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    (Note: this past Sunday I wrote a 20-tweet (!), 657-word (!!) tweetstorm that was largely a response to some things from about a month ago. Yeah, I can hold onto a grudge. Anyway, here I'm offering an expanded version of the content from that tweetstorm, but also some elaborations that can provide more clarity and nuance. -Pete)

    So last month I wrote a blog piece suggesting that the patterns of revitalization in Detroit and Chicago might be converging. The piece was in response to another piece written by Urbanophile Aaron Renn, in which he noted the factors behind the demographic challenges posed to Pittsburgh and Chicago. In the comments section, I said that Chicago was facing limits to revitalization that weren't readily recognized, while Detroit, in the early stages of its rebound, had fewer such limits. I suggested that perhaps there was a convergence between the two. Ultimately, I said, both cities were moving toward extreme bifurcation.

    At least, that's what I thought I was saying. I took some flak from Chicagoans in particular who took exception to the Detroit/Chicago comparison. Their criticisms came in two forms:

    1) You're crazy. There's no way Chicago and Detroit are comparable in any way.
    2) Only a third of Chicago is struggling. The wealthiest third is booming, the middle third is stable.

    Using the convergence framing that I did, and in the way I used it, the criticism was likely warranted. Chicago is far wealthier a city than Detroit is, and comparisons are almost irrelevant due to that fact.

    This point was brought home by one commenter in particular who made a very valid point: I did a neighborhood typology for Chicago that splits the city into one of six community types: gentrified; gentrifying; frontline; stable prosperous; transitioning; and isolated. I even did a tidy table that shows how the community types compare with each other in a range of demographic factors. Some people disagreed with some aspects of the typology, but this particular commenter was disappointed I didn't do one for Detroit.

    The commenter was right. I didn't do one. I tried to develop one for Detroit but there are no neighborhood or community-sized comparables in Detroit to Chicago's Community Areas in Detroit. Zip codes come closest but still miss a lot of nuance, so I chose not to use them.

    Then I saw this by Data Driven Detroit:



































    They did a residential neighborhood typology similar to mine, but at the census block level. Here it is at closer inspection:

    Here's how Data Driven Detroit characterized their typology work:

    Generally, the darker brown areas reflect residential areas that are more active, have higher population density, fewer vacant lots, fewer properties owned by banks, investors or the city, and less population decline.

    Orange tend to have more challenges to the stability of the neighborhood such as higher rates of housing vacancy or bank ownership or population decline. These areas are stable neighborhoods, but require more intervention than brown areas to retain that stability.

    Yellow areas have even greater challenges to neighborhood stability. Generally, blocks depicted as yellow have less existing housing than a brown area. These areas would require more intensive stabilization to be considered "traditional residential".

    Light green blocks are primarily residential areas with higher percentages of vacant lots or lower occupancy than traditional residential areas. Compared to dark green areas, the light green areas have quality housing stock, mixed with vacant lots.

    The darkest green blocks are least active, with less density, more abandonment, and a high concentration of vacant lots.

    Generally speaking, their analysis shows large amounts of vacant land (dark green) adjacent to the largely non-residential downtown, neighborhoods in various stages of transition beyond the city's zones of abandoned land, and areas of relative stability on the city's northeast and northwest sides. Keep in mind, however, that this typology is more about physical condition, and less about economic conditions. And, economically Detroit does lag Chicago, so stability there looks different from stability in Chicago. For those who know both cities well, the Pembroke neighborhood where I grew up on Detroit's Northwest Side might be a stable, black middle class area that's comparable to Chicago's Chatham, but it's not stable or prosperous in the way that maybe Portage Park is.

    The point I was trying to make about Chicago and Detroit is that I view both cities are pioneers of a brand of revitalization/gentrification that might be unique to the Midwest/Rust Belt. Both cities, and many others in the Midwest/Rust Belt, had development patterns that were impacted by their response to the Great Migration in the early part of the 20th century, and they impact development patterns to this very day. Most Rust Belt cities, from Buffalo to St. Louis, gained significant numbers of black residents between 1910-1930 and again from 1950-1970, as blacks moved away from the Jim Crow South and toward the opportunity presented by plentiful manufacturing jobs. The near universal response by all of the Rust Belt cities was to "carve out" a section of town for blacks to live in, and leave it alone. This caused dramatically different development patterns than in today's "superstar" cities, which generally received far fewer black migrants (Boston and New York, to some extent, while Washington, D.C. is a notable exception. Most West Coast cities received even fewer black migrants).

    I see Chicago as the leader here in adopting its pattern of segregation, and Detroit is following the same pattern. Chicago "gave up" much of the west and south sides for the new black arrivals and established other places in the city or suburbs. Detroit essentially "gave up" the entire city limits to its black residents and sprawled outward into suburbia. Ever since blacks emerged in Rust Belt cities, the response by white residents has been to move elsewhere -- and avoid the place you left with a passion.

    This has created an interesting dynamic as both Chicago and Detroit entered the New Urban Future that took hold maybe 25-30 years ago. Chicago was able to make the switch and accommodate the mostly white, upper-middle-class-led revitalization of parts of the city because, in accordance with development practice, revitalization almost exclusively took place within formerly poor and working-class white ethnic neighborhoods. Detroit, however, was very late to that party, in large part because its poor and working-class white ethnic neighborhoods had already disappeared. In neither city was their much of an effort to touch neighborhoods with people of color.

    Chicago

    On to today. Chicago's inventory of former poor and working-class white ethnic enclaves has effectively run out. Developers face a choice: expand outward into neighborhoods with larger numbers of people of color, or build more densely in already hot neighborhoods. With some exceptions (Humboldt Park, parts of Pilsen), developers are choosing the latter.

    This has serious ramifications. Building more densely in hot neighborhoods sounds good on the surface, but developers are likely approaching a ceiling (financial and physical) in those hot neighborhoods. Land acquisition costs go higher and higher. Development review and approval receives heightened scrutiny from city planners and elected officials. NIMBY residents organize against new development. And the price of housing has to go up to account for the additional headaches the developer receives. I think it's bringing revitalization efforts overall in Chicago to a halt.

    At the same time much of Chicago is hollowing out. Blacks in particular are leaving the city in droves, especially on the west and south sides. Black population in Chicago fell by 17 percent between 2000 and 2010, and another nine percent from 2010 to 2016. Overall, Chicago's black population is down 24.7% since 2000 -- nearly 260,000 -- and showing no signs of slowing down.

    Since the black withdrawal from Chicago is largely driven by black middle-class residents, motivated by poor school quality, crime, a lack of amenities or services, or poor job or growth opportunities, increasing concentrations of poorer residents with fewer choices are being left behind. So it appears Chicago is possibly headed toward extreme bifurcation: dense, wealthy concentration on the north lakefront, the Loop and near south side, and vacant concentrations of poor residents on the west and south sides. There are (and will be) concentrations of middle-class neighborhoods that sit between the affluence and poverty, but they will exist in various states of transition, potentially improving -- or collapsing..

    Detroit

    Meanwhile Detroit is in the very early stages of its own rebound. I was there 3 weeks ago and saw evidence of positive change. If you're from the D it's welcome, maybe even a little overwhelming. If you're not from there, it's the kind of normal city redevelopment you see in most cities today. Detroit just hadn't seen it.

    That's because what's happening there, in my opinion, is more redemptive than revitalizing. I've written about this before, and I think what's happening is that people who once turned their back on Detroit are now willing to return and give it another look. The economy is fine there, but it's not super-heated and bringing thousands of people and jobs. Detroit is going through an emotional recovery as much as an economic one.

    That being said Detroit has some good things going on in the downtown/Midtown/Corktown areas, but very little outside of that prospering core. The map above shows where the trouble lies. Immediately outside of downtown are broad expanses that are as vacant as they are occupied. Beyond this "empty quarter" are a ring of neighborhoods in transition surrounded by an outer ring of more stable neighborhoods. The loss of manufacturing jobs has made Detroit a mostly black working-class city, with people working in the service industry or no job at all, struggling, without much economic impetus moving them forward.

    Detroit's current rebound, however, means that significant change could be on the horizon. The influx of middle-class and affluent people that the city has witnessed over the last five years means that Detroit could eventually develop its own bifurcation features, like Chicago -- but with a twist. My guess is that the D will expand outward and build up its "empty quarter" until it comes up against the transitional neighborhoods in the secondary and tertiary rings.

    In this context Detroit's "empty quarter" is an asset, for two reasons: 1) new visions of large scale walkable urbanism can be considered, remaking large swaths of the city; and 2) less displacement/disruption and resulting conflict. My guess on where that might happen? I'd say the east riverfront, Poletown East, Milwaukee Junction, North End, Virginia Park, Woodbridge, LaSalle Gardens, the Southwest Side. Areas with considerable vacancy, but just enough urban fabric to form the foundation.

    It won't happen soon. There's not enough juice (or time) in this economic cycle for it to happen in Detroit soon. But I'd bet developers are already buying lots and placing bets on areas that will build out over the next 10-15 years.

    Here's where things get tricky. I can foresee a future where Detroit's expansive growth on largely empty land outside of downtown will be hailed, but ultimately stalled as it reaches intact neighborhoods. Chicago's vertical growth will be pilloried for having little influence in poor areas.

    All because both Chicago and Detroit are notable for their extreme avoidance of revitalization in black neighborhoods, a legacy of segregation patterns established by the Great Migration more than 100 years ago.

    This piece originally appeared on The Corner Side Yard.

    Pete Saunders is a Detroit native who has worked as a public and private sector urban planner in the Chicago area for more than twenty years.  He is also the author of "The Corner Side Yard," an urban planning blog that focuses on the redevelopment and revitalization of Rust Belt cities.

    Photo: A block in Detroit's Virginia Park neighborhood. It has the kind of urban fabric that might be poised to return in the D. From modeldmedia.com


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    Professional and business services have long been identified with the downtowns of cities like New York, Chicago and San Francisco, where lawyers, accountants and architects are thick on the ground. However, in recent years there's been a clear shift in the geography of this vital sector, with some of the strongest job generation emerging far from the high-rise canyons. This shift is of profound importance given that professional and business services is by far the largest high-wage job sector in the U.S. and one of the main ladders to the middle class, with an annual average salary of $60,446, compared to $48,115 a year for the average nonfarm job.

    Read the entire piece on Forbes.com.

    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.

    Mark Schill is a community and corporate strategy consultant with Praxis Strategy Group and Managing Editor of New Geography.

    Photo: Via Pexels.


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    They say Millennials are rejecting capitalism and are drawn to socialism. It’s hard to imagine why, as nearly all the problems they face are caused by bad government policies, not selfish entrepreneurs.

    This is most obvious in the field of transportation, where the public takeover of mass transit led to a 50 percent decline in productivity even as per capita transit ridership continued to fall. Yet proponents of socialized transportation argued that Europe was subsidizing their urban transit and intercity trains, so we should too. This took on special urgency as France and other countries built high-speed rail lines, creating an impression that the United States was somehow eating their technological dust.

    Now, the New York Times admits the truth, which is that the French government-owned railroad, SNCF, is “heavily subsidized and deeply indebted.” Although such subsidies and debt are not supposed to exist under European Union rules, and the EU has even ordered member states to open up their railways to competition, SNCF has been particularly resistant to that policy.

    Now French president Emmanuel Macron has decided to take on the SNCF unions, whose members receive “more generous benefits than almost any other workers, including a guarantee of early retirement,” says the Times. Not surprisingly, this has led to protests, strikes, cancellation of trains, and walkouts by allied unions such as air traffic controllers. Clearly, the French model for rail transportation was financially unsustainable, yet workers are unwilling to give up their privileges in order to fix the problems.

    Currently, SNCF has debts of $55 billion. This doesn’t count at least $8.4 billion worth of debt that the government had previously absorbed into the national debt. Most of this debt came from building high-speed rail lines.

    The latest data from the European Union say that French trains carry about 9.9 percent of surface passenger travel. While this is up from 9.3 percent in 1990, all of that increase is at the expense of buses, whose share declined from 6.0 to 5.3 percent in the same time period. In other words, all of those tens of billions of dollars did not net a single car off the roads.

    Meanwhile, French trains carry less than 11 percent of freight, as more than 86 percent of freight is transported on highways. Those numbers are in sharp contrast to the U.S., where at least a third of freight goes by rail and less than 40 percent goes by truck (and I suspect a bad model has erroneously exaggerated the role of trucks).

    American railroads are a model of capitalism, one of the least-subsidized forms of transportation in the world. They are profitable and do far more for the national economy than Europe’s socialized railroads, which mainly serve narrow elites.

    Media reports suggest that Macron is losing his fight with the unions. Instead of arguing over pay, he should just privatize the railroad and let the unions deal with the new owners.

    In any case, there are plenty of real-world examples of the failure of socialism, and plenty of examples of the success of capitalism. Next time a Millennial uses their smart phone, gets in a car, or places an order with Amazon, they should thank capitalism, while the next time they complain about high housing prices or disrupted transit services, they should thank government planners.

    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: Hürriyet Daily News.


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    Higher female literacy is a reliable predictor of lower fertility and improved prosperity.

    In a previous article, we highlighted a clear connection in sub-Saharan Africa between a country’s total fertility rate (TFR = average number of children per woman) and its young female literacy rate. The data showed that higher literacy may set off a chain reaction that results progressively in lower infant mortality, improved health for women, and lower fertility. While literacy rises to 90%, fertility falls gradually. Above 90%, it falls precipitously.

    In turn, this lower fertility can, under the right conditions, open a window of opportunity for the economy to realize a demographic dividend.
























    Among the many unsung factors that contributed to the onset of the Chinese boom in the 1990s is the sustained campaign during the preceding decades to boost China’s literacy levels. Even before the one-child policy was enacted, China’s TFR had fallen precipitously from 6.38 in 1966 to 2.75 in 1979, according to the World Bank. Overall literacy grew from 65% in 1982 to 78% in 1990 to 91% in 2000 and 96% in 2015. In those same years, female literacy grew from 51% to 68% to 87% to 94%.

    Today, male and female literacy are very close at 99.7% and 99.6% for young Chinese aged 15-24. This is worth noting because in the poorest countries of the world, female literacy tends to lag male by double digits. Higher female literacy is a reliable predictor of improved prosperity.

    Examining this correlation for the various Indian states, we find that the relationship holds well. India’s overall TFR has fallen rapidly in recent decades and in several states, it now stands at below replacement levels. This has occurred while literacy has improved but has remained below 70% in all but one state, Kerala. The table and chart show the TFR and level of female literacy for all the states.






























    Nirav Shah compiled the data and assisted in the preparation of this article.

    This piece originally appeared on Populyst.net.

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

    Photo: End of the year exams in Mahatma Gandhi Seva Ashram, Jaura, India. © Yann Forget / Wikimedia Commons.


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    Look away from President Trump and it’s easier to see how three long-term demographic and geographic trends are reshaping American politics.

    The demography favors Democrats. A growing share of the population is made of the unmarried, minorities, children of immigrants, and millennials. These are the rising groups—what some Democrats like to call the “the coalition of the ascendant”—that were sure to propel Hillary Clinton into the White House. Until they didn’t.

    The geography, on the other hand, favors Republicans. Although the election was won tactically in the Midwest, Trump’s largest margin of victory came from red states, many with swelling populations, such as Texas, Tennessee, Utah, Arizona, and the Carolinas.

    A third shift—the toughest to predict the political impact of—could be the most consequential: the movement within metropolitan areas. The core base of the Democratic Party is built around the urban core, particularly in large cities; that of the GOP is located in more rural areas. Yet the most recent census data suggests growth in both of these areas have mostly stopped, while the big gains now are in suburbs and smaller cities, including some in the now Republican-leaning Midwest.

    Over the past two decades, the non-Hispanic white population has declined from 76 percent of the population to 63. By 2030, according to Census Bureau projections, that percentage could fall to 56.

    This is not good news for today’s Republican Party, which counts heavily on the votes of non-Hispanic whites. These voters, motivated in part by their diminishing share of the population and political pies, supported Trump over Clinton by 21 percentage points. Trump did somewhat better with black and Hispanic voters than his more genteel predecessor Mitt Romney. Still, Trump lost Hispanic, African-American, and Asian voters by wide margins—winning less than 1 in 3 Hispanic voters and less than 1 in 10 black voters.

    In elections so far, millennials—who will be the country’s biggest voting bloc by 2024—also have tilted decisively to the Democrats. Still, support for Trump and the GOP has been edging up, particularly among white millennials, since the 2016 election.

    Many millennials, faced with dismal prospects for higher wages and steady work and, in some areas, insurmountable barriers to home ownership, are embracing socialistic policies. High rents have added to the appeal of the redistributionist agenda of what the 538 website has called a Democratic version of the “tea party”—free college, rent control and subsidies, and guaranteed jobs. This approach, as opposed to Clintonian moderation, increasingly dominates Democratic politics, a trend reaffirmed in the recent primary elections across the country.

    Ironically, the very forces, such as high housing prices, rents, and limited job opportunities are driving millennials, and minorities, to the very places that have served as bulwarks of conservatism, including Trump-friendly metros such as Dallas-Fort Worth, Nashville, and Indianapolis.

    The trajectory of migration works largely against the Democrats. In a recent analysis for Chief Executive magazine we found that while blue regions like San Francisco, San Jose, Seattle, Denver, and Portland enjoyed the largest increase of people 20-29. But when people start entering their thirties—the fastest growing demographic cohort—Austin, San Antonio, Tampa, Orlando, and Raleigh take the lead. For people in their forties, Las Vegas, Phoenix, and Florida cities are preferred. Among boomers—second only to millennials in numbers—New York, Los Angeles, Chicago, San Jose, Boston, and San Francisco lose out to lower-cost Sunbelt metros including Phoenix, Austin, Las Vegas, Orlando, and Tampa.

    The winners in the migration sweepstakes, notably among those approaching their child-bearing and house-buying years—are states that traditionally lean red: Texas, Arizona, Tennessee, Florida, Georgia, and Utah. Due also to higher birth rates, these states and their metro regions are growing far faster than their blue rivals, where Trump was generally trounced. New York, Massachusetts, Pennsylvania, and Connecticut have long experienced sub-par growth; New York is barely growing at all. Most importantly, California, which once led the nation in population growth, is decidedly slowing down with growth last year below the national average as a result of strong domestic out-migration, faltering immigration, and a lower-than-average birth rate.

    These numbers will alter the nation’s political balance. In the coming decade, congressional seats, and Electoral College votes, will continue to move to red states. Since 2000, the number of congressional seats has grown by two in both Texas and Florida while declining by two in New York and Ohio. The 2010 census added no congressional seats for California—for the first time since 1920.

    It remains to be seen if demographic states turn red states purple or blue, or if the blue new arrivals end up turning purple or red. But the latter seems more likely. Texas, for example, has been said to be “turning blue” for almost a decade, but continues—even as it gets more and more young people, minorities, and immigrants—to vote heavily Republican.

    Reporters who spend their time inside the 610 loop in Houston, and the cities of Dallas and Austin, may see the blue tide as inevitable, but it’s a different picture when you travel to the smaller cities, suburbs, and exurbs of this fast-growing state.

    Even if the tide is turning, it’s happening slowly, and the GOP has political and cultural advantages in both Texas and Florida that will delay any turning of the tide even if they don’t finally stop it. Latinos in Texas, for instance, are considerably more GOP-leaning than their counterparts elsewhere. And surely some of the blue-state refugees won’t be inclined to support the same policies that led them to leave these states in the first place. The suburban areas that attract newcomers still tilt decisively GOP, and in 2016, turned out mostly for Trump.

    As America bifurcates by generation, race, and geography, dispersion has continued apace. Despite efforts by politicians, pundits, and planners—mostly Democrats—to foster dense urbanization, Americans have continued to seek space, affordable housing, and safety. As the most recent census data shows, the much ballyhooed “return to the city,” always exaggerated in the press, has all but ceased while suburban growth is accelerating.

    Indeed, in virtually every metro area, population growth continues to be mostly in the suburbs and exurbs. Even in metropolitan areas of over a million, upwards of 85 percent of people live in a world of backyards, cars, malls, and generally good schools, compared to under 15 percent around the urban core. And the suburban share continues to increase, as evidenced in last year’s census estimates.

    The economy has followed the population, with suburbs accounting for 80 percent of all new jobs created since 2010. Some suburban areas, like Plano, north of Dallas, may soon have more office jobs than the historic downtown. The fastest growing big regions for jobs—such as Dallas-Fort Worth, Austin, San Antonio and Nashville—are clustered in deep-red states, Forbes has found. Six of the 10 fastest growing regions have virtually no traditional urban core; all six are in the south or Intermountain West.

    Overall, suburbs tend to slightly favor Republicans. Trump out-polled Hillary Clinton in suburbs by four points, two points better than Romney.

    That might change as millennials, immigrants, and minorities move to the periphery. The latest Current Population Survey on domestic migration indicates strong movement of Hispanics, African Americans, and Asians to the suburbs of metropolitan areas, and away from urban cores (.xls file). For example, a net 303,000 African Americans moved to the suburbs as 333,000 moved away from the principal cities. Suburbs are also home to many educated older voters, who, according to some surveys, are turned off by the Trump presidency.

    The combination of greater racial diversity, older educated voters, and millennials could topple the GOP stranglehold this year. This has been happening already in key areas such as Fort Bend County, Texas, outside Houston (PDF), which by some measurements constitutes the country’s most diverse county, and increasingly Latino and Asian Orange County, California. Stronger enforcement of immigration laws does not work well in districts where a large chunk of the population is made up of immigrants and their children. Similarly, young suburbanites with children in school may be more susceptible to Democratic positions on issues like gun control and education.

    Yet the Democratic drive to win these areas also faces challenges. As people buy houses and start families, they tend to become more conservative and Republican leaning. Millennials, now mostly renters according to American Community Survey data, are seen as reliably Democratic by most pundits but recent polls show that as they age into marriage, family formation, and homeownership, they seem considerably less disposed to support Democrats.

    Suburban residents are more likely than urban core residents or aging rural residents to have children, nearly twice as likely to be homeowners and be part of the country’s large, albeit beleaguered, middle class. They may be swayed by a strong economy, which many millennials credit to the GOP.

    Contempt for suburbia, so common among Democratic-leaning academics, planners, and media, could make appealing to these voters more difficult. Many party leaders support forced densification, anti-car strategies, and the annexation of suburbs—ideas that lack broad appeal in a country where most people live in single family homes and rely on cars and roads to conduct their lives. It may not help that some leftists in California and Seattle are now attacking single-family houses as inherently racist and environmentally toxic.

    Ultimately the future of American politics will revolve around appealing to these increasingly diverse suburban and red-state voters. However unpalatable Trump may be to some, the Democratic Party’s lurch toward an intersectional agenda of open borders and more immigration, climate alarmism, cultural progressivism, and relentless centralization of power at the federal level may have limited appeal, particularly amidst a stronger economy. Since last fall, Democrats have seen their advantage on the generic ballot slip from 12 percent to 4 percent.

    Parties win elections by paying attention to voters, their aspirations and how they like to live. Neither ultra-conservative rural areas or deep-blue urban cores represent the future of American politics—a future that will be decided in the largely suburban areas of our fastest-growing metropolitan areas.

    This piece originally appeared on The Daily Beast.

    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.

    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.


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  • 06/04/18--22:33: Brownout
  • Jerry Brown’s long political career will likely end in January 2019, when the 80-year-old’s second stint as California governor concludes. In the media’s eyes—and in his own mind—Brown’s gubernatorial encore has been a rousing success. His backers say that he has brought the state back, economically and fiscally, from the depths of the Great Recession, which hit California harder than it did the rest of the country. Brown has enacted an array of left-liberal policies, to the delight of progressives, and positioned California as a blue-state role model for the American future. A decade of phenomenal growth among Silicon Valley’s landmark companies has boosted the state’s image and helped restore its overall economy. Democrats hope that California will provide a template for reestablishing their appeal to voters nationwide.

    Read the entire piece at City Journal.

    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: California Air Resources Board from Sacramento, United States (Governor Jerry Brown) [CC BY 2.0], via Wikimedia Commons


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    Universities and health care, “eds and meds”, have been in a huge growth cycle over the last few decades. Many communities have been pinning their hopes on anchor institutions like a university or research hospital to retool their economies for the 21st century.

    Yet the higher education industry is facing a convergence of several trends and forces that are threaten their future. At a minimum, schools need to be figuring out how to navigate these choppy waters ahead.

    Here are six forces converging on colleges today and in the near future:

    1. The number of college students will soon plunge. Professor Nathan Grawe, in his book Demographics and the Demand for Higher Education, built a model that projects the future demand for college. He found that starting in 2025, the number of college bound students is likely to decline substantially.


    Figure 6.1 from Grawe’s book

    The elite top 50 will continue to experience robust demand, but others won’t be so luck. As Grawe told the Chronicle of Higher Education:

    The bottom line is there’s almost nothing that’s going to get us around the fact that, in the late 2020s, we should see really significant reductions in enrollment. If your strategy for this is to try to increase enrollments, the model suggests that that’s a bad idea.

    Grawe has provided a large amount of grim data on his web site.

    2. Tuition is soaring at rates far higher than inflation. This chart from Carpe Diem and AEI says it all. Tuition and textbooks have nearly tripled in price since 1997:






































    How much more can students and their parents take?

    3. Student loan debt is soaring. Earlier this year New York magazine put together this astonishing chart of the growth of student loan debt relative to other kinds of loans:

    CNBC reports that:

    Over the last decade, college-loan balances in the United States have jumped more than $833 billion to reach an all-time high of $1.4 trillion, according to a recent report by Experian.

    The average outstanding balance is now $34,144, up 62 percent over the last 10 years. In addition, the percentage of borrowers who owe $50,000 or more has tripled over the same time period, according to a separate report by the Consumer Financial Protection Bureau.

    The $1.4 trillion in student loans outstanding new exceeds total credit card debt and total auto loan debt. Some people now have over $1 million in student loan debt.

    4. The over-education problem. One factor that’s seldom directly pointed out is the disconnect between the number of people who go to college, and the number who can plausibly cash in from a degree.

    34.9% of people ages 25-34 have a bachelors degree or higher. This is probably a fair proxy for the share of younger people who will likely get degrees. But is 35% of the American public able to get a high paying job? Indicators are not.

    Much as been made of income inequality, the decline of the middle class, etc. Some share of the population, probably 20% or less, is reaping disproportionate rewards in the modern economy. Others have seen stagnating real wages. For example, the Atlantic just ran a cover story talking about the “9.9%” that had this chart showing the share of wealth held by the 0.1%, the 9.9%, and the bottom 90%:

    Even if people in the next decile below the 9.9% are doing well, that still leaves a ton of people with degrees who don’t necessarily face great economic prospects.

    They might instead end up changing diapers at a DC day care center. Washington put forth a mandate that day care workers have a college degree, which indicates they must believe there will be no shortage of takers.

    Combine a degree that won’t grant access to the high wage economy with student loan debt and it’s a recipe for big problems for young people.

    This is an area that deserves more study.

    5. University inequality. It’s not just workers who face inequality, but schools themselves. The Wall Street Journal has been reporting on a potential shakeout among colleges, in which the higher end universities continue to do well, but those ranked nearer to the bottom are in trouble. In one article related to this divergence they note:

    For generations, a swelling population of college-age students, rising enrollment rates and generous student loans helped all schools, even mediocre ones, to flourish. Those days are ending. According to an analysis of 20 years of freshman-enrollment data at 1,040 of the 1,052 schools listed in The Wall Street Journal/Times Higher Education ranking, U.S. not-for-profit colleges and universities are segregating into winners and losers—with winners growing and expanding and losers seeing the first signs of a death spiral.

    Similar they written that many non-selective small liberal arts may be in trouble.

    6. MOOCs. The rise of online education, notably in the form of “massively open online courses” has yet to disrupt the higher education model, but with the factors above bearing down, there’s a huge financial incentive to make this work. Industry after industry have been radically restructured by technology innovation, and it’s reasonable to believe that the business model of higher education will one day end up on the receiving end.

    7. The credentialing cartel. It’s widely understood that the primary value in a degree is having it. The degree itself is perceived as a key credential granting access to the job market. As Austen Allred put it, “Would you rather have a Princeton diploma without the Princeton education, or a Princeton education without a Princeton diploma?”

    Universities are in effect a cartel who can levy an entrance toll to the professional job market. This may last for quite some time, or even strengthen, but there is again great value to be unlocked in breaking this cartel. The tech industry is a good example, where even famous companies have been founded by drop outs. If you are a great developer, it doesn’t matter what your credentials are. This has been one secret to that industry’s success.

    None of these inevitably spells doom for colleges, and certainly not for any individual one. There is also a lot of nuance not captured in this short posting. But as a highlight of potentially disruptive forces, it shows that there is quite a collection of powerful disruptors and potential disrupters arrayed against the university environment. Savvy institutions should be working hard to get fit for the road ahead.

    This piece 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: sach1tb (https://www.flickr.com/photos/sach1tb/274991658/) [CC BY-SA 2.0], via Wikimedia Commons


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    One doesn’t expect the unexpected in California elections. A progressive Democrat will become governor; Dianne Feinstein will return to the Senate yet again; and so on. Nuances still matter, particularly at the congressional level, in part due to the “jungle primary” system, but nothing much has changed. Statewide, the ideological die, at least for now, is cast.

    Read the entire piece at City Journal.

    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 Alan Joyce, via Flickr, using CC License.


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    In recent years we have been using the City Sector Model (Figure 6, see City Sector Model Note below) to analyze the extent of urban core, suburban and exurban trends in major metropolitan areas. The City Sector Model gives a more accurate picture of how much modern metropolitan areas are dominated by the automobile oriented suburbanization that has occurred since World War II.

    Before 1920, non-automobile modes of travel were far more important and during the War transit reached its ridership peak. The following period from 1920 to 1940 was transitional, as automobiles first achieved a significant presence across most US urban areas. These trends were strongest in the prosperous 1920s, but were somewhat interrupted by the Great Depression (late 1929 to 1939) and World War II (1941 to 1945). Automobile use rebounded after the War, expanding strongly.

    The City Sector Model provides a much finer grain of suburban versus urban core analysis than possible from the previous analytical process relying on municipal jurisdictional boundaries (due to the lack of readily accessible smaller area data). A neighborhood in a central city may be anything from urban core to suburban, and even exurban. For example, much of the central city of Phoenix is automobile oriented suburban, as is most of San Jose and functionally suburban areas exists in many other central cities. Even the nation’s largest and densest large municipality, New York, has areas of automobile oriented suburbanization in southern Staten Island. The central cities of Oklahoma City and Kansas City include some exurban areas (outside the Census Bureau defined urban area).

    The latest estimates from the American Community Survey 2012-2016 (average year 2014) indicate that approximately 14.5 percent of the major metropolitan area population (the 53 with more than 1 million population) lives in the urban core. The rest, 85.5 percent, live in the suburbs and exurbs (Figure 1).

    The very small percentage of people living in the urban core may have came as a surprise, since jurisdictional analyses had produced numbers as high as one-third. However, the City Sector Model urban core definition was conservative, with a minimum population density of 7,500 per square mile (2,900 per square kilometer) and a combined transit, walk and bicycle work trip market share of 20 percent or more. This population density threshold is far below the targets set in planning blueprints for substantial intensification, such as Plan Bay Area in the San Francisco area.

    Where the Housing has been built

    Housing development trends starting in 1950, using the construction dates of occupied housing, both owned and rented, from the American Community Survey, 2012-2016, reinforce the suburbanization thesis. The metropolitan area borders used are the present delineations. The post-war suburban boom started before 1950, though census data is not readily available for the period in the 1940s after the war. However, by 1947, the Levitts were building the first modern suburban housing tracts in Levittown (Long Island), New York, and millions of new comparatively inexpensive suburban houses were to follow across the country, including similar Levitt developments in New Jersey, Pennsylvania and Maryland.

    More than 91 percent of occupied housing units in the major metropolitan areas were constructed in suburban and exurban areas from 1950 to 2014. Conversely, less than 9 percent of the housing units were constructed in the urban cores (Figure 2). This is approximately one-third less than the share of the population living in the urban core. The owned housing figure was even lower, at 4.6 percent. Much more rental housing was constructed in the urban core, at 15.6 percent.

    This turns out to be a familiar New York story (as in transit commuting, for example). In every major metropolitan area outside New York, 75 percent or more of the existing housing was built in the suburbs and exurbs between 1950 and 2014. In New York, the suburban and exurban share was 56.3 percent. New York's urban core captured 43.7 percent. This is 18 times the median suburban and exurban housing construction share for the other 52 major metropolitan areas (Figure 3).

    • In 27 major metropolitan areas, more than 97.5 percent of the housing units were constructed in the suburbs and exurbs.
    • In 16 more major metropolitan areas, more than 90 percent of the housing units were constructed in the suburbs and exurbs.
    • In nine major metropolitan areas between 75 percent and 90 percent of the housing units built from 1950 to 2014 were constructed in the suburbs and exurbs. In eight of these, the suburban and exurban figure was more than 80 percent, with Boston the lowest at 76 percent (Figure 4).

    Perhaps the most important reason for a greater share of housing construction in the suburbs lay in faster population growth. Generally, metropolitan areas that grew faster than the national average over the 64 years had little or no urban core housing construction. Figure 5 shows that the median population growth rate among the 27 metropolitan areas with more than 97.5 percent of their 1950 or later housing built in the suburbs and exurbs was two and a half times the national growth rate over the same period. Generally speaking, the more housing was concentrated in the core, the slower the population growth. New York is the only metropolitan area with less than 75 percent of its growth in suburban and exurban areas, and experienced population growth 58 percent below the national average.

    Pervasive Suburbanization: Housing Construction Over More than Six Decades

    In a recent article, we characterized the recent annual Current Population Survey metropolitan migration data as indicating a “pervasive suburbanization.” This is nothing new. Over the past 64 years, the suburbs and exurbs have had a clear predominance in housing construction in most of the nation’s major metropolitan areas.

    City Sector Model Note: The City Sector Model allows a more representative functional analysis of urban core, suburban and exurban areas, by the use of smaller areas, rather than municipal boundaries. The nearly 9,000 zip code tabulation areas (ZCTA) of major metropolitan areas are categorized by functional characteristics, including urban form, density and travel behavior. There are five functional classifications, two in the urban core (central business district, or CBD and inner ring), and three in the suburbs and exurbs (earlier suburban areas, later suburban areas and exurban areas), as indicated in Figure 6 below. The urban cores have higher densities, older housing and substantially greater reliance on transit, similar to the urban cores that preceded the great automobile oriented suburbanization that followed World War II. Exurban areas are beyond the built up urban areas.

    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.

    Photograph: Levittown, Pennsylvania
    https://upload.wikimedia.org/wikipedia/commons/6/64/LevittownPA.jpg


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    Jet fighters, smart bombs, terrorism and ethnic cleansing have not exactly improved the Middle East. Yet the perennial world trouble spot is not without resources — an increasingly educated population, massive energy resources and ample capital — but still suffers economically, with the world’s worst unemployment rates.

    Perhaps the way out of the region’s dilemma lies in allowing entrepreneurs to lead the region out of its current chaos. What warfare has failed to do, perhaps capitalism could accomplish, turning a violence prone disaster area into a marketplace success story.

    Wherever they settle, people from the region shine as entrepreneurs. In the United States, Middle Easterners traditionally boast among the highest start-up rates. Go anywhere the Mideast diaspora settles — Atlantic Avenue Brooklyn, Edgware Road in London, the Detroit suburbs, the San Fernando Valley, Anaheim and even parts of Germany — and grassroots capitalism flourishes.

    The Mideast’s capitalist legacy

    The Middle East boasts a proud legacy of capitalist innovation, notes author Nima Sanandaji in his important new book, “The Birthplace of Capitalism: The Middle East.” He traces the world’s first capital markets, banks, artisanal industries and long-distance traders to this region, including in the first great cosmopolitan cities.

    In classical times, Greek and Roman aristocrats held their noses about trade while Syrian and Jewish traders played dominant roles in imperial commerce. They continued this role even after the empire fell and well into the Middle Ages. “Iranians, Arabs, Turks, Jews, Kurds, Armenians and the myriad of people who inhabit the Middle East have widely different cultures,” Sanandaji notes. “ Yet they are all dealers and hagglers, with market exchange almost encoded into their cultural DNA.”

    Islam, the region’s dominant religion, he adds, was forged by Mohammed, a man from the merchant classes. It does not share a theological ambivalence about trade so common in other faiths.

    The Israeli example

    Israel, founded largely as a socialist state, long embraced a communalist world-view, epitomized by the kibbutzim. Yet today there is arguably no more capitalist and innovative place on earth than Israel’s secular capital, Tel Aviv.

    Of course, religious zealots still flourish, especially in Jerusalem and the settlement towns in the occupied territories. But largely secular innovators have made Tel Aviv, according to the Start-up Genome project, the sixth-richest entrepreneurial region in the world, ahead of Berlin, Los Angeles, Shanghai and Seattle.

    Like their ancient forebears, Israeli capitalists are outward looking, and internationalist in outlook. Large U.S. tech companies — Google, Microsoft, Intel — invest there to harvest cutting edge technology and there are an estimated 300 research and development centers in the tiny country.

    Dubai: The new Arab way

    Respect for Israel’s accomplishments is widespread in the region, albeit only privately. One young Emirati from Dubai confessed recently that his dream was to visit Tel Aviv, which he saw as the cutting-edge city of the modern Middle East.

    Although not quite a start-up hub like Tel Aviv, Dubai already represents an important regional role model. Its airport is second to none, its hotels, beaches and conference facilities widely attended by visitors from Russia, India and Europe. There are some signs of an emerging start-up scene in tech-related businesses. Modern and remarkably tolerant — as long as you don’t criticize royal authority — Dubai opportunistically seeks to become an enterprising society.

    Other cities in the region may be more populous, but only Dubai, in a study done by the Singapore Civil Service College and Chapman University, ranked as the seventh-most important global city in the world, ahead of Beijing, L.A. and the Bay Area. None of the other Middle East capitals outside Israel came close.

    A new Middle East?

    Unfortunately, some of the countries that once seemed ready to lead this shift, such as Turkey and Egypt, have recently suffered a resurgence in pervasive cronyism. Property rights remain questionable enough to discourage entrepreneurs. Iran boasts a growing community of young technology graduates but protests against a crony-dominated theocracy have not yet succeeded. Beirut, the natural business center of the regions, remains too politically divided to flourish.

    Yet there is a clear desire for change. Recently I saw this in Medina — one of Islam’s holiest cities — long off-limits to non-Muslims. Ambitious industrial and technology parks are being built around the city, although the social infrastructure for secularly minded or non-Muslim partners remains woefully insufficient, including restaurants, hotels or living quarters.

    Turning cities like Medina and others in Saudi Arabia into thriving, diverse capitalist centers represents the supreme challenge to the vision of Crown Prince Mohammed bin Salman. The heir apparent seems determined to remake the country, with its long mercantile history, into a center of finance and trade. His cities are still a long way from Tel Aviv or Dubai, but the determination to catch up is palpable.

    This is an ambition worth encouraging. The region and the world might enjoy a more secure and prosperous future if the region’s leaders started investing less in warfare and more in exploiting the rich veins of capitalist ambition that lie deep in its extraordinary past.

    This piece originally appeared in The Orange County 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: Eduard Marmet (Skyline of Tel Aviv) [CC BY-SA 2.0], via Wikimedia Commons


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    Every year over the past decade, in the Forbes’ annual “Best Places for Jobs” survey, we have been fortunate to assess Southern California’s economy and compare it to other large metropolitan areas. The results point to some strong points but also many long-term problems that regional leaders need to address.

    Overall Southern California remains an economic powerhouse, with the nation’s largest collection of information workers, the third-largest business and professional sector and, remarkably, still the largest core of manufacturing employees. Our economic legacy remains strong, but the rest of the world is catching up on us, and fast.

    The jobs race

    Our rankings balance last year’s growth with short-term and medium-term trends, emphasizing momentum. This year Los Angeles ranked a mediocre 43rd out of the 71 largest metros; employment has grown by 5.7 percent over the decade. Contrast that with Dallas, which ranked No. 1 the last two years and has expanded employment at five times L.A.’s rate since 2006. The Big D replaced the dominant post-2010 economic behemoths to the north — San Francisco and Silicon Valley — but both are still solidly in the top 10, having enjoyed over 20 percent job growth over the past decade.

    Within the region, job growth has been fastest the further you get from downtown. Orange County, for example, ranked 27th this year, enjoying a small edge over L.A. but the regional growth leader by far has been exurban Riverside-San Bernardino, which now ranks No. 10 on our overall list. Over the past decade, the region has enjoyed 15.3 percent job growth, which has actually accelerated from 2.6 percent in 2016 to a strong 3.8 percent rate last year.

    The high-wage conundrum

    Perhaps the biggest threat to Southern California’s economy is not a lack of jobs, but a shortage of those that pay higher wages to offset high housing costs. As Citylab recently reported, Los Angeles is now the most unaffordable place in the nation, in large part due to a relative dearth of higher-paying jobs.

    In the higher-wage sectors like professional and business services (by far the largest sector with higher-wage jobs), no Southern California metro comes close in terms of growth to places like Austin, Dallas, Nashville, Orlando, Kansas City and San Francisco, where such jobs have increased by 20 to 30 percent since 2012. In contrast Los Angeles experienced a paltry 8 percent increase. As was the case in overall job creation, Orange County and the Inland Empire grew faster, roughly twice as the pace, and ranked in the middle of U.S. metros.

    Perhaps most telling for L.A. has been the trajectory of information jobs, a sector in which entertainment hub Los Angeles with 214,000 positions has long been the leader. Yet here too the region’s growth has been modest, 27th on our list, with jobs actually dropping by 3 percent last year after a decade of steady, but not spectacular, growth. Orange County did somewhat better, ranking 19th on the list with 9.7 percent growth since 2012. But sadly the Inland Empire, ranked 49th, and actually lost information jobs in that period while San Francisco and San Jose enjoyed 60 percent growth.

    Blue-collar blues

    But arguably the biggest problem facing Southern California is seen in the decline in higher-paying blue-collar jobs, which long provided opportunity for newcomers and working-class people. With an estimated 348,000 industrial jobs, Los Angeles retains the biggest manufacturing workforce in the nation. But industrial jobs are up sharply nationwide, while L.A. has lost 6.8 percent of its manufacturing jobs over the past five years. Over the last two decades, the area has lost more than 46 percent of its manufacturing jobs — almost 300,000 positions.

    The suburban periphery has done better, although last year both Orange County has suffered a slight decline in industrial jobs. Instead for blue-collar workers, the real growth has been in the generally lower-paying leisure and hospitality sector — up both over 25 percent in L.A. and 21 percent in the O.C. since 2012.

    Given our high housing costs, the overall mediocre performance in the various higher-wage sectors and a shift, particularly outside the Bay Area, toward low-wage ones expand suggests a troubling picture. Housing may be the crisis de jour among regional talkers, but expanding better-paying jobs may prove an even greater imperative. Once these jobs and their workers migrate to other, lower cost-to-live markets, it is nearly impossible to lure them back.

    The bottom line is that the story for greater L.A. is mixed. As one of the largest and most diverse employment centers in the nation, the opportunity to grow employment in higher wage sectors and attract new capital remains strong. But even amid a broad national economic boom, if state and local policymakers do not relent in their efforts to drive business costs higher, the momentum will continue to head in wrong direction for many Southland workers.

    This piece originally appeared in The Orange County 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: Myriam Thyes [CC BY-SA 3.0 or GFDL], from Wikimedia Commons


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    Vermont, like many states, is suffering from demographic challenges. It has the fourth slowest population growth of any state since 2000. It has the lowest share of its population who are children under 18 (if you exclude the District of Columbia, a “city-state” from the figures). Vermont is also impeccably progressive, has many quaint cities and towns, and is known for natural beauty. None of these factors has driven population growth there. Population growth is not the only metric, but the situation in much of New England is not looking healthy to me, especially northern New England.

    The state has been making a big push lately to market itself for residents. One of its initiatives is a program that will pay $10,000 to remote workers who move there. CityLab says:

    Looking for a raise? If you keep your job, you could pocket an extra $10,000 by moving to Vermont.

    A new bill signed into law Wednesday will pay remote workers $5,000 a year for two years to make the Green Mountain State their home, as long as their employer is based somewhere else.

    The bill’s backers say it’s an effort to address a challenge with the state’s small, aging population—a 2017 census estimate placed it at just under 630,000, making Vermont less populous than Columbus, Ohio. “We need more people in the state and people participating in the workforce,” said Joan Goldstein, the commissioner of Vermont’s Department for Economic Development.

    It could be easier to convince people to move if they don’t have to change jobs, Goldstein said, and the money could help with relocation expenses or renting co-working spaces.

    This is a variation on the subsidizing people to move to your state theme that I’ve criticized elsewhere. What are seeing is states and localities increasingly giving out economic development subsidies to people, as well as businesses. While at some level it’s understandable, this is also something of a sign of desperation.

    Having said that, the idea of attracting remote workers who can choose to live anywhere is a good one for Vermont. This allows people who might like the Vermont lifestyle but aren’t necessarily a good fit for the Vermont employment market to still move there, if they have a location-independent position.

    Another possibility to look at is seasonal or part-time residents. Tony Hsieh had an idea I thought was a good one for his Downtown Project. He realized that not everyone would necessarily want to move to Las Vegas. So he came up with the phrase “subscribe to Las Vegas” to talk about people who spend time downtown there on a regular but not permanent basis. He also found a way to engage people who were coming to Vegas anyway, such as for a convention or just to gamble, and grab them to give lectures, etc. to boost the cultural cachet of his city.

    Because Vermont is already a seasons vacation destination, this might be difficult to do from an accommodations perspective. But creating a way for people to be able to spend say a month a year there as a working vacation could be another way to inject more people into the state.

    Another initiative Vermont undertook is something they call the “Stay to Stay Weekend.” I believe the idea is that you vacation there, but tack on some extra time to be sold on the possibilities of the state as a place to live and work. I like this one a lot. It’s similar to the Tony Hsieh crash pad initiative in Vegas, where he’d bring in people to stay for free in a block of apartments he owned there. This led to great press for him and allowed people to get exposure to his project they wouldn’t otherwise have.

    Similarly, it should be a much easier initial sell to get people to vacation in Vermont, and then when they are there you give them the sell.

    This piece 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.


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    Over the past few weeks, ridesharing in the United States has rolled in an important new direction: Uber has expanded “Uber Express Pool” to twelve urbanized areas: Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, Philadelphia, San Diego, San Francisco, Washington D.C., Seattle and northern New Jersey. The new service, like Uber Pool, provides customers with a lower fare in exchange for accepting other pick-ups and drop offs along the way. Rather than providing door-to-door service, however, users to walk a short distance, perhaps a couple of blocks, at the beginning and end of their journey.

    The payoff is a significantly lower fare. Having designated pickup and drop-off points allows for less circuitous rides while increasing the chances of the driver being able to handle several travel parties at each stop. It is akin to a high-tech jitney—and will certainly keep public transit operators on their toes.

    We have studied its implications for mobility and taken numerous trips on Uber Express Pool here in Chicago, where it launched just three week ago. Five findings stand out:

    1. Uber Express Pool has a “countdown clock” that generally runs up to two minutes before a pick up location is provided to the rider. Riders are given a map of the possible pickup zone before committing to their trip. After committing, a timer appears at the top of the screen, which often runs for a minute or two minutes, before an exact pickup location is provided. Having this countdown period allows the company to evaluate supply and demand conditions--and see if other riders materialize--before developing the route.




































    Uber app showing the new Express Pool option and a rectangular pickup zone.

    Walks of about two minutes are customary, although several extra minutes are added as a buffer after your arrival at the pickup point, which can be a little aggravating if you are a fast walker. Interestingly, the app, once you are onboard, provides notification when others passengers will be joining the ride, complete with his/her screen name and pick-up location, which is not the case on Uber Pool. Your drop-off point often changes as your trip progresses.

    2. Uber Express Pool is priced well below Uber Pool and UberX even on routes in which other pickups and drop-offs seem unlikely. On trips in the 4 – 10 mile range, this new service is generally priced 55 – 65% below UberX, making it substantially less costly than Uber Pool, which is generally priced about 35 – 45% less. A six-mile trip from downtown Chicago to Wrigley Field typically costs around $5.40, compared to $8.00 on UberPool and $15.00 for Uber X—and making it only about $3 more expensive that riding an “L” train.


    An Uber graphic showing the benefits of having users walk several blocks to reduce travel times.

    Using Uber Express Pool on longer-distance trips seem less compelling since savings do not rise proportionately with the length of the trip, instead remaining about $2 to $5 range compared to Uber Pool, although we found savings as high as $8 in highly congested parts of San Francisco.

    3. Rider should expect total trip times to be about the same as Uber Pool, making the chief disadvantage being exertion and stress of walking to and from pickup/drop off spots. Nevertheless, Express trips seem more predictable than Uber Pool trips due to the optimization of pick up/drop off locations.

    4. Uber Express Pool differs sharply from Lyft Shuttle, which operates to and from pre-determined stops over a pre-determined routes. Both draw from the same pool of drivers as their other services and generally transport you in automobiles rather than vans or mini-buses, as is the case on Via, the “microtransit” operator now in three U.S. cities. Lyft Shuttle, however, is generally available only on selected corridors during high demand periods, and is presently limited to Chicago and San Francisco, whereas Uber Express Pool is more universal. Its website provides a map of all the available pick-up and drop-off locations, and fares are substantially less than its Uber counterpart, often being just $3 or $3.50.
































    Lyft Shuttle routes showing designated stops near downtown Chicago. The service operates from 6:30-10:30 a.m. and 4-8 p.m.

    5. Uber Express Pool will appeal to travelers who might otherwise take public transit more than its other services. Using UberX or UberPool instead of public transit tends to be quite costly when measured in terms of the amount spent per unit of time saved. Our newly released study shows that, on 4 - 10 mile trips between neighborhoods in Chicago, UberX and Uber Pool users are spending the equivalent of about $40 and $80 per hour saved, respectively. The value proposition differs sharply between routes but, generally, these services are too expensive for most commuters who travel more than a few miles to use every day.

    Uber Express Pool, however, is different. Users often spend only about $30 per hour saved. Although its cost tends to be higher than the $15/hr. “value of time” rate often assumed for the typical transit passenger, travelers who put a premium on their time will no doubt find it hard to resist. Moreover, when transit service is slow or erratic, Uber Express Pool is often a bargain, and the greatest benefit to many will be the added comfort of traveling in a quiet and climate controlled vehicle rather than a bus or train.

    Uber rolled big discounts for this new service even on routes in which the demand for ridesharing demand is thin, indicating that the company is willing to incur short-term revenue losses to build awareness of this new product.

    It will be fascinating to watch how these microtransit options change the way people move from place to place--they appear poised to be game changers.

    Joseph Schwieterman, Ph.D., is professor of Public Services and director of the Chaddick Institute for Metropolitan Development at DePaul University in Chicago. His co-authored study Uber Economics was released in May.

    Photo: quotecatalog.com, via Flickr, using CC License.


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    The front page of The Wall Street Journal cited the difficulty of cities (Note 1) trying to stop the escalation of house prices “Western Cities Try, and Fail, To Slow Chinese Home Buying.” The more descriptive online headline said: Western Cities Want to Slow Flood of Chinese Home Buying. Nothing Works: Governments from Vancouver to Sydney to Toronto are using taxes and other restrictions to tackle real-estate bubbles. The article also covered Auckland and Melbourne and their attempts to discourage Chinese buyers, who have been getting much of the blame for the severe housing affordability.

    Focusing Exclusively on Demand

    But “nothing works,” because not everything has been tried. A healthy market, whether housing or asparagus, has a balance between supply and demand. In each of these cities, the demand for houses far outstrips the supply. Yet, the cities have studiously avoided the obvious supply side policy that could restore housing affordability --- repeal of urban containment policy, and its destructive urban growth boundaries (UGBs).

    Instead, these cities all have enacted demand side strategies, but that does not address that the problem is supply. The measures have largely been limited to foreign buyer prohibitions and foreign buyer taxes. As the article puts it, “a flood of capital that is washing over cities throughout the globe, distorting home prices, irritating local residents—and defying almost every attempt to restrain it.”

    Sydney, Vancouver, Auckland, Toronto and Melbourne Have Only Themselves to Blame

    With their long standing UGBs, these cities occupy five of the 11 least unaffordable slots in the 14th Annual Demographia International Housing Affordability Survey, out of 92 major markets in nine nations.

    The cities have only themselves to blame. Their UGBs virtually forbid housing subdivisions to be built on inexpensive urban fringe land. The resulting scarcity drives up land values (and house prices), as gaps of 10 times or more per acre emerge between adjacent properties, depending on which side of the UGB they are on. Without the UGB, there would be little difference in value.

    Anyone who drives has experienced how supply limitations force prices up, from buying petrol (gasoline) over the last two decades. The fatal flaw of urban containment is it that it puts a tight lid on urban land supply, while demand marches steadily upward, like the pressure intensifies in a teapot if it is not allowed to vent.This hurts not just suburban buyers, but city dwellers, including the poor, who are faced with higher taxes, rents and the threat of non-market based gentrification.

    Governments have relied on planning advice insufficiently cognizant of economic consequences. The planners have sought to control the organic expansion of cities, pejoratively called “urban sprawl” (Note 2) no matter what the economic and social costs.

    The False Promise of Intensification

    Some suggest “intensification” --- redeveloping neighborhoods with higher densities, especially with apartments and high rises. The prospects are anything but encouraging. Intensification is likely to have little effect on affordability since the “floor” of urban land values is controlled by properties bordering the inside of the UGB (Figure). At most, only modest value reductions would be likely from subdividing existing lots (Note 2). At the same time not all housing is the same. Researchers at Toronto’s Ryerson University attributed house price increases, at least in part, to a mismatch between the single-family ground-oriented housing that households prefer and the higher density houses planning regulations require. Houses are not commodities --- households have specific and varying tastes. And, many will resist being socially engineered into the smaller houses the planners want. Finally, wholesale redevelopment could energize neighborhood opposition, as led to defeating an intensification proposal in California this year.

    Severe Housing Unaffordability is Not New

    Severely unaffordable housing in these markets is not new. By 2009, price-to-income ratios (median house prices divided by median household incomes, a metric called the “Median Multiple”) had at least doubled from before urban containment had been adopted in Vancouver, Sydney, Auckland and Melbourne. The “flood” of Chinese buyers came later. Toronto’s housing affordability crisis also came later, with a dizzying increase as house prices rose 100 percent relative to household incomes over little more than a decade.

    Failed Public Policy

    The results are a classic case of failed public policy. Housing costs have risen so much that households have much higher housing costs, which lowers standards of living. For some, housing costs have risen so much that they have been forced into poverty. California, despite its enormous wealth, with its urban containment policies, has the highest housing cost adjusted poverty rate among the 50 states, worse even than Mississippi (which has a reputation for the worst poverty in the United States). Many in younger generations, such as the Millennials, are likely to have a lower standard of living than their parents or even their grandparents. Had these consequences been subject to public debate in an election, urban containment would not likely have been implemented. The biggest problem, however, is that here is a very real threat to the future of middle-income households, which represent an economic advance centuries in development and too valuable to allow to fritter away.

    Are the Chinese to Blame?

    No --- blaming Chinese buyers is a diversion. Buyers seeking profits are not to blame, whether Chinese, Russians, other foreigners, or other domestic or local buyers. The fault lies with the governments that virtually invited investors seeking huge profits. The globalization of real estate markets by the internet just makes things worse.

    Each of these cities has made itself an investment target. The imperative is to remove the appeal to such unwanted speculation. Once the financial returns on housing return to normal levels, investors will switch to other housing markets or seek other investments entirely.

    Will Montreal be the Next Target of Foreign Buyers?

    Other cities are at risk. For example, new Montreal mayor Valerie Plante was so (rightly) concerned that she sought provincial approval for a foreign buyers tax. With a shortage of developable land due to urban containment, housing affordability is deteriorating in metropolitan Montreal (See: “Canada’s Middle-Income Housing Affordability Crisis”).

    A Housing Market for Residents, Not Speculative Profit-Seekers from Anywhere

    Given all this, efforts to shield local residents from the horrendous house cost escalation are laudable. But more is needed than headlines --- results are needed. In Vancouver and Toronto, foreign buyers taxes had some positive impact in the most expensive sector (detached houses). But prices in the middle of the market continued to race well ahead of incomes. The crisis is in the middle of the market and even worse below.

    So long as there are UGBs, prices can be expected to rise faster than incomes and material improvement in housing affordability is unlikely. Importantly, removing UGBs does not require allowing the wasteful strictures mandating only extremely low density development documented in the Boston suburbs by Edward Glaeser, Jenny Shuetz and Bruce Ward at Harvard University. They found that 85 percent of land land was zoned for 2 houses per acre or less (5 per hectare) and in some communities average lot sizes were 1.5 acres (0.6 hectares).

    Auckland Promises to Lead the Way

    Of course, the cities should have considered the economic folly of urban containment before “jumping over the cliff.” But things are likely to only get even worse until UGBs are removed. The misguided policy priorities need to be corrected. People --- their standard of living and lower rates of poverty --- are more important than the urban form.

    There is hope. In one of the five cities, the necessary reform has been proposed by a government with the mandate to do so. New Zealand’s recently elected Labour government has promised to remove Auckland’s UGB. The others cities should follow. So long as these markets are rigged by UGBs, investors seeking high, virtually riskless financial returns will drive out those, particularly middle-income and lower middle-income households looking for homes.

    Note 1: As used in this article, “city” refers to metropolitan areas, which are also labor and housing markets. The city land use policies are those in effect in the cities, regardless of the enacting level of government.

    Note 2: The term “pejoratively” is used because urban sprawl remains ill-defined and has been refered to by planners to apply to everything from the densest urban areas in the world to the least dense. See “Focusing on People, Not Sprawl”).

    Note 3: Economists Edward Glaeser and Joseph Gyourko find that “land is worth far more when it sits under a new home than when it extends the lot of an existing home.”This suggests that the land values for new units on subdivided former single-family lots could rival the previous value of the lot. This does not consider the fact that land values in the already developed area are likely to dwarf those of parcels bordering the inside of the UGB.

    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.

    Photograph: Downtown Toronto, by author


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    I was streaming “Killing Eve” on BBC America last night when the internet got glitchy. The picture sporadically pixilated and the audio became garbled for a few minutes at a time. Then the streaming would crash and need to be restarted again. I also noticed there were as many commercials on a streaming service as with broadcast TV. Someone has to pay for these shows and that business model hasn’t changed since the early days of radio. I got a flashback to my youth when television screens were small with giant cathode ray tubes housed in bulky wooden cabinets. Programs arrived via antennas shaped like rabbit ears that could be moved around to get better reception. In a storm the signal would break up in the atmosphere. My frustrations with digital equipment in the Information Age are eerily familiar.

    Some years ago my land line telephone signal died. I contacted the phone company and had a maintenance guy come sort things out. He tested the line and announced that it was in fact dead, but he wasn’t able to resurrect it. I was confused. It’s a copper wire. There’s been a phone in this apartment for a century. Of course it can be fixed. There was a pause. Then he repeated his statement in a slightly different tone of voice. The line was dead and he couldn’t fix it. I got the hint. Land lines had become so unprofitable that the system was intentionally being allowed to deteriorate. The old phone was replaced with a Voice Over Internet Protocol unit from Ooma. A regular stationary phone is necessary because cell phones don’t function well in the apartment. I can see the giant transmission tower out my window, but still… no bars. And every so often, for reasons that I don’t understand, the VOIP phone craps out and garbles calls. A hundred years of technological innovation has unfolded and it’s still tricky to make a simple call sometimes.

    The explosion of internet based home delivery options seems novel, but there’s absolutely nothing new about it. Retailers and manufacturers have used mail order catalogues for ages just as restaurants have delivered pizza and Chinese food from phone orders for decades. Only the intermediaries have shifted – slightly.

    With the partial legalization of pot new ventures are entering the market. I have a friend who interviewed for a tech position at a company where he would be writing code. He was informed that Eaze isn’t a marijuana company. It’s a technology company. But on the ground a twenty two year old in a Volkswagen arrives at someone’s door carrying a little bag of “herbal remedies” for cash payment. How exactly is that different from what occurred in San Francisco 1972? (He declined the job.)

    “Green” and “technology” have become meaningless add on phrases attached to every aspect of life. How is a plumber who clears out clogged sewer lines any different than in Roman times? A mule is replaced with a van. Now there’s a camera at the end of the sewer snake. But is it really different?

    Here’s a car that can be rented explicitly to allow the driver to participate in ride hailing services like Lyft and Uber. In the Olde Days (ten years ago) many taxi drivers didn’t have the up-front cash required to own their own vehicles or licensing medallions so they effectively rented equipment from an established taxi company and hoped they generated enough in fares to earn a living. The difference between that and Hyrecar/Uber is extraordinarily subtle. What appears like a radical transformation in technology, the economy, and culture quickly reverts to a previous form with new names and fresh participants.

    A friend in Silicon Valley works for one of the larger tech companies doing what she describes as “systems hardening.” They throw money at her in giant buckets. She helps anticipate, detect, and structurally defend tech companies from threats and breaches of all kinds. She never discusses the particulars, but after a problem has been well publicized in the media she’ll quietly nod that she lead the team that worked on X or Y. A few days ago while she prepared a lovely dinner she mentioned a university student who had successfully exploited a weakness in certain computer systems as an academic demonstration. It was one of many such techniques that would eventually be used by someone to disrupt something on a grand scale. It’s only a matter of time. And the most likely vector would be someone employed inside a tech behemoth. Internal security is a bit of an espionage house of mirrors.











































































































    I like to read a little bit of everything. Science fiction, or what some are now calling speculative fiction, offers glimpses into our present culture’s dreams and fears about the future. A prevalent theme includes a period of technologic blacking out. In each scenario, with different twists and permutations, the internet goes dark for a while. When it’s revived some things (financial accounts, medical records, family photos, legal documents) are permanently lost, and what remains is compromised – including society’s trust in such systems.

    Another common thread is the way societies solve short term problems by adding new layers of complexity. But over time maintaining all that complexity itself becomes the primary burden which spawns a multitude of new problems. This summons a fresh round of solutions involving additional complexity. Rinse. Repeat.

    No one has benefited more from digital photography than I have. But I came upon this guy using an old school technique for creating photos that has all but disappeared. The quality of the photos is low by modern standards, although they are beautiful in their own way. And there’s something magical about creating something directly with simple materials with your own hands.

    I spent a few days at a friend’s house helping him renovate his kitchen. In the evenings we’d have dinner, fix ourselves a couple of drinks, and settle in to a good movie. He’s frugal and gets second hand equipment from thrift stores and the local landfill shop. (Yes, many landfills have retail stores full of unwanted goods.) Anything electronic that’s more than a few years old is essentially free. VHS tapes arrive by the case in perfect working order as people dump yesteryear’s technology. Free. Lately he’s noticed the shift to DVDs and CDs on offer in the “please give them a good home” pile now that electronic streaming has eliminated the need for physical stuff. Keep in mind, this is a guy who works as a self employed handyman yet owns five mortgage free homes. His relationship to money and “things” is focused on what’s real not what’s fashionable.

    I’ve developed my own personal strategy for navigating the future. I use technology (like this blog) for things that are fun and convenient, but not essential. Things that are critically important I keep off grid. I find real pleasure in atavistic activities – growing and preserving food, making and fixing things by hand, reading paper books, and understanding which things I truly need and what’s just hype. If the lights go out for a while… I’m good.

    This piece first appeared on Granola Shotgun.

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