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    It should be the obligation of older citizens to try to improve the prospects for their successors. But, here in California, as seen in a new report issued by the Chapman Center for Demographics and Policy, we seem to have adopted an agenda designed to make things tougher for them.

    Millennials everywhere face many challenges. The U.S. Census Bureau estimates that, even when working full-time, they earn $2,000 less than the same age group made in 1980. Nationwide, a millennial with a college degree and college debt, according to a recent analysis of Federal Reserve data, earns about the same as someone of the baby boomer generation did at the same age without a degree.

    Generational crisis

    But California millennials face an even greater challenge than most. Despite the anecdotes of youthful fortunes emanating from Silicon Valley, California’s millennials, on average, do not earn more than their counterparts elsewhere. Yet, they confront the highest housing prices in the nation, now 230 percent of the national average.

    These prices hit the newest and youngest buyers hardest. California boomers have rates of homeownership close to the national average, but people aged 25 to 34 suffered the third-worst homeownership rate (25.3 percent) among the 50 states. In San Francisco, Los Angeles and San Diego, the 25-34 homeownership rates range from 19.6 percent to 22.6 percent — approximately 40 percent or more below the national average. That is no surprise here, given that in Los Angeles and the Bay Area a monthly mortgage takes, on average, are close to 40 percent of income, compared to 15 percent nationally.

    California’s young people are also staying with their parents more than their counterparts elsewhere. Overall, approximately 47 percent of 18-34s lived with parents or other relatives in 2015, according to the American Community Survey. In California, the figure was 54 percent.

    Long-term implications

    These soaring prices could have severe demographic consequences. For every two homebuyers who have come to the state, five homeowners left, the research firm Core Logic has found. If millennials continue their current rate of savings, notes one study, it would take them 28 years to qualify for a median-priced house in the San Francisco area, but only five years in Charlotte, N.C., or three years in Atlanta. A recent ULI report found that 74 percent of all Bay Area millennials are considering a move out of the region in the next five years.

    This exodus could accelerate over the next decade, as most millennials reach their 30s, marry, settle down, start families and consider a home purchase. We have already passed, in the words of USC demographer Dowell Myers, “peak urban millennial.”

    The future market demand for affordable single-family homes seems likely to continue expanding. Nationally, among home purchases made by those under 35, four-fifths choose single-family detached houses, a form that is increasingly out of reach. This is not due to preference. Indeed, according to a California Association of Realtors survey, 82 percent of millennial renters in the state believe that purchasing a home is a clever idea and a safe investment.

    Some assume that building more high-density housing will solve California’s severe housing affordability crisis. Unfortunately, construction costs for higher-density housing range up to 7.5 times the cost of building detached housing. Equally important, the clear majority of new households generally prefer single-family residences by a wide margin.

    Read the entire piece at The Orange County Register.

    Click here to see the video on millennial prospects in California.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Flickr user American Advisors Group, CC License


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  • 05/12/17--22:33: The Downside of Pragmatism
  • ‘Pragmatism killed Michigan.”

    When my consultant friend Dwight Gibson said this about his home state, I was taken aback. I always thought pragmatism was a good thing, and I think of myself as a pragmatic person in many ways. My first response to hearing somebody present an intriguing but nebulous policy idea is usually to say, “Yes, but what exactly am I supposed to do to make this happen?”

    Pragmatism, which we like to identify as a quintessentially American trait, indeed is often a good thing. But as with many other good things, it comes with a dark side.

    In what Gibson, who heads the Exploration Group, calls the “maker” cities and states of the Midwest and Northeast, people historically worked primarily with their hands. They were factory workers, carpenters, plumbers, engineers. They could interact with the physical world to make it do what they wanted.

    That was powerful, but it brought negative baggage, such as the devaluing of other ways of interacting with the world. Political commentator David Frum once said of Detroit that a key reason it failed was a “defiant rejection of education and the arts.” To Frum, the statue of Joe Louis’ fist downtown is a powerful statement: “Here is a city ruled by brawn.” Manual workers often don’t really respect mental work (and vice versa). Hence the old refrain, “He might have book learning, but he doesn’t have any common sense.”

    But there’s more to it than that. We all see problems though the lens of our own occupational backgrounds and skill sets. I often see the world as a consultant would, for example. Rust Belt places, steeped in a culture of working with their hands, view the world in that pragmatic way. The manual worker or tinkering engineer says, “What can I do with the things that are in my hands?” They are often quite ingenious and creative in making use of these, but they tend to think only in those practical terms. The key question is, “Does it work?” From there it is, “Does it work efficiently?” These are the values of industrial management articulated by Frederick Taylor a century ago.

    The problem with this is that there’s no room for anything outside of the immediate and practical. In a pragmatic mindset, how do you make progress when you don’t see a practical path from point A to point B? You can’t, which is one reason why so many of these old industrial communities are stuck, even when you adjust for their legitimate structural challenges. Their world is limited to the possibilities that they hold, in a sense, in their hands. The people are gifted with their hands, but then end up being limited by them. The thinking goes something like, “If I can’t do it, it can’t be done.”

    By contrast, the coasts and creative centers have very different ways of seeing and interacting with the world. Creative people from the Rust Belt who move to Silicon Valley or Austin or New York often describe a sense of relief or even exhilaration. This isn’t because of the physical environment, but because of a culture that sees and values possibilities rather than only practicalities.

    We see this in the mantra of Steve Jobs, who thought that products needed to be “insanely great” and who built a company whose advertising slogan was “Think Different.” In Silicon Valley, people dream the impossible dream, one that is decidedly impractical, then sail off into the unknown to try to make it happen. This is very risky. It often flops badly. But the successes are what create the world we live in.

    On the other coast, it wasn’t a pragmatic decision for Donald Trump to ride down that escalator and announce that he was running for president. He already had a great business. He had a lot to lose by getting involved with politics. As commentators routinely asserted, he didn’t have “a path to victory.” And yet he won anyway.

    Trump is a lifelong New Yorker. His willingness to sail off on a difficult, audaciously ambitious journey without knowing if he could make it to the other side is a powerful, tangible example to the world of why New York has remained America’s and the world’s premier city for so long, even decades after its physical advantages, such as its port, have declined in value.

    Sailing off into the dangerous unknown is what the explorers of old did. Gibson named his firm the Exploration Group to make the point that it is still possible for organizations and places to get to destinations when they aren’t sure how to get there or what they’ll find when they do. This is ultimately what the people in creative capitals do. They explore unknown territories without a map, even if they don’t think about it that way.

    Rust Belt regions shouldn’t try to jettison their history and culture. That’s neither realistic nor desirable. Pragmatism itself is a powerful and necessary tool. It just can’t be the only one in the tool chest. If these communities want to bend the growth curve, they need to expand their repertoire of capabilities to include what appears to be the impractical and the decidedly non-pragmatic. That would do much more for their entrepreneurial ecosystems than any amount of gigabit fiber or venture capital funding ever will.

    *For more on this topic from Aaron M. Renn, listen to this episode of his podcast.

    This article originally appeared on Governing.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo: Mike Boening Photography, CC License.


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    The decisive victory of Emmanuel Macron for president of France over Marine Le Pen is being widely hailed as a victory of good over evil, and an affirmation of open migration flows and globalization. Certainly, the defeat of the odious National Front should be considered good news, but the global conflict over trade and immigration has barely begun.

    On both sides of the Atlantic, there are now two distinct, utterly hostile, opposing views about globalization and multiculturalism. The world-wise policies of the former investment banker Macron play well in the Paris “bubble” — and its doppelgangers in New York, San Francisco, Tokyo and London — but not so much in the struggling industrial and rural hinterlands.

    The trade dilemma

    For much of the past half-century, the capitalist powers, led by the United States, favored free trade, even with terms often vastly unbalanced. Now President Donald Trump has undermined this orthodoxy. But anti-globalism transcends conservatism. Besides the National Front, which won over a third of the vote, doubling its support from 2002, the other rising political force in the country, far-left socialist Jean-Luc Melenchon, is at least as hostile to free trade. Much the same can be said of the ascendant Bernie Sanders wing of the Democratic Party.

    Globalists argue that the free trade regime, primarily promoted by the United States, has been a boon to the world economy. Certainly, the last half-century has seen enormous progress in some countries, most notably in East Asia, and led to a general decline in global poverty. It has also produced lower prices for consumers in America and elsewhere.

    Yet, there has been a price to pay, perhaps not in Newport Beach or Beverly Hills, but definitely in areas such as Lille, France, or Rust Belt Ohio, where workers and communities suffered for free trade “principles.” The trade deficit with China alone, notes the labor backer Economic Policy Institute, has cost the country some 3.4 million jobs between 2001 and 2015.

    Immigration splits

    Immigration presents, if anything, a more divisive issue. A clear majority of Europeans, notes a recent Chatham House survey, oppose further immigration from Muslim-majority countries. Concerns over migration, a London School of Economic report found, fueled Brexit even more than trade and economics. Nor is this just a reaction of the old. Le Pen did far better among the young, winning some 44 percent of all 18- to 24-year-old voters.

    On this side of the Atlantic, most Americans favor less immigration and, according to a recent Pew Research Center study, also want tougher border controls and increased deportations of the undocumented. Most, including Republicans, may not identify with the less temperate sentiments of Trumpians, but 60 percent, according to a March Gallup poll, are worried about illegal immigration and oppose the more adamant expressions of progressive dogma, such as sanctuary cities. According to a February Harvard-Harris Poll survey, some 80 percent of Americans oppose the notion of sanctuary cities.

    Coming next: The great recalibration?

    Donald Trump and Emmanuel Macron could not be more different in tone and approach, but to succeed they will need to navigate the challenges of globalization in a way that meets the needs of their electorates. Trends and technologies may cross borders easily, but electorates retain their interests and identities. Rather than cling to a narrow perspective, perhaps both men can find a way to keep the trading system, and some limited immigration, without disrupting too many lives and the economy.

    Macron, today’s poster child for the globalists, is targeting London’s financial sector to bring back some high-end jobs to Paris, and could morph into an almost Trumpian protectionist, with the European Union serving as the preferred zone. For his part, Trump seems less likely than once believed to suppress trade, but he seems determined to make “deals” to turn the terms more in the favor of U.S. workers.

    The two newly elected leaders will confront some who embrace open borders and others who want to close the country off to newcomers. Neither approach makes sense, given the cultural and economic anxiety of many citizens, as well as the important contributions made by immigrants, particularly in the United States. Immigrants are critical to our lagging entrepreneurial sector, as laid out by the Kauffman Foundation. They also have played an oversized role in technology and other industries. Overall, 40 percent of all Fortune 500 companies were founded by an immigrant or their offspring. Some industries, including tourism and agriculture, could face major crises unless Trump finds a way to allow workers to come in as legal guest workers, rather than undocumented immigrants.

    This will require something in short supply today: a reasoned approach. The fulminating xenophobia of a Le Pen or Steve Bannon may be repugnant, but equally unreasonable and out of touch are the trade dogmas of the Davos group or open borders notions now embraced by many on the left.

    Finding a way toward some sort of great recalibration, a middle ground between extremes, may be difficult in these polarized times, but it may be the only way to address critical issues without making the future far worse than the recent past.

    This piece originally appeared on the Daily Breeze.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: By Lorie Shaull from Washington, United States (French Election: Celebrations at The Louvre, Paris) [CC BY-SA 2.0], via Wikimedia Commons


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    This is the introduction to a new report for the Center for Opportunity Urbanism on the future of the heartland region by Michael Lind and Joel Kotkin and a team of contributors. Download the full report (pdf) here.

    The greatest test America faces is whether it can foster the kind of growth that benefits and expands the middle class. To do so, the United States will need to meet three challenges: recover from the Great Recession, rebalance the American and international economies, and gain access to the global middle class for the future of American goods and services.

    The fulcrum for meeting these challenges is the combination of industries and resources concentrated in the New American Heartland, the center of the country’s productive economy. Traditionally, the Heartland has been defined as the agriculturally and industrially strong Midwest, alone or perhaps together with the Upper Plains. However, the geographic distribution of US manufacturing and energy extraction has expanded through the growth of new manufacturing zones, largely in Texas, the South and the Gulf Coast.

    Our map of the New American Heartland includes not only the Midwest and Upper Plains, but portions of all the Gulf States — Texas, Louisiana, Mississippi, Alabama, Florida — and the non-coastal southern states of Georgia, Tennessee, and Arkansas.

    It comprises most of the US between the Rocky Mountains and the Appalachians.

    The New Heartland incorporates the old Midwest and much of the South. Alongside it, the new continental periphery consists of the mountain and desert spine of North America from Mexico through to Canada, a region that is likely to remain thinly populated and devoted to resource extraction, tourism and wilderness preservation.

    Download the full report (pdf) here.


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    Dallas is called the Big D for a reason. Bigger, better, best: that’s the Dallas mindset. From the gigantic Cowboys stadium in Arlington to the burgeoning northern suburbs to the posh arts district downtown, Dallasites are reinventing their metropolis almost daily. The proposed urban park along the Trinity River, my Dallas friends remind me, will be 11 times bigger than New York’s Central Park.

    Here’s something else for them to boast about: the Dallas-Plano-Irving metropolitan area ranks first this year on our list of the Best Cities For Jobs.

    2017 Best Cities Rankings Lists

    It’s a region that in many ways is the polar opposite of the San Francisco and San Jose metropolitan areas, which have dominated our ranking for the last few years. (They still place second and eighth this year, respectively, among the largest 70 metropolitan areas, though San Jose is down sharply from second place last year.)

    Unlike the tech-driven Bay Area, Dallas’ economy has multiple points of strength, including aerospace and defense, insurance, financial services, life sciences, data processing and transportation. Employment in the metro area has expanded 20.3% over the past five years and 4.2% last year, with robust job creation in professional and business services, as well as in a host of lower-paid sectors like retail, wholesale trade and hospitality.

    According to Southern Methodist University’s Klaus Desmet and Collin Clark, Dallas’s success stems in part from the fact that it isn’t looking to appeal to the elite “creative class,” but to middle-class workers and the companies and executives who employ them. Dallas attracts both foreign and domestic migrants, particularly from places like California, where housing is, on an income-adjusted basis, often three times as expensive. This has had much to do with the relocation to the area of such companies as Jacobs Engineering, Toyota, Liberty Mutual and State Farm.

    Methodology

    Our rankings are based on short-, medium- and long-term job creation, going back to 2005, and factor in momentum — whether growth is slowing or accelerating. We have compiled separate rankings for America’s 70 largest metropolitan statistical areas (those with nonfarm employment over 450,000), which are our focus this week, as well as medium-size metro areas (between 150,000 and 450,000 nonfarm jobs) and small ones (less than 150,000 nonfarm jobs) in order to make the comparisons more relevant to each category. (For a detailed description of our methodology, click here.)

    The Rise of Low-Cost Meccas

    Dallas is far bigger (particularly if you add the neighboring 28th-ranked Ft. Worth-Arlington area to the mix) than any of the other metro areas that have prospered by offering cheaper alternatives to coastal cities, with lower taxes and generally more friendly business climates. Among them is No. 3 Nashville-Davidson-Murfreesboro-Franklin, Tenn.

    The metro area has seen rapid job growth, nearly 20.6% since 2011. Last year job growth was across the board, including a 4.1% expansion in manufacturing employment, 5.2% in business professional services, and 2.9% in the information sector.

    Like Dallas, Nashville has become a mecca for companies looking to relocate operations. Some, like UBS, are fleeing the high cost of places like New York or London. Others, like Lyft, are escaping high costs in coastal California. CKE Restaurants, owner of Carl’s Junior and Hardees, is moving operations from coastal California and St. Louis to set up shop in Nashville. All are bringing a diverse new range of jobs to the Music City.

    Other low-cost migration meccas include fourth-place Charlotte-Concord, Gastonia, No. 5 Orlando-Kissimmee-Sanford, and No. 6 Salt Lake City. All boast growing tech centers with rapidly expanding STEM employment, as well as business and professional service growth.

    Boom Towns Get Pricier

    Some thriving metro areas on our list are becoming increasingly expensive, but they still don’t pack the tax and housing punch associated with blue state economies. No. 7 Austin-Round Rock, No. 9 Seattle-Bellevue-Everett and No. 11 Denver-Aurora-Lakewood have been big beneficiaries of the tech boom, and continue to attract migrants from areas like the Bay Area, where housing prices are still twice as high.

    It’s possible for older large cities with strongholds in key industries to generate strong job growth. New York’s population growth in 2016 may be half of what was in 2010, but financial sector job growth and associated professional service firms enable the Big Apple to rank a respectable 25th. Another high-cost area, Boston-Cambridge-Quincy, with its unparalleled concentration of elite colleges, ranks 30th.

    The picture is not so pretty in Los Angeles-Long Beach-Glendale, a region whose housing costs are almost as high as the Bay Area, with the same onerous state regulatory and tax burdens. It ranks 40th this year, with anemic 1.2% job growth in professional and business services over the past three years and 4% in financial services. The L.A. area continues to bleed manufacturing jobs, down 2.1% in the last year and 4.6% since 2013. Even retail and wholesale trade showed weakness in 2016, growing at a lowly 0.7% and 1.7% rate, respectively. The Information sector, highlighted by Snapchat’s splashy IPO, made the best showing for Tinseltown, with employment rising 4.2% in the last year. The sector, which includes entertainment, has seen employment expand an impressive 20.9% since the bottom of the recession in 2011.

    As has been the case almost every year in this millennium, the super-sized metro area doing worst is Chicago. It ranks 51st this year, down four places. Since the Great Recession, Chicago has managed modest job growth of 8.3%, and only a weak 0.7% expansion in 2016. Despite an uptick in financial services jobs over the past two years, and some ballyhooed relocations of corporate headquarters, the metro area has been losing jobs in information, manufacturing, and wholesale trade. Business services was up a scant 0.5% in the last year.

    Demographic Change and Changing Momentum

    The resurgence of expensive areas -- notably New York and the San Francisco area -- has been propelled largely by demographic trends, notably the movement of highly educated millennials to these areas. Yet as millennials begin to enter their 30s, and seek to buy homes and raise families, the momentum may be turning decisively to regions that are both less expensive but still have considerable appeal to educated workers. Most of the big gainers this year – Dallas, Orlando, Salt Lake, Raleigh, and No. 24 Indianapolis – have developed better inner-city amenities in recent years while keeping housing costs low.

    This shift is being driven in large part by unsustainable housing costs. In the Bay Area, techies are increasingly looking for jobs outside the tech hub, and some companies are even offering cash bonuses for those willing to leave. A recent poll indicated that 46% of Millennials want to leave the San Francisco Bay Area.

    It seems that some areas located in pro-business, low-tax states are increasingly attracting the educated millennials that we usually associate with places like San Francisco, Brooklyn or West L.A. Since 2010, among educated millennials, the fastest growth in migration has been to such lower-cost regions as Atlanta, Orlando, New Orleans, Houston, Dallas-Fort Worth.

    Over time, this migration could restructure the geography of job growth. As the middle class, particularly those of child-bearing age, continue moving out of states like California and into states like Texas. Utah or The Carolinas, the geography of skills changes. New families, a critical engine of job growth, are far more likely to form in Salt Lake City, the four large Texas metropolitan areas, or Atlanta, than in the bluest metropolitan areas like New York, Seattle, Los Angeles or San Francisco, where the number of school-age children trend well below the national average.

    Ultimately, we may be on the cusp of a new economic era in which the cost of housing and living becomes once again a key determinant in regional growth. This trend has been developing for years, but both demographics, notably the aging of millennials, and out of control costs could accelerate it. Many areas may wish to somehow emerge as “the new Silicon Valley,” just as they wished once to be the next “Wall Street” or “Hollywood.” Yet these iconic economies are difficult, to impossible, to duplicate. It might make more sense instead to look the success of places like Dallas --- where lower costs are luring companies and talent at a level unrivaled in the nation.

    This piece originally appeared on Forbes.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Dr. Michael Shires primary areas of teaching and research include state, regional and local policy; technology and democracy; higher education policy; strategic, political and organizational issues in public policy; and quantitative analysis. He often serves as a consultant to local and state government on issues related to finance, education policy and governance. Dr. Shires has been quoted as an expert in various publications including USA TodayNewsweekThe EconomistThe Sacramento Bee, San Francisco Chronicle, and LA Times. He has also appeared as a guest commentator on CNN, KTLA and KCAL to name a few.

    Photo by Diann Bayes, obtained via Flickr using a CC License.


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    The results of the 2016 presidential election have been ascribed -- by the winner’s critics -- to racism, hysteria, stupidity, or nostalgia. But what the results most reflected was a looming economic divide. Essentially, Donald Trump won in the parts of the country that grow most of the food, drill for oil and gas, and produce palpable things. The places that went for Hillary Clinton are where intangibles such as media, software, and financial transactions drive the economy.

    Blue America elites denigrate, and even pity, the vast American heartland for its lack of hipness and  dependence on more traditional industries. Inconveniently, however, the vast region located between the Appalachians and the Rockies -- and from the Gulf of Mexico to the Canadian border -- is also home to roughly half the country’s population and electoral votes.

    Not content merely to attack Trump at every turn, frustrated liberal elites compete with each other to heap scorn on those who voted for him. “These are the folks who think intellectualism is a sign of weakness,” scolds  Gentleman’s Quarterly in a recent piece that calls Trump voters “bigoted morons … who stay willfully ignorant as a point of cultural pride.” Trump voters, adds Salon, should not hope for an industrial revival, since these jobs “are never coming back.” Rather than hope that jobs created by industry will return, one Berkeley economistsuggests these voters pack up and move to San Francisco — notwithstanding median housing price approaching $1.2 million.

    Stuff Still Matters

    Yet despite these attitudes, the heartland may yet prove the key to restoring a prosperous and more egalitarian future. As Michael Lind and I show in our new report for the Center for Opportunity Urbanism, heartland-centered industries provide far wider and better-paid work for those without a four-year degree. They also provide more opportunities to blacks and Hispanics, who account for  less than 5 percent of workers in Silicon Valley’s top firms while accounting for 25 percent of those in manufacturing and over 20 percent in the energy sector.   

    Nor are these opportunities disappearing as rapidly as either blue state pundits (or Trump himself) would have us believe. Since 2011, all but 18 of the country’s 70 largest regions, according to Pepperdine University economist Michael Shires, have seen an uptick in industrial jobs. Nor does this trend seem to be fading; openings for new industrial jobs are at the highest level since the onset of the Great Recession.

    Since 2011, nine of the fastest growing industrial areas in the U.S. are in red states, notes Shires. Between 2010 and 2016, the top four – Michigan, Indiana, Ohio, and Tennessee – have accounted for nearly 40 percent of the nation’s new manufacturing jobs.  

    These regions once were fertile ground for Democrats, and could again with a shift in attitude. Allied with trade unions, Democratic candidates took tough stands on international trade and openly promoted expanding manufacturing and energy jobs. Yet, increasingly, the Democratic Party has abandoned these concerns, preferring to talk about putting “coal miners out work,” imposing strict regulation of oil and gas industry growth, and curbing the auto sector. This explains, at least in part, why such states voted against Hillary Clinton in 2016 (while supporting the more populist-themed candidacy of her husband two decades earlier).

    Why the Heartland Matters to the Economy

    Although the industrial workforce has fallen from 10.5 percent to 8.5 percent of all nonfarm employment since 2005, manufacturing contributes to the economy far out of proportion to its shrinking share of employment. In 2013, notes economic historian Lind, the manufacturing sector employed 12 million workers, but generated an additional 17.1 million indirect jobs.  

    Far from being technically regressive, manufacturersalso employ most of the nation’s scientists and engineers. Regions in Trump states associated with basic industries -- Houston, Dallas-Fort Worth, Detroit, Salt Lake City, Dayton -- enjoy among the heaviest concentrations of STEM workers and engineers in the country, far above New York, Chicago and Los Angeles.

    For many communities, manufacturing matters because it creates so much additional output in the rest of the country. Overall, according to the Bureau of Economic Analysis, the multiplier effect for manufactured goods is more than twice that generated by retail, trade, or the professional and business services sector. 

    The contribution of manufacturing to U.S. productivity growth is also disproportionate. From 1997-2012, labor productivity growth in manufacturing — 3.3 percent per year — was a third higher than productivity growth in the private economy as a whole. Manufactured goods also accounted for 50 percent of all exports. By way of contrast, intellectual property payments for services such as royalties to Silicon Valley tech companies and entrepreneurs amounted to $126.5 billion in 2015, which represents less than 6 percent of the $2.23 trillion in total exports that year.

    Finally, there are the natural resource industries, to which the blue state punditry -- and unfortunately much of the political class -- are largely indifferent, if not openly hostile.

    The Mississippi Basin produces 92 percent of the nation's agricultural exports by value, as well as most of the feed grains, soybeans, and livestock and hogs produced nationally. Sixty percent of all grain exported from the U.S. is shipped via the Mississippi River through the Port of New Orleans and the Port of South Louisiana.

    The most rapid gains, however, stem from the upsurge in American-produced energy. Now that fracking appears to have turned the corner, the U.S. is on its way to becoming a major exporter of natural gas and petroleum-refined products. And energy jobs pay as well or better than those in the heralded occupations, such as finance, business services and information. Although down from its peak, energy sector employment remains at 2.2 million, well above 2010 levels. Low energy prices and stable sources of supply are among the reasons that industrial firms, including those from abroad, have flocked to large parts of the heartland, notably Texas and Ohio, where energy is a primary generator of high-paying manufacturing employment.

    Last Hope for America’s Middle Class?

    The heartland's most important contribution may be in providing a new opportunity for the country’s diminishing middle class. An array of scholarship, including a recent study by James Galbraith, a progressive University of Texas economist, has shown that the coastal states have the dubious honor of leading the way in increasing income inequality over the past 15 years. For all their progressive fulminations, cities such as San Francisco, New York and Los Angeles are now the most economically imbalanced in the nation.

    Increasingly, people seeking opportunity are leaving in large numbers from New York or California and heading to places such as Tennessee or Texas. Even traditional large losers of domestic migrants, such as Michigan and Ohio, have seen their out-migration rates drop since 2000. The migration trend has now tipped in favor of the region’s resurgent cities, including Midwestern cities such Des Moines, Indianapolis, Louisville (pictured), and Columbus.

    A critical factor here is the cost of living, particularly housing. In most cities, the price-to-income ratio, called the “median multiple,” is around 3 to 1. This ratio is two or three times higher in the prime regions of California or the Northeast.   

    Perhaps most revealing of the future are changes in youth migration, notably those with college degrees. Research conducted by Cleveland State University suggests a sea change since 2010 in the migration patterns of educated millennials towards heartland cities. In earlier periods the strongest growth did indeed go to hip locals such as San Francisco, San Jose, Washington D.C., Los Angeles and New York. More recently, the big growth has been in such Rustbelt redoubts like Pittsburgh and Cleveland, as well as Sunbelt standouts San Antonio, Houston, and Austin. These trends foreshadow likely migration patterns, and may become more pronounced when the younger cohort begins to start families and seek out homes.  

    These trends suggest that, rather than remaining a hopeless backwater, the heartland could increasingly provide a major contribution to the country’s economic future. These regions may not replace Silicon Valley or Manhattan as generators of hyper-wealth, but seem more likely to offer opportunities for the next American middle class. So, don’t cry for the heartland, or hold it in contempt. Rather than detritus of a fading economy, the middle of America may well hold the key to the future prosperity and American opportunity for the coming decades.

    This piece originally appeared on Real Clear Politics.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by David Grant, obtained via Flickr, using the CC License.


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    This is the introduction to a new report written by Tory Gattis of the Center for Opportunity Urbanism. Download the full report here.

    The core urban challenge of our time is ‘affordable proximity’: how can ever larger numbers of people live and interact economically with each other while keeping the cost of living – especially housing – affordable? In decentralized, post-WW2 Sunbelt cities built around the car, commuter rail solutions don’t work and an alternative is needed, especially as we see autonomous vehicles on the horizon.

    This briefing explores a next-generation mobility strategy for affordable proximity: MaX Lanes (Managed eXpress Lanes) moving the maximum number of people at maximum speed and allowing direct point-to-point single-seat high-speed trips by transit buses and other shared-ride vehicles today, and autonomous vehicles in the future. It includes a case study of Houston with a proposed network as well as profiles of similar lanes around the country.

    Download the full report here.


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    The Budapest area has lost population overall since 1980, having fallen from 3.03 million to 2.99 million in 2016, according to Hungarian Central Statistical Office data as reported by citypopulation.de (Graphic 1). This 1.3 percent loss is smaller than the national population loss over the same period of 8.2 percent. Moreover, during the last five years, the Budapest area is estimated to have gained 1.7 percent, even as Hungary lost 1.1 percent. In this regard, the trend in Budapest has been similar to that of Warsaw, with stronger population growth than in the nation as a whole, but at the same time greater population growth outside the urban core.

    The Budapest area described in this article includes two of Hungary's county level jurisdictions (megyék), the core municipality of Budapest and Pest, which surrounds Budapest with inner and outer suburbs. Each of the county level jurisdictions is further divided into districts.

    Urban Core Districts

    Budapest's center spans the Danube River and includes District I (former Pest) and District V (former Buda). These districts largely encompassed the "walking city" that existed before the coming of transit in the 18th century. Walking cities have especially high densities, and were subject to huge population losses when after transit and the automobile arrive. For example, from 1860 to 2010, core walking arrondissements (I through IV) of the ville de Paris have lost nearly 75 percent of their population (earlier comparisons are not readily available because new arrondissement boundaries were adopted in 1860).

    Similarly, since 1980, the former walking center of Budapest has lost 44 percent of its population. The largest loss occurred in the decade following the exit of Soviet influence, between 1990 and 2001. Over the past five years, these two districts have experienced a small population reversal, having increased approximately four percent.

    On the east side of the Danube, there are a number of high density districts adjacent to District V (Districts VI, VII, VIII, IX, X and XIII). These largely developed in the mass transit era and have suffered less serious losses. Since 1980, these districts have loss 29 percent of their population. Again, the greatest declines were between 1990 and 2001. However, modest losses continue and the most recent five year loss more than offset the gains noted above in the inner core districts.

    Budapest's urban core is renowned for its magnificent buildings, largely from the 19th century. Its core is a feast of architecture rivaling such urban showpieces as Paris, Barcelona and Buenos Aires.

    The urban core of Budapest includes the Royal Palace (Graphic 2) on the west side of the river and Parliament on the east side. There is the notable 'Chain Bridge," which opened in 1848 and still handles pedestrian, transit and highway traffic (Graphic 3).

    Parliament was completed in 1904, when Budapest was one of the two capitals of the Austrian-Hungarian Empire, under the dual monarchy (top photograph and Graphics 4 and 5). It is, in my view, one of the most distinctive seats of government in the world, having features that resemble those of the Palace of Westminster in London and a dome resembling that of the U.S. Capitol. Its distinctive reddish roofs are seen in current river cruise PBS television commercials.

    The Parliament is in Kussuth Square (Graphics 6 and 7), which was at the heart of the 1956 rebellion against Soviet rule, which resulted in a death toll of 2,500, followed by the loss of 200,000 refugees. There is now a memorial to the event below Kussuth Square, with exhibits tied together by a lighted red line symbolizing the bloody event (Graphic 8).

    The urban core also includes the Opera House that reminds one of the Garnier Opera in Paris. There are many more examples of ornate architecture, principally from the 19th century (Graphics 9 to 17), extending to "Heroes Square," where Imre Nagy, Chairman of the Council of Ministers of the Hungarian People's Republic (the national leader) was reburied, after having been executed for leadership of the 1956 rebellion.

    Other City Districts

    The other 15 districts of Budapest have lost six percent of their population since 1980. These districts are newer, have lower population densities and are more automobile oriented (Graphic 18). However, since 2011, these districts experienced a three percent increase. The other districts have more than 70 percent of Budapest's population, and this increase was enough to produce an overall two percent increase for Budapest county between 2011 and 2016. Even so, Budapest county has lost 15 percent of its population since 1980.

    The Suburbs (Pest County)

    The only part of the Budapest area that has grown since 1980 is Pest County, with its inner and outer suburbs (Graphics 19 and 20). Overall, Pest County has grown 27 percent. The eight inner suburban counties experienced the bulk of the growth, adding 50 percent, while the 10 outer suburban counties added four percent to their population.

    In the Soviet era, high rise apartment blocks were the rule, while there was little construction of detached housing. Following the Soviet exit, suburbanization developed rapidly, with considerable single family detached housing construction (Graphics 21 to 22). Houses continue to be under construction, both in existing suburban areas and in greenfield areas (Graphics 23 to 28), some in the Buda Hills, with stunning views of the city. This greenfield development appears to have stronger infrastructure regulations, illustrated by unusually wide (for Europe) suburban roadways and complete sidewalk development, even before house construction begins (Graphic 29).

    Progress in Budapest

    Hungary faces serious challenges, particularly due to its substantial population losses. Yet, as in the case of Tokyo-Yokohama, a national capital in a nation losing population can prosper by capturing nearly all of the nation's growth. This is also the reality in the Budapest region, where recent modest population gains have been achieved, even as the nation continued to lose population. Over the last three decades, Budapest has moved quickly from the excessive political and economic controls to a new future of people-centered modernity that the more fortunate cities in North America, Europe and Oceania were able to embrace much earlier.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). 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.

    Top photograph: Parliament from across the Danube (by author).


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  • 05/21/17--22:33: What Trump has wrought
  • Just a few short months ago, we seemed on the brink of a new political era. Donald Trump improbably was headed to the White House, while the Democratic Party, at near historic lows in statehouse power and without control of either house of Congress, seemed to be facing a lengthy period in political purgatory.

    Today some progressive voices still see a “bleak” future, but it is increasingly the Republican Party, and its shattered conservative core, that is reeling. Bitterly divided among themselves, and led by a petulant president with record-low ratings, the Republicans seem to be headed to a major crash just six months after a surprising victory.

    Gone from view now are visions of a renewed Republican Party uniting its traditional base with historically Democratic parts of Middle America. Rather than a realignment in the mode of Richard Nixon or Ronald Reagan, the Trump administration seems to be devolving into a remarkably early interregnum, a pause between alternating progressive eras.

    Trump supporters, not Trump, the real losers

    Donald Trump’s nationalist agenda started with a natural appeal to much ignored non-cosmopolitan America. Unlike the seemingly diffident and distant Barack Obama, Trump offered a laser-like focus on growing high-wage jobs for the declining middle and working classes. A reform agenda on everything from deregulation and taxes seemed to have the potential to escape the low-growth “new normal” and restore broad-based opportunity across the country.

    Due to his obsession with media relations and personal peccadilloes, Trump now has managed to undermine any chance of developing a coherent program to restore dynamism in Middle America. Although some regulatory relief has been imposed, mainly by reversing President Obama’s rule-by-decree, the president has failed to pass a program — for example, new infrastructure spending — that might expand productivity and expand employment opportunities. Instead, he has regressed, in his rare coherent moments, to the GOP corporatist, free-market theology, which threatens many entitlements, notably health care, on which so many Trump voters now depend.

    Trump’s failure to achieve long-term change will end up hurting not just his precious “brand,” but, more importantly, voters and states that backed him. To many who work in manufacturing, energy, homebuilding or agriculture, the president seemed to be a savior. Now these industries may only have four years — at most — before the hammer comes down again, with only the U.S. Supreme Court serving as a possible restraint.

    Read the entire piece at the Orange Country Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by Michael Vadon, obtained via Flickr, using the CC License.


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    The Cincinnati streetcar–now known as the Cincinnati Bell Connector since Cincinnati Bell paid $3.4 million for naming rights–is barely six months old, and already is having problems. Four streetcars broke down in one day a few months ago.

    Now the company that is contracted to operate the streetcar has warned that poor quality control by the railcar maker has resulted in “catastrophic failures” of three different major systems that cause regular breakdowns of the vehicles. Cincinnati Bell is upset enough to demand possibly illegal secret meetings with the city council over the streetcar’s problems.

    Cincinnati once counted itself lucky that it didn’t order streetcars from United Streetcar, the short-lived company that made streetcars for Portland and Tucson, many of which suffered severe manufacturing defects. But it turns out the vehicles it ordered from a Spanish company named Construcciones y Auxiliar de Ferrocarriles (CAF), which were delivered 15 months late, weren’t much better.

    The streetcar is routed through, and is supposed to revitalize, Cincinnati’s Over-the-Rhine district, a former low-income neighborhood near downtown. But that neighborhood was already revitalizing long before the streetcar opened. No doubt someone will credit the revitalization to the streetcar, but in fact it was due to millions of dollars in taxpayer subsidies.

    Many of those subsidies come from tax-increment financing (TIF). Cincinnati has liberally created dozens of TIF districts (a state law limiting TIF districts to 300 acres forced the city to create two for Over-the-Rhine, which is districts 3 & 4). The city encourages developers to simply apply for funds, effectively allowing them to use the money they would have paid in property taxes to help finance their development.

    Naturally, developers love it. Just like the streetcar, however, TIF is a raw deal for taxpayers who end up having to pay higher taxes, or receive a lower level of urban services, in order to provide services to the TIF districts that should have been funded out of the taxes paid by property owners in that district.

    This piece first appeared on The Antiplanner.

    Randal O’Toole is a senior fellow with the Cato Institute specializing in land use and transportation policy. He has written several books demonstrating the futility of government planning. Prior to working for Cato, he taught environmental economics at Yale, UC Berkeley, and Utah State University.

    Photo by RickDikeman (Own work) [CC0], via Wikimedia Commons


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    Someone asked me to reconcile my recent paper on rail funding with my stance on Cal-Train electrification that the feds should prioritize funding towards poorer cities. Very good question because there is an apparent conflict there.

    My recent paper was positioned as a response to Trump’s plan to completely eliminate rail transit capital grants while retaining the basic structure of federal transport funding. I think these grants should be retained, but routed to repairs on the core legacy transit system which have a very strong rationale. (I might advocate a difference if we were talking about broader reform ideas like block grants to states or devolution).

    More broadly, my belief is that the creative class has gotten a lot of love over the last 15 years. That’s understandable since cities who don’t capture at least some high income earners to help pay the bills are in trouble. But a lot of cities are well past that point. It’s time to shift into harvest mode on that and refocus our efforts on lower income residents (and cities with significant poverty challenges).

    Hence I want to see federal infrastructure funding routed to items like sewer and water system repairs.

    For transit, I would like to see a federal focus on sustaining a high quality basic bus network in places like Detroit. So I do support prioritizing funds to these regions for plain old bus service.

    I do think wealthy regions like the Bay Area should pay for their own expansion projects because they generate significant value that can be captured to pay for it. Caltrain electrification makes sense to me as a project. This is one that you can make an argument about whether it’s really an updating of a legacy line vs an expansion. But in general, state of good service repairs should be prioritized, so this is not where I’d spend my federal money. (Though again, it’s not an objectively bad project).

    It’s the same in DC, NYC, etc. Federal funds should go to repairs rather than expansion. Some projects like the Second Ave. Subway make sense from a demand perspective, so it’s not ridiculous if the feds funded them. But my preference would be to use federal funding for maintenance, with expansion projects funded locally.

    The one expansion project of federal significance is the Gateway Tunnel, which service a major interstate regional rail corridor (although it also has local transit benefits).

    In short, to the extent that we keep the same basic federal system, send rail capital grants to legacy city repair (potentially including systems in older cities like Cleveland that have a line or two that might need repairs). Cities should pay for their own rail expansion projects (at least until we significantly reduce our critical repair backlog). The feds should look at bus funding to figure out how to create better basic bus networks, focused on cities with significant poverty and fiscal stress. At a minimum, make sure they’ve got decent quality buses, depots, etc. There may be a limit to what the feds can accomplish here, but that’s my general view of where the priority should be: repairs to existing mission critical rail lines and helping distressed communities.

    This article originally appeared on Urbanophile.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo by Yuko Honda [CC BY-SA 2.0], via Wikimedia Commons


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    President Trump promised a $1 trillion infrastructure plan during his campaign. Spending more money on infrastructure is something that has broad support among people of all political persuasions.

    But as the case of Louisville’s $2.4 billion bridge debacle shows, not all infrastructure spending is good spending.

    And as a judge’s ruling halting the Maryland Purple Line project to require more environmental study shows, many of our infrastructure problems have nothing to do with money.

    I tackle these problems and more in a major essay on the rebuilding America’s infrastructure in the new issue of American Affairs. Some key themes include:

    • America’s infrastructure needs are overwhelmingly for maintenance, not expansion.
    • Infrastructure means much more than surface transport (highways, transit), but includes underfunded items like dams and sewers.
    • There is a mismatch between funding structures and infrastructure needs that must be fixed.
    • Politics and regulatory barriers are often a greater problem than money, and until we improve this, progress on fixing infrastructure will be limited.
    • Private capital alone will not solve the funding challenge and comes with big problems of its own. There’s no such thing as free money.
    • An initial sketch of what an infrastructure program should look like.

    Here is an excerpt:

    Yet there clearly are major infrastructure repair needs in America. We have not been properly maintaining the assets we have built. Levee failures notoriously caused much of the flooding in New Orleans after Hurricane Katrina, but America has yet to address the neglect of its dam and levee systems. For example, the recent possibility of an overflow or collapse at the Oroville Dam in California forced 180,000 people to be evacuated. Many dams, levees, and locks on our inland waterway system are in need of repair, often at significant cost. Examples include Locks 52 and 53 on the Ohio River. Built in 1929, their replacement cost is $2.9 billion. As the New York Times reported, this replacement has been botched, and it was originally supposed to cost only $775 million—still a lot of money.

    Tens of billions of dollars are also needed simply to renovate America’s legacy transit infrastructure. The District of Columbia’s own Metro subway system has suffered several accidents that require emergency repairs to improve safety. It lost 14 percent of its riders last year, as they lost faith in the system. San Francisco’s BART rail system needs at least $10 billion in repairs. Boston’s transit system needs over $7 billion in repairs. New York’s subway signals still mostly rely on 1930s-era technology.

    Similar maintenance backlogs affect other infrastructure types. America’s older urban regions need to spend vast sums of money on sewer system environmental retrofit—$2.7 billion in Cleveland and $4.7 billion in Saint Louis. The state of Rhode Island had to pay $163 million to replace its Sakonnet River Bridge because it had failed to perform routine maintenance on the old one. This is just a sampling of America’s infrastructure gaps.

    But the poster child for American infrastructure problems is Flint, Michigan, where a water treatment error caused lead to leach into the water supply, rendering it unfit for human consumption. This caused then candidate Trump to say, “It used to be cars were made in Flint, and you couldn’t drink the water in Mexico. Now, the cars are made in Mexico and you can’t drink the water in Flint.” To be clear, Flint’s water crisis was caused by human error, but that was only possible because of the city’s old lead-pipe infrastructure. America’s water lines, in many cases, haven’t been touched since they were originally installed many decades ago. Some cities still have wooden water pipes in service. Syracuse mayor Stephanie Miner once said that if her city received the same $1 billion commitment from the state that Buffalo did, she would spend three quarters of it just to fix the city’s water lines.

    While things are not uniformly dire, it is clear that there is a need to repair and upgrade America’s existing infrastructure. It is this rebuilding, not building—making America’s infrastructure great again—that the Trump administration should focus on.

    Click through to read the whole thing.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    By Pi.1415926535 (Own work) [CC BY-SA 3.0], via Wikimedia Commons


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    Much of the U.S. media tends to see smaller cities as backwaters, inevitably left behind as the “best and brightest” head to the country’s mega-regions. The new economy, insists the Washington Post, favors large cities for start-ups and new businesses. Richard Florida has posited the emergence of a “winner take all urbanism” that tends to favor the richest cities, such as New York and San Francisco.

    However this paradigm may reflect cosmopolitan attitudes and rivalries between large cities more than reality, with its complications and nuances. Smaller cities have long been disadvantaged in their ability to attract the most elite companies and Americans on the move, but that may well be changing. Following a post-financial crisis period in which many domestic migrants headed to the big cities, the latest Census data suggests that the flow is now going the other way, with the native born moving to smaller places with between 500,000 and a million people. The new trend in migration, notes the Atlantic’s Derek Thompson, a confirmed big city booster, has been a “great hollowing out,” with Americans leaving places like New York, Los Angeles and San Francisco for the suburbs and less costly, usually smaller cities. (Note that at least in New York’s case, foreign immigrants have been taking their places.)

    To be sure, many smaller towns are suffering, and the bottom of our annual survey of employment trends in America's 421 metro areas is dominated by them, starting with last place Beckley, W.V.; followed by Johnstown, Pa.; Charleston, W.V.; Weirton-Steubenville, Ohio; and Peoria, Illinois. Yet at the same time small city America — which we define as metro areas with less than 150,000 jobs — accounted for seven of the 10 cities where job growth has been the strongest.

    2017 Best Cities Rankings Lists

    Methodology

    Our rankings are based on short-, medium- and long-term job creation, going back to 2005, and factor in momentum — whether growth is slowing or accelerating. We have compiled separate rankings for America’s 70 largest metropolitan statistical areas (those with nonfarm employment over 450,000), as well as medium-size metro areas (between 150,000 and 450,000 nonfarm jobs) and small ones (less than 150,000 nonfarm jobs), the latter two of which are our focus this week, in order to make the comparisons more relevant to each category. (For a detailed description of our methodology, click here).

    The Utah Model

    What makes for successful smaller cities? There’s no simple formula, but several characteristics loom prominently. One is the extent and quality of its amenities: Many of our top cities are in attractive locations near mountains or the ocean, and tend to be home to colleges and universities. And, almost without exception, they are located in less costly, lower-tax states. Finally, it doesn’t hurt to be relatively close to a bigger urban area and a large airport.

    All these characteristics apply to the best metro area for jobs in 2017 -- Provo-Orem, Utah. Located an hour south of Salt Lake City and its big airport, the Provo-Orem area has a population of 603,000 and sits alongside the scenic Wasatch Mountains. It's home to the well-regarded Brigham Young University. Last year the metro area’s job count expanded an impressive 4.4%, and employment is up 29.2% since 2011. As one might suspect in a college-oriented area, the biggest growth has been in fields that tend to hire educated people, such as business and professional services, in which employment grew 5.8% last year, financial services (up 6.7%) and the information sector (plus 5.8%).

    But Provo is not alone in outstanding job growth in the Beehive State. In addition to its largest metro area, Salt Lake City, which ranks 13th, the small city of Saint George ranks third. Also benefiting from a scenic location in the state’s rugged southwestern corner, it’s less of a college town than a retirement and tourism magnet, which explains much of its 5.7% job growth last year. This was driven in large part by big expansions in health and education, with employment in those sectors up 4.6% last year and some 31.8% since 2011.

    Another Utah superstar is 18th-ranked Ogden-Clearfield. Its 2.9% job growth last year was driven in large part by financial services, with employment up 5.7%, and education and health, up 5.9%.

    So what accounts for one relatively small state that's home to only 3.1% of the U.S. population placing four cities in the top 20? Among the factors: the nation’s fastest population growth, a highly favorable business climate (Gov. Gary Herbert has made cutting red tape a priority of his administration), a burgeoning tech sector and a Mormon-influenced social culture that seems to encourage citizen engagement in local affairs.

    Other Hot Spots

    The other smaller boom towns are a varied lot, although all share locations in low tax, light regulation states. Some bigger cities -- San Francisco, Seattle, San Jose -- seem to have found a way to keep growing in higher cost environments, but this does not seem to be the case for smaller cities. Virtually all the small communities in our top 20 -- with the exception of No. 8 Fort Collins, Colo., -- come from such reddish states as the Carolinas, Texas, Idaho and, of course, Utah.

    Most of the fastest-growing metro areas tend to be in what some have called “amenity regions.” This is certainly the case for Ft. Collins, No. 9 Gainesville, Ga., No. 10 The Villages, Fla., and No. 17 Boise, Idaho. Many of these places, notably the Villages, are attractive to retirees and downshifting boomers while others may also lure young families.

    Yet there are some wide differences among our top small cities. Smaller cities often have very distinctive economies dominated by one or two industries. Sixth-ranked Fayetteville-Springdale-Rogers, a metropolitan area that sprawls between Missouri and Arkansas, is dominated by two forces, Bentonville-based Walmart, and a burgeoning retirement/tourism sector tied to its location in the scenic Ozarks. The area which enjoyed 3.3% job growth last year, and 20.4% since 2011, was paced by an expanding professional and business services sector, up a sizzling 8.0% last year; other dynamic sectors include financial services, up 4.5% last year, as well as the education and health, which grew 4.0%.

    Charleston-North Charleston, which ranked 4th on our list with a 3.2% job growth rate last year and 17.6% since 2011, epitomizes the new dynamic small cities. Not only does the area boast a charming ante-bellum urban core, and some of the country’s best food, it has also become attractive to companies seeking to lower costs. The city is home to Boeing’s 787 Dreamliner assembly plant and to Mercedes-Benz’s $500 million Charleston plant, which will add 1,300 jobs over the next few years. It is also about to house Volvo’s first North American manufacturing plant – a $500 million investment that could add up to 4,000 jobs home. Charleston has also emerged as something of a millennial draw as well, with the largest percentage of residents aged 25 to 34 of any midsized city.

    2017 Best Cities Rankings Lists

    The Future of Smaller Cities

    In contrast to the conventional wisdom, smaller cities may have a brighter future than many expect. Of course, it’s hard to see a rapid turnaround in some deindustrialized cities, particularly in the Midwest. Many energy-dependent cities are down sharply in our ranking from a year ago, including Baton Rouge, La., which dropped 97 places to 191st, and Bismarck, N.D., which plummeted 119 places to 221st. The Trump administration certainly has made noise about helping the energy industry, but the cold reality of the current global oversupply of oil suggests these places won’t be rebounding much in the near term.

    Right now, prospects seem best for amenity rich areas, in part because they appeal to both aging boomer and younger families. The scenic Pacific Northwest is home to many gainers this year, including Olympia-Tumwater, Wash., which gained as impressive 64 places from last year to 21st, Wenatchee, which rose seven spots to 22nd, and Bellingham, which jumped 100 places to 63rd.

    In the South, the attractive coastal city Wilmington, N.C., rose 76 places to 54th, and the Florida beach towns Northport-Sarasota-Bradenton, climbed 28 spots to 35th while Punta Gorda gained 26 places to 39th.

    The future of smaller American cities, in some senses, parallels that of their larger counterparts. Some areas seem positioned for further growth, while many others are stagnating or even dropping. The small city is far from obsolete, with a good number of them poised to expand strongly in the years ahead.

    This piece originally appeared on Forbes.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Dr. Michael Shires primary areas of teaching and research include state, regional and local policy; technology and democracy; higher education policy; strategic, political and organizational issues in public policy; and quantitative analysis. He often serves as a consultant to local and state government on issues related to finance, education policy and governance. Dr. Shires has been quoted as an expert in various publications including USA TodayNewsweekThe EconomistThe Sacramento Bee, San Francisco Chronicle, and LA Times. He has also appeared as a guest commentator on CNN, KTLA and KCAL to name a few.

    Photo by City of St. George (City of St. George) [CC0], via Wikimedia Commons


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    Seattle tops the growth charts among the top 25 cities in the Census Bureau’s latest release of 2016 city and town population estimates.

    Seattle, a land-locked (no annexation) city in the Pacific Northwest with a limited history of high density, managed to add 20,847 people last year, a growth rate of over 3% – tops among the 25 largest cities. Seattle has added about 94,000 people just since 2010. That’s over 15% growth. The total population growth in Seattle last year was about the same as that in New York City. Even if you rank by total change instead of percentage, Seattle would still be 5th out of the top 25 – ahead of some much larger places and some much sprawlier places.

    Seattle’s urban and regional population growth are strong. It is a national bright spot for transit growth. Its tech economy is nova hot. I haven’t been there in a while, but it seems to me that Seattle is a city undergoing a significant transformation to the next level.

    All but three of the top 25 cities posted growth in population, showing that there’s definitely central city growth happening in many places, even if the preponderance of national growth is suburban. The older cores of NYC, SF, DC, Boston, and Philly are all growing. Even the cities of Dallas and Ft. Worth grew nicely. Only Chicago, Detroit, and Memphis lost population. Houston, a geographically gigantic central city, posted fairly weak growth compared to what one might have expected.

    In the Midwest, Columbus passed Indianapolis to become the 14th largest city in the country. Detroit, despite enormous population loss, is still about the same population as Boston and Washington, DC.

    Here are the 25 largest cities in the country in 2016, ranked by year over year population growth rate:

    Rank City 2015 2016 Total Change Pct Change
    1 Seattle city, WA 683,505 704,352 20,847 3.05%
    2 Fort Worth city, TX 834,171 854,113 19,942 2.39%
    3 Phoenix city, AZ 1,582,904 1,615,017 32,113 2.03%
    4 Denver city, CO 680,032 693,060 13,028 1.92%
    5 Austin city, TX 930,152 947,890 17,738 1.91%
    6 Charlotte city, NC 826,395 842,051 15,656 1.89%
    7 San Antonio city, TX 1,468,037 1,492,510 24,473 1.67%
    8 Washington city, DC 670,377 681,170 10,793 1.61%
    9 Dallas city, TX 1,297,327 1,317,929 20,602 1.59%
    10 Jacksonville city, FL 867,164 880,619 13,455 1.55%
    11 Columbus city, OH 850,044 860,090 10,046 1.18%
    12 San Diego city, CA 1,390,915 1,406,630 15,715 1.13%
    13 Boston city, MA 665,984 673,184 7,200 1.08%
    14 San Francisco city, CA 862,004 870,887 8,883 1.03%
    15 Nashville-Davidson metropolitan government (balance), TN 654,078 660,388 6,310 0.96%
    16 Houston city, TX 2,284,816 2,303,482 18,666 0.82%
    17 Los Angeles city, CA 3,949,149 3,976,322 27,173 0.69%
    18 El Paso city, TX 678,570 683,080 4,510 0.66%
    19 Indianapolis city (balance), IN 852,295 855,164 2,869 0.34%
    20 San Jose city, CA 1,022,627 1,025,350 2,723 0.27%
    21 New York city, NY 8,516,502 8,537,673 21,171 0.25%
    22 Philadelphia city, PA 1,564,964 1,567,872 2,908 0.19%
    23 Memphis city, TN 654,454 652,717 -1,737 -0.27%
    24 Chicago city, IL 2,713,596 2,704,958 -8,638 -0.32%
    25 Detroit city, MI 676,336 672,795 -3,541 -0.52%

    And here are the top 25 ranked by the 2010-2016 growth rate.

    Rank City 2010 2016 Total Change Pct Change
    1 Austin city, TX 815,587 947,890 132,303 16.22%
    2 Seattle city, WA 610,403 704,352 93,949 15.39%
    3 Denver city, CO 603,329 693,060 89,731 14.87%
    4 Fort Worth city, TX 748,719 854,113 105,394 14.08%
    5 Charlotte city, NC 738,561 842,051 103,490 14.01%
    6 Washington city, DC 605,183 681,170 75,987 12.56%
    7 San Antonio city, TX 1,333,952 1,492,510 158,558 11.89%
    8 Phoenix city, AZ 1,450,629 1,615,017 164,388 11.33%
    9 Dallas city, TX 1,200,711 1,317,929 117,218 9.76%
    10 Houston city, TX 2,105,625 2,303,482 197,857 9.40%
    11 Nashville-Davidson metropolitan government (balance), TN 604,893 660,388 55,495 9.17%
    12 Columbus city, OH 790,864 860,090 69,226 8.75%
    13 Boston city, MA 620,701 673,184 52,483 8.46%
    14 San Francisco city, CA 805,766 870,887 65,121 8.08%
    15 San Diego city, CA 1,306,153 1,406,630 100,477 7.69%
    16 San Jose city, CA 955,290 1,025,350 70,060 7.33%
    17 Jacksonville city, FL 823,318 880,619 57,301 6.96%
    18 El Paso city, TX 650,604 683,080 32,476 4.99%
    19 Los Angeles city, CA 3,796,292 3,976,322 180,030 4.74%
    20 New York city, NY 8,192,026 8,537,673 345,647 4.22%
    21 Indianapolis city (balance), IN 821,659 855,164 33,505 4.08%
    22 Philadelphia city, PA 1,528,427 1,567,872 39,445 2.58%
    23 Chicago city, IL 2,697,736 2,704,958 7,222 0.27%
    24 Memphis city, TN 652,456 652,717 261 0.04%
    25 Detroit city, MI 711,088 672,795 -38,293 -5.39%

    And the top 25 ranked by total 2016 population:

    Rank City 2016
    1 New York city, NY 8,537,673
    2 Los Angeles city, CA 3,976,322
    3 Chicago city, IL 2,704,958
    4 Houston city, TX 2,303,482
    5 Phoenix city, AZ 1,615,017
    6 Philadelphia city, PA 1,567,872
    7 San Antonio city, TX 1,492,510
    8 San Diego city, CA 1,406,630
    9 Dallas city, TX 1,317,929
    10 San Jose city, CA 1,025,350
    11 Austin city, TX 947,890
    12 Jacksonville city, FL 880,619
    13 San Francisco city, CA 870,887
    14 Columbus city, OH 860,090
    15 Indianapolis city (balance), IN 855,164
    16 Fort Worth city, TX 854,113
    17 Charlotte city, NC 842,051
    18 Seattle city, WA 704,352
    19 Denver city, CO 693,060
    20 El Paso city, TX 683,080
    21 Washington city, DC 681,170
    22 Boston city, MA 673,184
    23 Detroit city, MI 672,795
    24 Nashville-Davidson metropolitan government (balance), TN 660,388
    25 Memphis city, TN 652,717

    This post originally appeared on Urbanophile.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo by Rattlhed at English Wikipedia (Transferred from en.wikipedia to Commons.) [Public domain], via Wikimedia Commons


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    If you listen to California’s many boosters, things have never been so good. And, to be sure, since 2011, the state appears to have gained its economic footing, and outperformed many of its rivals.

    Some, such as Los Angeles Magazine and Bloomberg, claim that it is California — not the bumbling Trump regime — that is “making America great again.” California, with 2 percent job growth in 2016, gained jobs more rapidly than most states. The growth rate was about equal to Texas and Colorado, but behind such growth centers as Florida, Nevada, Oregon, Washington, Utah and the District of Columbia.

    Bay Area: Still the tower of power

    Over the past few years, the Bay Area has grown faster in terms of jobs than anywhere in the nation. But this year, according to the annual survey of the nation’s 70 largest job markets that I do with Pepperdine University public policy professor Michael Shires for Forbes, there is a discernible slowing in the region. For the first time this decade, San Francisco lost its No. 1 slot to Dallas, which, like most other fastest-growing metros, boasts lower costs and taxes, and has created more middle-class jobs than its California rivals.

    The San Francisco area, which includes suburban San Mateo, remains vibrant. More troubling may be the weakening of the adjacent San Jose/Silicon Valley economy, which dropped six places to eighth — respectable, but not the kind of superstar performance we have seen over the past several years.

    This partly reflects an inevitable slowdown in information job growth. As the startup economy has stalled, and the big players have consolidated their dominance, sector growth has dropped from near double digits to well under half that. Perhaps more telling has been a shift in domestic migration, which was positive in San Francisco earlier in the decade, but has now turned sharply negative. These are clear signs of a boom that is cooling off.

    Read the entire piece at the Orange Country Register.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by Todd Jones (Flickr) [CC BY 2.0], via Wikimedia Commons


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    Prague is the capital of Czechia, a nation most readers have probably never heard of. Last year, the Czech Republic adopted a new name that does not reveal its governance structure (republic). The new name has not enjoyed widespread acclaim. The union of Czechoslovakia, which dates from the end of World War I, split peacefully in 1993, resulting in the creation of Czech Republic and Slovakia.

    Prague, like its central and eastern European cousins, Warsaw, Budapest and Bucharest, has experienced substantial decentralization of its population following the collapse of communism. As economies improved and more housing choices opened up, many residents opted to move to outer parts of the core cities or even beyond to suburban and exurban areas.

    Today, the municipality of Prague has approximately 100,000 more residents than in 1980. Yet, the distribution of the population is quite different than before. Then, the central and inner districts of the city had a population of approximately 980,000, while the outer districts were home to 200,000. The latest Czech Statistical Office estimates (for January 1, 2017) show the center and inner districts have declined to approximately 785,000 residents. The city's outer districts have experienced all of the population increase, more than doubling to above 460,000.

    Meanwhile, two-thirds of the growth (Graphic 1) has been in the suburbs of the Středočeský region (Central Bohemia), which surrounds Prague (Graphic 2).

    The Historic Inner District

    Prague's central district (District 1) comprises the pre-transit walking core of the city. It stretches across the Vltava River (Smetana's "The Moldau") from Wenceslaus Square across the Charles Bridge to Prague Castle, the site of St. Vitus Cathedral. The district also includes the Old Town Square. The population of District 1 dropped from 53,000 in 1980 to 29,000 in 2017, a decline of 44 percent.

    The most recent historic events have virtually all taken place in District 1. The 1968 revolt against Soviet control occurred in Wenceslaus Square and was put down by Warsaw Pact military action and tanks, with a loss of 500 Czechoslovakian citizens.

    This was the end of Alexander Dubček's "Prague Spring" attempt to liberalize communism. Dubček rose from head of the Slovak communist party to leader of the Czechoslovakian communist government. Dubček, however, was luckier than Imre Nagy of Hungary, the communist leader who paid for his liberalizing tendencies by being executed after the 1956 rebellion.

    Wenceslaus Square, named after St. Wenceslaus, Duke of Bohemia, was also the center of the "Velvet Revolution". Led by Václav Havel, he became Czechoslovakia's first president following the fall of communism. The communist parliament building (Graphic 3) played a major role, as described by prague-stay.com:

    "This Communist eyesore, loathed by many, loved by few was built after the old Exchange building was destroyed from 1966 – 1973. This glass monstrosity with its two giant pillars is still complete with nuclear shelters. The demands of the Velvet Revolution were accepted here in 1989 and the building was once home to Radio Free Europe who rented the location from former president Vaclav Havel for a very small fee per year (rumor has it that the fee was 1 CZK).”

    I watched Dubček, an unsurprising supporter of the Velvet Revolution, from the building’s gallery in his role as chairman of the national parliament in 1991. Soon after, the national parliament relocated from the building, which is now part of the National Museum. The main building is shown in the top photograph (my photo was not used because of the present scaffolding being used in its refurbishment).

    There is a memorial to victims of the 1968 Warsaw Pact action in front of the main building (Graphic 4), with a barbed wire wreath. Graphics 5 to 7 are also of Wenceslaus Square, which some travel guide books point out is more of a boulevard than a square.

    Old Town Square is shown in Graphics 8 to 12. Charles Bridge is illustrated in Graphics 13 to 16. This historic bridge was built between 1357 and 1402. The approach to Prague Castle and related views are in Graphics 17 to 21. Other views of the inner district are in Graphic 22 (the National Theatre) and Graphic 23.

    Inner and Outer Districts of Prague

    The inner districts (2 through 10) were mainly developed during the mass transit area. The outer districts, where all the city's growth has occurred, have generally lower population densities. There are some detached houses in the outer districts. Besides the historical buildings, Prague, like other European cities, is in many ways spatially dominated by the automobile, with its narrow, crowded streets and parking on sidewalks. (Graphics 24 to 27).

    The Suburbs

    The Středočeský region surrounds Prague and contains both suburban and exurban development (Graphics 28 to 36), including new construction (Graphics 30 to 36). The Středočeský suburbs exhibit a high quality of suburban infrastructure for eastern Europe, including sidewalks in most cases and curbs. However, the quality of the visible suburban infrastructure falls considerably short of that enjoyed by suburban residents of the United States, Canada, Australia, and New Zealand, where for decades nearly all suburban development has included these features, as well as streets wide enough for parking and cars to pass one-another in opposite directions.

    The Prague Area: Dominating Czechia's Population Growth

    As is occurring in Tokyo-Yokohama and Budapest, the Prague area is capturing nearly all the national growth, at 86 percent. This includes 58 percent in the suburbs and 28 percent in the outer districts. This is a far greater percentage than Prague's 25 percent of the population in 1980. (Graphic 37).

    Prague's Popularity

    For nearly three decades, Prague has been the capital of a nation free to set its own course, the longest period since the 1918 establishment of Czechoslovakia. Prague has become particularly popular among foreign tourists. Trip Advisor ranked Prague 5th among the cities of Europe last year, trailing London, Paris, Rome and Barcelona and ninth in the world. It is no minor accomplishment to edge out cities like Vienna, Amsterdam, and Budapest.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). 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.

    Top photograph: National Museum. Main building. By Jorge Láscar [CC BY-SA 2.0], via Wikimedia Commons


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    The gradual decimation of local voice in planning has become accepted policy in Sacramento. The State Senate is now considering two dangerous bills, SB 35 and SB 167, that together severely curtail democratic control of housing.

    SB 35: Housing Accountability and Affordability Act (Wiener)

    SB 35, the brainchild of San Francisco State Senator Scott Wiener, would force cities that haven’t met all their state-mandated Regional Housing Need Allocations to give by-right approval to infill market-rate housing projects with as little as 10% officially affordable housing. 

    SB 35 is anti-free speech and civic engagement. No public hearings, no environmental review, no negotiation over community benefits. Just “ministerial,” i.e., over-the-counter- approval.

    SB 35 is pro-gentrification. As a statewide coalition of affordable housing advocacy organizations has written:

    Since almost no local jurisdiction in the State of California meets 100% of its market rate RHNA goal on a sustained basis, this bill essentially ensures by-right approval for market-rate projects simply by complying with a local inclusionary requirement [for affordable housing] or by building 10% affordable units.

    The practical result is that all market rate infill development in most every city in California will be eligible for by-right approval per this SB 35-proposed State law pre-emption.

    Berkeley Housing Commissioner Thomas Lord also has pointed out, the RHNA program itself is a pro-gentrification policy. It follows that passage of SB 35 would further inflate real estate values and worsen the displacement of economically vulnerable California residents.

    SB 35 is pro-traffic congestion. It would prohibit cities from requiring parking in a “streamlined development approved pursuant” to SB  35, located within a half-mile of public transit, in an architecturally and historically significant historic district, when on-street parking permits are required but not offered to the occupants of the project, and when there is a car share vehicle located within one block of the development. Other projects approved under the measure would be limited to one space per unit.

    Absent the provision of ample new public transit, the prohibition of parking in new development will worsen neighborhood traffic problems. SB 35 says nothing about new transit.

    The construction of on-site parking is expensive, up to $50,000 a space. A measure that exempts new development, as designated above, from including parking without requiring developers to transfer the savings to affordable housing is a giveaway to the real estate industry.

    Nor does SB 35 say anything about funding the amount of infrastructure and local services—fire and police, schools, parks—that would be required by the massive amount of development it mandates. Are local jurisdictions expected to foot the bill?

    The lineup of SB’s supporters and opponents reveals serious splits in the state’s environmental and affordable housing advocates. SB 35 has revealed serious splits among advocates for both environmental protection and affordable housing.

    Supporters include Bay Area Council, the lobby shop of the Bay Area’s biggest employers; BAC’s Silicon Valley counterpart, the Silicon Valley Leadership Group; the San Francisco and LA Chambers of Commerce; the Council of Infill Builders; several nonprofit housing organizations, including the Non-Profit Housing Association of Northern California and BRIDGE Housing; the Natural Resources Defense Council; the California League of Conservation Voters; and a panoply of YIMBY groups, including East Bay Forward and YIMBY Action.

    Opponents include the Sierra Club; the League of California Cities; the Council of Community Housing Organizations; the California Fire Chiefs Association; the Fire Districts Association of California; a handful of cities, including Hayward, Pasadena, and Santa Rosa; the Marin County Council of Mayors and Councilmembers; and many building trades organizations, including IBEW Locals 1245, 18, 465 and 551, and the Western States Council of Sheet Metal Workers.

    SB 167: Housing Accountability Act (Skinner)

    This bill, introduced by State Senator Nancy Skinner, who represents Berkeley and other East Bay cities, and sponsored by the Bay Area Renters Federation (BARF), is a companion to SB 35. It would prohibit cities from disapproving a housing project containing units affordable to very low-, low- or moderate-income renters, or conditioning the approval in a manner that renders the project financially infeasible, unless, among other things, the city has met or exceeded its share of regional housing needs for the relevant income category. (As of November 2016, HUD defined a moderate-income household of four people in Alameda County as one earning under $112,300 a year.)

    The bill defines a “feasible” project as one that is “capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic environmental, social, and technological factors.” It does not define “successful” or “reasonable.”

    If a city does disapprove such a project, it is liable to a minimum fine of $1,000 per unit of the housing development project, plus punitive damages, if a court finds that the local jurisdiction acted in bad faith.

    SB 167 authorizes the project applicant, a person who would be eligible to apply for residency in the development or emergency shelter, or a housing organization, to sue the jurisdiction to enforce SB 167’s provisions. The bill defines a housing organization as

    a trade or industry group whose local members are primarily engaged in the construction or management of housing units or a nonprofit organization whose mission includes providing or advocating for increased access to housing for low-income households and have filed written or oral comments with the local agency prior to action on the housing development project [emphasis added].

    The highlighted passage was added to the existing Housing Accountability Act to encompass BARF’s legal arm, the California Renters Legal Advocacy and Education Fund (CaRLA), whose lawsuit of Lafayette recently failed. Last week CaRLA re-instituted its lawsuit of Berkeley over the city’s rejection of a project at 1310 Haskell.

    SB 167 further amends the existing Housing Accountability Act to entitle successful plaintiffs to “reasonable attorney’s fees and costs.”

    Predictably, the bill is supported by the Bay Area Council, the lobby shop for the region’s largest employers; the California Building Industry Association; the Terner Center at UC Berkeley; the San Francisco Housing Action Coalition; and YIMBY groups, including East Bay Forward, Abundant Housing LA, and of course CaRLA.

    Opponents include the California Association of Counties and the American Planning Association.

    If these bills—especially SB 35—become law, Californians will have lost a good deal of their right to a say the life and governance of the communities in which they live.

    This piece was first published in Berkeley Daily Planet and Marin Post.

    Zelda Bronstein, a journalist and a former chair of the Berkeley Planning Commission, writes about politics and culture in the Bay Area and beyond.


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    A Q&A With Alan Berger and Joel Kotkin.

    Third in a series of conversations during Infrastructure Week. See the previous Q&A with Dan Katz, Transportation Policy Counsel at Hyperloop One, and Parag Khanna, Geo-strategist and author of Connectography.

    The suburbs are back. In April, New York Magazine sounded the alarm that “more and more people are fleeing New York.” Time discovered just a few weeks ago that millennials are moving to the suburbs in drovesRecent studies have shown that millennials associate homeownership with the American dream more so than Generation X or baby boomers. As the world rapidly urbanizes, suburban migration presents an opportunity to define what this growth will look like — and how it might fit in more synergistically with urban cores and rural communities.

    Alan Berger (left) and Joel Kotkin (right), co-authors of Infinite Suburbia

    The truth is that the suburbs never fell from favor, we just stopped noticing that they became another form of the city. The shape of suburbia is an obsession for MIT professor Alan Berger and his co-author Joel Kotkin. Alan runs the MIT Norman B. Leventhal Center for Advanced Urbanism and teaches in the Dept. of Urban Studies and Planning, while Joel is a writer and Professor of Urban Studies at Chapman University in California. Prof. Berger is also a judge for our Hyperloop One Global Challenge.

    The two of them accurately highlighted this suburban resurgence long before it was popular, so we picked their brains about how they foresee emerging technology like Hyperloop playing a role in the trend. We discussed how new transportation modes might support suburban mobility and, perhaps, reshape suburbia as we know it.

    H1: We hear you have an upcoming book called Infinite Suburbia. What does “Infinite Suburbia” mean?

    Alan: The book’s title is meant to be polemical and measurable. Global urbanization is heading towards infinite suburbia. Around the world, the vast majority of people are moving to cities not to inhabit their centers, but to suburbanize their peripheries. Why? For many reasons, and almost always by their own choosing. Thus, when the United Nations projects the number of future “urban” residents, or when researchers quantify the amount of land that will soon be “urbanized,” these figures largely reflect the unprecedented suburban expansion of cities. By 2030, an estimated nearly half a million square miles (1.2 million square kilometers) of land worldwide will become urbanized, especially in Asia, Africa, and Latin America. In the United States alone, an additional 85,000 square miles (220,000 square kilometers) of rural land will be urbanized between 2003 and 2030 . Given that these figures represent the conversion of currently rural land at the urban fringe, these lands are slated to become future, seemingly infinite suburbias.

    Joel: In the United States, 69 percent of the population lives in suburbs. As late as 2010, over 75 percent of American jobs lay outside the urban core. Many other developed countries are also majority-suburban. In the global South, it is estimated that 45 percent of the 1.4 billion people who will become new urban residents will settle in peri-urban suburbs — areas where urbanized and rural areas meet . The sheer magnitude of land conversion taking place, coupled with the fact that the majority of the world’s population already lives in suburbs, demands that new attention and creative energy be devoted to the imminent suburban expansion.

    Projected Growth in Urbanized LandSource: Past and projected rural land conversion in the US at state, regional, and national levels

    H1: You point to suburbia as a truly global phenomenon. What does this say about common values across cultures?

    Joel: This reflects essential human desires for personal space, contact with nature, safety and, in some cases, better educational options. Dense cities are attractive particularly to those with high incomes and those without children. When people get into their thirties, and start contemplating a family, or simply a quieter life, they usually head to suburbia.

    H1: Why do the suburbs get such a bad rap?

    Joel: It started early on in Britain, where suburbs offended many of the same people who are offended now — the intelligentsia, artists and gentry. Suburbs have been associated with crassness, ugliness and blamed for the decline of cities. Unlike urban cores, suburbs have few boosters; most media and major academic institutions are clustered in denser, inner city areas. Planning departments have long ignored them, or tried to figure out how to undermine them. Now, the greens are also a factor, weighing against suburban life. Simply put: everyone of consequence generally hates them, except for the vast majority of metropolitan residents who live there.

    H1: What do you think earlier proponents of moving from cites got wrong, how can we harness new technology in a way that offers greater choice and sustainability?

    Joel: The initial problems came from not confronting such issues as quality of life, social space and walking opportunities. Some tract suburbs provided better, often more affordable housing, but with little in the way of social amenities. Fortunately this is changing in many new developments, as can be seen in places like Woodlands and Cinco Ranch outside Houston, or Valencia and Irvine in Southern California.

    Alan: My research group at MIT is currently working on a project that envisions the future of the American suburb past 2060. We have focused on the continued development of polycentricity in metropolitan areas and a tendency to expand in space as transportation technology, infrastructure, and policies allow. The framework of polycentricity will be carried forward because of spatial economics and the lowering cost of distance to affect location decisions. This future could plausibly include Level 5 autonomy (no human intervention required) for most vehicles in operation, where all driving situations can be handled by an autonomous driving system (car, truck, or all-terrain vehicle). Zero carbon emissions and Level 5 automation are absolutely in the near future, probably before Generation Z is buying cars for themselves.

    Personal transportation modes will remain dominant in suburbia, but shared automobiles will transform the need for bus/rail service in suburbs. All of this assumes that consumer adoption and regulatory approval are achievable and that there is ubiquitous, reliable, and secure, low-cost wireless connectivity to the Internet-of-Things. Research suggests that level 5 autonomy will lead to 80% accident reduction.

    The new spatial economics of automation will create huge environmental dividends. Reduced paving will lead to less urban flooding, less forest fragmentation, soil conservation, more groundwater recharge, and more landscape to use for common goods. Total automation will radically change the daily needs of various population segments. I can imagine increased long-distance commuting and mobile office vehicles, drone delivery for many errands, on-demand care and newly mobile elderly segments, and the elimination of drunk driving to name a few.

    Future Suburban FabricConceptual view of future suburban fabric - Image Credit: Matthew Spremulli, MIT Center for Advanced Urbanism.

    H1: Alan, you’re one of our esteemed judges for the Hyperloop One Global Challenge. Reviewing the applications – or engaging with teams and stakeholders at the event – what was one of the biggest surprises for you?

    Alan: At a recent review of the U.S. finalist proposals in Washington D.C., I was pleasantly surprised by what I would describe as ‘regional optimism’. There was great enthusiasm and acknowledgement that we need to disrupt the broken transportation systems that are not serving emerging regional economies well. For instance, many individual cities talked about how connecting with regional partners would rejuvenate cities well beyond their own borders. There was a palpable energy to fix things and to pragmatically solve big problems that have national implications, not just local ones. It is truly rare to be in a room all day (literally 9 straight hours) with state and local agency heads from all over the U.S., the people in the day-to-day regulatory and political trenches of their cities, and hear them dream about the future in such uninhibited ways.

    H1: You’re at a dinner party and a colleague proclaims Hyperloop only makes sense for intercity transport. How do you respond?

    Alan: I would politely tell my colleague she needed to think about the broader applications of the infrastructure. The Hyperloop's value is exponentially greater than that of the technology itself. Like other new infrastructure, it will be joined with other innovations — 'packetized' — creating a multiplier effect. In the case of the Hyperloop, when a pod reaches its exit it will begin to function as an autonomous vehicle and completely solve the ‘last mile’ problem. The passenger will continue to ride in the same car until it reaches its final destination. What a “city” is will be redefined in the extended regional context of commuting extra long distances in short times.

    H1: You’ve mentioned that even though more than 70 percent of people in the U.S. live in suburban areas —the suburbs are still growing. How can the U.S. successfully accommodate growing suburban interest and what can be done to invest in/revitalize/repurpose existing suburban infrastructure?

    Joel: The key thing is to take advantage of new technologies. An overwhelming dependence on the personal car, and the ineffectiveness of rail transit (as can proved in declining market shares in many markets) — means some new approaches are necessary that are more effective and less costly. Billions have been spent on light rail and subways in dispersed urban areas like Los Angeles, Houston, Dallas and Atlanta but this has not increased transit share. New technologies will soon make these systems even less relevant and useful.

    Alan: Joel is absolutely correct that tech innovations will change the infrastructural situation in suburbia. I think the key issue here is how we define and fund old vs. new infrastructure. There's little recognition that we need new forms of transport, and that building new infrastructure is not the same as modernizing old infrastructure. Of course, repairing bridges and helping to maintain state and national infrastructure are roles the federal government should and must continue to play. Despite that, the federal government needs to step into the future if America is going to continue to be the great transportation innovator that developed our magnificent web of trains, planes and automobile routes on a scale never seen or even imagined before.

    In addition to new forms of infrastructure, government needs to re-think transportation capital. Our federal funding model is stuck in the 1950s, servicing city cores with inefficient mobility. There aren't any signs that it's going to finance the innovative infrastructure projects we need for more spread out city forms. Private investors are best positioned to understand and act on the future growth dynamics that will make these new modes succeed.

    H1: Before “sprawl” became a contested word, Frank Lloyd Wright was famous for calling for more decentralization and opportunities for individuals to move away from the city. On the introduction of the automobile he wrote, man is “like a bird born in captivity, which finds the door opened. Soon he will learn that he can fly; and when he learns that he is free, he is gone.” In what ways do emerging technologies today have the power to give people greater choice to decide where to live, work, and experience leisure time?

    Alan: Wright’s Broadacre City should be reimagined with a Hyperloop! But seriously, we can't sacrifice the need for environmental safeguards, or for safety and security in infrastructure. Neither should the federal government dictate things like location choice by telling people where to live. Our government has to be a partner, not an obstacle in these arenas. It should be developing streamlined, efficient, modern regulations that enable the rapid growth of new transportation technologies — technologies that are themselves key to an environmentally sustainable future. Government should refocus the federal funding apparatus, this time as an active participant in public-private partnerships — the so-called Three Ps.

    Joel: The new systems, like Uber and Lyft, allow suburbanites greater flexibility at the same time the internet provides opportunity to turn the home into a primary workplace. In the future, the move towards Hyperloop technology and automated vehicles will further shatter the isolating aspects of suburban living. The beauty of suburban living — quiet, safe, allowing space — really evolves if you can strip out the maddening commute by car or even train.

    This piece first appeared on the Hyperloop One blog.

    Alan Berger is Professor of Landscape Architecture and Urban Design at Massachusetts Institute of Technology where he teaches courses open to the entire student body. He is founding director of P-REX lab, at MIT, a research lab focused on environmental problems caused by urbanization, including the design, remediation, and reuse of waste landscapes worldwide. He is also Co-Director of Norman B. Leventhal Center for Advanced Urbanism at MIT (LCAU).

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book is The Human City: Urbanism for the rest of us. He is also author of The New Class ConflictThe City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Header image credit: MIG|SvR.


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    Express coach lines like BoltBus and Megabus have grown dramatically in recent years, providing millions of Americans with new mobility options. When the subject of competition between bus and train arises, however, many transportation wonks instantly become minimizers. Some cite growing rail traffic to make the case that this competition hardly matters. Others point to severe congestion on the Northeast Corridor (NEC)—Amtrak’s busiest route—to build the argument that attempting to lure passengers from buses to trains is a pointless exercise. Still, others note that trains are roomier and more comfortable than buses. This implies that the latter will forever be a last-resort option.

    There may be a grain of truth in some of these assertions, but the fact is that today’s travel market is increasingly cutthroat. Neither Amtrak nor bus lines can continue to expect robust growth of traffic merely by doing more of the same. The national average price of gasoline has, stubbornly, remained below $2.50 for more than two years, nullifying much of the advantage buses and trains had as relatively more fuel-efficient modes. The average round trip ticket price for airline trips fell to $361.20 in 2016, down almost $20 from 2015.

    In this tough environment, air and automobile travel has grown while bus and rail traffic has ebbed. After years of steady growth, Amtrak experienced a slight drop in passenger miles of traffic during its 2016 fiscal year, despite an improving economy. FirstGroup, owner of Greyhound, which operates the popular express coach line BoltBus, and Stagecoach Ltd., which owns Megabus, both experienced revenue drops from their North American operations during the 2016 fiscal year.

    That means the gloves are coming off in the fight for market share. Amtrak is experimenting with new pricing strategies and has added free Wi-Fi to most routes, matching the amenities of express coach lines. BoltBus and Megabus have also lowered fares and created apps allowing travelers to quickly change their reservations at only a nominal cost. Megabus has also rolled out reserved seating, allowing passengers to choose a specific seat – even one at a table – when booking to appeal to those wanting to work on their trip or who are concerned about a lack of comfort and privacy.

    Amtrak & Express Coaches – What’s Really Going On?

    Intrigued at the shifting contours of bus versus rail competition, I evaluated the competition between Amtrak and relatively new express coach lines. Five results stand out:

    1) On short- and medium-distance corridors with several daily trains, competition with Amtrak from express coach lines is fierce. Among the 4,854 miles of such corridors with more than one Amtrak train each day, almost three quarters (74%) have parallel express coach service, with Megabus easily the most pervasive. The entire NEC operation runs head-to-head against not only BoltBus and Megabus, but smaller lines like Go Buses as well. Every mile of the Pacific Northwest’s Cascade Corridor is traversed by BoltBus, while Amtrak’s busiest medium-distance corridors in the Carolinas and the Midwest are served by Megabus’ double-deckers.

    By comparison, on long-distance routes and corridors having only one daily train, only about a third of mileage is subject to express coach competition. You will not find express coach lines paralleling any stretch of the Chicago – Los Angeles Southwest Chief route, yet every mile of the Crescent’s New York – New Orleans route is covered. Still, new bus lines are regularly popping up.

    2) The “sweet spot” for express bus lines are 125 – 300 mile routes, which allow for trips between 2.5 and 6 hours. Anything longer can seem insufferable in a bus, while shorter trips are often avoided due to many travelers’ desire to stay flexible. Plus, on short-hop routes, a large portion of the ride can be spent on traffic-clogged urban expressways, making travel times more unpredictable.

    This means than when trips are less than 125 miles, the train often wins. Both BoltBus and Megabus have withdrawn from the approximately 120 mile Los Angeles – San Diego route, and they provide scant competition on the Oakland – Sacramento “Capitol Corridor” and Chicago – Milwaukee “Hiawatha Corridor”, running no more than a pair of daily trips. Express coaches are more popular between New York – Philadelphia (90 miles) partially due to abnormally high train fares on this route, which often run four times the normal bus fare.

    3) Amtrak’s greatest advantage lies in serving intermediate stops. Another bright spot for Amtrak is that express coaches bypass many places generating extensive Amtrak business. Megabus, for example, runs express between Chicago and St. Louis (except for rest stops), while Amtrak calls on ten intermediate points, including Springfield, IL, the state capital. A similar pattern exists along other corridors.

    Express coach bus lines reach deeper in the NEC, serving not only Boston, New York, Philadelphia, Baltimore and Washington, D.C., but smaller points as well. Still, the railroad’s “string of pearls” network allows for direct trips between dozens of city combinations in a way not possible on express coaches, which tend to run direct to major hubs like New York.

    4) Express coach bus lines no longer operate predominately from Amtrak’s doorstep, which makes for a fairer fight. It may have once been true that express bus lines poached passengers eager to save a few bucks by leaving from curbs outside major train stations, but this is now rare. Almost two thirds of Megabus departures leave from points at least a half-mile away from the train. In New York, these buses now leave from about a mile away, on Manhattan’s west side. Only about a quarter of express coach departures operate from points a third-of-a-mile or less from Amtrak. This is the case in Boston and Washington, D.C., where dedicated bus terminals are connected to train stations.

    What’s more, development pressures and other urban issues are pushing the express coach lines to more remote spots. Earlier this year, for example, Megabus moved its loading zone to a location four blocks farther away from Chicago’s Union Station, where it had been located since its inception.

    Driving Up Demand

    Increasing demand over the next several years could take the sting out of the upsurge in competition. Oil prices are expected to inch up and the economy is improving. Moreover, working together could help give these modes a competitive edge in some circumstances. Buses can fill gaps in train schedules to provide better ground-travel options (while respecting federal rules limiting Amtrak’s involvement in the motor coach business). Intercity buses could more intensively feed Amtrak routes, as is done in California, who pioneered this approach, and Michigan, which has a similar strategy.

    But the bigger story is that bus-train competition has left the station and is speeding down the tracks. Expect bus lines to add new stops and continue to roll out amenities, while Amtrak works to boost frequency and speed, and grapple with its nemesis—delays—without the expectation of significant increases in federal funding over the short term. May the best mode win!

    Joseph Schwieterman, Ph.D., is professor of Public Services and director of the Chaddick Institute for Metropolitan Development at DePaul University in Chicago. He is the author of several books on railroads and a widely read annual report on the intercity bus industry.

    Photo by Chaddick Institute.


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  • 06/02/17--22:33: The Silicon Valley Mindset
  • The tech industry is one of the most powerful entities affecting our world. But who are these people? And what do they believe and how do they think about the world? A couple of recent articles provide a window into this.

    Rationalist Demographics

    The first is a set of demographics from the reader survey (unscientific, but with 5500 respondents) of the popular blog Slate Star Codex. SSC is the web site of Scott Alexander, pen name of a Midwest psychiatrist. It’s explicitly associated with the Rationalist movement and especially the Less Wrong community. If you’d like to get a feel for the Rationalist way of life, see the New York Times Magazine profile of them. One site says of them:

    …typical rationalist philosophical positions include reductionism, materialism, moral non-realism, utilitarianism, anti-deathism and transhumanism. Rationalists across all three groups tend to have high opinions of the Sequences and Slate Star Codex and cite both in arguments; rationalist discourse norms were shaped by How To Actually Change Your Mind and 37 Ways Words Can Be Wrong, among others.

    They analyze the world in terms of Bayesianism, game theory, trying to become aware of personal biases, etc. They are trying to improve themselves and the world through a clearer sense of reality as informed by their philosophical worldview above. Their heartland is Silicon Valley, though there’s a group of them NYC too of course.

    Alexander is a psychiatrist, but this community, and the Rationalists generally, is highly tech centric. Alexander himself is a defender of Silicon Valley. His readership is predominantly in computer science and other related tech professions, and overlaps heavily with Silicon Valley.

    His readers are 90% male, 89% white (Asians under-represented vs the Valley), and 81% atheist or agnostic. They skew significantly left in their politics. 55% of them are explicitly politically left, with another 24% libertarian. A higher percentage actually describe themselves as neoreactionary or alt-right (6.3%) than conservative (5.7%).

    The following table shows their responses on various topics:

    Item Left/Globalist Position Right/Populist Positions
    Immigration 55.8% more permissive 20.3% more restrictive
    Feminism 48.1% favorable 28.4% unfavorable
    Donald Trump 82.3% unfavorable 6.6% favorable
    Basic Income 60.1% favor 18.6% oppose
    Global Warming 72.8% requires action 13.7% does not require action
    Weightlifting 64.4% no/rarely 22.5% yes/often

    Silicon Valley Founders Survey

    A second source comes from a recent City Journal article by former Tech Crunch reporter Gregory Ferenstein. He used the Crunchbase database to survey 147 tech founders, including a few billionaires and other influentials, to get a sense of their belief system.

    One of his core findings is that Silicon Valley founders are strong believers in income inequality.

    The most common answer I received in Silicon Valley was this: over the (very) long run, an increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will increasingly subsist on some combination of part-time entrepreneurial “gig work” and government aid. The way the Valley elite see it, everyone can try to be an entrepreneur; some small percentage will achieve wild success and create enough wealth that others can live comfortably. Many tech leaders appear optimistic that this type of economy will provide the vast majority of people with unprecedented prosperity and leisure, though no one quite knows when.

    The founders he surveyed (a tiny subset so beware of error margins) 2/3 believed that the top 10% of people would collect 50% or more of all the income in a meritocracy (the system they endorse).

    Y Combinator Paul Graham got in trouble for openly talking about inequality as inevitable. Not because other Valley execs thought he was wrong, but because the optics are bad. It’s similar to Uber CEO Travis Kalanick. His real crime was being so gauche as to put a picture of Ayn Rand as his Twitter avatar. He should have known that he was supposed to spout politically palatable bromides while running his company in a Rand-like mode, which seems to be how many of these firms in fact operate.

    Speaking of which, the politics of Silicon Valley are an odd mix of leftism and hyper-market economics. Overwhelmingly, Silicon Valley donates money to the Democrats and to progressive causes. (They also largely hate Donald Trump with a passion). What’s more, they have a communitarian streak and don’t think of themselves as hard core individualists:

    Indeed, in my survey, founders displayed a strong orientation toward collectivism. Fifty-nine percent believed in a health-care mandate, compared with just 21 percent of self-identified libertarians. They also believed that the government should coerce people into making wise personal decisions, such as whether to eat healthier foods. Sixty-two percent said that individual decisions had an impact on many other people, justifying government intervention.

    But they also support a neoliberal vision of the economy.

    Silicon Valley’s reputation as a haven for small-government activists isn’t entirely off base: the Valley does support some staunchly libertarian ideas, and the tech elite are not typical Democrats. They don’t like regulations or labor unions. For instance, Bill Gates and Mark Zuckerberg have both given hundreds of millions of dollars to charter schools and supported policies that would allow public schools to fire teachers more readily and dodge union membership. Big tech lobbyists are also strong supporters of free trade. According to Maplight, several telecommunications companies have lobbied for the Trans-Pacific Partnership (TPP) trade deal that union groups and many Democrats oppose.

    Theirs is a move to make public schools more like charters—a different focus from a libertarian vision of simply privatizing the education system. The tech elite want to bring the essence of free markets to all things public and private. Using traditional American political categories, this would land them in the Republican camp.

    This is most evident in their techno-utopianism and belief that unbridled creative destruction always brings long run benefits:

    On the capitalistic side, tech founders were extraordinarily optimistic about the nature of change, especially the kind of unpredictable “creative destruction” associated with free markets. Philosophically, most tech founders believe that “change over the long run is inherently positive.” Or, as Hillary Clinton supporter and billionaire Reid Hoffman told me: “I tend to believe that most Silicon Valley people are very much long-term optimists. . . . Could we have a bad 20 years? Absolutely. But if you’re working toward progress, your future will be better than your present.”

    They in part reconcile all these through a belief in high taxation and redistribution, especially in the form of a basic income. This policy idea, nowhere fully implemented, is probably completely unknown to most Americans, yet has strong majority support in Silicon Valley (60% of SSC’s readers).

    The Silicon Valley State of Mind

    Combining these, what we see is that Silicon Valley is made up overwhelmingly of men, who are highly intelligent and with extreme faith in their intelligence and rationality, largely atheist, and largely leftist in their thinking, but who believe in an aristocracy of talent.

    They exhibit extreme faith in the goodness of technical progress and seem to believe that human problems can be resolved almost entirely through the realm of technology and engineering. They believe in policy, but a technocratic vision of it in which their rationalist designs, powered by technology, inform government decisions.

    One might say they are naive, but their track record of success gives them reasons for confidence. Consider Uber. Uber is effectively a technological workaround to dysfunctional politics and regulation. It has revolutionized transportation in many cities were taxis were before almost not available. Where almost all other reform efforts failed, Uber was a spectacular success. Apple, Google, Amazon, Facebook, etc. have all been extremely successful at what they do. And in any case, Silicon Valley’s “fail false” mentality means that they don’t necessarily see their failures – say, Mark Zuckerberg’s $100 million schools fiasco in Newark – as a reflection on their capabilities. Many failures and a handful of grand slams is how their system is designed to function.

    What’s more, it’s not just them who thinks they can fix things. Much of the rest of society seems to believe it too. For example, Alon Levy just put up a post examining the composition of NY Gov. Cuomo’s “MTA Genius Grant” panel, and how it is heavily slanted towards tech people vs. transportation people. Of course, the politicians and transport people have failed with the MTA to date. So they lose credibility by failures as Silicon Valley gains it with successes.

    However, their techno-optimistic view perhaps leads them to underestimate second and third order consequences and overestimate their ability to deal with them. For example, perhaps more than anyone else, Mark Zuckerberg and Jack Dorsey made Donald Trump’s presidency possible. Without his social media impact, and the ability of his troll army to drive news cycles, I very much doubt he would have gotten over the top. That’s a second order effect they never anticipated.

    Also, Trump himself is a classic example of creative destruction. He disrupted the politics business in the same way Netflix disrupted the video rental one. Yet they despise him and don’t think this is a positive change. It seems that they only like disruption when they are the ones controlling it, and don’t really believe in creative destruction per se. Instead it’s just another term of art for their taking over one industry after another.

    They themselves have no problem at all radically reordering society with unproven policies at levels far beyond what almost any political figure would do. Their blasé acceptance of massive job destruction and embrace of a speculative basic income scheme to compensate illustrate that. It’s no surprise to me that Mencius Moldbug, the founder of neoreaction (one of the sub-tribes commonly grouped with the alt-right that believes in absolute monarchy or the state as a publicly traded sovereign corporation), is a Silicon Valley techie and startup founder who reportedly started out in the Rationalist movement.

    They are also comfortable with an almost feudal distribution of wealth, so long as it’s based on an aristocracy of talent rather than heredity. And it’s an aristocracy that believes it should rule as well as profit. When they talk about a communitarian ethos in which the government needs to compel people to act properly, it’s pretty clear who the determinant of that is. It will of course be intelligent “rationalists” like them, who know what is right, have the technology to bring it into being, and whose motivations are beyond question (at least in their own mind).

    It’s a stunningly grandiose vision. Much like the EU, I suspect the public’s tolerance for it will be directly proportional to benefits continuously delivered. To the extent that Silicon Valley is able to deliver benefits to the common good, few will stand in their way. If the benefits slow, or the costs (including second and third order costs) start exceeding the benefits, we’ll see how it turns out for them.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo by Maurizio Pesce via Flickr, using CC License.


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