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Feudal Future Podcast – Is There Hope? The Future of California Politics

On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Tom Campbell and Shawn Steel to discuss the future of California politics.

The Great Office Refusal

The pandemic has cut a swath through our sense of normalcy, but as has been the case throughout history, a disastrous plague also brings opportunities to reshape and even improve society. COVID-19 provides the threat of greater economic concentration, but also a unique chance to recast our geography, expand the realm of the middle class, boost social equity, and develop better ways to create sustainable communities.

Driven partly by fear of infection, and by the liberating rise of remote work, Americans have been increasingly freed from locational constraints. Work continues apace in suburbs and particularly in sprawling exurbs that surround core cities, while the largest downtowns (central business districts, or CBDs) increasingly resemble ghost towns.

This shift has made it more practical for individuals and particularly families to migrate to locations where they can find more affordable rents, and perhaps even buy a house. But such a pattern may be countered by investors on Wall Street, who seem determined to turn the disruption to their own advantage by gearing up efforts to buy out increasingly expensive single-family homes, transforming potential homeowners into permanent rental serfs and much of the country into a latifundium dominated by large landlords.

We are in the midst of what the CEO of Zillow has called “the great reshuffling,” essentially an acceleration of an already entrenched trend of internal American migration toward suburbs, the sunbelt, and smaller cities. Between 2019 and 2021 alone, a preference for larger homes in less dense areas grew from 53% to 60%, according to Pew. As many as 14 million to 23 million workers may relocate as a consequence of the pandemic, according to a recent Upwork survey, half of whom say they are seeking more affordable places to live.

This suggests that the downtown cores of U.S. cities will continue to struggle. Since the pandemic began, tenants have given back around 200 million square feet of commercial real estate, according to Marcus & Millichap data, and the current office vacancy rate stands at 16.2%, matching the peak of the 2008 financial crisis. Between September 2019 and September 2020, the biggest job losses, according to the firm American Communities and based on federal data, have been in big cities (nearly a 10% drop in employment), followed by their close-in suburbs, while rural areas suffered only a 6% drop, and exurbs less than 5%. Today our biggest cities—Los Angeles, New York, and Chicago—account for three of the five highest unemployment rates among the 51 largest metropolitan areas.

The rise of remote work drives these trends. Today, perhaps 42% of the 165 million-strong U.S. labor force is working from home full time, up from 5.7% in 2019. When the pandemic ends, that number will probably drop, but one study, based on surveys of more than 30,000 employees, projects that 20% of the U.S. workforce will still work from home post-COVID. 

Others predict a still more durable shift: A University of Chicago study suggests that a full one-third of the workforce could remain remote, and in Silicon Valley, the number could stabilize near 50%. Both executives and employees have been impressed by the surprising gains of remote work, and now many companies, banks, and leading tech firms—including Facebook, Salesforce, and Twitter—expect a large proportion of their workforces to continue to work remotely. Nine out of 10 organizations, according to a new McKinsey survey of 100 executives across industries and geographies, plan to keep at least a hybrid of remote and on-site work indefinitely.

The shift of work from the office to the home, or at least to less congested spaces, threatens the strict geographic hierarchy of many elite corporations. Some corporate executives, like Morgan Stanley’s Jamie Dimon, are determined to force employees back into Manhattan offices, like it or not. It’s now a common mantra among like-minded executives, especially those connected to downtown office development, that workers are “pining” to return to the office. Some have even threatened employees who do not come back in person with lower wages and decreased opportunities for promotion, while offering to reward those willing to take the personal hit of coming back on-site every day.

Read the rest of this piece at Tablet.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo credit: Steven Zwerink via Flickr under CC 2.0 License.

Never Going Back

For months, corporate hegemons, real estate brokers and their media acolytes have been insisting that a return to “normalcy,” that is, to the office, was imminent. Some companies threatened to reduce the incomes of remote workers, and others warned darkly that those most reluctant to return to the five-day-a-week grind would find their own ambitions ground down to the dust. Workers have been reported to be “pining” to return to office routines.

Fears of returning to the office due to the Delta variant have delayed a mass return to gateway cities. Office vacancies grew in August. Since the pandemic began, tenants gave back around 200 million square feet, according to Marcus & Millichap data, and the current office vacancy rate stands at 16.2 percent, matching the peak of the financial crisis. Overall, it is widely expected that office rents will not recover for at least five years.

Things could get ugly as some $2 trillion in commercial real estate debt becomes due by 2025, particularly in large, transit dependent central business districts, reflecting in part reluctance among commuters to ride public conveyances. This is a world-wide phenomenon—occurring in New York, Hong Kong, Paris, London, and other financial centers—and accompanied by a marked decline in business travel, with conventions and meetings particularly devastated.

A New Economic Geography

So where is the work getting done? Increasingly, in the suburbs and exurbs of the big metros, smaller metros, cities and even some rural areas, all of which offer lower urban densities, which usually means less overcrowding. In the first year of the pandemic, big cities, according to the firm American Communities and based on federal data, suffered the biggest job losses, nearly 10 percent, followed by their suburbs, while rural areas suffered 6 percent and exurbs less than 5 percent. The highest unemployment rates today are in coastal blue states, while the lowest tend to be in central and southern states.

The shift towards dispersed and remote work suggests the beginnings of a new geographical and corporate paradigm. Suburbs and exurbs accounted for more than 90 percent of all new job creation in the last decade, but with the rise of remote work, proximity to the physical workplace has lost more  of its advantages. University of Pennsylvania Professor Susan Wachter notes that telework eliminates the choice between long commutes and inordinate housing costs. The areas where remote work is growing most are generally small cities, as well as Sunbelt locales in Florida and South Carolina.

The dispersion of work is not a matter of low-wage workers heading to cheap places to do low-status jobs. In metros over one million such as Raleigh-Cary, Austin, Orlando, Salt Lake City, Nashville, Phoenix, Dallas-Fort Worth, and Charlotte, professional and business-services jobs are growing much faster than they are in San Francisco, Chicago, New York, or Los Angeles. The number of employees using the office started to drop as early as 2017 in San Francisco, the biggest winner in the tech economy.

The pandemic supercharged these trends. The disturbing rate of fatalities and hospitalizations in the Northeast, notably New York City, including Manhattan but particularly the poorest sections of the outer boroughs, chased many urbanites to the suburbs, exurbs, and beyond. Even as infections spread to other regions, it remained easier to endure the pandemic in a more spacious house, particularly if mass transit is not necessary.

Demographer Wendell Cox shows that, despite the considerable spread to less crowded areas over the past year, areas with the highest urban densities, in spite of their lockdowns, have experienced two times or more overall adjusted Covid fatalities, after more than one year of draconian social distancing regulations that eliminated much of downtown employment and cut mass transit use by up to 90 percent. Car-dominated places, where people can more easily afford space, have lower infection and fatality rates; if other pandemics follow, as many suspect, memories of the recent hegira will remain.

The longer the pandemic lasts and new variants appear, the greater will be what new research from Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis refers to as  “residual fear of proximity.” The team suggests that when the pandemic fades, roughly 20 percent or more of all work will be done from home, almost four times the already growing rate before the pandemic. A study from the University of Chicago suggests this could grow to as much as one-third of the workforce and as high as 50 percent in Silicon Valley. Roughly 40 percent of all California jobs, including 70 percent of higher paying work, could be done at home, according to research by the Center of Jobs and the Economy.

Read the rest of this piece at American Mind.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo credit: Carol M. Highsmith, via Library of Congress under CC 1.0 License.

Feudal Future Podcast – The Psychological Impact of the Pandemic

On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Ross Elliott and Aaron Kheriaty to discuss the psychological impact of the pandemic.

Feudal Future Podcast – The Crisis on Labor

On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Robyn Domber, Lane Windham and Michael Bernick to discuss the crisis on labor shortages.

The Battle for Cities

America’s cities face an existential crisis that threatens their future status as centers of culture, politics, and the economy. Many urban advocates continue to delude themselves that U.S. cities are about to experience a massive post-pandemic return to “normal.” But the disruptive technological, demographic, and social changes of recent times are more likely to upend the old geographic hierarchy than to revive it.

A representative New York Times article from July 12 denied that the pandemic has impacted dense urban areas in particular, and blamed negative attitudes toward cities instead on what it called “alluring” anti-urban attitudes. Perhaps urban advocates need to ditch their own attitudes and confront reality (and the statistical evidence): Many key problems facing our core cities—growing social instability, rising crime, out-migration, increasingly radicalized politics, high costs, and tight regulation—predate the pandemic, and are not likely to go away easily. Clever proselytizing by urban media likely won’t be enough to convince Americans liberated by the efficacy of remote work to eventually return.

To survive and thrive, American cities need to reinvent urbanity by returning to a more diverse economy concentrated not in the central districts but in neighborhoods stretched across the city. Such a shift can only take place if the trajectory of urban politics changes. Some cities, notes Seth Barron, author of the newly published The Last Days of New York, have been captured by “an equity oriented social ideology” paid for by real estate interests and public sector unions, and backed by mainstream media and nonprofits, that has proven profoundly self-destructive. Outside New York, political leadership in cities like Portland, Oregon; Minneapolis; Seattle; and San Francisco continue to work assiduously to restrain law enforcement, even in the face of rising crime.

There appears to be a growing pushback against the progressive urban agenda, whose journalistic promoters often minimize social disorder. Defunding the police has not turned out to be a progressive success; the five cities that reduced their police budgets the most in 2020—Austin, Texas; New York; Minneapolis; Seattle; and Denver—have seen murders spike over the past year, well above the national average. Having partially gone down the path of defunding in 2020, New York, Baltimore, and Oakland, California, have now taken steps to restore some police funding. In ultraliberal San Francisco, the vast majority of city residents want more police; almost half are considering leaving the city, citing social disorder as a key reason. Residents of the fashionable Capitol Hill area in Seattle are erecting barriers to keep out the homeless.

But if the urban gentry are upset, the real shift is further down the social pecking order. The surprising victory of ex-cop Eric Adams as New York’s next mayor took place amid a surge in violent crime, garnering support for his centrist, pro-police platform from the city’s minority voters. My colleague Charles Blain, president of the Urban Reform and Urban Reform Institute in Houston, noted that opposition to “defunding” has come primarily from African American and Latino politicos in his city, while support seems to stem mostly from affluent white liberals.

Political divides within cities increasingly defy traditional definitions of right and left. There’s a growing conflict between those largely dependent on public schools, spaces, and transit, and those free of the need for public services due to their ability to live close to work, send their kids to private schools, or choose not to have kids at all. Much of the base of urban radicalism has shifted from minority communities to the ultrawoke, largely white, educated left.

Yet progressives, due in part to small voter turnouts, still dominate representative bodies like the New York City Council; the newly elected Manhattan district attorney follows the left’s program of low-intensity crime enforcement. In Buffalo and Pittsburgh, recent elections have favored far-left candidates. In Philadelphia, a recent attempt to remove the George Soros-backed District Attorney Larry Krassner failed miserably, despite rising crime.

The current urban trajectory is downwind of demographics. Despite the media hurrahs of a massive “back to the city” movement, Americans have been moving in the opposite direction for most of the past decade. Since 2012, suburbs and exurbs have accounted for about 90% of all metropolitan growth. The rate of growth in America’s biggest and most expensive cities began to decline as early as 2015, and the population shift to suburbs, exurbs, and smaller cities has accelerated, something evident well before the pandemic.

Read the rest of this piece at Tablet Magazine.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: JJ, via Flickr under CC BY-NC-ND 2.0 License.

Feudal Future Podcast – What Works Best? Working from Home vs. Working in the Office

On this episode of Feudal Future, hosts Joel Kotkin and Marshall Toplansky are joined by Doug Holte, Kate Lister, and Andrew Segal to discuss work post-pandemic.

How America Abandoned the World—and Our Own Inner Cities

In America and across the globe, COVID-19 is diminishing people’s prospects, exacerbating inequality and creating ever-more feudal societies as the pandemic ravages the health and the pocketbooks of the poor and the poorly educated.

Globally developing countries are suffering from what The Nation describes as “a gargantuan north-south vaccination gap” between developing countries where fewer than 10 percent of people have been vaccinated compared to around 70 percent in Western Europe, Israel, Canada and US. And within affluent countries, there’s nearly as wide a gap between well-off and well-educated populations, and rural and urban backwaters still suffering from “a pandemic of the unvaccinated.”

In the long history of pestilence and plague, French historian Fernand Braudel noted, there was always a “separate demography for the rich”. As today, the affluent tended to eat better and could often escape the worst exposure to pestilence by retreating to country estates, while the poor have been left to fend for themselves as “victims of the urban graveyard effect” that’s persisted since the fall of Rome.

Despite attempts in the media to deny or downplay the links between density and disease, COVID death and infection rates remain worse in dense urban counties where poorer residents often have to navigate insufficiently ventilated enclosed spaces that their more affluent and mobile counterparts have been mostly able to avoid.

Generally speaking, educated and affluent city and suburban dwellers recovered their incomes within the first year of the pandemic, even as millions of Americans have fallen into poverty or are on the verge of destitution, and the federal moratorium on evictions is about to expire. Overall, upper-income workers recovered completely while lower-wage workers suffered major income declines.

As of May, employment for those making $60,000 a year or more is up by 7.4 percent since the pandemic began, while employment for those making $27,000 a year of less has plunged by 21 percent, according to tracktherecovery.org. The drop in low-wage employment has been even steeper in affluent areas, like Manhattan, as the high-wage workers who had clustered there are now dispersed while working remotely and buying services in their new locales.

This trend could accelerate if new pandemics emerge in the near future, as many fear they will. But for now, at least for developed countries, vaccinations offer a way out. Since January, COVID-19 has dropped from the leading cause of death in America to the seventh leading cause. But even here, the widely varied inoculation rates suggest future social problems, particularly as COVID-19 is becoming “hyper-regionalized” in communities with both low vaccination and low immunity rates, according to former FDA commissioner Dr. Scott Gottlieb.

These come primarily in two very different, but historically impoverished and poorly educated populations: rural America, where the national media has mocked the people getting sick as Trumpist rubes, and inner-city America.

Read the rest of this piece at Daily Beast.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo: MCJ1800, via Wikimedia under CC 4.0 License. Composite, R. Howard.

Dumb and Dumber

By: Jane Wells
On: Wells Street

One of the funny things about being human is that no matter how successful we are, we always end up doing something stupid. I prove this point hourly. The hope is that over time we learn from our mistakes and don’t repeat them.

But who am I kidding?

So let’s get to it! Here’s a summary of dumb moves from Wall Street to Main Street to Tokyo. Read more

Upward and Outward: America on the Move

These are times, to paraphrase Thomas Paine, that try the souls of American optimists. A strain of insane ideologies, from QAnon to critical race theory, is running through our societies like a virus, infecting everything from political life and media to the schoolroom. Unable to unite even in the face of COVID-19, the country seems to be losing the post-pandemic struggle with China while American society becomes ever more feudalized into separate, and permanently unequal, classes.

Read more