The Fight For Our Future Belongs to the ‘Burbs

This piece first appeared on The Daily Beast.

Look away from President Trump and it’s easier to see how three long-term demographic and geographic trends are reshaping American politics. Read more

The Cities Creating The Most White-Collar Jobs, 2018

by Joel Kotkin and Dr. Michael Shires

Professional and business services have long been identified with the downtowns of cities like New York, Chicago and San Francisco, where lawyers, accountants and architects are thick on the ground. However, in recent years there’s been a clear shift in the geography of this vital sector, with some of the strongest job generation emerging far from the high-rise canyons. Read more

Where U.S. Manufacturing is Thriving, 2018

by Joel Kotkin and Dr. Michael Shires

The ‘80s futurist John Naisbitt once called manufacturing a “a declining sport,” and to be sure the share of Americans working in factories has fallen far from the 1950 peak of 30% to roughly 8.5% last year.

Yet, manufacturing’s contributions to the economy are far out of proportion to its shrinking share of employment. Read more

Growth in America is Tilting Toward Smaller Cities

Excerpted from an article that first appeared at Forbes.com

We are often told that America’s future lies in our big cities. That may no longer be entirely true. Some of the strongest job creation and population growth is now occurring in cities of 1 million people or less. Read more

Finance Flies West, and South

This article first appeared at City Journal.

The recently announced departure of New York City-based Alliance Bernstein for Nashville, taking more than 1,000 jobs with it, suggests a potential loosening of New York’s iron grip on the financial-services industry. Yet the move reflects a longer evolution that has seen financial firms leave not only New York but also other traditional centers—what one historian calls the “Yankee Empire”—that for two centuries dominated banking, insurance, and investment capital. Read more

Where Talent Wants to Live

Excerpted from an article that first appeared at Chief Executive.

With unemployment down and wages rising, there’s growing concern that a lengthy and potentially crippling talent shortage will sweep the U.S. Addressing this could become a critical issue for businesses competing with Asian and European firms facing similar and, in many ways, more severe shortages.

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The Midwest is Booming – Just Not Where You Think

This piece originally appeared at The Daily Beast.

The Midwest is booming, but not where you might think. Kansas City, Minneapolis, Indianapolis, Columbus, Grand Rapids, and Des Moines are the fastest-growing cities in the Midwest—lapping bigger hubs like Detroit, Cleveland, Buffalo, Pittsburgh, St. Louis, and even Chicago that are still suffering from stagnant economies and slow or even negative population growth. Read more

Suburbs Could End Up On The Cutting Edge of Urban Change

This article first appeared at The Orange County Register.

Over the past decade, the old urban model, long favored by most media and academia, became the harbinger of the new city. We were going back to the 19th century, with rising dense urban cores, greater densities and thriving transit systems.

That paradigm now lives on in myth and media, but not so much in reality. As the census data this year, and indeed since at least 2012, suggests, Americans continue to do what they have done for at least a half century – spread out, innovate and, in the process, re-create the urban form.

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What the Census Numbers Tell Us

Population growth in New York, L.A., and other big coastal centers lags that of more affordable midsize metros, where Americans are moving.

The most recent Census population estimates revealed something that the mainstream media would prefer to ignore—the slowing population growth of big cities, including New York. The New York Times, for example, trumpeted Gotham’s historically high population yet failed to mention that the city’s growth is not only dramatically slowing but also, in the case of Brooklyn, declining for the first time since 2006. New York’s rate of growth, impressive earlier in this decade, now ranks among the nation’s lowest, mostly because of rising domestic out-migration. In 2017, nearly three times as many domestic migrants left the city as in 2011. This may be one reason why rents, which have soared for a decade, have begun to flatten, though they remain at a level many potential newcomers may still find difficult to afford. <!– more –>

New York’s population slowdown is hardly unique. Many of the largest U.S. metropolitan areas have seen domestic out-migration surge over the last few years. The highest-percentage declines were found in Los Angeles, Chicago, New York and, remarkably, tech-heavy San Jose, which ranked worst among 53 metropolitan areas with populations above 1 million. Last year, the San Francisco Bay Area’s seven metros experienced out-migration more than ten times higher than the annual average since 2010. This includes the “boomtown” San Francisco metropolitan area, which attracted domestic migrants from 2010 through 2015 but saw strong net out-migration last year. At 0.60 percent, San Francisco’s 2017 population growth was half its post-2010 average. In 2017, population growth in Los Angeles was among the lowest in the nation, and at 0.19 percent, down two-thirds from its annual average since 2010.

The trend of people moving to metros with the densest urban cores—a mainstay of media coverage—is clearly over. The nation’s two megacities, New York and L.A., are shedding domestic migrants far faster than smaller metropolitan areas. Over the last year, the two coastal giants have lost domestic migrants at a rate of 0.95 percent—five times faster than metropolitan areas between 5 million and 10 million residents. Meanwhile, metropolitan areas with between 2.5 million and 5 million residents added domestic migrants at 0.14 percent, while those with 1 million to 2.5 million people grew through domestic migration at a rate of 0.33 percent. The major surprise was in the often-overlooked medium-size metropolitan areas—those with between 500,000 and 1 million people. These metros gained 105,000 net domestic migrants, far outpacing the negative 165,000 net domestic migrants for those with populations greater than 1 million.

Last year’s growth leaders among the large metros were located heavily in the dispersed metros of the Sun Belt and intermountain West—Austin, Las Vegas, Dallas–Ft. Worth, San Antonio, Raleigh, Charlotte, Tampa–St. Petersburg, Orlando, and Jacksonville. Among metros with more than 500,000 people, Seattle is the only one in the Top 25 located on either the West Coast or the Northeast—and it comes in at number 25.

Perhaps even more surprising has been the resurgence of some, though certainly not all, Midwestern metros. It may be hard for big-city elites to believe, but Des Moines, Columbus, and Indianapolis, and others are now growing much faster than New York, Los Angeles, or Chicago. One big reason: in terms of domestic migration, these areas are gaining far more new residents than are the biggest metros.

Along with the shift to medium-size metros, the Census estimate confirms a trend that, in some circles, is hard to accept: people are moving “back to the suburbs.” In 2017, the core counties lost nearly 440,000 net domestic migrants, while the suburban counties gained more than 250,000. This trend is true even in New York, where the city dominates the local economy and offers urban amenities that easily outshine those of typical urban cores. The day before the new population estimates were released, the New York Times wrote eagerly about the decline of New York’s suburbs and exurbs. But, if the editors had waited for the 2017 data, they would have stumbled on another, less-welcome statistic: in terms of domestic migration, New York’s suburbs gained five people for each one who moved to Gotham over the last year. This is a far cry from earlier in the decade, when the city routinely added more population than the suburbs.

This trend is, if anything, more pronounced in other large metros. In Los Angeles, the core-county growth rate was a thin 0.13 percent, well below the national average of 0.72 percent. By contrast, much faster growth took place in Riverside-San Bernardino, part of the Inland Empire—though much disdained for its “sprawl,” its postwar suburban development has been slightly denser than that of New York—which grew at 0.47 percent. This is especially remarkable considering California’s draconian, and profoundly anti-suburban, planning regime.

The reasons for this shift in migration patterns are varied. One likely factor is the aging of the millennial generation. As members of this large cohort enter their thirties and look to buy houses and raise families, they seek out suburbs and more affordable metropolitan areas. Many of the metros with the fastest growth are those where buying a home remains feasible for middle- and even working-class families.

Entering their retirement years, the baby boomers are also having an effect. Among areas with more than 500,000 people, Florida accounted for six of the top ten metros for domestic migration last year. Metros like Las Vegas and Boise—hotspots for retirees from California—also make the short list.

The Trump administration’s economic policies appear to benefit many Southern, Midwestern, and intermountain West metros, and may be driving population growth in those areas. Energy and manufacturing jobs are important in these areas, and policies on trade, oil, and gas development make a significant difference. Though the Bay Area and New York economies remain relatively strong, they no longer pace the nation. The Top Ten job-growth leaders in 2017 came primarily from Sun Belt metros, led by Riverside-San Bernardino, Austin, Nashville, Orlando, and Jacksonville. Other large metro economies, notably Los Angeles and Chicago, lag far behind.

These developments, though disturbing to big-city boosters, are largely positive. It’s doubtful that most residents of the Bay Area, Los Angeles, or New York want to see the continuation of breakneck population growth, with its attendant consequences of higher housing prices and rents, increased congestion, and strains on public services. Growth in Midwestern and Southern metros represents a welcome shift away from concentration, and it is sparking not only suburban expansion but also, in places like Columbus and Indianapolis, lively development of the urban core.

The new Census estimates could represent both a return to the patterns of the previous decade and the suggestion of a healthier diffusion of urban growth. One of America’s great strengths, noted Alexis de Tocqueville, lies in the vitality of its many urban centers, which allows “intelligence and power” to be “dispersed abroad.” A country dominated by a handful of expensive coastal cities might be appealing to academics, the mainstream media, and some real estate interests, but for a great continental nation, a wider distribution of growth seems far more beneficial—for the emerging metros, the overheated coastal megacities, and the people who live in them.

Landless Americans Are the New Serf Class

While home ownership remains the dream of most Americans, fewer and fewer people here can afford to own one.

For the better part of the past century, the American dream was defined, in large part, by that “universal aspiration” to own a home. As housing prices continue to outstrip household income, that’s changing as more and more younger Americans are ending up landless, and not by choice.

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