No issue plagues Californians more than the high cost of housing. By almost every metric—from rents to home prices—Golden State residents suffer the highest burden for shelter of any state in the continental U.S. Its housing prices are, adjusted for income, as much as two to three times higher than those in key competitive states, such as Florida, Texas, Tennessee, and North Carolina, and neighbors like Arizona and Nevada.
“From the Beginning, California promised much. While yet barely a name on the map, it entered American awareness as a symbol of renewal. It was a final frontier: of geography and of expectation.”
— Kevin Starr, “Americans and the California Dream, 1850-1915” (1973)
On the surface, California’s job story seems positive. The “headline” unemployment number for December 2022 is low (4.1%). Payroll jobs continue to bounce back to close to pre-pandemic levels. https://edd.ca.gov/en/about_edd/news_releases_and_announcements/unemployment-november-2022/. As Mad Magazine’s Alfred E. Newman would say, “What? Me worry?”
But a closer look at the longer-term, 20-year statistics shows a state with some very worrisome issues related to jobs, some of which are unique to California’s set of past policy choices. Read more
A major shift in the demographic evolution of America is occurring, largely out of sight in the national media, but profoundly affecting communities throughout the Heartland.
The 20 state region, which extends between the Appalachians and the Rockies, has for generations been largely unaffected by the massive movement of people from abroad that has so dramatically transformed the great metropolitan regions of coastal America.
In the national media, the Heartland represented a region, as the New York Times described it, as ’not far from forsaken,’ a depopulating place where the American dream has come and gone. Others have seen the region as an unreconstructed mecca for intolerance, one that had few immigrants and poor race relations and seems destined to suffer for it. As one professor at Vanderbilt suggested recently, the region was “dying from whiteness” and that its “politics of racial resentment is killing America’s heartland.”
Perhaps it is time to change that narrative. Over the past decade, the Heartland’s share of the foreign-born population has risen from 23.5 percent in 2010 to 31.1 percent in 2019. This shift can be seen in many Heartland communities, some such as Louisville, Columbus and Nashville, have seen their immigrant populations swell more than 40 percent from 2010 to 2019, often helping to reverse generations of demographic decline. They are now growing their foreign-born populations faster than such historic immigrant hubs as New York, Los Angeles, San Francisco, Boston and Philadelphia.
The reasons include many factors also seen in our previous studies on entrepreneurs and millennials; lower costs, economic growth and better access to good schools. Perhaps the most underappreciated may be the spirit of friendliness that has been cited by the vast majority of the people we interviewed. For people who have migrated great distances, and sometimes at personal risk, the reception in the Heartland—sometimes described as a hotbed of nativist and xenophobic attitudes—often instead has been both warm and inspiring.
“Each immigrant comes with different potential and dreams,” observes Ahmed Elkhady, a half Palestinian, half Egyptian resident in Cedar Rapids, Iowa, known as the Motorcycle Imam, who works with underprivileged children. “I have big hope in this first migrant generation. They come with unique perspectives from all over the world. They come to grow in a new place they get to help create.” This shift in migration is good not only for the Heartland but also for the nation. Spreading new talent to areas that need it, it also takes the pressure off already overcrowded areas. For too long, essentially since the 1970s, the Heartland, with the notable exception of Texas, was on the sidelines in the nation’s demographic transition, leaving a large part of the country facing much slower population growth and rapid aging. It is on the sidelines no longer.
Download the full report here (PDF).
This piece and the report first appeared at Heartland Forward. Joel Kotkin, Mark Schill, Karla López del Río, Wendell Cox, Alicia Kurimska, and Celia López del Río authored the report.
Heartland Forward is a non-partisan organization that seeks to improve economic performance in the center of the United States by advocating for fact-based solutions to foster job creation, knowledge-based and inclusive growth. Learn more at HeartlandForward.org.
Image credit: Heartland Forward, from the report
In a new report from Urban Reform Institute, edited by Joel Kotkin, J.H. Cullum Clark and Anne Snyder explore what happens when opportunity stalls. Pete Saunders and Karla Lopez del Rio tell the story of how homeownership enabled upward mobility for their respective families. Wendell Cox quantifies the connection between urban containment policies and housing affordabilty.
The introduction, authored by Charles Blain, President of Urban Reform Institute is excerpted below:
The middle-class way of living is under constant threat as housing costs increase, eating away larger shares of the average American’s income.
Homeownership, which has been a critical source of advancement for middle-class, immigrant, and ethnic minority families and an asset that people can pass down from one generation to the next, is under threat. For many families, this means that instead of building wealth, they are seeing opportunity erode before their eyes.
As housing costs are the biggest driver of variation in living costs across metropolitan areas, the relentless housing cost increases of the last two decades have undermined standards of living for many Americans in the nation’s most expensive cities. If home prices continue to outpace household incomes for ordinary Americans in coming years, the American Dream will move ever further out of reach for millions of families. This is especially the case for Millennials and Gen Zers for whom high and rising housing costs are the single largest obstacle to accumulating wealth and achieving a financially sustainable life.
The COVID-19 crisis presents America with enormous challenges, but also new opportunities to move forward in rethinking policy on the future of housing and work to improve affordability and advance opportunity – particularly for our most disadvantaged communities.
A fresh policy agenda can breathe new life into the American Dream and protect middle-class standards of living. This agenda should prioritize new housing supply at all price points, particularly in growing, high-opportunity places. Cities should relax urban containment policies that have had the clear effect of making urban real estate scarce and expensive. State governments should reform tax codes that make it more cost effective to leave land stagnant than to build upon it.
If we want to protect the ability to climb the socioeconomic ladder from one generation to the next, we must face the crisis of unaffordable housing and declining homeownership. We must protect the biggest opportunity for advancement and scale back the rules and regulations that continue to snatch this opportunity away from millions of Americans.
Click here to download/read the full report.
Join the discussion on a new policy agenda for home ownership and opportunity in our post-pandemic economy.
Date: December 4, 2020
Time: 11:30AM – 1:00PM (Central Time)
In this new report, Beyond Feudalism: A Strategy to Restore California’s Middle Class, Joel Kotkin and Marshall Toplansky examine how California has drifted toward feudalism, and how it can restore upward mobility for middle and working-class citizens. An excerpt from the report follows below:
“We are the modern equivalent of the ancient city-states of Athens and Sparta. California has the ideas of Athens and the power of Sparta. Not only can we lead California into the future, we can show the nation and the world how to get there.”
Arnold Schwarzenegger, January 2007
California has always been a state where excess flourished, conscious of its trend-setting role as a world-leading innovator in technology, economics and the arts. For much of the past century, it also helped create a new model for middle and working-class upward mobility while addressing racial, gender and environmental issues well in advance of the rest of the country. Read more
In the imaginations of its boosters, and for many outside the state, California is often seen as the role model for the future. But, sadly, California is also moving backward toward a more feudal society.
Feudalism was about the concentration of wealth and power in a relative handful of people. Historically, California created fortunes for a few, but remained a society with enormous opportunity for outsiders, whether from other states or countries. One of Pat Brown’s biographers, Ethan Rarick, described his leadership as having made the 20th century into “The California Century,” with our state providing “the template of American life.” There was an American Dream across the nation, he noted, but here we had the California Dream. Read more
How can Orange County become a better place to live for all of its residents? Joel Kotkin and Marshall Toplansky explore the challenges and solutions in Orange County Focus: Forging Our Common Future, a research brief from Chapman University’s Center for Demographics and Policy. Read an excerpt from the report below:
<em>Orange County is, in many ways, among the nation’s best of places to live and work, but also one whose very attractiveness threatens its long term social, economic and environmental sustainability.
Much of this report is built around the assumption that Orange County will retain its allure for those who have the means and opportunity to live here. Few locations possess its combination of cultural and natural assets, talent, and innovative spirit. These attractions have helped make Orange County the nation’s sixth largest county in terms of its output, which is larger than that of 25 states.
Yet, as we discovered in our initial report, “The OC Model,” Orange County faces severe challenges on numerous fronts. The area has continued to lag competitors in high paying job creation in relation to its most dynamic high cost rivals, the Bay Area and Seattle, as well as to those like Austin, Dallas, Denver and Phoenix, that offer lower housing prices, a more pro-business environment, and often more compelling career opportunities. This can be seen in such crucial fields as professional and business services, and in high-technology and finance, where our relative strength, while still impressive, has been stagnant and, in some cases, has even decreased.
Maintaining and then expanding OC’s presence in these fields should be the dominant focus of future development efforts, along with expanding the opportunities for middle-skill jobs. Given the current regulatory environment in California and the likely persistence of high housing prices, Orange County must nurture high wage employment in promising fields like data analytics, medical technology, and design, which pay enough to allow millennial and Generation X workers to stay here. At the same time, we must maintain our strengths in real estate and finance. Without growth in these select sectors, the county will continue to age rapidly, and become akin to places like Hawaii or Palm Beach, Florida — retirement-oriented communities serviced by low-wage workers.</em>
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Gage Skidmore, used under CC 2.0 License
![African American children learning about Thanksgiving, with model log cabin on table, Whittier Primary School, Hampton, Virginia. Photograph by Frances Benjamin Johnston, [1899 or 1900].](https://joelkotkin.com/wp-content/uploads/2023/09/Thanksgiving-36x36.jpg){kind=small}
Library of Congress, in Public Domain