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New Roller Coasters for 2011

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The recession has seen many capital budgets at theme parks held back over the last few years, but even still, there are many parks building new and exciting rides all over the world. Here is a round up of some rides to get you foaming at the mouth.

Cheetah Hunt in Tampa Busch Gardens
The Cheetah Hunt, as you might expect from its namesake, is a “Linear Synchronous Motor Launch Coaster”, i.e. it uses magnets to launch you off fast then it uses strategically places LSM launch pads two more times on your ride. It is set to open in Spring 2011 and is set to be one of the most exciting rides in the country. The 4.5 thousand feet of track will send you to the top of mountains to twisting through a rocky gorge. Watch the video to whet your appetite.

The Green Lantern at Magic Mountain
This new ride looks like unlike anything you may have seen before, unless you have been to Grona Lund where the exact same ride has been featured for a couple of years. Two carts each spin independently, which for me just means you get an inconsistent ride and could, if the weight isn’t distributed correctly, fail to even turn upside down on the ride.

Formula Rossa in Ferrari World, Abu Dhabi
Another launched roller coaster, opened in November 2010 and is officially the worlds fastest roller coaster reaching 240 kph in 4.9 seconds, this ride uses a Hydraulic launch system and requires the riders to wear protective eye goggles due to the risk of impact with airborne particulates or insects. That just sounds crazy and the investment made to create it would have matched the investment of the cities in the Arab Emirates have seen.


http://www.flickr.com/photos/paolo_rosa/5320853732/sizes/m/in/photostrea...

Superman: Escape from Krypton
This isn’t in itself a new ride, as much as it is an update to an older slightly dated one. Formally Superman: The Escape, the upgrades are little more than the cars are turned backwards. But despite this less than impressive update the ride experience is jaw dropping. Being launched backwards, you are never too sure when you are about to reach the incline and once you reach the top the sustained weightlessness is amazing, all before you find yourself hurtling ground-wards.  Exhilarating update and the simplicity would have saved a few cents.


http://www.flickr.com/photos/beaster725/5596829350/sizes/m/in/photostrea...

There are many more rides being planned in the next few years, including two big rides in the UK for Thorpe Park. Busch Gardens Williamsburg has had plans for a new rollercoaster or drop ride approved. So the outlook seems pretty hopeful for thrill seekers and adrenalin junkies looking for new thrills. The recession hasn’t dampened the record breaking spirits of the theme park owners. This is just a short list of new rides but there are many more all over the world. If you find yourself on Holiday in America or on any UAE or Dubai Holidays, try and visit a park with one of these exhilarating rides.

Andy Don went to University in Brighton and travelled the world shortly after graduating; he is now working as a trip advisor and marketing executive. Follow him on his twitter @andym23.

Lead Photo by Drew Bennet


Can the Winnipeg Model Save Detroit?

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Detroit, not only in the US but across the globe, has become the poster child for urban decay.  The city lost 25% of its population between 2000-2010, and over half its population since 1950.  Over 90,000 houses stand empty, and many neighborhoods have been completely abandoned. 

The burden of maintaining infrastructure and law enforcement in a city with an eroding tax base and sparse population has lead to attempts to “shrink” the city.  This means bulldozing several areas of the city, and relocating existing residents.  Current Mayor Dave Bing realizes this, and has pledged to knock down a staggering 10,000 structures during his first term.  In the past such slum clearances lead to vigorous opposition from urbanists like Jane Jacobs, who argued that top down approaches to urban redevelopment would cause a great deal of pain, for little to no benefit.  Yet despite the fact that Jacobs is widely admired by planners, the plan to shrink the city has met with little opposition in Detroit.  Frankly, unless Detroit sees a major population surge, shrinking the city may sadly be necessary.  

Last week, New York Mayor Michael Bloomberg appeared on NBC’s Meet the Press, and at one point mused about using immigration policy to repopulate the city.   Bloomberg didn’t offer a substantive policy proposal, but the premise makes perfect sense.  Most of Detroit’s problems stem from the fact that fewer and fewer people are working and paying taxes in the city.  There is more infrastructure than people need or the city can afford. 

Ultimately the issue then is getting people to live in Detroit. But the biggest problem, even with a mild resurgence in the auto sector, is that Americans, and even most Michiganders, don’t want to live in Detroit, even with jobs.

But for many immigrants, Detroit would seem like a major upgrade over their current living situation. This is not as far-fetched a notion as some may believe. Here’s a proposal for Detroit based on an unlikely Canadian immigration success story: Winnipeg.

Learning from Winnipeg

When Americans think of Winnipeg, they think of white guys wearing earmuffs in July, speaking with the kind of Canadian accents typically ridiculed on American sitcoms.  When Canadians from outside of Manitoba think of Winnipeg, they think of a former industrial city that is hardly a draw to the much sought after “creative class” even though  the city has the nation’s lowest housing cost.  What no one from outside the city associates with Winnipeg is immigration.

Winnipeg’s immigration success is not well known outside of the province, but it is hard to dispute the facts.  Smart immigration policies have helped Winnipeg stabilize its population and reverse the city’s decline.

Between 1971-1996, the city of Winnipeg grew by just under 16%, or roughly 0.6% per year.  Like many North American cities, all of the growth was taking place in the suburbs.  In fact, the population of Downtown Winnipeg shrunk by 23.25% during that period.  Though the rate of decline is nowhere near that of Detroit, the causes and effects are similar.  Manufacturing declined; people moved to the suburbs, aided by highway expansions and low cost automobiles; residents moved to more entrepreneurial cities, such as Calgary; ensuing job and population decline lead to a decline in safety.  The most notable difference is that racial tensions in Detroit exacerbated suburban flight.  But the similarities are sufficient to use Winnipeg as a model.

Using immigration to reverse population decline in Manitoba

In 1998, the Province of Manitoba introduced the Provincial Nominee Program, which gave the province the ability to recruit immigrants over and above federal immigration quotas.  Since Manitoba was not seen as the most attractive place for new immigrants to settle, only 1.8% of immigrants to Canada settled in the province between 1996-2000 (Note 1).  Since the introduction of the nominee program, immigration to the province has increased by 250%.  The increase in the City of Winnipeg has been staggering.  In the years 1996-2000, the city saw 15,809 new immigrants.  In just one year, 2007-2008, the city attracted 16,585 immigrants.  Equally as important, 78% of Manitoba immigrants stay in the province, which is a significant improvement over the 1980s, when they had a retention rate of less than 50%.  Increased immigration ended Manitoba’s population stagnation, and the province now enjoys consistently positive net migration.

Economic outcomes of Manitoba immigrants

A survey of immigrants who migrated to Manitoba through the provincial nominee program shows promising results.  Three quarters of participants surveyed have never experienced involuntary unemployment.  Of those surveyed, 85% were employed, and 7% were in school.  While the average annual household income of $49,066 for participants is lower than the provincial average of $60,242, they are generally making enough money to live reasonably well, contributing to the provincial and municipal tax bases. 

Reasons for the program’s success

Of course, mass immigration often creates challenges for recipient regions.  Aside from the need for immigrants to find jobs, they also often require language training, and educational upgrading to meet certification levels for their professions. However, the success of the program shows that participants were by and large able to overcome these difficulties.  Some of this can likely be attributed to the fact that immigrants of similar backgrounds tended to cluster together, some integrating into communities with existing settlers of similar backgrounds.  The primary examples of these two patterns are the concentration of Filipino immigrants in Winnipeg, and the large number of Mennonites from Germany, Mexico, and South America who integrated into existing Mennonite communities.  This can be important, since it allows for them to develop, or take advantage of informal support networks.  Living in a community with speakers of the same language makes it easier for immigrants whose first language is not English to integrate into the community, and can help with finding employment. 

Benefits of targeted immigration to Detroit

Immigration is often a source of innovation and entrepreneurship.  Recent studies have shown that immigrant entrepreneurs in America have created more jobs for existing Americans than  for other    immigrants.  More people moving to Detroit would also mean more customers for the service industry in the city.  And by paying property taxes, they would help to keep the city government afloat.  Perhaps the most important benefit would be that more people generally would make the city safer.  Criminals, after all, hate witnesses. 

Hopeful signs from recent immigration to Detroit

Recently, Detroit has experienced an influx of Latino and Muslim immigration.  Despite the stigma attached to these groups by many Americans, anecdotal evidence suggests that these newcomers have been a boon to the city.  According to the Immigration Policy Center, Arab American employment now contributes $7.7 billion to the Detroit metro economy, and provides $544 million in tax revenue to the state.  They now support over 140,000 jobs in the city.  Latino immigrants are being credited with helping to revitalize Southwest Detroit, which saw $200 million of investments between 1993-2008, and the area’s population grew by nearly 7% between 1990-2000 even as most of the city declined.  The City is now home to nearly 50,000 Latinos, up from under 20,000 in 1990.    

And for those who claim immigrants take American jobs, the evidence suggests the opposite.  Despite the fact that immigrants have lower average wages than non-immigrants, they manage to have a disproportionate economic impact in many cities, Detroit being one of the best examples.  According to the Fiscal Policy Institute, immigrants contribute 1.3 times as much to the economy per capita as non-immigrants in Detroit.  This means, among other things, they disproportionately create jobs and contribute to the tax base.    

Policy recommendations

Creating a targeted immigration program would require co-operation between municipal, state and federal governments.  The policies recommended here are one set of options among many.

  • The federal government should create an ”urban revitalization” visa category to allow for municipalities with severe demographic declines to accept immigrants without counting them towards immigration quotas.
  • The state of Michigan, or other similarly challenged states, should create a specific program modeled on Manitoba’s provincial nominee program.
  • Immigrants should be required to prove that they have the financial means to support themselves for a specified amount of time in the absence of income.  This would ensure that they didn’t burden the existing welfare system.
  • Participants in the program could be required to undertake language training at their own expense, or to prove a basic competence in English. 
  • The City of Detroit should move more aggressively towards allocating abandoned buildings to provide housing or places for businesses of immigrants, or anyone else who wants to occupy them for that matter.  Filling buildings means more property taxes.
  • The City should concentrate on settling new immigrants of similar ethno-linguistic backgrounds into specific underpopulated areas.  Rather than simply allowing a certain number of immigrants into the city, they could create zones with high vacancy levels, and allow immigrants who apply to the program to move into these zones initially.  The aim should be to populate one neighborhood every two years to fill current vacancies.
  • Instead of punitive measures to force immigrants to stay in Detroit, the city should provide incentives to stay.  This could include requiring immigrants under this program to sign long term leases with large deposits, or to purchase property.  This is preferable to attempting to monitor the movement of immigrants. 
  • The city and state should attempt to partner with businesses, who may be interested in opening operations in the city due to the influx of immigrant labor.  This could help to give further incentives for new immigrants to stay, and create jobs for existing unemployed residents.

Many of these recommendations require more micromanagement than I’d personally prefer, but address political and economic realities.  Simply allowing anyone and everyone to immigrate to Detroit or anywhere else in America is a political non-starter.  Also, the dire budgetary situation facing the City of Detroit and the state of Michigan means that neither can afford to allow new immigrants to become economic liabilities.  After all, the justification for this program is to replace the tax base and reduce crime, not to create a new underclass.  Though there would certainly be some hiccups, evidence in Winnipeg and Manitoba could help to revitalize both Detroit and much of the state of Michigan.  Failure to undertake an aggressive revitalization strategy will make an aggressive shrinking strategy inevitable.  Given the two choices, revitalization seems vastly preferable.

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Note 1: Unless otherwise noted, data on the Manitoba Provincial Nominees Program is based on http://www2.immigratemanitoba.com/asset_library/en/resources/pdf/pnp-manitoba-provincial-nominee-program-tom-carter-report-2009.pdf

 

Steve Lafleur is a public policy analyst and political consultant based out of Calgary, Alberta. For more detail, see his blog.

Photo by Arlo Bates

Is The Information Industry Reviving Economies?

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For nearly a generation, the information sector, which comprises everything from media and data processing to internet-related businesses, has been ballyhooed as a key driver for both national and regional economic growth. In the 1990s economist Michael Mandell predicted cutting-edge industries like high-tech would create 2.8 million new jobs over 10 years.  This turned out to be something of a pipe dream. According to a recent 2010 New America Foundation report, the information industry shed 68,000 jobs in the past decade.

Yet this year, information-related employment finally appears to be on the upswing, according to statistics compiled by Pepperdine University economist Michael Shires. The impact of this growth is particularly marked in such long-time tech hot beds as Huntsville, Ala., Madison, Wis., and San Jose-Sunnyvale-Santa Clara, Calif., in the heart of Silicon Valley, all of which have relatively high concentrations of such jobs.

The San Jose area, home of Silicon Valley, arguably has benefited the most from the  information job surge. Much of this gain can be traced to the increase in social networking sites such as Facebook, LinkedIn and Twitter, all of which have been incubated in the Valley. Good times among corporations  have led many to invest heavily in software productivity tools, while those marketing consumer goods have boosted spending for software and internet-related advertising.

The 5,000 mostly well-paying information jobs added this year was enough to boost San Jose’s standing overall among all big metros 20 places to a healthy No. 27 in our ranking of the best cities for jobs.

But as economists enthuse over the tech surge, we need to note the limitations of information jobs even in the Valley. Software and internet jobs, which have increased 40% over the past decade, have not come close to making up for the region’s large declines in other fields, notably manufacturing, construction, business and financial services. Overall, the region has lost 18% of its jobs in the past decade — about 190,000 — the second-worst performance, after Detroit, among the nation’s largest metros. It still suffers unemployment of close to 10%, well above the national average of 9.0%.

This dual reality can also be seen in the local real estate industry. Office vacancies may be back in the low single digits in some markets popular with social networking firms, such as Mountain View, but they remain around 14 or higher throughout the region — 40% higher than in 2008. No matter how impressive reporters find a new headquarters for high-fliers like Facebook, the surplus of redundant space, particularly in the southern parts of the Valley, suggest we are still far from a 1990s style boom.

Some observers also warn that the long-term prospects for the Valley may not be as good as local boosters assume.  Analyst Tamara Carleton cites many long-term factors — like the financial condition of local cities and diminishing prospects for less skilled workers — that make it tougher on those who live below the higher elevations of the information economy. She also says that a precipitous decline in foreign immigration could slow future innovation.

This dichotomy is even more evident in the other big information gainer among our large cities, Los Angeles. Although it is little known by the media or pundit class, the Big Orange actually boasts the nation’s single largest number of information jobs. Its over 5% growth in information jobs translates to roughly 10,000 new positions over the past year. In LA, the big sector for information jobs is likely not social media but traditional entertainment, one of the area’s core industries.

Yet information growth clearly is not bailing out the overall economy. Other much larger sectors, such as manufacturing and business services, continue to shrink. The area still suffers from an unemployment rate of roughly 12%.

Other information winners among our large metros include Boston and Seattle, both traditional centers for software-related jobs. These areas have not been as hard-hit by the real estate and industrial declines as their California counterparts, so increasing information employment does not constitute the outlier that we see in the Golden State.

Less expected gains were notched by some of our other big information sector winners. One big surprise was New Orleans-Metairie-Kenner, whose information sector, including a growing film and television industry, expanded almost 39% in past year. As is the case with its strong overall rankings in our best cities survey, the Big Easy’s comeback from the devastation of Katrina is heartening. But we must curb our enthusiasm by pointing out that total regional employment remains 100,000 less than it was before the hurricane.

Equally intriguing has been the strong performance of Warren-Troy-Farmington, Hills, Mich., and Detroit-Livonia, each of which has benefited from the resurgence of the American auto industry. In these areas, information jobs tend to be tied to the needs of large industrial companies. The state has also waged a major campaign for film and television jobs, as part of an attempt to diversify its economy.

Yet for all the hype that surrounds industries like media and software, it’s critical to point out that overall this is not a huge employment sector. Even in Seattle — home to Microsoft, Amazon and other software based companies — information jobs account for barely 6% of the total. In Los Angeles, it’s 5%, compared with 10% each for manufacturing and hospitality. In media-centric New York, information accounts for barely 4% of jobs, less than half that of financial services and one-third that of the huge business service sector.

In most other areas, including those experiencing strong growth, information jobs constitute an even smaller part of the economy. In New Orleans, Warren, Mich., and Detroit, such jobs account for less than 2% of employment . Still, the growth of this sector is a promising one for  economies that have long been dominated, like New Orleans, by the generally low-paying hospitality industry, or in the case of the Michigan cities, the volatile and often chronically hurting manufacturing sector.

The increase in information jobs, however welcome, should not be sold as a universal elixir for  creating widespread prosperity. Over time, strong regional economies are those that rely on diverse employment sources rather than one.  Growth in high-tech and media jobs can wow impressionable reporters and earn economic developers bragging reights, but they can do only so much to lessen the recession’s impact on the vast majority of workers and the broader regional economy.


Top Cities for Information Job Growth, 2009-2010
New Orleans-Metairie-Kenner, LA 38.86%
Honolulu, HI 25.11%
Shreveport-Bossier City, LA 18.85%
Huntsville, AL 14.71%
Leominster-Fitchburg-Gardner, MA  13.33%
Redding, CA 10.53%
Madison, WI 10.20%
San Jose-Sunnyvale-Santa Clara, CA 10.01%
Grand Rapids-Wyoming, MI 7.63%
Providence-Fall River-Warwick, RI-MA 6.33%
Top Big Cities for Information Job Growth, 2009-2010
New Orleans-Metairie-Kenner, LA 38.86%
San Jose-Sunnyvale-Santa Clara, CA 10.01%
Providence-Fall River-Warwick, RI-MA 6.33%
Los Angeles-Long Beach-Glendale, CA  5.08%
Warren-Troy-Farmington Hills, MI  3.97%
Boston-Cambridge-Quincy, MA  3.54%
Riverside-San Bernardino-Ontario, CA 3.46%
Charlotte-Gastonia-Rock Hill, NC-SC 3.02%
Detroit-Livonia-Dearborn, MI  2.48%
Seattle-Bellevue-Everett, WA  1.47%




Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo by Angelo Amboldi

World Urbanization Update: Delhi 2nd in a World of Smaller Urbanization

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Perhaps the most surprising development in urban areas over the past year was the ascendancy of Delhi to rank second in the world in population, following only Tokyo – Yokohama. Based upon the new United Nations population estimate, the 7th annual edition of Demographia World Urban Areas places Delhi's population at 22.6 million. Tokyo – Yokohama, however, is in no immediate jeopardy of losing its number one status, with a population estimated at 36.7 million, approximately 70 percent greater than that of Delhi (Note 1). Demographia World Urban Areas includes population estimates  for all identified urban areas in the world with 500,000 or more residents. Among these 796 urban areas, 169 are in higher income nations and 627 are in lower income nations.

The Largest Urban Areas: For years, demographers have been watching Mumbai on the assumption that it might eventually emerge as the largest urban area outside Tokyo – Yokohama. However, Mumbai, at 21.3 million, has fallen behind faster growing Delhi and now ranks as the sixth largest urban area in the world. Seoul-Incheon, in Korea, has emerged as the number three urban area, based upon higher than anticipated  suburban growth registered in the 2010 census and now shows a population of 22.5 million. Jakarta, Indonesia's capital, now stands as number four, with a population of 22.2 million, followed by number five Manila at 21.3 million (Note 2). The next three largest world urban areas are in the Americas with New York at 20.7 million, Sao Paulo at 20.4 million and Mexico City at 19.6 million. The world's 10th largest urban area is Shanghai (18.7 million), which experienced larger than anticipated growth toward the end of the decade (Table).








10 Largest Urban Areas in the World: 2011
Rank
Geography Urban Area
Current Year Population Estimate
Land Area: Square Miles
Density
Land Area: Km2
Density
Density Year
1 Japan Tokyo-Yokohama
36,690,000
3,500
10,500
9,065
4,000
2011
2 India Delhi, DL-HAR-UP
22,630,000
605
37,000
1,567
14,300
2011
3 South Korea Seoul-Incheon
22,525,000
835
27,000
2,163
10,400
2011
4 Indonesia Jakarta
22,245,000
1,075
20,400
2,784
7,900
2011
5 Philippines Manila
21,295,000
550
37,000
1,425
14,300
2009
6 India Mumbai, MAH
21,290,000
300
70,300
777
27,100
2011
7 United States New York, NY-NJ-CT
20,710,000
4,349
4,500
11,264
1,800
2000
8 Brazil Sao Paulo
20,395,000
1,125
18,100
2,914
7,000
2011
9 Mexico Mexico City
19,565,000
780
25,000
2,020
9,700
2011
10 China Shanghai
18,665,000
1,125
16,500
2,914
6,400
2011

 

Among the top ten urban areas, New York is by far the least dense, followed by Tokyo-Yokohama. They are also the most affluent, with seven of the remaining 10 far more dense and located in lower income countries, while Seoul-Incheon is more dense, but in a nation that is among the latest entrants to higher income status (Figures 1 & 2).


Highest Population Densities: Dhaka, the capital of Bangladesh is the most dense with 90,600 persons per square mile or 35,000 per square kilometer. Dhaka ranks 24th in population in the world and crowds its approximately 11.5 million residents into 125 square miles or 325 square kilometers (less than the land area of the municipality of Portland, Oregon). Mumbai ranks second in population density, with 70,300 per square mile or 27,100 percent per square kilometer. Among high income urban areas, Macau is the most dense, at 70,000 per square mile or 27,000 per square kilometer, slightly ahead of its neighbor across the Pearl River, Hong Kong, which is estimated to have 66,100 residents per square mile or 25,500 per square kilometer. Of course, both Hong Kong and Macau have artificially high densities, driven by their enclave status. Comparatively few urban areas in the high income world exceed 15,000 per square mile (6,000 per square kilometer).

Largest Urban Land Area: Although we commonly identify Gotham with the density of high-rise Manhattan, New York sprawls more than any of the top urban areas. Its urban area contains far the largest  land area, stretching to cover 4,350 square miles or 11,300 square kilometers. Los Angeles, more noted for its physical expanse, has approximately one-half the land area of New York and it extends less than both Tokyo – Yokohama and Chicago. Perhaps astonishingly, the Boston urban area covers approximately 95 percent of the land area of Los Angeles, though with only one-third the population.

Larger Urban Areas, Higher Density: As urban areas become larger, their population densities also increase. Moreover, as in the top 10 urban areas, lower income nations tend to have far higher densities than the urban areas located in the higher income nations(Figures 3 & 4).


  • Overall urban densities are approximately 9,000 per square mile (3,500 per square kilometer) in urban areas with between 500,000 and 1 million population and rise to 15,500 per square mile (6,000 per square kilometer) among urban areas with more than 10 million population.
  • Urban areas in higher income nations range from a population density of 3,800 per square mile (1,500 per square kilometer) among urban areas with from 500,000 to 1,000,000 population. Larger urban areas with more than 10 million population average o 8,900 per square mile (3,400 per square kilometer).
  • The urban areas located in lower income nations have far higher densities densities, ranging from 15,100 per square mile (6,000 per square kilometer) in the 500,000 to 1,000,000 population category and up to 22,100 residents per square mile (8,500 per square kilometer) in the over 10 million population category.           

 

Population Density by  Region: There is also considerable variation in urban population densities between the regions of the world (Figures 5 & 6).


The lowest densities are in affluent areas. The United States and Canada, at 3,600 per square mile (1,400 per square kilometer), Oceania at 4,100 per square mile (1,600 per square kilometer) and Europe at 8,400 per square mile (3,200 per square kilometer). Latin American urban densities are 15,900 per square mile (6,200 per square kilometer), followed by Africa at 18,600 per square mile (7,200 per square kilometer) and Asia, at 18,800 per square mile (7,300 per square kilometer).

The overall population density of urban areas with more than 500,000 residents in India is estimated at 37,000 per square mile (14,400 per square kilometer), which is more than double that of China, at 17,000 per square mile (6,700 per square kilometer).

A Smaller Urban World? A review of the size of the world urban areas shows the planet to be made up principally of rural areas and towns and cities with less than 500,000 population. In 2011, approximately 51 percent of the world is urban and 49 percent is rural. Urban areas ranging from just a few thousand residents to under 500,000 residents account for 27 percent of the world's population, which constitutes a majority of its urban population. Among the larger urban areas, megacities (10,000,000 and larger) and the urban areas with between 1 million people and 2.5 million people each for approximately 6 percent of the world population. The other larger categories of urban areas each account for approximately 4 percent of the world's population (Figure 5).

The McKinsey Global Institute recently reported that the world's megacities were growing less quickly than the other large urban areas. This development, along with the distribution of world urban population may indicate that world's largest urban areas, especially the megacities, may not be the wave of the future; instead it may be smaller urbanized regions between 500,000 and 10 million.  These regions, with three times the population of the megacities, will likely shape urbanity over the next few decades.

----------------

Note 1: An urban area is an urban agglomeration or an urban footprint (area of continuous development). An urban area is the organism of the “city” in its spatial dimension. Census authorities in a number of nations have adopted similar definitions for urban areas (Examples are United States, Canada, United Kingdom, France, Norway, Sweden and Australia). Demographia World Urban Areas uses national census bureau data for both population and land area estimates where it is available and estimates urban land area from satellite imagery for all others.

Note 2: for the purposes of this analysis, higher income urban areas are generally in nations with a gross domestic product of $20,000 per capita, purchasing power parity.

Note 3: The urban area population estimates of Seoul-Incheon, Jakarta and Manila are considerably of love those reported by the United Nations. The United Nations data for these urban areas is based upon a far smaller definition of urbanization than is used in other urban areas. As additional explanatory notes are found in Demographia World Urban Areas.

Photo: India Gate, Delhi (by author)

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life

Where Do the Children Play?

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Are compact cities healthy cities? One argument for compact cities is that they are good for our health.  The New Zealand Public Health Advisory Committee in 2008, for example, cited four principles for healthy urban planning based on the density of development: urban regeneration, compact growth, focused decentralisation, and linear concentration.  The aim is less time in cars and more use of active transport.

One objective of Auckland’s Regional Growth Strategy, with its emphasis on CBD and centre-focused residential growth is “safe and healthy communities”.  But how far can that be achieved through residential intensification?  Does regulating for a compact city work for everyone?  Everywhere? 

Kids and consolidation

Research by Penelope Carroll and Karen Witten of Massey University, summarised here and in a recent article in The Aucklander, highlights the disadvantages for children in the inner city. 

Witten and Carroll suggest that traffic volumes, strangers on the street, and lack of outdoor play space mean that children in central city environments are likely to be confined indoors.  And that raises the disadvantages of high density dwellings: insufficient space, internal noise, lack of natural light, lack of privacy, inadequate parking, inadequate indoor play space, and the potentially hazardous nature of balconies.  Poor health outcomes is a major concern.

A key issue for children in compact parts of the compact city is lack of opportunity for outdoor activity.  Heavily trafficked streets are not good for bike riding, or even walking alone.  Auckland’s centre is devoid of segregated cycleways or play areas.  Getting to school or the park is a major mission, and may well need a car trip. 

Even the Auckland Domain, a splendid sprawling park on the CBD fringe, is surrounded by high intensity streets, remote from most central apartments, and is hardly child-friendly.  The much smaller Victoria Park is similarly difficult to access, isolated by major arterial roads.  Albert Park is about the only central green space of note, but this is a throughway between university and town, not an ideal area for children to play. 

Auckland CBD Green Space

Perhaps the well-being of children is not a major issue here, because only around 600 (aged under 15) lived in the CBD in 2006.  But it was up 130% over a decade.  And they do count.

Anyway, the limits of central city living for children – and families – flag more general issues:

  • The need to think seriously about how we cater for families in higher density living generally, in the CBD, in other centres, and in suburbs targeted for intensification;
  • How we provide safe, public green space, areas for play, and ease of movement in high density, mixed use environments; and
  • Just how healthy is the inner city residential for living generally?

CBD living – not so healthy?

The factors potentially stressing children in the CBD impact on adults too.  Research for Auckland City in 2003 (CBD Metadata Analysis by No Doubt Research) suggested dissatisfaction with inner city apartment living came from a diminished sense of security and safety, noise nuisance, small units, absence of outdoor living spaces, and lack of a sense of community. 

In the absence of outdoor recreation space adult residents may get some exercise in the burgeoning gymnasium sector (for between $1,000 and $2,500 a year).  But for many recreational and social activities a car is a necessity.  Simply to take advantage of the key benefits cited for living in Auckland – access to outdoor recreation opportunities, organised sports, beaches, bush and countryside – residential Intensification around centres means more time- and fuel-consuming car trips.

On top of a lack of open useable space the latest State of the Region Report documents the heaviest concentration of air pollutants in and around central Auckland, hardly a healthy living environment.

Central Auckland Haze
Source: Auckland Regional Council,
State of the Region, 2010

Community in the central city

Research by Larry Murphy of the University of Auckland (“Third-wave gentrification in New Zealand: the case of Auckland” Urban Studies 2008, Volume 45) described different communities in the CBD: the well-to-do with their spacious harbour edge apartments (and quite possibly a second home – a beach cottage or lifestyle block – outside the city); the student-dominated quarter to the east; and the low income population to the west.  Families may end up in the latter area, in cramped apartments in featureless apartment blocks, simply for reasons of affordability.

These are transient populations, some 52% of residents in the Central East and Central West Census Area Units had been in their current dwellings for less than a year in 2006.  This compares with 23% in Auckland as a whole.  These particularly high residential mobility figures contradict any suggestion that high density living might create a strong sense of community cohesion.

Okay for some, for some of the time

The CBD works for some people.  The proliferation of downtown bars and entertainment caters particularly for the young and well-to-do.  Gentrification of the harbour-edge works for the professional couple, the wealthy, and out-of-towners.  But the central city is not right for middle or low income households, or families. 

Two key ingredients of a compact city strategy are increasing residential densities and boosting inner city living.  But these raise health and equity issues.  At the least, they call for investment in the quantity and quality of public space in areas targeted for intensification, making potentially big demands on the public purse given the value of land in the CBD and other commercial centres. 

We may just have to acknowledge the benefits of suburban living for some time to come and seek opportunities for sustainable development that don’t oblige less well-off families to dwell in small apartments and featureless blocks around busy commercial areas for lack of affordable alternatives.

Phil McDermott is a Director of CityScope Consultants in Auckland, New Zealand, and Adjunct Professor of Regional and Urban Development at Auckland University of Technology.  He works in urban, economic and transport development throughout New Zealand and in Australia, Asia, and the Pacific.  He was formerly Head of the School of Resource and Environmental Planning at Massey University and General Manager of the Centre for Asia Pacific Aviation in Sydney. This piece originally appeared at is blog: Cities Matter.

Photo by Pat Scullion

Natural Gas Vehicles Floor It in Long Beach

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The Alternate Clean Transportation Expo held in Long Beach earlier this month was a spectacular display of engineering ingenuity by Natural Gas Vehicle providers. The event's theme was that America’s self sufficiency in natural gas has decoupled our energy resources from petroleum prices. But the consensus among the gathered engineers and scientists was to look beyond the current prices of petroleum alone, and consider that domestic self sufficiency includes keeping jobs at home.

The NGVs (Natural Gas Vehicles, which include Compressed Natural Gas—CNG, as well Liquefied Natural Gas—LNG) reduce greenhouse gas emissions almost 20 percent on medium and heavy duty models, and 30 percent on light duty vehicles.

All fuels, including natural gas, release energy by burning. But cleanliness and renewability are probably the single most talked-about aspect of NGVs. From energy field to vehicle engine, natural gas needs very little processing to make it usable, compared to crude oil, which is processed into gasoline by complex and expensive refining techniques. A naturally occurring fuel, its chemical formulation is about 90% methane, with smaller amounts of ethane, propane, butane and carbon dioxide, a high octane rating of about 120 – 130, and clean burning characteristics.

Biomethane gas is extracted from biomass, and is therefore renewable, and it can be produced economically in large quantities. Current estimates are that the US has proven reserves of over 1500 TCFs (trillion cubic feet) of natural gas which, by some estimates, should last for the next 100 years.

Potentially, natural gas will create jobs not only through vehicle manufacturing, but through the construction of new CNG stations. A landfill processing plant near Dallas, Texas, owned by a pioneering company in CNG station installation, Clean Energy™, creates up to 9,000,000 GGEs (gasoline gallon equivalents)of biomethane gas for fueling stations. It has agreements with airports in Tampa, New York City, New Orleans and Philadelphia to build CNG filling stations that will support ground transport vehicles and off-airport parking shuttles.

Of course, legitimate concerns have been expressed about the safety of natural gas vehicles. Notably, in a tragic 1998 accident a stopped bi-fueled Honda (a vehicle that can run on CNG or gasoline) was impacted by another vehicle moving at almost 100 mph. A fire started by the gasoline engine broke out.

NGV supporters counter that the 50 liter CNG tank was intact and remained secure in its support bracket, that NGVs are subject to same federal standards as regular vehicles, and that natural gas cylinders are thicker and stronger than conventional gas tanks.

The NVG safety record also includes a survey of more than 8,000 natural gas utility, school, municipal and business fleet vehicles that have traveled 178 million miles, in which the vehicle injury rate was 37% lower than in a gasoline fleet. Under federal and state regulations, fueling stations, indoor parking structures, repair garages and car dealerships must all meet high safety standards. Leaking gasoline forms puddles and creates a fire hazard; if the CNG engine leaks at all, the fuel will normally rise to the ceiling and disappear. Insurance companies nationwide have looked at the safety of natural gas buses and fleets and have no reservations about insuring them.

Hybrids were also on display at the Expo, including a notable innovation by Parker Hannifin Company. Says Tom Decoster, business development manager of the Cleveland-based firm, “We are going to let California know there are alternatives to electric and CNG.” Parker’s alternative is the hydraulic hybrid, with regenerative braking energy stored as a pressurized gas in a vessel. These vessels are known to be accumulators, which Parker compares to batteries. While stored electricity from a battery drives a motor, energy from an accumulator powers a pump-motor to drive wheels. This assistance increases fuel efficiency and sometimes permits a smaller engine.

Average fuel consumption for a conventional Class 8 vehicle is about 9,800 gallons per year. RunWise™, Parker’s vehicle, reduces the fuel consumption by 30 to 50 percent, depending on route density and operating conditions. “The more stops a vehicle makes during the day, the more efficient the system becomes relative to a conventional drive train,” Decoster says, adding that the NGV also reduces CO2 emissions, compared to a conventional vehicle, by 38 tons per year, the equivalent of about six midsize cars or planting 1,500 trees. It has reduced brake replacement cycles from every few months to almost 2 years. Parker’s technology is intended for refuse trucks and for fleets that need frequent stops, such as those run by FedEx and UPS.

This highly technical conference and engineering-driven trade show was innovative in one other way, too. Expo organizer GNA designed events to reach out beyond the technorati to ordinary consumers who -- it hopes -- will one day be its loyal customers.

Shashi Parulekar is a Los Angeles-based engineer. He holds an MBA, and served as Asia Pacific M.D. with Parker Hannifin Co in Michigan for over ten years.

Chicago: Out of the Loop

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The “global city” is one of the dominant themes related to  urban success today.  In this model, cities serve both as huge agglomerations of top specialized talent and also as “control nodes” of the global economy serving as key sites for the production of financial and producer services demanded by the new globalized economy. In her seminal book on the subject, Saskia Sassen noted New York, London, and Tokyo as the paradigmatic examples of the global city.

The status of global cities, however, is protean, and not all “global cities” are created equal or occupy a similar status. Tokyo, for example, is clearly fading in the face of the shift of economic power from Japan to the Chinese sphere of influence – Shanghai, Beijing, Hong Kong and Singapore.

Chicago has long prided itself as one of those cities, and consistently rated in the top ten global cities in various surveys. It's a huge business services hub, financial hub, transport hub, cultural center, and massive draw for talent. The greater Loop area is clearly a classic global city area, densely packed with knowledge workers, with gleaming towers all around – over a hundred of which went up in the last decade. The transformation of the Loop and the surrounding neighborhoods in the last 20 years has been nothing short of stunning and remains a testament to the record of both Mayor Daleys.

Even at its best, the global city model has its weaknesses, such as extreme income inequality, but at least it seems to provide a model that works in an era when so many urban formulas have failed.  Chicago, for example, has used its global city status to avoid the rot that has hit so many Midwestern cities.

But for Chicago, though its global city side is running strong, there's a serious problem. Although impressive both economically and awe-inspiring in its physical form, the greater Loop economy is just too small – especially relative to the size of the region. This suggests that the Chicago region cannot rely primarily on the global city to carry its economy.

This might seem difficult to believe given that the greater Loop is the second largest business district in the United States and home to over half the region's office space. But it can be easily illustrated by comparing Chicago employment to that in Manhattan.  Here's a comparison of total jobs in Manhattan vs. all of Cook County, Illinois.


Source: Quarterly Census of Employment and Wages

As you can see, Manhattan has almost as many jobs as all of Cook County, and the two are converging. Given trends in both cities, it doesn't seem unreasonable to think that in the near future Manhattan may actually have more jobs than Cook County.  Not only are there more jobs in Manhattan, but they pay significantly higher wages.  Here is a comparison of the average weekly wage between the two:


Source: Quarterly Census of Employment and Wages

Manhattan wages dropped as a result of the financial crash, but still remain 70% higher than Cook County – and until the crash had been pulling away.  They may be surging again as Wall Street has been a notable beneficiary of the bailouts. But the difference in scale is significant under any circumstances. Manhattan, with a mere tenth of the regional population, has about as many jobs as Cook County, which has over half the regional population. The wealth and income engine of Manhattan is simply of a different order and power than any other US city. As a result, the global city side of New York for which Manhattan is a proxy really can pay the freight for not just the outer boroughs, but also the greater region and the budgets of not only New York but to some extent New Jersey and Connecticut as well.

By contrast, Chicago's global city side, strong as it is, simply cannot perform the same role in powering its region and state. Though estimates are that it encompasses something like 600,000 people participate in it, and though the Loop along with select suburban business districts are legitimately thriving, this economy is just too small to support the entire region. In fact it can't pay the bills even for the rest of Chicago itself, much less the region or state, especially considering that the non-global city parts are basically Rust Belt in character.  That's one reason local government finance is in such rough shape.  The city is facing a deficit of about $650 million and the state’s unfunded future liabilities are upwards of $160 billion.

Clearly, Chicago needs to continue focusing on expanding the size of its Loop economy and ensuring that it remains a top global city destination in the future. But unlike some other places that can hang their hat on that if they want, Chicago has to go beyond just being a global city and also be something more. After all, Chicago does not enjoy a “lock” on any industry, like New York with finance and media, or even Houston in energy, the Bay Area in technology or Los Angeles in entertainment. In almost every major business category it is not the lead player, which allows for greater economies of agglomeration and, perhaps even more importantly, a powerful and enduring global signature.

But bluntly, the world city economy is too diffused and small to offer much to the 90% of its people who aren't a part of that.  In short, Chicago needs more “outside the Loop” thinking.

A critical aspect of the challenge here lies with improving  the state and local business climate, recently rated as one of the worst in the country by Chief Executive magazine. If you're a hedge fund partner, architect, or celebrity chef, things are great. But for bread and butter type businesses and workers, which constitute the vast majority of the economy, things are quite different. That's why everyone from the CEO of Caterpillar,based three hours from the city, on down is publicly complaining and threatening to move.

Fixing this means finally rooting out the corruption that undermines confidence in local government, restructuring state and local finances to provide more certainty to investors, continuing to focus on education, addressing the infrastructure investment deficit, and radically reducing the red tape that plagues small and medium sized businesses.

None of these are sexy or easy. In fact, the CEO of the Chicagoland Chamber of Commerce recently said he's not putting any faith in claims by Rahm Emanuel, the new mayor  that red tape relief is on the way, reflecting the level of skepticism in the local business community right now. Today businesses in the city literally need a city ordinance passed in order to do seemingly simple things like add an awning or get a sidewalk café permit – something that is totally at the discretion of the alderman.  The Chicago Reader recently reported that this sort of “ward housekeeping” accounts for over 95% of city council legislation. Clearly this approach is toxic to business.  That’s why these items are absolutely mission critical items to creating a regional economy that can actually generate employment and pay the bills going forward. Glamor jobs and prestige employers downtown just aren't going to cut it by themselves anymore.

Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

Photo by Doug Siefken

Condo Culture: How Florida Became Floridastan

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Welcome to Griftopia. The Florida housing industry needs a karmic rebalancing. Our recent roar of building new structures is echoed today by the squeaks and pops of a different type of construction industry. Invasive testing – the architectural equivalent of a biopsy – seems to be on the rise. Saws, hammers, and cranes can be heard through the quiet suburban developments and subdivisions around Florida, as shingles and stucco are cut off in small patches to reveal serious problems within.

Like the hidden defects in mortgage-backed securities and other arcane instruments of finance, these flaws are covered up and papered over, but are no less damaging. They are also just as revealing about our collective haste to accommodate growth.

Few other places saw as much suburban expansion as Florida did, beginning in the 1990s and lasting right up until the bursting of the 2008 real estate bubble. Old hands in the Florida real estate development game see the cycle as never-ending, stretching all the way back to Ponce de Leon, whose “fountain of youth” was perhaps the state’s first marketing gimmick. The most recent bust, however, provides important lessons, should future cycles include speculators and regulators alike feeding at the trough. Rapid growth breeds errors, compromises, and sloppiness which have dire, lasting consequences.

Pundits are assigning blame for the Millennial Depression up and down the economic ladder, and certainly the Florida housing boom and bust provides many examples of all that went wrong. The largest developers, driven by stockholders and Wall Street to seek rapid growth and high profits, gambled that Florida’s population boom would last forever. With the good addresses already taken, “B” properties close to interstates, under flight paths and adjacent to sensitive wetlands began to see activity. Low density reduced the developers' risks and reduced construction costs, as well.

The Florida condominium – outwardly appearing as an apartment complex — was a home ownership product for the masses. As long as the product lasted 30 years (or however long it took to pay off the mortgage), no one much cared about its quality and stability as an asset. Anonymous, stick-built stucco boxes, baking in the Florida sun, seemed the perfect solution to meet the demands of stockholders and investors, and the regulatory pathway was smoothed over to keep the production line rolling.

Immigrants from abroad and from other parts of the country bought their own piece of the American Dream: gated entries, warrens of tight garages, patches of St. Augustine grass, buggy-whip sized oak trees and tightly wrapped stucco and glass boxes. Balconies are common, although the tiny decks and the heat preclude much enjoyment of the outdoors. Designed to prevent neighbors from meeting or children to freely play, these contemporary cracker box condos sullenly sweat in the heat. Still, they gave a much-needed step-up for the vast service workforce looking for a way out of the rental market and into an ownership position, and buyers can perhaps be forgiven for overlooking the cheapness of construction in favor of a new way to prosperity and success.

The demand, however, outstripped the ability to deliver. Design and construction delays simply due to over-commitment and lack of manpower meant that corners were cut, compromises were made, and slop was tolerated. It was as if the investment mania on Wall Street – in journalist Matt Taibbi’s words, “griftopia” – had trickled down to the field superintendents, masons, and framing crews. A collective haste gripped much of the state’s growth industry, haste that is cause for regret today.

A ten-year-old stucco building may look to be in perfectly good shape from the outside. When entering the bland, beige entry hall, however, the tang of mold immediately invades one’s nose. Once water has been trapped in a building it breeds a most sinister fungus.

Condominium units that suffer this malady are ascending the legal chain one by one across the girth of the state. First, individual owners collect themselves and confront their homeowner’s association. HOAs bombarded with complaints succumb quickly to “condo chaser” attorneys who promise to split the goodly sums they can rake off the insurance companies that covered the contractors and design professionals involved in the mess. And then, discovery begins.

It takes about a week to vivisect a low-rise building. Ordinarily, the stucco walls are saw-cut down to the bone, and the plaster comes off in a solid sheet, revealing metal strap ties and sheathing tissue within. The sheathing panels themselves are made of glued together wood chips – so-called “oriented strandboard” – only as strong as the glue itself. Removal of the sheathing layer reveals the deep ligaments and structural bones of the building.

Buildings designed in Texas, Ohio, Georgia, and elsewhere populate the Florida landscape. These buildings have almost no roof eave at all, as if the fierce Florida sun didn’t matter. The skin-tight stucco may not be Portland cement plaster, because dryvit (an acrylic latex substitute for stucco invented after World War II to quickly rebuild Europe) has become a popular substitute. The windows are set at the outside of the wall, with no shading at all on the glass. The effect is that the building looks as stretched tight as a balloon.

Unfortunately, such a combination frequently admits water into tiny cracks and crevices, and the water has no way to seep out. Revealing the interior guts of a building is the only way to uncork mold and rust horrors that are otherwise invisible. Insidious ants wind their way into the dark spaces between walls and floors where water and food are available.

Biopsies on sick buildings reflect our collective errors of judgment, and the healing process will be lengthy and expensive. Designs that do not reflect the harsh realities of Florida’s hot, wet climate are certainly responsible for some of the errors. Designs that did not acknowledge the scarcity of experienced construction crews were also responsible, because construction takes teamwork and skill. And contractors, encouraged to cut costs in order to boost their own bottom lines, cut time or cut labor to get the job done faster.

Designers and contractors may also legitimately point the finger back at clients who pushed hard. A collective irrationality set in towards the end of the last decade. More work had to be done by fewer people, less experience was available to go around, and in the heat of the moment steps could be skipped in the name of innovation. The consequences are being felt only now.

A huge, sad pile of lost resources, our vanishing wood and raw materials, must be hauled off to clean these errors out of the system. Sadder to see are the homeowners, as they pack up and move out of their mold-infested units. But saddest of all is the apparent inability of the industry to learn from its own mistakes.

Let’s hope that this time around it can happen differently. Reject growth for growth’s sake. Florida, hooked on this drug for too long, deluded itself into filling up wetlands and paving more and more space.

Instead, as the tide rolls in once again, Florida can make a pact with itself to invest in development, rather than growth. Redeveloping older, inner cores of cities where services and employment are already in place can go a longer way towards making the state a sustainable, diverse place to live than paving one more tract of raw land mowed down for home lots can.

Revamp the state’s development culture. Private developers have written Florida’s growth management code, and gradually increased the requirements so that only the largest and most deep-pocketed developers can compete. Protecting neither the environment nor quality of life very well, the development regulations are in dire need of rewriting, with a different set of requirements that favor smaller-scale development and redevelopment, and encourage affordability.

In the meantime, discovery continues. More leaky roofs, more fungus-infested units, and more attics seething with ants, testimony to our collective haste and greed. As the nation slowly recovers economically, Florida has paused for breath on the pathway to healthy construction. Before the next boom, its development industry would be wise to use this break in the action to consider the alternatives.

Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

Photo by the author.


Asia’s New Landless Peasants?

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Landless people have long sparked instability in Asia. From the days of the Qin dynasty (3rd century B.C.), through the huge Taiping rebellion in the mid-19th century, to the successful Communist revolutions in China and Vietnam and a nearly successful insurrection in Malaysia during the mid-20th, the property-less have historically risen against those in power.

Today as East Asia grows more affluent, landlessness is again on the rise. Although peasants in many places remain both poor and restive, the real threat is in the region’s dynamic cities, where rapid increase in housing prices threatens to push hundreds of millions outside the property-buying market.

This boost in prices is due to the rapid economic and population growth in many Asian cities. Across China the price of housing per square meter more than doubled over the past decade, according to the National Statistical Bureau. Prices-compared-to-incomes in the diaspora hot beds of Singapore and Hong Kong are now, according to research from the consultancy group Demographia, the highest in the advanced world — at least 50% higher than New York, San Francisco, Toronto, Sydney or London.

There are some good market-based reasons for these high prices. Most major Asian cities are thriving economically and growing far more rapidly than their Western counterparts. Over the past decade, the population of Shanghai, China’s largest city, rose 35%, or by nearly 6 million, which is more than the population of any Western European city besides London, Paris and Essen-Dusseldorf. Beijing’s population rose by 6 million in the past 10 years to nearly 20 million. And Singapore’s far more affluent population jumped 20%, a rate exceeded in the advanced world only by Atlanta, Ga., among urban areas of more than 4 million.

The recent spike in prices, particularly in the more affluent cities, also stems from high liquidity, low interest rates and rising inflation, notes Cheong Koon Hean, CEO of Singapore’s Housing and Development Board. To these factors she adds what she calls “a herd mentality” as people rush to invest in property as a hedge against inflation.

The traditional Chinese obsession with property ownership exacerbates these factors. As  Nanjing-based blogger and social critic Lisa Gu writes, “Owning a property is the greatest life-goal for most Chinese citizens.”

In mainland China the rush to own is bolstered by the lack of a strong social safety net or popular trust in other investment vehicles, such as stock and bonds. ”China lacks good investment channels besides housing,” says Han Hui, senior partner in prominent Beijing real estate law firm. “People put money into real estate because they still don’t trust anything else.”

The appeal of home-ownership in China is particularly marked since it’s more of a land-use right, which in the case of residential property, expires after 70 years (40 years for commercial property). The lease begins to run out on the date that the real estate developer signs for the land, and not on the homeowner’s date of purchase.

Whatever its cause, this Asian form of irrational exuberance is clearly boosting inequality across the region’s cities.

This is becoming a key issue, particularly for the younger generation.  ”House price” ranked third on the list of the top 10 most popular phrases used by Chinese netizens, says Lisa Gu. Many young Chinese, she notes, are giving up on the ideal of owning a house before marriage and starting their lives together as renters. This is widely called “getting married naked.”

For young professionals this now might just prove a temporary annoyance, but it could evolve into something more bothersome as they age. Some might opt to avoid very expensive cities, such as Beijing or Shanghai, for up-and-coming smaller urban centers such as Chengdu, the provincial capital of agriculturally fecund Sichuan province. This city has a growing tech center but offers housing prices as much as one third those in China’s existing megacities. Although salaries are also lower, overall affordability remains much higher than in the established urban regions.

For the many millions of poorer Chinese, including the many migrants from the countryside, the housing crunch presents a more serious issue. Most have moved to the big cities, particularly in eastern China, for better opportunities and quality of life. Virtually all the net growth in Beijing and Shanghai, according to the most recent Chinese census, came not from registered residents but among migrants — those lacking hokou status. They constitute now over one third of the population in these megacities.

Such migrants include people of various incomes, but also a large impoverished population.  Some live in sub-standard conditions not often associated with the gleaming epicenters of Asian capitalism. Like residents of the slums of third-world cities, many are landless peasants, a group now estimated at 70 million or 80 million.

This problem of landless peasants is likely to grow as more land is set aside for urban and industrial development. Many will face difficulty finding a decent place to live even as more affluent Chinese snatch up multiple apartments for speculative investment. This has accelerated a worsening gap between rich and poor that is of major concern to the country’s Communist rulers.

Of course, no one suggests anything like a new peasant rebellion is in the offing. It is critical to recognize that, for all its imperfections, China’s astounding rise has lifted hundreds of millions of people out of the grip of unceasing poverty.

But unaddressed, the property crisis could well slow east Asian capitalism’s rapid ascent. High housing prices may already be contributing to depressed birthrates — even in places where the “one child” policy does not apply, such as Singapore, Taiwan and South Korea.

Such long-term problems are overshadowed by more immediate concerns. Fallout about cascading house prices led the Chinese central government earlier this year imposed new restrictions aimed at slowing rampant speculation — such as requiring 60% payments for second homes and restricting the purchases of additional homes.

The interior city of Chongqing has taken even more drastic steps. The hardline government there has embraced a distinctly uncapitalist response to the housing crisis: a massive program to increase the supply of rental as well as state-owned apartments that would be available to poorer residents, including those from the countryside. This contrasts with programs in Singapore, where 80% of the population live in the public housing, but some 95% own flats purchased from current owners or the Housing Development Board.

In China, the failure of the housing market to find places for the poor and working class could provide a rationale for expanding the state’s role in managing the economy. It certainly provides fuel for Chongqing’s active affirmation of what is seen as a revival of “red culture.”

Beyond such ideological implications, the housing crisis could threaten both the long-term social stability and economic growth of East Asia. Unless addressed, growing dissatisfaction among a large bloc of property-less citizens has the potential to become a politically destabilizing force and a brake against market-friendly liberalization. As East Asia remains the primary driver of the world’s economic engine, this could prove bad news not only for upwardly mobile Chinese but everyone else as well.

This piece originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo by Colin Manuel

The Recipe for Unlivable Cities in New Zealand

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The Auckland Council’s great vision is to make Auckland one of the world’s most livable cities. Yet the outcome of its currently proposed plans will be a city which is second best for most Aucklanders.

Some 60% to 80% of residents of New World cities state a clear preference for a single family home with its own backyard. In Victoria state, where Melbourne is located, 70% of the population, for example, preferred a single family home according to one government study. There have been similar findings from US based groups like the National Association of Realtors.

Yet even when this is acknowledged, many in the media, taking their clue from planners and urban theorists, seek to change this reality.  The May 9 issue of the NZ Herald carried a story titled “The Dying Backyard Dream” tells us “Many Auckland suburbs will become home to high-rise apartment blocks with the quarter acre dream (1,000 sq m) reserved for the privileged few.”

This fairly represents the intended outcomes of Council’s Spatial Plan as outlined in the discussion paper “Auckland Unleashed”.  But if this new vision is realized how can Auckland be a “liveable city” for all those residents who are unable to realize their preference for a low-density suburban home? Instead, they must “learn to accept” life in “terrace houses, duplexes, courtyard houses, maisonettes, and 4 -5 storey apartment buildings”.

When working-class and middle-class households find they are priced out of the market for the housing of their choice, they will simply move to some other location, here or overseas. This has long been the case with British migrants to places like New Zealand and now people from China and the diaspora countries, currently the largest source of new immigrants.

Yet these households provide the core labour force for the productive sectors, and for the manufacturing sector in particular. For some reason engineers and scientists tend to place more emphasis on home life and work life balance than financiers, and other members of the “creative classes”. (i.e. those who are creative with other people’s money). Hence, in the Bay Area, engineers and scientists gravitated to suburban Silicon Valley while the “creative classes” gravitated to downtown San Francisco.

The New Geography team have documented the recent changes in the diverse states of the U.S. using the data from the 2010 U.S. Census. Their findings deserve careful study if we want to provide livable cities for the mass of New Zealanders, rather than for a wealthy elite.  In the U.S., according to the most recent Census, middle class people and companies have moved to Texas and the Southeast, because these areas are business-friendly, have low housing costs, reasonable taxation, and regulatory environments that encourage industrial expansion.

This suggests it may be time to propose urban visions that are more humane for the vast majority by rejecting intensification and concentration in favor of the more adaptable and resilient environment of more dispersed cities and suburbs.  A key advantage of smaller dispersed cities such as Raleigh, Austin, San Antonio and Indianapolis, is their more affordable housing means up to four out of five households can afford their preference for a suburban house with a backyard.

The densifiers insist that dispersal increases commuting times and yet the average commute in low-density urban areas like Salt Lake City and Kansas City is slightly above twenty minutes. (Aucklanders should be so lucky).  If the aim is economic growth and job creation, the transport system must provide genuine mobility throughout the entire labour market of the metropolitan area, not just to the central business district.

Auckland’s Spatial Planners should take note of this recent research, and Christchurch leaders should seize the opportunity to be the Number One City in New Zealand if they don’t.
A major source of evidence in support of Unleashing Auckland is the ARC’s “Future Housing Demand Study” which assumes that Auckland’s density must increase to develop a healthy and growing urban economy. Unfortunately these assumptions are not supported by any evidence from the rest of the New World. In fact, forced densification is as often as not a   recipe for failure.

The Auckland urban area is already the second densest in the New World and the street network was never designed to cope with such high densities. Rather than reducing congestion, doubling the density on a given street increases the vehicle trips on that street by at least 70 – 90%. How can such densification reduce congestion?

These surveys of housing preference also tell us that the growing number of smaller households will not NEED three bedrooms, and hence will not prefer them. Such inferences ignore the growth in the spatial demands of home occupations, home arts and crafts, telecommuting, and the need for spare rooms to accommodate visiting friends and relatives – not to mention a lifetime’s accumulation of stuff. Even single people will buy a three bedroom house to guarantee long term salability and value. The rooms soon fill it up.

Aging couples are presumed to want to be rid of their backyard “burden”. Yet we are a nation of gardeners, and retirees are some of the keenest gardeners of all. It’s a healthy hobby.

The Wellington Regional Strategy Report also assumes the need for intensification, and also presumes “need” determines “preference” as in:

The eventual decrease in two-parent families will have implications in terms of reducing demand for larger dwellings on larger sections, resulting in a surplus of this stock.

So larger dwellings must be getting cheaper. Sorry, they are not.

The report also presumes that ordinary folk just don’t know what they are doing when they make their choices. Researchers find that people actually make their trade-offs very well – especially the trade-off between travel times and distances, and price and amenity.

Evidently, the early development of Silicon Valley was a dreadful error because“ … having centrally located and compact form of residential development provide greater benefits to the city than lower density forms.” But what would those scientists and engineers know? They built the world’s premier technology region in the suburbs, just as had been done a half century earlier in Los Angeles or in scores of other tech belts scattered from Austin, TX to the outer rings of London, Paris and Tokyo.

The report also claims a “large proportion of retirees are currently moving to Kapiti Coast, which indicates there is an insufficient housing supply in other locations to meet their needs.” Maybe these retirees have actually chosen to live on the Kapiti Coast, an area of smaller, low density development sixty kilometers from Wellington, because they prefer it. Many people would share their choice. Similarly, who speaks for the children who lose the freedom to enjoy spontaneous outdoor play, and to benefit from a free-ranging life?

There is nothing wrong with medium and high-density living for those who make a free choice within a functioning and affordable market. Councils should be maximizing our freedom to choose by focusing on general affordability. They must start by reducing the cost of land by freeing up supply.

Owen McShane is Director of the Centre for Resource Management Studies, New Zealand.

Photo by Pat Scullion

Diagnosing New Inflation Symptoms

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It's been more than three years since the Great Recession began, and it's no longer debatable that the federal spending in its wake did not provoke inflation. Years of forecasts by fiscal conservatives about the result of government expenditures have proved to be wrong. After three fiscal stimulus packages, core inflation — which excludes the volatile prices of oil and commodities— remains very much in check. The core rate is the most reliable guide to future inflation, and it has not trended upward.

Headline inflation, however, the rate that does include these two, has increased. Is the recent uptick in gas and food prices a game-changer on inflation? Does it mean that predictions of an inflation tsunami were well-founded? And what's the best course to follow now?

Many commodity prices have made double and triple digit gains over the past year. The changes are more than a blip — cotton futures, for example, have risen 162 percent— even if the cost of oil continues to decline. These prices are notoriously subject to rapid change for reasons that don't reflect the structure of the U.S. economy. Factors can include Middle East politics, weather, activity in the developing world, and, most significantly today, speculative profiteering.

Gold and other commodities have become a hot destination for players — money managers — as these markets have become the rare opportunity for high returns. In the absence of federal regulation and supervision, the low interest rates that are so crucial to business growth and to the vast majority of Americans have been allowed to feed into the permissive speculative superstructure.

The run-up has clearly impacted the poor and the hungry in the undeveloped world. In academic and policy circles, there's a high level confidence that commodities account for only a small share of GDP in wealthy countries, and so aren't of concern as long as core inflation is under control. At the Levy Institute, in contrast, our research shows that even in the developed world expensive food, energy, and materials can crowd out other household purchases. Consumer budgets can be hurt even before serious headline inflation appears.

If commodity prices were to continue to climb broadly and sharply, the Federal Reserve could face the prospect of a serious episode of cost-push inflation, similar to what we saw in the 1970s and '80s. Fed Chairman Ben Bernanke might find himself occupying the chair of Paul Volcker in more ways than one.

This kind of inflation is caused neither by the effects of low interest rates on the broader economy, nor by government spending. And, as with any symptom of ill health, the cause dictates the appropriate treatment. So if Bernanke's response was to raise interest rates dramatically in the hope of abating inflation to some arbitrarily low target, it would be a risky mistake. An interest rate rise would be a serious danger to growth and job creation. Business and labor are far too fragile to deal with a double whammy from rising gas and food prices coupled with monetary policy tightening.

A better response would be 'watchful waiting', a phrase seen in the December 1996 minutes of the FOMC (Federal Open Market Committee) meeting. A commodity price inflation could remain at least somewhat isolated.

Higher commodity prices will be used as an excuse to charge that the Fed's supposedly lax policy has unleashed an inflationary flood of cash throughout the economy. But the Fed's so-called 'easy money' is parked at the Fed itself, as bank reserves, since banks are not lending. This can't cause inflation either. Logic hasn't stopped newly re-branded Republican presidential candidate Newt Gingrich, who recently admonished that "The Bernanke policy of printing money is setting the stage for mass inflation."

Those who purchase securities for long-term investment evidently disagree. Bond traders aren't anticipating an inflationary surge. Just look at the yield spread between inflation-indexed and non-indexed Treasury securities of the same maturity. It has remained almost constant over the past year. In other words, buyers who want their returns insulated from inflation are paying only slightly more for protection than they were last year. That flatness — the unwillingness to pay a premium for inflation insurance — indicates that long-term bond buyers haven't revised their inflation forecasts.

Also unlikely to revise their predictions: inflation doom-drummers, even as energy prices level, and wages, another inflation indicator, are by no means jumping. Like eons of 'the-end-is-nigh' prognosticators, they don't exactly have a great track record. Back in spring 2008, a frenzied Glenn Beck urged Fox viewers to "Buy that coat and shoes for next year now." Some of his Washington cohorts are coy about inflation's estimated time of arrival. Republican House Majority Leader Eric Cantor, for example, tells us that "fears" of "future" inflation are "hanging over the marketplace." Others, like former Pennsylvania Senator Rick Santorum, say its already arrived (Obama brought it). The accusations continue despite a lengthy stretch of the lowest inflation rates in modern U.S. history, even with the current commodities rise.

Paul Ryan (R-WI) has been hailed as both a truth sayer and a soothsayer on the economy. He recommends that the Federal Reserve raise interest rates now to head off inflation "before the cow is out of the barn", ignoring the pain this would cause families and businesses. Here's my recommendation: Don't trust predictions about the future from those who've misread the present, and been very wrong in the past.

Dimitri Papadimitriou is President of the Levy Economics Institute of Bard College, and Executive Vice President and Jerome Levy Professor of Economics at Bard College.

Photo by Deb Collins (debs-eye): Beurs van Berlage, built by Hendrik Berlage between 1896 and 1903 as the commodities exchange in Amsterdam.

Transit: The 4 Percent Solution

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A new Brookings Institution report provides an unprecedented glimpse into the lack of potential for transit to make a more meaningful contribution to mobility in the nation's metropolitan areas. The report, entitled Missed Opportunity: Transit and Jobs in Metropolitan America, provides estimates of the percentage of jobs that can be accessed by transit in 45, 60 or 90 minutes, one-way, by residents of the 100 largest US metropolitan areas. The report is unusual in not evaluating the performance of metropolitan transit systems, but rather, as co-author Alan Berube put it, "what they are capable of." Moreover, the Brookings access indicators go well beyond analyses that presume having a bus or rail stop nearby is enough, missing the point the availability of transit does not mean that it can take you where you need to go in a reasonable period of time.

Transit: Generally Not Accessible: It may come as a surprise that, according to Brookings, only seven percent of jobs in the nation's largest metropolitan areas can be reached by residents in 45 minutes during the morning peak period (when transit service is the most intense). Among the 29 metropolitan areas with more than 2,000,000 population, the 45 minute job access average was 5.6 percent, ranging from 12.6 percent in Boston to 1.3 percent in Riverside-San Bernardino. The New York's metropolitan area's 45 minute job access figure was 9.8 percent (Figure 1).

Brookings did not examine a 30 minute transit work trip time. However, a bit of triangulation (Note 1) suggests that the 30 minute access figure would be in the range of 3 to 4 percent, at most about 4,000,000 jobs out of the more than 100 million in these metropolitan areas.   At least 96 percent of jobs in the largest metropolitan areas would be inaccessible by transit in 30 minutes for the average resident (Figure 2).

The Brookings report also indicates that indicates that 13 percent of employment is accessible within 60 minutes by transit and 30 percent within 90 minutes (Note 2). Brookings focuses principally on the 90 minutes job accessibility data. However, the reality is that few people desire a 45 minute commute, much less one of 90 minutes.

In 2009, in fact, the median one way work trip travel time in the United States was 21 minutes (Note 3). Approximately 68 percent of non-transit commuters (principally driving alone, but also car pools, working at home, walking, bicycles, taxicabs and other modes) were able to reach work in less than 30 minutes. The overwhelming majority, 87 percent, were able to reach work in 45 minutes or less, many times transit's seven percent. Transit's overall median work trip travel time was more than double that of driving alone (Figure 3).

A mode of transport incapable of accessing 96 percent of jobs within a normal commute period simply does not meet the needs of most people. This makes somewhat dubious claims that transit can materially reduce congestion or congestion costs throughout metropolitan areas. The Brookings estimates simply confirm the reality that has been evident in US Census Bureau and US Department of Transportation surveys for decades: that transit is generally not time-competitive with the automobile. It is no wonder that the vast majority of commuters in the United States (and even in Europe) travel to work by car.

Much of the reason for transit's diminished effectiveness lies in the fact that downtowns --- the usual destination for transit --- represent a small share of overall employment. Downtown areas have only 10 percent of urban area employment, yet account for nearly 50 percent of transit commuting in the nation's largest urban areas (Figure 4).

Meanwhile, core areas, including downtown areas, represent a decreasing share of the employment market as employment dispersion has continued. Since 2001, metropolitan areas as different as Philadelphia, Portland, Dallas-Fort Worth, Salt Lake City, Denver and St. Louis, saw suburban areas gain employment share. Even in the city of New York, outer borough residents are commuting more to places other than the Manhattan central business district (link to chart).

Transit: The Long Road Home: Transit problem stems largely from its relative inconvenience.    In 2009, 35 percent of transit commuters had work trips of more than 60 minutes. Only six percent of drivers had one way commutes of more than 60 minutes. For all of the media obsession about long commutes, more than twice as many drivers got to work in less than 10 minutes than the number who took more than an hour. In the case of transit, more than 25 times as many commuters took more than 60 minutes to get to work as those who took less than 10 minutes.

Economists Peter Gordon and Harry W. Richardson have shown that the continuing dispersion of jobs (along with residences) has kept traffic congestion under control in the United States. Available data indicates that work trips in the United States generally take less time than in similar sized urban areas in Europe, Japan, Canada and Australia.

Transit Access is Better for Low Income Citizens: The Brookings report also indicated that job accessibility was better for low income citizens than for the populace in general. Approximately 36 percent of jobs were accessible to low-income residents in 90 minutes, compared to the overall average of 30 minutes. This, of course, is because low income citizens are more concentrated in the central areas of metropolitan areas where transit service is better. But even this may be changing. For example, Portland’s aggressive gentrification and transit-oriented development programs are leading to lower income citizens, especially African-Americans, being forced out of better served areas in the core to more dispersed areas where there is less transit. Nikole Hannah Jones of The Oregonian noted:

"And those who left didn't move to nicer areas. Pushed out by gentrification, most settled on the city's eastern edges, according to the census data, where the sidewalks, grocery stores and parks grow sparse, and access to public transit is limited." 

Realistic Expectations: More money cannot significantly increase transit access to jobs. Since 1980, transit spending (inflation adjusted) has risen five times as fast as transit ridership. A modest goal of doubling 30 minute job access to between 6 and 8 percent would require much more than double the $50 billion being spent on transit today.

Moreover, there is no point to pretending that traffic will get so bad that people will abandon their cars for transit (they haven't anywhere) or that high gas prices will force people to switch to transit. No one switches to transit for trips to places transit doesn't go or where it takes too long.

Nonetheless, transit performs an important niche role for commuters to some of the nation's largest downtown areas, such in New York, Chicago, Boston, San Francisco, and Philadelphia. Approximately half or more of commuters to these downtowns travel there by transit and they account for nearly 40 percent of all transit commuters in the 50 largest urban areas.   

Yet for 90 percent of employment outside downtown areas, transit is generally not the answer, and it cannot be made to be for any conceivable amount of money. If it were otherwise, comprehensive visions would already have been advanced to make transit competitive with cars across most of, not just a small part of metropolitan areas.  

All of this is particularly important in light of the connection between economic growth and minimizing the time required to travel  to jobs throughout the metropolitan area.

The new transit job access is important information for a Congress, elected officials, and a political system seeking ways out of an unprecedented fiscal crisis.

A four percent solution may solve 4 percent of the problem, but is incapable of solving the much larger 96 percent.

Notes:

1. For example at difference between transit commuters reaching work in less than 30 minutes and 45 minutes, Brookings employment access estimate of 7 percent at 45 minutes would become 3 percent at 30 minutes.

2. The Brookings travel time assumptions appear to be generally consistent with data from the Census Bureau's American Community Survey (ACS) and the US Department of Transportation's National Household Transportation Survey (NHTS). Brookings, ACS includes the time spent walking to transit in work trip travel times (For example, the ACS questionnaire asks respondents how long it takes to get from home to work and thus includes the time necessary to walk to transit).

3. Median travel times are estimated from American Community Survey data for 2009 and includes working at home. The "median" is the point at which one half of commuters take more time and one-half of commuters take less time to reach work and is different from the more frequently cited "average" travel time, which was 25.5 minutes in 2008.

4. Is Transit Better in Smaller Metropolitan Areas? It is generally assumed that transit service is better in larger metropolitan areas than in smaller metropolitan areas. Yet, the Brookings data seems to indicate the opposite. Larger metropolitan areas tended to have less job access by transit than smaller metropolitan areas. In the largest 20 percent (quintile) of metropolitan areas, only 5.5 percent of employment was accessible within 45 minutes. This was the smallest quintile accessibility score, and well below the middle quintile at 9.2 percent and the bottom quintile at 8.3 percent. The top quintile included metropolitan areas with 2.6 million or more people, the middle quintile included metropolitan areas with 825,000 to 1,275,000 population and the bottom quintile included metropolitan areas between 500,000 and 640,000 (Figure 1). This stronger showing by smaller metropolitan areas probably occurs because it is far less expensive for transit to serve a smaller area. Further, smaller metropolitan areas can have more concentration in core employment.  Even so, smaller metropolitan areas tend to have considerably smaller transit market shares than larger metropolitan areas.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life

Photo: Suburban employment: St. Louis (by author)

Goodbye, New York State Residents are Rushing for the Exits

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For more than 15 years, New York State has led the country in domestic outmigration: for every American who comes to New York, roughly two depart for other states. This outmigration slowed briefly following the onset of the Great Recession. But a new Marist poll released last week suggests that the rate is likely to increase: 36 percent of New Yorkers under 30 are planning to leave over the next five years. Why are all these people fleeing?

For one thing, according to a recent survey in Chief Executive, New York State has the second-worst business climate in the country. (Only California ranks lower.) People go where the jobs are, so when a state repels businesses, it repels residents, too. It’s also telling that in the Marist poll, 62 percent of New Yorkers planning to leave cited economic factors—including cost of living (30 percent), taxes (19 percent), and the job environment (10 percent)—as the primary reason.

In upstate New York, a big part of the problem is extraordinarily high property taxes. New York has the 15 highest-taxed counties in the country, including Nassau and Westchester, which rank first and second nationwide. Most of the property tax goes toward paying the state’s Medicaid bill—which is unlikely to diminish, since the state’s most powerful lobby, the political cartel created by the alliance of the hospital workers’ union and hospital management, has gone unchallenged by new governor Andrew Cuomo.

New York City doesn’t suffer from outmigration to the extent that the state does; in fact, the city grew slightly over the past decade, thanks to immigration. And there’s more work in Gotham than in the state as a whole. The problem is that the kind of work available shows that the city accommodates new immigrants much better than it supports middle-class aspirations. A recent report from the Drum Major Institute helps make sense of the Marist numbers: “The two fastest-growing industries in New York are also the lowest paid. More than half of the city’s employment growth over the past year has been in retail, hospitality, and food services, all of which pay their workers less than half of the city’s average wage.” Worse yet, more than 80 percent of the new jobs are in the city’s five lowest-paying sectors. Parts of the country are seeing a revival of manufacturing—traditionally a source of upward mobility for immigrants—but not New York City, whose manufacturing continues to decline. The culprits here include the city’s zoning policies, business taxes, and declining physical infrastructure.

Then there’s the cost of living in New York City. A 2009 report by the Center for an Urban Future found that “a New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston. In Manhattan, a $60,000 salary is equivalent to someone making $26,092 in Atlanta.” Even Queens, the report found, was the fifth most expensive urban area in the country.

The implications of Gotham’s hourglass economy—with all the action on the top and bottom, and not much in the middle—are daunting. The Drum Major report, which noted that 31 percent of the adults employed in New York work at low-wage labor, came with a political agenda. The institute wants the city to subsidize new categories of work by expanding the scope of “living-wage” laws, which require higher pay than minimum-wage laws do, to all businesses that receive city funds or contracts. But that would mean higher taxes for the middle class and a further narrowing of the hourglass’s midsection.

Governor Cuomo is calling for a property-tax cap, but without “mandate relief” for localities—for example, relaxing state laws that require localities to pay out exorbitant pension benefits. Mayor Michael Bloomberg has pledged not to increase local taxes, but even at their current level, city taxes and regulations will keep serving as an exit sign for aspiring twentysomething workers. In short, we can expect New York to lead the country in outmigration for the near future.

This piece first appeared in the City Journal.

Fred Siegel is a contributing editor of City Journal, a senior fellow at the Manhattan Institute, and a scholar in residence at St. Francis College in Brooklyn.

Photo by Christopher Schoenbohm

Recover, Rebuild: Christchurch New Zealand After the Earthquake

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Lincoln University in New Zealand did a great job of assembling some leaders in the principles and practice of disaster recovery for its Resilient Futures workshop recently in support of recovery in Christchurch after the February earthquake.  And in keeping with one of the themes – the importance of quality and timely communications – the papers and summary are already posted on the web.

Without being there, it’s hard to judge the tone of discussion and the weight given to the lessons from experience overseas and in New Zealand.  But quick publication of the papers provides useful insights. 

My immediate thoughts follow – but I recommend anyone interested to read the summary and original papers.

Key themes

Some of the papers looked a bit academic, but there is correspondence between what the practitioners and academics have  to say.  It’s good to see theory and practice reinforce each other. 

Here are what I see as the most important threads:

(1)    The common sense but urgent approaches proposed for recovery, and the practicality of  some of the examples of what has been done elsewhere and what can be done in Christchurch;
(2)    The role of central government; there were differences in the detail among speakers, but by and large they see government adopting a leadership and motivational role, providing funding and oversight, especially in the recovery stage;
(3)    Local democracy is a key based on the role of local government and citizen participation, especially in the planning and rebuilding processes, and on the importance of involving local, even localised, communities (“clusters", "villages”).
(4)    The need for existing institutions to adapt to changed circumstances, streamlining decision-making while maintaining transparency;
(5)    The need to ensure that citizen, community, and other interest groups can participate and contribute by way of knowledge, resources, and time;
(6)    The need for speed, which nevertheless brings with it a risk of exacerbating pre-disaster imbalances and inequities between areas and groups; and the trade-off that may be required between speed and deliberation to deliver good long-term outcomes;
(7)    Recognising how easily the temporary can become permanent, and planning accordingly;
(8)    The window of opportunity that might be created for improving land uses and infrastructure in the course of replacement and rebuilding;
(9)    Finding the time to envision the future, to build consensus around architecture and planning options, and to achieve citizen buy-in to proposed solutions;
(10)The need for plans to address and reduce – and be seen to reduce – future risks;
(11)The significance of open space,  the importance of greenways and green-spaces, the likelihood that the city will have to expand, and the notion of an expanded city as an assembly of connected villages.

(It’s reassuring to see I’m not alone in advocating a new approach to spatial planning to limit the damage arising from extreme events, and to facilitate post-disaster recovery.  See my post of March 2 2011).

The challenges

There are potential contradictions in all this.  For example, speed is of the essence where infrastructure and shelter are laid waste, where jobs have evaporated, and communities have been torn apart. But haste should not create a city with parts which are forever temporary, where material gaps among groups widen, or where short-term expediency creates long-term risks. 

Nor should the importance of government leadership limit the capacity of the community at large to participate in rebuilding, to deliberate and debate, and help shape the new Christchurch.

The various speakers confirmed the importance of addressing multiple risks, something fundamental to planning for resilient cities.  If it can address multiple risks and provide outcomes that reduce them, then planning for the new Christchurch will enable “communities and local leaders to make best use of the opportunities the event has created”.

The experience of previous disasters confirmed that public engagement is central to achieving “political stability, community buy-in and support for new initiatives, the identification of workable solutions, and a generally positive recovery that promotes confidence in both the process and the likely end result”.

Differentiating recovery and rebuilding

Perhaps what we need to do if we are to use the wealth of material and insight provided by the Lincoln University initiative, and others like it, and to work through the contradictions is distinguish between recovery and rebuilding.  Recovery is about restoring as quickly as practical safety, security and shelter, and the structures and infrastructure needed to ensure them.  It demands urgent attention, rapid deployment of resources, and  high level of expediency. 

Rebuilding is a little less urgent and maybe even more challenging.  It is about the way communities will live in the future, how people get on with their lives, their play, their work, and their recreation in a healthy and prosperous urban environment.  Rebuilding requires deliberation, identification of options, and working our way to consensus.  It cannot be rushed.  Nor should it be unnecessarily prolonged.  Ideally, rebuilding will start with community engagement rather than tagging it on through consultation later on, a strategy which risks energy- and morale-sapping disputes about objectives and outcomes.

Getting the governance right

It appears from the papers presented that we know what has to be done: it’s how we set about doing it that is critical to a successful rebuild.

Accelerating and sustaining recovery while laying solid foundations for rebuilding is perhaps the biggest challenge facing those in positions of authority and leadership.  Recognising the differences between them might be a good starting point.

If this challenge is to be met, it is important that the governance structures - who does what and under what authority – are appropriate at the outset.  The creation of a central agency, the Christchurch Earthquake Recovery Authority (CERA), looks like a good start, especially if it focuses on recovery and thereby gives Christchurch City Council the space and capacity it needs to provide leadership in the rebuilding process.  How these two agencies demarcate their roles and work alongside each other will have a major impact on the creation of a resilient and liveable Christchurch.

Phil McDermott is a Director of CityScope Consultants in Auckland, New Zealand, and Adjunct Professor of Regional and Urban Development at Auckland University of Technology.  He works in urban, economic and transport development throughout New Zealand and in Australia, Asia, and the Pacific.  He was formerly Head of the School of Resource and Environmental Planning at Massey University and General Manager of the Centre for Asia Pacific Aviation in Sydney. This piece originally appeared at is blog: Cities Matter.

Photo by Geof Wilson

The Evolving Urban Form: Jakarta (Jabotabek)

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There is probably no large urban area in the world that better illustrates the continuing dispersion of urban population and declining urban population density than Jakarta. Recently released 2010 census data indicates over the past decade that 84 percent of the metropolitan area (Jabotabek) population growth occurred in the suburbs (Note 1). This continues a trend which saw more than 75 percent of growth in the suburbs between 1971 and 2000 (Figure 1).

Savannah State University (Georgia) Professor Deden Rukmana notes that this trend includes “many moderate and high-income families” who left the central city for better amenities while many poor people moved out to the fringe areas to escape what might be seen in the West as gentrification . 

The Megacity: Jabotabek: Jakarta is one of only a few world megacities (over 10 million) that have changed their names in recognition of their regional rather than core city focus (this sentence corrected from original). The most recent megacity with a new name is Mexico City, now referred to as the Valley of Mexico (Zona Metropolitana del Valle de México). Other examples are Tokyo-Yokohama (Kanto) and Osaka-Kobe-Kyoto (Keihansh1n).   Jakarta’s changed name, Jabotabek, represents an acronym made up of the beginning letters of the municipality of Jakarta and the three adjacent regencies (subdivisions of provinces), Bogor, Tangerang and Bekasi (Note 3). Jabotabek is one of the fastest growing megacities in the world and is experiencing accelerated growth. This is in contrast to the situation identified by the McKinsey Global Institute, which noted the declining growth rates of most megacities. In 2000, Jabotabek had a population of approximately 20.6 million, which by 2010 had risen to 28.0 million or 36 percent, nearly doubling its rate of population from the 1990s.    Jabotabek's additional 7.4 million people is nearly equal to that of London (Greater London Authority), nearly as large as the city of New York and more people than live in the entire Greater Toronto area. In 2000, Jabotabek had a population of approximately 20.6 million, which by 2010 had risen to 28.0 million (Figure 2).

Jabotabek's unexpectedly high growth was greater than the 6.6 million added in both the Shanghai and Manila regions over the same period and above the 5.8 million increase in the Beijing region. The percentage growth in Shanghai and Beijing was slightly higher than in Jabotabek and slightly lower in Manila. The megacities of the United States, Western Europe and Japan have all fallen back to growth rates of less than five percent per decade (Tokyo-Yokohama, New York, Osaka-Kobe-Kyoto, Los Angeles and Paris).

Population Trends by Sector: Population growth and rates are indicated in the table for the sectors of Jabotabek and the constituent jurisdictions.


Jakarta Region (Jabotabek)
Population by Sector: 2000-2010
2000
2010
Change
% Change
Core: Jakarta 8.36 9.59 1.23 15%
Inner Suburbs (Municipalities) 4.94 7.23 2.30 47%
Tangerang 1.33 1.80 0.47 36%
Tangerang Selatan 0.80 1.30 0.50 63%
Depok 1.14 1.75 0.61 53%
Bekasi 1.66 2.38 0.71 43%
Outer Suburbs & Exurbs 7.30 11.20 3.90 53%
Bogor (Municipality) 0.75 0.95 0.20 27%
Bogor (Regency) 2.92 4.78 1.86 64%
Tangerang (Regency) 2.02 2.84 0.82 41%
Bekasi (Regency) 1.62 2.63 1.01 63%
Jabotabek: Total 20.60 28.02 7.42 36%
Population in millions

 

City of Jakarta: The core city of Jakarta is the "Special Capital Region" of  Indonesia, similar to the District of Columbia in the United States, the Distrito Federal in Mexico or the Capital Federal in Argentina. This core of Jakarta grew 15 percent and added more than 1.2 million population, rising from 8.36 million in 2000 to 9.59 million in 2010, a turnaround from a loss of nearly 500,000 people between 1995 and 2000. The city of Jakarta captured 16 percent of metropolitan area growth and now accounts for 34 percent of the population of Jabotabek (Figures 3, 4 & 5).

Inner Suburbs: The inner suburbs, which are made up for the purposes of this article by the municipalities of Bekasi, Tangerang, Depok and Tangerang Selatan (South Tangerang) grew 47 percent during the 2000, from 4.94 million to 7.23 million. These inner suburban municipalities captured 31 percent of the metropolitan area growth and now have 26 percent of the population of Jabotabek (Figures 3, 4 & 5).

Outer Suburbs and Exurbs: The outer suburbs and exurbs (Note 2) experienced the greatest growth, at 53 percent, rising from 7.30 million to 11.20 million. For the first time, the outer suburbs surpassed the core with the largest population. The outer suburbs and exurbs accounted for 53 percent of the metropolitan area growth and now have 40 percent of the population of Jabotabek (Figures 3, 4 & 5).

Urban Area:  The substantial growth of Jabotabek occurred principally in the urban area (the area of continuous development or the agglomeration). It appears likely that the urban area population will exceed 24 million (Note 4). It thus seems likely that the Jakarta urban area will again be ranked as the second largest in the world, following Tokyo-Yokohama. Jakarta had been displaced by Delhi (and Seoul-Incheon), for which United Nations 2010 estimates had indicated higher than anticipated population growth as Delhi passed Mumbai to become the largest in India.

Overall, the Jakarta urban area has a population density of approximately 22,000 per square mile or approximately 8500 per square kilometer. Yet the overall density of the Jakarta urban area has declined as population has moved to the outer suburbs which have a population density only one third that of the city of Jakarta. The inner suburbs have a population density that is only two thirds that of the city of Jakarta (Figures 6 and 7).


Despite this, the Jakarta urban area is much denser than most large urban areas in the high income world. Overall, the Jakarta urban area is approximately 2.5 times as dense as the Paris urban area, more than three times as dense as the Los Angeles urban area, and approximately seven times as dense as the Portland urban area. Other urban areas in the developing world are even denser:  Delhi is more than 1.5 times as dense as Jakarta, Mumbai more than three times as dense and Dhaka is more than four times.

 


Informal housing, city of Jakarta (photo by author)

 

A Larger Metropolitan Area?  This continuing population growth could cause Jabotabek to expand even further. Indonesia's President Susilo Bambang Yudhoyono (SBY) has proposed expanding the metropolitan area to include the regencies of Karawang, Serang, Purwakarta and Sukabumi as well as the municipalities of Serang, Sukabumi and Cilegon. Already, Jakarta's continuous urbanization nearly reaches the Karawang urban area to the east (population over 600,000) and is nearing Serang regency to the west. SBY's "Greater Jakarta" has a population approaching 36 million according to the 2010 census. Further pressure on suburban growth could be generated by plans in Jakarta to limit the core city's population to 12 million.

Yet even so it may take some decades, before Jakarta, or perhaps Delhi, could pass Tokyo-Yokohama’s nearly 37 million people to become the world’s largest urban area, assuming that they do not experience the reduced population growth so widespread in other megacities.   

---------

Notes:

1. Caution should be used in making comparisons of metropolitan areas, especially between nations. There is virtually no consistency in the delineation of metropolitan areas between nations. In some cases, such as Japan, the United States, France and Canada, Metropolitan areas are based upon commuting patterns, but even between these nations there is no consistency.

2. For the purposes of this article, suburbs are inside the urban area, but outside the central city (Jakarta). Exurbs are the portions of the metropolitan area (Jabotabek) outside the urban area.

3. The provinces of Indonesia and the state of Virginia are subdivided similarly. In Virginia, all of the land area is divided into municipalities or counties. In the provinces of Indonesia, all of the land area is divided into municipalities (kota) and regencies (kapupaten). The regencies are further divided into sub-districts (kecamatan). Jabotabek is located in three provincial level jurisdictions, the Special Capital District of Jakarta, and the provinces of West Java (Java Barat) and Bantan. West Java has a population of 43 million, approximately 6,000,000 more than the largest state in the United States, California. Banten is bordered on the west by the Sunda Strait, location of Krakatoa, the volcano.

Further, the name Jabotabek may not survive. As municipalities (Note 3) were carved out of the regencies in the 1990s and 2000s, the megacity was called Jabodetabek by some and proposed additions to the metropolitan area could bring even more variations. Inconsistent and alternative names probably make likely that sources will continue to call the megacity "Jakarta."

4. This urban area population is much larger than reported by the United Nations, which for Indonesian urban areas limits its estimates to the jurisdiction of the core city, and thus excludes suburbs. As is generally the case throughout the world, the continuous urbanization of Indonesian urban generally areas extends far beyond core cities.

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Photograph: Luxury housing in Cileungsi sub-district, Bogor regency (outer suburbs), by author

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life


The Katrina Effect: Renaissance On The Mississippi

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In this most insipid of recoveries, perhaps the most hopeful story comes from New Orleans. Today, its comeback story could serve as a model of regional recovery for other parts of the country — and even the world.

You could call it the Katrina effect. A lovely city, rich in history, all too comfortable with its fading elegance and marred by huge pockets of third-world style poverty, suffers a catastrophic natural disaster; in the end the disaster turns into an opportunity for the area’s salvation.

Had Katrina never occurred New Orleans would likely have continued its inexorable albeit genteel decline; the area’s population dropped from 627,000 in 1960 to 437,000 in 2005, the year the hurricane occured. Instead the disaster brought new energy and a sense of purpose to the Big Easy.

I first realized that New Orleans was going through some kind of renaissance when looking at some numbers.  In our list of the country’s biggest brain magnets — based on analysis of where college-educated adults were moving to by demographer Wendell Cox —  New Orleans ranked No. 1, ahead of such hot spots as Raleigh-Durham, N.C., and Austin, Texas.

Then came our analysis of the best large cities for jobs: New Orleans ranked No. 2 in our survey, up a remarkable 46 places. New Orleans’ performance was particularly impressive in the information field, which includes software and entertainment, and in which the Big Easy grew the most — over 30% last year alone – among our major metros.

Yet numbers do not tell the whole story. Sometimes statistics simply look great against the background of catastrophic decline. New Orleans was so far down and received so much recovery money that recent improvements could be explained as a short-term bounce back from a disaster.

But the resurgence of New Orleans, whose population is now back to almost 350,000, represents something far more significant and long-term. For one thing, the storm undermined the corrupt, inept political regimes that had burdened the area for decades. “Katrina shattered the networks and broke down the old hierarchies,” notes Tim Williamson, a New Orleans native and founder of Idea Village, a nonprofit focused on aiding local entrepreneurs.  ”People felt we were dying. Now we feel like we are refounding a great American city.”

For example, inept leaders like former Mayor Ray Nagin and the equally lost Kathleen Blanc have been replaced by more effective figures like Mayor Mitch Landrieu and Gov. Bobby Jindal. Equally important, according to a recent Brookings report, New Orleanians have become noticeably more engaged with their community. Particularly impressive have been improvements in the local schools, once among the nation’s worse. Last year, the majority (61%) of public school students in Orleans Parish (counties in NOLA are called parishes) attended charter schools, which are now attracting some middle class families.

Most impressive, this once stagnant region has transformed into an entrepreneurial hot bed. “Five years ago people thought we were crazy to be here,” says Matt Wisdom, founder of Turbosquid, a firm with 45 employees that provides three-dimensional images to corporate clients. “Now instead of people being amazed we are here, they want to get here to ride the wave.”

Walking along Magazine Street from the edge of the Garden District to the Central Business District, you still pass some rough areas. But the way is peppered with scores of independently owned shops and small businesses, many of them opened since the hurricane. Their owners for the most part appear to be younger than 40.

“We used to have this huge brain drain to the Northeast, the West Coast and Texas, but this has changed,” Williamson says. “After Katrina everyone was forced to become an entrepreneur. The dominant concept for the rebuilding has become one of resiliency and self-employment — it’s been bottom up. It’s become as much of our identity as Mardi Gras or the Jazzfest.”

Since its founding back in 2000 Idea Village has assisted 1,000 local companies with business plans, financing and focus. Most are small, but some of what Williamson calls post-Katrina generation companies, like Naked Pizza, founded in 2006, have expanded rapidly. Specializing in a healthy, organic version of the traditional high-fat fast food, Naked Pizza has won financial backing from Dallas Maverick owner Mark Cuban. The company, which employs 40 employees at its New Orleans headquarters, expects to have over 70 franchises by the end of the year  .

Many rapidly rising businesses specialize in digital media, attracting talent from other places like the West Coast and New York. 37-year-old Kenneth Purcell, founder of Iseatz, moved his entertainment and travel business from New York to NOLA in 2009 and has since grown his company from seven people to 25.

One big advantage of starting a business in New Orleans is its affordable housing. Based on median price against median household income, the region’s prices are roughly 50% less than those in New York or San Francisco. This is particularly attractive both to middle-aged couples with children who can afford a spacious suburban home that are far less expensive than their equivalents in Los Angeles, Westchester or Silicon Valley.

It also is attractive to the smaller subset of employees, many of them young, who are drawn to traditional cities. Some New Orleans neighborhoods remind me of pre-1980 Greenwich Village, offering a charming urban environment without either the extortionate price tag or oppressive density.

Immigration, much of it from Mexico, also is contributing to the regional remake. Over the past decade, as both white and black populations dropped, the Asian population grew by 3000 and Hispanics by 33,500, most of them settling in suburban Jefferson Parish.  Once predominately African-American, New Orleans is returning to its more multi-racial past while re-establishing its strong cultural and social ties to Latin America.

Yet despite all positive signs, it may be too early to proclaim, as some boosters do, a “New Orleans miracle.” After all, the city’s population remains over 100,000 below its depressed pre-Katrina levels. There are still over 47,000 vacant housing units in the city, many of the uninhabitable, notes Allison Plyer, who runs the Greater New Orleans Community Data Center. Overall, the recovery remains stronger in the suburbs, many of which suffered less damage from the storm. The share of regional population living in Orleans Parish, where the city of New Orleans is located, has slipped to 29% compared with 37% in 2000. Jefferson Parrish now has more jobs than the city across all income categories.

Plyer believes the priority for the entire region lies in restoring the higher-paid blue-collar and middle-class jobs that for decades have disappeared from the city.  Young tech and media firms can help gentrify parts of a city, but they are not sufficient to provide opportunities to the vast majority of its residents. To do this, Plyer suggests, the region will have to focus more on “export” oriented jobs in industries such as  energy, manufacturing and trade.

Critically these fields can provide decent salaries for a broad swath of workers.  Right now, Plyer adds, 45% of the workforce earns less than $35,000 a year, one byproduct of the domination of the generally low-paying tourism industry. Jobs connected to shipping pay twice as much on average as tourism; energy three times as much. A new steel plant announced recently by Nucor in suburban St. James Parish could create more than 1200 jobs with average pay of $75,000 annually.

“We’ve allowed Houston and Biloxi to move ahead in a lot of these other industries,” she explains.  ”We have to move ahead in engineering and services and energy to compete with Texas. We can’t be just a tourism economy.”

Ultimately, New Orleans’ long-term recovery may depend on exploiting historic raison d’etre: location. The region  stands astride the primary corridor for the Midwest grain trade and sits in the middle of the Gulf trade routes. It also boasts some of the nation’s richest energy deposits.

Coupled with its enormous cultural appeal, resurgence in the  more traditional economy could spark the most remarkable urban comeback story of the new century. Once the poster child for urban despair, New Orleans may develop a blueprint for turning a devastated region into a role model not only for other American cities but for struggling urban regions around the world.

This piece originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo by Adam Reeder

Orlando: Uncle Sam Meets Mickey Mouse

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Hawks and doves disagree on whether World War II ended the Great Depression.  Depending on which species of bird squawks louder, military spending may be the only way out of our current financial malaise.  In many ways it is already happening, although it is a surreptitious and quiet influence felt mostly in the high-tech economic sector.  Defense growth in one of the most unlikely places – Orlando, Florida – has already begun to diversify the region’s income stream, create a new urban corner of Central Florida, and tap into some of the natural allies and partners that already exist here.  Mickey Mouse is now sharing Orlando with Uncle Sam as the militarization of the local economy increases.

America’s current rough patch, as Dr. Roger Siebert recently wrote about , seems to be deeper than any in recent memory, and recalls the 1930s.  During that time, isolationism was only cured by a slap in the face:  Pearl Harbor.  Today’s isolationism, so vigorously voiced in the calls to depart Afghanistan, seems to echo that period.  Enlistment in the military isn’t exactly vigorous, and intervention in troubled regions is not on the radar screen of even the most ardent hawk.  America seems too self-involved at the moment to care.

Yet at this very same time, Pentagon spending is quietly rising in the modeling, simulation, and training fields.  Already employing 53,000 Floridians, 9,000 more than the state’s hallowed agriculture industry, this growth sector is hugely dependent upon a high-skilled, high-wage workforce.  The ability to train soldiers, sailors, and pilots without the expense of actual bombs and equipment has clearly demonstrated its benefits to the satisfaction of the military brass, making it inevitable that more is to come.

Co-located next to Florida’s premier high-tech medical research park, Lake Nona, the National Simulation Center is the most common name used to describe the efforts underway at the Central Florida Research Park on the east side of town.  More importantly, however, the Center is adjacent to the University of Central Florida.  Already the second largest university in the country, UCF is home to much of this Center’s local 18,000 workforce.   With Navy, Air Force, and Marines research and training, the Simulation Center has quietly become the world’s largest military simulator .

Regionally, it leverages its old Naval Training Center roots and proximity to NASA facilities at Cape Canaveral to capture workers, skill sets, and continuous research and improvement.    While the town struggles with slumping tourism and anemic population growth, the high-tech military industry is rapidly taking over as one of the biggest new economies to hit Florida.

Spinoffs from military research can only benefit Central Florida’s attractions and rides, as future tourists will be able to experience more and more virtual thrills in addition to more traditional meatspace rides and shows.   In the meantime, it remains a quiet partner in diversifying the economy.

In the 1990s, the Naval Training Center left Orlando, ostensibly because it duplicated facilities that the Navy had elsewhere.  Its developable land, close to downtown Orlando, became Baldwin Park, and the old barracks, classrooms, and laboratories were quickly bulldozed for lucrative residential real estate.  Few were aware that the functions of the Orlando Naval Training Center were downsized, not eliminated, and were quietly relocated to the east side of town.

The Training Center evolved into the National Simulation Center. As a research-intensive industry, it capitalized on its new proximity to the University of Central Florida’s campus, and began an interchange with the engineering and computer science programs at that school.  UCF, today with over 50,000 students, has quickly grown to become the nation’s second largest university, just behind Ohio State.  UCF’s own Research Park has grown to rival the fabled Research Triangle in North Carolina, due to the synergy between military and higher education.

Its new location also moved the Training Center a little bit closer to the Kennedy Space Center as well.  The Navy has always had a presence at Cape Canaveral, and with the employee base around the Space Center available less than an hour’s commute away, the Training Center has already benefitted from the availability of this highly skilled workforce who has suffered from the ebb and flow of NASA’s political fortunes.

Medical research being conducted by Scripps, Burnham, and Nemours will also benefit from this activity, as they are all building new facilities at Lake Nona.  This medical research campus will employ many with the same skills, education, and training as the Simulation Center, and provide choices for the scientists and engineers living in Lake Nona’s suburbs.  This makes the residential real estate around Lake Nona a bright spot in Central Florida’s otherwise horrendous housing market .

Surrounding the Simulation Center, small companies have already started feeding creativity and innovation into the giant maw of the military, and spinoffs – commercialization of its technology – have also benefitted larger companies such as Orlando’s game design team at Electronic Arts and the military contractor Lockheed Martin.  This supply chain, once established in Orlando, gives localized sustainability to this industry and suggests that it has achieved a foothold among the tourism, agriculture, and growth industries firmly established in Central Florida.

Geographically, East Orlando is difficult to develop.  Like the surface of swiss cheese, land above the flood plain, traditionally agricultural, is interlaced with wetlands and lakes, and it has been historically ignored for the broad swaths of low-hanging fruit closer to the theme parks and population centers on the west side of town.  Pressure to develop, however, has suddenly put this area in the spotlight, and controversial proposals by homebuilders and other owners have raised questions about whether Florida should stay on its historic pathway of man vs. nature.   Infrastructure – roads, utilities, and other unglamorous investment – still doesn’t exist in much of East Orlando.  Because development has historically been in small pockets fragmented by the area’s mosaic of wetlands, connectivity and sheer mass will be difficult to achieve without great cost to the environment.

Yet this does not have to be so.  Dense development can happen with respect to nature, as proven by countries such as Germany and Sweden .  If left to the same old forces that developed the rest of Florida, it is unlikely that East Orlando will experience any innovation regarding development strategy, and Central Florida will host the same old battles of environmentalists vs. developers again and again.  The state’s growth strategy – leaving it up to private interests – may have already guaranteed this outcome.

If, however, innovation transcends the research mission and influences the style of development to support this research, then the military and medical centers in East Orlando have a chance to provide a true, new pathway to the future.  Like Victor Gruen’s 1963 concept for Valencia, which recognized such modern aspects of society such as the car, East Orlando could be planned as an employment-based community within the context of nature using contemporary science and technology.  Orlando, the ephemeral city home to amusement parks and orange groves, could become a model for development to influence other areas struggling with the same questions.

Militarization of the economy may become a vehicle for true change.  The cluster of military agencies and private businesses, headed by Lockheed Martin, all revolve around this economy and provide a badly-needed shot in the arm of Orlando’s workforce.  With high-salary, highly educated workers, global connectivity, and a growth engine no less than the Department of Defense, Orlando can be assured of some good times ahead while the tourism and housing sectors recover.  The region’s leadership must think carefully how to embrace this new savior, and what the greater implications are for the future.

Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

Photo by Research Development Engineering Command

Listing the Best Places Lists: Perception Versus Reality

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Often best places lists reflect as much on what’s being measured, and who is being measured as on the inherent advantages of any locale.  Some cities that have grown rapidly in jobs, for example, often do not do as well if the indicator has more to do with perceived “quality” of employment.

Take places like Denver and Seattle. Both do well on what may be considered high-tech measurements – bandwidth, educated migration, entrepreneurial start ups – but have trailed other places in terms of creating jobs. Others, such as Oklahoma City and Raleigh, do better in terms of overall job creation and cost competitiveness.

There are effectively few truly objective criteria, and the Area Development list does tend to weigh a bit heavy on the factors that help more expensive – although not necessarily the most costly – cities. If cost of doing business, or regulatory environments were given more weight, some of the high fliers would not do as well.

We prefer to focus less on atmospherics and more on how people, and businesses, are voting for their feet. San Francisco and New York have generally had slower job growth and greater outmigration, but do well on lists that focus on perceived qualitative factors.

But then there is Austin. Here is one region that has it all, the low costs and favorable regulatory climate of Texas along with the amenities associated with a high-tech region. The area creates a large number of jobs of varying types and is still inexpensive enough to attract young, upwardly mobile families. This gives it a critical advantage over places like Silicon Valley, Los Angeles or New York.  Unlike those three centers, Austin performs extraordinarily well in quantitative measurements.

The region that most closely matches Austin in these respects is not Seattle and Denver, but Raleigh Durham. Recently a group of leaders from Raleigh made a visit to Denver to learn what makes that city successful. Speaking to the group, we pointed out that by objective measurement – job growth, educated migration, population growth – Raleigh beat Denver by a long shot, yet it was to Denver the group was looking for inspiration. In fact, over the past three years, Americans have moved to Raleigh at a rate more than three times that of Denver.  Perception can be a funny thing which makes a winner feel inferior to a clear runner-up.

Another strange result is that New York and Houston had the same number of mentions. Yet looking at numbers --- from educated migration, job growth, population increase --- Houston slaughters New York. People, from the college educated on down are flocking to Houston while fleeing, in rather large numbers, from New York. One has to wonder where the rankers live and where they are coming from. Houston triumphs on performance, while New York, to a large extent, wins on perception. 

Looking simply at job growth over the past ten years for the Leading Locations mentioned on at least five surveys, the 14 regions separate themselves into three groups.  The top tier of places – Austin, Raleigh, San Antonio, and Houston – all have seen job growth of more than 12% and seem to be recovering from the recession faster than the others.  

Salt Lake City and Charlotte were tracking with the top tier of places until 2007 but have since fallen to the second tier of cities.  The remainder of the second tier includes steady growers Dallas and Lincoln, along with Oklahoma City, a region that has seen a boom in jobs since bottoming out in 2003.

The final job growth tier of places includes five regions that have fewer jobs than ten years ago.  Seattle drops just below the zero line after being hit particularly hard by the 2001 and 2008 recessions, while New York and Denver finish near the national rate.  Pittsburgh and Boston spent most of the decade below their 2000 employment levels, but each seem to be recovering from the recession faster than many of the other Leading Locations cities. 

But perhaps the biggest problem with lists has to do with the size of regions. Much of the fastest growth in America, particularly in terms of jobs, has been in small metros, many with fewer than 1 million or 500,000 residents. Smaller dynamic areas such as Anchorage, Alaska; Bismarck, North Dakota; Dubuque, Iowa; or Elizabethtown, Kentucky – all in the top 25 of NewGeography’s Best Cities for Job Growth 2011 Rankings – are too small to show up on some lists yet may be a location of choice for expansion. This reflects not so much their relative desirability but the fact that, unlike larger regions, they simply are not included on many rankings.

Ultimately, a list of lists does tell us much, but perhaps only so much for a specific individual or business. For someone interested in the movie business, for example, Los Angeles – and increasingly places like New Orleans or Albuquerque – are great draws, but perhaps not so much for financial services.  The lists of lists are useful to identify hotspots, but for most location decisions, it may be more imperative to drill down to more detailed industry sectors and workforce attributes. And most of all, take the perception factor into account and look instead at the real numbers to tell you where to go.

This piece first appeared at AreaDevelopment.com, as part of its Leading Locations series discussing best cities rankings.

Joel Kotkin is a Distinguished Presidential Fellow in Urban Futures at Chapman University in California, an adjunct fellow with the London-based Legatum Institute, and the author of The Next Hundred Million: America in 2050. Mark Schill is Vice President of Research at Praxis Strategy Group, an economic research and community strategy firm.  Both are editors at NewGeography.com, a provider of two surveys for Area Development’s Leading Locations list.

Photo by mclcbooks

Inside Sydney's Central Business District: the Retail Core

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World famous for its beautiful harbour setting, Sydney’s Central Business District is undergoing a resurgence. As the hub of Australia’s finance sector, it stumbled during the global crisis. Office vacancies jumped from 5.7 per cent in early 2008 to 8.8 per cent in mid 2009, despite stable supply. Ultimately, though, Sydney was spared the worst, owing to its rise as a staging post for trade and investment in the Asia-Pacific region, which averted the havoc of Europe and North America. Recovery is now underway, if slowly. White-collar employment is picking up and the vacancy rate is down to 7.3 per cent. Landlords are again celebrating the prospect of rising rents.

But there’s a bigger story. This revival is happening amid some notable trends. Post-crisis, the CBD’s functional map is being redrawn by a wave of Asian and other visitors and investors, prominently listed property trusts and pension funds looking for a safe haven, the spatial demands of a transformed white-collar workplace, intensive residential development on the CBD fringe and officials pushing flashy “green” projects. There’s no doubting the importance of these developments, or that they will be hyped by inner-city based media.

In fact, central Sydney has been losing economic clout, in relative terms, to the periphery or suburban hinterland for some time, a polycentric trend observed in other countries. Between the 1981 to 2001 censuses, encompassing the most active period of economic liberalisation in Australia’s history, Sydney’s general population growth was 23 per cent, while outer areas in Greater Western Sydney grew by 38 per cent. The CBD’s share of Sydney’s jobs shrunk from around 30 per cent to 9 per cent during this period. Four of the five strongest growing Local Government Areas (LGAs) in the year to 30 June 2009 were still in the outer west: Blacktown, Parramatta, The Hills Shire and Liverpool.

The latest wave of change will prove significant and long-lasting, but the CBD isn’t destined for a return to metropolitan supremacy.

Sydney CBD
Sydney CBD

The retail core

For theorists of the CBD, peak land value intersection (PLVI) is a pivotal concept. This is the centrally-located point, usually at the intersection of two thoroughfares, where land values are highest. Without doubt, Sydney’s PLVI is the intersection of George and Market Streets. George Street is the CBD’s spine, traversing a north-south axis from Circular Quay to Central Station. Historically, Market Street was the critical entry route from the west, extending from the defunct Pyrmont Bridge (over Darling Harbour), and now from a branch of the Western Distributor. Blocks surrounding the PLVI are typically occupied by upscale department stores, absorbing peak land prices with high turnover of quality goods on multiple floors. Thus Myer and Gowings stores occupy the north-east and south-east corners respectively, and David Jones a site further east along Market Street (the Gowings site is earmarked for refurbishment as a boutique hotel). The iconic Queen Victoria Building arcade sits on the south-west corner.

According to the “core-frame model”, another tool of CBD theory, activities competing for the highest rents, like upmarket retail and superior grade office towers, concentrate in core blocks, while marginal activities disperse to peripheral blocks. In terms of the theory, the latter are a “zone in transition”, at an intermediate stage between lower grade building stock and future redevelopment. Activities like low-end retail, fast-food, novelty shops, pawnbroking, wholesaling, storage, off-street parking, warehousing and light-manufacturing locate there.

Traditionally, Sydney’s CBD had a retail core around the PLVI bounded by York, Park, Elizabeth and King Streets, south of an office core bounded by King, Clarence and Macquarie Streets and Circular Quay. Judging by the headlines, the retail core is Sydney’s biggest news. Long a feature of suburban life, the CBD is being transformed by the arrival of mall-style shopping, adding to the mix of department stores, arcades and stand-alone shops. In some ways, it’s catching up with the social evolution of shopping as a “complete experience” linked to identity formation.

The catalyst is Westfield’s $1.2 billion development at the corner of Pitt Street Mall and Market Street, just a block east of the PLVI. A pedestrianised section of Pitt Street between King and Market Streets (not a regular mall), Pitt Street Mall is the retail core’s epicentre. Last year, global real estate firm CB Richard Ellis (CBRE) rated it the second most expensive street for retail rents in the world. The first was New York’s Fifth Avenue.

With rents so high, investment dollars are pouring in. Fronting the eastern side of Pitt Street Mall, Westfield’s contemporary glazed-glass structure, box-like at street level but topped by Sydney Tower, converts four properties into 93,000 square metres of retail space, distributed over a six-storey shopping mall. The first stage opened last October. On completion, it will house 330 flagship and specialty fashion outlets, and lifestyle stores, most of them international brands, including Sydney firsts Versace, Gap, Zara and Miu Miu, together with several eateries. Two skybridges link the complex to nearby Myer and David Jones department stores.

Westfield’s opening coincided with a general revamp of Pitt Street Mall, featuring landscaping, paving and tree-planting by Sydney City Council, and reconstruction of the mall-like Mid-City Centre, 52 shops on four-levels fronting the Mall’s western side, almost opposite Westfield, penetrating west to 420 George Street. One Mid-City store, jewellery retailer Diva, is reputedly paying the highest rent in the CBD, $13,500 per square metre a year.

Pitt Street Mall’s face-lift set off a reshuffle of fashion and luxury goods retailers around the retail core, with knock-on effects all the way up George Street. Burberry is moving to refurbished premises at 343 George Street, Louis Vuitton to a new flagship store on the corner of King and George Streets, Dior to Castlereagh Street, and Zegna and Prada to Westfield, from Martin Place. This follows the 2008 opening of the world’s largest Apple store, at glass-clad 367 George Street (roughly opposite Mid-City at 420).

Pitt Street Mall
Pitt Street Mall

A sign that the retail core may be busting out of its old confines, and creeping north of King Street, major retail developments are planned in the vicinity of Wynyard railway station, at 301, 333 and 383 George Street. Some of these anticipate the most striking proposal yet: a futuristic commercial and residential precinct on the foreshore of East Darling Harbour, or Barangaroo, seeing the retail core spill into the CBD’s rising “western corridor”, which was a "zone in transition" in the days when Darling Harbour and Walsh Bay were working ports. This $6 billion plan includes 30,000 square metres of retail space and a pedestrian walkway to nearby Wynyard, the CBD’s busiest underground station.

It’s easy to explain such hyperactivity. Sydney is one of a handful of global cities in a developed country which wasn’t flattened by the financial crisis. There’s a clear international dimension to the CBD’s resurgence. According to Cushman & Wakefield’s International Investment Atlas 2011, the Asia-Pacific is dominating global property investment. Ranked eleventh, Sydney joins 6 other Asia-Pacific cities in the top 20. In the 18 months to June 2010, reports CBRE, Sydney ranked fourth in the world in terms of cross-border investment. Foreign investors accounted for 42 per cent of Australia’s property asset acquisitions in the third quarter of 2010, way above the typical level of 10 to 15 per cent. In these conditions, Sydney shot up to ninth out of 65 cities in AT Kearney‘s 2010 Global Cities Index. And a 2010 survey by real estate agents Jones Lang La Salle rated Tokyo and Sydney the most popular Asian cities for investment. At a time when many asset classes carry outsized risks, Australian commercial property is a safe option.

Of course, there’s nothing new about Asian investment in the retail core. Three of its most fashionable shopping arcades belong to Ipoh Pty Ltd, which is owned by a Singaporean fund manager: the Queen Victoria Building, The Strand Arcade between Pitt Street Mall and 412-414 George Street, and The Galleries, on the corner of George and Park Streets, the core’s southern edge.

But urban planners would be wrong to overestimate the impact of all this on the wider metropolitan region. Quite clearly, Westfield’s target market embraces a small minority of Sydney’s 4.5 million residents. Commenting on the mall’s opening, the Group’s managing director hoped it would be a “destination for the people of Sydney, and the 26.8 million domestic and international visitors who come to Sydney each year”. The Australian Financial Review, citing Westfield, reported that it will “service not only 240,000 workers in the [CBD], but 1.5 million in the primary trade area across the richest suburbs and the 26 million tourists who visit the city each year”. David Jones’ CEO expressed similar sentiments, saying “my hope is that Sydney’s CBD retail precinct becomes a world-class shopping destination on a par with the world’s best such as Oxford Street, London, and Rodeo Drive in LA”.

Much of the investment surge is predicated on large numbers of visitors, and the growth of inner-suburbs ringing the CBD. If the travelling patterns of China’s newly cashed-up middle class are any guide, for instance, these hopes won’t be disappointed. The number of Chinese visitors to Australia is forecast to grow by 7.9 per cent a year, reaching 783,000 a year by 2019. Meanwhile, Sydney LGA’s population is ballooning (the CBD and environs). Between 2001 and 2009, it grew by 38 per cent, or 49,000 new residents. Eager to meet the former state government’s target of 55,000 new residential units over the next decade, Sydney Council is presiding over a number high-density projects on derelict industrial or recreational sites. Most of the newcomers will belong to the same demographic as current residents, younger, upper-income professionals with a taste for inner-city living. They are no cross-section of Sydney’s population. Below average in age, their median weekly income is $717, compared to $518 for the whole metropolitan region.

To an extent, Sydney CBD is exhibiting features of the global city phenomenon, when highly-developed zones “secede” from their hinterland and develop stronger ties to distinct occupational classes and overseas markets. The revitalised retail core is unlikely to lure the vast majority of shoppers -- who live and work far from the CBD -- away from suburban megacentres like Chatswood Chase, Miranda Fair, Warringah Mall, Castle Towers, Minto Mall, Top Ryde City, Westfield’s other centres at Bondi Junction, Parramatta, Burwood, Hurstville, Hornsby and Penrith, local retail strips, or the growing number of Australians who shop online. Just as suburban malls attract customers from their surrounding feeder population, the same applies to the retail core, but with a higher proportion of domestic and foreign visitors.

The CBD’s revival shouldn’t be misinterpreted. It doesn’t herald a return to regional primacy. Calls by green-tinged academics and newspaper editors and columnists for billions to be spent on CBD-centric rail networks are wrongheaded. Such plans can only have a distorting and negative effect on economic vitality across the metropolitan region, especially fast growing outer LGAs. Look at the CBD’s story. For all the contemporary rhetoric linking urban success to green amenity, it owes more to plain old capitalism.

John Muscat is a co-editor of The New City, where this piece originally appeared. 

Photo by Christopher Schoenbohm.

UN Celebrates Seven Billion People a Year Too Early

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The UN has decided to announce that on October 31, 2011 the Earth’s human population will pass the seven billion mark, up from the six billion that was designated on December 5, 1998. The United Nations Population Division Agency is the main organization that estimates global population. Every two years, their report attempts to piece together surprisingly fragmentary national census data and demographic surveys to arrive at a global estimate. As a geographer, I have long been interested in these reports, and in all aspects of population change and distribution on the earth.

The UN report is subject to a variety of interpretations, but the main news story has been that a revised methodology projects a global population of 10.1 billion in the year 2100, driven most notably by continued rapid population growth in Africa. This will be a call to arms for population planning programs to increase funding targeted in Africa, along with a new round of debate over the long term sustainability of seven billion people.

The numbers reveal mostly positive news for those concerned about population growth and hoping for a leveling off of population (achievement of zero population growth). First, the aggregate global estimates from 1950 to 2010 show that the rate of global population growth peaked in 1969 at 2.12% per year, and has now declined to 1.15% per year. This means that population growth has been slowing down for the past 42 years.

In addition, the absolute annual increase in population peaked in 1988 at 89.63 million and has declined to 78.152 million in 2010. The overall dynamic is a deceleration toward a leveled-off population this century, with some uncertainty as to whether the peak will be eight, nine or ten billion persons.

We are going from a preindustrial world of a half billion people to a post industrial, urbanized one of seven to ten billion with a global economy hundreds of times larger than the one in the year 1800. Seven to ten— is it too casual to give or take three billion? The difference is not as large as it sounds, since most human activity is concentrated on ten percent of the surface.

That's because three quarters of the Earth’s surface area is covered in ocean and ice, and of the dry land, sixty percent of that consists of tundra, deserts, boreal forests and other lands that have very low population densities. As a result, the difference between a world of 7 billion and one of 10 billion is 350 persons per square mile compared to 500 per square mile of settled land. To put the difference in perspective, look at the densities of France, at 296 per square mile, compared to that of Italy, at 521 per square mile. Passing the seven billion mark, or hitting 10 billion, doesn't call for some fundamental reckoning, or indicate that we've reached a carrying capacity ceiling.

Still, given that UN numbers are estimates, how accurate are the projections for Africa? Table #1 shows the 2010 estimates for the five regions of Africa, and the 2050 and 2010 projections. While East and West Africa combined represent 9 percent of global population and land area, this last frontier of population growth is interesting. The estimates indicate dramatic growth from 1950 to 2010. Population in North, South and Middle Africa as a group have peaked, while East and West Africa are still accelerating. (The other 91 percent of the globe is 80 percent of the way to the UN’s population peak in 2058 and is basically done with population growth.)

The dynamics of global population change are becoming focused on East Africa and West Africa, the two regions which together comprise about forty percent of the land area of Africa. With the rest of the world experiencing a mix of modest population growth and decline, East and West Africa are projected to experience 94 percent of future global population growth. Even with a more likely scenario of a leveling off at 1.523 billion rather than going on to a very large 2.14 billion, East and West Africa will still represent the largest demographic change story of the 21st century.

Do East and West Africa have some demographic similarities with China and Latin America back in 1960? If so, as has been seen around the world, fertility declines from 6 to 2 children per mother will happen much more quickly than the UN 2011 projections suggest. Given that African real economic growth of 57% has been robust in the last ten years, including a 29% gain in real per capita income, there is evidence that the continent is slowly emerging out of a poverty trap. Africa is also rapidly urbanizing, and demographic surveys conclusively show a big difference in the fertility rates of women living in urban areas as opposed to rural ones. East and West Africa represent a very interesting final chapter in modern population growth, with the challenge to use land and fresh water efficiently and protect significant wildlife resources, while potentially becoming an economic powerhouse later into the century.

The story will be interesting and important to follow. In the next forty years, East and West Africa, along with South Asia, will be the big population growth centers, while the rest of the world will increase very slowly. Even with dramatic economic growth, urbanization, and a doubling of population in East and West Africa in the next few decades, the global population could very well level off at 8.8 billion rather than 10.1 billion.

Back to the estimates themselves: The UN pieces together a global story from a set of data and estimates from countries with infrequent censuses. Table Two shows official national census estimates for 31 countries, which represent about 60% of the global population. Most of the census results are coming in below UN projections.

Assuming that the rest of the world’s nations that have not conducted recent censuses have similar overall projection problems, one could infer that the actual population is at least one percent lower than the UN 2011 estimates. If we just assume the UN population growth rates for 2010-11 are accurate, and project these 31 country census results forward to July 1, 2011, we get a population of 6.9 billion people. We would then estimate that the world population would hit 7 billion in October, 2012.

So why is the UN declaring October 31, 2011 as the day of 7 billion? While nobody knows what the true world population is, perhaps the UN should err on the side of accuracy… and put off this announcement until 2012. A delay would increase the probability that we actually have crossed that symbolic threshold, something for all people on earth to reflect upon.

Ron McChesney is a Geographer who founded a research firm called Three Scale Strategy and a related non-profit called Three Scale Research. The company studies and reports on the economy of the state of Ohio and how Ohio interacts with the rest of the world. His research interests include the study of patterns and changes in population, land use, economics, energy production and transportation.

Data Sources: UN Population Division, International Monetary Fund, Geohive.com

Photo by etrenard, "Niger Portrait"

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