Autonomous Cars Are About to Transform the Suburbs

This excerpt is from an article that first appeared at Forbes.com

Suburbs have largely been dismissed by environmentalists and urban planners as bad for the planet, a form that needed to be eliminated to make way for a bright urban future. Yet, after a few years of demographic stultification amid the Great Recession, Americans are again heading to the suburbs in large numbers, particularly millennials. Read more

From Disruption to Dystopia: Silicon Valley Envisions the City of the Future

This article first appeared at The Daily Beast.

The tech oligarchs who already dominate our culture and commerce, manipulate our moods, and shape the behaviors of our children while accumulating capital at a rate unprecedented in at least a century want to fashion our urban future in a way that dramatically extends the reach of the surveillance state already evident in airports and on our phones. Read more

Trump’s Infrastructure Plan is a Rare, and Potentially Bipartisan, Feel Good Moment

This article first appeared at The Orange County Register

President Trump’s proposed trillion dollar plus infrastructure program represents a rare, and potentially united feel good moment. Yet before we jump into a massive re-do of our transportation, water and electrical systems, it’s critical to make sure we get some decent bang for the federal buck. Read more

The Screwed Millennial Generation Gets Smart

This article first appeared at The Daily Beast.

It turns out that kids today want the same thing their parents did—a home of their own that they can afford to raise a family in.

It’s been seven years since I wrote about “the screwed generation.” The story told has since become familiar: Millennials, then largely in their twenties, faced a future of limited economic opportunity, lower incomes, and too few permanent, high-paying jobs; of soaring college debt and structural insecurity (PDF). The Census Bureau estimates that, even when working full-time, they earn $2000 less than the same age group made in 1980 (PDF). More than 20 percent of people 18 to 34 live in poverty, up from 14 percent in 1980 (PDF).

Incredibly, many pundits applauded these conditions and credited millennials, forced by economic circumstances into difficult choices, for fulfilling the old boomer dreams that the boomers themselves had long since abandoned of a less materialistic, greener future in dense and heavily planned urban environments.

The environmental magazine Grist envisioned “a hero generation” that will escape the material trap of suburban living and work that engulfed their parents. “We know the financial odds are stacked against us, and instead of trying to beat them, we’d rather give the finger to the whole rigged system,” the millennial author concludes. An editor at the same magazine declared herself a part of the GINK generation (as in “green inclinations, no kids”) that she said meant not only a relatively care-free and low-cost adult life, but also “a lot of green good that comes from bringing fewer beings onto a polluted and crowded planet.”

It has been often asserted that millennials (defined as the generation born between 1982 and 2002) do not want to buy homes or live in suburbia; Fast Company, saw this as “an evolution of consciousness.” The Guardian declares that millennials are refusing to accept “the economic status quo” while Wall Street looked forward to profiting from the idea that millennials will be satisfied to live within a “rentership society” (PDF).

But millennials, as noted in a new paper from Anne Snyder and Alicia Kurimska, aren’t embracing downward mobility but rather are increasingly creating their own aspirational strategies (PDF). Some are doing this consciously by ignoring the wise planners and establishing homes for themselves in suburban and Sun Belt locales once considered insufficiently hip.

Despite the hype from the press and urban planners, millennials are following in the footsteps of previous generations by locating on the periphery major metropolitan areas and Sun Belt cities, most of which are simply agglomerations of suburbs.

This pattern seems certain to accelerate as millennials enter their thirties, the age when contemporary populations tend to marry, settle down, and have children. To be sure, notes Pew, more 18- to 34-year-olds now live with their parents than with spouses or significant others for the first time since the question was first asked in the 1880s. But when they do leave the nest, albeit later than in previous generations, they are becoming adults whose collective decisions are not so different from those of their parents.

Their searches for homeownership and procreation reflect this trend. It turns out that millennials did not reject homeownership because of their enhanced social consciousness, but because of high prices and low incomes. In survey after survey, the clear majority of millennials—roughly 80 percent, including the vast majority of renters—express interest in acquiring a home of their own. A Fannie Mae survey of people under 40 found that the vast majority thought owning made more financial sense, a sentiment shared by an even larger share of owners (PDF). They cited such things as asset appreciation, control over the living environment, and a hedge against rent increases.

“Homes and families will change many millennials, much as they changed previous generations.”

As generational researchers Morley Winograd and Mike Hais have long pointed out, millennial attitudes about family and their preferred future remained fundamentally mammalian and surprisingly conventional, albeit with a greater emphasis on gender equality. The vast majority of millennials, according to Gallup and others, want to get married and have children. Their top priority, according to Pew, is to be “good parents.”

The average millennial is now in their late twenties, and will be well into their thirties by the end of the decade. Already, 16 million millennials have had children, up from barely 6 million a decade ago, a number that is likely to soar in coming years, particularly if this group continues the recent trend of more women, and especially better educated ones, having children in their forties.

Despite endless talk about millennials as the group triggering a “back to the city” movement, census data shows that their populations in many core cities are stagnating or declining. In April 2016, the real estate website Trulia found that millennials were rushing out of expensive cities, with the group making up roughly a quarter of the population in New York and Washington, D.C., but accounting for half of all departures from them.

Its report concludes: “To summarize, those who earn very little income, those who work in unstable, less urban-based, and low-paying industries, and younger generation households that have not yet established a stable career have moved away from these pricey cities at much greater rates than the rest of the population.”

Between 2013 and 2014, only 2,662 people between the ages of 25 and 34 migrated to D.C., according to census data, roughly a quarter of the 10,430 people in that age bracket who arrived between 2010 and 2011.

Since 2010, the 20 to 29 populations have declined in the core areas of much celebrated youth magnets including Chicago (-0.6 percent) and Portland (-2.5 percent). Other areas, like Los Angeles and Boston, have lost millennials since 2015.

“In New York, incomes for young adults have dropped since 2000, even as rents have shot up by 75%.”

Costs appear to be key here. According to Zillow, for workers between the ages of 22 and 34, rent costs claim upwards of 45 percent of income in Los Angeles, San Francisco, New York, and Miami, compared to closer to 30 percent of income in metropolitan areas like Dallas-Fort Worth and Houston. The costs of purchasing a house are even more lopsided. In Los Angeles and the Bay Area, a monthly mortgage takes, on average, close to 40 percent of income, compared to 15 percent nationally. In many cities millennials seem destined to live as renters, without gaining any equity in property. In San Francisco, 18- to 24-year-olds now make up one of the fastest-growing homeless populations.

A recent survey by the UCLA Luskin School suggests that 18- to 29-year-olds were the age group least satisfied with life in Los Angeles (PDF), perhaps something reflected in the overbuilt and increasingly vacant downtown market. Similarly a recent USC study found that high prices made attracting talent increasingly difficult. In the Bay Area, according to ULI, 74 percent of millennials are considering an exit, largely due to high housing prices.

In New York, incomes for people aged 18 to 29 have dropped in real terms since 2000, despite considerably higher education levels among millennials (PDF). At the same time, rents have shot up by 75 percent.

Meanwhile, the much mocked suburbs have continued to dominate population trends, including among millennials. As people age, they tend, economist Jed Kolko notes, to move out of core cities to suburban locations. Although younger millennials have tended toward core cities more than previous generations had, the website FiveThirtyEight notes that as they age they actually move to suburban locations at a still higher clip than those their age have in the past. We have already passed, in the words of USC demographer Dowell Myers, “peak millennial,” and are seeing the birth of a new suburban wave (PDF).

To some extent, the meme about millennials and cities never quite fit reality outside of that observed by journalists in media centers like New York, D.C., and San Francisco. More than 80 percent of 25- to 34-year-olds in major metropolitan areas already live in suburbs and exurbs, according to the latest data—a share that is little changed from 2010 or 2000.

Suburban tastes remain predominant with 4 in 5 people under 45 preferring the single-family detached houses most often in suburban locales (PDF). Surveys such as those from the Conference Board and Neilson consistently find that most millennials see suburbs as the ideal place to live in the long run (PDF). According to a recent National Homebuilders Association report, more than 2 in 3 millennials, including most of those living in cities, would prefer a house in the suburbs.

“As millennials grow up, they are moving to the ’burbs at an even faster pace than previous generations did at the same age.”

In the process, note authors Snyder and Kurimska, their generation is also changing suburbia. “These transplants value high social cohesion and want neighborhoods with walking trails and other community features like fitness centers, local shops and manmade lakes,” they observe. They may also initially at least choose smaller homes, according to Zillow, and often in places closer to work and with more things close by to do. The good news for them: The majority of new jobs continue to be created in suburbs, along with most theaters, ethnic restaurants, and music venues.

At the same time, millennials are shifting to different regions. Much of this has to do with housing costs. The income required to buy a home in Silicon Valley ($216,000), San Francisco ($171,000), Los Angeles ($115,000), or New York City ($100,000) dwarfs what is required in places like Orlando ($54,000), San Antonio ($54,000), or Nashville ($47,000).

Not coincidentally, those more affordable places are growing their millennial populations far more quickly. The Millennial homeownership rates is 37 percent in Nashville, 29 percent in San Antonio and 27 percent in Orlando, compared to under 20 percent in New York, Los Angeles and San Francisco.

To be sure, some millennials are moving into downtowns in these places, at least for a few years, but many more remain in what Grist called “sprawling car dependent cities.” Among the 10 major metropolitan areas whose 25- to 34-year-old populations grew most rapidly between 2010 and 2016, seven have more than 95 percent of their population in suburban or exurban settings.

In fact, most of the places with the biggest growth among millennials are highly suburban, sprawling cities. The top 10 regions with the fastest growth in their 25- to 34-year-old populations since 2000 include nontraditional urban areas such as Austin, Orlando, San Antonio, San Bernardino-Riverside, Las Vegas, Houston, Oklahoma City, and Jacksonville. In contrast, Boston ranks 40th out of 53 metro regions, New York 44th, San Jose 47th, Los Angeles 48th, and Chicago 51st.

So perhaps there is hope, after all, of millennials as a “hero generation.” As more of them follow their parents’ path to homes of their own in the suburbs and the Sun Belt’s sprawling metros, they will surely be changed by their environment and they will surely change it. Parenting, as well as homeownership, tends to make people more conservative.

While the strongest population growth now takes place in what Jed Kolko calls “the suburbiest” suburbs, those on the outer fringes, even there millennials are drawn to locations with town centers—whether restored or created—and prefer things such as bike trails and parks over golf and malls. The millennial suburb, as MIT’s Alan Berger has noted, will be different—more walkable, more environmentally sustainable, and likely more connected eventually by autonomous technologies.

While millennials may push back against the efforts of progressives, evident in California particularly, to limit suburban development that thus closes off their housing options, they will also oppose the culturally conservative agendas that long dominated many suburbs. This will be particularly true in areas attracting young minorities, such as northern Virginia, Ft. Bend County, outside of Houston, and Orange County, California.

In this sense, the millennials may be our best hope for a more reasoned future. They are unlikely—particularly as they raise families—to embrace planners’ fantasies of a high-density future. What they can accomplish is to shift the debate about how we live toward a more reasoned, collaborative, tolerant but also family-friendly direction.

That alone would make them smarter than their parents.

Homepage photo credit: Financial Resource Center.

The Cities Where African Americans are Doing the Best Economically 2018

This article originally appeared at Forbes.

The 2007 housing crisis was particularly tough on African-Americans, as well as Hispanics, extinguishing much of their already miniscule wealth. Industrial layoffs, particularly in the Midwest, made things worse.

However the rising economic tide of the past few years has started to lift more boats. The African-American unemployment rate fell to 6.8% in December, the lowest level since the government started keeping tabs in 1972. Although that’s 3.1 percentage points worse than whites, the gap is the slimmest on record. A tightening labor market since 2015 has also driven up wages of black workers, many of whom are employed in manufacturing and other historically middle and lower-wage service industries.

There’s still much room for economic improvement for the nation’s black community — the income gap with whites remains considerably higher than it was in 2000, with the median black household earning 35.5% less — but as we pay homage to Martin Luther King this week, the record low unemployment rate is a cause for celebration.

President Trump has predictably taken credit for the good news, but kudos more likely should go to those states and metropolitan areas that have created the conditions for black progress.

The gains have not been evenly spread. To determine where African-Americans are faring the best economically, we evaluated America’s 53 largest metropolitan statistical areas based on three critical factors that we believe are indicators of middle-class success: the home ownership rate as of 2016; entrepreneurship, as measured by the self-employment rate in 2017; and 2016 median household income. In addition, we added a fourth category, demographic trends, measuring the change in the African-American population from 2010 to 2016 in these metro areas, to judge how the community is “voting with its feet.” Each factor was given equal weight.

The South Also Rises

One of the great ironies of our time is that the best opportunities for African-Americans now lie in the South, from which so many fled throughout much of the 20th century. In the past few decades, many good jobs have moved South and blacks, like many whites and Hispanics, have followed.

The South dominated the previous version of this ranking, developed through the Center for Opportunity Urbanism, three years ago, and still does. All of the top 10 metro areas are in the South, led in a tie for the No. 1 spot by Washington, DC-VA-MD-WV and Atlanta, which was our previous leader.

Washington, with its ample supply of well-paid federal jobs, is the metro area where blacks have the highest median household income in the nation: $69,246. Amid rising home prices, the black home ownership rate has dipped to 48.3% from 49.2%, but that’s still fourth highest among the largest metro areas.

Atlanta, with its historically black universities and strong middle class, has long been described as the black capital of America, and its thriving entertainment scene has given rise to claims that it’s become a cultural capital as well. Entrepreneurship is strong, with some 20% of the metro area’s black working population self-employed, the highest proportion in the nation, and though median black household income is quite a bit lower than in the D.C. area at $48,161, costs are lower too. In-migration has slowed since the financial crisis, but the black population is still up 14.7% since 2010.

Atlanta and Washington are followed in our ranking by Austin, Texas, Baltimore and Raleigh, N.C., with the rest of the top 20 rounded out exclusively by Southern cities, except for Boston in 19th place.

Two key determinants seem to be driving these rankings: homeownership and self-employment, traditional benchmarks of entering the middle class. All of the top 10 boast homeownership rates that match or well exceed the black national average of 41 percent. (It should be noted that the national average is a full third lower than the national average for all ethnicities.)

These patterns hold up as well for income. Black incomes have been rising most rapidly since 2010 in largely fast-growing Sun Belt locales, as analyst and Forbes contributor Pete Saunders has found, such as Nashville, Raleigh and Austin. It appears as if the fastest income gains are generally being made in the places where other ethnic groups are advancing as well. After Washington, the metro areas where blacks have the highest annual household incomes are San Jose ($65,400), the capital of Silicon Valley, and No. 4 Baltimore ($53,200), which like Washington has a huge federal employment base.

The New Great Migration

Perhaps the most persuasive indicator of African-American trends lies in population growth. During the period of the Great Migration out of the south in the early 20th century, an estimated 6 million blacks headed north and west to cities such as New York, Los Angeles, Chicago and St. Louis. But now the tide is reversing, with the African-American population dropping in the latter three over the past six years, as well as in San Francisco and cities with fading industrial cores like Pittsburgh, Cleveland, Detroit and Milwaukee.

In contrast the metro areas whose African-American populations have expanded the most since 2010 are the South and Sun Belt: Las Vegas, Dallas-Fort Worth, Austin, Phoenix.

In some cases it’s clear that blacks are leaving for better economic opportunities. In others, high housing prices may play a role: In Los Angeles and San Francisco the black homeownership rate is about 9 percentage points lower than the major metro average.

In San Francisco the black community seems headed toward irrelevance and extinction as tech workers have driven up home prices to unprecedented levels; the metropolitan area’s African-American population has dropped 6.3% from 2010.

The situation is particularly dire in California where strict land-use and housing regulations have been associated with increases in home prices relative to income of 3.5 times the rest of the nation since 1995. In coastal California, African-Americans face prices from more than two to nine times their annual incomes than non-Hispanic whites. African-American homeownership rates in California are down 17% in the Golden State compared to a decline of 11% for Hispanics and 6% for non-Hispanic whites. Asian homeownership rates have stayed the same.

Blacks, like many other Americans, are likely to continue to move, as Pete Saunders notes, to cities that are both high growth and relatively low cost. In these cities, housing and land use policies generally allow the market to function, resulting in lower home prices and greater housing choice. Business investment and job creation are also strongly backed. Blacks, like others, are moving to these places for opportunity.

In many cases this means a reversal of the Great Migration and a return trip to parts of the country now far more accommodating to black aspirations than those places which once provided the greatest opportunities.

Homepage photo credit: Ryan Quick via Flickr under CC 2.0 License

The Cities Where a Paycheck Stretches the Furthest 2017

This article first appeared at Forbes.

We often conflate high salaries with prosperity, but that can be deceptive. Someone who lives in New York or San Francisco might make more money than a counterpart in the same profession in Houston or Dallas-Fort Worth, but when the cost of living is factored in, their Southern colleagues may actually come out ahead.

At the Center for Opportunity Urbanism, we developed a Standard of Living Index to get a better sense of where workers are getting the most for their paychecks. We began with the Bureau of Economic Analysis regional price parities for the 107 metropolitan statistical areas with more than 500,000 residents, added the costs for purchasing the average house and weighted the index based on the national distribution of renting and owning (63 percent owning, 37 percent renting). Housing plays a disproportionate role in the difference in costs between the most and least expensive metro areas, as we will detail later.

The picture that emerges is one of a very varied set of regional economies, all seeking to boost pay and the standard of living faster than costs. Some do this well, while others are getting left behind.

The Top 10

As the world capital of technological innovation, the San Jose metropolitan area, which includes much of Silicon Valley, has by far the highest average salary — $116,000 — among the 107 largest metropolitan areas. That‘s more than twice the national average, and $31,000 more than the metro area with the second-highest average pay, Bridgeport-Stamford, Conn.

The cost of living in the San Jose area is also impressively high, nearly 60% above the national average, driven by outrageous real estate prices. Factoring that in, the average paycheck there is worth $67,485– much lower than nominal pay, but still high enough to rank first in the nation.

Three other tech-oriented metro areas rank in the top 10: Boston (seventh) and Seattle (ninth), where high salaries compensate for prohibitive costs, and Durham, N.C., in third place, where costs are slightly above average. In all three, the cost of living adjusted pay varies from around 10% to 18% above the national average.

Houston retains its second-place rank from last year, with a cost of living 9% above the national average, but with pay that’s nearly 20% above. The nominal average pay there of $64,000 pencils out to $58,400 when adjusted for cost of living.

Fourth place Atlanta has a cost of living 2% above the national average but with pay 14% above. The rest of the top 10 is rounded out by Detroit (eighth), Hartford (ninth) and Dallas-Ft. Worth (10th), which are not on the minds of most venture capitalists, but offer relatively higher salaries and reasonable costs that benefit residents.

The metro area where a paycheck buys the least: Honolulu, where the high costs of all the necessities shipped in from the mainland, not to mention high housing costs, erodes the value of the average $50,200 wage to $32,500.

California’s Conundrum

One thing that screams out to anyone looking at the numbers: the preponderance of California metro areas that inhabit the bottom rungs of the survey.

California’s recovery has been driven largely by the Bay Area, which includes San Francisco and San Jose.

Yet the rest of state, whose growth rate has now slowed to the national average after several years playing above par, is not keeping up as well. The clear culprit: housing costs so high that San Francisco’s wages are not nearly high enough to cover the costs. San Francisco, ranks 19th, second best among California metropolitan areas. It shares prohibitive costs that are almost as high as San Jose — some 50% above average — but with pay nearly $16,000 lower, barely 6% above the national average.

A remarkable five of the bottom 10 metro areas on our rankings are from the Golden State. These include both interior metropolitan areas — No. 101 Fresno and No. 104 San Bernardino-Riverside — that suffer from rising house prices and California’s draconian regulatory and tax regime but without the benefit of above average salaries. Other interior areas hurting include Modesto, ranked 91st, and Stockton,95th. Both have seen home prices rise as newcomers, fleeing the Bay Area’s insane costs, have settled in for long commutes but still working there. Indeed, Stockton has now been included in the Bay Area combined statistical area by the Office of Management and Budget.

Yet the coast is not in the clear either, as No. 102 Oxnard’s ranking suggests. But perhaps more surprising is the poor showing by No. 92 San Diego, which has a strong technology economy, and even worse the massive Los Angeles area, home to Hollywood, which ranks 100th, by far the worst among the 10 largest metropolitan areas on our list. The reason? An average salary that is barely above the national average but with a cost of living, driven by high housing prices that drops the value of the paycheck to 20% below the national average.

Full List: The Cities Where A Paycheck Stretches The Most And Least

What The Future Holds

The widening divergence in housing costs — an issue which has occupied much of the recent tax reform debate — is becoming an increasingly determinative factor in the evolution of metropolitan economies. The largest cost difference in goods and services other than rents among the 107 metropolitan areas is 35%. The spread from lowest to highest in rents is 255%. The biggest gap, however, is in the cost differences for purchasing the average-priced house – a whopping 624%, nearly 2.5 times the differences in rents. This drives the overall cost of living difference up to 124% between the least and most expensive metropolitan areas.

As we have seen some areas — notably San Jose, Boston and Seattle — have been able to cope with higher costs because industries there are able to offer relatively fat paychecks. But even these storied areas may face challenges as the cost gaps rise. Already growth has slowed, and even gone into reverse in the Bay Area, a downturn at least somewhat tied to bloated housing costs. A 2015 survey found some 74 percent of millennials in the area were contemplating leaving, largely due to high rents and home prices.

These issues will become larger as millennials begin to look to buy houses for their young families. We have calculated the difficulty of transitioning from renting to purchasing, by comparing annual average housing costs for renters to average housing costs for a newly purchased house. The gaps tend to be much wider in places like the Bay Area, Los Angeles and New York, than for example, in Chattanooga, Tampa-St. Petersburg, Indianapolis, Orlando, San Antonio, Atlanta or Birmingham.

Some people are moving in large numbers from the more expensive areas to areas where costs are lower.. The 10 most expensive metropolitan areas (including San Jose), where the cost of living is 25% or higher than average, exported 1.4 million domestic migrants to other parts of the country from 2010 to 2016. In contrast, the 77 metropolitan areas with costs of living below average attracted more than 2,000,000 net domestic migrants. This could also accelerate the flow of business investment to these places, as skilled labor becomes more constrained, or the demands for compensation more extreme, as people struggle to meet costs.

The Urban Revival is an Urban Myth, and the Suburbs are Surging

This article first appeared on The Daily Beast.

The past decade has seen a gusher of books arguing for and detailing the supposed ascendancy of dense urban cores, like the inimitable Edward Glaeser’s influential Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier, and about the ‘burbs as the slums of the future, abandoned by businesses and young people, like Leigh Gallagher’s The Death of Suburbia: Where the American Dream Is Moving.

But as we show in Infinite Suburbia, the new book we co-edited, the vast majority of American economic and demographic growth continues to take place there.
Read more

The Future of America’s Suburbs Looks Infinite

This article first appeared at The Orange County Register.

Just a decade ago, in the midst of the financial crisis, suburbia’s future seemed perilous, with experts claiming that many suburban tracks were about to become “the next slums.” The head of the Department of Housing and Urban Development proclaimed that “sprawl” was now doomed, and people were “headed back to the city.”

This story reflected strong revivals of many core cities, and deep-seated pain in many suburban markets. Yet today, less than a decade later, as we argue in the new book that we co-edited, “Infinite Suburbia,” the periphery remains the dominant, and fastest growing, part of the American landscape.

This is not just occurring in the United States. In many other countries, as NYU’s Solly Angel has pointed out, growth inevitably means “spreading out” toward the periphery, with lower densities, where housing is often cheaper, and, in many cases, families find a better option than those presented by even the most dynamic core cities.

Reality check: What the numbers say

Less than a decade since the housing crisis, notes demographer Wendell Cox, barely 1.3 percent of metropolitan regions live in the urban cores we associate with places like New York City, Boston, Washington or San Francisco.

Counting the inner ring communities built largely before 1950, the urban total rises to some 15 percent, leaving the vast majority of the population out in the periphery. More important still, the suburban areas have continued to grow faster than the more inner-city areas. Since 2010, the urban core has accounted for .8 percent of all population growth and the entire inner ring roughly 10 percent; all other growth has occurred in suburban and exurban areas.

Much of this has been driven by migration patterns. In 2016, core counties lost roughly over 300,000 net domestic migrants while outlying areas gained roughly 250,000. Increasingly, millennials seek out single-family homes; rather than the predicted glut of such homes, there’s a severe shortage. Geographer Ali Modarres notes that minorities, the primary drivers of American population growth in the new century, now live in suburbs. The immigrant-rich San Gabriel Valley, the Inland Empire, Orange County and their analogues elsewhere, Modarres suggests, now represents “the quintessential urban form” for the 21st century.

Read the entire piece at The Orange County Register.

Joel Kotkin is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He is executive director of NewGeography.com and lives in Orange County, CA.

Alan Berger is Professor of Landscape Architecture and Urban Design at Massachusetts Institute of Technology where he teaches courses open to the entire student body. He is founding director of P-REX lab, at MIT, a research lab focused on environmental problems caused by urbanization, including the design, remediation, and reuse of waste landscapes worldwide. He is also Co-Director of Norman B. Leventhal Center for Advanced Urbanism at MIT (LCAU).

Photo: Laurie Avocado, via Flickr, using CC License.

Is There a Civilization War Going On?

This article first appeared at The Orange County Register.

“Civilizations die from suicide, not by murder.” — Arnold J. Toynbee

From the heart of Europe to North America, nativism, sometimes tinged by white nationalist extremism, is on the rise. In recent elections, parties identified, sometimes correctly, as alt-right have made serious gains in Germany, Austria and the Czech Republic, pushing even centrist parties in their direction. The election of Donald Trump can also be part of this movement.

Why is this occurring? There are economic causes to be sure, but perhaps the best explanation is cultural, reflecting a sense, not totally incorrect, that western civilization is on the decline, a movement as much self-inflicted as put upon.

French intellectuals First to See the Trend

In 1973 a cranky French intellectual, Jean Raspail, published a speculative novel, “The Camp of the Saints,” which depicted a Europe overrun by refugees from the developing world. In 2015 another cranky Frenchman, Michael Houellenbecq, wrote a bestseller, “Submission,” which predicted much the same thing, ending with the installation of an Islamist government in France.

Both novels place the blame for the collapse of the Western liberal state not on the immigrants but on cultural, political and business leaders all too reluctant to stand up for their own civilization. This is reflected in such things as declining respect for free speech, the importance of citizenship, and even the weakening of the family, an institution now rejected as bad for the environment and even less enlightened than singlehood.

Critically, the assault on traditional liberalism has come mostly not from the reactionary bestiary, but elements of the often-cossetted left. It is not rightist fascism that threatens most but its pre-condition, the systematic undermining of liberal society from within…

Read the rest of the article at The Orange County Register.

Photo: JÄNNICK Jérémy [CC BY 3.0], via Wikimedia Commons

Rising Rents are Stressing Out Tenants and Heightening America’s Housing Crisis

This article first appeared at Forbes.

The home-buying struggles of Americans, particularly millennials, have been well documented. Yet a recent study by Hunt.com found that the often-proposed “solution” of renting is not much of a panacea. Rents as a percentage of income, according to Zillow, are now at a historic high of 29.1%, compared with the 25.8% rate that prevailed from 1985 to 2000.

No surprise, then, that 58% of the 1,300 renters in the Hunt survey said they felt “stressed” about their rent, or that many respondents said they couldn’t save for future purchases like homes. Rather than the sunny freedom promised by those who promote a “rentership society,” most of those surveyed said that finding a convenient place with the amenities they required – for example, fitness rooms, places for pets and adequate space – was very difficult. Some renters have been forced to euthanize their pets, spend upwards of 50 days looking for a place or move farther from family and friends.

All of this is taking place at a time when the national vacancy rate has fallen to 7.3% (in the second quarter of 2017), from 11.1% in the third quarter of 2009. That trend has continued even with apartment construction in many areas, notably core cities, because the new buildings tend to be too expensive for most renters.

Fuel For A Housing Crisis

There is a strong relationship between high rents and high house prices. Although rents have not risen as much as house prices generally, they tend to attract people who in the past might have become homeowners but instead have been crowded out by the high prices. This essentially brings into the rental market more affluent tenants who directly compete with those with lower incomes.

The result in many places, such as Southern California, is overcrowding. Two-thirds of the places in the United States (municipalities and census-designated places) with more than 5,000 residences and with more than 10% of housing units being overcrowded are in California, according to the American Community Survey.

The rent-related stress also points to a bigger crisis: the decline in the purchase of homes. One of the most prominent reasons for not buying a house directly relates to higher rents: It becomes all but impossible to save enough for a down payment. This also reflects changes in the labor market; service and blue-collar workers, whose incomes have been down in relation to rents, are the most burdened by rising rents. In San Francisco, even a teacher has been driven into the ranks of the homeless.

The situation is worst in the most expensive markets. In New York City, incomes for millennials (ages 18–29) have dropped in real terms compared with the same age cohort in 2000, despite considerably higher education levels, while rents have increased 75%. New York, Los Angeles and San Francisco have three of the nation’s four lowest homeownership rates for young people and among the lowest birthrates.

According to Zillow, for workers ages 22-34, rent costs claim up to 45% of income in the Los Angeles, San Francisco, New York and Miami metropolitan areas, compared with closer to 30% of income in metros like Dallas-Fort Worth and Houston. Home prices provide an even starker contrast. Dallas-Fort Worth, the nation’s fastest-growing housing market, as well as Houston, San Antonio and Charlotte have prices that are more like one-third those of the superstars.

That helps explain why, according to the Hunt survey, the highest percentage of people who cannot save for future purchases (almost 60%) live on the pricey West Coast. The West Coast also had the largest percentage of people stressed about their rent, followed, not surprisingly, by the East Coast.

High rents may also help explain recent shifts in migration to lower-rent areas. A recent survey by Apartmentalist.com found that the best prospects for renters becoming homeowners are in metropolitan areas like Pittsburgh, Provo, Madison, San Antonio, Columbus, Oklahoma City and Houston; the worst are, not surprisingly, in California, New York, Boston and Miami.

Profound Implications

What emerges from the Hunt study, and other research, is a renting population that may never achieve home ownership. This represents a sort of social evolution from the culture of self-assertion and independence that once so clearly characterized America after World War II and was so important to the unprecedented spread of middle-income affluence. Rather than striking out on their own, many millennials are simply failing to launch, with record numbers living with their parents or forced to shell out much of their income rent.

The implications of high rent, and declining home ownership, could be profound over time. In survey after survey, a clear majority of millennials — roughly 80%, including the vast majority of renters — express interest in acquiring a home of their own. A Fannie Mae survey of people under 40 found that nearly 80% of renters thought that owning made more financial sense, a sentiment shared by an even larger number of owners. They cited such things as asset appreciation, control over the living environment and a hedge against rent increases.

But it won’t just be renters impacted by rising rents. Jason Furman, who served as chairman of the Council of Economic Advisors under President Obama, calculated that a single-family home contributed two and a half times as much to the national GDP as an apartment unit.

The decline in investment in residential properties has dropped to levels not seen since World War II. By some estimates, if we had that kind of housing investment again, we would return to 4% growth, as opposed to our all-too-familiar 2% and below.

America’s housing crisis, long tied to ownership, is now extending into rising rents. But the stress that renters are feeling impacts all of us.

Photo credit: Omar Bárcena, via Flickr, using CC License. (Minor brightening of image)