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If Biden Can’t Build a Better Economy, America is In Trouble

Donald Trump’s finally gone, but if Joe Biden wants his return to normalcy to be any more successful than his predecessor’s appeal to greatness, he’ll need to take on the real issues dragging red and blue America down: economic torpor, ever increasing inequality, and policies that diminish people’s prospects of making it into or maintaining their positions in the middle class. Read more

Look to Orange County for How to Turn California Purple

For decades, Orange County was a reliable incubator of conservative politics, and, in the era of Nixon, Goldwater and Reagan, a fairly powerful force in the state and on the national level. More recently, the area has been widely seen as tilting blue, particularly during the Trump era, with the media celebrating the end of “the Orange Curtain” in the 2018 midterm elections and its metamorphosis into another addition to our state’s progressive political culture. Read more

Ownership and Opportunity: A New Report from Urban Reform Institute

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)

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Americans Won’t Live in the Pod

“No Bourgeois, No Democracy”
Barrington Moore

Protecting and fighting for the middle class regularly dominates rhetoric on the Right and Left. Yet activists on both sides now often seek to undermine single-family home ownership, the linchpin of middle-class aspiration.

The current drive to outlaw single-family zoning—the one protection homeowners possess against unwanted development—has notched bans in the City of Minneapolis and the state of Oregon, with California not far behind. Advocates have tapped an odd alliance of progressives and libertarians. Essentially, it marries two inflexible ideologies, in principle diametrically opposed, but neither of which see housing as a critical element of family and community. In its stead, the Left seeks to place the state in charge, while libertarians bow instinctively to any de-regulatory step they see as increasing “freedom and choice.”

Although couched in noble sentiments, both approaches are fundamentally hostile to both middle- and working-class aspirations. Without a home, the new generation—including minorities—will face a “formidable challenge” in boosting their worth. Property remains key to financial security: Homes today account for roughly two-thirds of the wealth of middle-income Americans while home owners have a median net worth more than 40 times that of renters, according to the Census Bureau. Equally important, a shift from home ownership would also weaken the basis of democracy. Since ancient times, republican institutions have rested on the firmament of dispersed property ownership.

An Odd Time for More Density

The push for ever-greater density and against suburban home ownership could not come at a less propitious time. Even before the pandemic, big cities like New York, Los Angeles, and Chicago were losing population. Since 2010, despite all the talk of a massive “return to the city,” suburbs and exurbs account for about 90% of all metropolitan-area growth. Millennials, often seen as an urban generation, have fueled population growth in the suburbs since 2010.

Millennials have had a hard time buying homes—among post-college millennials (25-34), ownership has dropped from 45.4% in 2000 to 37.0% in 2016, a drop of 18% according to Census Bureau data—but three-quarters want single-family detached houses, according a 2019 report on home buyer preferences by the National Association of Homebuilders. A 2018 Apartment List survey found that 80% of millennials dream of home ownership. Among those under 35 who do buy homes, four-fifths choose single-family detached houses.

This shift has been greatly accelerated by the pandemic, and could gain even more momentum from the rising crime and disorder in many of our core cities. Pew reports roughly one in four Americans either moved on account of COVID-19 or knew someone who did so, with the largest percentages for young people under 30. Since 2018, according to Gallup, the percentage of Americans saying they want to live in cities dropped 55%, down to barely 13%. Rather than the much-ballyhooed “back to the city” movement, we are entering what Zillow describes as “a great reshuffling” to suburbs, smaller cities, and less expensive states. Even non-metro areas, for the first time in over a decade, are beginning to gain population.

The rise of online work is likely to accelerate the trend. Stanford economist Nicholas Bloom projects we will see telecommuting increase from 5% of the workforce before the pandemic to something closer to 20%. More important still, most people now working from home express a preference—some 60% according to Gallup—to do so for the foreseeable future. Even when offices opened early this summer in New York, real estate brokers report, most workers refused to return. And now developers, like KB Homes, are adding home offices to their newest offerings.

These trends will be reinforced by shifts in job markets. A new survey by the Site Selectors guild suggests that only 10% of companies are looking to expand in large cities, one sixth as many as choose suburbs, and a third of those who favor rural areas. Meanwhile major office and residential complexes are being downsized, cancelled, or hit with major price reductions in cities from Chicago and New York to Los Angeles and San Francisco.

Read the rest of this essay on the American Mind.


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 credit: Taxiarchos228 via Wikimedia under CC 3.0 License.

California’s Woke Hypocrisy

No state wears its multicultural veneer more ostentatiously than California. The Golden State’s leaders believe that they lead a progressive paradise, ushering in what theorists Laura Tyson and Lenny Mendonca call “a new progressive era.” Others see California as deserving of nationhood; it reflects, as a New York Times columnist put it, “the shared values of our increasingly tolerant and pluralistic society.” Read more

Book Interview: Joel Kotkin Speaks on Neo-Feudalism with Financial Sense

By: Chris Sheridan
On: FS Insider

Joel Kotkin, Presidential Fellow in Urban Futures at Chapman University and executive director of the Urban Reform Institute, speaks with FS Insider about his latest book, The Coming of Neo-Feudalism: A Warning to the Global Middle Class.

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Beyond Feudalism: A Strategy to Restore California’s Middle Class

Beyond Feudalism: a Strategy to Restore California's Middle ClassIn 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 Preening: A State Of Delusion

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

The Rebellion of America’s New Underclass

Like so many before them, our recent disorders have been rooted in issues of race. But in the longer run, the underlying causes of our growing civic breakdown go beyond the brutal police killing of George Floyd. Particularly in our core cities, our dysfunction is a result of our increasingly large, and increasingly multi-racial, class of neo-serfs.

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