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    It is massively larger than 11 million illegals.

    Hans Rosling, co-founder of Gapminder, calls it “the biggest change of our time”. It is Africa’s population growth from 1 billion people today to 2.5 billion by 2050 and 4 billion by 2100.

    You could say that a close “second biggest change of our time” is the aging and stagnation of the population in rich countries. The combined population of North America, Europe, Japan and Australia/New Zealand is now at 1.3 billion and it will remain at 1.3 billion by 2050 and 2100 with small gains in North America and Oceania offset by declines in Europe and Japan.

    This boom and bust present an unprecedented challenge to policy makers in every country of the world. Poor countries in Africa and Asia are ill-prepared for a boom that will last for decades. And rich countries must adapt their economies to a new reality of flat or falling domestic demand. In addition, the West also faces an increased flow of migrants from Africa and the Middle East fleeing poverty or war.

    If a candidate wishes to seriously address the demographic emergency, he might turn his attention to the much larger global picture, not just what happens at the US-Mexico border. Without an improvement in local conditions in Africa and Asia, millions will try to move to the West. The numbers we now see crossing the Mediterranean at great risk will pale in comparison to those of twenty or thirty years from now.

    In the same week that Donald Trump announced his immigration plan, there was news that Germany could accept as many as 750,000 refugees this year. If they end up remaining in Germany, this would amount to 0.9% of the German population, a higher annual rate of immigration than the US has had in over a century. By way of comparison, the current US rate is at 1 million green cards per year, equal to 0.3% of  the US population. The post war average is 0.25% per year.

    The migrant crisis is putting Europe’s openness to the test. Not all countries are as welcoming. Sweden is more open than others and has been accepting the equivalent of 1%+ of its population every year. Other countries only agree to take in very small numbers or reserve the right to be selective.

    Of course, it is not as easy to move from Africa to North America. The Atlantic and Pacific Oceans will deter millions of desperate migrants who will instead try their luck with Europe.

    In fact, barring the unexpected, the Western hemisphere is relatively insulated from this century’s population boom. On current UN projections, the population of North and South America will rise by a relatively modest 225 million between now and 2050, less than 10% of the entire 2.4 billion rise in world population. Nonetheless we can assume that some millions, or perhaps tens of millions, out of a few billions, will find their way across the oceans.

    This chart shows the scale of the expected changes. The first bar on the left, nearly invisible, is the current population of illegal immigrants in the US, estimated at 10 to 15 million. The next one, barely visible, are the future legal immigrants into the US between today and 2050 assuming the current run rate of 1 million per year. The next four bars are the increases in populations for the US, the Western hemisphere, Africa and the world in the next 35 years.

    IllegalsvsPopChg

    So you can see that our domestic concerns are minute in comparison to what is happening elsewhere in the world. It is true that close proximity to a crisis creates a greater sense of urgency. A small problem next door can be more pressing than a large problem a thousand miles away.

    But the rapidly changing demographics of the West, and of Africa and Asia, are already having an impact on our lives. It is right therefore to discuss the following during a political campaign:

    • Developed countries including the US, Canada, Europe, Japan, Australia, New Zealand are having fewer children than in the past. Their total fertility ratios (TFR) are below the replacement level of 2.1 average children per woman. This means that the populations of these countries are shrinking (Japan, Germany, Italy), plateauing (Europe in general) or growing slowly (North America, France, Great Britain).
    • According to the latest UN estimate, the US population will increase from 322 million today to 389 million in 2050. This projection includes future immigrants and is equivalent to an annual growth rate of 0.5%, well below the 1.2% average of the last 100 years. The post war average is also 1.2%.
    • Europe’s population will fall from 738 million to 707 million. Russia, Germany and Italy will shrink while France and the UK grow slowly.
    • Several emerging markets including China and Russia also have TFRs below replacement. China’s population will be peaking then falling. It will be surpassed by India’s within the next ten years.
    • All the above mentioned countries except India have aging populations. The median age in the United States is now 38 years and rising. In nearly all European countries, it is over 40. In Germany and Japan, it is 46. At the other end of the spectrum, in booming Nigeria, Ethiopia and Congo, it is less than 20.
    • Dependency ratios (loosely the number of dependents per worker) are rising everywhere except in Sub-Saharan Africa, India and a few other countries.
    • As noted above, the populations of Sub-Saharan Africa and of the Indian subcontinent (India, Pakistan, Bangladesh) are booming. Sub-Saharan Africa is estimated to grow from 962m today to 2.1 billion in 2050. India from 1.3 billion to 1.7 billion.
    • And the world population is expected to grow by 2.4 billion additional people by 2050. But the Western hemisphere is expected to add only 225 million, less than 10% of the projected increase.

    Screen Shot 2015-08-17 at 4.04.27 PM

    So what is to be done?

    One of Mr. Trump’s proposals is to build a wall along the Mexican border. Beyond the near term, this may or may not prove effective. Certainly, the Southern border as it stands today is one of the softest points of entry for current and future illegal immigrants.

    A more comprehensive and more robust solution is to improve conditions in the migrants’ countries of origin through trade, investments in infrastructure, health care and education, and assistance in building stronger institutions. (Such an effort may fly in the face of Mr. Trump’s other promise to repatriate jobs that have been outsourced to China and other emerging markets, but that is another topic.)

    Contrary to some political discourse, an investment in the economies of poor countries is not just altruism. It is a win-win strategy and an investment in our own future. Bjorn Lomborg, founder of the Copenhagen Consensus, wrote recently about investing in the health and education of children in poor countries:

    It is morally right that every child should be given the best chance to survive, eat well, stay healthy, and receive an education. Now we also know that it is among the best investments we can make. Healthy, well-educated kids grow into productive adults, capable of providing a better future for their own children, creating a virtuous circle that can help build a better, more prosperous world.

    Our own work at populyst centers on the development of the populyst index™ which rates each country on three measures: innovation/productivity, demographics/health care, and institutional strength/governance. In recent years, the deteriorating demographics of the West have eroded their standing in the index. And the booming demographics of poor countries have given them an opportunity to make significant strides if they can implement the needed reforms.

    A symbiotic solution that addresses the challenges of both rich and poor countries would involve the following:

    • Emerging economies would benefit from western capital, technology and institutional expertise.
    • Better health care in Africa and India would lower infant mortality, improve women’s health and accelerate the fall in TFRs, curbing the big population boom.
    • Domestic demand is slackening in rich countries and would benefit from new sources of demand from rising populations. A rising standard of living in poor countries will add to the revenues of Western firms dealing with sluggish home markets.
    • An improvement in emerging economies would relieve the migrant crisis we are now seeing in the Mediterranean and Europe.

    In case of inaction, the political instability and economic dislocation the world may suffer because of the ongoing population boom will touch our own country in more undesirable ways than a few million unwanted immigrants have done so far.

    How do we respond to the twin problem of stagnant demographics in the West and booming demographics in poor countries? This is the question that all candidates should be debating.

    Sami Karam is the founder and editor of populyst.net and the creator of the populyst index™. populyst is about innovation, demography and society. Before populyst, he was the founder and manager of the Seven Global funds and a fund manager at leading asset managers in Boston and New York. In addition to a finance MBA from the Wharton School, he holds a Master's in Civil Engineering from Cornell and a Bachelor of Architecture from UT Austin.


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  • 10/22/15--22:38: Conferences and Progress
  • Californians attend innumerable conferences on housing and economic growth.  Year after year, in counties across California, the same people show up to say and hear the same things.  Mostly what they say and hear is naive, and nothing ever changes.

    I was reminded of this when I saw a report on what appears to have been a typical conference at the Harris Ranch on Growing the Central Valley Economy.

    There is no doubt that the Central Valley economy could use some economic growth.  After years of paying a disproportionate share of the costs of California’s coastal-driven energy, environmental and water regulations, the Valley’s economy is suffering.  Poverty is rampant, as California leads the nation with a three-year average poverty rate of 23.4 percent according the Census Bureau’s most recent comprehensive poverty measure.

    The Valley and some other inland areas are the primary reason California leads the nation in poverty and inequality.  Throughout the Valley, economic growth is anemic.  It’s negative in some areas.  Some counties are seeing declining populations.

    Conferences, at least the typical California conference, won’t help.  They only serve to provide a low-cost means to salve the participants’ consciences, allowing them to feel that they are doing something.

    Consider the recommendations that came through the report:

    Creative thinking from the public policy sector

    You can bet your net worth that you will hear about creative thinking or thinking outside the box at every California housing or economic development conference. At best, it doesn’t mean anything. If it does mean anything, creative thinking from the public policy sector is the worst thing that could happen.

    Public policy sector creative thinking is what has created the San Joaquin Valley’s stagnant economy and California’s poverty and inequality in the first place. California’s ruling elite are proud of California’s regulatory quagmire. No one could have imagined 20 years ago how successful they would be in putting it in place. Today, it remains unduplicated by any state, but Oregon is trying.

    The public sector does not create jobs or wealth, although it can provide preconditions through infrastructure development or contracts. But government is not the source of innovation or wealth creation. That comes from entrepreneurs, whether in the once-dominant aerospace industry or the early days Silicon Valley’s world-leading tech sector.  It won’t create any in the future.

    The best that government can do is to get out of the way of innovators—that means stream-lining the regulatory process and protecting property rights, in order to provide a predictable business environment.

    Let’s hope we don’t see more creative thinking from the public policy folks.

    Putting a “face” on the Valley and individual lives affected, emphasizing the continuing drought, pending fracking legislation, and burgeoning trade and logistic sectors in the seven-county region known as the San Joaquin Valley

    I think the idea is that if the coastal elite could just see the impacts of their policies, they would change those policies to allow more economic vigor in the Valley. The naivety is touching, and shockingly naive.

    Let’s face it, California’s coastal elite likely care more about some Minnesota dentist’s shooting a lion than they care about the lives of Valley residents. Their policies are there to save the world. If they cause some inconvenience for people in the Valley, well that’s just the cost of progress.

    It might be different if they thought their policies would impact their own incomes. Their policies don’t. Tech sector people know their incomes come from all over the world, and they just relocate plants, call centers, tech support and even development outside of California if costs become too high. There is a reason that the Silicon Valley no longer is building more of the chip factories for which it was named.

    The retired coastal elite’s income is mostly independent of California’s economy. Once again, the checks come from someplace else.

    Accessing and employing the most effective tools from science, engineering and technology to responsibly advance technological applications

    Yep, and motherhood is a wonderful thing. Technology and applications will advance, regardless of what happens in the San Joaquin Valley. How is this supposed to help the Valley? California has priced itself out of competitive tradable goods production. That’s why Intel, Apple, Facebook and others are spending billions expanding outside of California.

    Technology will benefit Valley residents, but it won’t be a source of economic growth until the Valley has a competitive cost structure. And that cannot happen until the state takes its foot off the valley’s neck.

    Building coalitions to ensure adequate resources and investment in the Central Valley during what is likely to be a dramatic transition period

    Coalitions are another topic that comes up in every California conference. We’ve heard this for decades, and nothing has happened.

    All that coalitions, at least as they materialize in California, can do is advocate. Most often, they advocate to the government. Since governments are the source of the problem and not the source of economic growth and wealth, this not an effective strategy. The coalitions might extract some wealth from someone else, but they are not going to create economic vigor.

    Focusing locally on training and retaining that will help boost opportunities for employment and contribute to an improved quality of life as the region continues its transformation to a progressively more sustainable future

    This is another thing you hear constantly California conferences. Education and training are something that we have chosen to do for our young people. It can be an economic development tool. In California today, though, education is not an economic development tool.

    San Joaquin Valley graduates of high school or college can’t get jobs in the Valley. The Valley’s unemployment rates are way above the State’s even in good years. More individuals with degrees won’t change this. All it means is that Texas, Arizona, Utah, and other states will have a better pool of California workers to supply their economies. We may feel a moral obligation to educate, but it’s not a local economic development tool.

    What Could Work?

    The California Environmental Quality Act (CEQA) was originally enacted to protect California’s pristine natural environments. Since then it’s evolved into a tool which allows almost anyone to stop or delay just about any project. In fact, the threat of a CEQA case is often wielded by project opponents in order to extort concessions from companies.

    CEQA dramatically increases the uncertainty and costs associated with California projects. It needs to be rewritten to achieve its original purpose while limiting its use as a tool for maintaining the status quo.

    California’s other regulations that most hurt economic growth are either environmental or are designed to bring in “stakeholders .” All need to be evaluated on a cost-benefit basis.

    Chapman University researchers have presented compelling evidence that California’s greenhouse gas regulations have almost no impact on global carbon levels, but we know they have considerable costs.

    Regulations designed to bring in “stakeholders” effectively grant almost everyone veto power over most projects. You could hardly design a more effective method to slow or stop growth.

    Politically, there is no chance of making necessary regulatory revisions anytime soon. There is hope, though. California’s minority caucus recently stopped proposed regulation mandating a 50 percent decrease in California’s use of gasoline. The minority caucus’ constituents are California’s primary regulatory victims. It was good to see them stand up for their constituents. I hope to see more of it in coming years. That will be far more effective than another conference.

    Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org.


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    I’m reading Once in a Great City: A Detroit Story by David Maraniss, a book I plan to review for City Journal. But I want to highlight something briefly that really caught my eye about Motown Records. It’s no secret Detroit punches above its weight in musical influence, and the Motown sound was clearly a big part of that. Maraniss asks “Why Detroit? What gave this city its unmatched creative melody?” He lays out his theory of the case with regards to Motown Records.

    The family piano’s role in the music that flowed out of the residential streets of Detroit cannot be overstated. The piano, and its availability to children of the black working class and middle class, is essential to understanding what happened in that time and place, and why it happened, not just with Berry Gordy, Jr. but with so many other young black musicians who came of age there from the late forties to the early sixties. What was special then about pianos and Detroit? First, because of the auto plants and related industries, most Detroiters had steady salaries and families enjoyed a measure of disposable income they could use to listen to music in clubs and at home. Second, the economic geography of the city meant that the vast majority of residents lived in single family homes, not high-rise apartments, making it easier to deliver pianos and find room for them. And third, Detroit had the egalitarian advantage of a remarkable piano enterprise, the Grinnell Brothers Music House. [emphasis added]

    Like most things, the rise of Motown Records was multifactoral. Maraniss keys in on the prevalence of pianos in black homes. Note his factors creating this, to which one could also add the first rate musical education available to public school students at places like Cass Tech that he refers to multiple times throughout the text.

    But of course I highlight: “the vast majority of residents lived in single family homes, not high-rise apartments, making it easier to deliver pianos and find room for them.”

    It’s no secret that Detroit, like most Midwest cities, is a city of single family homes. Detached houses have a bad rep in planning circles today, but in this case the space they afforded allowed black families to have a piano – and in Motown Records founder Berry Gordy, Jr.’s case, a baby grand at that. This would be much more difficult in a microapartment to say the least.

    Let’s not get too carried away. As Gordy was founding Motown, Jane Jacobs was pointing out the trouble with Detroit’s “gray belts” of single families that were already being abandoned. Pete Saunders has highlighted Detroit’s housing stock as one of the nine key urban planning reasons Detroit failed (ironically, in part because today these houses are too small).

    Nevertheless, no preponderance of single family homes, no widespread pianos in black Detroit homes, and likely no Motown Records either. The history of American music was literally shaped by the single family housing character of Detroit. If we can acknowledge its flaws, it’s only fair to acknowledge it’s unique strengths too.

    What this suggests is that cities shouldn’t despair too much about their existing built form, even if in many cases they are struggling with it. The question might be, what does that form enable that you can’t get elsewhere? Grinnell Brothers Music figured out that auto money + under-served black households + single family homes meant a potential market for pianos. And the rest is history. What other market opportunities exit right before our urban planning eyes that we have not yet noticed?

    Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.


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    From the inception of the Soviet Union, transformation was built, quite consciously, on eliminating those forces that could impede radical change. In many ways, the true enemy was not the large foreign capitalists (some of whom were welcomed from abroad to aid modernization) but the small firm, the independent property owner.

    “Small scale commercial production is, every moment of every day, giving birth spontaneously to capitalism and the bourgeoisie … Wherever there is business and freedom of trade, capitalism appears,” noted the state’s founder Vladimir Lenin. He understood that while larger firms could be manipulated to serve the state, “capitalism begins in the village marketplace.”

    Later on, this drive to eliminate grassroots capitalists—notably the “rich peasants” or kulaks—took on a particularly deadly form. In 1929 Stalin decided on the “liquidation of the kulaks as a class.” Millions of small rural entrepreneurs were imprisoned, murdered, or starved to death, until by the end of the ’30s independent business in the Soviet Union was largely eliminated, giving the state free rein.

    Who are America’s Kulaks?

    The United States, fortunately, is not the Soviet Union and even the most “transformation” oriented politician does not—at least yet—have power to create a gulag or openly appropriate the wealth or lives of citizens. Yet lately there is nevertheless a powerful trend to limit and largely disempower the country’s small business community—our kulaks—from a host of antagonists, including the Obama administration, the large financial institutions, and the ever-expanding regulatory apparat.

    In the 19th century, the small farmer epitomized the national ideal: independent, hard-working, frugal and engaged in his community. Later, as agriculture’s share of the economy dropped, the “yeoman” farmer gave way to the Main Street business owner, whose conflicts, particularly in the late 19th and early 20th centuries, were more with oligopolistic corporations—notably utilities, oil companies, and railroads—than the government.

    Kulaks are not just people with some money and capital. They tend to be engaged in the private sector, where risk is an everyday concern. There are other parts of the affluent middle class who are not Kulaks but actually beneficiaries of the intrusive state, such as academics, parts of big business and, of course, elite members of the ever-expanding governmental nomenklatura. These professionals, as well as corporate executives, have helped make the Democratic Party, as the New York Times’ Tom Edsall suggests, the “favorites of the rich.”

    The Decline of a Class

    In the ascendance during the Reagan and Clinton booms, our kulaks—the roughly 10 million businesses under 500 employees that employ 40 million people—are clearly in secular decline, with grave implications for the economy, employment, and the future of democracy.

    Rather than a new age of democratic capitalism imagined by Reagan era conservatives, we increasingly live in a world dominated by large companies. The overall revenues of Fortune 500 companies have risen from 58 percent of nominal GDP in 1994 to 73 percent in 2013. At the same time, small business start-ups have declined as a portion of all business growth, from 50 percent in the early ’80s to 35 percent in 2010. Indeed, a 2014 Brookings report (PDF) revealed that small business “dynamism,” measured by the growth of new firms compared with the closing of older ones, has declined significantly over the past decade, with more firms closing than starting for the first time in a quarter century. Only 35 percent of small business owners, according to a recent survey by the National Small Business Association, express optimism about the economy.

    This decline in entrepreneurial activity marks a historic turnaround. Start up rateshave fallen for young people in particular, dropping to the lowest levels in a quarter century. At the same time the welfare state has expanded dramatically to the point that nearly half of all Americans now get payments from the federal governmentnotably through Medicare and Social Security. At the same time, the lack of grassroots economic activity may contribute to labor participation rates, now the lowest in almost four decades.

    The Obama administration’s progressive-sounding rhetoricmay offend some of the thinner-skinned members of the oligarchy, but his economic policies—the bank bailouts, super-low interest rates, and growing federal power—have also improved the balance sheets of the corporate hegemons and the super-rich. In contrast, these policies do little, or less than little, for the yeoman class. Money today is made far more easily today by playing games with the market than making or selling on Main Street.

    High business costs, some related to the rising tide of regulation under President Obama—including Obamacare—have become a huge burden to smaller firms. Indeed, according to a 2010 report (PDF) by the Small Business Administration, federal regulations cost firms with fewer than 20 employees more than $10,000 each year per employee, while bigger firms paid roughly $7,500 per employee. The biggest hit to small business comes in the form of environmental regulations, which cost 364 percent more per employee for small firms than it does for larger ones. Small companies spend $4,101 per employee, compared to $1,294 at medium-sized companies (20 to 499 employees) and $883 at the largest companies, to meet these requirements.

    Nowhere has consolidation of power under the current regime been more obvious than in the financial sector. Goldman Sachs’ Lloyd Blankfein has described his firm as “among the biggest beneficiaries of reform.” The new regulatory environment has created huge barriers to any potential competitors and places smaller firms at a distinct disadvantage.

    In contrast these regulations have hastened the rapid decline of community banks, for example, down by half since 1990, particularly hurts small businesspeople who depended on loans from these institutions, leaving them, as even Ben Bernanke admits, with major obstacles at achieving credit.

    The large banks also benefited from the Obama administration’s steady refusal to prosecute any Wall Street grandees. Their get-out-of-jail-free card is a testament to the pilfering lobbyists of Washington’s K Street and the greed of politicians in both parties.

    Resisting the New Duopoly: Big Government and Big Business

    Under Lenin and Stalin, the threat to the kulaks was explicit, and in the end genocidal. Here in America, to be sure, the process is far less extreme. And not all the assault on Kulaks can be traced to government.

    Technology and globalization often work against small firms. In the past, technology promoted competition whereas now it increasingly works to foster the consolidation of a new oligarchy dominated by such quasi-monopolies as Microsoft, Amazon, Apple, Google, and Facebook.

    Indeed, the future being envisioned in the media and by the oligarchs is one dominated by automated factories and computer-empowered service industries. This will reduce opportunity for both middle-class jobs and small business in the future. To some, the American middle and working classes are becoming economically passé. Steve Case, founder of America Online, has even suggested that future labor needs can be filled not by current residents but by some 30 million immigrants. In this he reflects the cosmopolitan notions favored by the oligarchs. But likely not so much by the Kulaks and the bulk of the populace.

    Rather than a republic of yeoman, we could evolve instead, as one left-wing writer put it, to live at the sufferance of our “robot overlords,” as well as those who program and manufacture them, likely using other robots to do so. The financial community seems to have little problem with this tendency, as we can see in its support for companies such as Uber, which, however convenient, is growing at the expense of what had been thousands of full time workers. And former top Obama aides are leading Uber’s defense against threatened taxi drivers.

    Politicians on both the right and left seek to appeal to middle class voters and small business owners, but neither party can be said to have the interests of these groups at heart. The large corporations and banks have enjoyed an unprecedented surge in profits, but few small business have crashed that party. Republicans and their leading lobbyists generally have no interest in doing anything, such as equalizing capital gains and income rates, that would offend those who support their campaigns and fund their ongoing political activities.

    In the past, Democrats may have appealed to Kulaks, but that seems to have died with the end of Bill Clinton’s second term. Whereas the first Clinton accepted limits on government largesse, the newly emboldened progressives, citing inequality, are calling for more transfers to the poorer parts of society. They even plan to hit the kulaks where they live—largely suburbia—as part of an effort to social engineer American communities.

    This trend has almost universal support in the mainstream media, the campuses, and some corporations, who can better manipulate the regulatory and tax system. There is even a role model: to become like Europe. As The New York Times’ Roger Cohen suggests, we reject our traditional individualist “excess” and embrace instead continental levels of modesty, social control, and, of course, ever higher taxes.

    Trump, Sanders, and the future of the Kulaks

    The assault on the kulaks has had significant political consequences, although the endgame remains very much in question. Certainly there’s widespread dissatisfaction towards the Obama administration: in 2012, small business ownersranked as the least approving group for the current regime.

    Yet it is not just Republicans or Tea Partiers who are upset with the rising plutocracy. Americans, according to Gallup, greatly favor small companies over big business. Indeed most large institutions—government and media as well as large corporations—now suffer some of the lowest rankings in recent history, with only small business and the military doing well.

    Given these attitudes, it’s not surprising that the rising candidates of 2015 were those—Trump, Carson, Sanders , and even Fiorina—who have tried to position themselves in opposition to the status quo. The candidate most feared by Wall Street isn’t the folksy socialist Bernie Sanders but Donald Trump, whose candidacy, reports Politico, is setting off “a wave of fear” among the investor class. This is not just concern over Trump’s xenophobia, but his essential populism.

    Both Trump’s support and that of Ben Carson come from Republicans who do not oppose higher taxes on the ultra-rich; they might not be far right culturally but they tend to the left on issues of economic security. These issues are critical toboomers, the group that dominates the small property owning class and the largest share of voters, and have been turning more conservative.

    The kulaks may agree with Bernie Sanders on the dangers of corporate power, but they are likely no fans of redistribution. They also may suspect, rightly, that they, and not the grandees at Apple or Goldman Sachs, will be the ones to pay for the Democrats’ increasingly extravagant redistributionist demands.

    Overall the kulaks do not seem impressed with candidates, such as Hillary Clinton and Jeb Bush, who are essentially creatures of dueling oligarchies. The kind of acceptance of corporate leadership that dominated Republican politics through much of the past half century is now fading, and the results are a GOP fractured not only by ideology but also by class. The big money may be on the corporate side, but there are a lot more Kulaks than grandees when it comes to voting.

    In Russia, the forces of the state managed to destroy the kulaks, cementing a legacy of economic stagnation, particularly in the countryside, that remains today. America’s war on the kulaks may be less bloody-minded, but if it is not somehow halted, both our economy and the country’s intrinsic entrepreneurial spirit will fade. We may end up looking all too much like contemporary Russia, an oligarch-dominated kleptocracy that holds out increasingly little promise to its own people, and provides no real role model to the rest of the world.

    This piece first appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Main Street America Russell, Kansas by http://www.cgpgrey.com [CC BY 2.0], via Wikimedia Commons


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    The US preference for detached housing remains strong, according to the newest data just released in the 2014 American Community Survey, by the United States Census Bureau. In 2014, detached house and represented 82.4 percent of owned housing in the United States. This is   up 1.8 percentage points from the 80.6 percent registered in the 2000 census. The increase may be surprising, given the efforts of planners to steer people into higher density housing, especially apartments.

    The US Situation in 2014

    Among owned housing, mobile homes ranks second only to detached housing. Attached houses, which are ground oriented units with common walls, such as townhomes and semi detached homes (also called duplexes) are the third most popular form of owned housing, accounting for 5.7 percent of units in 2014. Perhaps surprisingly, the apartments planners prefer ranked fourth preference among households buying their own homes. Apartments, which include lower rise, midrise and high-rise condominiums account for 5.5 percent of owned housing. (Figure 1). The fifth, and by far the smallest category of owned housing is "Boats, RVs, Vans, Etc., which represented 0.1 percent of owned housing.

    Trend Since 2000

    There were approximately 4.7 million more detached houses in 2014 than in 2000. This means that 114 percent of the new owned housing stock was detached housing. Despite their second ranking among housing types, there were substantial losses in the number of mobile homes. In 2014 there were approximately 1.1 million fewer mobile homes and continuing losses could drop mobile homes below attached homes and apartments over the next decade. Mobile homes are often transitional for households aspiring to afford detached or even attached housing. Attached homes enjoyed a strong increase of approximately 410,000 units. The strong detached and attached housing increase could reflect, in part, the realization of those aspirations.

    Apartments, which were within 15,000 of attached houses in 2000, dropped to approximately 270,000 behind, while adding only 160,000 owned units. In view of the strong condominium construction rates in some cities, this may be surprising. On the other hand, it could be indicative of the "dark and empty" thesis that many of the new units have been purchased for only occasional use and not as primary residences, some rented out by owners (Figure 2).

    There was an 18,000 unit loss in "Boats, RVs, Vans, Etc."

    Owned Housing by Metropolitan Classification

    The preference for detached housing was pervasive, even in the metropolitan areas with the largest pre-World War II urban cores (identified using the City Sector Model). Nearly 71 percent of owned housing is detached in these metropolitan areas, which include New York, Los Angeles, Chicago, Philadelphia, Washington, Boston and San Francisco. The detached housing percentage rises to 85 percent in the other 46 metropolitan areas with more than 1 million population and is similar for the 53 metropolitan areas between 500,000 and 1 million population. Among the 106 metropolitan areas with more than 500,000 population, the percentage of detached housing increased in 86.

    The detached housing share is a smaller 80 percent outside these largest metropolitan areas.

    The defining difference between the metropolitan areas with the largest cores is in owned apartments, which represent 15 percent of owned housing. This is more than three times the rate of owned apartments in the other 46 major metropolitan areas and the 53 metropolitan areas with between 500,000 and 1,000,000 population (Figure 3).

    Housing Types by Metropolitan Areas

    Among the 106 metropolitan areas, 86 have detached percentages of owned housing of 80 percent or more. The highest detached housing percentage is in Omaha, at 94.8 percent. Modesto trails closely at 94.4 percent. This may not be surprising, since so many households have been driven away from close enough-for-a-long-commute San Francisco Bay Area by its exorbitant house prices and severely constrained housing choices. Detached housing is now a luxury in the Bay Area well beyond the resources of middle income households who did not buy their homes in the past, when prices were lower.

    The gap between second and third is much larger, with Dayton having a detached housing percentage of 92.8 percent, followed closely by Kansas City (92.7 percent), Memphis (92.6 percent) and Wichita (92.4 percent). Stockton, at 92.3 percent has attracted so many San Francisco Bay Area residents that it is now a part of the San Francisco Bay combined statistical area ranks eighth, (Figure 4).

    The lowest rates of detached owned housing are in Miami (63.8 percent), Philadelphia (63.9 percent), New York (65.4 percent), Baltimore (65.4 percent), and Honolulu (66.0 percent).

    Philadelphia and Baltimore compensate substantially for their low detached housing percentage by leading in attached housing, which is widely dispersed in both the core municipalities and the suburbs. More than 30 percent of Philadelphia's owned housing is attached, and 27 percent of Baltimore's. In Washington and Allentown more than 20 percent of owned housing is also attached (Figure 5).

    Honolulu has the largest percentage of owned apartment housing, at 26.6 percent. New York (24.1 percent) and Miami (23.6 percent) follow. Only two other metropolitan areas, have more than 15 percent of their owned housing in apartments, Boston and Chicago (Figure 6).

    All of the metropolitan areas with the 10 highest percentages of mobile homes are in the South, with the exception of Tucson. Lakeland, Florida has by far the largest mobile on percentage, and over 20 percent. McAllen, Sarasota, Baton Rouge and Tucson complete the top five, ranging from 12.6 percent to 14.5 percent (Figure 7).

    As noted above, the percentages of owned housing in the "Boats, RVs, Vans, Etc." category are much smaller. McAllen has the largest share at 1.2 percent. The top 5 is rounded out by Bakersfield, Phoenix, Portland (OR-WA) and Tucson (Figure 8).

    The Detached House: Still King

    Three decades ago, historian Robert Fishman wrote: "For the first time in any society, the single-family detached house was brought within the economic grasp of the majority of households" (Note). The US may have been first, but it is not alone. The same observation can be made for other nations, such as Japan, Canada, Australia, New Zealand and Norway. The detached house is alive and well in the United States and may even be increasing its domination.

    Note: This quotation is from Fishman's "Bourgeois Utopias: The Rise and Fall of Suburbia" (page 183). The subtitle should not be interpreted to suggest that this is another superficial anti-suburban screed. In fact, Fishman's point can be interpreted as indicating that suburbia has been replaced by a new type of city, even less connected with the former dominant (monocentric) core.

    Photo: Minneapolis-St. Paul suburbs (author)

    Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and principal of Demographia, an international public policy and demographics firm.He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.


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    The old issues of class, race and geography may still dominate coverage of our changing political landscape, but perhaps a more compelling divide relates to generations. American politics are being shaped by two gigantic generations – the baby boomers and their offspring, the millennials – as well as smaller cohorts of Generation X, who preceded the millennials, and what has been known as the Silent Generation, who preceded the boomers.

    Both the boomers and the Silents gradually have moved to the right as they have aged. Other factors underpin this trend, such as the fact that boomers are overwhelmingly white – well over 70 percent compared with roughly 58 percent for millennials. People in their 50s and 60s have seen their incomes and net worth rise while millennials have done far worse, at this stage of their lives, than previous generations.

    Although millennials are more numerous than boomers, the elderly are a growing portion of the population, and they tend to vote in bigger numbers. Voters over age 65 turn out at a rate above 70 percent, while barely 40 percent of those under 25 cast ballots. That may be one factor in why this presidential campaign is dominated not by youth, but by aging figures like Donald Trump (69), Hillary Clinton (68) and Bernie Sanders (74).

    The Silent Generation

    Leading generational analysts – Neil Howe, Morley Winograd, Mike Hais – have suggested that the experiences people have growing up shape political beliefs throughout their lives. This does not mean that people do not change as they age, but where they started remains a key factor in determining how far these changes spread within a generation.

    The now-passing Greatest Generation – the group that survived the Depression and the Second World War – were largely shaped by the experiences of the New Deal and the boom of the postwar era. This has made them consistently less conservative than successor generations, and they have retained their Democratic affiliations.

    Read the entire piece at the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: driki


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    California has a long history of boom and bust cycles, but over the past 25 years or so, California’s cycles appear to be becoming more volatile, with increasing frequency, higher highs, and lower lows.  The fast-moving business cycle may not provide the time necessary for many people to recover from previous busts, and may be too limited in its impact. Even now, 22 of California’s 58 counties have unemployment rates of 7.5 percent or higher. Eleven California counties have unemployment rates of at least nine percent.  And these, we are told, are the best of times.

    Policy behavior is predictable throughout the business cycle. 

    Sacramento is awash in cash during a boom, because California’s revenues are more closely related to asset prices than economic activity.  As the economy grows, particularly in an era of ultra-low interest rates, asset prices climb faster than the economy grows, and California is flush.  Sacramento acts as if the boom will continue forever.  Spending commitments are increased, or taxes are decreased.  Politicians congratulate themselves on “fixing” the budget problem.

    For Sacramento, economic busts and the resulting fiscal crisis are acts of God, completely independent of policy.  State revenues fall more rapidly than economic activity falls, because asset prices fall faster than overall economic activity. Sacramento tries to transfer the fiscal pain to local governments.  Mostly, they are successful. As of July, Local government employment was still down almost five percent from its pre-recession high, while state government employment is up about 4.5 percent over the same period.

    Sacramento is currently enjoying a boom, but this boom, like all booms, will ultimately lead to a bust.  There are signs that California’s confrontation with its next bust could come soon.

    Asset prices are cause for concern.  After a five-year Bull Market that saw cumulative gains of over 70 percent, the S&P is little changed this year.  Over the past 60 days, it’s been very volatile.  California’s median home price is up over 70 percent from its recession low.  It too has recently shown volatility, reflecting the huge differences between regional markets.

    Housing affordability (percentage of population that could afford the median home) is down too.  It’s fallen from over 50 percent to about 30 percent.  We can’t be sure, but it’s probably below a sustainable level.  That is, below a level that can sustain a middle-class population.  Several California communities have lower levels home ownership rates, but places like Marin County have minimal middle classes.

    California’s tech sector has served the state well over the past business cycle.  In quarter after quarter the Bay Area has led the state in job creation.  In many quarters, the Bay Area was the only California region to gain jobs.

    But California’s tech sector can be very volatile, as the last dot.com bust in 2000 showed.  Today, venture capital investment is near the levels we saw just before tech’s big bust.  The number of deals is lower though.  It’s not clear that it is again a bubble about to bust, the possibility should be seriously considered.  Ideally, we would have a plan to deal with the subsequent fiscal challenges.

    If tech does decline, the impacts will be more than fiscal.  California’s Information sector, down more than 100,000 jobs from its previous high, still has not recovered from the dot.com bust:

    Recent data imply that continued economic growth, even the slow growth we’ve become accustomed to, is threatened.  California’s most recent jobs report was a big disappointment.  National data was disappointing too.  Only 20 states saw employment increases in September.

    California’s position on the Pacific Rim between Asia’s manufacturing sector and the world’s largest consumer market guarantees that trade is an important sector for California.  Increasingly, however, that sector is at risk.  China’s economic growth is weakening.  Competing ports in Mexico and Canada threaten California’s trade sector, as does the Panama Canal expansion.  California’s response has been to ignore the challenges and to refuse to expand ports to accept today’s largest ships.  California’s share of North American trade will surely continue to decline:

    An economic downturn would have a huge impact on California and its citizens.  California’s budget surplus is precarious, and the state has failed to make any real changes in California’s fiscal structure.  Instead of using California’s period of good fortune to reduce the budget’s vulnerability to volatile asset prices, by broadening the tax base, Sacramento has amazingly elected to increase revenue volatility by augmenting the status quo with a temporary tax.

    The games that partisan politicians play leads me to the conclusion that they either don’t believe that their policies adversely affect real lives, or they don’t care.  Certainly, economic outcomes   affect real lives.  There is abundant evidence that unemployment and poverty cause drug abuse, domestic violence, broken families, poor health outcomes, and many other social pathologies.

    The question, then, is do policies affect economic outcomes?  In their book Why Nations Fail, Acemoglu and Robinson compare side-by-side communities that appear identical but have different economic outcomes, cities like Nogales Arizona and Nogales Mexico.  These two cities, and the other pairs in the book, are identical, except for being in different countries.  They are adjacent to other.  They have the same resources.  They are demographically very similar.  They only differ by political regimes.   Acemoglu and Robinson find that policy decisions and the inclusiveness of the decision process have dramatic impacts on economic outcomes, and thus people’s lives.

    California policy is dominated by a rich coastal elite who control most of the media, finance campaigns, rule over the universities and generally dominate all discussion.  The result is extreme inequality, persistent nation-leading poverty, high housing costs, and limited opportunity for California’s most disadvantaged populations.  And, California’s most disadvantaged will pay the most for California’s next downturn.  They won’t write checks, because they can’t.  Their net worth won’t decline, because it’s already at or below zero.  They’ll pay a far higher cost in broken homes, broken families, and broken lives.

    Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org.


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    By finally backing away from its one-child policy, China would seem to be opening the gates again to demographic expansion. But it may prove an opening that few Chinese embrace, for a host of reasons.

    Initially, the one-child policy made great sense. The expansion of China’s power under Mao Zedong was predicated in part on an ever-growing population. Between 1950 and 1990, the country’s Maoist era, the population, roughly doubled to 1.2 billion, according to U.N. figures. Deng Xiaoping’s move to limit population growth turned out to be a wise policy, at least initially, allowing China to focus more on industrialization and less on feeding an ever-growing number of mouths.

    Three decades later, this policy clearly has outlived its usefulness. China’s population growth is now among the slowest in the world, and it is aging rapidly. The U.N. expects the Chinese population to peak around 2020, about when India will pass the Middle Kingdom as the world’s most populous country.

    Perhaps the most troubling impact will be on the workforce. In 2050, the number of children in China under 15 is expected to be 60 million lower than today, approximately the size of Italy’s population. It will gain nearly 190 million people 65 and over, approximately the population of Pakistan, which is the world’s sixth most populous country.

    The same broad pattern will play out in Taiwan, South Korea, Singapore and Japan, but those countries’ much greater per capita wealth gives them a greater ability to cushion the impact than China. Demographer Nicholas Eberstadt envisions a developing of fiscal crisis in China caused by “this coming tsunami of senior citizens,” with a smaller workforce, greater pension obligations and generally slower economic growth.

    These factors were clearly part of the calculus that led to suspending the one-child policy. But if China’s rulers think they can change demographic trends on a dime, they are massively mistaken.

    The birthrates of many other East Asian countries have plummeted as well, despite campaigns to promote fertility. In South Korea, Taiwan, Japan, Singapore birthrates are near one per woman, roughly half the rate needed to sustain the current population. With the exception of Singapore, which accepts many immigrants, none have a reasonable path away from rapid aging of their populations and shrinking workforces.

    So what is causing this plunge? Gavin Jones, a demographer based at the National University of Singapore, identifies primarily rapid urbanization and sky-rocketing house prices. In 1979, China’s population was 80 percent rural; today the proportion is roughly half that.

    This transformation makes reversing the one-child policy largely moot, Jones says. Indeed a 2013 easing of restrictions on family size in certain circumstances elicited far fewer takers than expected. Barely 12 percent of eligible families even applied.

    One critical problem is the high cost of real estate, particularly in China’s most important cities, which makes it difficult for young couples to attain the space to house a larger family, let alone leave them sufficient financial resources to raise the children. China’s main cities have suffered arguably the world’s most rapid growth of property prices relative to income. Last year, The Economistestimated house price to income ratios of nearly 20 in Shenzhen 17 in Hong Kong and over 15 in Beijing, between 50% and 100% higher than ultra-expensive Western places like San Francisco, Vancouver or Sydney.

    This explains in part why prosperous cities like Shanghai and Beijing, now have among the lowest fertility rates ever recorded — down near 0.7 per woman, or one-third the replacement rate. If the experience of densification and high prices spread to other Chinese cities, officials may be lucky if couples even bother to have one child.

    One alternative strategy may be to slow urbanization and disperse population to less congested areas, but policy seems to be headed in the exact opposite direction. In 2013 China announced plans to bring an additional 250 million people from the countryside into the city.

    This could boost the economy, as planners hope, but also reduce the fertility rate. All over the world the displacement of rural populations, accelerate the pattern of low fertility, notes the demographer Jones. For one thing, separation from their relatives in the countryside means there is little in the way of family support for taking care of children.

    Jones suggests that urbanization has also undermined the traditionally family centered religious values of Chinese society. Pew Research identifies China as the least religious major country in the world, making it, even more than Europe, a paragon of atheism. All around the world, the decline of religious sentiments has been associated with low fertility around the world.

    Finally the announcement’s timing may not be fortuitous. When China’s economy was booming and the future looked limitless, more families might have considered a second child. But with the economy slowing, it seems logical to expect that weak economic conditions will reduce fertility rates further, as has been the case in Japan and Taiwan.

    What matters most here is what China’s decision reveals about changing attitudes on population. For the last half century, we have tended to be worried about overpopulation, particularly in Asia. And to be sure some parts of the world, notably sub-Saharan Africa still have birthrates far above their capacity to accommodate newcomers.

    But it is now clear that many parts of the world — notably East Asia and Europe — face a very different demographic challenge rooted in falling fertility, diminishing workforces, and rapid aging. As British author Fred Pearce has put it, “The population ‘bomb’ is being defused over the medium and long term.”

    Eliminating the one-child policy may not much change the current trajectory of China’s demography, but it marks a significant shift in the debate about population that will be with us for decades to come.

    This piece first appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by Paul Munhoven (Own work) [CC BY-SA 3.0], via Wikimedia Commons


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    Will Britain vote before the end of 2017 to stay in the European Union? Or will it leave, launching the much-debated Brexit? As the Lions face the Chiefs this Sunday in London, a perhaps related question is whether London should be awarded a franchise in the National Football League. Many Londoners would love nothing more than for the city to be granted a team, even if that team turns out to be the Jacksonville Jaguars, who are considering whether to become the first NFL exiles. If Britain were to leave the EU but join the NFL, maybe the last act of the American revolution will be a reverse takeover of England.

    Before explaining the English romance for what they call “American football,” let’s briefly review why Britain is getting cold feet about the EU. Keep in mind that the United Kingdom is an EU member more in spirit than on the ground, as Britain kept the pound as its currency, and has yet to embrace the Maastricht treaty on open borders. About all it conceded to the Union on immigration was a relaxation of the quarantine for cats and dogs.

    Britain liked the EU when it meant that Brits could easily buy condos in the south of Spain, or import duty-free claret from Bordeaux. It has had less enthusiasm for providing social services for Polish emigrants or bailing out insolvent Greek banks.

    The chances are good that Britain will be the first major power to bolt from the Union. For the moment, those supporting Brexit span the political spectrum, and include left-wing Labour socialists—angry at Europeans for taking away British jobs—and Tory rebels, for whom the EU is yet another melting-pot being dumped on traditional English values.

    Nor has the Balkanization of British politics helped the European cause. Prime Minister David Cameron, whose Conservatives enjoy an 8 seat majority in the House of Commons (but have 98 seats more than Labour, with many fringe parties taking up the balance), supports staying in Europe with some “fundamental” modifications to the terms of British membership. But if the price of power for Cameron means ditching the Europeans, he might be the first to whisper “wogs out” at the Tory club bar.

    Cameron’s political luck, so far, is that his term in office has coincided with the self-destruction of the Labour party (from 256 seats down to 232) and the near-extinction of the Liberal Democrats, who in the last election went from having 56 seats in the Commons to 8.

    In the 2015 election, Labour also found itself bounced out of Scotland, with its supporters going to the Scottish Nationalists. Then it replaced opposition leader Ed Miliband with Jeremy Corbyn, a dyed-in-the-wool, North London, Tony Benn socialist who dreams of nationalizing industry, and possibly — although not probably — reinstituting 1970s coal miner strikes and BritRail cold pork pies.

    After their electoral losses, the Labour faithful decided to vilify their last prime minister, Tony Blair, now the most unpopular man in British politics, for abandoning socialism in favor of his New Labour concoction, which was the British equivalent of Bill Clinton’s cozy triangulation with House Republicans in the 1990s.

    Labour’s lurch to the far left has put the Tories in position as Britain's leading national political party. But they cannot find much consensus around centrist, pro-European opinions, as Conservatives have the dichotomous challenge of keeping Scotland and maybe Wales in the United Kingdom while watering down the appeal of nativist, skinhead nationalist parties.

    The most visible European opposition to EU membership comes from the right-wing UK Independence Party (UKIP), although it only has one seat in the Commons. Scottish Nationalists, who went from 6 to 55 seats, for the moment are pro-EU, and a negative vote on Europe might renew the push within Scotland to leave the United Kingdom.

    With the center unable to hold, it is no wonder that London has embraced the National Football League as if it were a wartime support convoy. My younger son and I recently went to Wembley Stadium to watch the New York Jets play the Miami Dolphins, and at the same time see how London views the NFL. We were part of a throng of 83,000 (keep in mind that UKIP’s entire membership is only 47,000), few of whom seemed much concerned about the future of the European charter.

    To be sure, the crowd included diehard Jets and Dolphin fans who flew in for the game. Seated in front of us were three older guys (I could have been one of them) wearing Klecko, Namath, and Maynard jerseys, and no one would mistake them for moonlighting Arsenal fans taking in some American “footie.”

    Many of those in the stands wore American football jerseys from the closet depths. Wembley Stadium was temporarily transformed into a NFL Halloween parade with the likes of Rodgers, Roethlisberger, Montana, Rice, Gastineau, Luck, Romo, Marino, and Peyton Manning astride the stadium ramps.

    I associate British football (okay, soccer) fans with drunken hooliganism, but this sober crowd stood to sing “God Save the Queen,” and it applauded the Dolphin cheerleaders as if they were a road opera company.

    Unlike a European soccer game with all the advertisements jammed into halftime, the Jets and Dolphins "match" took almost four hours to complete.

    During the long afternoon there were booth reviews, thirty-second time outs, injuries, instant replays, concussion protocols, pauses after each quarter, and the two-minute warning, which felt like three-week business trip (“Hey Queen Elizabeth, this Bud’s for you!”).

    So frequent were the official time-outs for beer and car commercials, after a while Wembley had the air of the Universal Studios back lot, and the Jets and Dolphins looked like extras, hired out for a day of filming.

    The Jets beat the Dolphins, although for much of the second half they tried to snatch defeat from the jaws of victory. (It is, after all, the 45th year of their rebuilding program.) Mercifully for Jets fans, the refs littered the “pitch” with penalty flags, and they nullified a Dolphins drive that started one yard from the Jets’ end zone.

    During many time-outs, I wondered why the British might vote out the European Union (and its time-efficient, free-flowing soccer matches), and vote in the NFL, or at least lobby it for a local franchise. In British soccer the clock never stops, not even for injuries, and the game ends in two hours. Neither side has cheerleaders in sequins.

    My guess is that that the London romance with the NFL speaks to UK ambivalence about the continuing embrace of the European Union.

    American football might be, as my British friend Simon Hoggart said, “random violence interrupted by committee meetings,” but unlike the European Union it has clear winners and losers and ends with a Super Bowl, as opposed to a wobbly common currency, milk subsidies, and Greeks on the dole.

    Will London trade EU membership for an NFL franchise? My guess is that it will. During the ill-fated NFL Europe attempt, London had the Monarchs, who could not keep pace with Düsseldorf’s Rhein Fire, and the league folded. This time, among the team names they should consider are the Queens, Kings, Beefeaters, Towers, Guards, and Tussauds. I can’t quite come to terms with the London Jaguars. It sounds like a car dealership.

    Would 83,000 fans have turned up for a Jeremy Corbyn or David Cameron speech on Brexit? I doubt it. Who really knows if Britain wins or loses by being in the European Union? It's one of those political issues that is impossible to decipher, except on an emotional level.

    Or, as Joe Namath, the legendary New York Jets quarterback and counterculture figure, said of an earlier dilemma, “I don’t know if I prefer Astroturf to grass. I never smoked Astroturf.”

    Matthew Stevenson, a contributing editor of Harper’s Magazine, is the author most recently of Remembering the Twentieth Century Limited, a collection of travel essays, and Whistle-Stopping America. His next book, Reading the Rails, will be published in 2015. He lives in Switzerland.

    Flickr photo by Tony Webster: NFL on Regent Street, London


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    City of Auckland Chief Economist Chris Parker has called for establishment of a house price to income ratio objective of 5.0, to be achieved by 2030. The recommendation was included in a report commissioned by Auckland Mayor Len Brown and Deputy Mayor Penny Hulse.

    Housing Affordability and Urban Containment Policy

    The recommendation has been brought about in response to Auckland's severely unaffordable housing. Recent reports indicate a price to income ratio over 9.0, at least triple that of New Zealand to the early 1990s.

    Like a number of metropolitan areas, Auckland has had urban containment land-use policy for some time. Auckland has drawn an urban growth boundary around development, largely banning new greenfield housing outside the boundary. As economics would predict, with a continuation of strong housing demand and the significant supply reduction, house prices have been shot skyward. The latest Demographia International Housing Affordability Survey showed Auckland to have a median multiple of 8.2 (the median multiple is the median house price divided by the median household income), though later data indicates a further deterioration (above).

    Avoiding the Consequences of Urban Containment

    House price volatility has been a growing concern in urban containment markets where house prices have escalated so strongly relative to incomes and economic productivity. The bursting of the US housing bubble in the last decade indicates the damage that can be inflicted on people and their finances when exorbitantly high house prices collapse. This is a fate governments seek to avoid not only in Auckland, but at the national level.

    According to Parker's report, the city of Auckland is expected to add 1 million additional residents over the next 30 years. Parker indicated that: "If high house prices are sustained or continue to rise relative to incomes then ... consequences and risks will become more significant:" He cited:

    "-loss of social cohesion — an increasingly socially divided city with a line drawn between those in the housing market and those outside

    -macroeconomic instability via rapid house price deflation.

    -Increased unemployment as businesses relocate activities to other more competitive cites locally (e.g. Christchurch, Hamilton, Tauranga) and internationally (e.g. Melbourne and Sydney)

    -Increased household crowding and related social ills."

    City Councilor Dick Quad echoed similar concerns in an email: "It’s staggering that Auckland’s homeownership is now down to 50% from 64% just 9 years ago. The social chaos we are creating can be seen on a daily basis with overcrowding, third world diseases (resulting from overcrowding) poor educational outcomes, and a city in which the landed gentry have grabbed all the wealth. We are engaged in a social experiment which is destined to end in disaster."

    Councilor Quax applauded Parker's work, but had concerns about implementation, indicating that the policy "flies in the face of what many of our politicians believe."

    According to Parker, reaching that the objective will include a number of both supply and demand side strategies. Most, importantly, Parker's list includes opening greenfield land for development. Even urban containment (smart growth) theorists agree that the imposition of urban containment boundaries, such as in Auckland, is associated with higher land prices within the urban area. Their hopes that higher density housing would cancel out the housing affordability losses have been dashed, due to the massive increase in land costs. For example, comparable land on either side of Auckland's urban containment boundary varies by a minimum of 8 times. Without the boundary, the expected difference would be virtually nil. In addition, high density housing is considerably more expensive to build than the detached housing people prefer.

    Yet, only in a few places have policymakers taken the important step from failed intentions to the reforms necessary to reverse the housing affordability losses. Among the major metropolitan areas with the most severe urban containment policies, house prices have risen to two to three times the rate of household incomes.

    The "Good:" Better than an Unattainable "Perfect"

    Even if the 5.0 price to income multiple were achieved by 2030, housing would remain seriously unaffordable in Auckland. Parker argues that a lower target (such as the 3.0 Demographia International Housing Affordability Survey standard) would not likely be achievable:

    "It is doubtful that a 5.0 median price multiple could be achieved considerably earlier than 2030. (Unless there was a substantial bust, which should be avoided, given that so much is now at stake with existing high prices and the macroeconomic risks that would result.) The types of changes needed are structural (and change at a glacial pace), and will take many years to compound."

    His point is well taken. The "perfect" strategy of a 3.0 objective could well be the enemy of the good.

    Reaching a 5.0 price to income multiple by 2030 would be a great improvement. Two decades of housing market distortion cannot be erased overnight.

    The alternative could be continued house price increases in a policy environment that continues to outlaw building the new housing that people prefer.

    As the city continues to examine options for improving housing affordability, it will be important to set interim objectives, such as annual improvements or perhaps improvements on a three year basis. Further, it will be important for the city to continually review its policies and liberalize regulation even further if the targets are not reached.

    Setting an Example

    Auckland could be taking a significant step by seeking to reverse the damage done by out-of-control house prices. Certainly, the prodding it has received from the New Zealand government has helped. Just a couple of weeks ago, Deputy Prime Minister Bill English told a university audience: "... while the justification for planning is to deal with externalities, what has actually happened is that planning in New Zealand has become the externality." Research commissioned by the Productivity Commission of New Zealand may have also been influential.

    The city's Auckland Development Committee recently endorsed Parker's proposal and agreed "in principle" to include the objective in the next update of Auckland's metropolitan plan. By lowering  housing costs, the city  would improve standards of living and reduce poverty. Auckland could also become an example for metropolitan areas as diverse as Vancouver, San Francisco, Portland, and London, where all of the talk about improving housing affordability has remained just that, while prices continue to soar beyond the means of the middle class, particularly young families

    Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and principal of Demographia, an international public policy and demographics firm.He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Lead photo: City of Auckland Coat of Arms by Jayswipe (Heraldry photos) [Public domain], via Wikimedia Commons


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    With more than $10 billion already invested, and much more on the way, some now believe that Los Angeles and Southern California are on the way to becoming, in progressive blogger Matt Yglesias’ term, “the next great transit city.” But there’s also reality, something that rarely impinges on debates about public policy in these ideologically driven times.

    Let’s start with the numbers. If L.A. is supposedly becoming a more transit-oriented city, as boosters already suggest, a higher portion of people should be taking buses and trains. Yet, Los Angeles County – with its dense urbanization and ideal weather for walking and taking transit – has seen its share of transit commuting decline, as has the region overall.

    Since 1980, before the start of subway and light-rail construction, the percentage of Angelenos taking transit has actually dropped, from 7.0 percent to 6.9 percent, while the region (including the Inland Empire and Ventura County) has seen the transit share drop from 5.1 percent to 4.7 percent. These reductions in ridership have been experienced both on the rail and bus lines.

    The simple truth is that this region is just not structured to run largely on rails. We should not prioritize our transit dollars on trying to remake our region into something resembling New York, or even San Francisco, but in serving the needs, first and foremost, of those who remain dependent on public transit.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.


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    It’s time to put an end to the urban legend of the impending death of America’s suburbs. With the aging of the millennial generation, and growing interest from minorities and immigrants, these communities are getting a fresh infusion of residents looking for child-friendly, affordable, lower-density living.

    We first noticed a takeoff in suburban growth in 2013, following a stall-out in the Great Recession. This year research from Brookings confirms that peripheral communities — the newly minted suburbs of the 1990s and early 2000s — are growing more rapidly than denser, inner ring areas.

    Peripheral, recent suburbs accounted for roughly 43% of all U.S. residences in 2010. Between July 2013 and July 2014, core urban communities lost a net 363,000 people overall, Brookings demographer Bill Frey reports, as migration increased to suburban and exurban counties. The biggest growth was in exurban areas, or the “suburbiest” places on the periphery.

    How could this be? If you read most major newspapers, or listened to NPR or PBS, you would think that the bulk of American job and housing growth was occurring closer to the inner core. Yet more than 80% of employment growth from 2007 to 2013 was in the newer suburbs and exurbs. Between 2012 and 2015, as the economy improved, occupied suburban office space rose from 75% of the market to 76.7%, according to the real estate consultancy Costar.

    These same trends can be seen in older cities as well as the Sun Belt. Cities such as Indianapolis and Kansas City have seen stronger growth in the suburbs than in the core.

    This pattern can even be seen in California, where suburban growth is discouraged by state planning policy but seems to be proceeding nevertheless. After getting shellacked in the recession, since 2012 the Inland Empire — long described as a basket case by urbanist pundits — has logged more rapid population growth  than either Los Angeles and even generally healthy Orange County. Last year the metro area ranked third in California for job growth, behind suburban Silicon Valley and San Francisco.

    To those who have been confidently promoting a massive “return to the city,” the resurgence of outer suburbs must be a bitter pill. In 2011, new urbanist pundit Chris Leinberger suggested outer ring suburbs were destined to become “wastelands” or, as another cheerily described them, “slumburbs” inhabited by the poor and struggling minorities chased out of the gentrifying city.

    In this worldview, “peak oil” was among the things destined to drive people out of the exurbs . So convinced of the exurbs decline that some new urbanists were already fantasizing that suburban three-car garages would be “subdivided into rental units with street front cafés, shops, and other local businesses,” while abandoned pools would become skateboard parks.

    This perspective naturally appeals to people who write most of our urban coverage from such high-density hot spots as Brooklyn, Manhattan, Washington, D.C., or San Francisco. And to be sure, all these places continue to attract bright people and money from around the world. Yet for the vast majority, particularly families, such places are too expensive, congested and often lack decent public schools. For those who can’t afford super-expensive houses and the cost of private education, the suburbs, particularly the exurbs, remain a better alternative.

    Even as Houston, like other Sun Belt cities, has enjoyed something of a renaissance in its inner core, nearly 80% of the metro area’s new homebuyers last year purchased residences outside Beltway 8, which is far to west of the core city.

    If you want to know why people move to such places, you can always ask them. On reporting trips to places like Irvine, California, Valencia, north of Los Angeles, or Katy, out on the flat Texas prairie 31 miles west of Houston, you get familiar answers: low crime, good schools and excellent access to jobs. Take Katy’s Cinco Ranch. Since 1990, the planned community has grown to 18,000 residents amid a fourfold expansion in the population of the Katy area to 305,000.

    To some, places like Cinco Ranch represents everything that is bad about suburban sprawl, with leapfrogging development that swallows rural lands and leaves inner city communities behind. Yet to many residents, these exurban communities represent something else: an opportunity to enjoy the American dream, with good schools, nice parks and a thriving town center.

    Nor is this a story of white flight. Roughly 40% of the area’s residents are non-Hispanic white; one in five is foreign born, well above the Texas average. Barely half of the students at the local high school are Caucasian and Asian students have been the fastest-growing group in recent years, with their parents attracted to the high-performing schools.

    “We have lived in other places since we came to America 10 years ago,” says Pria Kothari, who moved to Cinco with her husband and two children in 2013. “We lived in apartments elsewhere in big cities, but here we found a place where we could put our roots down. It has a community feel. You walk around and see all the families. There’s room for bikes –that’s great for the kids.”

    Here Come The Millennials

    Potentially, the greatest source of exurban and peripheral revival lies with the maturation of the millennial generation. Millennials — born between 1982 and 2002 — are widely portrayed as dedicated city dwellers. That a cohort of young educated, affluent people should gravitate to urban living is nothing new. The roughly 20% who, according to an analysis by demographer Wendell Cox, live in urban cores may be brighter, and certainly more loquacious, than their smaller town counterparts, dominating media coverage of millennials. But the vast majority of millennials live elsewhere — and roughly 90% of communities’ population growth that can be attributed to millennials since 2000 has taken place outside of the urban core.

    To be sure, millennials are moving to the suburbs from the city at a lower rate than past generations , but this is more a reflection of slower maturation and wealth accumulation.

    According to U.S. Census Bureau data released last month, 529,000 Americans ages 25 to 29 moved from cities out to the suburbs in 2014 while 426,000 moved in the other direction. Among younger millennials, those in their early 20s, the trend was even starker: 721,000 moved out of the city, compared with 554,000 who moved in.

    This may well reflect rising cost pressures, as well as lower priced housing many millennials can afford. Three-quarters, according to one recent survey, want a single-family house, which is affordable most often in the further out periphery.

    Future trends are likely to be shaped by an overlooked fact: as people age, they change their priorities. As the economist Jed Kolko has pointed out, the proclivity for urban living peaks in the mid to late 20s and drops notably later. Over 25% of people in their mid-20s, he found, live in urban neighborhoods; but by the time they move into their mid-30s, it drops to 18% or lower. In 2018, according to Census estimates, the number of millennials entering their 30s will be larger than those in their 20s, and the trend will only get stronger as the generation ages.

    Some might argue that millennials will be attracted to more urban suburbs, places like Bethesda, Md.; Montclair, N.J.; or the West University or Bellaire areas of Houston, all of them located near major employment centers with many amenities. These suburban areas are also among the most expensive areas in the country, with home prices often in the millions. And a number of older inner ring suburbs, as we saw in the case of Ferguson, are troubled and have lost population — even as the number of residents in downtown areas have grown.

    So when millennials move they seem likely to not move to the nice old suburbs, or the deteriorating one, but those more far-flung suburban communities that offer larger and more affordable housing, good schools, parks and lower crime rates.

    Among the research that confirms this is a study released this year by the Urban Land Institute, historically hostile to suburbs, which found that some 80% of current millennial homeowners live in single-family houses and 70% of the entire generation expects to be living in one by 2020.

    The Future Of Exurbia

    Far from being doomed, exurbia is turning into something very different from the homogeneous and boring places portrayed in media accounts. For one thing exurbs are becoming increasingly ethnically diverse. In the decade that ended in 2010 the percentage of suburbanites living in “traditional” largely white suburbs fell from 51% to 39%.  According to a 2014 University of Minnesota report, in the 50 largest U.S. metropolitan areas, 44% of residents live in racially and ethnically diverse suburbs, defined as between 20% and 60% non-white.

    And how about the seniors, a group that pundits consistently claim to be heading back to the city? In reality, according to an analysis of Census data, as seniors age they’re increasingly unlikely to move, but if they do, they tend to move out of urban cores as they reach their 60s, and to less congested, often more affordable areas out in the periphery. Seniors are seven times more likely to buy a suburban house than move to a more urban location. A National Association of Realtors survey found that the vast majority of buyers over 65 looked in suburban areas, followed by rural locales.

    Trends among millennials, seniors and minorities suggest that demographics are in the exurbs’ favor. The movement to these areas might be accelerated by their growing sophistication, as they build amenities long associated with older cities, such as town centers, good ethnic restaurants and shops, diverse religious institutions and cultural centers. At the same time, the growth of home-based business — already larger than transit ridership in two-thirds of American metropolitan areas and growing much faster — increases the need for larger homes of the sort found most often in the outer rings.

    Rather than regard these communities as outrages to the urban form, planners and developers need to appreciate that peripheral developments remain a necessary part of our evolving metropolitan areas. With a new generation looking for affordable homes, good schools and low crime, it seems logical that many will eventually leave core cities that offer none of the above. The future of exurbia is far from dead; it’s barely begun.

    This piece first appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.


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    When I was back in Chicago over Labor Day, I had to check out the “big three” new public space projects there: the Riverwalk, Maggie Daley Park, and the 606 Trail. The Riverwalk is a spectacular project I already wrote about. Maggie Daley Park, a new playground just across Columbus Dr. from Millennium Park’s Frank Gehry designed band shell, has been controversial and got mixed reviews. But I really liked it. More importantly, kids seem to love it. The place was jammed, and it appeared to be mostly locals. My cousin tells me her young daughter can’t get enough of the place. I’m not doing a post on this, but it looks like another big win.

    The 606 Trail, a 2.7 mile biking and walking trail built on the embankment of an abandoned rail line, is a different story, however.

    The problem with the 606 is not that it’s bad. In fact, it’s a nice, eminently serviceable rail trail. I won’t do a full writeup since Edward Keegan had a good review in Crain’s in which he asks, “Is that all there is?” that I think gets it basically right.  Numerous other reviews are also available.

    What I will do is highlight three areas that I think contribute to Keegan being underwhelmed: inflated expectations, financing problems, and an odd lack of attention to design detail.

    Inflated Expectations

    The fact that the 606 is an elevated trail on an abandoned rail line creates an almost inevitable comparison to New York’s High Line. The city did nothing to downplay those comparisons, and in fact suggested Chicago’s trail would actually be considered superior. For example, in national urbanist web site Next City, Deputy Mayor Steve Koch said, “A lot of people are familiar with the High Line — this is a concept far beyond that truly transformative project.”  Frances Whitehead, lead artist for the project, told WBEZ regarding the High Line, “I think we’re gonna smoke them.”

    It’s very clear the city wanted this to be considered a project worthy of national, not just local attention. Back to Koch, he said, “Someone will call you up and say, ‘I want to see the city’ Thisis where you’ll go; this is the way you’ll do it. And I think people are going to come from all over the globe.”

    The very name speaks to the ambition level. Originally it was known as the Bloomingdale Trail, a name that technically still exists but which has been replaced for most purposes by “the 606.” The new name was taken from the first three digits of zip codes in the city of Chicago. Thus by using 606, the name itself suggests a project of citywide, not neighborhood, significance. The city also pushed for national media – and got it.

    The problem is that the 606 is not even remotely another High Line, nor a project of citywide significance, nor a bona fide tourist attraction for the masses. It’s a neighborhood serving rail-trail that is elevated above the streets with some nicer features like lighting that you don’t see often. Like many other rail trails around the country, I expect it to have a significant positive development affect in the neighborhood, as well as being a great recreational amenity. All great things – if the trail had been sold that way originally.

    To be fair, some like the Trust for Public Land, which was involved in the project design, were more realistic. Their CEO Will Rogers told Next City, “The High Line really reshaped the whole Meatpacking District. The Bloomingdale is going to provide parks and green space for neighborhoods that desperately need it, and bicycle access for people going downtown. It’s a different kind of investment.” But this isn’t the message that won out in shaping perceptions. The city would have been better off setting expectations much differently.

    Insufficient Funds

    The 606 Trail was primarily paid for using federal CMAQ transportation funds. According to DNA Chicago, the total price of the 606 is $95 million, with $50 million in CMAQ funds, $20 million privately raised, $5 million from the city, and $20 million to fill (for what purposes I am not sure, though see below).

    The use of a CMAQ funding had key implications. One is that it more or less required the project to be primarily a bicycle trail. The entire edifice of obnoxious federal transport regs are in play here. Two is that it made this a CDOT project, not a Parks District one (though I believe the Parks District is now in charge of it). I believe many of the things that contribute to Keegan’s feelings come from the funding strings and a budget that was too low. In fact, this project to me brought back echoes of the CTA’s Brown Line expansion project in the way that various parts of it give off the vibe of being value engineered.

    One of the things that got whacked in the Brown Line project, for example, was paint. Except for a handful of places such as over Armitage Ave, metal on the project was simply left in a raw galvanized state. I previously noted the austere results of that project give off an homage to prison yard feel. The same look is present on the 606. Consider these photos:

    Galvanized metal railing at the CTA Fullerton station.

    Mesh galvanized metal railing at the CTA Fullerton station.

     

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    Mesh galvanized railings along the 606.

     

    There’s nothing wrong with using an industrial motif, which is very appropriate in Chicago. And obviously security for adjacent property owners is important. It’s also possible that these had to be over-engineered to meet DOT/federal standards, much like the Brown Line station railings for passengers that could stop a Mack truck. The designers may well have felt these were the best choices. But my gut tells me that, like with the Brown Line, this may have been a money issue.

    A lot of people have noted the fact that the landscaping has not yet been fully planted or grown to maturity as a reason for the trail’s feel. That surely plays a role. But the preponderance of galvanized metal through much of it plays a big role in giving the 606 an austere feel.

    This also demonstrates how the city’s financial problems have practical consequences. Because the city’s budget is in such bad shape, it had to turn to CMAQ, which imposed strings you’d rather not have in an ideal world. And you may not have the cash to do it right. (The Riverwalk doesn’t suffer from this, possibly because its commercial spaces generate revenues to bond against).

    Design Oddities

    The 606 also has some odd design misses. For example, here is what the Trail physically looks like. It’s a concrete biking path with a soft blue rubberized running path on either side.

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    Let’s see, where have I seen this design pattern before?

    Fullerton L platform.

    Fullerton L platform.

    The CTA uses a similar blue shoulder area on its platforms. But in its case, the design pattern is used to indicate the edge of the platform and thus an unsafe area to stand. You are supposed to stand behind the blue line. Using a similar width blue area, even if a different shade, for a jogging path on the 606 violates a local design affordance, like putting a handle on a door and labeling it “Push.”

    Then there’s this arch bridge:

    The 606 Trail over Milwaukee Ave.

    The 606 Trail over Milwaukee Ave.

    This design is dimensionally awkward, something Keegan points out too. Given that this is a rail trail, it’s also notable that the designers chose a steel arch pattern that is not idiomatic of rail bridge design, certainly not in Chicago anyway. This also makes me again wonder about the role of CDOT in the project. This arch structure is the same pattern they used for the Halsted St. bridge over the north branch of the Chicago River that Blair Kamin similarly labeled, “less than graceful.” (The Damen Ave arch bridge works much better, probably because the span is longer and higher, lending itself to more elegant design proportions).

    The name “606” itself is also a bit off. Inside Chicago the reference may be obvious, but outside of its this name is likely to be parsed as an area code, particularly with the “0” middle digit from the original North American Numbering Plan. Today you frequently see people sporting their city’s main area code on shirts and such as a bit of local pride, particularly as area codes have shrunk down to city scale size in many places. The 606 area code is Appalachian Kentucky, however, not Chicago. Few people without a connection to Chicago will know that its zip codes start with 606.

    These aren’t huge items, but cumulatively they add up. The little things separate great design from good, and the 606 missed some opportunities.

    On the whole, this trail will be a great amenity for the neighborhoods it passes through, and also be legitimately functional for transportation given its elevated nature and the transportation lines it connects to such as Metra’s Clybourn station. It was fairly well patronized when I was on it, but with no sense of crowding. And this was on a nice Labor Day afternoon, suggesting that that chaos and safety issues of the lakefront path won’t be repeated here.

    If only it had originally been sold for what it was instead of a High Line beater, had raised that last $20 million (plus a bit more, perhaps), and had a little more attention to detail in some design elements, the 606 would be probably be seen as something that significantly exceeded expectations instead of something that did not live up to the hype.

    Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.


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    A recent report published jointly by the World Bank and by Agence Française de Développement highlights the challenge of realizing Africa’s promised demographic dividend. The title Africa’s Demographic Transition: Dividend or Disaster? (see footnote 1) sums up the authors’ thesis that the dividend is not an automatic result of falling fertility ratios (TFR).

    Instead, falling TFRs open a window of opportunity which can lead to a demographic dividend when governments and the public sector implement the requisite steps to capitalize on this opportunity. Lower child mortality usually leads to falling fertility ratios and improvements in women’s health. But most important among concurrent or subsequent initiatives are investments in education, and the provision of sufficient jobs to a booming working-age population.

    From the report [our emphasis]:

    Declines in child mortality, followed by declines in fertility, produce a “bulge” generation and a period when a country has a large number of working-age people and a smaller number of dependents. Having a large number of workers per capita gives a boost to the economy provided there are labor opportunities for the workers.

    And elsewhere:

    The first and perhaps most challenging step is to speed up the fertility decline in countries where it is currently slow or stalled. Reducing fertility leads to immediate gains in income per capita as youth dependency rates fall. However, achieving the full potential of the demographic dividend requires economic policies that take advantage of the opportunity. Formulating and implementing policies that strengthen financial institutions and encourage saving will channel rising incomes into domestic savings and investments that further fuel growth and development.

    Empirical evidence points to three highly interactive accelerators [of fertility decline]:

    • Health, especially child health. Child health is a critical input into fertility declines. As children’s health and survival rates improve, family demand for more children declines as confidence in child survival increases. Smaller family sizes improve maternal health, which further improves child health, completing a virtuous cycle.
    • Education, especially education for girls. Female education is a critical driver of lower desired fertility and the transition from high to low fertility. Fertility decline, in turn, has a strong effect on education by allowing for fewer, healthier, better nourished, and better educated children.
    • Women’s empowerment, which is clearly related to the first two. Better educated and healthier women with more market, social, and decision-making power in the family—are likely to have fewer children (World Bank 2011). And women who have fewer children—as a result of delayed age of marriage, delayed first sexual contact, or more space between births—are much more likely to enter the paid labor market, to have higher earnings, and to be more empowered.

    Further, the report provides a road map of the policies that are necessary to convert fertility decline into a first demographic dividend and a second demographic dividend. These policies are shown in Table 0.3 (all charts below are from the report).

    Screen Shot 2015-10-29 at 10.04.26 AM


    Table 0.1 shows a correlation between each country’s total fertility ratio (TFR) and its GDP per capita. Countries with high TFRs have lower GDP per capita. Some of the most populous countries, Kenya, Ethiopia and Tanzania are in the middle ranges, while others like DR Congo are near the GDP bottom (and TFR top). Nigeria is an outlier with better than average GDP per capita but a higher than average TFR. Botswana and South Africa have higher GDP per capita and lower TFRs.

    Screen Shot 2015-10-28 at 1.49.21 PM


    Table 0.2 shows the relation of child mortality and TFRs. Low mortality coincides with a low TFR. Nigeria and DR Congo are problematic with high mortality and high TFRs, whereas Tanzania still maintains a higher than average TFR despite relatively low child mortality.

    Screen Shot 2015-10-28 at 1.50.27 PM


    Figure 0.5 shows the evolution of TFRs for several countries since 1960. Niger’s remained high while South Africa’s declined. Nearly all country TFRs are falling, albeit at a slower rate than previously expected in some cases.

    Screen Shot 2015-10-28 at 1.49.50 PM

    Figure 0.6 shows the clear divide in TFRs between rural and urban areas of Ethiopia, Ghana and Kenya. An increase in agricultural productivity and the creation of urban jobs will contribute to further declines in TFRs.

    Screen Shot 2015-10-28 at 1.50.06 PM


    Download the full report here.

    Sami Karam is the founder and editor of populyst.net and the creator of the populyst index™. populyst is about innovation, demography and society. Before populyst, he was the founder and manager of the Seven Global funds and a fund manager at leading asset managers in Boston and New York. In addition to a finance MBA from the Wharton School, he holds a Master's in Civil Engineering from Cornell and a Bachelor of Architecture from UT Austin.

    1. Canning, David, Sangeeta Raja, and Abdo S. Yazbeck, eds. 2015. Africa’s Demographic Transition: Dividend or Disaster? Africa Development Forum series. Washington, DC: World Bank. doi:10.1596/978-1-4648-0489-2. License: Creative Commons Attribution CC BY 3.0 IGO

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    There’s a weird war raging these days. There are people who advocate high rise living and public transit in the urban core to the exclusion of other arrangements. And then there are folks who can’t hold their head up high in church on Sunday if they don’t live on a quarter acre lot out on the far fringe of the metroplex with four cars parked in front of their fully detached home. I always choose the thing in the middle. It’s called a “town”. I’m a Main Street kind of guy.

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    This is Haddon Avenue in Collingswood, New Jersey. It’s an intact functioning pre World War II Main Street town complete with hardware store, local mom and pop shops, great places to eat, business incubators, post office, public parks, and City Hall. The majority of the buildings are one and two stories tall.

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    Transit exists in Collingswood in the form of a PATCO train station and bus service, but transit isn’t necessary to travel within Collingswood itself. The train and bus are there to get people from one town center to another. Philadelphia is fifteen minutes away. Once you’re in town you can walk or bike everywhere. That includes the young, the elderly, people with limited physical mobility, the rich, the poor… everyone.

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    The most affordable apartments are directly above the shops. These are perfect for young adults as well as older people on a fixed income. Both groups enjoy the convenience of nearby shops and activities. As you turn off of Haddon Avenue the commercial buildings transition to residential side streets.

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    Duplexes nestle up against the commercial corridor and provide moderately priced homes and rental accommodations. These in-between properties work well for couples, empty nesters, and young families on a budget.

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    A couple of blocks away are fully detached homes on larger lots. Collingswood is built in such a way that a person could go from childhood to old age and find a comfortable place to live at an appropriate price point within a half mile.

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    Schools and public parks are located right in the residential neighborhoods.

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    All levels of employment from a first teen aged service job to an advanced career in Center City Philadelphia (fifteen minutes away by train) are available.

    This arrangement satisfies nearly all the metrics for both of the warring factions. A traditional Main Street town is neither sprawl nor a hyper dense concrete city. It’s economical as well as ecological. It’s beautiful and family friendly. And perhaps most importantly, a Main Street town is physically structured in a way that allows its diversified local tax base to support the required infrastructure over the long haul.

    Too bad it’s essentially illegal to build new places like this anymore…

    John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He's a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.


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    When we speak about the ever-expanding chasm that defines modern American politics, we usually focus on cultural issues such as gay marriage, race, or religion. But as often has been the case throughout our history, the biggest source of division may be largely economic.

    Today we see a growing conflict between the economy that produces consumable, tangible goods and another economy, now ascendant, that deals largely in the intangible world of media, software, and entertainment. Like the old divide between the agrarian South and the industrial North before the Civil War, this threatens to become what President Lincoln’s Secretary of State, William Seward, defined as an “irrepressible conflict.”

    Other major economic divides—between capital and labor, Wall Street versus Main Street—defined politics for much of the 20th century. But today’s tangible-intangible divide is particularly tragic because it undermines America’s peculiar advantage in being a powerhouse in both the material and non-material worlds. No other large country can say that, certainly not China, Japan, or Germany, industrial powerhouses short on resources, while our closest cousins, such as Canada, Australia, and New Zealand, remain, for the most part, dependent on commodity trade.

    The China syndrome and the shape of the next slowdown

    Over the past decade, the United States has enjoyed two parallel booms that combined to propel the economy out of recession. One was centered in places like Houston, Dallas-Ft. Worth, Oklahoma City, and across much of the Great Plains. These areas were all located in the first states to emerge from the recession, and benefited massively from a gusher in energy jobs due largely to fracking.

    At the same time, another part of the economy, centered in Silicon Valley as well as Seattle, Austin, and Raleigh/Durham, has also been booming. Though far more restricted than their counterparts in the “tangible” economy in terms of both geography and jobs, the tech/digital economy did not lag when it came to minting fortunes. By 2014, the media-tech sector accounted for six of the nation’swealthiest people. Perhaps more important, 12 of the nation’s 17 billionaires under 40 also hail from the tech sector.

    Until China’s economy hit a wall this fall, these two sectors were humming along, maybe not enough to restore the economy to its ’90s trim robustly enough to improve conditions in many parts of the country. But as China begins to cut back on commodity purchases, many key raw material prices—copper and iron to oil and gas as well as food stuffs—have fallen precipitously, devastating many developing economies in South America, Africa, the Middle East, and Southeast Asia.

    Plunging prices are also beginning to hurt many local economies in the U.S., particularly in the “oil patch” that spreads from west Texas to North Dakota. This is one reason why overall economic growth has fallen, and is unlikely to revive strongly in the months ahead. Overall, according to the most recent numbers, job growth remains slow and long-term unemployment stubbornly high while labor participation is stuck at historically low levels. Much of this loss is felt by the kind of middle and working class people who tend to work in tangible industries.

    But it’s not just the much maligned energy economy that is in danger. The recovery of manufacturing was one of the most heartening “feel good” stories of the recession. Every Great Lakes state except Illinois now enjoys an unemployment rate below the national average, and several, led by the Dakotas, Minnesota, Nebraska, and Iowa, boast unemployment that is among the lowest in the nation. Now a combination of a too-strong dollar, declining demand for heavy equipment, and falling food prices threaten economies throughout the Great Lakes and the Great Plains.

    Waging war on the tangible economy

    President Obama’s emphasis on battling climate change—aimed largely at the energy and manufacturing sectors—in his last year in office will only exacerbate these conflicts. For one thing, the administration’s directive to all but ban coal could prove problematic for many Midwest states, including several—Iowa, Kansas, Ohio, Illinois, Minnesota, and Indiana—that rely the most on coal for electricity. Not surprisingly, much of the opposition to the Environmental Protection Agency’s decrees come from heartland states such as Oklahoma, Indiana, and Michigan. The President’s belated rejection of the Keystone Pipeline is also intensely unpopular, including among traditionally Democratic-leaning construction unions.

    These policies have also succeeded to pushing the energy industry, in particular, to the right. In 1990 energy firms contributed almost as much to Democrats as to Republicans; last year they gave more than three times as much to the GOP.

    In contrast, the tech oligarchs and their media allies largely embrace the campaign against fossil fuels. Environmental icon Bill McKibben, for example, has won strong backing in Silicon Valley for his drive to marginalize oil much like the tobacco industry was ostracized earlier. Meanwhile the onetime pragmatic interest in natural gas as a cleaner replacement for coal is fading, as the green lobby demands not just the reduction of fossil fuel but its rapid extermination.

    Embracing the green agenda costs Silicon Valley little. High electricity prices may take away blue collar jobs, but they don’t bother the affluent, well-educated, Telsa-driving denizens of the Bay Area, who also pay less for power. But those rates are devastating to the less glamorous people who live in California interior. As one recent study found, the average summer electrical bill in rich, liberal andtemperate Marin County was $250 a month, while in impoverished , hotter Madera, the average bill was twice as high.

    Many Silicon Valley and Wall Street supporters also see business opportunities in the assault on fossil fuels. Cash-rich firms like Google and Apple, along with many high-tech financiers and venture capitalist, have invested in subsidized green energy firms. Some of these tech oligarchs, like Elon Musk, exist largely as creatures of subsidies. Neither SolarCity nor Tesla would be so attractive—might not even exist—without generous handouts.

    In this way California already shows us something of what an economy dominated by the intangible sectors might look like. Driven by the “brains” of the tech culture, the ingenuity of the “creative class,” and, most of all, by piles of cash from Wall Street, hedge funds, and venture capitalists, the tech oligarchs have shaped a new kind of post-industrial political economy.

    It is really now a state of two realities, one the glamorous software and media-based economy concentrated in certain coastal areas, surrounded by a rotting, and increasingly impoverished, interior. Far from the glamour zones of San Francisco, the detritus of the fading tangible economy is shockingly evident. Overall nearly a quarter of Californians live in poverty, the highest percentage of any state. According to a recent United Way study, almost one in three Californians is barely able to pay his or her bills.

    Silicon Valley’s political agenda

    For the time being, with the rest of the economy limping along, the tech oligarchs seem, if anything, ever more arrogant and sure that they will define the future of the country’s politics. At a time when most small business owners hold Obama in low regard, the Democratic Party can consider the tech sector as an intrinsic part of its core political coalition. In 2000 the communications and electronics sectorwas basically even in its donations; by 2012 it was better than two to one democratic.

    Once largely apolitical or non-partisan in their approach, firms like Microsoft, Apple and Google now overwhelmingly lean to the Democrats. President Obama has even enlisted several tech giants—including venture capitalist John Doerr, Linked In billionaire Reid Hoffman, and Sun cofounder Vinod Khosla—to help plan his no doubt lavish and highly political retirement.

    The love-fest between Obama and Silicon Valley grows from a common belief in being extraordinary. The same media that has marveled at Obama’s celebrated brilliance also hails Silicon Valley’s ascendency as a triumph of brains over brawn.

    Yet in reality many traditional industries such as energy and manufacturing still depend on skilled engineers. Indeed, after Silicon Valley, the biggest concentration of engineers per capita (PDF) can be found in brawny metros like Houston and Detroit. New York and Los Angeles, which like to parade as tech hotbeds, rank far behind.

    In contrast to engineers laboring in Houston or Detroit, those who work in Silicon Valley focus largely on the intangible economy based on media and software. The denizens of the various social media, and big data firms have little appreciation of the difficulties faced by those who build their products, create their energy, and grow their food. Unlike the factory or port economies of the past, those with jobs in the new “creative” economy also have little meaningful interaction with working class labor, even as they finance politicians who claim to speak for those blue collar voters.

    This may explain the extraordinary gap between the economies—and the expectations—of coastal and interior California. The higher energy prices and often draconian regulations that prevented California from participating in the industrial renaissance are hardly issues to companies that keep their servers in cheap energy areas of the Southwest or Pacific Northwest and (think Apple) manufacture most if not all of their products in Asia.

    In the process the Democrats, once closely allied with industry, are morphing into a post-industrial party. Manufacturing in strongholds like Los Angeles, long the industrial center of the country, continues to erode. In a slide that started with the end of the Cold War, Southern California’s once-diverse industrial base has eroded rapidly, from 900,000 jobs just a decade ago to 364,000 today. New York City, which in 1950 boasted 1 million manufacturing jobs, now has fewer than 100,000. Overall, manufacturing accounts for barely 5 percent of state domestic product in New York and 8 percent in California, compared to 30 percent in Indiana and 19 percent in Michigan.

    This divide could become decisive in the election. In contrast to advances in energy, autos, and homebuilding, which produced good blue collar and middle-skilled jobs, the benefits of the current tech boom have been limited, both in terms of job creation (outside of the Bay Area) and increased productivity, for the vast majority of voters.

    This underlying economic conflict is redefining our politics less along lines of ideology and more in terms of interests. Increasingly states that follow the Obama line on energy, such as New York and California, are not contestable for Republicans. But elsewhere—beyond the coasts—there may be greater resistance.

    Among those who are likely to revolt are those workers and entrepreneurs in the oil patch, those who build heavy machinery, and those who grow large quantities of food. The recent Republican win in Kentucky was in part based on opposition to anti-coal regulations coming from the Obama administration. As the EPA ramps up its regulatory onslaught, one can expect energy-dependent industries and regions to recoil, particularly at a time when their industries are headed into a recession. Republicans claims that regulatory policies hurt the tangible economies will gain traction if car factories and steel mills start shutting down again, while farmers plant fewer soybeans and developers build fewer suburban homes.

    The emergence of an economic civil war?

    Hillary Clinton may praise the economic progress under President Obama, and win the nods of those in the tech, media, and financial community who have done very well on his watch. There’s enough momentum from these industries to guarantee that the entire West Coast and the Northeast will fold comfortably, and predictably, into the Clinton column, despite rising concern about crime, homelessness, and loss of middle class jobs. But the very same policies that attract the tech world voter to Clinton will just as certainly alienate many working class and middle class Democrats in places like Appalachia, the Gulf Coast, and particularly the politically pivotal Great Lakes.

    The stakes could be huge. If the Republicans can convince most voters in the middle of the country that the coastal-driven policy agenda is a direct threat to their interests, the GOP will likely carry the day. But if the Democrats can convince the country that coastal California and New York City represent the best future for us all, then get ready for Hillary, because nothing else—certainly not the old social issues—will stop her.

    This piece first appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.


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    This is the Executive Summary from a new report “A Question of Values: Middle-Income Housing Affordability and Urban Containment Policy" authored by Wendell Cox and published by the Frontier Centre for Public Policy. Ailin He, a PhD doctoral candidate in economics at McGill University served as research assistant.

    The "report is a public policy narrative on the relationships between urban containment policy, housing affordability and national economies. It is a synthesis of economic and urban planning analysis that is offered as a policy evaluation of urban containment. The analysis is presented in the context of higher-order objectives of domestic policy: improving the standard of living and eradicating poverty" (Page 9). The research focuses on the international experience, especially in Canada, Australia, New Zealand, the United Kingdom and the United States. Download the full report (pdf) here.

    Middle-income housing affordability is important to people and the economy: Canada’s house prices have risen more than house prices in most other high-income nations. This is of concern, because higher house prices reduce discretionary incomes, which defines the standard of living and poverty. If discretionary incomes are reduced, households will have less to spend on other goods and services, which can retard job creation and economic growth. Improving the standard of living and eradicating poverty are among the highest-order domestic priorities.

    Urban containment policy can lead to higher house prices: Urban land-use regulation has become stronger in many metropolitan areas and often includes urban containment policy. Urban containment severely restricts or bans development in urban fringe areas. Consistent with basic economics, this increases land values and house prices (all else equal). The planning intention and expectation is that higher housing densities will offset the land-price increases and that housing affordability will be maintained.

    Severe losses in housing affordability have been experienced in urban containment markets: Top housing and economic experts attribute much of the loss in housing affordability to stronger land-use policy.

    Housing affordability losses have been sustained in the five nations this report focuses upon: Across the United Kingdom, Australia, New Zealand and some markets in Canada and the United States, house prices have nearly doubled or tripled compared with household incomes as measured by price to income ratios. Much of this has been associated with urban containment policy.

    Demand and supply: Some research suggests that the huge house-price increases have occurred due to higher demand and the greater attractiveness of metropolitan areas that have urban containment policy. However, the interaction of supply and demand sets house prices. Claims that metropolitan areas with urban containment policy are more attractive are countered by their net internal out-migration and diminished amenities for some households.

    An intrinsic urban containment amenity seems doubtful: Some urban containment advocates claim that urban containment policy intrinsically improves amenities (such as a dense urban lifestyle). However, whether a feature is an amenity depends on individual preferences. Moreover, the strong net internal migration away from many metropolitan areas with urban containment policy is an indication that there is no urban containment amenity for most households.

    Higher densities have not prevented huge losses in housing affordability: In contrast with planning expectations, the land-value increases expected from urban containment have not been nullified by higher densities within urban containment boundaries.

    Intervening urban containment boundaries are more influential than topographic barriers: It has been suggested that topographic barriers such as mountains and the ocean cause higher house prices. However, in urban containment metropolitan areas, urban containment boundaries are usually placed between the built-up urban areas and the topographic barriers. As a result, house-price increase associated with the land shortage will be principally associated with the urban containment boundary, not the topographic barrier.

    A competitive land supply is required for housing affordability: A risk with urban containment policy is that by limiting the land for sale, large landholders will seek to buy up virtually all of the land for future gain. Without urban containment, there will not be a land shortage, and there will not be an incentive to monopolize the land supply. A sufficient land supply can be judged to exist only if prices relative to incomes are not higher than before the urban containment policy came into effect.

    Urban containment policy has been associated with reduced economic growth: Evidence suggests that urban containment policy reduces job creation and economic growth. The increased inequality noted by French economist Thomas Piketty is largely attributed to the housing sector and is likely related to strong regulation. Other research estimated a US$2-trillion loss to the U.S. economy, much of it related to strong land-use regulation, and called this “a large negative externality.”

    Urban containment policy has important social consequences: There are also important social consequences such as wealth transfers from younger to older generations and from the less-affluent to the more-affluent households.

    Urban containment policy has failed to preserve housing affordability: Some have expressed concern that urban containment policy might not have been implemented if there had been the expectation of losses in housing affordability. In fact, the administration of urban containment policy has been deficient, with corrective actions largely not taken despite the considerable evidence of losses in housing affordability. In urban containment markets, programs should be undertaken to stop the further loss of housing affordability and transition toward restoring housing affordability. Further, urban containment should not be implemented where it has not already been adopted.

    Canada could be at risk: Canada could be at greater risk in the future. Already, huge losses in housing affordability have been sustained in Vancouver and Toronto. Other metropolitan areas are strengthening land-use regulations. This could lead to severe consequences such as lowering middle-income standards of living and greater poverty with less job creation and less economic growth.

    The urban containment debate is fundamentally a question of values: Ultimately, the choice is between the planning values of urban design or urban form and the domestic policy values of improving the standard of living and reducing poverty. Urban containment policy appears to be irreconcilable with housing affordability. Proper prioritization requires that the higher-order values of a better standard of living and less poverty take precedence.

    Download the full report (pdf) here.

    Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and principal of Demographia, an international public policy and demographics firm.He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.


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  • 11/10/15--21:38: The Sociology of Fear
  • As part of its annual Survey on American Fears, Chapman University has tried to identify what Americans fear the most. A team of professors and students teamed up to retool last year’s survey tool and dig up American’s deepest horrors. In total, a random sample of 1,500 adults across the country were  asked about 88 different individual fears, in which they were to rank questions accordingly. Last year Americans were worried about walking alone at night and identity theft. But with the presidential elections just around the corner, it wasn’t surprising to see that corruption of our own government officials topped this year’s results.

    Sociology of Fear

    Nobody has ever cracked the code of human emotions. Our feelings are rooted within the depths of our physiology, but our cheers and screams are also products of our environment. Put in sociological terms, “fearfulness in varying degrees is part of the very fabric of everyday social relations”. This is bad news for those who thought the pursuit of happiness would be all fun and games.

    Director of the Fear Survey Chris Bader recruited a group of interdisciplinary students to join the semester long course to help retool last year’s survey and to provide fresh perspective on what American’s Fear. But when the student researchers involved in the project (including me) arrived at the first class of Sociology of Fear, we weren’t completely aware of what would be a grueling month of debate, passion, and even tears.

    Our class conducted multiple rounds of survey testing with friends, family and strangers to get feedback on additions made to last year’s survey tool. The most common fear amongst us twenty something college students facing the brink of graduation was “not living up to our potential”, and we considered this when evaluating the current state of American fears.

    Rapid communication and transfer of information creates the perception that our peers are having more fun and being more productive than us, and FOMO (Fear of Missing Out) was brought up numerous times during discussion. But our personal explorations did not interfere with the macro-level research conducted for the project, and in the end, the fears that rose to the top of the list were cross-generational.  After all, the survey was on American fears, not millennial anxieties.

    The course was a growing experience, but it was the work of the research faculty and project leaders that transformed this experience into excellent insights on the current American situation.

    Biggest Fears Today

    The survey explored four categories of fear: personal fears, natural disasters, paranormal fears, and drivers of fear behavior. The top American domains of fear averaged to be man-made disasters, technology, and government. Given the political transformations and technological developments taking place today, the results seem spot on.



    In order of most feared to least, the environment, personal future, natural disasters, crime, personal anxieties, daily life, and judgment of others came in next on the list. Makes sense – I’m sure most of us have some concern about how we’re perceived by others, but this sentiment doesn’t quite stack up to a 8.0 earthquake or creepy government spying.

    As for the top individual fears, 58% of respondents were afraid or very afraid of corruption of government officials. Perhaps Americans are on to some of the fishy things going on in Washington at the moment, or are simply sucked into the negative rhetoric commonplace in some opinion outlets.  Meanwhile, only 30% of Americans are afraid or very afraid of global warming impacting their lives.

    Following behind fear of government officials, 44.8% of Americans are afraid or very afraid of cyber terrorism. 44.6% are afraid or very afraid of corporate tracking of personal info, and 44.4% of terrorist attacks. 41.4% where afraid or very afraid of government tracking of personal info, and 40.9% of bio-warfare. The remaining top fears surrounded financial and personal issues, with identity theft coming in at 39.6%, economic collapse at 39.2%, running out of money in future at 37.4%, and credit card fraud at 36.9%.

    The survey also found that these fears are actually driving our actions. Fear has the strongest impact on our voting patterns. About one third who have an above average fear of government reported having voted for a particular candidate due to their fears. Even more alarming is the fact that “of those respondents who have an above average fear of the government, over 15% have purchased a gun due to fear.” Eight percent of people with an above average fear of the government send their children to private school out of fear.



    As if gun control and education reform weren’t complicated enough, we can say that emotions will play some role in how policy is shaped in the coming years.

    A society of hope or fear?

    That fact that Americans fear government and technology is not surprising, given the individualist basis on which our nation was founded and the exponential technological growth we’re experiencing today. The Internet is forcing institutions and businesses to be increasingly transparent in everything from product sourcing to internal communications, and the watchdog power that citizens now have is both empowering, and frightening.

    It’s easy to be blinded by fear, as our emotions are the most mysterious, yet powerful forces behind our decisions. But for every 58% who are afraid of government corruption, there is 42% who isn’t. For every 44.4 percent who are afraid of terrorism, there is 55.6% with no worries. Surely, there are preventative benefits that come with healthy skepticism and insecurity, but too much diminishes any hope for societal progress. Can we keep this in mind as we go about our business, citizenship, and personal lives?

    The things that make us afraid can be dealt with. Some of them are opportunities, others are threats, and a good deal of them are complex issues and events that require brave souls to challenge them head on. This being said, we can all use a little inspiration to give us light in the face of darkness.

    Nelson Mandela told us quite simply, “May your choices reflect your hopes, not your fears.” Emerson’s advice was a bit more menacing, perhaps more appropriate given the nature of this survey. “Always do what you are afraid to do.”

    Charlie Stephens is a researcher at the Chapman University Center for Demographics and Policy, and an MBA candidate at the Argyros School of Business and Economics at Chapman University.He is also a regular contributor to the creative business site PSFK.com and the founder of substrand.com, a social awareness site that helps people, businesses, and communities understand their cultural environments and connect in new grounds.

    Photo: "Actress-fear-and-panic" by MyName (Bantosh) - self-made, taken in course of professional work. Licensed under CC BY-SA 3.0 via Wikimedia Commons.


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    When’s the last time you heard some futurist or management guru suggest that in the future more of us will be working at the same desk doing routine tasks on a predictable working week schedule? No? That’s just one of many problems that advocates of limitless spending on public transport need to keep in mind in dealing with the issue of urban congestion.

    Increasing urban congestion is said to cost the economy dearly and if Infrastructure Australia is to be believed, it will cost even more in the future unless something is done now. They warn the current estimate of a $13.7 billion annual cost will balloon to $53 billion by 2031.

    Congestion is without dispute a handbrake on economic productivity but the range of solutions for reducing congestion range from the outright zany (see Elizabeth Farrelly’s suggestions for Prime Minister Turnbull as one example) to milder versions of zany. They all tend to be very expensive and many impose unacceptable compromises on our basic freedoms (such as proposals to ban cars from cities).

    Increased investment in public transport is a feature of many proposed solutions for alleviating congestion. It is true that we have under-invested in public transport systems in past decades and it’s equally true that we’ve under-invested in private transport. Basically, we’ve cheered a rising population while passing the buck for funding and delivering the infrastructure needed to support that growth to future generations. Rising congestion levels are making it feel like crunch time now.

    But there are valid questions about the capacity of public transport to alleviate congestion which are rarely getting asked. Rather than a magical silver bullet, there are a few things to keep in mind before you climb aboard the merry bandwagon of limitless investment in public transport…

    The nature of work is changing. Public transport systems work best on a hub and spoke model of employment and commuting, built on predictable schedules designed around predictable commuter needs. Central business districts of very high employment concentrations, where people work in the same workplace from day to day and for the same hours each day, are ideal candidates for public transport.  But increasingly this is looking like a 20th century model of work. Technology has been the primary driver of change, allowing more workplace flexibility and providing for increased location diversity. ‘Standard hours’ of work are being diluted and at the same time companies increasingly realise the high costs of ‘paper factories’ for administrative staff in costly CBD locations makes little sense. With this, the centralised nature of work is also being diluted and this is working against the centralised economic model that makes fixed public transport systems (especially rail) effective.

    Society is changing. There was a time when commuting trips to work in central locations were mainly a case of getting there and getting home.  Much has changed. A rising proportion of women in the workforce and how this has changed family responsibilities means that commutes to and from work are also often tied in with other objectives: dropping off or picking up school kids or children in child care is only a part of this (but one which is said to contribute to 20% of private vehicle traffic on the roads in peak periods during school terms).  Add in to this the increasing propensity to shop less but more frequently (who owns a chest freezer anymore?) and to mix in pre and post work social or recreational appointments, and you have a very different pattern of commuting which public transport will struggle to service.

    The suburban economy. A telling reality for proponents of increased public transport investment is that employment remains – and in some cases is increasingly – suburban by nature. Between 8 and 9 out of 10 of all jobs in metropolitan regions are suburban by location, and when you consider that the same proportion of residents in any metropolitan location are also suburban by residence, the problem of servicing this reality through public transport is apparent. In the last inter censal period, the proportion of metropolitan wide jobs located in the CBD actually fell in Brisbane (to 12.5%), while in Melbourne it remain unchanged (at 10%) and Sydney recorded a small rise (to 13.5%). The raw numbers of jobs in suburban locations are growing faster, as a rule, than those in CBDs.  The cost of creating a public transport system designed around suburban home to suburban workplace commutes is beyond calculation. In Australia, we will be in flying cars like the Jetsons long before this happens.

    The new and emerging economy. The way cities were designed – with concentrations of white collar workers in CBDs and with discrete areas set aside for industrial, retail or other specified activities – is no longer as important for new or emerging economies. Technology in particular means that physical place is less essential for connectivity to markets. Communication is less dependent on physical proximity. This doesn't mean CBDs will lose their higher order function but it does mean that disruptive or emerging businesses, for which new technologies are more than just a novelty but a foundation, will have less need for the types of places offered by centralised business districts. They can locate in lower cost areas of the metropolitan area, and make use of the central business districts on occasion, rather than routine. Attracting and retaining these emerging types of businesses will also put the onus on suburban business centres to lift their game, but in many cases this isn’t difficult. Just think of any number of start ups or tech based companies you’ve read of recently and think about how many of these have been in non-traditional locations. Even when these businesses mature, their lack of interest in a CBD style presence doesn’t seem to change. Witness the many technologically innovative businesses in the USA or Europe, by way of example.

    Where does this leave us with solutions for congestion? Ironically, increasing public transport investment designed to ferry people into and out of central business areas is unlikely to make much difference to metropolitan wide congestion. It can’t – simply because only a minority of jobs (between 10% and 15% in the case of Australia’s major cities) are in these locations. People with jobs in these locations may currently have relatively high rates of public transport usage already (often 40% plus) but imagine the cost of increasing this to 80%? The cost of getting there is incalculable for cities of our size, and in any way, it would only benefit 10% to 15% of the urban workforce. Ironically, the people most likely to benefit from this type of public transport prescription tend be much higher wage earners, living close to the inner city in highly valued real estate. (Have a look at this analysis from The Pulse a couple of years ago). Yet their higher capacity to pay is not reflected in most policy debate.

    The reality is that public transport can only go so far in alleviating congestion. Social and economic change to the nature of work is changing the shape of employment decisions and has forever changed the nature of the commute. Public policy officials, urbanists and politicians who pretend that all that’s needed to ‘solve congestion’ is massively increased investment in heavy rail, light rail or dedicated busway networks are deluded: this thinking is rooted in nostalgic notions of work, unrelated to the future of work.

    And as if to demonstrate the fact we should not expect better from our various governments, when a technological innovation comes along that promises to realize the long held dream of ride sharing and increased persons per vehicle - which if widely embracedwould go a long way to solving congestion at no cost to taxpayers -  governments stand in the way. It’s called Uber. Go figure.

    Ross Elliott has more than 20 years experience in property and public policy. His past roles have included stints in urban economics, national and state roles with the Property Council, and in destination marketing. He has written extensively on a range of public policy issues centering around urban issues, and continues to maintain his recreational interest in public policy through ongoing contributions such as this or via his monthly blog The Pulse.


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    Sandy Ikeda and I have published a new Mercatus paper on the regressive effects of land use regulation. We review the empirical literature on how the effects of rules such as maximum density, parking requirements, urban growth boundaries, and historic preservation affect housing prices. Nearly all of the studies on the price effects of land use regulations find that — as supply and demand analysis would predict — these rules increase the price of housing. While the broad consensus on the price effects of land use regulations is probably to no surprise to Market Urbanism readers, some policy analysts continue to insist that in fact rules requiring detached, single family homes help cities maintain housing affordability.

    Ed Glaeser, Joseph Gyourko, and Raven Saks estimate the effects of regulations on house prices in their paper “Why Is Manhattan So Expensive? Regulation and the Rise in Housing Prices.” They estimate what they call the “zoning tax” in 21 cities. The zoning tax indicates the proportion of housing costs that are due to land use regulations. The chart below shows the percentage of housing costs that this “tax” accounts for:

    The zoning tax as calculated by Edward Glaeser, Joseph Gyourko, and Raven Saks in 'Why Is Manhattan So Expensive? Regulation and the Rise in House Prices' (2003).

    The zoning tax as calculated by Edward Glaeser, Joseph Gyourko, and Raven Saks in “Why Is Manhattan So Expensive? Regulation and the Rise in House Prices” (2003).

    Policies that increase housing costs have a clear constituency in all homeowners, but they hurt renters and anyone who is hoping to move to an expensive city. The burden of land use regulations are borne disproportionately by low-income people who spend a larger proportion of their income on housing relative to higher income people. These regressive effects of land use policy extend beyond reducing welfare if the least-advantaged Americans. Additionally, rules that increase the cost of housing in the country’s most productive cities reduce income mobility and economic growth.

    In our paper Sandy and I also discuss proposals for reducing the inefficiency of cities’ current land use regulation practices. David Schleicher has proposed some of innovative policy improvements, including a zoning budget that a city can implement to commit itself to permitting a certain amount of new development. A zoning budget would create a situation in which local policymakers are forced to make tradeoffs between different land use restrictions, as opposed to the current situation in which there is no limit to policies restricting building. Another proposal that Schleicher suggests is a tax increment local transfer, or a TILT. With TILTs, homeowners who live near new development would receive some portion of the additional property taxes that the city raises by allowing the development. The purpose of TILTs is to reduce NIMBY opposition to development.

    We hope that our paper will be a helpful resource to those looking for an accessible overview of this area of research and point to future research opportunities for institutional reforms to allow for the construction of affordable housing.

    This piece first appeared at Market Urbanism.

    Emily Washington is a policy research manager for the Mercatus Center at George Mason University. She manages the Spending and Budget Initiative and State and Local Policy Project portfolios. Her writing has appeared in USA Today, The Christian Science Monitor, Economic Affairs, and The Daily Caller. She contributes to the blogs Neighborhood Effects and Market Urbanism.


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