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The Changing Patterns Of U.S. Immigration: What The Presidential Field Should Know, And You

Wed, 08/12/2015 - 05:25

Public concern about illegal immigration, particularly among older native-born Americans, as well as the the rising voting power of Latinos, all but guarantees that immigration is an issue that will remain at the forefront in the run-up to the 2016 elections. Nor is this merely a right-wing issue, as evidenced in the controversy over “sanctuary cities”; even the progressive Bernie Sanders has expressed concern that massive uncontrolled immigration could “make everybody in America poorer.”

Yet despite the political heat, there is precious little dispassionate examination of exactly where immigrants are coming from, and where in the U.S. they are headed. To answer these questions, we turned to demographer Wendell Cox, who analyzed the immigration data between 2010 and 2013 for the 52 metropolitan statistical areas with populations over a million.

One would think listening to the likes of Donald Trump that the country is awash with hordes of unwanted newcomers from Mexico and Central America. But sorry, Donald, the numbers show a changing picture in terms of who is coming, as well as the places that they choose to settle.

Perhaps due to Mexico’s stronger economy and lower birthrates, Mexicans are no longer as dominant in the ranks of new immigrants as in the last decade. Mexico is still the single largest place of origin of new immigrants, but from 2010 through 2013, Mexican migration to the U.S. dropped 17.7% to an average of 140,266 a year, according to data from the U.S. Department of Homeland Security. Meanwhile the inflow from Asia has increased: immigration from China is up 25.8% to 74,458 a year, and 10.7% from India to 65,336 a year. Asia now equals the Americas as a source of new immigrants, with each accounting for 40% of the annual total.

European immigration, once the mainstay of growth for the U.S., fell 32% from 2010 to 2013 to an average of 91,000 a year, surpassed by the number of African immigrants, which has soared 29.6% to 98,000 annually.

America’s new African population tends to be well-educated — considerably more than the national average: they are more than 60% more likely to have a graduate degree than other Americans. The vast majority are fluent in English and fully one-third hold management or professional level jobs. Not surprisingly, they are generally doing well in their new country. The places where they settle — notably New York, greater Washington, Houston and Dallas-Fort Worth — will likely benefit from their presence in coming years.

Just as Mexican and Asian immigration changed the ethnic geography of America, boosting economies and changing local culture, one can expect the Africans to do much the same in the coming years.

The Largest And Fastest-Growing Immigrant Hubs

The largest foreign-born communities in America reflect both size and longstanding immigrant populations. The leader remains the New York metropolitan statistical area, which was home in 2013 to 5.69 million people born elsewhere, following by Los Angeles with 4.3 million, Miami with 2.2 million, Chicago with 1.69 million and Houston with 1.39 million.

But a look at the metro areas with the fastest-growing foreign-born communities tells a different story, one of growing migration into the more interior and central parts of the country. In many ways, this reflects the attraction of areas with relatively low housing prices and buoyant local economies. In contrast, the economies of many traditional immigrant hubs like Los Angeles and Chicago have not done so well, while places in coastal California and near New York suffer from high housing prices.

Pittsburgh ranks first for recent pace of growth, with a 17.4% jump in its foreign-born population to 89,000 from 2010 through 2013, almost four times the 4.3% national rate over the same span. The western Pennsylvania city has built a robust economy based on energy, medical services and technology. Its housing prices are low — roughly a third those of the Bay Area based on median income — and the city is situated in an attractive setting with rolling hills. Pittsburgh is attracting both less educated immigrants from more expensive places, and also educated newcomers, notes demographer Jim Russell, some due to the strong universities in the area.

Other surprising heartland destinations for immigrants include Indianapolis, whose foreign-born population expanded 14.3% in 2010-13 to 127,767, the second fastest rate of growth among the largest metro areas; Oklahoma City (third fastest, up 12.9% to 110,269); and Columbus, Ohio (up 9.8% to 139,562). Generally, these cities, like Pittsburgh, have strong economies, low housing prices and favorable state regulatory climates.

The Move South Continues

Until the 1970s, the South was an also-ran in immigration, with the exception of Florida. But today many of the fastest-growing foreign-born communities are in the South. These include still-recovering New Orleans, whose numbers of foreign born surged 12.4% in 2010-13 to 91,412, as well as Charlotte (up 11.2% to 225,673) and Austin (up 10.7% to 279,923).

This  movement to the South in recent decades has changed the geography of the most immigrant rich parts of the country. Three of the 10 metro areas with the largest number of foreign born residents are in the south. Miami has some 2.26 million immigrant residents make  up with 38.8% of its population, the highest proportion of any large metro area in the country. The Houston metro area has the fifth biggest foreign-born population, Dallas-Ft. Worth, the eighth.

The Texas metro areas, and their emerging southern counterparts, offer much of what the prospering Rust Belt cities also provide — strong broad-based economies and an affordable cost of living, particularly housing. Immigrants tend to prioritize home ownership and often work in thriving blue-collar fields such as manufacturing , logistics and construction.

Coastal Growth Follows The Economy

The Atlantic and Pacific coasts have long dominated immigration, but there appears to be some subtle changes in this picture. Most big coastal metro areas have logged steady but below average growth of their foreign-born populations, including New York, with a 3.67% increase. (Note that even with relatively slow growth in percentage terms, New York added a net 208,800 immigrants, more than the total foreign-born populations of any of the four fastest growers.) Some blue areas are doing much better in terms of growth rate, including Seattle (9th), Boston (11th) and San Jose (15th). All tend to be expensive, but have done very well in the recovery, largely due to technology-related growth.

In contrast, some traditional immigrant hubs with weaker economies have lagged behind. Chicago’s foreign-born population increased 1.71%, less than half the national average. Los Angeles’ foreign born population ticked down 0.1% amid economic stagnation and rising housing prices. When it comes to immigration, it is the geography of opportunity that still prevails.

U.S. Metropolitan Areas with the Highest Share of Immigrants No. 1: Miami, Fla.

Number of Foreign-Born: 2.26 million

Percentage of Population, 2013: 38.8%

No. 2: San Jose, Calif.

Number of Foreign-Born: 719,460

Percentage of Population, 2013: 37.5%

No. 3: Los Angeles, Calif.

Number of Foreign-Born: 4.39 million

Percentage of Population, 2013: 33.2%

No. 4: San Francisco, Calif.

Number of Foreign-Born: 1.34 million

Percentage of Population, 2013: 29.7%

No. 5: New York, NY-NJ-PA

Number of Foreign-Born: 5.69 million

Percentage of Population, 2013: 28.5%

No. 6: San Diego, Calif.

Number of Foreign-Born: 761,580

Percentage of Population, 2013: 23.7%

No. 7: Houston, Tex.

Number of Foreign-Born: 1.42 million

Percentage of Population, 2013: 22.6%

No. 8: Washington, D.C.

Number of Foreign-Born: 1.31 million

Percentage of Population, 2013: 22.0%

No. 9: Las Vegas, Nev.

Number of Foreign-Born: 440,866

Percentage of Population, 2013: 21.7%

No. 10: Riverside-San Bernardino, Calif.

Number of Foreign-Born: 932,747

Percentage of Population, 2013: 21.3%

 

This piece first appeared in Forbes.

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

Photo by telwink

The Peril to Democrats of Left-Leaning Urban Centers

Mon, 08/10/2015 - 22:38

Twenty years ago, America’s cities were making their initial move to regain some of their luster. This was largely due to the work of mayors who were middle-of-the-road pragmatists. Their ranks included Rudy Giuliani in New York, Richard Riordan in Los Angeles, and, perhaps the best of the bunch, Houston’s Bob Lanier. Even liberal San Franciscans elected Frank Jordan, a moderate former police chief who was succeeded by the decidedly pragmatic Willie Brown.   

In contrast, a cadre of modern mayors is minting a host of ideologically new urban politics that put cities at odds with millions of traditional urban Democrats. This trend is strongest on the coasts, but is also taking place in many heartland cities. Bill de Blasio is currently its most prominent practitioner, but left-wing pundit Harold Meyerson says approvingly that many cities are busily mapping “the future of liberalism” with such policies as  the $15-an-hour minimum wage, stricter EPA greenhouse gas regulations, and housing policies intended to force people out of lower density suburbs and into cities.

For the Democrats, this urban ascendency holds some dangers. Despite all the constant claims of a massive “return to the city,” urban populations are growing no faster than those in suburbs, and, in the past few years, far slower than those of the hated exurbs. This means we won’t see much change in the foreseeable future in the current 70 to 80 percent of people in metropolitan America who live in suburbs and beyond. University of Washington demographer Richard Morrill  notes that the vast majority of residents of regions over 500,000—roughly 153 million people—live in the lower-density suburban places, while only 60 million live in core cities.  

This leftward shift is marked, but it’s not indicative of any tide of public enthusiasm. One-party rule, as one might expect, does not galvanize voters. The turnout  in recent city elections has plummeted across the country, with turnouts 25 percent or even lower. In Los Angeles, the 2013 turnout that elected progressive Eric Garcetti was roughly one-third that in the city’s 1970 mayoral election.

Bolstered by this narrow electorate, liberal pundits celebrate the fact that 27 of the largest U.S. cities voted Democratic in 2012, including “red” state municipalities such as Houston -- but without counting the suburbs, where voter participation tends to be higher. An overly urban-based party faces the same fundamental challenges of a largely rural-oriented one—for example, the right-wing core of the GOP—in a country where most people live in neither environment.

Demographic and Political Transformation of American Cities

City dwellers have historically voted more liberally than their country or suburban cousins, but demographic trends are exacerbating this polarizing impulse. Simply put, the cities that could elect a Giuliani or a Riordan no longer exist. The centrist urban surge of the 1990s was both a reaction to the perceived failures of Democratic “blue” policies as well a reflection of the makeup of white-majority, middle-class neighborhoods in places like Brooklyn, Queens and the San Fernando Valley that featured healthy numbers of politically moderate “Reagan Democrats”—or Bill Clinton Democrats, circa 1992

Since then, these communities have been largely supplanted by groups far more likely to embrace a more progressive political stance: racial minorities, hipsters, and upper-class sophisticates. These groups have swelled, and gotten much richer, in places like brownstone Brooklyn  or lakeside Chicago, while the number of inner city middle-class neighborhoods, as Brookings  has demonstrated, have declined, to 23 percent of the central city—half the level in 1970.

This new urban configuration, notes the University of Chicago’s Terry Nichols Clark, tend to have different needs, and values, than the traditional middle class. Since their denizens are heavily single and childless, the poor state of city schools does not hold priority over the political power of the teachers unions. The key needs for the new population, Clark suggests, are good restaurants, shops and festivals, not child-friendly parks and family-oriented stores. Sometimes even crazy notions—such as allowing people to walk through the streets of San Francisco naked—are tolerated in a way no child-centric suburb would allow.

These tendencies underscore as well the increasingly homogeneous political culture emerging in cities. In 1984, for example, Ronald Reagan took 31 percent of the vote in San Francisco, and 37 percent in New York. He actually carried Los Angeles. By 2012, a Republican with a more moderate history could not muster 20 percent of the vote in San Francisco. And Mitt Romney lost Los Angeles by more than a 2-1 margin, while garnering barely 20 percent in all New York boroughs besides Staten Island.

Economic Hubris

These changes also reflect a shift in the economic role of cities. Until the 1970s, cities were centers of production, distribution and administration. Then the industrial base of urban areas, and related jobs such as logistics, began moving away from the traditional manufacturing cities  to overseas, the suburbs or the Southeast.  In 1950 New York, according to economic historian Fernand Braudel, 1 million people worked in factories, mostly for small companies. Today the city’s industrial workforce now stands at a paltry 73,000, a dramatic decline from some 400,000 as recently as the early 1980s.

A similar, if less spectacular, decline has taken place in what are still the two largest industrial metropolitan statistical areas, Chicago and Los Angeles. The one-time “City of Big Shoulders” and its environs had 461,600 industrial jobs in 2009. Today it has fewer than 300,000. Los Angeles, in a process that started with the end of the Cold War, has seen its once-diverse industrial base erode rapidly, from 900,000 just a decade ago to 364,000 today. 

In some cities, a new economy has emerged, one that is largely transactional and oriented to media. The upshot is that denizens of the various social media, fashion and big data firms have little appreciation of the difficulties faced by those who build their products, create their energy and food. Unlike the factory or port economies of the past, the new “creative” economy has little meaningful interaction with the working class, even as it claims to speak for that group.

This urban economy has created many of the most unequal places  in the country. At the top are the rich and super-affluent who have rediscovered the blessings of urbanity, followed by a large cadre of young and middle-aged professionals, many of them childless. Often ignored, except after sensationalized police shootings, is a vast impoverished class that has become ever-more concentrated in particular neighborhoods. During the first decade of the current millennium, neighborhoods with entrenchedurban poverty actually grew, increasing in numbers from 1,100 to 3,100. In population, they grew from 2 million to 4 million.Some 80 percent of all population growth in American cities, since 2000, notes demographer Wendell Cox, came from these poorer people, many of them recent immigrants.

Such social imbalances are not, as is the favored term among the trendy, sustainable. We appear to be creating the conditions for a new wave of violent crime on a scale not seen since the early 1990s. Along with poverty, public disorderlinessgang activityhomelessness and homicides are on the rise in manyAmerican core cities, including Baltimore, Milwaukee, Los Angeles and New York. Racial tensions, particularly with the police, have worsened. So even as left-leaning politicians try to rein in police, recent IRS data in Chicago reveals, the middle class appears to once again be leaving for suburban and other locales. 

Urbanity and Politics

These social and economic changes inform the new politics of the Democratic Party. On social policy, the strong pro-gay marriage and abortion positions of the Democrats makes sense as cities have the largest percentages of both homosexuals and single, childless women. When the party had to worry about rural voters in South Dakota or West Virginia, this shift would have been more nuanced, and less rapid.

Yet with those battles essentially won, the new urban politics are entering into greater conflict with the suburban mainstream, which tends to be socially moderate, and even more so with the resource-dependent economies of rural America. The environmental radicalism that has its roots in places like San Francisco and Seattle  now directly seeks to destroy whole parts of middle America’s energy economy.

Such policies tend to radically raise energy costs. In California, the green energy regime has already driven roughly 1 million people, many of them Latinos in the state’s agricultural interior, into “energy poverty”—a status in which electricity costs one-tenth of their income. Not surprisingly, those leaving California, notes Trulia, increasingly are working class; their annual incomes in the range of $20,000 to $80,000 are simply not enough to make ends meet.

Geography seems increasingly to determine politics. Ideas on climate policy that seem wonderfully enlightened in Manhattan or San Francisco—places far removed from the dirty realities of production—can provide a crushing blow to someone working in the Gulf Coast petro-chemical sector or in the Michigan communities dependent on auto manufacturing.

It’s more than suburban or rural jobs that are on the urban designer chopping block. Density obsessed planners have adopted rules, already well advanced in my adopted home state of California, to essentially curb  much detested suburban sprawl and lure people back to the dense inner cities. The Obama administration is sympathetic to this agenda, and has adopted its own strategies to promote “back to the city” policies in the rest of the country as well.

But as these cities go green for the rich and impressionable, they must find ways to subsidize the growing low-paid service class—gardeners, nannies, dog walkers, restaurant servers—that they depend on daily. This makes many wealthy cities, such as Seattle or San Francisco, hotbeds for such policies as a $15-an-hour minimum wage, as well as increased subsidies for housing and health care. In San Francisco, sadly, where the median price house (usually a smallish apartment) approaches  $1 million, a higher minimum wage won’t purchase a decent standard of living. In far more diverse and poorer Los Angeles, nearly half of all workers would be covered -- with unforeseen impacts on many industries, including the largegarment industry.

These radicalizing trends are likely to be seen as a threat to Democratic prospects next year, but instead will meet with broad acclaim among city-dominated progressive media. Then again, the columnists, reporters and academics who embrace the new urban politics have little sympathy or interest in preserving middle-class suburbs, much less vital small towns. If the Republicans possess the intelligence—always an open question—to realize that their opponents are actively trying to undermine how most Americans prefer to live, they might find an opportunity far greater than many suspect.

This piece first appeared at Real Clear Politics.

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

Photo by Kevin Case from Bronx, NY, USA (Bill de Blasio) [CC-BY-2.0], via Wikimedia Commons

Progressive Policies Drive More Into Poverty

Sun, 08/09/2015 - 22:38

Across the nation, progressives increasingly look at California as a model state. This tendency has increased as climate change has emerged as the Democratic Party’s driving issue. To them, California’s recovery from a very tough recession is proof positive that you can impose ever greater regulation on everything from housing to electricity and still have a thriving economy.

And to be sure, the state has finally recovered the jobs lost in the 2007-09 recession, largely a result of a boom in values of stocks and high- end real estate. Things, however, have not been so rosy in key blue-collar fields, such as construction, which is still more than 200,000 jobs below prerecession levels, or manufacturing, where the state has lost over one-third of its employment since 2000. Homelessness, which one would think should be in decline during a strong economy, is on the rise in Orange County and even more so in Los Angeles.

The dirty secret here is that a large proportion of Californians, roughly one-third, or some 3.2 million households, as found by a recent United Way study, find it increasingly difficult to keep their heads above water. The United Way study, surprisingly, has drawn relatively little interest from a media that usually enjoys highlighting disparities, particularly racial gaps. Perhaps this reflects a need to maintain an illusion of blue state success. If Republican Pete Wilson were still governor, I suspect we might have heard much more about this study.

Read the entire piece at The Orange County Register.

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

The Really Big Housing Picture

Fri, 08/07/2015 - 22:38

Everywhere I go it seems there’s some kind of housing crisis. In some places home values are dropping precipitously, people are unable to sell and move on, and formerly middle class homes are being abandoned or converted to poorly maintained rental properties. In other places home values and rents are obscenely high and ordinary people and essential workers are being driven out of whole cities and counties. The national economy has bifurcated and the shrinking middle class is reflected in a two tiered housing market. I’d like to explore the root causes of the situation.

Wikipedia

Wikipedia

Our current real estate schism is based on two forces. First, we as a society decided decades ago that we didn’t want to be shackled by the social conventions and obligations that hindered individuals in their quest for personal fulfillment and private gain.

For liberals this took the form of women’s liberation, black liberation, gay liberation… Everyone wanted to throw off the yoke of conformity. For conservatives it took the form of tax revolts, rebellions against regulations of every kind, a search for open space, cheap labor, and new markets.

These two groups were in no way mutually exclusive. Both the California Hippy and Evangelical Christian from South Carolina were pushing the country in the same direction for decades whether they knew it or not. Everyone was rebelling against social constraints and dismantling the old system that created the broad stable middle class in the first place.

The second force in the housing crisis is based on physical mobility made possible by car culture, affordable commercial aviation, containerized cargo shipping, and modern telecommunications. Geography stopped being a material limitation for the last few generations. As a result, people have self segregated. The rich have congregated in a handful of premium locations and radically driven up the cost of living in those spots. The poor have been left to their own devices in economically and culturally abandoned regions. And the ever diminishing middle class has leveraged itself into a thousand little niches in an attempt to keep up as their incomes and status decline.

I was recently at a meeting in Northern California where government officials, local business people, and community organizers all gathered to promote their various objectives. These were all incredibly kind, decent, responsible people who truly cared about their town. The difficulties on hand will be familiar if you live in one of the more expensive parts of the country.

There’s a desperate need for affordable housing. There’s huge pressure to preserve productive farmland and the natural landscape. There’s fierce NIMBYism that stops new growth of every kind. There’s serious money pressing down on the scarce property that is available. There’s a water shortage brought on by years of drought. And there simply is no culturally or politically tolerable mechanism to reconcile any of these conflicting forces. Honestly, for the people who already own property in the area the situation is pretty sweet – so long as the authorities manage to keep the ever growing homeless camps out of sight. The default setting is to simply let things fester and muddle through.

Just a month earlier I was at a different meeting in another town where the problem was reversed. A formerly prosperous town was hitting an economic wall as growth and development had come to a complete halt with unpleasant consequences. There was plenty of cheap land all around and everyone was desperate to see it covered in new homes, shopping malls, and office parks as quickly as possible. But market demand evaporated. Developers couldn’t justify building much of anything because there were no buyers on hand. Too much of the existing building stock was already sitting vacant.

You’d think these two problems could solve each other. Why don’t all the people desperate for affordable housing in one place simply move to the place with abundant vacancies? Of course, it doesn’t work that way. Communities are more than a pile buildings. People need the right mix of employment, education, culture, and so on. You can’t live in a cheap place if you have no access to jobs. And you can’t take a job in a place where there is no available housing.

Let’s go over some of the particulars again. Mass motoring allowed almost everyone to move away from the things and people they didn’t like. If your taxes went up you moved away. If “undesirables” arrived on your block you moved away. If you didn’t like the snow you moved away. Cheap private transportation on America’s highways made it possible for the vast 20th century middle class to remove itself from traditional communities and find bliss is splendid isolation.

Affordable commercial aviation let people migrate to previously remote locations. A car could get you from New Jersey to Florida in a couple of days, but a plane could get you there in a couple of hours. Air transport preferentially poached the affluent, the young, the educated, and retirees from established towns and delivered them to previously obscure destinations. The ability to hop quickly and cheaply from place to place was a tremendous boon to some lucky towns, but the death knell to others.

Containerized shipping brought raw materials and cheap manufactured goods in from every corner of the globe. If workers threatened to strike you moved your company away. Far away. If you found a better tax deal you moved away. If you needed the authorities to turn a blind eye to your company’s waste stream you moved away. The toaster ovens, refrigerators, and steel belted radial tires could all be made somewhere else for a lot less money.  And along with those jobs went a big chunk of the old middle class.

Information technology has added a new layer of mobility to the population. It’s now possible to use your mobile phone to turn your home air conditioner on and off from six thousand miles away. On the one hand this sort of technological magic allows millions of people to earn a living remotely. An accountant from Albuquerque can live in a beach cabin in Hawaii while still drawing her livelihood from New Mexico.

On the other hand, what happened to blue collar jobs in the past is now happening to white collar jobs. Your CT scan or X-rays can now be sent via the Internet to a technician in the Philippines who will interpret your medical condition remotely. Film editing can be done entirely online from Brazil. Computer code can be written in India. Architectural and engineering work can be done digitally in the Ukraine. If a job can be scanned, or Skyped, or pushed through a fiber optic wire somehow it will eventually be sent to a low wage region to be done by someone who is smarter, faster, and more desperate for work than you are.

And this isn’t factoring in the jobs that will soon be done entirely by machine intelligence. That accountant in Hawaii needs to pay attention to what she’ll do when her clients all switch to the cheaper advanced computer program that can wiggle around the tax code better than she can. Then again, the guy who writes that computer code will become very rich and might be able to move to Hawaii himself.

So what are the options here? First, we can allow the already stressed middle class to continue to shrink so that the U.S. becomes a two tiered society of haves and have nots – with many more losers than winners. Inevitably this will require an increase in both government police and private security to keep the wealthy protected from the pissed off impoverished masses. There are plenty of examples of what that looks like around the world.

Or, we could tax the rich and redistribute the funds to the formerly middle class population that has trouble feeding itself and keeping a roof over their heads. We also know what that looks like.

Or we could create a new social, political, and economic national compact that restructures absolutely everything. Some old fashioned societal constraints might be a prerequisite for equity and a renewed middle class. Rights come with responsibilities. Aging Baby Boomers will fight that sort of thing tooth and nail. But Millennials will likely grab at it with both hands. Toss in fuel supply disruptions and a break down in international trade relations and American society might find itself coalescing in very different ways.

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.

More Local Decisions Usurped by Ideological Regulators

Thu, 08/06/2015 - 22:38

In hip, and even not-so-hip, circles, markets, restaurants and cultural festivals across the country, local is in. Many embrace this ideal as an economic development tool, an environmental win and a form of resistance to ever-greater centralized big business control.

Yet when it comes to areas being able to choose their urban form and for people to cluster naturally – localism is now being constantly undermined by planners and their ideological allies, including some who superficially embrace the notion of localism.

In order to pursue their social and perceived environmental objectives, they have placed particular onus on middle- and upper-class suburbs, whose great crime appears to be that they tend to be the places people settle if they have the means to do so.

Central planning

Nothing is more basic to the American identity than leaving basic control of daily life to local communities and, as much as is practical, to individuals. The rising new regulatory regime seeks decisively to change that equation. To be sure, there is a need for some degree of regulation, notably for basic health and public safety, as well as maintaining and expanding schools, parks, bikeways and tree-planting, things done best when supported by local voters.

Read the entire piece at The Orange County Register.

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

City Hall photo by Flickr user OZinOH.

Congratulations Boston!

Wed, 08/05/2015 - 22:38

Congratulations Boston! Your rejection of the "honor" of representing the US as its candidate for the 2024 Summer Olympics is an inspiring example of government performing its obligation to taxpayers and their hard earned money. Those of us who think that government has a responsibility to wisely use taxpayer money sometimes forget that Massachusetts enacted Proposition 2 1/2 not long after California's fabled Proposition 13.

In an era of routinely wasteful government spending, Boston’s decision stands out as unusual. It rivals the courage of New Jersey Governor Chris Christie who cancelled a new Hudson River rail tunnel, mid-project, because of the consultants and builders seemed sure to take advantage of the blank check that New Jersey taxpayers were required to pledge. This, of course has been the record of major infrastructure projects all over the world and most recently one of the most grotesque examples was Boston's own "Central Artery." But unlike “the Big Dig”. This time Boston didn't have speaker Tip O'Neill to bring home the bacon. Then, the federal government capped its share and Boston had to pay it all. Unsurprisingly, the bill was much higher and had to be paid by Massachusetts, along with the interest on extra debt that had to be issued.

Oxford University Professor Bent Flyvbjerg, who has become famous for his quality analysis of large infrastructure projects, especially urban rail projects, produced a report with Allison Stewart on the history of Olympics cost overruns between 1960 and 2012. The two worked under the auspices of the Said Business school of England's at Oxford. They concluded:

The data thus show that for a city and nation to decide to host the Olympic Games is to take on one of the most financially risky type of megaproject that exists, something that many cities and nations have learned to their peril.

They found that every Olympic Games, summer or winter, for which complete data is available experienced cost overruns. The most recent, in London, experienced a cost overrun of 100 percent. Flyvbjerg and Steward used a very simple model that has been applied to the previous infrastructure work. They just looked at the final bill that included all the expenses.This was compared to the amount the sponsors and their funders, the taxpayers, were it was going to cost when the application was approved by the local political process.

The principal problem was the Olympic Committee requirement that sponsors must ensure the financing of all major capital investment required and are "on the hook" for any cost overruns.

Montréal's legendary Mayor Jean Drupeau sold his city on an Olympics bid saying that "the Montréal Olympics and no more have a deficit that a man can have a baby." Well, men are not yet having babies, but Montréal gave birth to a world-class cost overrun in its 1976 summer Olympics.  According to Flyvbjerg and Stewart, the 1976 Montréal Olympics had a cost overrun of nearly 800 percent, nearly double the 1992 420 percent cost overrun of Barcelona. Montréal may have set a record for much more than the Olympics with its cost overrun.

Things have been virtually as bad in Greece. The researchers reported that "Olympic cost overruns and debt have exacerbated" the Greek economic crisis.

There has been one exception to this sorry record. Los Angeles, host of the 1984 summer Olympic Games, actually turned a profit, sending more than $300 million to the international Olympic Committee and using the local profits for the LA84 Foundation, which funds youth sports and related activities, even 30 years after the event.

I coordinated the information program for employees at the Southern California headquarters of Crocker Bank (subsequently sold to Wells Fargo), assisting employees in getting to work during what was expected to be the high traffic from the 1984 Olympics. It turns out that the advice of local officials to encourage and vacations and working at home paid off handsomely. People who commuted during the Olympic Games had unusually light traffic.

In addition, I was a member of the Los Angeles County Transportation Commission (LACTC), having been appointed by Mayor Bradley and confirmed by the Los Angeles City Council. Both the Mayor and the Council were committed to putting on the show without burdening the taxpayers – no public money. And Olympic Committee was established under the direction of Peter Ueberroth, who became a legend for his skillful management of the games.

But there was some public money lost on the Olympics. The Southern California Rapid Transit district (SCRTD), the large regional transit operator announced its intention to provide bus service to Olympic venues from all over the Los Angeles area. SCRTD claimed that it would be able to do the job without public subsidy. I believed otherwise and predicted that the service would fall far short of its ridership projections and lose about $5 million. LACTC had the authority to ban the expenditure, which I tried to do. Unfortunately I was unable to obtain the necessary votes to make that happen. In the end, the ridership fell far short of projection (the kind of thing Professor Flybvjerg usually reports on urban rail projects).

Meanwhile, the Olympics were a one-off to Los Angeles. Most infrastructure projects of this nature are financially ruinous. Maybe Massachusetts learned a lesson from the Central Artery. Boston proved itself to be a world-class city in having the courage to say "no."

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

He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris. 

Photograph: Boston, by author

Historic Districts: The Past or The Future?

Tue, 08/04/2015 - 22:38

Preservation seems like an easy idea to support. Who would be against it? History, character, and a sense of place are what great communities are all about. They generate tourism and makes us all culturally richer. Landowners in historic districts even enjoy higher land values than nearby landowners in newer, usually blander developments. What’s not to like?

Apparently, a lot. Cities unilaterally impose ordinances from time to time, regulating building size, shape and use, and rarely are there complaints, although the changes affect everyone in the city. Here in Florida, building codes were recently stiffened, causing buildings in the entire state to become more expensive, and there were no complaints to speak of. But in the small community of Winter Park, when a proposal was floated to make obtaining historic district status less onerous, indignant protesters with cries of “property rights” were voiced. Protesters who were shy about fighting the State and the City may have finally found, in individual neighborhoods, a small enough foe to bully.

Protesters claim that they fear restraint of trade, and they’re hoping to cash in on rising land values, particularly where they have been historically low. A historic designation might make an owner think twice before knocking a house down.

There’s mirth in Cyria Underwood’s eyes as she tells us about coming here to Winter Park from Louisville, Kentucky. A tall, elegant African American woman, Underwood works at the Hannibal Square Heritage Center, and observes Winter Park’s preservation battles like this: “Black people have an oral history tradition, and it’s a good thing we do. We don’t expect our own buildings to get preserved. So here on the West Side, we hand down our oral history from mother to child, father to son. It’d be nice to see preservation taken seriously,” she muses, her eyes still smiling, “but African Americans have learned to make do without it.”

Interest rates remain low. In neighborhoods like the West Side, where Cyria works, owners feel the pressure to sell. Hannibal Square, built originally for blacks in the 1880s, today houses a mix of families, some of whom go back to the town's early days. Walkability, playgrounds and parks make this a dream community for urbanists; many residents ride the buses that travel up and down Denning Avenue, and Sunrail’s Winter Park Station is a couple of blocks away. Finally, it seems, this area has come into its own and become a hip, urban community at long last.

“However,” murmurs Cyria, her eyes twinkling, “the wolf is at the door.” She’s referring to developers who buy small houses on small lots and replace them with much larger homes, townhomes, and even multifamily clusters. West-siders have been clinging on by the skin of their teeth. Service jobs with modest incomes and part-time work (much of it a long bus ride away) have kept this neighborhood afloat. While land values all around have skyrocketed, the West Side — historically African-American — has not been rewarded with such good fortune. Property values are, to put it politely, stable.

Fairolyn Livingston moved out of the West Side in the '70s, but comes back frequently. She explains that when a West Side homeowner sells, he or she walks off counting the cash. But Livingston cites more than one seller who couldn’t replace the Winter Park lifestyle with the proceeds from his or her home, and ended up moving into poorer and even less upwardly mobile parts of town. So goes gentrification: the new buyer, often white, unwittingly banishes an African American family to a lower stratum, hardening class divisions.

Livingston is candid about the younger newcomers. Asked whether they join the neighborhood churches, she chuckles. “Oh, no. There’s no interaction with our community.” The new buyers, however, benefit from the short walk to Park Avenue’s chic restaurants and shops, and can Sunrail to happy hour downtown. The West Side’s character, meanwhile, dissolves under the homogenous new face of urban America, where everywhere resembles everywhere else.

Cyria Underwood, Fairolyn Livingston and many others are unworried about the preservation battles being waged in Winter Park right now. This is not surprising: preservation of the West Side has not been high on the City’s agenda. The same development pressures are being fought all over.

Locally, Friends of Casa Feliz, a Winter Park preservation organization, will be co-hosting a West Side History panel discussion this autumn to help keep what is left of the architecture.

It’s part of keeping a conversation going about the local urban future. Historic districts come into being in most places with a simple majority, but Winter Park’s requirement of a supermajority makes them difficult and rare. Protesters against preservation see this as just fine, and do not want property rights to change.

While he isn’t a vocal protester, realtor Mark Squires is a realist. With a Clark Gable smile and wink, he is a true denizen of Winter Park real estate. “Everyone wants historic character,” Squires offers, “but nobody wants to pay for it.” Smaller, older homes have tiny kitchens and bathrooms, and are often hard to maintain. Squires and his colleagues find that, for many young couples with kids, Winter Park’s lifestyle is in high demand. The last thing on their busy agendas is fixing cast iron pipes or repainting wood trim. Many buyers want new, as the developers, builders, realtors and lenders are well aware. Every home becomes a potential knockdown, if the price fits the formula.

Squires’ local reality is that historic preservation, while it might make everyone a little better off, makes home sales harder. Our local economy is geared towards short-term private profit, and the notion that preservation can also be profitable is rarely considered. While developers in Boston, Chicago, and elsewhere have proven that historic preservation can make money, it has yet to be seen as a both/and proposition in Central Florida. City Hall dithers over the proposed historic district ordinance while the bulldozers roll.

Underwood is philosophical about it. “Willing seller, willing buyer, you know? You can’t control what someone does after you go.” Rich or poor, the same argument applies. The individual decides whether to push the easy button and go for new, or save a little bit of quality for future generations.

The current wave of transactions, fueled by low interest rates and demand for in-town living, is recasting the character of her neighborhood, as well as of the more affluent areas of the East Side. If the City Commission votes to ease historic district formation, perhaps there will be more than just oral history to remember Old Winter Park by. If not, and more bungalows succumb to the McMansion, we’ll all just have to huddle up around her chair and ask for stories about the buildings that used to be here, and the people who lived within them.

Richard Reep is an architect with VOA Associates, Inc. who has designed award-winning urban mixed-use and hospitality projects. His work has been featured domestically and internationally for the last thirty years. An Adjunct Professor for the Environmental and Growth Studies Department at Rollins College, he teaches urban design and sustainable development; he is also president of the Orlando Foundation for Architecture. Reep resides in Winter Park, Florida with his family.

Photo of Cyria Underwood by the author

Rethinking the Scandinavian Model

Mon, 08/03/2015 - 22:38

During a tour to Paris, Bruce Springsteen explained that his dream was for the US to adapt a Swedish style welfare state. The famous musician is far from alone in idealizing Nordic policies. The four Nordic nations (Denmark, Finland, Norway and Sweden) are often regarded as prime role-models the policies to be emulated by others. Internationally, advocates of left of centre policies view these countries as examples of how high tax social democratic systems are viable and successful. Paul Krugman, for example, has said: “Every time I read someone talking about the ‘collapsing welfare states of Europe’, I have this urge to take that person on a forced walking tour of Stockholm”.

This admiration has a long history. In the mid-1970s Time Magazine described a country that sounded much like a utopia. “It is a country whose very name has become a synonym for a materialist paradise”, the international magazine wrote and continued to report about Sweden: “No slums disfigure their cities, their air and water are largely pollution free... Neither ill‑health, unemployment nor old age pose the terror of financial hardship.” Similarly, political scientist John Logue argued in 1979: “A simple visual comparison of Scandinavian towns with American equivalents provides strong evidence that reasonably efficient welfare measures can abolish poverty as it was known in the past; economic growth alone, as the American case indicates, does not”. Logue believed that the greatest threat to the Nordic welfare states was that they were too successful; eliminating social problems to such a degree that people forgot the importance of welfare policies.

The high regard comes as no surprise. Nordic societies are uniquely successful. Not only are they characterised by high living standards, but also by other attractive features such as low crime rates, long life expectancy,  high degrees of social cohesion and even income distributions. Various international rankings conclude that they are amongst the best, if not the best, places in the world in which to live. One example is the “Better Life Index”, complied by the OECD. In the 2014 edition of the index Norway was ranked as the nation with the second highest level of well-being in the world, followed by Sweden and Denmark in third and fourth position. Finland ranked as the eighth best country.

The OECD “Better Life Index”

 

1. Australia

2. Norway

3. Sweden

4. Denmark

5. Canada

6. Switzerland

7. United States

8. Finland

9. Netherlands

10. New Zealand

 

If one disregards the importance of thinking carefully about causality, the argument for adopting a Nordic style economic policy in other nations seems obvious. The Nordic nations – in particular Sweden, which is most often used as an international role‑model – have large welfare states and are successful in a broad array of sectors. This is often seen as proof that a ”third way” policy between socialism and capitalism works well, and that other societies can reach the same favourable social outcomes simply by expanding the size of government. If one studies Nordic history and society in‑depth, however, it quickly becomes evident that the simplistic analysis is flawed.

To understand the Nordic experience one must bear in mind that the large welfare state is not the only thing that sets these countries apart from the rest of the world. The countries also have homogenous populations with non-governmental social institutions that are uniquely adapted to the modern world. High levels of trust, strong work ethic, civic participation, social cohesion, individual responsibility and family values are long-standing features of Nordic society that pre-date the welfare state. These deeper social institutions explain why Sweden, Denmark and Norway could so quickly grow from impoverished nations to wealthy ones as industrialisation and the market economy were introduced in the late 19th century. They also play an important role in Finland’s growing prosperity after the Second World War.

Take Sweden as an example. In 1870 free markets were introduced in this agrarian society. During the coming 100 years Sweden combined low taxes, liberal regulations and strong working ethics to experience an unrivalled growth rate in Europe. In 1870 Sweden’s GDP per capita was 57 per cent lower than in the UK. In 1970 it had risen to become 21 per cent higher. The shift towards high taxes and state involvement actually began   occurred around 1970, resulting in a long-lasting period of stagnation that was broken through ambitious market reforms during the 1990s and onward.

Perhaps even more interestingly, even the social progress that Nordic countries are admired for developed during the latter part of the 19th century and the first half of the 20th century, developed not under socialism but at a time when Nordic countries combined free markets and low taxes with small (and efficient) welfare states. Researchers have for example shown that it was during this period that Sweden and Denmark developed a relatively equal income distribution. Long life expectancy is another example. In the picture below I show the life expectation at birth is shown for various OECD nations in 1960 – when Nordic nations had small welfare states – and 2005 – when Nordic welfare states were at their peak. In both periods Nordic countries were characterized by relatively long life expectancy, but if anything, this was more the case when the countries had small rather than large welfare states. The reason is simply that everything is not politics, cultural attributes such as a love for nature and healthy diets explains much of Nordic citizens good health.

Similarly, it comes as no surprise that descendants of the Nordics who migrated to the US in the 19th century are still characterised by favourable social outcomes, such as a low poverty rate and high incomes. In fact, as shown below, Nordic Americans have considerably higher living standard in capitalist America than their cousins in the Nordics. This is interesting, since those Nordic citizens who migrated to the United States in large groups during the 19th and 20th centuries were anything but an elite group. Rather, it was often the poor who left for the opportunities on the other side of the Atlantic.

A key lesson from the success of Nordic society lies in what can broadly be defined as “culture matters”. We should not be surprised that it is these nations, with their historically strong work ethic and community-based social institutions, t  have had fewer adverse effects from their welfare states and are therefore used as the poster child for those wishing to extol the benefits of active welfare policies. On the other hand, Southern European countries with similar sized welfare states and size of government have had less favourable outcomes.

Paul Krugman is right in noting that a forced walking tour of Stockholm disproves the idea of the collapsing welfare states of Europe. Nordic societies have not collapsed under the weight of welfare policies, particularly since they have lately adopted by introducing market reforms, reducing the generosity of welfare programs and cutting taxes. Such a tour may perhaps also be wise for Krugman himself, in teaching that Scandinavian countries have been rather unexceptional. The normal economic rules apply: incentives, economic freedom, a strong self-sufficient culture and a regime of good governance all matter when it comes to economic success. The question that remains is whether Scandinavian countries will continue their return to the free-market roots that have historically served them so well. If so, the Nordic culture of success can in combination with sound policies allow growth, innovation and entrepreneurship to flourish.

Dr. Nima Sanandaji is a research fellow at CPS, and the author of “Scandinavian Unexceptionalism - Culture, Markets and the Failure of Third-Way Socialism”. The book, which was recently released is currently being translated to a number of different languages. The entire book is available through the Institute of Economic Affairs which has published it.

What Jane Jacobs Got Wrong About Cities

Sun, 08/02/2015 - 08:25

Few people have had more influence on thinking about cities than the late Jane Jacobs.

The onetime New Yorker turned Torontonian, Jacobs, who died in 2006, has become something of a patron saint for American urbanists, and the moral and economic case she made for urban revival has been cited by everyone frompundits and think tanks to developers.

However, though widely celebrated for her insights and unabashed embrace of dense urbanism, Jacobs may ultimately prove more influential than relevant. Her writing was often incisive and inspiring, particularly when she opposed planning and overdevelopment and embraced the role of middle-class families in cities. But the urban revival that has actually taken place is at variance with her own romantic version of cities and how they work.

Currently the American cities that are doing best are not those with a flourishing middle class but those have become the preferred playgrounds of the rich and famous—New York, San Francisco, even Washington, D.C. At the same time, vast portions of urban America remain cut off from society’s mainstream.

The Nature of the New Urban Revival

When Jacobs published her most important work, The Death and Life of Great American Cities,in 1961, America’s cities were clearly in trouble. Racial tensions and a massive flight to suburbia were undermining the promise of cities, and the only response of planners at the time seemed to be to expand freeway access, tear down old neighborhoods, construct massive apartment blocks, and subsidize big employers.

Jacobs rightly opposed these approaches, and constructed a far more human and enduring vision of urbanism. Her appealing perspective was based on middle-class neighborhoods, families, and grassroots economic activity. Her maxim about the best role for places remains a guiding light to those who care about upward mobility: “A metropolitan economy, if it is working well, is constantly transforming many poor people into middle-class people, many illiterates into skilled people, many greenhorns into competent citizens. … Cities don’t lure the middle class. They create it.”

Yet when cities did begin to come back—a handful in the ’80s and then again more around the time of the millennium—the revivals were in many ways the opposite of her grassroots vision. Instead of creating more family-oriented middle-class neighborhoods, the urban revival ended up being based on “luring” the affluent, the still forming young person, or the accomplished, childless professional than generating a new middle class.

Witold Rybczynski noted in 2010 that the rise of successful urban cores increasingly has little in common with Jacobs’s romantic bottom-up organic urbanism:

“The most successful urban neighborhoods have attracted not the blue-collar families that she celebrated, but the rich and the young. The urban vitality that she espoused—and correctly saw as a barometer of healthy city life—has found new expressions in planned commercial and residential developments whose scale rivals that of the urban renewal of which she was so critical. These developments are the work of real estate entrepreneurs, who were absent from the city described … but loom large today, having long ago replaced planners and our chief urban strategists.”

As Rybczynski suggests, the current rise of “urban vitality” derives not from the idiosyncratic, diverse and, if you will, democratic form that Jacobs celebrated but in a more manufactured matter that at times outdoes suburbs for conformity and boredom.

The Evisceration of the Urban Middle Class

Jacobs’s vision failed in large part because today’s cities play a different economic role than they did in the past. The economic basis of her New York—small businesses, manufacturers, business service firms employing masses of middle-class workers—has declined while the city has evolved into what Jean Gottman called the “transactional metropolis,” dependent on the most elite financial services, high-end consumption, and the all too present media industry.

This urban economy has many strengths but increasingly relies on the rich. A Citigroup study suggested that cities, particularly New York and London, have become “plutonomies”—economies driven largely by the wealthy class’s investment and spending. In this way the playground or luxury cores serve less as places of aspiration than geographies of inequality.

New York, for example, is by some measurements the most unequal of American major cities: Gotham’s 1 percent earns a third of the entire city’s personal income—almost twice the proportion for the rest of the country.

Other luxury cores exhibit similar patterns. A 2014 recent Brookings report found that virtually all the most unequal large central cities—with the exception of Atlanta and Miami—are dense, luxury-oriented cities such as San Francisco, Boston, Washington, New York, Chicago, and Los Angeles. Although high-wage jobs have increased in these metropolises, the bulk of new employment in cities like New York has been in low-wage service jobs.

As urban studies author Stephen J.K. Walters notes, these cities tend to develop highly bifurcated economies, divided between an elite sector and large service class. He notes this is “the opposite of [Jane] Jacobs’s vision of cities” that relied on “transforming” poor people into the middle-class people

Even diversity, often cited by Jacobs as a great asset of cities, has suffered. Among the most successful cities today are what analyst Aaron Renn has labeled “the white cities”—places like Boston, San Francisco, Seattle, and Portland, Oregon—which have historically been home to relatively small and now shrinking, minority populations. San Francisco’s black population is 35 percent lower than what it was in 1970. In the nation’s whitest major city, Portland, African-Americans are being driven out of the urban core by gentrification, partly supported by city funding. Similar phenomena can be seen inSeattle and Boston, where long existing black communities are rapidly shrinking.

In the more diverse big cities like Los Angeles, New York, and Chicago, gentrification takes place alongside growing concentrations of poverty. It is often forgotten, according to demographer Wendell Cox, that 80 percent of the increase in urban core population in the last decade was from poor people; overall, despite the growth of poverty in suburbs, the core poverty rate remains more than twice as high.

Nor is this situation necessarily improving. During the first 10 years of the new millennium, neighborhoods with entrenched urban poverty actually grew, increasing in numbers from 1,100 to 3,100 and in population from 2 million to 4 million. “This growing concentration of poverty,” note urban researchers Joe Cortright and Dillon Mahmoudi (PDF), “is the biggest problem confronting American cities.”

We see this in places like Brooklyn and Chicago, two much-hyped epicenters of urban gentrification. Brooklyn’s poorer sections—a quarter of the residents are onfood stamps—have become even more so, notes analyst Daniel Hertz. Incomes between 1999 and 2001, he notes, dropped overall, falling in the poorer areas even as they soared in the more gentrified neighborhood closer to Manhattan and surrounding Prospect Park.

Hertz found similar, if more extreme, phenomena in Chicago, which has also seen an unwelcome return to high crime rates, particularly in its poorer sections. Gentrification has indeed expanded into formerly working- and middle-class neighborhoods, but poverty and despair still characterize much of the city. As Chicago urban analyst Pete Saunders has put it: “Chicago may be better understood in thirds—one-third San Francisco, two-thirds Detroit.”

Here Comes the Childless City

Arguably Jacobs’s biggest miscalculation related to urban demographics. As H.G. Wells predicted well over a century ago, cities now depend in large part on affluent, childless people, living what Wells labeled a life of “luxurious extinction.” Jacobs’s contemporary, the great sociologist Herbert Gans, already identified a vast chasm between suburbanites and those who favor urban core living who he identified as “the rich, the poor, the non-white as well as the unmarried and childless middle class.”

Jacobs never got this point, perhaps because she instinctively hated where families were in fact headed: the suburbs. Like many intellectuals in the ’50s and ’60s, she saw no need for suburbs, even as they experienced explosive growth, just dense city surrounded by traditional countryside.

Perhaps nothing of Jacobs seems more dated than her assertion that “suburbs must be a difficult place to raise children.” She lovingly portrayed neighborhoods like her own West Village as ideal places where locals watched out for each other. She wrote about how “Mr. Lacey, the locksmith, bawls out one of my sons for running into the street, and then later reports the transgression to my husband as he passes the locksmith shop. Mr. Lacey, with whom we have no ties other than street propinquity, feels responsible for him to a degree.”

At best, Jacobs’s compelling portrait from 1961 is something of an anachronism. Families in urban apartments today, notes Cornell researcher Gary Evans (PDF), generally have far weaker networks of neighbors than their suburban counterparts, a generally more stressful home life, and significantly less “social support.” Toronto author Phillip Preville notes, “In the years since, all the Mr. Laceys of the world have died and gone to downtown heaven,” he notes. “We can all talk Jane’s talk, but some people are pickled in Jane’s brine.”

Certainly statistics back up Preville’s assertion. Greenwich Village today now largely consists of students, wealthy people, and pensioners. Despite the presence of many young people, children and teens between 5 and 17 account for only 6 percent of the Village’s population, far below the norms for New York City (PDF), and less than half the 13.1 percent found across the United States’s 52 largest metropolitan areas. Overall, Manhattan has among the lowest percentage of children in the country; a majority of its households are made up of singles.

This pattern holds across the country. According to census data, in 2011 children 5-14 constitute about 7 percent in core districts across the country, roughly halfthe level seen in suburbs and exurbs. By 2011 people in their 20s constitute roughly one-quarter of the residents in urban cores, but only 14 percent or fewer of those who live in suburbs, where the bulk of people go as they start to reach the point of establishing families.

Even in Toronto, generally seen as one of the world’s most livable cities and Jacobs’s chosen home, Statistics Canada notes that for every person who moved from the hinterlands to the city, 3.5 moved towards the periphery. The people most likely to move out are 25 to 44, people entering the stage of family formation. As one Torontonian, who recently moved to the suburbs, observed: “The big city has its uses. It served me well, and I served it back. Living in Toronto enabled me to transform my life in ways I dearly wanted: marriage, fatherhood, career advancement. That transformation has brought with it needs that Toronto cannot adequately provide: personal space, affordability, an emphasis on community over privacy. The intensity and the anonymity of the city now hinder my life more than they help. Simple as that. I’m outta here.”

Overall, high-density cores, whether in Canada, America, or East Asia, consistently exhibit the lowest percentages of children. The far more ultra-dense cities of East Asia—Hong Kong, Singapore, and Seoul—exhibit the lowest fertility rates on the planet (PDF), sometimes less than half the number required simply to replace the current population. Due largely to crowding and high housing prices, 45 percent of couples in Hong Kong say they have given up on having children.

In Asia people have few opportunities to move to lower-density housing. But in the United States, with abundant and often much cheaper land, super-urbanity often serves as a kind of way station in which people spend only a portion—often an exciting and career-enhancing one—of their lives. But when they grow older, and particularly when they decide to start families, they tend to leave for the periphery.

Getting Beyond Nostalgia

Nostalgia makes people feel good. Some still dream about a coming revival of diverse, child-friendly, dense city neighborhoods. They dream, in the words of oneauthor, of bringing us “back to the way we were, when most people lived in cities, did not own a car, walked or took the bus or train to work, and lived in much smaller residences.”

Wishing to return to something that last predominated a half-century ago does not mean it will occur. Just as conservatives who hearken for a return to the ’50s are sure to be disappointed, urban advocates who suggest a “return to the city” for middle-class families will be as well. Both minorities and millennials, often thought of as spearheading a “back to the city” drive, are, according to most indicators, moving out to the suburbs as they enter their 30s and start families.

Dense urbanity, of course, remains a huge contributor to the nation’s economy and culture. Urban centers are great places for the talented, the young, and childless affluent adults. But for most Americans, the central city offers at best a temporary lifestyle. It does not fit with what people can afford and where they want to live. There is a reason why 70 to 80 percent of Americans in our metropolitan areas live in suburbs, and those numbers are not likely to change appreciably in the coming decade.

Cities, as Jacobs hoped, have indeed experienced a renaissance, but not in the form she preferred. To be sure, this revival is a hell of lot better than the urban dystopia that developed in the years after Jacobs’s Death and Life of Great American Cities first appearedBut it’s time to recognize that we are not seeing a renaissance of the kind of middle-class urbanity that she loved and championed. That city has passed into myth, and, unless society changes in very radical ways, it is never going to come back.

This piece originally appeared at The Daily Beast.

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

By Phil Stanziola [Public domain], via Wikimedia Commons

Special Report: Maximizing Opportunity Urbanism with Robin Hood Planning

Sat, 08/01/2015 - 07:26

This is the first section of a new report authored by Tory Gattis for the Center for Opportunity Urbanism titled Maximizing Opportunity Urbanism with Robin Hood Planning. Download the full report (pdf) here.

Across America and the developed world, we face a well-reported crisis of income stagnation, rising inequality, a declining middle class, and a general lack of broad prosperity. Yet contemporary urban planning seems disconnected from this crisis, focusing instead on pedestrian aesthetics, environmentalism, and appealing to the supposed preferences of the wealthy and the “creative class.” This approach increasingly dominates urban thinking, expressed often as New Urbanism or Smart Growth. In this perspective, dense and usually older cities like New York, Portland, and San Francisco have been held up as models. For the most part, planners see their world through the perspective of an architect – an architect of the physical form of cities. But what if they tried the perspective of an economist – an architect of opportunities for people to have a better life?

Cities matter far more than they used to as engines of opportunity and upward social mobility – the very essence of the American Dream. As the basis of the economy has shifted from industry to services, proximity to others now matters more than ever before. A factory can be anywhere and ship its products anywhere, but, generally speaking, most services need to be in-person. This is pushing more and more of the population to agglomerate around not so much cities, as defined by their political boundaries, but major metros, including numerous suburban rings, where the vast majority of the population resides. In many metros, limited housing supply has driven up home prices and rents to levels where much of the middle and working classes are either unable to buy or must pay a heavy portion of their incomes in mortgages or rents.

This is occurring as economic and technological factors have directed ever more wealth to a relatively small population of elites, whose demand for specialized services - whether personal spending or that of the corporations they control - has become a major part of the economy. Economic opportunity is driven not just by proximity to others in general, but by proximity to the very small but critically influential super-affluent class – what Citigroup research calls the “Plutonomy”. iv In some markets, such as Miami, New York and San Francisco, the locational preferences of this class - who often have several residences and many are foreign buyers - has been yet another driver of major metro agglomeration and higher housing prices, particularly where there are strong land use regulations.

Family sizes have shrunk and reduced fertility rates are leading towards destabilizing demographic implosions in Europe, Japan, and China – and the U.S. trend is moving in the same direction.vi As nations seek to improve fertility rates, one of the greatest challenges is a shortage of family-friendly housing with sufficient space. If that space is not affordable, then people do the next best alternative: shrink their family size. Whereas families used to be comfortable with multiple children per bedroom, the modern standard is one bedroom for every child – not to mention the “home office” for virtual work by the dual-income parents. With the large suburban house both regulatory out-of-favor and unaffordable in some metropolitan areas, families are forced to shrink to live in expensive density, or pay very high prices and rents for what used to be considered standard middle class homes.

The planning community generally has few answers to these dilemmas, but in practice the steps they often advocate may actually be making it worse. A dominant tenet of Smart Growth actually seeks to restrict suburban development and encourage density to contain urban expansion. Draconian regulations – and ever higher costs - are piled on any new developments. On the other side, pressure from NIMBY homeowners often limits development of any kind – including high-density. In some areas, exclusionary zoning – such as tight restrictions on multi-family housing – is used to prevent minority, disadvantaged, or lower-income populations from moving in nearby.

All in all, the net effect is a suffocating restriction on new housing supply even as demand increases, leading to skyrocketing home prices. This has the effect of making affluent NIMBY homeowners, who are disproportionately white and older, quite happy since their homes prices, sans new competition, are almost certain to increase. But the system works like a “Robin Hood in reverse” for younger, middle and working class families that lose out. This is a major driver of inequality - in fact, recent analysis indicates that homeownership completely accounts for the rise in inequality in recent decades. xii Planners have to take a hard look in the mirror and face an uncomfortable truth: whether they have been conscious of it or not, they have been direct accomplices in the rise of inequality and the decline of the middle and working class.

Download the full report (pdf) from the Center for Opportunity Urbanism.

Tory Gattis is a Founding Senior Fellow with the Center for Opportunity Urbanism, and co-authored the original Opportunity Urbanism studies. Tory writes the popular Houston Strategies blog and its twin blog at the Houston Chronicle, Opportunity Urbanist, where he discusses strategies for making Houston a better city. He is the founder of Coached Schooling, a startup to create a high-tech network of affordable private schools ($10/day) combining the best elements of eLearning, home and traditional schooling to reinvent the one-room schoolhouse for the 21st century. Tory is a McKinsey consulting alum, TEDx speaker, and holds both an MBA and BSEE from Rice University.

The Incompetence Hypothesis to Explain the Great Recession

Thu, 07/30/2015 - 22:38

Seeking an understanding of the Great Recession, I am finding that most of the 2008 financial crisis and its aftermath can be explained by incompetence. In the final weeks of writing a book on the systemic failure in US capital markets, I had to re-read the Securities and Exchange Commission (SEC) Inspector General’s 2009 report on their failure to stop Bernard Madoff despite having received credible evidence of a Ponzi scheme. The inspector concluded that it did not have anything to do with the fact that an SEC assistant director was dating (and later married) Madoff’s niece; or that Madoff had held a Board seats at important financial regulators.* Despite eight substantive complaints and two academic journal research reports over 16.5 years about problems with Madoff’s investments, Madoff was never caught. In the end he turned himself in, admitting to a $64 billion Ponzi scheme. The inspector’s conclusion: incompetence.

In economics, ‘interest’ – whether it be self-interest or interest group pressure – is the ‘safe’ explanation for outcomes that are detrimental to the public. If interest group pressure (or even populism) is behind a bad policy decision, then it is not a ‘mistake.’ Rather, it is an intentional, rational decision as described by Chicago School economist and Nobel laureate George Stigler. However, if a policy decision is the result of bad judgment, then Stigler cannot explain it. Brazilian economist Luiz Carlos Bresser-Pereira suggests that the relevant variable in this case is incompetence. Incompetence is an independent explanatory variable; it cannot be explained in rational or historical terms.

Incompetence arises from three sources: 1) ignorance, 2) arrogance, or 3) fear. Policy advisors and regulators may be guilty of applying theories second-hand but with great authority and self confidence. They may be ignorant of the complexities of economic theory and they may apply abstract economic theories inappropriately to specific policy problems. For example, they allowed banks to engage in a wide range of investments under the financial theory of ‘diversification.’ That theory works for portfolios but not for businesses, which need to specialize to realize the gains from their comparative advantage. Financially derived theories like this were applied automatically, transformed into a series of clichés.

‘Diversification’ in a portfolio of financial investments lets you increase the returns while reducing the risk. But in business it means ‘splintering’ which destroys performance capacity and increases risk. Financial institutions are tools to be used in furthering the efforts of the broad economy: the more specialized financial institutions become, the greater their performance capacity. Increased productivity from specialization comes with better quality as businesses become more adept at their specific products and services. The differences in natural aptitudes and abilities produce economic benefits when tasks are matched to capabilities. The more experience a worker has at performing a task, they more efficient they become in doing the work. As management guru Peter Drucker wrote: ‘Organizations can only do damage to themselves and to society if they tackle tasks that are beyond their specialized competence.’

An example of an economic theory applied arrogantly is Washington’s constant fawning over ‘free market solutions’ when the rules, regulations and court decisions covering capital markets fill the bookshelves of law offices around the world. There is no such thing as a free market – no economist of value believes that the perfectly competitive market exists. The Wall Street Bailout is a good example of the third source of incompetence – fear. Consider this description of the exchange between Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and the senior legislators from the House and Senate on Thursday, September 18, 2008:

Sen. CHRISTOPHER DODD: Sitting in that room with Hank Paulson saying to us in very measured tones, no hyperbole, no excessive adjectives, that, "Unless you act, the financial system of this country and the world will melt down in a matter of days. "

JOE NOCERA: Bernanke said, "If we don't do this tomorrow, we won't have an economy on Monday."

Sen. CHRISTOPHER DODD: There was literally a pause in that room where the oxygen left.

Inside the Meltdown, Frontline February 17, 2009, WGBH Educational Foundation, Boston. 

Regardless of the source of the incompetence, the visible results are 1) failure to take correct strategic policy decisions, and 2) failure to adopt well-designed reforms.

Policy decisions are the day-to-day management decisions that usually produce immediate results. In monetary policy, for example, these would be interest rate decisions. Interest rate policy decisions need to be made at the right time and to move rates in the right direction.

Reforms produce medium-term outcomes that may or may not require legislative approval. The Dodd-Frank Act, which was supposed to reform Wall Street and protect Main Street, in reality created very little change but suggested that financial regulators reform their own rules. Poor reforms may be the result of incompetent designs and not just pressure from interest groups, although this also happens.

Bresser-Pereira’s analysis offers one more alternative explanation for the cause of bad policy and reforms. Between interest and incompetence lies ‘confidence building.’ It is simply doing what is expected in an effort to gain the confidence of financial supporters. If we substitute “Goldman Sachs” for “United States” and “Wall Street” for “developed countries” in this quote from Bresser-Pereira, then his description of ‘confidence building’ is as true of Washington, D.C. as it is of Brazil:

‘They do not limit themselves to seeing the United States and, more broadly, the developed countries, as richer and more powerful nations, whose political institutions and scientific and technological development should be imitated. No, they see the elites in the developed countries both as the source of truth and as natural leaders to be followed. This subordinate internationalism ideology, already called ‘colonial inferiority complex’ and entreguismo**, is as detrimental to a country as old-time nationalism. What I am singling out as a major source of incompetent macroeconomic policies is the uncritical adoption of developed countries’ recommendations.’

If we say that bad policy decisions are always rational, motivated by interest, then we must conclude that policy-makers are ‘dishonest, protecting their own interest or those of their constituencies rather than the public interest’ (Bresser-Pereira).  If this view were always true, then the world would look more like communist Russia in 1980 than the way it does today. How would entrepreneurs and consumers have financed not only the invention but the proliferation of microchips, cell phones, and personal computers that have made the world safer and easier to navigate; how would they have discovered and made widely available artificial hearts, HIV medications and targeted cancer therapies? Since 1981, the number of poor people in the world declined for the first time in history, by 375 million. Global life expectancy was 68 in 2014, up from 61 in 1980; infant mortality is down to 49.4 per 1000 live births in 2014 from 80 in 1980. Yet as a result of the havoc wrecked upon the global economy in 2008 by incompetent regulators, policy makers and bankers, global unemployment grew from 20 to 50 million while falling incomes combined with rising food prices to raise the number of undernourished people in the world by 11%.

A solution, from this perspective, lies in cleaning house of the incompetent staff from Washington to Wall Street and improving recruiting methods to build competence for the future.

* Madoff has a seat on the Board of the International Securities Clearing Corporation, one of the predecessor organizations to the Depository Trust and Clearing Corporation, the world’s largest post-trade processing center. Madoff was also Chairman of the NASDAQ, and had seats on the Boards at the National Association of Securities Dealers (now the Financial Industry Regulatory Authority – the same organization that failed to act on a referral letter from the SEC to stop R. Allen Stanford’s Ponzi scheme.

**Brazilian Portguese roughly translated as ‘appeasement’ or ‘submission.’

For more information:

Luiz Carlos Bresser-Pereira, Latin America’s quasi-stagnation, in A Post Keynesian Perspective on 21st Century Economic Problems, Elgar, UK. http://www.bresserpereira.org.br/

The World Factbook 2013-14. Washington, DC: Central Intelligence Agency, 2013.

https://www.cia.gov/library/publications/the-world-factbook/index.html

Susanne Trimbath, Ph.D. is CEO and Chief Economist of STP Advisory Services. Dr. Trimbath’s credits include appearances on national television and radio programs and the Emmy® Award nominated Bloomberg report Phantom Shares. She appears in four documentaries on the financial crisis, including Stock Shock: the Rise of Sirius XM and Collapse of Wall Street Ethicsand the newly released Wall Street Conspiracy. Dr. Trimbath was formerly Senior Research Economist at the Milken Institute. She served as Senior Advisor on United States Agency for International Development capital markets projects in Russia, Romania and Ukraine. Dr. Trimbath teaches graduate and undergraduate finance and economics.

The Evolving Urban Form: Jing-Jin-Ji (Dispersing Beijing)

Wed, 07/29/2015 - 22:38

China's cities continue to add population at a rapid rate, despite a significant slowdown in population growth. Although overall population is expected to peak around 2030, the urban population will continue growing until after 2050. China’s cities will be adding more than 250 million new residents in the next quarter century, according to United Nations projections. China's cities will add nearly as many people as live in Indonesia, the world's fourth largest country, more than live in Brazil and 10 times as many as live in Australia.

Two of China's six megacities (urban areas with more than 10 million population) are nearly adjacent, within 90 miles (150 kilometers) of one another. The urban areas of Beijing and Tianjin have a combined population of 35 million and are among the fastest growing in the world. This is an increase of nearly 60% from the 2000 population of 21 million.

The Jing-Jin-Ji Megalopolis

The faster growing of the two, Beijing, is the national capital. Beijing is encircled by five freeway standard ring roads or beltways. These are numbered 2 through 6, with the first ring road being surrounding the Forbidden City. Its population is served by a number of additional expressways and the world's longest subway. For some time there has been discussion of integrating the metropolitan areas of a much larger region. A principal purpose is dispersion --- to redistribute activities, such as government administration and manufacturing away from Beijing's congested core to peripheral locations.

Over the past year, there have been various announcements describing the process. The  megalopolis would be called Jing-Jin-Ji, and would be composed of Beijing, Tianjin and Hebei province. An alternative name would be the "Capital Economic Circle." The name, Jing-Jin-Ji is constructed of the last syllables of "Beijing" and "Tianjin," along with "ji," which is the pronunciation of the one character Mandarin abbreviation for Hebei.

The Need for Dispersal

Beijing has just become too dense and too crowded. Traffic congestion already is among the worst in the world. According to The Sydney Morning Herald, the situation has become so bad that officials intended to limit the population of the Beijing municipality (province) to 23 million, only slightly above the population that is nearing 22 million. They also intend to reduce the population of central districts by 15%.

Important steps are already being taken. Construction has begun on a new facility to house Beijing municipality functions in the suburban district ("qu") of Tongzhou. This subsidiary center is a 40 minute drive from the city center. Tongzhou borders the municipality of Tianjin and, according to the Beijing Municipality government is itself growing about one-quarter faster than the Beijing municipality itself.

There are also plans to move many of the manufacturing facilities that have located in Beijing to the other jurisdictions. The extent of the manufacturing dominance of Beijing is illustrated by the much larger "floating population," of Beijing, which consists of migrants from other parts of the country who lack local residence permission (hukou). According to data in the China Yearbook 2014, Beijing has more than double the ratio to its population of migrant workers as Tianjin and nearly 10 times the ratio of Hebei, which has more than two-thirds of the megalopolis population.

One large automobile manufacturer has already completed moving out of Beijing to Huanghua, a county level city in the Hebei municipality of Cangzhou, which borders Tianjin to the south.

Geography of Jing-Jin-Ji

The jurisdictions comprising Jing-Jin-Ji have approximately 110 million residents. The gross land area is approximately 216,000 square kilometers (83,000 square miles), approximately the land area of Romania or the US state of Idaho. No one, however, should imagine a Phoenix or Portland type sprawl of such a magnitude. As is indicated the Table, the overall population density of Jing-Jin-Ji is only 500 residents per square kilometer (1,300 per square mile).  The largest urban areas comprise only 3.5% of the land area, yet contain approximately 40% of the population. Despite the massive urbanization of Beijing and Tianjin, and the other large urban areas, Jing-Jin-Ji has a population that is 40% rural.





Components of Jing-Jin-Ji Jurisdiction Total Population (2013) Density (per KM2) Principal Urban Area Population (2015) Urban Density (per KM2) Beijing 21.2      1,300 20.2      5,100 Tianjin 14.7      1,200 10.9      5,400 Jing-Jin-Ji Core 35.9      1,300 31.1      5,200 Baoding 10.2         500 1.3      5,900 Langfang 4.4         700 0.5      3,800 Canzhou 7.2         500 0.5      3,800 Tangshan 7.5         600 2.4      8,700 Zhangzhiakow 4.6         100 1.2      9,200 Qinhuangdao 2.9         400 1.0      6,500 Chengde 3.7         100 0.1      4,300 Inner Jing-Jin-Ji 40.5         300 7.0      6,600 Shijiazhuang 10.4         700 3.4    17,000 Handan 9.2         800 2.0    11,900 Xingtai 7.1         600 0.7      6,000 Henshui 4.3         500 0.4    11,800 Outer Jing-Jin-Ji 31.0         600 6.5    12,500 Jng-Jin-Ji 109.2         500 44.6      5,900 Population in millions. Jurisdition population from government sources Urban area population from Demographia World Urban Areas

 

The Nearby Urban Areas

In addition to Tianjin, other urban areas are expected to gain functions, jobs and residents from Beijing. Baoding, an urban area to the southwest of Beijing is expected to gain hospitals, educational institutions and government offices. Baoding has a population of 1.3 million and is a former capital Hebei, but was displaced by Shijiazhuang in 1967. Shijiazhuang, with a population of 3,4 million, is located  in the outer ring of Jing-Jin-Ji.

Langfang is unusual in being a discontinuous municipality, part of which is an enclave surrounded by Beijing and Tianjin (as is Hebei province), and the other part located to the south of both jurisdictions. Langfang is in the path of growth of both Beijing and Tianjin. The urban area of Langfang is still relatively small, with 500,000 residents. The urbanization along the Jingtang Expressway through Langfang nearly reaches the development of Beijing to the northwest and Tianjin to the southeast.

Tangshan is directly north of Tianjin and east of Beijing. Tangshan seems likely to benefit from the dispersion of functions, jobs and residences by virtue of its proximity to both of the megacities. A new high speed rail line has just been announced that would connect Tangshan with Beijing in 30 minutes. Tangshan gained international notoriety in 1976 when it was struck by a devastating earthquake (photo here) that virtually flattened the city and killed at least 240,000 people (estimates of the earthquake death toll reach 800,000). Tangshan has been completely rebuilt, with impressive modern architecture (photograph above, taken from an earthquake memorial), but not appreciated by all. One architectural critic has insensitively bloviated that the new architecture "has been more destructive to Tangshan’s urban history than the great earthquake." Today, Tangshan is an urban area of 2.4 million.

Qinhuangdao, an urban area of 1 million, lies just beyond (northeast of) Tangshan on the way to Shenyang and China's Dongbei (Manchuria). Qinhuangdao could profit from its well placed seaport.

Transportation Improvements

Important transportation improvements have been announced. There are plans to expand Beijing's subway, which already has the highest ridership in the world and is second longest (after Shanghai). New suburban train lines will be built and new high speed rail lines will connect the cities within Jing-Jin-Ji that are farther apart. There will be considerable expansion of the already comprehensive expressway system, including Beijing's seventh ring road, which is to be fully completed by 2017. Already, approximately 400 kilometers have been completed, much of it through the mountains to the west of Beijing.

Decentralizing Beijing

Jing-Jin-Ji would be China's third megalopolis, joining with the Yangtze Delta (centered on Shanghai) and Pearl River Delta (centered on an axis from Guangzhou to Shenzhen). But Jing-Jin-Ji is substantially different and not so obvious a candidate for integration. Jing-jin-ji's urban areas are located farther apart than in the Pearl or the Yangtze. Yet its concentration of development is greater, especially in the Beijing core, which provides much of the justification for decentralization.

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

He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris. 

Photograph: Tangshan's modern architecture, from an earthquake memorial (by author)

Latino Politicians Putting Climate Change Ahead of Constituents

Tue, 07/28/2015 - 22:28

Racial and economic inequality may be key issues facing America today, but the steps often pushed by progressives, including minority politicians, seem more likely to exacerbate these divisions than repair them. In a broad arc of policies affecting everything from housing to employment, the agenda being adopted serves to stunt upward mobility, self-sufficiency and property ownership.

This great betrayal has many causes, but perhaps the largest one has been the abandonment of broad-based economic growth traditionally embraced by Democrats. Instead, they have opted for a policy agenda that stresses environmental puritanism and notions of racial redress, financed in large part by the windfall profits of Silicon Valley and California’s highly taxed upper-middle class.

Nowhere in California is this agenda more clearly manifested than with state Senate President pro Tem Kevin de León, who represents impoverished East Los Angeles. De León has proclaimed addressing “climate change” as the Senate’s “top priority” and is calling for, among other things, disinvestment from fossil fuel companies. Rarely considered seem to be the actual impacts of these policies on the daily lives of millions of working- and middle-class Californians.

War on Blue Collar Jobs

Despite vastly exaggerated claims about the prospects for so-called green jobs since the passage of Assembly Bill 32, the landmark 2006 climate change law, California is adopting policies detrimental to growing the higher-wage blue-collar sector. Green policies favoring expensive alternative energy have fostered energy prices that, for industrial users, are an estimated 57 percent higher than the national average. No surprise, then, that California has produced barely half the rate of new manufacturing jobs as the rest of the nation.

Read the entire piece at the Orange County Register.

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

By Neon Tommy (Senator Kevin De Leon) [CC BY-SA 2.0], via Wikimedia Commons

The Geography of Ideology Ultra R, Ultra D and 50 to 50

Mon, 07/27/2015 - 22:38

Recently I grouped all US counties into several categories, from True Believers R and D, R and D leaning groups, and also those areas that are more equally divided. In anticipating the 2016 election, I take here a brief look at a small number of counties (2012 data) that are extreme cases of R voting (over 90%, 28 counties), of D voting (over 80%, 26 counties), and of 50:50 voting (39 counties from 49.7 to 50.3 D vote). These are also shown on the maps. Note that the D counties in blue don’t look impressive, as they are small in area, but big in votes. How do these three sets differ in geography and in character?

Set 1: Ultra Republican

The extreme R counties are an amazing set. Ten of the 28 (8 in Utah, 2 in Idaho) are dominantly Mormon. The non-Mormon counties include 17 scattered across the high plains from Montana, 1, Nebraska, 3, Kansas, 1, Oklahoma 1, and 11 in Texas, with one outlier in eastern Kentucky. Only one is east of the 100th Meridian, famous for dividing east and west in the US. All these counties are basically conservative on social issues.

Overall densities are far lower and rural shares far higher than for the other sets. They are overwhelmingly white (92%) and less than 1% black on average. They have the highest shares of husband-wife families, with and without children, and the lowest shares of single parent families, roommates and singles. For example the black population is essentially 0 in half the counties. Husband-wife and children households ae exceptionally high in 5 counties: Franklin, ID; and Duchesne, Morgan, Sevier, and Uintah Utah—all Mormon. The roommate share is under 2 percent in 7 counties, compared to a national average of almost 5.

Male labor force participation averages a high 73% and unemployment a low 3.8%. As expected for these locations, farming is a frequent occupation in these counties, exceeding 10% in 8 counties, as in MT, NE, and TX. Finally church attendance is far higher than in the other sets, averaging 71% compared to 48% in the set 2 counties.  

The Mormon counties exhibit some variation in size and settlement. Five are all rural, four are rural and small town (micropolitan), but one is a small metropolis, Utah county (Provo, with Brigham Young University), perhaps the heart of Mormon orthodoxy. The 18 non-Mormon counties include 13 small rural counties and 5 counties (all in Texas) with small cities.

Since the total vote in these counties was only 234,000 (76,000 without Utah county!) and 92% R, it is probably not worth a Democrat candidate spending much effort in these locales. Yet it is possible that without the “negativity” of race, an Anglo woman at the top of Democratic ticket should do better in conservative white settings. 

Set 2: Ultra Democratic   

The extreme D counties are similarly an amazing set, just in different dimensions. The dominant characteristic is the very high minority share – in all 26 counties – and correlated with that high shares of single parent families, unemployment, and general and especially child poverty. The minority share averages 81%, with 43% black. Thirteen have high black shares: mostly southern and rural, in AL, GA, MS, but also Washington, DC, Baltimore, and Prince George, MD. Four have high Hispanic shares: TX, NM, three Native American (ND, SD, WI), and six are more racially mixed: San Francisco and Alameda, CA, Philadelphia, and 4 New York city boroughs.

The second distinguishing feature is dense urban character and sheer size, but only for a subset of 12 counties, as 9 are rural or small town minority counties. The large urban counties include San Francisco, Alameda, Washington DC, Orleans, Prince George, Baltimore, St. Louis, Bronx, Kings, New York, Queens, and Philadelphia. These set 2 metropolitan counties are mainly coastal (plus St. Louis and Orleans),   while rural minority counties are mainly in the northern plains, (Native American) or the southern “Black belt”.

The small city minority counties are Macon, AL (Tuskegee), Hancock, GA, Taos, NM, Starr and  Zavala, TX,  Claiborne, Holmes and Jefferson, MS, and Shannon, SD, leaving only 3 totally rural counties, Greene, AL, Sioux, ND and Menominee, WI. 

These highest D counties also have the highest share of people 18-44, of singles and of roommate households, and the lowest in families, as well as being lowest in labor force participation and church attendance but highest in poverty and unemployment.

Even though highly Democratic, with a 2012 D vote of 4,000,000 to 700,000 R, the total vote is so large that it may be worth a fair Republican campaign effort simply to reduce the giant D margin, which was key to the 2008 and 2012 D wins. Without the dominance of race, Republicans might do better, if voter turnout of minorities falls.

Set 3: Balanced 50-50 counties

The set 3 counties with a 50:50 D and R split, are far more diverse and complex, as we might expect, and suggest how difficult they can be for candidates to create convincing messages!  These counties are intermediate in density and are quite high in shares of micropolitan territory, that is, independent small city counties.

Of the 39 counties, 6 are entirely rural (GA, IA, MS and WI (3)), while one (Harris-Houston) is a giant metropolitan core county with almost half the total vote of these set 3  counties. Five are suburban to large metro areas – in GA, MD, NJ, PA, and WA.  Five are small metropolitan areas, Lincoln, NE (Lancaster), Florence, SC, State College (Centre), PA, Montgomery, VA (Blacksburg), and Canton (Stark), OH. Thus 23 are small city micropolitan, with counties in AR, CA, CO, IL, IA, MD, MI, MN, MS, NC, OH, OR, SC, WA, and WI.

While the set 1 counties are all but one in the western half of the country, and the set 2 counties, coastal urban or southern rural-small town, the set 3 counties are most prevalent in the upper Midwest: IL 2, IA 5, MN 3, WI 5, MI 1, OH 1, and NE 1, almost half the counties, with another ten in the south, AR 1, MS 2, GA 2, SC 2, FL 1, NC 1, and VA, 1. The single largest cluster of these 50:50 counties is in northwestern Wisconsin, with an additional county across the state line in Minnesota.

In social and economic characteristics these counties tend to be intermediate between the set 1 and set 2 counties, for example averaging 22% minority (closer to set 1 than to set 2), but fairly high in a few counties in the south. They tend to be a little closer to the set 2 D set on the social dimension: shares of roommates, singles, and in religiosity, but closer to the set 1 R set in economic, income and job variables, as in higher labor force participation and lower poverty rates. 

Clearly these set 3 counties represent the impressive diversity of the more balanced areas of American electorate, where campaigning will be especially critical.




Table  1 Differences between D, R and 50:50 Sets Averages Variable Set 1 R Set 2 D Set 3 50:50   Age 18-44 30 39 33   White 92 33 82   Black 0.7 43 11   Minority 16 81 22   HW w children 28 11 20   Single parent 10 29 16   Singles 22 30 28   Urbanized area 3 54 21   UC (small city) 18 11 26   Rural 82 32 53   Male Labor Force Participation 73 62 69   Unemploy 3.8 12.2 7.3   Services 15 22 17   Farm 7 1 1.7   Churches/100 4 1.5 1.8   Poor 13 26 14.5   Child Poor 17 36 18  

 

Conclusion

These counties are but a small sample of the 3,180 counties. Yet they represent the extreme drivers of a well-publicized American polarization, but also where we see a non-polarized America. The regional concentrations of the three helps illuminate the amazing differences in American cultural and political geography.

Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist).

In Comparing Metro Areas, the Devil is in the Details

Sat, 07/25/2015 - 22:38

Frequently I see examples of metro areas comparing themselves to other, more successful metro areas.  Metro area movers and shakers take a deep dive into the intricacies of what makes a "good" place tick, and try to implement the takeaways in their metro.  This is a reasonable action, but I believe it misses the point.  There is more to examine by taking a deep dive within your own metro than looking at another.

Surely there are physical scale, density and economic differences between metro areas that are worth exploring.  But those differences can be overstated.  Milwaukee, for example, will never be the Silicon Valley, for a host of reasons. Just as importantly, the reverse is true. 

When I see that, say, Kansas City wants to do what Portland's doing, or Grand Rapids wants to do what Nashville's doing (totally fabricated examples, I might add), I cringe for three reasons -- 1) distinctiveness, not homogeneity, should be the hallmark of cities and metro areas; 2) metro areas are already far more alike than different, in terms of their built environment and even their economies; and 3) there is more inequality that is evident within metro areas than between them.

Why is it that, when looking at the marketplace of metros, they try to emulate successes rather than striking out for distinctiveness?  This generally stands in opposition to what happens in business, where firms seek to deliver a product that is of better quality, or less expensive, or offers more options, in order to stand out in the marketplace. 

Unfortunately we end up having metro areas chasing advantages they will never be able to attain.  The Bay Area's combination of entrepreneurship and top-tier education, leading to the R&D work that supports Silicon Valley, is only tangentially replicable in a handful of metros nationwide.  The low-tax, low-cost advantage that many interior metro areas enjoy over their coastal brethren is not something that can be done in the high-tax, high-cost coastal metros.

Addressing the third point will lead to greater city and metro growth than trying to replicate what any other metro area purports to be doing at a metro scale.

Let me offer one example.  Below you'll see a table that shows the top 25 metro areas from 2010, organized by median household income.  The data is from the Census Bureau's American Community Survey in 2011 (although there is more recent data available, the reason for using this dataset will become clearer below):




Median household income for the top 25 metro areas falls within a fairly narrow range.  Together, the metros have a median of medians, if you will, of $57,783, with a standard deviation of about $7,300.  The Tampa/St. Petersburg metro area comes in at the lowest ($46,890), while San Francisco/Oakland comes in as the highest ($76,911). 

At the metro level, there are easy answers to explain why some metro areas are where they are -- the supercharged, tech-driven or eds-and-meds economies lift San Francisco and Boston, while the presence of larger numbers of retirees in some Sun Belt metros, and deindustrialization that saw jobs move away, depresses incomes in Tampa, Miami, Pittsburgh or Detroit. 

It's data like this that reinforces the simple tropes that drive our understanding of metro areas.

But what if we look within a metro area?

I have a dataset that has 2011 American Community Survey data for 283 municipalities within the Chicago metro area, as well as the 55 zip codes that comprise the city of Chicago.  This data covers about 8.5 million of the 9.5 million within the broader metro area, excluding a handful of outlying exurban counties in Illinois as well as a few counties in Indiana and Wisconsin.  By looking at finer grained data that examines municipalities, and breaks down the behemoth that is the region's core city of Chicago, we can see how there are greater differences within the a metro area than between them.

Median household income falls within a far broader range within the Chicago area than in the top 25 MSA dataset.  In 2011, the median of median household incomes for the 338 places identified was $68,325, which is completely understandable when one considers higher income suburban municipalities being over-represented in the dataset.  The range, however, is what stands out -- the highest median household income was in North Shore Kenilworth ($242,188) while the lowest was in Chicago's 60621 zip code, which corresponds with the city's Englewood neighborhood ($19,692).  What's crazy, though, is that the standard deviation for median household income in the Chicago area in 2011 ($32,700) is nearly double the actual number for the 60621 zip code. 

There were 68 municipalities and city zip codes that had median incomes below $50,000 in 2011; there were 54 municipalities and city zip codes above $100,000.  One group presently drives metro area economic policymaking, while another remains largely ignored.

There is greater variation within metros than there is between them.  This idea should inform our urban policymaking.  (Note: I use Chicago only because I have the data for it.  I imagine other metros, particularly large ones, will have similarly large ranges; the range likely decreases as metros get smaller, but remains to some extent.)

For decades economic developers have relied on two economic strategies to improve conditions that influence data points like median household income -- 1) attract more skilled businesses and workers, and 2) work like hell to retain skilled businesses and workers. The first strategy works in metros that have relied on migration for growth; the second works almost nowhere.

As I see it, there is an opportunity for dramatic metro area improvement by those that focus on talent development, rather than talent attraction or retention.  When metro areas focus on the successes of our nation's metro area "winners", and try to implement a talent attraction/retention strategy, they relegate themselves to the whims of a select group who, for a variety of reasons, can choose to be anywhere.  Developing talent -- investing in early, secondary and higher education, forging strong links between higher education and the business community, supporting entrepreneurship and investment -- can pay dividends.  At some point, metros that become proficient at talent development will find that that activity evolves into talent attraction, creating the vibrant economic environment that all metros desire.

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.

Lead photo: View of the Life Sciences Complex, UB School of Medicine at the University at Buffalo, with downtown Buffalo, NY in the background.  Panoramas such as this can make any place look fantastic, but the devil is in the details.  Source: medicine.buffalo.edu.

The Cities Leading A U.S. Manufacturing Revival

Thu, 07/23/2015 - 22:38

Manufacturing may no longer drive the U.S. economy, but industrial growth remains a powerful force in many regions of the country. Industrial employment has surged over the past five years, with the sector adding some 855,000 new jobs, a 7.5% expansion.

Several factors are driving this trend, including rising wages in China, the energy boom and a growing need to respond more quickly to local customer demand and the changing marketplace.

To generate our rankings of the best places for manufacturing jobs, we evaluated the 373 metropolitan statistical areas for which the U.S. Bureau of Labor Statistics has complete data over the past decade. Our rankings factor in manufacturing employment growth over the long term (2003-14), medium term (2009-14) and the last two years, as well as momentum.

The Rust Belt Is Back

No part of America suffered more from the de-industrialization of the past 40 years than the Great Lakes states. Yet as manufacturing  has come back, particularly the auto industry, many of the region’s economies have begun to resurge. Despite all the fashionable chatter over the question of whether we’ve reached “peak car,” the auto industry has enjoyed six straight years of increased sales, driven by low interest rates, the need to replace older cars and rising consumer confidence.

The epicenter of this trend is exactly where the industrial decline hit hardest: Michigan, which sweeps the top three places on our list of the big cities generating the most new manufacturing jobs. The state has now recovered about 40% of the manufacturing jobs it lost during the recession. The Detroit-Dearborn-Livonia metropolitan area ranks No. 1 among the country’s 70 largest metropolitan areas for manufacturing employment growth over the time period for our study. Since 2009 the Detroit area has seen a remarkable 31.3% rebound to 89,300 industrial jobs, including a 9.8% expansion last year. This growth has helped begin to reverse a long-standing decline in employment overall—still down 12.3% since 2003—with overall employment up 5.9% since 2009.

Detroit’s recovery is not just a matter of inertia, but reflects a unique combination of circumstances. The area is home not only to many skilled workers, but boasts the second largest concentration of engineers among the country’s 85 largest metro areas, behind only Silicon Valley.

In second place is Warren-Troy-Farmington, in the Detroit suburbs, where manufacturing employment is up 38.8% since 2009. In third place is Grand Rapids-Wyoming, a longtime furniture-making hub where an uncommonly high share of jobs is in manufacturing, one in five; the metro area has seen industrial employment rebound 27.9% since 2009.

Another Midwest hotspot has been Toledo, Ohio, only 60 miles from Detroit, which ranks first among the mid-sized cities we evaluated, with a 17.4% jump in industrial employment since 2009.

Southern Cooking

The other big cluster of industrial hotspots is in the Southeast. Manufacturing has been heading to the region for several decades, recently primed by  major investments from German and Japanese companies, among others. A prime example is Nashville-Davidson-Murfreesboro, Tenn., No. 4 on our list, where manufacturing employment has jumped 23.9% since 2009. Japan’s Nissan and Bridgestone have establishing manufacturing plants in Central Tennessee, which has also created opportunities for small domestic parts companies in the region. Nissan also relocated its U.S. headquarters to the area in 2006 from Southern California. And domestic auto makers are have become major players in the Southeast—Ford employs some 14,000 in the Louisville, Ky., area, which checks in at No. 7 among our largest MSAs. The South, notes a recent Brookings study, now has the highest number of workers in the country employed in “advanced industries,” which tend to be the higher paying, more technically oriented parts of the factory economy.

Other areas that have become primary places for new industrial investment include such Deep South locations as Savannah, Ga., No. 2 on our mid-sized list, as well as No. 8 Columbia, S.C., a major center for German car companies, and No. 10 Charleston, S.C., which has benefited from the expansion of Boeing and aerospace suppliers there. These areas missed much of the  industrial revolution a century ago but are playing an impressive game of catch-up. Each has seen their industrial workforces grow over 20% since 2009. Other southern stars include Cape Coral-Ft Meyers, Fla., No. 4 on our mid-sized city list. Our small cities list also turns up Southern outperformers:  No. 2 Naples-Immokalee-Marco Island and No. 3 Sebastian-Vero-Beach, Fla.

The Energy Belt

Falling oil prices may be causing the oil and gas industry to rein in exploration and drilling budgets, but it provides an enormous boon for downstream industries such as refining and petrochemicals. This could keep industrial job growth going in two of our top MSAs that are in the oil patch.  Oklahoma City, where manufacturing job growth has soared 23.1% since 2009, ranks sixth, and  Houston, where the industrial workforce has expanded 19.8% over the same time  span, ranks ninth. Houston now is home to 257,300 manufacturing jobs, the third largest concentration in the country.

As in Detroit, Houston’s industrial rise is powered by more than by brawn. The area ranks sixth among the nation’s major metros in number of engineers per capita. If the Bay Area is master of the digital economy, Houston ranks as the technological leader of the material one; it is the capital for the energy-driven revival of U.S. industry.

Smaller energy-rich areas that have also experienced rapid industrial growth. These include two Louisiana metro areas, No. 3 Baton Rouge and No. 7 Lafayette, third and seventh, respectively on our mid-sized metro area list, as well as Midland, Texas, fifth on our small areas list. Perhaps most surprising, given its location in anti-carbon California, has been the steady growth in Bakersfield,  which stands fifth on the mid-sized list and is home to some of the nation’s largest oil fields. With 20.3% industrial growth since 2009, the area, sometimes known as “little Texas,” is the only metro area in the Golden State to make it to the top 10 in either the large or mid-sized list.

A Shift To Smaller Cities

Once American industry was identified predominately with big cities: New York in 1950, according to economic historian Fernand Braudel, had the largest industrial economy in the world, employing a million workers, mostly at small manufacturers. In the 1970s and 1980s, the industrial zeitgeist moved increasingly to Los Angeles, which vied with Chicago as the largest center for factory jobs.

Today this pattern is changing dramatically. Besides the move toward the south and energy hotbeds, industry has been expanding in smaller cities as well as suburban areas beyond the core cities, says University of Washington geographer Richard Morrill. This is not unique to the United States; Germany, which has perhaps the most admired industrial sector in the world, also has dispersed its industrial base, largely to smaller cities.

The reasons for this shift vary, from strict environmental laws in Northern cities, as well as stronger unions, and cheaper land elsewhere.

For example, although the New York state capital Albany ranks fifth on our big metro area list, driven in large part by semiconductor manufacturing, New York City stands at a weak 62nd out of 70. Since 2009, New York has lost 3.3% of its manufacturing jobs; the city’s industrial workforce now stands at a paltry 74,700, a dramatic decline from some 400,000 as recently as the early 1980s.

Yet with its powerful array of media, business service and hospitality businesses, New York appears to be able to withstand deindustrialization more than the two largest industrial MSAs, Chicago and Los Angeles. The one-time “city of big shoulders“ and its environs has also lost industrial jobs since 2009, down to 278,000 from 286,500 in 2011, and a far cry from the 461,600 it had in 2000.

The decline has been, if anything, more rapid in 59th place Los Angeles. This process began with the loss of more than 90,000 aerospace jobs since the end of the Cold War. Los Angeles’ industrial job count stands at 363,900 — still the largest in the nations but down sharply from 900,000 just a decade ago.

Does Industrial Growth Still Matter?

Clearly deindustrialization has a bigger impact in some areas than others. Cities like San Francisco and New York appear better positioned for the post-industrial transition than Chicago or Los Angeles, where manufacturing lingered longer and the elite service or tech industries are not nearly as predominant. Yet the impact of industrial decline — or resurgence — may be more important in the future than many suppose.

This is particularly critical for blue-collar workers, for whom industrial jobs tend to pay more. Welders and other skilled workers are increasingly in short supply, particularly as baby boomers begin to leave the workforce. Many of the cities which did well in our rankings are among the best in building new training partnerships with their industrial employers—these are skills that are decreasingly taught in the modern secondary and college curricula. In some places, vocational skills have recently been commanding higher post-graduation salaries than traditional college degrees.

Industrial growth also provides an opportunity for emerging cities, particularly in the South and the energy belt, to add to their employment base and, in some cases, their connections with international markets. Over-dependence on manufacturing, as the Rust Belt experience showed, can be dangerous, and the need to diversify employmentremains critical. Threats to future growth include the strong dollar, the decline in the energy sector and economic weakness abroad reducing exports.

But factory jobs remain an important asset for many regions. They may not be the central force they once were, but these jobs seem likely to continue making a big difference in the fates of many economies, both big and small.

This piece originally appeared at Forbes.

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

Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

Auto manufacturing photo by BigStockPhoto.com.

Blaming Foreigners for Unaffordable Housing

Thu, 07/23/2015 - 06:25

In a number of Western world cities, there is rising concern about foreign housing purchases which may be driving up prices for local residents. Much of the attention is aimed at mainland Chinese buyers in metropolitan areas where housing is already pricier than elsewhere. The concern about housing affordability is legitimate. However, blaming foreigners misses the point, which is that the rising prices are to a large degree the result of urban containment policies implemented by governments.

London and the United Kingdom              

The Daily Mail reports that London being deluged with foreign house buyers, who are buying not only expensive properties but also "starter homes," driving prices up. The Mail singles out Russian and Chinese buyers, many of whom pay cash for their purchases. Paula Higgins of the Home Owners Alliance lamented the fact that many foreign buyers are paying cash.  She questions the appropriateness of foreign investment in "family homes." David King, of Priced Out, said: "Foreign investment is driving up prices, making it even harder for ordinary people to get a decent place to live."

Real estate firms headquartered in Russia are steering their clients to less expensive locations, outside London, such as to the north of England and Wales. A London real estate firm said that only 15% of its sales were to buyers from the UK. There is pressure for the government to protect local home buyers

Certainly these investors are stepping into an already pricey market. The 11th Annual Demographia International Housing Affordability Survey found London house prices to be a severely unaffordable 8.5 times household incomes in 2014. London has the seventh worst housing affordability out of the 86 major markets rated in nine nations. The outside-the-greenbelt exurbs of London have house prices 6.9 times incomes.

Vancouver

Vancouver is a city of immigrants. According to data compiled by University of British Columbia (UBC) Geography Professor David Ley, nearly 90 percent of metropolitan Vancouver's growth over the past two decades has been from foreign immigration (this article contains a graph with the numbers). Yet, there is significant concern about home purchases in the Vancouver area by mainland Chinese. UBC Professor Henry Yu's history class described the issue in a video (Blaming the Mainlander).

The Demographia International Housing Affordability Survey found Vancouver house prices to be a severely unaffordable 10.6 times household incomes in 2014. Vancouver has the second worst housing affordability out of the 86 major metropolitan areas rated in nine nations. Hong Kong has the worst housing affordability, with a median multiple of 17.0.

California and New York

Ilya Marritz of Public Broadcasting Systems (PBS) radio station WNYC remarked on how foreign investment is driving up prices in the New York and San Francisco bay areas: "There’s this relatively new trend of people buying properties in the city and not actually spending a lot of time living here." The Demographia International Housing Affordability Survey found New York metropolitan area housing to cost 6.1 times incomes, a 65% increase since before the housing bubble.

The Diplomat, which specializes in Asia-Pacific affairs, commented that “there’s no doubt that China’s presence in the Bay Area market is driving up prices. The Diplomat quoted real estate executive Mark McLaughlin; “it’s added a demographic of buyers who, generally, take a long-term view. They’re not sellers in the next five to seven years.” Chinese buyers are sitting on much of this property as housing in the Bay Area becomes increasingly scarce, causing its value to skyrocket."

The Demographia International Housing Affordability Survey places both San Francisco and San Jose metropolitan area house prices at 9.2 times incomes, tied for fourth least affordable in the 9 nations.

The Los Angeles Times reports strong mainland Chinese purchasing activity in the suburbs of Los Angeles, from the San Gabriel Valley to Orange County, particularly Irvine as well as in Riverside-San Bernardino (the Inland Empire).

The Demographia International Housing Affordability Survey found house prices to be 8.0 times incomes in Los Angeles, the 10th least affordable major metropolitan area in the Survey. Nearby San Diego prices are even higher, at 8.3 times incomes, earning it the 8th least affordable major metropolitan area in the 9 nation Survey.

New Zealand

Things have become more heated in New Zealand. The Labour Party opposition housing spokesperson Phil Twyford blamed foreign investors for driving up house prices in Auckland, New Zealand's only metropolitan area with more than 1,000,000 population.

"Kiwi families who are struggling to buy their own home want to know the impact offshore speculators are having on skyrocketing Auckland house prices. They are sick and tired of losing homes at auction to higher bidders down the end of a telephone line in another country."

This evoked considerable criticism for ethnic insensitivity not only among New Zealand's large Chinese minority, but also ordinary citizens. Radio New Zealand opined: "For a party that has diligently and deliberately courted the ethnic vote, including the Chinese community in Auckland, this was a risky strategy." The Economics Minister accused Labour of playing "the race card." There was predictable reaction in China, which is New Zealand's largest goods export partner. The Shanghai Daily headlined: "New Zealand housing market debate descends into race row. "Meanwhile, the National Party government continues its difficult task of trying to reverse the consequences of urban containment policy in Auckland.

The Demographia International Housing Affordability Survey found Auckland house prices to be a severely unaffordable at 8.2 times household incomes in 2014. Auckland has the ninth worst housing affordability out of the 86 major metropolitan areas rated in nine nations.

Australia

In Sydney, the Party for Freedom produced a brochure "blaming Chinese property buyers for pushing up home prices, 'ethnically cleansing' Australian families from their suburbs and creating a new 'stolen generation,'" according to The Sydney Morning Herald (" Race hate flyer distributed in Sydney's north shore and inner city"). The brochure also referred to foreign purchasers as "greedy foreign invaders," and charged them with "pricing locals out of the market." A You-Tube video was posted in which the party chairman burns the flags of China, the Australian ruling Liberal Party, the Labor Party and the Greens and images of Australia's Prime Minister and the New South Wales Premier.

Predictably, this brought a sharp reaction from public officials, such as Lane Cove mayor David Brooks-Horn, whose affluent North Shore community was targeted for distribution of the brochures.

Despite this "vile attack," as New South Wales Multiculturalism Minister characterized it, there remains serious concern in Australia about rising house prices, which many blame on foreign investors aalthough avoiding the extremes indicated above.

The Demographia International Housing Affordability Survey found Sydney house prices to be a severely unaffordable 9.8 times household incomes in 2014. This is the third most unaffordable market among the 86 major metropolitan areas rated in nine nations.  Today, The Australian Financial Review reported that the median house price in Sydney has reached $1,000,000 for the first time. This is a 23% increase in just one year.

Melbourne, with prices 8.7 times incomes is sixth least affordable.

"Supply, Supply, Supply"

There is a common theme among those who are blaming foreigners for the escalation in their local house prices: foreign buyers have driven up demand, thus increasing prices and driving local purchasers out of the market. That might be a plausible theory if demand by itself raised prices. But, all else equal, demand results in higher prices only when there is a shortage of supply. And a shortage of supply is exactly what has been produced by government policies in each of the metropolitan areas described above.

The problem lies largely with the blunt policy instrument of urban containment, which makes it virtually impossible to build on wide swaths of suburban greenfield land. Urban containment policy's most destructive strategies are urban growth boundaries or greenbelts, which often prohibit development on virtually all greenfield sites and other regulations that deny planning permission on the majority of parcels suitable for housing on and beyond the urban fringe. The shortage of supply so important to the price increases has been produced by government policies in each of the metropolitan areas described above (Figure).

The problem is that urban containment policy "creates its own weather." Investors are disproportionately drawn to markets where there are shortages. Sir Peter Hall and his colleagues pointed out that development plans provide a guide for developers of where to buy within the metropolitan area (in The Containment of Urban England).

A Canary Wharf buyer in London told The Wall Street Journal: “If I could afford it I’d buy as many as I could”... “Flats [in London] are a great investment. I can’t see that changing." Nor will it so long as the "sure thing" of extraordinary house price increases supported by planning policy continues. San Francisco Bay Area public officials may as well have hung a "Welcome Speculators" banner from the Golden Gate Bridge.

James Laurenceson, Deputy Director of the Australia-China Relations Institute at the University of Technology in Sydney, told The Sydney Morning Herald.:

"Housing affordability is a real problem. The real reasons are right in front of our eyes - limited land releases, zoning regulations, development charges, record low interest rates and tax breaks to property investors. There’s not a Chinese buyer amongst them."

Indeed, most of the cities above became severely unaffordable well before an affluent middle-class was enabled by China's economic reforms.

New South Wales Premier Mike Baird characterized the solution as "supply, supply, supply," which he sees as "the principal lever" for improving housing affordability. Housing affordability proposals that do not start with the supply shortage are little more than empty rhetoric. Attempts to blame the prices primarily on foreigners are not only misleading, but also diverts the public from the more important role played by limiting supply.

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

He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris. 

Photograph: Opera House, Sydney (by author).

Presidential Candidate Jim Webb is an Old-time Democrat

Tue, 07/21/2015 - 22:38

Will Rogers famously stated, “I am not a member of any organized political party. I am a Democrat.” And he was not so far from the truth. The old Democratic Party was a motley collection of selected plutocrats, labor bosses, Southern segregationists, smaller farmers, urban liberals and, as early as the 1930s, racial minorities. It was no doubt a clunky coalition but delivered big time: winning World War II, pushing back the Soviet Union and making it to the moon while aiding tens of millions of Americans to ascend into the middle class.

Only one Democratic candidate in the 2016 presidential race, James Webb, represents this old coalition. A decorated combat veteran, onetime Reagan Navy secretary and former U.S. senator from Virginia, Webb, 69, combines patriotism with a call for expansive economic policies to help the middle class. He speaks most directly to white working-class voters, particularly in places like Appalachia, the South and in rural hamlets and exurbs across the country, precisely where Democrats are now regularly thrashed in elections.

Webb, notes the National Journal, combines “Elizabeth Warren’s passion for economic justice with Rand Paul’s itch to reinvent foreign policy.” After all, the former soldier was one of the harshest critics of George W. Bush’s disastrous Iraq invasion.

Yet, so far, his candidacy is attracting little to no mention in the media. Part of the problem may lie with the fact that he most identifies with an America – white, rural or suburban – disdained or ignored by the official press. Many current Democrats not only dislike these constituencies, but don’t even want to deal with them, counting, instead, on their coalition of the affluent, minorities and millennials to carry the day.

Read the entire piece at The Orange County Register.

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

Jim Webb photo by flickr user kalexnova.

Special Report: The Laissez Faire New Orleans Rebuilding Strategy Was Exactly That

Mon, 07/20/2015 - 22:38

Urban risk may be understood as a function of hazard, exposure, and vulnerability.1 In metro New Orleans, Katrina-like storm surges constitute the premier hazard (threat); the exposure variable entails human occupancy of hazard-prone spaces; and vulnerability implies the ability to respond resiliently and adaptively—which itself is a function of education, income, age, social capital, and other factors—after having been exposed to the hazard.

This essay measures the extent to which, after the catastrophic deluge triggered by Hurricane Katrina in 2005, residents of metro New Orleans have shifted their settlement patterns and how these movements may affect future urban risk.2 What comes to light is that, at least in terms of residential settlement geographies, the laissez faire rebuilding strategy for flooded neighborhoods proved to be exactly that.

“The Great Footprint Debate” of 2005-2006

An intense debate arose in late 2005 over whether low-lying subdivisions heavily damaged by Katrina’s floodwaters should be expropriated and converted to greenspace. Most citizens and nearly all elected officials decried that residents had a right to return to all neighborhoods. Planners and experts countered by explaining that a population living in higher density on higher ground and surrounded by a buffer of surge-absorbing wetlands would be less exposed to future storms, and would achieve a new level of long-term sustainability.

Despite its geophysical rationality, “shrinking the urban footprint” proved to be socially divisive, politically volatile, and ultimately unfunded. Officials thus had little choice but to abrogate the spatial oversight of the rebuilding effort to individual homeowners, who would return and rebuild where they wished based on their judgment of a neighborhood’s viability.

Federal programs nudged homeowners to return to status quo settlement patterns. Updated flood-zone maps from FEMA’s National Flood Insurance Program, for example, would provide actuarial encouragement to resettle in prediluvial spaces, while the federally funded, state-administered Louisiana Road Home Program’s “Option 1”—to rebuild in place, by far the most popular of the three options—provided grant money to do exactly that.

“Shrinking the urban footprint” became heresy; “greenspacing” took on sinister connotations; and rebuilding in flooded areas came to be valorized as a heroic civic statement. Actor Brad Pitt’s much-celebrated Make It Right Foundation, for example, pointedly positioned its housing initiative along a surge-prone canal, below sea level and immediately adjacent to the single worst Katrina levee breach, to illustrate that if a nonprofit “could build safe, sustainable homes in the most devastated part of New Orleans, [then it] would prove that high-quality, green housing could be built affordably everywhere.”3 Ignoring topography and hydrology gained currency in the discourse of community sustainability even as it flew in the face of environmental sustainability.

A Brief History of New Orleans’ Residential Settlement Patterns, 1718-2005

Topography and hydrology have played fundamental roles in determining where New Orleanians settled since the city’s founding in 1718. The entire region, lying at the heart of the   dynamic deltaic plain of the Mississippi River, originally lay above sea level, ranging from a few inches along the marshy perimeter, to a few feet along an interior ridge system, to 8 to 12 feet along the natural levee abutting the Mississippi River.

From the 1700s to the early 1900s, the vast majority of New Orleanians lived on the higher ground closer to the Mississippi. Uninhabited low-lying backswamps, while reviled for their (largely apocryphal) association with disease, nonetheless provided a valuable ecological service for city dwellers, by storing excess river or rain water and safeguarding the city from storm surges. Even the worst of the Mississippi River floods, in 1816, 1849, and 1871, mostly accumulated harmlessly in empty swamplands and, in hindsight, bore more benefits than costs. New Orleanians during the 1700s-1900s were less exposed to the hazard of flooding because the limitations of their technology forced them to live on higher ground.4

Circumstances changed in the 1890s, when engineers began designing and installing a sophisticated municipal drainage system to enable urbanization to finally spread across the backswamp to the Gulf-connected brackish bay known as Lake Pontchartrain. A resounding success from a developmental standpoint, the system came with a largely unforeseen cost. As the pumps removed a major component of the local soil body—water— it  opened up cavities, which in turn allowed organic matter (peat) to oxidize, shrink, and open up more cavities. Into those spaces settled finely textured clay, silt, and sand particles; the soil body thus compacted and dropped below sea level. Over the course of the twentieth century, former swamps and marshes in places like Lakeview, Gentilly, and New Orleans East sunk by 6-10 feet, while interior basins such as Broadmoor dropped to 5 feet below sea level. New levees were built along the lakefront, and later along the lateral flanks, were all that prevented outside water from pouring into the increasingly bowl-shaped metropolis.

Nevertheless, convinced that the natural factors constraining their residential options had now been neutralized, New Orleanians migrated enthusiastically out of older, higher neighborhoods and into lower, modern subdivisions. Between 1920 and 1930, nearly every lakeside census tract at least doubled in population; low-lying Lakeview increased by 350 percent, while parts of equally low Gentilly grew by 636 percent. Older neighborhoods on higher ground, meanwhile, lost residents: Tremé and Marigny dropped by 10 to 15 percent, and the French Quarter declined by one-quarter. The high-elevation Lee Circle area lost 43 percent of its residents, while low-elevation Gerttown increased by a whopping 1,512 percent.5

The 1960 census recorded the city’s peak of 627,525 residents, double the population from the beginning of the twentieth century. But while nearly all New Orleanians lived above sea level in 1900, only 48 percent remained there by 1960; fully 321,000 New Orleanians had vertically migrated from higher to lower ground, away from the Mississippi River and northwardly toward the lake as well as into the suburban parishes to the west, east, and south.6

Subsequent years saw additional tens of thousands of New Orleanians migrate in this pattern, motivated at first by school integration and later by a broader array of social and economic impetuses. By 2000, the Crescent City’s population had dropped by 23 percent since 1960, representing a net loss of 143,000 mostly middle-class white families to adjacent parishes. Of those that remained, only 38 percent lived above sea level.7

Meanwhile, beyond the metropolis, coastal wetlands eroded at a pace that would reach 10-35 square miles per year, due largely to two main factors: (1) the excavation through delicate marshes of thousands of miles of erosion-prone, salt-water-intruding navigation and oil-and-gas extraction canals, and (2) the leveeing of the Mississippi River, which prevented springtime floods but also starved the delta of new fresh water and vital sediment. Gulf waters crept closer to the metropolis’ floodwalls and levees, while inside that artificial perimeter of protection, land surfaces that once sloped gradually to the level of the sea now formed a series of topographic bowls straddling sea level.

When those floodwalls and levees breached on August 29, 2005, sea water poured in and became impounded within those topographic bowls, a deadly reminder that topography still mattered. Satellite images of the flood eerily matched the shape of the undeveloped backswamp in nineteenth-century maps, while those higher areas that were home to the historical city, quite naturally, remained dry.

But the stark geo-topographical history lesson could only go so far in convincing flood victims to move accordingly; after all, they still owned their low-lying properties, and real estate on higher terrain was anything but cheap and abundant. Besides, New Orleanians in general rightfully felt that they had been scandalously wronged by federal engineering failures, and anything short of full metropolitan reconstitution came to be seen as defeatist and unacceptable. Most post-Katrina advocacy thus focused on reinforcing the preexisting technological solutions that kept water out of the lowlands, rather than nudging people toward higher ground. “Shrink the urban footprint” got yelled off the table; “Make Levees, Not War” and “Category-5 Levees Now!” became popular bumper-sticker slogans; and “The Great Footprint Debate” became a bad memory.

Resettlement in Vertical Space

The early repopulation of post-Katrina New Orleans defied easy measure. Residents living “between” places as they rebuilt, plus temporarily broken-up families, peripatetic workers, and transient populations all conspired to make the city’s 2006-2009 demographics difficult to estimate, much less map. The 2010 Census finally provided a precise number: 343,829. By 2014, over 384,000 people lived in Orleans Parish, or eighty percent   of the pre-Katrina figure. Of course, not all were here prior; one survey determined roughly 10 percent of the city’s postdiluvian population had not lived here before 2005.8

How had the new population resettled in terms of topographic elevation? We won’t know precisely until 2020, because only the decennial census provides actual headcounts aggregated at sufficiently high spatial resolution (the block level) for this sort of analysis; annual estimates from the American Community Survey do not suffice. Thus we must make do with the 2010 Census. While much has changed during 2010-2015, the macroscopic settlement geographies under investigation here had largely had fallen into place by 2010.



Figure 1. Residential settlement above and below sea level, 2000 and 2010; analysis and maps by Richard Campanella.

When intersected with high-resolution LIDAR-based digital elevation models, the 2010 Census data show that residents of metro New Orleans shifted to higher ground by only 1 percent compared to 2000 (Figure 1). Whereas 38 percent of metro-area residents lived above sea level in 2000, 39 percent did so by 2010, and that differentiation generally held true for each racial and ethnic group. Whites shifted from 42 to 44 percent living above sea level; African Americans 33 to 34 percent, Hispanics from 30 to 29 percent, and Asians 20 to 22 percent.

Clearly, elevation did not exercise much influence in resettlement decisions, and people distributed themselves in vertical space in roughly the same proportions as before the flood. Yet there is one noteworthy angle to the fact that the above-sea-level percentage has risen, albeit barely (38 to 39 percent): it marked the first time in New Orleans history that the percent of people living below sea level has actually dropped.

What impact did the experience of flooding have on resettlement patterns? Whereas people shifted only slightly out of low-lying areas regardless of flooding, they moved significantly out of areas that actually flooded, regardless of elevation. Inundated areas lost 37 percent of their population between 2000 and 2010, with the vast majority departing after 2005. They lost 37 percent of their white populations, 40 percent of their black populations, and 10 percent of their Asian populations. Only Hispanics increased in the flooded zone, by 10 percent, in part because this population had grown dramatically region-wide, and because members of this population sometimes settled in neighborhoods they themselves helped rebuild.

The differing figures suggest that while low-lying elevation theoretically exposes residents to the hazard of flooding, the trauma of actually flooding proved to be, sadly, much more convincing.

Resettlement in Horizontal Space

Contrasting before-and-after residential patterns in horizontal space may be done through traditional methods such as comparative maps and demographic tables. What this investigation offers is a more singular and synoptical depiction of spatial shifts: by computing and comparing spatial central tendencies, or centroids.  

A centroid is a theoretical center of balance of a given spatial distribution. A population centroid is that point around which people within a delimited area are evenly distributed.9

Centroids capture complex shifts of millions of data with a single point. But they do not tell the entire story. A centroid for a high-risk coastal area, for example, may shift inland not because people have moved away from the seashore, but because previous residents decided not to return there. It’s also worth noting it takes a lot to move a centroid, as micro-scale shifts in one area are usually offset by countervailing shifts elsewhere. Thus, apparent minor centroid movements can actually be significant. Following are the centroid shifts for metro New Orleans broken down by racial and ethnic groups (Figures 2 and 3).

In 2000, five years before the flood, there were 1,006,783 people living within the metro area as delineated for this particular study, of whom 512,696 identified their race as white; 435,353 as black; 25,941 as Asian; and 50,451 as Hispanic in ethnicity. Five years after the flood, these figures had changed to 817,748 total population, of whom 416,232 were white; 327,972 were black; 27,562 were Asian, and 75,397 were Hispanic.10 When their centroids are plotted, they show that metro residents as a whole, and each racial/ethnic sub-group, shifted westward and southward between 2000 and 2010, away from the location of most of the flooding and away from the source of most of the surge, which generally penetrated the eastern and northern (lakeside) flanks of the metropolis.

Did populations proactively move away from risk? Not quite. What accounts for these shifts is the fact that the eastern half of the metropolis bore the brunt of the Katrina flooding, and the ensuing destruction meant populations here were less likely to reconstitute by 2010, which thus nudged centroids westward. Additionally, flooding from Lake Pontchartrain through ruptures in two of the three outfalls (drainage) canals disproportionally damaged the northern tier of the city, namely Lakeview and Gentilly. Combined with robust return rates in the older, higher historical neighborhoods along the Mississippi, as well as the unflooded West Bank (which sit to the south and west of the worst-damaged areas), they abetted a southwestward shift of the centroids. In a purely empirical sense, this change means more people now live in less-exposed areas. But, as we saw with the vertical shifts, the movements are more a reflection of passive responses to flood damage than active decisions to avoid future flooding.



Figure 2. Population centroids by race and ethnicity for metro New Orleans, 2000-2010; see next figure for detailed view. Analysis and maps by Richard Campanella.

 



Figure 3. A closer look at the metro-area population centroid shifts by race and ethnicity, 2000-2010; analysis and map by Richard Campanella.

Reflections

Resettlement patterns in metro New Orleans have only marginally reduced residential exposure to the hazard of storm surge. In the vertical dimension, metro-area residents today occupy below-sea-level areas at only a slightly lower rate than before the deluge, 61 percent as opposed to 62 percent, although that change represents the first-ever reverse (decline) of the century-long drift into below-sea-level areas. Likewise, residents’ horizontal shifts, which were in southwestward directions, seemed to suggest a movement away from hazard, but these shifts were more a product of passive than active processes .

Metro New Orleans, it is important to note, has substantially reduced its overall risk—but mostly thanks to its new and improved federal Hurricane & Storm Damage Risk Reduction System (HSDRRS) rather than shifts in residences. No longer called a “protection” system, the Risk Reduction System is a $14.5 billion integrated network of raised levees, strengthened floodwalls, barriers, gates, and pumps built by the U.S. Army Corps of Engineers and its contractors to protect the metropolis from the surges accompanying storms with a 1-percent chance of occurring in any given year.11 The HSDRRD, which worked well during Hurricane Isaac’s surprisingly strong surge in 2012, has given the metropolis a new lease on life, at least for the next few decades. But all other risk drivers—the condition of the coastal wetlands, subsidence and sea level rise, social vulnerability, and, as evidenced in this paper, exposure—have either slightly worsened, only marginally improved, or generally remained constant.

The exposure-related patterns reported here reflect who won the “Great Footprint Debate” ten years ago.12 Months after Katrina, when it became clear that no neighborhoods would be closed and the urban footprint would persist, decisions driving resettlement patterns in the flooded region effectively transferred from leaders to homeowners. Rather inevitably, the laissez faire rebuilding strategy proved to be exactly that, and people generally repopulated areas they had previously occupied, though at markedly varied densities.

Ten years later, the resulting patterns are a veritable Rorschach Test. Some observers look to the 75-90 percent repopulation rates of certain flooded neighborhoods and view them as heroically high, proof of New Orleanians’ resilience and love-of-place. Others point to the 25-50 percent rates of other areas and call them scandalously low, evidence of corruption and ineptitude. Still others might point to the thousands of scattered blighted properties and weedy lots and concede—as St. Bernard Parish President David Peralta admitted on the ninth anniversary of Hurricane Katrina—that “we probably should have shrunk the footprint of the parish at the very beginning.”13

As for the HSDRRS, continual subsidence and erosion vis-à-vis rising seas, coupled with costly and as-yet undetermined maintenance and certification responsibilities, will gradually diminish the safety dividend provided by this remarkable system. The nation’s willingness to pay for continued upkeep, meanwhile, may grow tenuous; indeed, it’s not even a safe bet locally. Voters in St. Bernard Parish, which suffered near-total inundation from Katrina, defeated not once but twice a tax to pay for drainage and levee maintenance, a move that may well increase flood insurance rates.14

Residents throughout the metropolis appear to be repeating the same mistakes they made during the twentieth century: of dismissing the importance of natural elevation, of over-relying on engineering solutions, of under-maintaining these structures in a milieu of scarce funds, and of developing a false sense of security about flood “protection.”

We need to recognize the limits of our ability to neutralize hazards—that is, to presume that levees will completely protect us from storm surges—while appreciating the benefits of reducing our exposure to them. Beyond the metropolis, this means aggressive coastal restoration using every means available as soon as possible, an effort that may well require some expropriations. Within the metropolis, it means living on higher ground or otherwise mitigating risk. In the words of University of New Orleans disaster expert Dr. Shirley Laska, “mitigation, primarily elevating houses, is [one] way to achieve the affordable flood insurance…. It is possible to remain in moderately at-risk areas using engineered mitigation efforts, combined with land use planning that restricts development in high-risk areas.”15

Planning that restricts development in high-risk areas: this was the same reasoning behind the “shrink the urban footprint” argument of late 2005—and anything but the laissez faire strategy that ensued.

Bio

Richard Campanella, a geographer with the Tulane School of Architecture, is the author of “Bienville’s Dilemma,” “Geographies of New Orleans,” “Delta Urbanism,” “Bourbon Street: A History,” and other books. His articles may be read at http://richcampanella.com , and he may be reached at rcampane@tulane.edu or @nolacampanella on Twitter.

Acknowledgements

The author wishes to thank Gulf of Mexico Program Officer Kristin Tracz of the Walton Family Foundation, Dr. Shirley Laska, and the Gulf Coast Restoration Fund at New Venture Fund, and Tulane School of Architecture, as well as Garry Cecchine, David Johnson, and Mark Davis for their reviews.

1 David Crichton, “The Risk Triangle,” in Natural Disaster Management, edited by J. Ingleton (Tudor Rose, London, 1999), pp. 102-103.

2 In this paper, “metro New Orleans” means the conurbation (contiguous urbanized area shown in the maps) of Orleans, Jefferson, western St. Bernard, and upper Plaquemines on the West Bank (Belle Chasse); it excludes the outlying rural areas of these parishes, such as Lake Catherine, Grand Island, and Hopedale, and does not include the North Shore or the river parishes.

3 Brad Pitt, as cited in “Make It Right—History,” http://makeitright.org/about/history/, visited February 13, 2015.

4 Richard Campanella, Bienville’s Dilemma: A Historical Geography of New Orleans and Geographies of New Orleans (University of Louisiana Press, 2006, 2008); R. Campanella, Delta Urbanism: New Orleans (American Planning Association, 2010); R. Campanella, “The Katrina of the 1800s Was Called Sauve’s Crevasse,” Times-Picayune, June 13, 2014, and other prior works by the author.

5 H. W. Gilmore, Some Basic Census Tract Maps of New Orleans (New Orleans, 1937), map book stored at Tulane University Special Collections, C5-D10-F6.

6 Richard Campanella, Bienville’s Dilemma: A Historical Geography of New Orleans (University of Louisiana Press, 2008) and other prior works by the author.

7 Coincidently, 38 percent of all residents of the contiguous metropolis south of Lake Pontchartrain also lived above sea level in 2000. Thus, at both the city and metropolitan level, three out of every eight residents lived above sea level and the other five resided below sea level. All figures calculated by author using highest-grain available historical demographic data, usually from the U.S. Census, and LIDAR-based high-resolution elevation data captured in 1999-2000 by FEMA and the State of Louisiana.

8 Henry J. Kaiser Family Foundation, “New Orleans Five Years After the Storm: A New Disaster Amid Recovery” (2010), http://kaiserfamilyfoundation.files.wordpress.com/2013/02/8089.pdf

9 Defining the study area is essential when reporting centroids. New Orleans proper, the contiguous metro area, and the Metropolitan Statistical Area, which includes St. Tammany and other outlying parishes, would all have different population centroids. This study uses the metro area south of the lake shown in the accompanying maps. It is also important to use the finest-grain—that is, highest spatial resolution—demographic data to compute centroids, as coarsely aggregated data carries with it a wider margin of error. This study uses block-level data from the decennial U.S. Census, the finest available.

10 Figures do not sum to totals because some people chose two or more racial categories while others declined the question, and because Hispanicism is viewed by the Census Bureau as an ethnicity and not a race.

11 For details on this system, see http://www.mvn.usace.army.mil/Missions/HSDRRS.aspx

12 Richard Campanella, Bienville’s Dilemma: A Historical Geography of New Orleans (University of Louisiana Press, 2008), pp. 344-355.

13 David Peralta, as quoted by Benjamin Alexander-Bloch, “Hurricane Katrina +9: Smaller St. Bernard Parish Grappling with Costs of Coming Back,” Times-Picayune/NOLA.COM, August 29, 2014.

14 Mark Schleifstein, “St. Bernard Tax Defeat Means Higher Flood Risk, Flood Insurance Rates, Levee Leaders Warn,” Times-Picayune/NOLA.COM, May 4, 2015, http://www.nola.com/environment/index.ssf/2015/05/st_bernard_tax_defeat_means_hi.html ; see also Richard Campanella, “The Great Footprint Debate, Updated,” Times-Picayune/NOLA.COM, May 31, 2015.

15 Shirley Laska, email communication with author, April 12, 2015.

LA’s Tale of Two Cities

Sun, 07/19/2015 - 22:38

It’s the best of times and the worst of times in Los Angeles.

Los Angeles is now attracting notice as a so-called “global city,” one of the world’s elite metropolises. It is ranked #6 in the world by AT Kearney and tied for 10th in a report by the Singapore Civil Service College that I contributed to.  Yet it also has among the highest big city poverty rates in the nation, and was found to be one of the worst places in America for upward mobility among the poor. Newspaper columns are starting to refer to LA as a “third world city.”

Though the Bay Area gets the headlines, the LA region likes to boast it’s coming on strong in tech.  With a diverse set of marquee names including Snapchat, Tinder, Oculus, and SpaceX, LA’s startup scene continues to grow. But tech growth overall has been middling, ranking 28th out of the country’s sixty-six largest region in information job growth, according to a recent Forbes survey.

More disturbing, job growth has also been slow, ranking 35th overall, at a time when it’s long time rivals in the Bay Area occupy the top job and tech rankings. Some of this reflects the loss of a key industry, aerospace, but also the departure of major corporations such as Lockheed,  Northrup Grumman, Occidental Petroleum, and Toyota, which has left LA’s once vaunted corporate community but is a shell of its former self.

Yet LA’s glitz factor remains potent. The fashion industry has gained considerable recognition.  Tom Ford set up shop and brought his runway show to the city. Locally grown brands like Rodarte have a major following.   LA also is increasingly a global center of gravity in the art world.

Yet behind the glitz, in the city of Los Angeles, aging water mains regularly erupt and the streets and sidewalks decay, with the city’s own report estimating it has an $8.1 billion infrastructure repair backlog.

One report chronicles the flight of cash-strapped New York creatives fleeing to sunny, liberating, and less expensive LA.  Another how high prices and the Southern California grind are sending those same creatives packing.

What’s going on here?

What we are witnessing is LA changing in the context of the two tier world ---divided between rich and poor --- that we live in. This has been made worse by a city that has excessively focused on glamour at the expense of broad based opportunity creation.

Los Angeles may be a creative capital and a great place to live as a creative worker, but it was always much more than that. It was also a great place to build the middle class American Dream or run a business that employed people at scale. For example, it was and still today remains the largest manufacturing center in the United States.  Yet it has lost half of its manufacturing job base since 1990.  That’s over half a million manufacturing jobs lost in the region since then, with over 300,000 of those just since 2000. Unlike Detroit, Houston, Nashville and even Portland, the region has not benefited at all from the resurgence of US manufacturing since 2009.

Manufacturing decline, of course, is hardly unique to LA, but the city’s problems are particularly acute because region is so huge and diverse, being both the second largest metro area in the country, and the most diverse major region in America.  LA has a higher share of Hispanic population than any major metro apart from San Antonio – one twice as high as the Bay Area.  The LA/Inland Empire’s 8.4 million Hispanics would by themselves be the fourth largest metro area in the country, and are more than the total number of people living in the Bay Area. The area also has over a million black residents.

With their heavily well-educated populations the Bay Area and Boston can perhaps get away with operating as sort of luxury boutiques for upscale whites and Asians, however dubious a decision that may be. Not so LA.

The problem is that LA and California more broadly have adopted the luxury boutique mindset.  Policies are made in ways that favor the glamorous industries like Hollywood, high tech, and the arts – industries that don’t employ a lot of aspiring middle class people, particularly Hispanics or blacks.  

These policies include strongly anti-growth land use and environmental policies designed to produce the kind pristine playgrounds favored by glamour industries and creative elite. But they have rendered the region increasingly unaffordable to all but the highly affluent or those who were lucky enough to buy in long ago. 

Tech firms and entertainment companies can afford to pay their key workers whatever they need to live in LA.  That’s tougher for more workaday businesses. Ditto for business regulations, where many industries don’t have the margins to spend on things like a phalanx of compliance attorneys.

Now that high prices are starting to hurt younger hipsters who want to join the creative industries, this is starting to get attention. But if it’s a problem for young, educated Millennials, it’s a disaster for the working class. 

LA does deserve credit for potentially opportunity expanding investments in transit. But if transit can be seen as a potential winner, most political  leaders seem more concerned with finding ways to simply attempt to politically reallocate some money to those being squeezed by their policies, all at the expense of growth. The $15 minimum wage is Exhibit A. Like rent control, a high minimum wage benefits a few lucky winners while harming others and making it harder to justify business investment that would create more jobs and entry level opportunities onto the ladder of success, while raising consumer prices. The fact that nearly half of LA’s workers might be covered by the new minimum is a damning testament to the erosion of the region’s middle class job base.

The real measure of success for LA is not how many runway shows, startups, and elite rankings it can achieve, but whether it can recover its role as an engine of opportunity for its large and diverse population to achieve their American Dream. Local leaders would be better served looking for policies that will expand opportunity instead of the ones they are following that actually reduce it.

Aaron M. Renn is a Senior Fellow at the Manhattan Institute for Policy Research and a Contributing Editor at its magazine City Journal.

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