of efficient allocation. Water prices in these jurisdictions are connected to supply and demand and are also, predictably, significantly higher than in non-adjudicated basins.

There are two important issues with California's water laws that need to be addressed. One relates to owners of agricultural land; they are entitled to "reasonable and beneficial use" of water under the land. This is called an "overlying right." Unfortunately, they’re not allowed to sell or transfer the water to other users. This needs to change.

Another is that the California Environmental Quality Act, the Endangered Species Act, and the State Water Resources Control Board prevent the building of the infrastructure that's required to move water. About 75 percent of California’s supply of water originates north of Sacramento, while 75 percent of California’s demand for water originates south of Sacramento. Water needs to move, and the California State Water Project is insufficient to allow local and regional transfers. Northern Colorado and parts of Oregon provide examples of regions that effectively transfer water between users.

Asserting California's existing water laws and changing inefficient parts of those laws are revolutionary ideas, and a first-order political challenge. To do so would require leadership and courage, two characteristics that are almost non-existent in American political leadership. It's worth the effort. It would fundamentally improve California's future.

Unfortunately, it could take five to ten years, a time frame not conducive to managing today’s emergency. Californians need to understand that we have a crisis, and we need to act now.

Matthew Fienup teaches graduate econometrics and works for the Center for Economic Research and Forecasting at California Lutheran University, where he specializes in applied econometric analysis and the economics of land use. He is currently working on his PhD at the Bren School of Environmental Science and Management at the University of California Santa Barbara. He holds a Masters Degree in Economics from UCSB. Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org

Flickr photo by M. Dolly, California Garden: "Hacking out the lawn and replacing it with drought tolerant and native plants... Best decision ever! Shown here: Abutilon palmeri - Indian Mallow, and Salvia mellifera - Black Sage."

Transforming Kokomo: No Need to Move Mountains

Mon, 08/11/2014 - 22:38

Across the country—but particularly in the heavily industrialized Northeast and Midwest—smaller cities have confronted the grim realities of the unflattering “Rust Belt” moniker, and all of its associated characteristics, with varying degrees of success.  With an aging work force, difficulty in retaining college graduates, and a frequently decaying building stock, the challenges they face are formidable.  Cites from between 30,000 and 80,000 inhabitants typically boomed due to the exponential growth of a single industry, and, in many cases, the bulwark of that industry left the municipality nearly a half century ago, for a location (possibly international) where the cost of doing business is much cheaper. Essentially, everything the smaller Rust Belt cities had to offer is completely tradable in a globalized market; the resources that provided the town’s life blood are either depleted or are simply to expensive to cultivate further.

Reinvention is the only condition likely to save many of these cities from persistent economic contraction, but, with an overabundance of retirees and older workers, these towns lack the collective civic will that could be expected in larger communities with more diversified economies.  An absence of young people intensifies (and, to a certain extent, justifies) the low level of civic investment in one’s own community; after all, if a resident is six months from retirement, how likely is it that he or she would support public investments intended to improve quality of life for twenty or thirty years into the future? For that matter, how likely will a population of retirees remain engaged to encourage or challenge major private sector investments as well?

By no means am I intending to denigrate needs and ambitions of the senior population; I’m merely observing that a stagnant Rust Belt city with this demographic profile will demonstrate vastly different priorities from a city rife with young families.  While every Rust Belt city large and small must avoid obsolescence that results from the spoils of globalization, the smaller cities—which have tended to be dominated in the past by a single thriving industry—are less likely to claim alternative sectors and labor pools if their primary manufacturing lifeblood fails.  A dying city of 80,000 may not exert the same impact within a region (particularly in the densely populated Midwest and Northeast) that a city of 500,000 would, but it is far more of black eye for the state than a town of 2,000 that has lost its raison d’être.  This conclusion is obvious.  Many of these small cities must reordering of their economies comprehensively; while the state, the county, or private foundations may offer some outside help, the constituents of these cities themselves are typically the best equipped to understand how their city should evolve.  Unfortunately, many of these communities aren’t yet even aware of the need for this reinvention, let alone which avenue to pursue in order to achieve it.

It is with no small amount of reassurance that I can assert that Kokomo, Indiana is not one of these latter cities.

No Rust Belt complacency on display here in the City of Firsts.  Though a recently as 2008 it was on Forbes’ list of America’s Fastest Dying Towns, a recent visit shows much more evidence than I’ve seen of some comparably sized cities in the region that the civic culture is neither resting on its laurels nor wringing its hands about how much better things used to be.  In fact, one of the Indianapolis Star’s leading editorialists, Erika Smith, recently visited the city, and, after receiving a tour from the Mayor, was pleasantly surprised by how proactive it has been in implementing precisely the type of quality-of-life initiatives largely perceived as necessary to help a historically blue-collar city stave off a brain drain or descend into irrelevancy.

I, too, recently received the Kokomo tour, followed by a meeting with Mayor Greg Goodnight, and I can also recognize some of the city’s most impressive achievements at shaking off the post-industrial malaise that saddled the city with double-digit unemployment rates as recently as a few years ago.  Since then, the city has introduced a trolley system at no charge to users; prior to this initiative, the city had had no mass transit for decades.  The Mayor pushed successfully to annex 11 square miles in the town’s periphery, therefore elevating the population by about 10,000 people.  The Mayor’s team worked to convert all one-way streets in Kokomo’s downtown to two-ways, recognizing that accommodating high-speed automobile traffic in a pedestrian-oriented environment only detracts from the appeal.  The team has restriped several miles of urban streets to incorporate bike lanes, and it has converted a segment of an abandoned rail line into a rail-with-trail path, branding it by linking it to the city’s industrial heritage. They have deflected graffiti from several bridges and buildings through an expansive and growing mural project.  They have upgraded the riverfront park with an amphitheatre and recreational path. They have introduced several sculptural installations, the most prominent of which is the KokoMantis, a giant praying mantis made entirely of repurposed metal and funded privately.  And my personal favorite: with the support of the City, the school superintendent has integrated a prestigious International Baccalaureate (IB) program to the public school system, including an international exchange program for young men from several foreign countries (a girls’ program should arrive in the next year or two) who live in a recently restored historic structure in Kokomo’s walkable downtown, attending demanding courses that bolster their chances of admittance in a coveted American university.  Most impressively, the City of Kokomo has achieved all of this without incurring any public debt in the past year.

Obviously the individuals offering me this tour are going to make sure their Cinderella is fully dressed for the ball, and I recognize that not a small amount of the securing of certain infrastructural projects and transportation enhancement grants requires a political savvy that the current civic leadership has in abundance.  And I don’t want to rehash Ms. Smith’s article, which more than effectively chronicles this approach at a macro level.  In addition, Erika Smith recognizes, as do I, that very few of these initiatives (the IB foreign exchange program notwithstanding) are really particularly earth-shattering.  But when most other similarly sized cities in the Midwest seem to be engaged in a race to the bottom, luring new industry through generous tax breaks (often initiated at the state level), Kokomo seems to recognize that a town lacking any amenities outside of low cost of living has to compete with dozens of other cities in Ohio and Michigan and Pennsylvania, and elsewhere in Indiana, that offer the exact same brand.  Whether this investment yields a long-term return remains to be seen, but it certainly demonstrates the right gestures necessary to instill civic stewardship in a place whose decades of job loss have seriously scratched its mirror of self-examination.

What ultimately struck me about Kokomo—which Erika Smith only touched upon—was the level of design sophistication evident in some of these civic projects.  I need only focus on a single location in the city, in which two particularly laudatory techniques are on display.  At the intersection of Markland Avenue and Main Street, just south of downtown, the Industrial Heritage Trail begins its journey southward.  Here’s a view as the trail terminates at its junction with those two streets, looking northwestward:

Here is a view in the other direction:

Continuing a bit further in this direction, one encounters this painted wall:

And, pivoting slightly to the left, another mural that is still in progress:

This photo series identifies two amenities that stand out for the astute decision-making that apparently took place during the implementation.  The Industrial Heritage Trail clearly operates a railway corridor, but it is not a rail-trail.  Unlike the more common rail-trail conversion, this Kokomo trail did not incorporate the removal of the original rail infrastructure.  The Rails to Trails Conservancy would label this approach a rail-with-trail, indicating that the trail shares the railway easement, typically separated by fencing.  Rail-trails such as the Monon Trail in metro Indianapolis are still the more common practice. However, a growing number of communities are embracing rail-with-trails, not only because they obviate the need for costly removal of rails, ties, and ballast, but they reserve the rail infrastructure for the possibility that a railroad company may reactivate the line in the future.  If the sponsors of Kokomo’s Industrial Heritage Trail had removed the infrastructure, the possibility of ever reintroducing rail along the corridor would be virtually nil.  As it stands, the only conceivable disadvantage to rail-with-trails is that, in the event a rail company reintroduces train service, its close proximity to the path may prove hazardous to bicyclists or pedestrians.  Otherwise, the decision to retain the railway not only helped to diversify options, it most likely saved a considerable amount of money.

The other smart decision was the site selection for those murals.  The ones featured in the photos above are part of a growing mural campaign that the City of Kokomo introduced, and every one that I recall shows real foresight in the locational decisions. What makes them so good?  The murals in the photos above front a public right-of-way, minimizing if not completely precluding the chance that later development will conceal them.  I blogged a few years ago about an excellent mural in Indianapolis that showed wonderful care and craft in the entire implementation process…except where the conceivers chose to locate it.  Not only did they paint on a cheap, cinder-block building that will likely tumble down if market pressures encourage new development in the neighborhood, but the mural also faces a vacant lot which is large enough to host a new structure that would block it completely, no doubt frustrating the community and pitting them against a developer.

Compare this to Kokomo’s murals.  Here’s one a little further south on the Industrial Heritage Trail:

Again, it fronts the trail itself—not a chance that a developer will try to block it.  And here’s another along a bridge underpass for the recently completed trail along the Wildcat Creek:

The original intention of the mural was to repel vandals at spot that previously suffered from it frequently; this approach has proven successful in locations across the country. But it also sits in a park along a new greenway, so it should remain in perpetuity. Granted, Indianapolis has plenty of murals along retaining walls and buildings that front the aforementioned Monon Trail.  Those, too, should survive far into the future.  But in recent years, the City of Indianapolis has encouraged countless murals on the side walls of commercial buildings—sites where a blank wall faces a parking lot, where a building once stood.  While these bare walls often scream for some ornamentation to help distract from what used to be there (another adjoining building), in many instances the parking lots will likely fall under increasing development pressure in upcoming years.  Will the locals thwart development in order to save the mural?  This remains to be seen, and I don’t want to base too much of an analysis on speculation.  But it’s hard to deny that these public art investments seem less astute than the once I witnessed in Kokomo.

One could argue that Kokomo is merely taking advantage of the fact that it is jumping into the game relatively late; it benefits by learning from the mistakes of others.  But decisions that stand the test of time also contribute their fair share to foster civic goodwill. Taxpayers are rarely too forgiving of poorly conceived projects, and several successive blunders, no matter how small they may be, demonstrate poor accountability.  Only time will determine the return on investment, but Kokomo certainly has a leg up on many of its competing small cities,  My suspicion is, if these projects stimulate the discussion and enthusiasm for proactive leadership that they suggest (Mayor Goodnight was re-elected last year by a landslide), the citizens of Kokomo are only beginning to stoke the fire.

This post originally appeared in American Dirt on November 16, 2012.

Eric McAfee is an itinerant urban planner/emergency manager who fuses his cross county (and trans-national) travels and love of contemporary landscapes into his blog, American Dirt.

In the Future We’ll All Be Renters: America’s Disappearing Middle Class

Sun, 08/10/2014 - 12:14

An Excerpt from Joel Kotkin’s Forthcoming book The New Class Conflict available for pre-order now from Telos Press and in bookstores September, 2014.

In ways not seen since the Gilded Age of the late nineteenth century, America is becoming a nation of increasingly sharply divided classes. Joel Kotkin’s The New Class Conflict breaks down these new divisions for the first time, focusing on the ascendency of two classes: the tech Oligarchy, based in Silicon Valley; and the Clerisy, which includes much of the nation’s policy, media, and academic elites.

The Proleterianization of the Middle Class

From early in its history, the United States rested on the notion of a large class of small proprietors and owners. “The small landholders,” Jefferson wrote to his fellow Virginian James Madison, “are the most precious part of a state.” To both Jefferson and Madison, both the widespread dispersion of property and limits on its concentration—“the possession of different degrees and kinds of property”—were necessary in a functioning republic.

Jefferson, admitting that the “equal division of property” was “impractical,” also believed  “the consequences of this enormous inequality producing so much misery to the bulk of mankind” that “legislators cannot invent too many devices for subdividing property.” The notion of a dispersed base of ownership became the central principle which the Republic was, at least ostensibly, built around. As one delegate to the 1821 New York constitutional convention put it, property was “infinitely divided” and even laborers “expect soon to be freeholders” was a bulwark for the democratic order.

This notion of American opportunity has ebbed and flowed, but generally gained ground well into the 1960s and 1970s.  The very fact that the United States was more demographically dynamic, notes Thomas Piketty, naturally reduced the role of inherited wealth compared to Europe, most notably in France,  where population growth was slower.  Mass prosperity hit a high point in America in the first decades after the Second World War, the period where the country achieved its highest share of world GDP at some forty percent.  By the mid-1950s the percentage of households earning middle incomes doubled to 60 percent compared with the boom years of the 1920s. By 1962 over 60 percent of Americans owned their own homes; the increase in homeownership, notes Stephanie Coontz, between 1946 and 1956 was greater than that achieved in the preceding century and a half.

But today, after decades of expanding property ownership, the middle orders—what might be seen as the inheritors of Jefferson’s yeoman class—now appear in a secular retreat.  Homeownership, which peaked in 2002 at nearly 70 percent, has dropped, according to the U.S. Census, to 65 percent in 2013, the lowest in almost two decade.  Although some of this may be seen as a correction for the abuses of the housing bubble, rising costs, stagnant incomes and a drop off of younger first time buyers suggest that ownership may continue to fall in years ahead.

The weakness of the property owning yeomanry comes at a time when other classes, notably the oligarchs and the Clerisy, have gained power and influence. Over twenty years ago Christopher Lasch argued that “the new class” was arising that “begins and ends with the knowledge industry.”  For this group, the rest of society, he suggested, exists only “as images and stereotypes.” Progressive theorists, such as Ruy Texerira, have suggested that, in the evolving class structure, the traditional middle and working class is of little importance compared to the rise of a mass “upper middle class” consisting largely of professionals, tech workers, academics, and high-end government bureaucrats.

The Economic Decline of the Yeomanry

All this suggests what could be seen as the proletarianization of the yeoman class. In the four decades since 1971 the percentage of those earning between two thirds and twice the national median income has shrunk, according to Pew, from over sixty to barely fifty percent of the population. While middle class incomes have fallen relative to the upper income groups, house prices and health insurance, utilities and college tuition costs have all soared.

This reflects some very dramatic changes in the nature of the employment market. For over a decade, job gains have been concentrated largely in the low-wage service sector, such as in retail or hospitality, which alone accounted for nearly sixty percent of job gains; in contrast middle income positions actually have been declining. Meanwhile, taxes on corporate profits, which are at an all time high, have fallen to near historic lows.

This trend has continued even in the recovery.  Between 2010 and 2012, the middle sixty percent of households, did worse not only than the wealthy, but even the poorest quintile between 2010 and 2012.  In the years of the recovery from the Great Recession the middle quintiles income dropped by 1.2 percent while those of the top five percent grew by over five percent. Overall the middle sixty percent have seen their share of the national pie fall from 53 percent in 1970 to barely 45 percent in 2012. Of roughly one in three people born into middle class households, those earning between the 30th and 70th percent of income now fall out of that status as adults.

This decline, not surprisingly, has engendered a dour mood among much of the yeomanry. For many, according to a 2013 Bloomberg poll, the American dream seems increasingly out of reach; this opinion was held by a margin of two to one among all Americans, and three to one among those making under $50,000, but also a majority earning over $100,000 annually. By margins of more than two to one, more Americans believed they enjoy fewer economic opportunities than their parents, and will experience far less job security and disposable income. This pessimism is particularly intense among white working class voters, and large sections of the middle class.

Many people who once had decent incomes, and may have owned or hoped to own a house or start a business have slipped to the lower rungs of the economy. In the past decade, the number of people working part-time and receiving such benefits as food stamps has expanded well beyond inner cities and impoverished rural hamlets.  Many of the long-term unemployed are older, and often somewhat well-educated workers, who have fallen from the middle class over the past decade. The curse of poverty has also expanded more into suburban locations; something widely cited by the urban-centric Clerisy, but further confirms the yeomanry’s stark decline.

The Assault on Small Business

Perhaps nothing reflects the descent of the yeomanry than the fading role of the ten million small businesses with under 20 employees, which currently employ upwards of forty million Americans. Long a key source of new jobs, small business start-ups have declined as a portion of all business growth from 50 percent in the early 1980s to 35% in 2010. Indeed, a 2014 Brookings report, revealed that small business “dynamism”,  measured by the growth of new firms compared with the closing of older ones, has declined significantly over the past decade, with more firms closing than starting for the first time in a quarter century.

Instead of stemming from the grassroots, the recovery after the latest crash was led, unlike in previous expansions, by larger firms while small company hiring remained relatively paltry. Self-employment rose, but increasingly this took the form of sole proprietorships as opposed to expanding smaller companies with employees. By 2013, smaller firms with under one hundred employees added far fewer jobs than in the prior decade. Unlike prior post-war recoveries, since 2007, grassroots companies did not lead the way out of recession and continued to lose ground compared with larger companies that either could afford the costs or avoid the taxes imposed by, the Clerical regime.

This decline in entrepreneurial activity marks a historic turnaround.  In 1977, SBA figures show, Americans started 563,325 businesses with employees. In 2009, they started barely 400,000 Business start-ups, long a key source of new jobs, have declined as a portion of all businesses from 50 percent in the early 1980s to 35% in 2010.

There are many explanations for this decline, including the impact of offshoring, globalization and technology.  But some reflects the impact of the ever more powerful Clerical regime, whose expansive regulatory power undermines small firms. Indeed, according to a 2010 report by the Small Business Administration, federal regulations cost firms with less than 20 employees over $10,000 each year per employee, while bigger firms paid roughly $7,500 per employee.  The biggest hit to small business comes in the form of environmental regulations, which cost 364% per employee more for small firms than large ones. Small companies spend $4,101 per employee, compared to $1,294 at medium-sized companies (20 to 499 employees) and $883 at the largest companies, to meet these requirements.

The nature of federal policy in regards to finance further worsened the situation for the small-scale entrepreneur.  The large “too big to fail” banks received huge bailouts, but have remained reluctant to loan to small business. The rapid decline of community banks, for example, down by half since 1990, particularly hurts small businesspeople that depended on loans from these institutions.

The Descent of the Yeomanry, with Cheers from the Clerisy

Despite America’s egalitarian roots, the prospect of mass downward mobility has been embraced widely by some business oligarchs and much of the Clerisy. The future being envisioned is one dominated by automated factories and computer-empowered service industries that will continue to pressure both jobs and wages in the future. In this scenario, productivity will rise, but wages may stagnate or decline. This leads some to propose that the American middle and working classes has become economically passé. Steve Case, founder of America Online, has even suggested that future labor needs can be filled not by current residents but by some thirty million immigrants.

Arguably the first group to feel the downward pressure has been blue collar workers, whose lot has declined over the past few decades. After World War Two, as the United Autoworkers’ Walter Reuther noted, “the union contract became the passport to a better life” that was creating “a whole new middle class.” But with the shifting of industry overseas and the decline of private sector unions, the path for blue collar workers to enter the middle class has become more difficult.

Although they often claim to defend the middle class, the political stance adapted by the Clerisy, as well as the tech oligarchs and the investors, tends to worsen this trajectory. Environmental concerns impose themselves most against basic industries such as fossil fuels, agriculture and much of manufacturing. These employ many in highly paid blue-collar fields, with average salaries of close to $100,000. In the last decade, top U.S. firms, notes the liberal Center for American Progress, have cut almost three million domestic jobs.  Automation also leads to the diminution of traditional white collar professions as well as the shift of high-end service jobs offshore.

Overall, it has become increasingly common to regard the middle class as threatened and even doomed. Indeed, as early as1988 Time magazine featured a cover story on the “declining middle class,” which at that time was considerably more healthy than today. After the great recession, the American blue-collar worker has been pitied, but certainly not helped by the clerisy, which believes that there is no hope for manufacturing or similar outmoded jobs in an information age. Blue collar workers were described in major media as “bitter,” psychologically scarred” and even an “endangered species.” Americans, noted one economist, suffered a “recession” but those with blue collars endured a “depression.”

This perspective extends across ideological lines.  Libertarian economist Tyler Cowen suggests that an “average” skilled worker can expect to subsist on little but rice and beans in the future U.S. economy. If they choose to live on the East or West Coast, they may never be able to buy a house, and will remain marginal renters for life. Left-leaning Slate in 2012 declared that manufacturing and construction jobs, sectors that powered the yeomanry’s upward mobility in the past, “aren’t coming back. Rather than a republic of yeoman, we could evolve instead, as one left-wing writer put it, living at the sufferance of our “robot overlords,” as well as those who program and manufacture them, likely using other robots to do so.

Contempt for the middle class is often barely concealed among those most comfortably ensconced in the emerging class order. Financial Times columnist Richard Tomkins declared that the middle class, “after a good run” of some two centuries, now faces “relative decline” and even extinction. This historical shift towards mass downward mobility elicited only derision, not concern: “Classes come and classes go” and that when the middle orders disappears about the only ones that will be sorry to see them go might be the “middle classes themselves. Boo hoo.”

The Rise of the Yeomanry

This reversal in class mobility and the slowing diffusion of property ownership in America, if not addressed, threatens to undermine the country’s traditional role as beacon of opportunity. Equally important, the diminution of the middle orders threatens one of the historic sources of economic vitality and innovation.

The roots of America’s middle class reflects the critical role such small holders have played throughout history.  Dynamic civilizations tend to produce more than their share of “new men.”  But nowhere was this middle class ascendency more dramatic than in Europe, first in Italy and later in northern Europe. 

Initially, this was a comparatively small, outside group, with much of the activity conducted by outsiders such as Jews and, later, Christian dissenters. They were the driving force of the expanding capitalist  market, the creators of cities and among the primary beneficiaries of economic progress. Peter Hall quotes a historian of 15th Century Florence:

Apprentices became masters, successful craftsmen

became entrepreneurs, new men made fortunes in

commerce and money-lending, merchants and bankers

enlarged their business. The middle class waxed more

and more prosperous in a seemingly inexhaustible boom.

These “new men,” which included some landless peasants, gradually overthrew the old  artisan-like traders, eventually supplanted the aristocracy, and in some instances, the royal families as well. In most cases, their ascendency, although at times exploitative, generally promoted the expansion of both freedom and individual choice. They also were among the first commoners to seek out land, often in the periphery, in part as a business decision, but also to mimic the lifestyles of the traditional aristocracy.

As occurs in every economic transition some benefited some at the expense of others. Some “new men” from peasant and artisan backgrounds rose, but many others became part of an impoverished proletariat. Many urban artisans lost their jobs to machines, but many others used their expertise to move into the middle class, often through technical innovations that, in the words of the French sociologist Marcel Mauss, constituted “a traditional action made effective, ”notably in agriculture, metallurgy and energy.

As a colony of Britain, the Americans reflected that island’s rapid ascendancy  of small holders in the 17th and 18th Century, which linked liberation from feudalism with a less hierarchical order and the dispersion of ownership. The rise of the yeoman class in Britain was particularly critical in foreshadowing the evolution of America. These small landowners played a critical role in the overthrow of the monarchy under Cromwell, and consistently pushed for greater power for those outside the gentry. 

Yet ultimately many paid a great price for liberal reform, allowing for enclosures of what had been communal pasture; in the process productivity rose.  Some benefited, becoming gentry themselves, while many smallholders lost their lands, and flowed into the towns where they joined the swelling proletariat. Others, notably large merchants, bought political influence and marriage into old families. By 1750, according to Marx, the Yeomanry had disappeared, a claim denied by some who believed this class persisted, albeit weakened, well into the 19th Century.

The American Model

Many of these displaced yeoman found a more opportune environment in America, where diffusion of ownership, as both Jefferson and Madison noted, remained central to the very concept of the nation.  Small holders served, in the words of economic historian Jonathan Hughes, as  “the seat of Republican government and democratic institutions.”

America’s focus on dispersed ownership was further enhanced by government actions throughout the country’s history.  In contrast to their counterparts in Britain, the yeomanry in the United States enjoyed access to a greater, and still largely economically underutilized land mass, as well as a persistently growing economy. “In America,” de Tocqueville noted, “land costs little, and anyone can become a landowner.”

The Homestead Act was signed by President Lincoln in 1862. By granting land to settlers across the Western states, Lincoln was extending the notion of what historian Henry Nash Smith described as a  “agrarian utopia” ever further into the continental frontier. Yet in reality the Homestead Act, which offered for a $.25 registration fee $1 per 160 acres proved more symbolic than effective, impacting perhaps at most two million people in a nation over 30 million. Railways, using their land grants, actually sold more land than the government gave away.

The westward expansion of the Republic created huge opportunities for expansion of land ownership.  Jefferson wanted the land sold to the public to be a source of one-time revenue and a permanent holding for the buyer.  In many ways, at least until the 1890s, a far higher proportion of Americans owned land—almost 48%—than countries such as Britain where ownership was far more concentrated. These lands, not surprisingly, also became the source of often wild speculative booms and busts, both on the agricultural frontier and the burgeoning cities.

Many factors ultimately undermined the first old agrarian Jeffersonian dream. Capitalist-led industrial growth shifted the proportion of the population living in cities. Only 5 percent in 1790, it rose to almost 20 percent in 1850, and nearly 40% by 1900. The new order, as in England, also weakened the position of the old artisanal professions, which often made up the ranks of the small scale owners; in many cases they were replaced by women, children and new migrants, from the countryside or from abroad. They became, as the British reformist paper The Morning Star wrote, “our white slaves, who are toiled onto the grave, for the most part silently pine and die.”

The movement into cities, and the industrial economy, turned many workers from owners to renters. In the new industrial centers, it became far harder to start a business or own property. Even white collar workers often lost out as the instrumental economic rationality of capitalism displaced a more locally focused economy based on tradition, religion and small-scale production.

In the United States, conditions were generally less gruesome than in Britain or the rest of Europe,  but this did not slow the tendency towards ever great concentration of ownership. The rise of great entrepreneurs like Morgan, Vanderbilt, and Carnegie drove parts of the economy into the hands of  a relative handful of people. This concentration of power and land ownership engendered a powerful protest in both rural and urban areas. Henry George’s influential Progress and Poverty, published in 1879, maintained that “the ownership of land” was the “fundamental fact” determining the social, political and “moral condition of a people.” Land, he asserted, should be owned by the public and government funded by rents.

George’s approach appealed to a population that was seeing land ownership slipping from their grasp. Even on the land, as farming itself modernized, there was a gradual shift , as  farms mechanized and markets became more global, toward tenancy; by 1900 one in three American farmers were landless tenants. The concentration of property ownership continually grew from the 1870s on well into the 1920s.

By the early 20th century, as the original rustic yeoman dream was weakening, there was increased pressure for change from the growing urban population. Much of the pressure came from  a middle and upper-middle class who felt threatened by the concentration of ownership and political power in the hands of the industrial and financial oligarchies.

The Homeownership Revolution

As the nation moved from its agricultural roots, the yeoman class interest in property would find a new main expression in the form of homeownership. This would represent an opportunity both to escape the crowded city or, for the migrant from rural areas, live in a less dense urban environment. This drive was supported by both conservatives and New Dealers, who promulgated legislation that expanded homeownership to record levels. “A nation of homeowners,” Franklin Roosevelt believed, “of people who own a real share in their land, is unconquerable.”

The great social uplift that occurred then, coming to full flower after the Second World War, saw a working class—not only in America but in Europe and parts of east Asia—now enjoying benefits before available only to the affluent classes.  In 1966, author and New Yorker reporter John Brooks observed in his The Great Leap: The Past Twenty-Five Years in America, that, “The middle class was enlarging itself and ever encroaching on the two extremes—the very rich and the very poor.” Indeed, in the middle decades of the 20th Century, the share of income held by the middle class expanded while that of the wealthiest actually fell.

New Deal legislation—the Housing Act of 1934, creation of the Federal Housing Administration (FHA) and the Federal National Mortgage Association, or Fannie Mae—set the stage for the great housing boom of the 1950s. This was further augmented by the GI bill, which also provided low-interest loans to returning veterans.  The success of the private financial and construction interests who benefited from this boom, suggests author Eric John Abrahamson, was largely fostered by what he describes as a “planned” economy that consciously sought to expand ownership both during the New Deal and particularly in ensuing decades. Almost half of suburban housing, notes historian Alan Wolfe, depended on some form of federal financing. This egalitarian impulse was in part driven by people returning from WW II and Korea, many of whom benefited from the GI Bill.

This resulted in an unprecedented dispersion of property ownership. This process was aided by a strong economy and the expansion of automobile ownership, which greatly expanded the yeomanry’s mobility. Increasing numbers of the middle class and even working class people become homeowners, sparking an enormous surge in home building. By 1953, the number of Americans owning their own homes climbed to twenty-five million, up from eighteen million in 1948. A country of renters was transformed into a nation of owners. Between 1940 and 1960 non-farm homeownership rose from 43 percent to over 58 percent. It was an accomplishment of historic proportions, notes historian Abrahamson, of “a transformed Jeffersonian vision.”

New Class Conflict Over the form and Nature of Growth

In recent decades, this vision of widening prosperity and property ownership has become increasingly threatened, as most evidenced by the housing bust of 2007-8. It also has come under increased attack from among the ranks of the clerisy. To be sure, many of those who bought homes in the last decade were not economically prepared, as some analysts suggest. But in the wake of the housing bust, the attack on homeownership expanded to include not only planners and pundits, but even parts of the investment community have seen in the yeomanry’s decline an opportunity to expand the base of renters for their own developments.

The ideal of homeownership, particularly in the suburbs, have long raised the ire of many  academics and intellectuals in particular . Some have sought to de-emphasize increased wealth and seek instead to embrace what they consider a more moral, even spiritual standard. This movement, not so far from old feudal concepts, had its earliest modern expression in E.F. Schumacher’s 1973 influential Small is Beautiful and the writings of London School of Economics’ E.J. Mishan.

Both writers rightly criticized the sometimes cruelly mechanistic nature of much technological change, but also revealed a dislike of the very kind of expansive growth that has lifted so many into the yeoman class after the Second World War, not only in America but in Europe and parts of East Asia. “The single minded pursuit for individual advancement, the search for material success,” Mishan wrote, “may be exacting a fearful toll on human happiness.”

In the search for an alternative, both writers looked not forward, but backwards.  Schumacher described “the good qualities of an earlier civilization”, that is, the old rural English society identified not so much with progressivism, or socialism, but the old Tory class order.

More recently, many advocates of slow, or no growth are finding inspiration in even less enlightened settings than old England. Some point to the small Himalayan kingdom of  Bhutan, the site of a 2014 pilgrimage by Oregon Gov. John Kitzhaber . This  “happiness”  poster child makes an odd exemplar for the 21st century. In contrast to the praise heaped on the tiny nation by Kitzhaber, one Asian development expert recently described the country  as ”still mired by extreme poverty, chronic unemployment and economic stupor that paints a glaring irony of the ‘happiness’  the government wants to portray.” In this “happiest place on earth” one in four lives in poverty, nearly forty percent of the population is illiterate and the infant mortality rate is five times higher than in the United States. It also has a nasty civil rights record of expelling its Nepalese minority of the country.  

Bhutan, of course, is a pastoral country, but some urbanists also increasingly apply their “happiness” ideal to cities, particularly poorer ones. Canadian academic Charles Montgomery, for example, celebrates  what he sees as  high levels of happiness in the city slums of developing countries. Montgomery points to impoverished Bogota, for example,  as “a happy city” that shows the way to urban development. If we can’t do a Bhutanese village, maybe we  can be compelled to evacuate suburbia for the pleasures of life in some thing that more reflects life in a crowded favela.  

Although this emphasis on happiness certainly has its virtues, and should be a consideration in how a society grows, lack of economic growth, and low levels of affluence, seems an unlikely way to make  people more content. Recent research, in fact, finds that, for the most part, wealthier countries are not only richer but happier than those assaulted by poverty. Indeed the happiest countries are not impoverished at all, according to the Earth Institute, but highly affluent countries led by Denmark, Norway, Switzerland, the Netherlands and Sweden; the lowest ranked countries were all very low-income countries in Africa.

The argument against growth  has  gained currency with the rise of environmentalism, long focused, often with justification, on the negative impacts of economic expansion. This has engendered an understandable search for an alternative standard to measure societal well-being. Climate change campaigners such as The Guardian’s George Monbiot  than “a battle to redefine humanity” , essentially ending the era of “expanders” with that of “restrainers.” Some economists, particularly in Europe, have embraced the  notion of what they call “de-growth,” that is a planned, ratcheting down of mass material prosperity. 

Winners and Losers in the ‘Happiness’ Game

In any conflict over the preferred shape of society, there are winners and losers. The shift from a focus on growth to one on what is fashioned as sustainability has proven a boon both for the public sector, particularly those working in regulatory agencies and politicians who now have new ways to elicit contributors, and those parts of the private sector that work most closely with government. Other beneficiaries include connected investors, including many who benefit from “green” energy subsidies that, particularly when measured by their production of energy, are considerably higher than those secured over the past century by oil and gas interests.

The downsizing of growth, naturally, also appeals to many who already enjoy wealth, such as Ted Turner, who then promote anti-growth policies through their foundations, and, as a bonus,  get to feel very good about themselves. Other winners include the media Clerisy, notably in Hollywood–who propagandize such views while living in unimaginable luxury—as well as academics. The successful and well-compensated producer and director James Cameron complains about “ too many people making money out of the system” and warns that growth must stop to save the planet.

So who loses in the new anti-growth regime? Certainly these include large parts of the working class—farmworkers, lumberjacks, factory operatives, oil field workers and their families—who work in extractive industries most subject to regulatory constraints and higher energy prices. Particularly hard hit may well be young families who, perhaps forsaking the “slacker” life, now find their aspirations of a house and decent job blocked by the generally older, and better off, advocates for “happiness.”

Wall Street and “Progressives” find Common Ground

The rise neo-Feudalism, and the decline of the yeomanry is best understood as the consolidation of ownership in ever fewer hands. This process has been greeted with enthusiasm by financial hegemons, who have stepped in with billions to buy foreclosed homes and then rent them; in some states this has accounted for upwards of twenty percent of all new house purchases. Having undermined the housing market with their “innovations,” notably backing subprime and zero down loans, they now look to profit from the middle orders’ decline by getting them to pay the investment classes’ mortgages through rents.

In the wake of the housing bust, and the longer than expected weak economy following the Great Recession, many financial analysts have insisted that we were headed towards a “rentership society” as homeownership rates plunged from historic highs in the three years following the crash. Part of this shift has been exacerbated by the movement of large investment groups like Blackstone to buy up single family houses for rent, representing a kind of neo-feudalist landscape, where landlords replace owner occupiers, perhaps for the long-run.

The impact of the investor move into housing has had a negative effect on middle and working class potential buyers who find themselves frequently outbid by large equity firms.” There is the possibility that Wall Street and the banks and the affluent 1 percent stand to gain the most from this,” said Jack McCabe, a real estate consultant based in Deerfield Beach, Fla. “Meanwhile, lower-income Americans will lose their opportunity for the American Dream of building wealth through owning a home.”

But, however convenient these developments may prove to investors on Wall Street, for society and the future of the democracy, the concentration of ownership in fewer hands is highly problematical. Rather than the yeoman with his own place, and the social commitment that comes with it, we could be creating a vast, non-property owning lower class permanently forced to tip its hat—and empty its wallet—for the benefit of his economic betters.

One would expect that this diminution of the middle class would offend those on the left, which historically supported both the expansion of ownership and the creation of a better life for the middle class. Yet some progressives, going back to the period before the Second World War, have disliked the very idea of dispersed ownership; many intellectuals, notes Christopher Lasch, found  a society of “small proprietors” and owners “narrow, provincial and reactionary.”

Increasingly, the media and many urbanists, who see a new generation of permanent renters as part of their dream of a denser America, also embrace this vision as being more environmentally benign than traditional suburban sprawl.

The very idea of homeownership is widely ridiculed in the media as a bad investment and many journalists, both left and right, deride the investment in homes as misplaced, and suggest people invest their resources on Wall Street, which, of course, would be of great benefit to the plutocracy. One New York Times writer even suggested that people should buy housing like food, largely ignoring the societal benefits associated with homeownership on children and the stability communities.  Traditional American notion of independence, permanency and identity with neighborhood are given short shrift in this approach.

This odd alliance between the Clerisy and Wall Street works directly against the interest of the middle and aspiring working class. After all, the house is the primary asset of the middle orders, who have far less in terms of stocks and other financial assets than the highly affluent. Having deemed high-density housing and renting superior, the confluence of Clerical ideals and Wall Street money has the effect on creating an ever greater, and perhaps long-lasting, gap between the investor class and the yeomanry.

This piece originally appeared at The Daily Beast.

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available for pre-order at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Why Do We Care About Transportation Mode Share?

Fri, 08/08/2014 - 22:38

The New York Times ran an op-ed piece that helpfully demonstrated the pitfalls of lifestyle arguments in favor of urbanism, namely that they are annoying to everyone but the people making the argument.

The boys, like their father, are lean, strong and healthy. Their parents chose to live in New York, where their legs and public transit enable them to go from place to place efficiently, at low cost and with little stress (usually). They own a car but use it almost exclusively for vacations.

“Green” commuting is a priority in my family. I use a bicycle for most shopping and errands in the neighborhood, and I just bought my grandsons new bicycles for their trips to and from soccer games, accompanied by their cycling father.

These arguments – whether they’re about physical health, or “diverse” or “vibrant” or “creative” communities, or whatever else – are, at bottom, about telling people that they are lacking, and that in order to improve themselves they should become more like the author. In the 1970s, when city dwellers felt superior mainly because of their supposed cultural capital and were telling middle-class suburbanites to loosen up a little, that might have been obnoxious but harmless. In our current situation – when the city dwellers making these arguments are the economic elite (the author of this particular piece, Jane Brody, lives in gentrified brownstone Brooklyn, I believe) – it’s a lot more sinister. Brody talks about commutes as if their length and form were something that most people could freely choose, rather than something imposed upon them by their wages and the price of housing and form of development of their metropolitan area. She makes this a story about personal morality, rather than the constraints we choose to put on people through public policy.

This is related, I think, to the study about mode share in U.S. cities that got passed around the urbanist blogosphere recently. In virtually every instance, the study was presented like a sports power ranking, with the winning cities being those with the least travel by car (“city of Chicago ranks sixth among large U.S. cities for percentage of people either biking, walking, or riding transit,” is a typical formulation of the lede).

But why, exactly, do we care about mode share? The pettiest possible answer is that we doconceive of cars v. transit/biking as a sort of culture war, just like many committed drivers have alleged, and what percentage of people choose to drive or do something else is how we measure whether or not we are winning. This, clearly, is not a particularly edifying possibility. A better answer might be that we really do want everyone else to be more like us – to reap the benefits of non-car commuting, from being healthier (although, contra Brody, I spent my subway commute today scarfing down a pound of spaghetti) to polluting less – and this tells us how many people are enjoying those perks.

That’s much more reasonable, but still problematic in that, like the Times piece, it strongly implies that the issue is individual choice, rather than the circumstances that constrain that choice. The people who write for places like Streetsblog know that circumstances matter, but for the casual reader, articles about mode share makes those issues a sort of specialists’ background.

That’s too bad, because mode share does convey some important information about constraints. If we assume that, allowing for some cultural margin of error, most people will choose to get to work via whatever method they find most efficient and comfortable, then we can determine roughly what percentage of people in any given city have decent access to transit – access that’s at least in the same ballpark of convenience as driving – just by looking at what percentage of people actually use it. Obviously there are complications to this: since one major inconvenience of driving is cost, cities with high poverty rates may have mode shares that exaggerate their transit’s effectiveness, for example. And since transportation choice is basically zero-sum on an individual basis – that is, all that matters is the relative efficiency of each mode – you could get a lot of people on transit by making driving truly hellish, without providing decent service. (Although in the American context, I think there are vanishingly few places where that would be an issue.)

Moreover, if we care about mode share as a proxy for service effectiveness, then beyond a certain point – say, a quarter, a third, whatever, of commuters – you’re kind of done. It doesn’t really matter. If New York City, with one of the most comprehensive transit systems in the world, can only get 50% of its commuters on buses and trains, then surely most of the distinction between it and, say, Asian cities with much higher transit mode shares isn’t the quality of their systems (although they may be of higher quality), but the increased misery of driving in ever-denser places. The issue stops being whether we can get from 40% to 45%, but whether subregions of the metropolitan area have strongly varying mode shares, suggesting that you can only get decent access to transit if you live in the right place. And, of course, that is in fact the case.

But if what really matters is service levels and access – if what we’re trying to accomplish is giving everyone a level of service where transit is a viable option, for reasons outlined here– then why not just measure that directly? Why not have widely-disseminated statistics about the percentage of people in every metropolitan region who can walk to a transit stop? Or make a bigger deal about the number of people who can reach some given percentage of metro area jobs via transit in a reasonable time frame? I almost never see those numbers in urbanist conversations, and to the extent that I do, they’re sort of ghettoized into the “social justice” urbanist subculture.

But these seem like relevant numbers for “mainstream” urbanists, too. In fact, they seem a lot better than mode share. Generalized public arguments in favor of transit projects are more likely to benefit from language that suggests they’ll provide options, rather than language that suggests the ultimate goal of the policy is to force people out of their cars. Because, in fact, that’s what public policy should be about: making transportation easier for more people, rather than moralizing about the perfectly legitimate choices that people make, given their circumstances.

This post originally appeared in City Notes on November 11, 2013. Daniel Hertz is a masters student at the Harris School of Public Policy at the University of Chicago.

Image from BigStockPhoto.com: A metro bus in Madison, Wisconsin.

UN Projects 2030 US Urban Area Populations

Thu, 08/07/2014 - 14:17

The United Nations periodically publishes World Urbanization Prospects. One of the highlights is both historic and projected detailed population information for individual cities around the world. The publication provides perhaps the best summary of US urban area population trends since 1950 and also projects their population through 2030. The UN provides data for the 135 urban areas with an estimated population of at least 300,000 residents in 2014. Urban areas are the city in its physical form – the built up area (as opposed to cities in their functional or economic form, the metropolitan area, which includes economically connected territory outside the built up area, from the urban core to the suburbs to the periphery bordering farms and other rural land).

US Urban Areas Since 1950

The United States has undergone an urban population revolution since 1950, the first year that urban areas were designated by the US Census Bureau. In 1950, two-thirds of the population of the urban areas in the UN list was located in the urban areas of the Northeast and the Midwest (including Washington & Baltimore). By 1990, the share had dropped to one half. The UN expects this trend to continue, projecting only 40 percent of the urbanized population to be in the Northeast and the Midwest by 2030 (Figure 1).

Not unexpectedly, this new urban landscape has produced substantial shifts in the rankings of urban areas. The top three cities remain the same, New York, Los Angeles and Chicago; Los Angeles overtook Chicago between 1950 and 1960. This was a stunning achievement, because during the 1950s, Chicago also was experiencing strong growth, adding approximately 1.2 million residents. This is approximately four times the 300,000 added in between 2000 and 2010. Los Angeles passed Chicago by adding 2.5 million residents, the largest 10 year increase of any city since 1950. Los Angeles continued to add more than one million residents per decade through 2000, but has since fallen into the sluggish growth pattern more identified with the Northeast and Midwest, adding less than 400,000 residents between 2000 and 2010.

From today's perspective, it may be surprising that New York grew strongly after 1950, adding 1.8 million residents in the 1950s and 2.0 million in the 1960s. After that, however, the population began declining and did not recover until the 1990s. Like Chicago and Los Angeles, despite the clear improvement in many areas, population growth was small in the last decade, at 550,000.

There has been little stability in the rankings of the rest of the top 10, with only two 1950s entries remaining. Philadelphia, which was ranked 4th in 1950 is now fifth. Boston was ranked 6th, but has fallen to 10th. Detroit was 5th ranked in 1950, and was 12th in 2010. San Francisco has fallen from 7th to 13th. The largest losses in ranking were Pittsburgh which fell 8th to 26th, St. Louis which dropped from 9th to 20th and Cleveland, which fell from 10th to 24th. 

New entrants Miami, Dallas-Fort Worth, Houston, Washington and Atlanta have replaced these cities in the top 10.

The Largest Cities in 2030

The UN's population projections to 2030 indicate modest rankings changes from the present. The top 10 would remain the same, except that Boston would be replaced by Phoenix. As a result, only four of 1950s top ten remain in 2030 – New York, Los Angeles, Chicago and Philadelphia (Figure 2). The rise of Phoenix is particularly impressive. In 1950, Phoenix had a population little more than 200,000. By 2030, it is projected to have 4.8 million residents.

Houston is expected to rise from the 7th largest urban area in 2010 to 4th largest in 2030. Houston would thus pass Miami, Philadelphia and in-state rival Dallas-Fort Worth. Miami and Philadelphia would each fall two positions.

By 2030, there would be 53 urban areas with more than 1,000,000 population, up from 41 in 2010. By comparison, there were only 12 cities with more than 1,000,000 residents in 1950. Seven of the new 1,000,000 cities  are located in major metropolitan areas as of 2010. New Orleans would be restored to the over 1,000,000 list, after having been knocked out by the 2005 Hurricane Katrina and Rita events. Buffalo, however, which is the only other urban area to have fallen below 1,000,000 population (in the 1980s), will not be restored to that level, according to the UN. In addition, Bridgeport, Tucson, Albuquerque, El Paso and McAllen would reach the 1,000,000 level by 2030. The addition of El Paso and McAllen would tie Texas with California, with each having six urban areas with more than 1,000,000 population.

Greater Growth in Smaller Cities

The UN anticipates that US growth will be less concentrated in the largest urban areas between 2010 and 2030. Overall, the population of New York, Los Angeles and Chicago is expected to grow less than 9 percent, less than one half their 19 percent 2010 overall share of the urban population reported by the UN. The other cities over 5 million and those between 2.5 million and 5 million would grow slightly less than their overall share of the population, as is indicated in Figure 3

The smaller population categories would grow faster than their population share. The cities with 1,000,000 to 2.5 million population would grow nearly 15 percent faster than their proportion of the population. Those with from 500,000 to 1,000,000 would grow nearly 20 percent more than their proportion of the population. The cities will fewer than 500,000 residents would capture nearly 50 percent more of their growth than their current population proportion.

Fastest Growing Cities

Only four of today's 50 largest cities would be among the 20 fastest growing from 2010 to 2030. Charlotte and Raleigh would rank 6th and 7th respectively, both growing approximately 72 percent. Austin would rank 11th, growing 59 percent and Las Vegas, at 14th, would grow 51 percent.

The largest percentage growth would be in smaller urban areas, especially in areas near much larger urban areas. The Woodlands would grow 170 percent, nearly five times that the rate of adjacent Houston, which would itself be the fastest growing urban area of more than 2,000,000 population (35 percent). Murrieta-Temecula and Victorville would grow 100 percent and 75 percent respectively, dwarfing the 36 percent of nearby Riverside San Bernardino. Kissimmee would double adjacent Orlando's growth rate, at 78 percent. Provo is expected to grow 69 percent, nearly three times the growth rate of nearby Salt Lake City. Santa Clarita and Lancaster would grow 64 percent and 55 percent respectively, much faster than their much larger neighbor, Los Angeles, at 9 percent.

South Florida cities Cape Coral (80 percent), Bonita Springs-Naples (52 percent) and Port St. Lucie (51 percent) by would grow at three to five times giant Miami.

The same pattern holds even in the Northeast Corridor. Poughkeepsie, at 32 percent, would grow nearly four times the rate of nearby New York, while Worcester would more than double the growth of Boston.

Fayetteville, Arkansas, an urban area that includes Bentonville, with the Wal-Mart headquarters, is the only urban area that is far from larger urban areas and projected to be among the fastest growing (80 percent). Fayetteville is more than 200 miles from both Kansas City and Oklahoma City.         

Continuing Dispersal

Of course, projections are no more than educated guesses. The emerging reality could be similar or radically different than the projections, as is always the case. Nonetheless, from the present vantage point, UN projections show continuing dispersal, as greater growth occurs in smaller urban areas, and continues to move outside the Northeast and Midwest.

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

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Note on additional resources: The United States Conference of Mayors has published metropolitan area projections to 2042. Demographia World Urban Areasprovides urban land area and density estimates for all indentified urban areas of 500,000 population or more, with population data provided by the United Nations, national census authorities and other sources.

Photo by Mike Lee

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