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Aristocracy of Talent: Social Mobility Is the Silver Lining to America’s Inequality Crisis

Mon, 04/04/2016 - 06:42

Yes, wealth concentration is insane. But the ways in which wealth is shifting are surprising—and give reason for a little optimism.

In an age of oligarchy, one should try to know one’s overlords—how they made their money, and where they want to take the country. By looking at the progress of the super-rich --- in contrast with most of us --- one can see the emerging and changing dynamics of American wealth.

To get a sense of these trends, researcher Alicia Kurimska and I  tapped varying analyses from the Forbes 400 list of richest Americans. No list, of course, captures all the relevant data, but the Forbes list (I am a regular contributor to that magazine’s website) allows us to look not only at who has money now, but how the dynamics of wealth have changed over the past decade or more.

The bad news here is that our oligarchs are getting richer, and, unlike in the decades following World War II, they are primarily not taking us on the ride. Indeed at a time when middle-class earnings have stagnated for at least a decade and a half,   the oligarch class is making out like bandits. This, of course, extends to much of the infamous “top 1 percent.” The share of income of the top 1 percent of households in the US increased from 10 percent in 1979 to upwards of 20 percent in 2010, as famously found by economist Thomas Piketty and Emmanuel Saez. 

But if the highly affluent are thriving, the super-rich are enjoying one of the brightest epochs since the days of the robber barons. These people , according toa study by economists Steven N. Kaplan and Joshua D. Rauh, the top 0.0001 percent of 311.5 million US individuals. In constant 2011 dollars, their wealth has grown seven-fold since 1992 --- from $214 billion in 1982 to $1.525 trillion in 2011. This at a time when most Americans have endured little or no real income growth.

 What we are talking about is a concentration of wealth and power unprecedented since the turn of the last century. According to an analysis by the left-leaning Institute for Policy studies, America’s 20 wealthiest people own more wealth than the entire bottom half of the population—152 million people in 57 million households. The top 100 own as much wealth as the entire 44.5 million-strong African-American population  (there are only two African Americans on the list), and the top 200 have more than the entire 55 million-strong Latino population (there are 15 Latinos on the list). To make an international comparison, the 400 have more wealth than the GDP of India, arguably the most up and coming big economy on the planet. 

The Rise of the self-made

Not all the news is bad, however. The proportion of the 400 who inherited their money has been steadily decreasing. There are more self-made billionaires than existed in the 1980s. Kaplan and Rauh report that since the 1980s the share who grew up wealthy fell from 60 percent to 32 percent. 

This does not mean so much the return of Horatio Alger --- the share who grew up poor remained constant at 20 percent --- but that most super-wealthy came from affluent but not rich families, which gave them some head start, notably in education.They did not hand the keys to the kingdom to their offspring. Rather than country clubbers clipping coupons, the rich since the 1980s have become largely, if not entirely, self-made.  

But origins are not the only thing that has changed in this era of oligarchy. So too have the industries that create the wealth --- largely represented by the shift toward technology and finance --- and, not surprisingly, where that wealth tends to concentrate. These shifts are already changing not only our economy, but also the outlines of political power, as industries friendlier to Democrats, notably tech and finance, supplant those, notably energy, that have long been associated, particulary in the last decade,  with the Republicans.

The shift in the fortunes of the super-rich reflect changes in our industrial structure over the past third of a century. The big winners have been in scalable businesses  where capital is king and rapid accumulation possible. Rauh and Kaplan, for example, report that the big winners have emerged  not only in tech, but also include owners of retail and restaurant chains, tech firms and private finance, including hedge funds  Over the period between 1982 and 2012, finance’s share grew the most, followed by technology and mass-retailing.

Who’s losing ground? The big losers are a bit counter-intuitive. Despite all the attacks on “big oil,” energy has actually suffered the biggest decline in terms of presence on the Forbes list. Energy, for example, used to account for about 21 percent of the 400,  but that has shrunk to about 11 percent. Equally puzzling, amidst a high-end building boom (not so much for the hoi polloi), real estate’s share has dropped about as much. Perhaps less surprising are the losses among non-tech based consumer industrial companies. 

Since 2012, the year the Rauh study was completed, the tech billionaires have, if anything, expanded their presence, while it’s likely that, with the drop in energy prices, the oil barons will slip even further. On the 2014 list, for example, in terms of dollar gains, five of the top six were from the tech sector, led by Mark Zuckerberg, whose fortunes increased by a remarkable $15 billion (Warren Buffett was the lone exception). Mark Zuckerberg’s gains were larger than the $12 billion increase between Charles and David Koch, even at the peak of the energy boom.

Fully half of the top 10 on the list came from the tech community, with the balance made up of Wall Street/finance people (Buffett and Michael Bloomberg) along with the Kochs and David Walton, the youngest son of Wal-Mart founder Sam Walton.

The New Geography of Wealth

Perhaps more surprising has been the shift in the location of the rich. Despite the rise of the tech oligarchs, the biggest gainers over the past decade have not occurred in California but in New York, Florida and Texas. This reflects not only the power of Wall Street and the investment class (some of whom have decamped to Florida), but the growing diversification of the Texas economy. 

Oil, of course, still plays a critical role among the Texas rich, but it’s much more than that now. The richest people in the Lone Star Stateinclude Alice Walton, the Ft. Worth-based heir to the retail fortune, but also Austin tech mogul Michael Dell, Dallas financier Andy Beal, and San Antonio supermarket mogul Charles Butt. The first energy billionaire, pipeline entrepreneur Richard Kinder, clocks in as fifth richest Texan. Even if energy remains weak for the next decade, Texas seems likely to keep producing gushers of billionaires.

If we break the rich list by region, it’s no surprise that New York, long the nation’s premier financial center, would rank first, with 82 billionaires. In second place is the San Francisco area, with 54 billionaires, most of them tied to technology. The Bay Area, with about one-third of the population, surpasses third-place Los Angeles, with 34. Miami ranks fourth with 27, Dallas fifth with 19; each is ahead of the traditional second business capital, Chicago, which ranks sixth with 15, just a few paces ahead of  Houston with 12.

The Future of Oligarchy  

What is the future trajectory of wealth in America? One thing seems certain: the twin tech capitals of Bay Area and Seattle, now home to nine of the 400, are likely to expand their reach. One clear piece of evidence is age; people generally do not get richer when they retire. In contrast, virtually all self-made billionaires under 40 are techies

Of course, the biggest growth can be expected in the Bay Area, particularly as tech people think of new ways to “disrupt” our lives – for our own good, of course. Whole industries such as music, movies, taxis, real estate are increasingly controlled from the Valley; as these companies wax, many of the old fortunes made in these fields will begin to wane. This is also true across the board in retail, where Seattle’s Jeff Bezos now looms as a colossus greater than any individual chain of traditional stores.

Ultimately what will make “the sovereigns of cyberspace,” to quote author Rebecca MacKinnon, so dominant is precisely what made John D. Rockefeller so rich: control of markets. Google, for example, accounts for over 60 per cent of Internet searches. It and Apple control almost 90 percent of the operating systems for smartphones. Similarly, over half of American and Canadian computer users use Facebook, making it easily the world’s dominant social-media site. 

And soon, they, like the old Wall Street elites or the energy barons, may be able to regard the government as yet another subsidiary. They will benefit greatly from the likely electoral victory of the Democrats, who are increasingly dependent on tech contributions, while the old economy oligarchs already in retreat, in energy, manufacturing and real estate, fade before them. 

The prognosis for the future of American wealth, then, is for an ever-expanding role for both tech and private investors, and a gradual shift away from basic industries that are geared to our diminishing middle class. This may not be good for America but will be wondrous indeed for the ever more powerful, and outrageously wealthy, new ruling class.

This piece originally appeared at The Daily Beast.

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

Singapore’s Midlife Crisis

Fri, 04/01/2016 - 22:38

Lee Kwan Yew, one of the great political architects of our time, died a year ago, but the regime he established in Singapore remains entrenched in power. In fact, the parliamentary elections last year—to the surprise and consternation of Lee’s critics—enlarged his People’s Action Party (PAP) majority in Parliament from a record low of 60 percent to close to 70 percent. Despite talk of a “new normal” defined by more competitive politics, the city-state’s norms remain very much as they have been for the better part of a half century. Voters have their reasons for remaining in thrall to the PAP. The party’s cadre of well-educated civil servants has turned the Republic of Singapore into arguably the best-run city on the planet, a place of almost surreal efficiency. Thanks to its reputation for cleanliness, safety, and prosperity, Singapore is attracting growing numbers of immigrants from around the world. In 2013, the International Monetary Fund estimated Singapore’s per-capita GDP to be $78,000, making the average Singaporean wealthier than the average American.

Yet, despite clear support for the regime among the electorate, many thoughtful Singaporeans look to the future with foreboding. One major worry is that the city-state has reached maximum capacity, with 5.3 million people crammed onto a flood-prone island of just 225 square miles. The newcomers have driven up home prices and displaced natives. Talk among the city’s planning and business elites about luring even more immigrants—raising Singapore’s population to roughly 7 million by 2030—has generated a growing sense of unease among the usually well-behaved local residents in this most orderly of places. Even amid their prosperity, Singaporeans are now among the most pessimistic people in the world, alongside the understandably dour residents of Greece, Cyprus, Slovenia, and Haiti. Some have voted with their feet—almost one in ten Singapore citizens now lives abroad, and according to a recent survey, half of Singaporeans would leave if they could.

Since the city broke off from its short-lived federal union with Malaysia in 1965, the PAP has exercised an iron grip on Singaporeans’ political loyalties, but there are growing concerns—including high up in the ranks of business, government, and academia—that this prosperous nation faces a new and more uncertain era, one for which the government’s top-down planning model may no longer be well suited.

At the time of its independence from Great Britain in 1959, Singapore was a poor, isolated, and overcrowded Asian metropolis, with high levels of unemployment and illiteracy. Western observers questioned whether the city could survive on its own—the Times of London, for example, predicted that the Singaporean economy “might collapse” without the presence of the British military. The 1963 union with Malaysia fell apart over racial and ideological tensions. China is the mother country of most Singaporeans; ethnic Chinese form 74 percent of Singapore’s population, with Malays constituting just 13 percent and Indians most of the rest.

In 1965, the quasi-socialist PAP, led by 41-year-old Cambridge-educated lawyer Lee Kuan Yew, took power and sought to diversify the Singaporean economy. A scion of an old Hakka Chinese trading family, Lee created an “authoritarian constitutional democracy,” as British historian C. M. Turnbull described it. Determined to avoid both the corruption afflicting most of Asia’s nonaligned countries and the crushing rigidities of Communism, Lee served in effect as an elected dictator. In a 1980 biography, author Alex Josey compared Lee’s leadership of the PAP with Mao Tse-tung’s role in the Chinese Communist Party. But Lee played things very differently. As much a product of British political ideology as of Chinese culture, Lee came to Fabian socialism directly from the source: he was, as Josey put it, “a patient revolutionary,” and the PAP’s philosophy of governance was rooted in the British socialist tradition of gradual reform. Speaking in 1965 at an Asian socialist conference in India, Lee embraced the notion that “the socialist has got to be realistic and practical in his approach.” Under Lee, the PAP nurtured the economy much like greenhouse agronomists nurture crops, implementing policies only after intense study and input from experts, local and global.

Bustling street in Singapore, 1962. (Photo by John Pratt/Keystone Features/Getty Images)

In his bid to modernize Singapore—celebrated last year in the production there of The LKY Musical—Lee embraced a commitment to trade and the rule of law. During the 1970s, due largely to new investments and better use of personnel, productivity in Singapore’s trade sector grew by roughly 40 percent. Under Lee, the PAP invested heavily in the island’s great natural advantage: the 16-kilometer-wide Singapore Strait, connecting East Asia with the Indian Ocean. One of the party’s early accomplishments was a labor deal with the port’s labor unions, allowing for relaxed work rules and an updating of the facility. By 1980, the majority of Singaporeans worked in the trade sector, which led much of the city’s productivity growth.

The PAP administrators weren’t content to see Singapore become a mere trading post, however. In contrast to other developing Asian economies, which emphasized local entrepreneurship and state-owned or -directed companies, Lee’s planners set about enticing American, European, and Japanese multinationals to relocate by touting Singapore’s English-speaking workforce, low-tax environment, and by-now first-class infrastructure. The country’s big break, Lee later suggested, came in 1968, when Texas Instruments—then one of the world’s largest manufacturers of semiconductors—opened a factory employing 1,000 people at the Kallang Basin industrial estate. “We had to create a new kind of economy, try new methods and schemes never tried before anywhere else in the world, because there was no other country like Singapore,” Lee reminisced in his 2000 memoir, From Third World to First.

Continuing to look ahead, Lee and his mandarins understood that Singapore couldn’t thrive solely as a manufacturing hub, either. They correctly anticipated the evolution of an economy more reliant on technology and high-end services—for which education would be crucial. “Education must serve a purpose,” the PAP declared in 1965, and schooling was tailored to meet development goals, including instruction in English. It worked: Singaporean students do far better on tests than either their American counterparts or the average of OECD countries, and the Center on International Education Benchmarking describes Singapore’s workforce as “among the most technically competent in the world.” The national educational formula—especially the Singaporean approach toteaching math, based on intensive instruction and a focus on problem solving—has been widely adopted, including in the United States and Canada.

Singapore’s development model also influenced its neighbors, especially China. Deng Xiaoping visited in 1978, and the famously pragmatic Communist autocrat saw an ideal formula for lifting his country out of poverty. Yet as China moved forward, Singapore ascended even higher.

In a recent study that I conducted with the Manhattan Institute’s Aaron Renn and demographer Wendell Cox for Chapman University and the Singapore Civil Service College, we ranked global cities on factors including connectivity to the world economy, demographic diversity, cultural influence, technical workforce, foreign investment, and financial power. Singapore placed fourth, just behind London, New York, and Paris, but ahead of Tokyo and Hong Kong, and far ahead of much larger Beijing or Shanghai. Singapore has earned similar scores in other studies: ninth in the A. T. Kearney 2014 Global Cities index and fifth in the London-based Globalization and World Cities Network. These rankings are remarkable, considering that Singapore is much smaller than its prime competitors. Thirteen cities in China alone have larger populations.

Lee Kwan Yew in 2013. (Photo by Chris McGrath/Getty Images)

But Singapore’s appeal to foreign investors and migrants is easy to understand. The city has developed arguably the world’s best urban infrastructure, and its streets are rarely congested. Subways and buses, though crowded, are clean and generally well-functioning. The PAP regime’s intelligent planning also extended to housing. Before the PAP came to power, Singapore’s housing stock was dominated by run-down slums. By establishing the Housing Development Board, the state created decent, if small, residences for its citizens. This helped keep housing prices well below those in other Asian cities. Wendell Coxestimates that the city’s housing costs relative to income are roughly one-third to one-half those in Hong Kong, Shenzen, Beijing, and Shanghai. Its homeownership rates are well above those in the United States.

Singapore also offers a stable legal and business climate. Like Hong Kong, the city-state benefits from a tradition of British governance and law. According to the World Justice Project’s ranking of civil justice systems—assessing the ability of ordinary citizens “to resolve their grievances and obtain remedies through formal institutions of justice”—Singapore ranks sixth, behind Norway, the Netherlands, Germany, Denmark, and Sweden, but ahead of Canada (13th) and the U.S. (27th). By comparison, China ranks 79th. Along with Hong Kong, Singapore also appears regularly at the top of global rankings for business climate. A combination of legal norms and transparency has lifted Singapore to become the world’s fourth global financial center, behind only New York, London, and Hong Kong. Singapore is home to twice as many regional headquarters for multinationals as much larger Tokyo. A 2011 Roland Berger study named Singapore the leading location for European companies to establish headquarters in the Asia-Pacific.

To the extent that Singapore has a current economic weakness, it is tied to the PAP’s top-down planning model: key economic decisions are made not by entrepreneurs but by government-led agencies and large conglomerates like Singapore Airlines, GIC, and Temasek Holdings. In Hong Kong, Taiwan, and South Korea, by contrast, privately owned firms generate wealth while also wielding power. Singapore has no equivalents of Hong Kong’s Li Ka Shing, whose net worth is estimated by Forbes at over $30 billion; his Cheung Ho conglomerate employs 280,000 people in 52 countries. Nor does the city-state boast any companies like Taiwan’s Foxcomm, a dominant global power in manufacturing; South Korea’s Samsung, among the world’s leading tech and telecommunications firms; or even China’s Ali Baba, a start-up that has grown into one of the world’s top Internet firms.

Singapore has avoided a common trap for governments throughout Asia: corruption. Lee and the PAP kept Singapore’s government clean by paying top bureaucrats high salaries. Freed from temptation, these bureaucrats, as one history of the civil service put it, could focus on ways “to mould people’s behaviors.” If Singaporeans did as they were told, they would benefit: this was the PAP’s essential promise.

For a long time, it seemed to work. Most Singaporeans continued to back the PAP, in large part because the party delivered the material goods. “In Singapore, we’ve been very looked after. The social contract was if we vote for you, we the government will look after you,” says Singapore-born entrepreneur Calvin Soh. This “patriarchal system of governing,” as he calls it, was ideally suited for a manufacturing economy, where people were “efficient, obedient, and followers.” The bureaucracy carefully built the city’s economy, expanding opportunity for the city’s middle and working classes. Unemployment, 14 percent at the time of independence, became rare, and it remains so today, at around 2 percent.

But “moulding people’s behaviors” has proved more difficult than building new transit lines or improving port facilities. Even in the early days, the PAP’s approach prompted some opposition and grumbling about the regime’s authoritarian bent. David Marshall, a former Singaporean ambassador to France, suggested in 1994 that the PAP was possessed of “a computer brain and a plastic heart.” He chastised the ruling party’s “suffocation of dissent,” which many observers believe continues, though to a lesser degree than in the past.

Today’s Singaporeans, notes Soh, have less faith in the PAP than their forefathers did, partly because of economic factors. As recently as 2011, annual GDP growth chugged along at 6 percent, but last year it grew by just 2 percent, a rate similar to that of the United States and other high-income countries. Meanwhile, mirroring another problem in the affluent world, real wages for ordinary Singaporeans have stagnated. From 1998 to 2008, the income of the bottom 20 percent of households dropped an average of 2.7 percent, while the salaries of the richest 20 percent rose by more than half. Singapore’s educated population also faces growing competition from China and India, which are as hungry for success as Singapore was a half-century ago. “We went from wild animals forging a new country to tamed, well-fed animals in a zoo,” Soh jokes. “We kind of got contented and lost that hunger, that desperation, that edge for the hunt. We are a victim of our success.”

Once, the bureaucracy thought that it could “create” a new culture. But many young Singaporeans don’t want their culture manufactured for them any more. Singaporeans, notes graduate student Arthur Chia, are “proud of what we have built, but many Singaporeans are also concerned with what we may be losing.”

In a sense, there are two Singapores: one seen by multinationals and business travelers; and the other serving the local population. A trip down Orchard Road, the city’s historic shopping boulevard, reminds one of Hong Kong’s Causeway Bay, New York’s Fifth Avenue, or London’s Regent Street. Much of this Singapore—so anxious to appeal to the global rich and corporations—has become uniform and predictable. A once-unique urban environment has been transformed into what architect Rem Koolhaus calls “the generic city,” “a city without qualities,” and a “Potemkin metropolis.”

The young are drawn to the other Singapore. In areas such as Geylang, restaurants, bars, and ill-disguised houses of prostitution coexist with a heavy concentration of Buddhist temples and Islamic mosques. Also popular is Tiong Bahru, an old art-deco district of open-air restaurants, hip bars, and charming apartments. But even here, independent restaurants and shops, which once proliferated, struggle with high rents, as they do in other prosperous global cities.

These districts satisfy native Singaporeans’ nostalgia for an earlier version of the city, imagined as more romantic and less relentlessly hygienic. Eager to rediscover what they see as a grittier and more human past, younger Singaporeans have pushed to save what’s left of Singapore’s architectural heritage. They express a desire to return to the values of community they associate, interestingly enough, not with old China but with communal Malay culture. This “kampong spirit” reflects a deep disconnect between the goals of the bureaucracy and those of many citizens. “The starting point for the government is not values, and that’s part of the problem,” notes Alfred Wu, a professor at the Singapore Management University. “It’s all about utilitarianism. The government sets the path and people are not that involved. This makes it hard to change.”

Singapore's Orchard Road (Photo by wikubaskoro)

The movement of foreign capital and workers into Singapore has intensified the feeling of cultural drift and worries about the future. As the labor supply has dwindled, partly because of a plunging birthrate and consistent out-migration, the city-state has become ever more dependent on foreign labor. As recently as 1980, over 90 percent of residents were Singaporean citizens. Today, that number has fallen to 63 percent; by 2030, if the government plans hold up, foreigners will actually outnumber the natives.

Many Singaporeans feel that the foreign influx is making them strangers in their own land. Most students at the Civil Service College are of Chinese descent. Yet even they view the city’s Chinatown district, now largely populated by people from mainland China, as foreign territory. “We don’t relate to it. We don’t see it as Singaporean,” one student confided to me. These tensions can be seen in other global cities, of course, such as New York, London, and Toronto, but these are large, sprawling metropolitan regions. The impact of population growth and immigration is more intensely felt in space-constrained Singapore.

Like other successful global cities, Singapore is also becoming an abode of the rich; its millionaire households now number 188,000. As in other global cities, rising levels of real-estate investment from China, the Indian diaspora, and the Middle East have driven up prices, particularly in the private housing market. Many see the influx of foreign wealth as undermining the egalitarian nature of traditional Singaporean society. Some Singaporeans of Chinese descent take a particularly dim view of newly arrived Indians, whether professionals or lower-wage workers. Local playwright Alfian Sa’at’s 2013 play, Cook a Pot of Curry, was inspired by a well-publicized incident involving a Chinese migrant family’s objections to the pungent aroma coming from a neighboring Indian family’s kitchen. The play touched off a heated media debate about the purpose of immigration, the need for assimilation, and the preservation of national identity. Some government officials were troubled by the controversy, which undermined their vision of engineered social harmony.

The presence of so many skilled foreign workers from China and India is unquestionably threatening social cohesion. Increased competition for low-wage jobs has stoked tension among the city’s south Indian and Sri Lankan immigrants, who occupy much of the lower employment tier. Last year, for the first time since 1969, a riot took place in the city—in Little India, after police rousted some inebriated workers. These disturbances have led the government to tighten its immigration policies.

Photo by Peter Kirkeskov Rasmussen

Singapore’s challenges go beyond its changing population. A diminishing portion of Singaporeans say that they are interested in marriage. Singapore’s birthrate is now one of the world’s lowest. Since 1990, the number of births to Singapore residents has dropped from almost 50,000 annually to barely 37,000. The government has sought to reverse this pattern with well-funded incentives to encourage families—such as subsidies for housing—but the fertility rate still stands at 1.3 per woman, well below replacement level.

“Demographically, there’s really no way out, no way to stop the decline,” suggests longtime University of Singapore demographer Gavin Jones, over a dim-sum lunch in Holland Village, an old Singaporean neighborhood popular with expats. “The government has tried to address this with incentives, but it doesn’t work. The culture of not having children is now very much internalized. It is seen as something that limits your options.” To some extent, this view reflects trends throughout East Asia, where family bonds are weakening. The low-birth pattern is also evident in Singapore’s competitors, notably Hong Kong, where nearly half of young couples believe that they can’t afford to have children. Shanghai, notes Jones, now has one of the lowest peacetime fertility rates ever recorded.

Young Singaporeans say that the decision not to have children is pragmatic. “Having kids was important to our parents,” noted one thirtyish civil servant, “but now we tend to have a cost and benefit analysis about family. The cost is tangible, but the benefits are not knowable or tangible.” Many Singaporeans suspect that, however good things may be now, they won’t be better for the next generation.

“Delivering babies is not such a good business now,” suggests Fong Yoke Fai, a prominent local gynecologist. “There’s a change in perception. Personal goals are more important than social or religious ones. People don’t think they can afford the housing for children, so they opt not to have them.”

Singaporean planners, who in the 1960s and 1970s fretted about overpopulation, now must confront what their Japanese peers face—an aging population that can only be sustained by immigration. By 2030, Singapore could have many more people over 65 than under 25. If this trend continues, the main question facing the city-state may not be how to remake itself but how to get rich enough, fast enough, to support millions of elderly citizens.

Going forward, it seems clear that Singapore must change its model, and perhaps jettison the idea of mold making entirely. The city-state needs less planning and more spontaneity. Government attempts to promote creativity or start new cutting-edge industries are bound to fail in a society where bloggers can lose their jobs or get arrested for offending the sensibilities of the bureaucratic elite. Singaporean authorities have also banned films, such as local director Ken Kweck’s 2012 feature, Sex.Violence.FamilyValues, which they found racially controversial. “Even Chinese citizens who take up Singapore citizenship wouldn’t want [censorship],” suggests Soh, whose new company produces archival photos of various locations in the city, many of which have long since been destroyed. “They didn’t leave China to be in China.”

Singapore’s planners will be tempted to meet the new challenges by doing what they do best—designing, implementing, and managing vast new projects, especially physical infrastructure, that promise to keep the city competitive. In recent years, these efforts have included a remarkable “greening” of the city, with many small parks and a network of nature trails as well as Gardens by the Bay, a large indoor collection of trees, recently completed near the central core. The Gardens represent a broader effort to grow Singapore’s service and tourism sectors, notably through the construction of a massive casino—a remarkable development, as gambling was long considered a curse in Chinese culture. Lee Kwan Yew promised that casinos would appear in his country only “over my dead body,” but even before his death, gambling had become big business: Singapore has vaulted ahead of Las Vegas to boast the world’s second-largest casino revenue. Only Macau takes in more.

But turning Singapore into an Asian Las Vegas won’t solve the city’s fundamental problems. The real crisis is not in how Singapore is regarded in New York and London, or even in Beijing and Shanghai, but how it meets the needs and aspirations of its own people. Singapore’s leaders must revamp their approach to governance, becoming more responsive to local needs and less focused on defined goals.

“No amount of analysis and forward planning,” says longtime government advisor Peter Ho, “will eliminate volatility and uncertainty in a complex world.” The old managerial model, he concedes, has become outdated. To thrive in the future, Singapore will have to find its way without a predrawn map. As Asia modernizes and develops a modern infrastructure, Singaporeans cannot remain competitive merely by being more efficient or better educated. The city-state will have to rediscover the boldness of its founding generation, even while discarding many of its methods. “We will have to be pioneers again,” notes Calvin Soh, “and recognize that we don’t have the same strategic advantages that we used to have. We have to start planning for the next ten years from that viewpoint. And that plan has to come from the grassroots, not from above.”

Singapore's Gardens by the Bay (Photo by M!cka)

This piece originally appeared in The City Journal.

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

Singapore skyline photo by

In Praise of Plain Old Bus Service

Thu, 03/31/2016 - 22:38

My recent post on counting the long term costs of building rail transit got a lot of hits – and as expected a lot of pushback.

There are a lot of people out there that are simply committed to the idea of rail transit, no matter how unwarranted a particular line or system might be.

I find it interesting that the place with the most people applying serious skepticism to transit projects seems to be New York – the place with the biggest slam dunk of a case for it of any city.

Lots of people, for example, have critiqued the proposed Brooklyn-Queens light rail line. In a city where there’s a desperate need for more transit, advocates are very focused on making sure the limited capital we have gets spent on useful projects. Not everyone agrees with each other, but there’s a robust debate, focused on the actual merits.

In cities without much experience of transit, there appears to be a huge bias in favor of very expensive rail projects regardless of their merits.

Some have asked me whether I support Bus Rapid Transit. I can, in some circumstances. Though Alon Levy has convinced me that the economics of South American style BRT don’t necessarily transfer to high income countries.

What I do very much support is significantly improved Plain Old Bus Service (POBS).

Most cities in America have pretty awful bus service, with meandering, radial routes that run infrequently and are basically deployed as a social service.

Contrast that with Chicago or LA (or even New York, despite its subway dominance), where we see bus grid networks that run with reasonable frequency.

I define “reasonable frequency” as meaning I can show up at the stop without consulting a schedule or tracker app, confident that my max burn on wait time is at least semi-humane. Ten minute or less headways would be best, but I can live with 15.

Jarrett Walker has highlighted the role of Portland’s high frequency bus grid, launched in 1982, as changing the game there and making the city’s subsequent light rail system actually functional.

Thirty years ago next week, on Labor Day Weekend 1982, the role of public transit in Portland was utterly transformed in ways that everyone today takes for granted.  It was an epic struggle, one worth remembering and honoring.

I’m not talking about the MAX light rail (LRT) system, whose first line opened in 1986. I’m talking about the grid of frequent bus lines, without which MAX would have been inaccessible, and without which you would still be going into downtown Portland to travel between two points on the eastside.

Pretty much any city could benefit from a better POBS network and higher frequencies.  This is where there is vast opportunity to invest in American transit without breaking the bank.

Yes, buses cost money. I’m not saying its free. This is where I say we should spend more. A solid POBS system is just the basics to be in the game for any city looking to retrofit transit culture.

Even Portland, the city held up as the exemplar for light rail investment, started by getting its bus system right.

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

Portland Bus Grid. Image via Human Transit

Population Growth in the Largest Counties: Texas, Florida and the South

Wed, 03/30/2016 - 05:16

As last week's US Census Bureau population estimates indicated, the story of population growth between 2014 and 2015 was largely about Texas, as it has been for the decade starting 2010 (See: “Texas Keeps Getting Bigger” The New Metropolitan Area Estimates).  The same is largely true with respect to population trends in the nation's largest counties, with The Lone Star state dominating both in the population growth and domestic migration among 135 counties with more than 500,000 population. Florida also did very well, especially in view of the population and migration reversals that occurred around the Great Recession. Strong showings in other Southern states ensured that 80 percent of the fastest-growing large counties and those with the fastest domestic migration rates were in the South. The few remaining positions were taken up by metropolitan areas in the West (Table).

Large County Growth in Texas

Houston, which is the fastest growing major metropolitan area (over 1 million population) in the nation includes the two fastest growing large counties. Fort Bend County added 4.29 percent to its population between 2014 and 2015 and now has 716,000 residents. Montgomery County grew 3.57 percent to 538,000. In addition to these two suburban Houston counties, Harris County, the core County ranked 16th in growth, adding 2.03 percent to its population and exceeding 4.5 million population.

Dallas-Fort Worth, the second fastest-growing major metropolitan area has two counties among the top 20. The third fastest-growing county is Denton (located north of Dallas-Fort Worth International Airport), which added 3.42 percent to its population over the past year and now has 781,000 residents. Collin County, to the north of Dallas County, grew 3.17 percent and now stands at 914,000 residents. Its current growth rate would put Collin County over 1 million population by the 2020 census.

Travis County, with its county seat of Austin, grew 2.22 percent to 1,177,000 and ranked 12th. Bexar County, centered on San Antonio grew 2.01 percent and ranks 17th.

The I-4 & Middle Florida Corridor

But there is another impressive growth story in the "I-4 & Middle Florida" corridor (the term “Central Florida“ is not used, because that usually just denotes the Orlando area).  This includes counties along the Interstate 4 corridor, which runs from Tampa-St. Petersburg through Orlando to Daytona Beach as well as one county along Interstate 95 just south of Daytona Beach and adjacent to the Orlando metropolitan area.

Five of the fastest growing 20 counties with more than 500,000 population are located in this corridor. Orange County, the core of highly suburban Orlando grew at a rate of 2.49 percent between 2014 and 2015 and ranked seventh. Polk County (Lakeland metropolitan area), located midway between Orlando and Tampa-St. Petersburg grew 2.33 percent and ranked 10th. The south western terminus of Interstate 4 in   Hillsborough County, which includes Tampa, Hillsborough County, grew 2.33 percent, though slightly slower than adjacent Polk County and ranked 11th. The other, north eastern terminus of Interstate 4 is located in Daytona Beach, in Volusia County. Volusia County grew at a rate of 2.00 percent and ranks 19th in population growth. Just to the south of is Brevard County, straddling Interstate 95. Brevard County (Palm Bay-Melbourne metropolitan area) grew 2.01 percent and ranked 18th in growth.

But Florida's fastest-growing large county was Lee, centered on Cape Coral and Fort Myers. Lee County added 3.35 percent to its population and now has 702,000 residents.

Other Fast Growing Counties

Denver County continued its strong growth (2.80 percent) and ranked sixth. Wake County, core of the Raleigh metropolitan area, grew at 2.49 percent and ranked eighth. Utah County, in the Provo metropolitan area grew 2.43 percent and ranked ninth.

Other counties in the top 20 included Clark (Las Vegas) in Nevada, Mecklenburg (Charlotte) in North Carolina, Gwinnett, a suburban county of Atlanta and Washington, a suburban county of Portland.

Overall, sixteen of the 20 fastest growing large counties were in the South and four in the West (Figure 1).

Largest Domestic Migration

As with population growth, the top 20 in domestic migration was dominated by the South with 16 entries. Four of the migration magnets were located in  metropolitan areas from the West (Figure 2).

Not surprisingly, the counties with the largest net domestic migration were often near the top of the list in population growth. Lee County, Florida (Cape Coral and Fort Myers) had the greatest net domestic migration between 2014 and 2015, at 3.10 percent. This is a particularly important reversal for Lee County, which experienced some of the most catastrophic house price declines during the housing bust.

Houston’s Fort Bend and Montgomery counties (Texas), the fastest growing large counties had the second and third largest domestic migration respectively. Denton County and Collin County, in the Dallas-Fort Worth metropolitan area ranked 5th and 7th respectively. Bexar County (San Antonio) ranked 18th, while Travis County (Austin) ranked 20th.

The I-4 & Middle Florida corridor also did well. Volusia County (Daytona Beach) ranked 4th in domestic migration, followed by its neighbor to the south, Brevard County. Polk County (Lakeland) ranked 9th, Hillsborough County (Tampa) ranked 13th and Orange County (Orlando) ranked 16th. In addition, Pinellas County (St. Petersburg), just across the bridge from Tampa ranked 12th. Palm Beach County, which is outside the I-4 & Middle Florida corridor ranked 14th.

Denver County, at 8th, was the highest ranking in domestic migration outside Texas and Florida. Other high ranking counties included #10 Wake County (Raleigh), #11 Clark County (Las Vegas), #15 Maricopa County (Phoenix), Mecklenburg County (Charlotte) and #19 Washington County (suburban Portland).

Slowest Growing Counties

Seventeen of the 135 largest counties lost population. The 20 large counties with the least percentage population growth (or loss) were fairly evenly distributed outside the West. Eight were in the Northeast, seven in the Midwest and five in the South (Figure 3). The largest losses occurred in the counties containing core cities with some of the largest population losses in the last seven decades. These include Wayne County (Detroit), Cuyahoga County (Cleveland) Baltimore city, Cook County (Chicago) and Allegheny County (Pittsburgh), Hartford County, Monroe County (Rochester) and Erie County (Buffalo). The bottom 10 also included New Haven County, Connecticut and Summit County, Ohio (Akron).

Largest Domestic Migration Losses: A New York Story

Among the 20 largest domestic migration losses, 10 were in the Northeast, four in the Midwest, and six in the South (Figure 4)

The largest domestic migration losses are taking place  in the New York metropolitan area, which accounted for eight of the 13 largest counties in terms of domestic migration losses. This includes Hudson County New Jersey, which had the largest loss. It also included Kings County (Brooklyn), which had the fourth largest domestic migration loss. Bronx County had the seventh largest loss, Queens County the eighth largest loss and Manhattan County the 11th largest loss. In addition, other New Jersey suburban counties had substantial domestic migration losses, including Passaic County, Middlesex County and Essex County (Newark).

The South rated best in population growth and net domestic migration, but some large southern counties had among the largest domestic migration losses. These include Fairfax County (Washington suburb), El Paso County in Texas, Miami-Dade County in Florida and Baltimore city. Cook County (Chicago) was also among the top 10 domestic migration losers.

Moreover, the 13 large counties with the greatest losses excluded   Wayne County, with its core city (Detroit) that has lost more of its population (percentagewise) than any other large municipality in the world. Yet, all of the counties listed above, including the eight in the New York metropolitan area lost a greater share of their population by domestic migrants than Wayne County.

Dominance by the South and the West

Overall, the largest counties added approximately 1.53 million residents over the past year. More than one half of that net domestic migration was in 19 counties of the South, 11 in the West, none in the Midwest and none in the Northeast. Three quarters of the net domestic migration was in just 52 of the 135 counties, with the South accounting for 30 counties. There were also 20 counties in the West, two in the Midwest and none in the Northeast. The two Midwestern counties were Franklin, Ohio (Columbus) and Dane, Wisconsin (Madison).

US Counties Over 500,000 Population: Ranked By Population Growth 2014-2015 % 2014-2015 & 2010-2015 Population Change Dom. Migra. Rank County, State 4/2010 7/2014 7/2015 Fr2010 Fr2014 Fr2010 Fr2014 Fr2010 Fr2014 1 Fort Bend, Texas      585        687        716      131        29 22.4% 4.29% 13.1% 2.69% 2 Montgomery, Texas      456        519        538        82        19 17.9% 3.57% 11.8% 2.48% 3 Denton, Texas      663        755        781      118        26 17.8% 3.42% 10.4% 2.14% 4 Lee, Florida      619        679        702        83        23 13.5% 3.35% 10.8% 3.10% 5 Collin, Texas      782        886        914      132        28 16.8% 3.17% 9.3% 1.86% 6 Denver, Colorado      600        664        683        83        19 13.8% 2.80% 7.2% 1.59% 7 Orange, Florida   1,146     1,256     1,288      142        32 12.4% 2.52% 3.6% 0.84% 8 Wake, North Carolina      901        999     1,024      123        25 13.7% 2.49% 6.6% 1.22% 9 Utah, Utah      517        562        575        59        14 11.3% 2.43% 0.3% 0.45% 10 Polk, Florida      602        635        650        48        15 8.0% 2.33% 4.2% 1.53% 11 Hillsborough, Florida   1,229     1,318     1,349      120        31 9.7% 2.33% 3.4% 1.11% 12 Travis, Texas   1,024     1,151     1,177      152        26 14.9% 2.22% 6.5% 0.77% 13 Clark, Nevada   1,951     2,069     2,115      164        46 8.4% 2.21% 3.1% 1.20% 14 Mecklenburg, North Carolina      920     1,012     1,034      114        22 12.4% 2.19% 4.9% 0.84% 15 Gwinnett, Georgia      805        878        896        90        18 11.2% 2.06% 3.6% 0.69% 16 Harris, Texas   4,093     4,448     4,538      445        90 10.9% 2.03% 2.0% 0.38% 17 Bexar, Texas   1,715     1,860     1,898      183        37 10.7% 2.01% 4.4% 0.82% 18 Brevard, Florida      543        557        568        25        11 4.5% 2.01% 4.5% 1.97% 19 Volusia, Florida      495        508        518        23        10 4.7% 2.00% 5.3% 2.14% 20 Washington, Oregon      530        563        574        44        11 8.4% 1.96% 2.3% 0.80% 21 Maricopa, Arizona   3,817     4,090     4,168      351        78 9.2% 1.91% 3.9% 0.92% 22 Washington, District of Columbia      602        660        672        70        12 11.7% 1.88% 4.3% 0.57% 23 Tarrant, Texas   1,810     1,946     1,982      173        36 9.6% 1.86% 3.0% 0.61% 24 Arapahoe, Colorado      572        620        631        59        11 10.3% 1.85% 4.0% 0.72% 25 El Paso, Colorado      622        663        674        52        12 8.4% 1.75% 2.2% 0.55% 26 Palm Beach, Florida   1,320     1,399     1,423      103        24 7.8% 1.74% 4.2% 1.00% 27 Snohomish, Washington      713        759        773        59        13 8.3% 1.72% 3.0% 0.67% 28 King, Washington   1,931     2,082     2,117      186        35 9.6% 1.67% 2.4% 0.29% 29 Multnomah, Oregon      735        778        790        55        12 7.5% 1.60% 2.8% 0.68% 30 Alameda, California   1,510     1,613     1,638      128        25 8.5% 1.57% 1.2% 0.22% 31 Pierce, Washington      795        831        844        49        13 6.1% 1.54% 1.1% 0.58% 32 San Joaquin, California      685        715        726        41        11 6.0% 1.54% 0.6% 0.52% 33 Duval, Florida      864        899        913        49        14 5.6% 1.52% 0.5% 0.47% 34 DeKalb, Georgia      692        724        735        43        11 6.2% 1.47% -2.5% -0.10% 35 Davidson, Tennessee      627        669        679        52        10 8.3% 1.46% 2.0% 0.30% 36 San Francisco, California      805        853        865        60        12 7.4% 1.44% 0.6% 0.20% 37 Broward, Florida   1,748     1,870     1,896      148        27 8.5% 1.43% 1.7% 0.11% 38 Franklin, Ohio   1,164     1,234     1,252        88        18 7.6% 1.43% 1.0% 0.17% 39 Fulton, Georgia      921        996     1,011        90        14 9.8% 1.41% 3.4% 0.28% 40 Cobb, Georgia      688        731        741        53        10 7.7% 1.41% 1.4% 0.24% 41 Riverside, California   2,190     2,328     2,361      171        33 7.8% 1.40% 3.0% 0.51% 42 Tulsa, Oklahoma      603        630        639        36          9 5.9% 1.40% 1.5% 0.53% 43 Contra Costa, California   1,049     1,112     1,127        78        15 7.4% 1.35% 2.8% 0.49% 44 Sacramento, California   1,419     1,481     1,501        83        20 5.8% 1.34% 0.4% 0.28% 45 Dallas, Texas   2,368     2,520     2,553      186        34 7.8% 1.34% 0.0% -0.10% 46 Salt Lake, Utah   1,030     1,093     1,107        78        14 7.5% 1.32% -0.1% -0.09% 47 Oklahoma, Oklahoma      719        767        777        58        10 8.1% 1.31% 2.5% 0.23% 48 Dane, Wisconsin      488        517        524        36          7 7.3% 1.30% 1.9% 0.25% 49 Hidalgo, Texas      775        832        842        68        11 8.7% 1.29% -1.1% -0.52% 50 Pinellas, Florida      917        938        950        33        12 3.6% 1.25% 3.7% 1.18% 51 Stanislaus, California      514        532        538        24          6 4.7% 1.21% -0.7% 0.12% 52 Santa Clara, California   1,782     1,896     1,918      136        22 7.7% 1.16% -1.5% -0.53% 53 Jefferson, Colorado      535        559        566        31          6 5.8% 1.16% 3.4% 0.69% 54 Douglas, Nebraska      517        544        550        33          6 6.4% 1.12% 0.2% -0.07% 55 Suffolk, Massachusetts      722        770        778        56          8 7.8% 1.08% -2.1% -0.75% 56 Johnson, Kansas      544        574        580        36          6 6.6% 1.08% 1.6% 0.12% 57 San Diego, California   3,095     3,266     3,300      204        34 6.6% 1.04% -0.2% -0.29% 58 Fresno, California      930        965        975        44        10 4.8% 1.02% -1.7% -0.21% 59 Kent, Michigan      603        630        636        34          6 5.6% 0.97% 0.6% 0.02% 60 Bronx, New York   1,385     1,442     1,455        70        14 5.1% 0.95% -6.0% -1.10% 61 Montgomery, Maryland      972     1,030     1,040        68        10 7.0% 0.94% -2.2% -0.80% 62 Kern, California      840        874        882        43          8 5.1% 0.91% -1.5% -0.31% 63 Hennepin, Minnesota   1,152     1,212     1,223        71        11 6.1% 0.91% -0.1% -0.29% 64 Miami-Dade, Florida   2,498     2,669     2,693      195        24 7.8% 0.91% -3.3% -1.23% 65 Guilford, North Carolina      488        513        518        29          5 6.0% 0.90% 1.9% 0.15% 66 San Mateo, California      718        758        765        47          7 6.5% 0.90% 0.2% -0.21% 67 Ramsey, Minnesota      509        534        538        29          4 5.8% 0.84% -1.5% -0.60% 68 San Bernardino, California   2,035     2,110     2,128        93        18 4.6% 0.84% -1.1% -0.23% 69 Middlesex, Massachusetts   1,503     1,573     1,585        82        13 5.5% 0.80% -0.8% -0.42% 70 Hudson, New Jersey      634        670        675        41          5 6.4% 0.80% -6.6% -1.65% 71 Orange, California   3,010     3,145     3,170      160        25 5.3% 0.79% -0.4% -0.32% 72 Essex, Massachusetts      743        770        776        33          6 4.4% 0.72% 0.1% -0.18% 73 Queens, New York   2,231     2,322     2,339      109        17 4.9% 0.72% -5.1% -1.09% 74 Anne Arundel, Maryland      538        560        564        27          4 4.9% 0.70% 1.0% -0.04% 75 Prince George's, Maryland      864        903        910        46          6 5.3% 0.68% -2.4% -0.72% 76 Honolulu, Hawaii      953        992        999        46          7 4.8% 0.67% -2.4% -0.75% 77 Plymouth, Massachusetts      495        507        510        15          3 3.1% 0.66% 0.7% 0.14% 78 Kane, Illinois      515        528        531        16          3 3.0% 0.63% -1.8% -0.23% 79 New Castle, Delaware      538        553        557        18          3 3.4% 0.62% -0.6% -0.18% 80 Kings, New York   2,505     2,621     2,637      132        16 5.3% 0.61% -5.0% -1.25% 81 Bergen, New Jersey      905        933        939        33          6 3.7% 0.61% -0.8% -0.28% 82 Los Angeles, California   9,819   10,109   10,170      352        61 3.6% 0.60% -2.7% -0.60% 83 Jackson, Missouri      674        684        688        13          4 2.0% 0.58% -1.4% -0.06% 84 Pima, Arizona      980     1,004     1,010        30          6 3.0% 0.58% 0.1% 0.02% 85 Lancaster, Pennsylvania      519        534        537        17          3 3.3% 0.56% -0.6% -0.28% 86 Ventura, California      823        846        851        27          4 3.3% 0.52% -1.3% -0.34% 87 Chester, Pennsylvania      499        513        516        17          3 3.4% 0.52% 0.1% -0.16% 88 Union, New Jersey      536        553        556        19          3 3.6% 0.49% -3.0% -0.70% 89 Worcester, Massachusetts      799        815        819        20          4 2.6% 0.49% -1.1% -0.27% 90 Norfolk, Massachusetts      671        693        696        25          3 3.8% 0.48% 0.0% -0.29% 91 Marion, Indiana      903        935        939        36          4 3.9% 0.48% -1.6% -0.55% 92 Ocean, New Jersey      577        586        589        12          3 2.1% 0.48% 0.6% 0.07% 93 New York, New York   1,586     1,637     1,645        59          8 3.7% 0.46% -4.4% -0.99% 94 Sedgwick, Kansas      498        509        512        13          2 2.7% 0.45% -2.3% -0.48% 95 Middlesex, New Jersey      810        837        841        31          4 3.8% 0.43% -3.8% -1.02% 96 Baltimore, Maryland      805        828        831        26          3 3.3% 0.40% -0.4% -0.31% 97 Westchester, New York      949        973        976        27          4 2.9% 0.40% -1.9% -0.46% 98 Jefferson, Kentucky      741        761        764        23          3 3.0% 0.39% -0.3% -0.27% 99 Bristol, Massachusetts      548        555        557          8          2 1.5% 0.39% 0.0% 0.04% 100 Philadelphia, Pennsylvania   1,526     1,562     1,567        41          6 2.7% 0.38% -3.1% -0.68% 101 Macomb, Michigan      841        862        865        24          3 2.8% 0.37% 0.6% -0.12% 102 Montgomery, Pennsylvania      800        817        819        19          3 2.4% 0.33% -0.2% -0.24% 103 Essex, New Jersey      784        795        797        13          2 1.7% 0.31% -4.9% -0.89% 104 Fairfax, Virginia   1,082     1,139     1,142        61          3 5.6% 0.28% -4.3% -1.47% 105 Will, Illinois      678        686        687        10          2 1.4% 0.24% -2.4% -0.47% 106 Fairfield, Connecticut      917        946        948        31          2 3.4% 0.24% -1.9% -0.74% 107 Providence, Rhode Island      627        632        633          7          1 1.1% 0.23% -3.4% -0.67% 108 Nassau, New York   1,340     1,359     1,361        22          3 1.6% 0.20% -1.2% -0.33% 109 Passaic, New Jersey      502        510        511          9          1 1.9% 0.20% -5.6% -1.20% 110 Oakland, Michigan   1,202     1,240     1,242        40          2 3.3% 0.19% -0.3% -0.53% 111 Delaware, Pennsylvania      559        563        564          5          1 0.9% 0.17% -1.8% -0.43% 112 Hamilton, Ohio      802        806        808          5          1 0.7% 0.16% -2.4% -0.40% 113 Bernalillo, New Mexico      663        676        677        14          1 2.1% 0.15% -1.2% -0.47% 114 Bucks, Pennsylvania      625        627        627          2          1 0.3% 0.12% -0.8% -0.14% 115 St. Louis, Missouri      999     1,002     1,003          4          1 0.4% 0.12% -1.8% -0.35% 116 El Paso, Texas      801        836        836        35          0 4.4% 0.01% -3.3% -1.44% 117 Jefferson, Alabama      658        660        660          2        (0) 0.3% 0.00% -1.6% -0.33% 118 DuPage, Illinois      917        934        934        17        (0) 1.8% 0.00% -2.5% -0.80% 119 Camden, New Jersey      514        511        511        (3)        (0) -0.5% -0.01% -4.0% -0.68% 120 Milwaukee, Wisconsin      948        958        958        10        (0) 1.1% -0.02% -3.4% -0.86% 121 Lake, Illinois      703        704        704          1        (0) 0.1% -0.03% -4.1% -0.80% 122 Shelby, Tennessee      928        938        938        10        (0) 1.1% -0.04% -3.2% -0.83% 123 Monmouth, New Jersey      630        629        629        (2)        (0) -0.3% -0.05% -2.0% -0.37% 124 Montgomery, Ohio      535        533        532        (3)        (0) -0.5% -0.05% -2.4% -0.45% 125 Suffolk, New York   1,493     1,502     1,502          8        (1) 0.6% -0.05% -2.5% -0.63% 126 Erie, New York      919        923        923          4        (1) 0.4% -0.07% -1.4% -0.47% 127 Monroe, New York      744        750        750          5        (1) 0.7% -0.10% -2.6% -0.80% 128 Hartford, Connecticut      894        897        896          2        (1) 0.2% -0.11% -3.4% -0.81% 129 Summit, Ohio      542        543        542          0        (1) 0.0% -0.12% -1.4% -0.41% 130 Allegheny, Pennsylvania   1,223     1,233     1,230          7        (2) 0.6% -0.20% -0.4% -0.46% 131 Cook, Illinois   5,195     5,249     5,238        43      (10) 0.8% -0.20% -4.0% -1.06% 132 New Haven, Connecticut      862        861        859        (3)        (2) -0.3% -0.21% -3.4% -0.84% 133 Baltimore city, Maryland      621        624        622          1        (2) 0.1% -0.30% -3.8% -0.92% 134 Cuyahoga, Ohio   1,280     1,261     1,256      (24)        (5) -1.9% -0.37% -3.7% -0.76% 135 Wayne, Michigan   1,821     1,766     1,759      (61)        (7) -3.4% -0.38% -6.2% -0.87% In 000s Data from Census Bureau


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

Photograph: Lee County, Florida (Cape Coral-Fort Myers), Top domestic migration gainer (by author)

The Sun Belt Is Rising Again, New Census Numbers Show

Mon, 03/28/2016 - 22:38

From 2009-11, Americans seemed to be clustering again in dense cities, to the great excitement urban boosters. The recently released 2015 Census population estimates confirm that was an anomaly. Americans have strongly returned to their decades long pattern of greater suburbanization and migration to lower-density, lower-cost metropolitan areas, largely in the South, Intermountain West and, most of all, in Texas.

Among the nation’s 53 largest metropolitan statistical areas, the two biggest population gainers between July 1, 2014, and July 1, 2015, were Houston and Dallas-Ft. Worth, together adding roughly 300,000 people. Their growth, in absolute terms, was larger than that of both Los Angeles and New York, which, respectively, are nearly two and three times as populous, notes demographer Wendell Cox. Two other Sun Belt metropolitan areas, Atlanta and Phoenix, also added more people over the year to July 2015 than L.A. and New York.

The divergence in growth is even greater when expressed in percentage terms. Of the 10 fastest-growing metro areas in the country, all but two were located in the old Confederacy. Austin ranks first, with 3.0%  growth, followed by Orlando, Fla. (2.6%), and Raleigh (2.5%). Other fast-growing southern metro areas included San Antonio, Texas (2.2%); Nashville, Tenn.; and Jacksonville, Fla. (both 2.0%). The fastest growers outside the South are Denver (2.1%) and Las Vegas (2.2%), the latter of which is now clearly back from the dead.

The old big cities aren’t all losing people. New York and Los Angeles’ populations grew as well, 0.43%  and 0.65%, respectively, but that’s well below the overall U.S. population growth rate of 0.79% over the same span. Some metro areas, notably Chicago, Pittsburgh, Rochester, Hartford, Cleveland and Buffalo suffered slight losses, while many others, such as St. Louis, Memphis, Milwaukee and Detroit remained essentially stagnant.

Critically, the most recent patterns confirm longer-term trends. Most of the cities at the top of the list are also the ones that have been growing fastest since 2000, led by Raleigh, Austin, and Las Vegas. Also in the top 10 since 2000 are the other three big Texas cities, Phoenix, Charlotte, Orlando and one California metro, largely exurban San Bernardino-Riverside. The slowest growth also follow a similar pattern, with Chicago, several Rust Belt cities, as well as Los Angeles and New York, all in the bottom quintile in percentage terms.

Where Americans Are Moving

To look ahead to where America will be growing in the future, perhaps the best indicator is net domestic migration. This measures where people are moving, essentially taking their skills, purchasing power and capital with them. Houston and Dallas-Fort Worth enjoyed the largest net gains from domestic migration, roughly 60,000 each, from July 1, 2014, to July 1, 2015, followed by Phoenix, Tampa-St. Petersburg, Atlanta and Austin. The Sun Belt, once written off as doomed by the urbanist punditry, is clearly back.

In percentage terms, Austin led the nation, with a population expansion of 1.7% from net domestic migration. The top 10 cities in percentage terms are all in the Sun Belt (Tampa-St. Petersburg ranked second, followed by Raleigh, Orlando and Jacksonville) or the Intermountain West (Denver and Las Vegas).

The biggest losers in overall domestic migration are New York (-164,000), Chicago (-80,000) and Los Angeles (-71,000). In percentage terms, Chicago suffered the biggest losses, followed by New York, Hartford, Memphis and Milwaukee. Despite the explosive growth in Silicon Valley,   San Jose ranked 9th in percentage loss, just behind 10th place Detroit.

In looking at these trends, the Atlantic’s Derek Thompson, one of the more savvy Census watchers, recently suggested that “it’s 2006 again” as people head out to the Sun Belt metros. When international migration is added to the mix along with the domestic migration numbers, the top five gainers remain in the Sun Belt, led by Houston and Dallas-Fort Worth, which are also becoming meccas for immigrants.

These trends predate the recession. Since 2000, the biggest migration winners in percentage terms are Raleigh, Austin, Las Vegas, Charlotte, Phoenix, and Orlando. In total numbers since 2000 it’s also a familiar list, led by places like Phoenix (net gain: 705,000), Dallas-Ft. Worth (569,000), Atlanta (547,000), Riverside-San Bernardino (513,000) and Houston (496,000).

The biggest losers are also familiar, led by the New York metropolitan area, which has lost 2.65 million net migrants since 2000, followed by Los Angeles (negative 1.65 million) and Chicago (down 880,000). Remarkably the two metro areas that have benefited the most from the digitization of the economy are in the loser’s column; between them San Jose and San Francisco lost over 550,000 domestic migrants since 2000.

The Suburban Revival Continues

The other big finding from the new estimates: suburbs are back. In the wake of the housing bust it was widely predicted that the ‘burbs were doomed by high gas prices, millennial preferences and a profound shift of employment to the core cities. The New York Times NYT -0.08% evenpublished fantasies on how the suburban carcass could be carved up, envisioning suburban three-car garages “subdivided into rental units with street front cafés, shops and other local businesses” while abandoned pools would become skateboard parks.

As  economist Jed Kolko has noted, the much celebrated era when core cities grew faster than suburbs — the immediate 2009-2011 aftermath of the recession — turned out to be remarkably short-lived. From July 2014-July 2015, only seven out of 53 core cities added more domestic migrants than their suburbs. Of these, the District of Columbia (Washington) could be considered high density urban; the other five core counties are functionally more suburban than urban (Phoenix, Raleigh, Richmond, Sacramento and San Antonio).

Overall domestic migration continues from the core cities to the suburbs. Over the last year core counties lost a net 185,000 domestic migrants, while the suburban counties gained 187,000.

Looking Ahead

These trends are likely to continue as long as the economy achieves even modest growth.  One big factor will be the migration of millennials, now headed increasingly to Sun Belt cities and suburbs. Since 2010,  among educated millennials, the fastest growth in migration has been to such lower-cost regions as Atlanta, Orlando, New Orleans, Houston, Dallas-Fort Worth, Pittsburgh, Columbus, and even Cleveland.

This is largely a product of high housing prices. According to Zillow, rents claim upward of 45% of income in Los Angeles, San Francisco, New York, and Miami compared to less than 30% of income in places like Dallas-Fort Worth and Houston.  The costs of purchasing a house are even more lopsided: in Los Angeles and the Bay Area, a monthly mortgage takes, on average, close to 40% of income, compared to 15% nationally.

Millennials are also headed increasingly to the suburbs. According to the National Association of Realtors, 80% of the homes purchased by millennials between 2013 and 2014 were detached houses, and 8% had chosen attached housing. This trend will accelerate in the next few years, suggests Kolko, as the peak of the millennial wave turns 30.

Similarly immigrants — the other big driver shaping our future geography — are also moving increasingly to Sun Belt cities such as Houston, Dallas-Ft, Worth and Atlanta, as newcomers seek out both economic opportunities and lower housing prices. New York remains the immigrant leader, with the foreign-born population increasing by 600,000 since 2000, but second place Houston, a relatively newcomer magnet for immigrants, gained 400,000, more than Chicago and the Bay Area combined. The regions experiencing the highest growth in newcomers in percentage terms were Charlotte and Nashville, which each have seen their foreign-born populations double.

In the coming decade, immigrants and millennials will produce the vast majority of the country’s children — and they increasingly sending them to school in the suburbs of Sun Belt cities. Central (urban core) areas lost substantial numbers of schoolchildren between 2000 and 2010, while school populations rose in newer suburbs and exurbs. Overall the child populations in cities such as Austin, Houston, San Antonio, Raleigh, Orlando and Nashville are on the rise while dropping in places like Los Angeles and Chicago, as well as some Rust Belt cities.

America’s geography will be increasingly dominated by Sun Belt cities as well as suburbs. This challenges the preferred narrative among most planners and the mainstream media, as well as some developers who  believe more Americans desire to live in high cost, high density locales. Some day perhaps the facts — as seen both in this year’s numbers and longer term trends — will intrude on the narrative. Dispersion is back, and getting stronger. It’s time that developers, planners and the media adjust to the facts, rather than just reflect their prejudices.

Population Change in the Nation's Largest Metropolitan Areas, 2014-2015 Change Rank Region 2014 Population 2015 Population 14-15 Change % Change 1 Houston-The Woodlands-Sugar Land, TX  6,497,864 6,656,947 159,083 2.4 2 Dallas-Fort Worth-Arlington, TX  6,958,092 7,102,796 144,704 2.1 3 Atlanta-Sandy Springs-Roswell, GA 5,615,364 5,710,795 95,431 1.7 4 Phoenix-Mesa-Scottsdale, AZ  4,486,543 4,574,531 87,988 2 5 New York-Newark-Jersey City, NY-NJ-PA  20,095,119 20,182,305 87,186 0.4 6 Los Angeles-Long Beach-Anaheim, CA  13,254,397 13,340,068 85,671 0.6 7 Miami-Fort Lauderdale-West Palm Beach, FL  5,937,100 6,012,331 75,231 1.3 8 Washington-Arlington-Alexandria, DC-VA-MD-WV  6,033,891 6,097,684 63,793 1.1 9 Seattle-Tacoma-Bellevue, WA  3,672,866 3,733,580 60,714 1.7 10 Orlando-Kissimmee-Sanford, FL  2,326,729 2,387,138 60,409 2.6 11 San Francisco-Oakland-Hayward, CA  4,595,980 4,656,132 60,152 1.3 12 Denver-Aurora-Lakewood, CO  2,755,856 2,814,330 58,474 2.1 13 Tampa-St. Petersburg-Clearwater, FL  2,917,813 2,975,225 57,412 2 14 Austin-Round Rock, TX  1,943,465 2,000,860 57,395 3 15 San Antonio-New Braunfels, TX  2,332,790 2,384,075 51,285 2.2 16 Riverside-San Bernardino-Ontario, CA  4,438,715 4,489,159 50,444 1.1 17 Charlotte-Concord-Gastonia, NC-SC  2,379,177 2,426,363 47,186 2 18 Las Vegas-Henderson-Paradise, NV  2,069,146 2,114,801 45,655 2.2 19 Portland-Vancouver-Hillsboro, OR-WA  2,348,607 2,389,228 40,621 1.7 20 Nashville-Davidson--Murfreesboro--Franklin, TN  1,793,910 1,830,345 36,435 2 21 Boston-Cambridge-Newton, MA-NH  4,739,385 4,774,321 34,936 0.7 22 San Diego-Carlsbad, CA  3,265,700 3,299,521 33,821 1 23 Raleigh, NC  1,243,035 1,273,568 30,533 2.5 24 Sacramento--Roseville--Arden-Arcade, CA  2,244,879 2,274,194 29,315 1.3 25 Minneapolis-St. Paul-Bloomington, MN-WI  3,495,656 3,524,583 28,927 0.8 26 Jacksonville, FL  1,421,004 1,449,481 28,477 2 27 Columbus, OH  1,997,308 2,021,632 24,324 1.2 28 San Jose-Sunnyvale-Santa Clara, CA  1,954,348 1,976,836 22,488 1.2 29 Oklahoma City, OK  1,337,619 1,358,452 20,833 1.6 30 Indianapolis-Carmel-Anderson, IN  1,971,861 1,988,817 16,956 0.9 31 Kansas City, MO-KS  2,071,283 2,087,471 16,188 0.8 32 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD  6,053,720 6,069,875 16,155 0.3 33 Salt Lake City, UT  1,154,513 1,170,266 15,753 1.4 34 Richmond, VA  1,259,685 1,271,334 11,649 0.9 35 New Orleans-Metairie, LA  1,251,962 1,262,888 10,926 0.9 36 Baltimore-Columbia-Towson, MD  2,786,853 2,797,407 10,554 0.4 37 Grand Rapids-Wyoming, MI  1,028,962 1,038,583 9,621 0.9 38 Cincinnati, OH-KY-IN  2,148,450 2,157,719 9,269 0.4 39 Louisville/Jefferson County, KY-IN  1,271,172 1,278,413 7,241 0.6 40 Virginia Beach-Norfolk-Newport News, VA-NC  1,717,853 1,724,876 7,023 0.4 41 Tucson, AZ  1,004,244 1,010,025 5,781 0.6 42 St. Louis, MO-IL  2,806,191 2,811,588 5,397 0.2 43 Providence-Warwick, RI-MA  1,609,533 1,613,070 3,537 0.2 44 Birmingham-Hoover, AL  1,142,823 1,145,647 2,824 0.2 45 Milwaukee-Waukesha-West Allis, WI  1,574,115 1,575,747 1,632 0.1 46 Memphis, TN-MS-AR  1,342,914 1,344,127 1,213 0.1 47 Detroit-Warren-Dearborn, MI  4,301,480 4,302,043 563 0 48 Buffalo-Cheektowaga-Niagara Falls, NY  1,136,642 1,135,230 -1,412 -0.1 49 Rochester, NY  1,083,678 1,081,954 -1,724 -0.2 50 Hartford-West Hartford-East Hartford, CT  1,213,225 1,211,324 -1,901 -0.2 51 Cleveland-Elyria, OH  2,064,079 2,060,810 -3,269 -0.2 52 Pittsburgh, PA  2,358,096 2,353,045 -5,051 -0.2 53 Chicago-Naperville-Elgin, IL-IN-WI  9,557,294 9,551,031 -6,263 -0.1

This piece originally appeared in Forbes.

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

Photo by telwink.

Even as They Retire, it's Still About the Boomers

Sun, 03/27/2016 - 22:38

America’s baby boomers, even as they increasingly enter retirement, continue to dominate our political economy in ways no previous group of elderly has done. Sadly, their impact has also proven toxic, presenting our beleaguered electorate a likely Hobbesian presidential choice between a disliked, and distrusted, political veteran and a billionaire agitator most Americans find scary.

Throughout the campaign, boomers have provided the bedrock of support for both Hillary Clinton and Donald Trump. Bernie Sanders may have devastated Clinton among millennial voters, by almost 3-1, but she has more than offset that gap by winning overwhelming support from older voters.

In the South, it was older African Americans, particularly women, who sealed Clinton’s big wins. But older voters of all races have supercharged her campaign elsewhere; she won older voters by 39 percentage points in Missouri and 54 points in Ohio. She also captured upward of 73 percent of their votes in critical states like Virginia.

No surprise that she also did well in Arizona and Florida, states that are major retirement havens. Four of the five areas with the most retirees per capita are located in these two states.

But it’s Donald Trump who arguably was the biggest winner in the boomer wars. He has thrived most in states with aging white populations, notably Nevada, Arizona, Florida, Massachusetts, New Hampshire and South Carolina. He has consistently run five to 15 points better with the boomer generation than among younger GOP primary voters.

Some of this preference is attributable to racist and xenophobic sentiments among older people, who are, for example, typically far less favorable toward inter-racial dating than younger cohorts. Similarly, boomers are far more likely than millennials to harbor patriotic sentiments; only a third of them believe America is the greatest country in the world, compared with half of boomers. Trump’s appeal to “Make America great again” may connect with boomers, but not so much with their offspring.

Read the entire piece at The Orange County Register.

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

The Relationship Between Fertility and National Income

Sat, 03/26/2016 - 22:38

We all heard that “demography is destiny”. But how many of us truly believe it? If demography was destiny, the world would look very different today. The two demographic giants China and India would be uncontested economic and military powers. The United States would be a regional power struggling to keep up. Larger European nations such as Britain, France and Germany would barely register on the economic map, while smaller ones such as Switzerland and Finland would be invisible. Nigeria and DR Congo would be African powerhouses. Brazil, Indonesia and the Philippines would be the shining stars of their continents.

None of this is true because demography is not destiny. Population size alone does not set a country on a predictable course. Still, demography is, among other factors, an important determinant of destiny. While the rate of demographic growth (or decline) is important, what is more important is the age distribution of the population. Too many old people means an elevated dependency ratio and less income available for spending and investing. Too many young people means an overburdened education system and high unemployment.

The chart below shows for each country the percentage of the population that is aged 0-29 vs. per capita GDP based on purchasing power parity (PPP). The correlation is undeniable.

Countries with a smaller percentage of young people have higher GDP per capita. Many of these countries and regions, including the United States, Europe and China, have benefited from a demographic dividend while their birth rates declined in recent decades.

Conversely, countries with more young people have lower GDP per capita. Most of them are in Asia and Africa.

We can argue about causality. Are countries poorer because they have more children? Or do they have more children because they are poorer? Or are they both poorer and have more children because of a third factor?

Nothing is simple and all three are true. Countries are poorer because they have too many children, mothers have no time to educate themselves, and there is little or no disposable income to save or invest. But countries also have more children in part because they are poorer, have inadequate health services and suffer from high child mortality. And many countries are poorer and more fertile because female literacy is low and gender inequality is high.

What is known is that countries that experience a decline in their birth rate sometimes realize a demographic dividend, an economic boost that can last years or even decades. Improving health care and boosting literacy have been shown to break the cycle of extreme poverty and extreme fertility.

Meanwhile, this is the world that we face in the next few decades: rich countries that are getting older and poor countries that are very young. Working-age populations are shrinking in the rich countries while in poor countries, they are booming beyond those countries’ abilities to educate them, shelter them and employ them.

The chart above shows that there are many outliers, countries that are either poor despite being relatively older, or richer despite being relatively younger. When we looked to see if the outliers have anything in common, it turned out that they do.

The first group (old and poor) are shown in red and are the countries that are former or current communist states. The second group (rich and young) are shown in black and are the leading oil and gas-producing nations. The yellow data points are the nations that are (or were) both communist and wealthy from energy resources.

Communism may be considered an “unusual” way of managing an economy since it conflicts with strong human instincts for creativity and innovation. Likewise, the huge accidental wealth that comes from finding oneself living on top of vast underground resources may also be deemed “unusual” (or certainly lucky) since it is probably rare, or perhaps even unprecedented, in several millennia of human experience.

If we remove the outlying red and black data points, we end up with the chart below with a much better regression and trend line and an r-squared of 0.78, a large improvement from 0.37 when all the data is included. The trend line is curved because the y-axis is on a log scale.

This reinforces the idea that in a large majority of countries, young populations tend to be far poorer. At first, this statement may ring intuitively true and uncontroversial, because young people have had less time to accumulate wealth, until one examines the magnitude of the wealth gap. The GDP per capita of the very youngest nations is less than 5% that of the oldest. The Central African Republic’s is 1% of Switzerland’s.

This is a constantly changing dynamic. And it remains to be seen whether the rich countries of the West can weather the aging of their populations and maintain their GDP per capita at current levels.

They may struggle to do so and we may find that over the long term, demography reasserts itself every so often, even if temporarily, as the leading driver of our destiny.

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

Baby photo by Bigstock.

“Texas Keeps Getting Bigger” The New Metropolitan Area Estimates

Thu, 03/24/2016 - 18:19

The United States Census Bureau has just released its 2015 population estimates for metropolitan areas and counties. Again, the story is Texas, with the Bureau’s news release headline reading: Four Texas Metro Areas Collectively Add More Than 400,000 People in the Last Year. The Census Bureau heralded the accomplishment with a ”Texas Keeps Getting Bigger” poster, which is shown below. The detailed data is in the table at the bottom of the article.

Fastest Growing

Texas has four of the nation’s major metropolitan areas (over 1,000,000 population), and all of them ranked in the top 20 (out of 53) in population gain between 2014 and 2015. Houston again was number one, with a gain of 159,000, Dallas-Fort Worth followed in second place, gaining 145,000. The gap between Dallas-Fort Worth and Houston was small, only 10 percent. However, the gap between the third largest city (Atlanta) and Dallas-Fort Worth was more than 50 percent

Austin and San Antonio were also in the top 20. Austin gained 57,000 residents, and again was the fastest growing major metropolitan area in the nation (3.0 percent). San Antonio added 51,000.

This represents something of a return to pre-Great Recession normalcy, with Atlanta adding the third most population (95,000) and Phoenix adding 88,000. These two metropolitan areas were hard hit in the housing bust, but are seeing a return of substantial growth. New York, which is far larger than any of the top four, took fifth place, adding 87,000 (Figure 2).

On a percentage gain basis, all four Texas metropolitan areas were in the top 10. Austin was again the fastest growing. Houston was 4th, San Antonio 6th and Dallas-Fort Worth 8th. Two other of the national best performers in percentage population growth were also high on the list, including #3 Raleigh and #5 Las Vegas. Las Vegas was the fastest growing major metropolitan area through most of the 2000s. When Las Vegas stumbled late in the 2000s, Raleigh assumed the top position. Denver ranked 7th, the only non-southern metropolitan area in the top 10 (Figure 3).

Slowest Growing (or Losing)

The Chicago metropolitan area had the largest population loss, at 6,000. This was the second straight year of losses for Chicago, though last year’s was much smaller. Chicago, at 9.55 million residents will need to reverse this performance if it is ever to add the 450,000 people necessary to make it a megacity of over 10 million. Chicago’s weather is not the most inviting and the state of Illinois’ dismal fiscal position (rated by one source as the second worst run in the nation) is not likely to attract the job creating investment necessary to population growth.

Five other metropolitan areas experienced losses, including Pittsburgh, Cleveland, Hartford, Rochester and Buffalo. Not all of the South is growing either with both Memphis and Birmingham residing in the bottom 10 (Figure 4).

Pittsburgh lost the largest percentage of its population, followed by Rochester, Cleveland, Hartford, Buffalo and Chicago (Figure 5).

Domestic Migration: Top 10

The four Texas cities all showed up on the top 10 in numeric net domestic migration gain as well. Houston added 62,000 net domestic migrants, followed by Dallas-Fort Worth and 58,000. Phoenix ranked third, Tampa St. Petersburg ranked fourth and Atlanta ranked fifth. Austin was sixth in net domestic migration and the other Texas City, San Antonio, ranked 10th (Figure 6).

Austin led the nation in the percentage of population growth from net domestic migration, at approximately 1.7 percent. Tampa St. Petersburg ranked second, followed by Raleigh, Orlando and Jacksonville (Figure 7).

Domestic Migration: Bottom 10

By far the largest net domestic migration loser was New York, which lost 164,000. Chicago lost 80,000, and Los Angeles lost 71,000. It was a substantial drop to the fourth largest loser, Washington at 28,000,   closely followed by Philadelphia at 24,000 and Detroit at 22,000 (Figure 8).

Chicago had the largest percentage loss of any major metropolitan area from net domestic migration, at 0.83 percent, slightly more than New York's 0.82 percent. Hartford, Rochester and Memphis ranks from 3rd to 5th, all losing 0.6 percent from net domestic migration or more. Milwaukee, Los Angeles, Virginia Beach, San Jose, Detroit and Cleveland all lost between 0.5 percent and 0.6 percent to net domestic migration (Figure 9).

Ranking Changes

There were a few changes in the rankings this year. Washington passed Philadelphia to assume the sixth largest position. Philadelphia, which was the fourth largest metropolitan area in the nation in the early 2000's has fallen to seventh, having also been passed by both Dallas-Fort Worth and Houston. Denver overtook St. Louis, to assume the 19th position. Orlando passed both San Antonio and Pittsburgh to become the 24th largest metropolitan area. Even while falling behind Orlando, San Antonio past Pittsburgh. Las Vegas overtook Kansas City and became the 29th largest metropolitan area. Austin passed both Indianapolis and San Jose.

Milestones were also set by Miami, which rose to above 6 million population, while Columbus and Austin grew to more than 2 million. Perhaps the bigger surprise was a milestone not reached. Had recent trends continued, Honolulu would have become the 54th metropolitan area to reach 1 million population. However, Honolulu fell short by 1300 residents.

Return to the City: The Elusive Illusion

Despite the popular lore one hears at a Starbucks in Manhattan or reads in some ever-hopeful core city-centric news outlets, people are still moving to the suburbs. There is no doubt that urban cores, especially close to downtown areas (central business districts) are doing better than before, in no small measure because crime rates have fallen so much (Thank you, Rudi Giuliani).

In all, 22 core counties out of 53 added net domestic migrants. But only y seven added more domestic migrants than the corresponding suburbs. Of these, only one is dominated by high density urbanization, the District of Columbia (Washington). Another, New Orleans, continues its recovery from the huge hurricane population losses. The other five core counties are functionally more suburban than urban (Phoenix, Raleigh, Richmond, Sacramento and San Antonio).

But, overall, domestic migration continues from the core cities to the suburbs. That has been the case even in the worst year for suburban growth (2010-2011) and continued in 2014-2015. Core counties last year lost a net 185,000 domestic migrants, while the suburban counties gained 187,000.


With the release of 2015 population estimate data, halfway between the 2010 and 2010 census, the nation is settling back into a pattern of suburban southern and western growth.

Major Metropolitan Area Population Estimates: 2015 Population 2014-2015 Rank Metropolitan Area 2010 2014 2015 % Change 2014-2015 Net Domestic Migration Rank: Domestic Migration 1 New York, NY-NJ-PA     19,601     20,095     20,182 0.43% -0.82%           52 2 Los Angeles, CA     12,844     13,254     13,340 0.65% -0.54%           47 3 Chicago, IL-IN-WI       9,471       9,557       9,551 -0.07% -0.84%           53 4 Dallas-Fort Worth, TX       6,453       6,958       7,103 2.08% 0.83%           14 5 Houston, TX       5,948       6,498       6,657 2.45% 0.95%           12 6 Washington, DC-VA-MD-WV       5,667       6,034       6,098 1.06% -0.46%           42 7 Philadelphia, PA-NJ-DE-MD       5,971       6,054       6,070 0.27% -0.40%           40 8 Miami, FL       5,586       5,937       6,012 1.27% -0.28%           36 9 Atlanta, GA       5,304       5,615       5,711 1.70% 0.66%           16 10 Boston, MA-NH       4,565       4,739       4,774 0.74% -0.31%           38 11 San Francisco-Oakland, CA       4,345       4,596       4,656 1.31% 0.19%           22 12 Phoenix, AZ       4,205       4,487       4,575 1.96% 1.01%           11 13 Riverside-San Bernardino, CA       4,244       4,439       4,489 1.14% 0.16%           23 14 Detroit,  MI       4,291       4,301       4,302 0.01% -0.51%           44 15 Seattle, WA       3,449       3,673       3,734 1.65% 0.43%           17 16 Minneapolis-St. Paul, MN-WI       3,356       3,496       3,525 0.83% -0.23%           32 17 San Diego, CA       3,104       3,266       3,300 1.04% -0.29%           37 18 Tampa-St. Petersburg, FL       2,789       2,918       2,975 1.97% 1.41%             2 19 Denver, CO       2,554       2,756       2,814 2.12% 1.16%             8 20 St. Louis,, MO-IL       2,790       2,806       2,812 0.19% -0.27%           33 21 Baltimore, MD       2,716       2,787       2,797 0.38% -0.31%           39 22 Charlotte, NC-SC       2,224       2,379       2,426 1.98% 1.15%             9 23 Portland, OR-WA       2,232       2,349       2,389 1.73% 0.91%           13 24 Orlando, FL       2,140       2,327       2,387 2.60% 1.28%             4 25 San Antonio, TX       2,153       2,333       2,384 2.20% 1.14%           10 26 Pittsburgh, PA       2,357       2,358       2,353 -0.21% -0.28%           35 27 Sacramento, CA       2,155       2,245       2,274 1.31% 0.41%           18 28 Cincinnati, OH-KY-IN       2,118       2,148       2,158 0.43% -0.12%           31 29 Las Vegas, NV       1,953       2,069       2,115 2.21% 1.20%             6 30 Kansas City, MO-KS       2,014       2,071       2,087 0.78% 0.04%           26 31 Cleveland, OH       2,076       2,064       2,061 -0.16% -0.51%           43 32 Columbus, OH       1,906       1,997       2,022 1.22% 0.26%           19 33 Austin, TX       1,728       1,943       2,001 2.95% 1.71%             1 34 Indianapolis. IN       1,893       1,972       1,989 0.86% 0.05%           25 35 San Jose, CA       1,842       1,954       1,977 1.15% -0.52%           45 36 Nashville, TN       1,676       1,794       1,830 2.03% 1.18%             7 37 Virginia Beach-Norfolk, VA-NC       1,680       1,718       1,725 0.41% -0.52%           46 38 Providence, RI-MA       1,602       1,610       1,613 0.22% -0.28%           34 39 Milwaukee,WI       1,557       1,574       1,576 0.10% -0.54%           48 40 Jacksonville, FL       1,349       1,421       1,449 2.00% 1.22%             5 41 Oklahoma City, OK       1,258       1,338       1,358 1.56% 0.66%           15 42 Memphis, TN-MS-AR       1,326       1,343       1,344 0.09% -0.60%           49 43 Louisville, KY-IN       1,238       1,271       1,278 0.57% 0.02%           28 44 Raleigh, NC       1,137       1,243       1,274 2.46% 1.32%             3 45 Richmond, VA       1,210       1,260       1,271 0.92% 0.19%           21 46 New Orleans. LA       1,196       1,252       1,263 0.87% 0.19%           20 47 Hartford, CT       1,214       1,213       1,211 -0.16% -0.74%           51 48 Salt Lake City, UT       1,092       1,155       1,170 1.36% -0.04%           29 49 Birmingham, AL       1,129       1,143       1,146 0.25% -0.09%           30 50 Buffalo, NY       1,136       1,137       1,135 -0.12% -0.46%           41 51 Rochester, NY       1,080       1,084       1,082 -0.16% -0.70%           50 52 Grand Rapids, MI          990       1,029       1,039 0.94% 0.09%           24 53 Tucson, AZ          982       1,004       1,010 0.58% 0.02%           27 Total   170,895   178,063   179,875 1.02% -0.52% In 000s Data from Census Bureau


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

Cover picture: Census Bureau ”Texas Keeps Getting Bigger” poster (poster is used at the top and also as the first figure)

Why You Should Think Twice Before Building a Rail Transit System

Wed, 03/23/2016 - 22:38

The Washington Metro system was shut down completely for a day recently to allow crews to inspect all of the power cables in the system. They found 26 cables and connectors in need of immediate repair.

This is just the latest in a series of safety problems and breakdowns that have plagued the system.

Metro has a large unfunded maintenance liability. This doesn’t surprise us because we expect American transit systems to have a backlog.

The difference is that unlike NYC, Chicago, Boston, etc., which have systems a century old, the Washington Metro system is actually new.

The oldest part of the Metro opened in 1976. That means Metro is 40 years old – max. Much of it is actually newer than that.

Forty years after opening, Metro already faces a maintenance crisis.

This should give other regions pause when it comes to building a rail transit system. My colleague Alex Armlovich points out that NYC has more or less been on a 40 year refresh cycle, with two rounds of major system investment since the subways opened. This doesn’t seem out of line as a capital life heuristic to me.

So cities need to keep in mind that if they build a rail system, they not only have to pay to build it, they pretty much have to pay to rebuild it every 40 years. This is a challenge because as we see it’s easier to muster the will to build something new than to maintain something you already have.

Given the huge permanent capital outlays implied by rail transit, you only want to build it where there’s sufficient value to justify it. Washington unquestionably achieves this. It simply hasn’t been able to capture the value into a maintenance revenue stream, plus Metro (like many systems) has been badly mismanaged.

The problem comes in for cities that aren’t NYC, Chicago, Boston, Philly, DC, and San Francisco. Once you get below that group, the value starts becoming more debatable.

Exhibit A is Los Angeles, which has spent untold billions on a huge rail system as ridership actually declined.  LA is continuing to build more and more rail.

But what happens when this system is old?

LA’s Red Line opened in 1993, so is 23 years old.  By the time LA finishes its current rail build out, it’s likely that the original parts of the system will be coming into the zone for a major capital refresh.

Thus shortly LA will find itself in a perpetual capital catchup cycle starting in only a couple decades. This possibly may not happen, but it has happened everywhere else, so why should LA be different?

Given the ridership levels we’ve seen so far, will the value added from rail vs. the old bus approach be there? It’s not looking good. And if the case in LA is looking weak, certainly smaller and less dense places are even more speculative.

All these smaller cities investing billions into rail had better hope their projections of massive benefits come true, because all too soon the rebuild bill will start coming due.

If you don’t believe me, just ask Washington.

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

Photo Credit: Ben Schumin – CC BY-SA 3.0

Trumpism: America’s Berlusconi Moment

Tue, 03/22/2016 - 22:38

Trump envisioned and created today’s city of white boxes for rootless new money types, who dominate the city even as they leave little mark here.

An old joke—that in heaven, the Italians do the cooking; in hell, they run the government—feels a lot darker now that American politics are taking an Italian turn.

Since the fall of Il Duce, Italy has had a staggering 62 governments, and while American doesn’t have that problem yet, our political system is showing all the signs of decline—an inability to come to any consensus, the increased vulgarity of discourse, the utter incompetence of an impenetrable bureaucracy and the growth of extra-constitutional fascist and Mob-like “familial” —run modes of governance—with which Italians have long and unhappy familiarity.

Let’s start with Donald Trump, who the American left now routinely deems an American fascist in the mold of Benito Mussolini. Like Trump, Mussolini (a former journalist) rose rapidly to power as his country was disintegrating from within. Then, too, nationalist resentments were reaching a fever pitch as a large part of the populace—and especially the middle and working classes—lost its remaining faith in the system as economic conditions decayed.

In 1919, for example, there were “cost of living” riots throughout the peninsula as the old governing class lost its grip on the state. Fascism, as Mussolini himself suggested, was predicated on strength—on the use and threat of violence. The disruptive hooliganism of Trump supporters at his rallies evokes the frenzied, violent environment in which Il Duce claimed power in the 1922 “March on Rome,” and held it he was finally ousted and arrested in 1943.

As the Financial Times’  Martin Wolff wrote, Trump follows a pattern that “embodies how great republics meet their end.”

But past results, as the fine print says, are no indicator of future ones and the comparisons between Trump and Mussolini seem overdrawn. Take a breath and recall that Ronald Reagan and George W. Bush, too, were widely dismissed as “fascists” or even Nazis in their time.

Trump clearly has an authoritarian personality , and he appeals to those with that bent, but he’s hardly a true heir to Mussolini. For one thing, Mussolini, like Hitler, was not born into money; they emerged from the life-or-death struggles of the Great War. Unlike those two, Trump does not boast an organized paramilitary black or brown shirt movement.  

It is in the nature of his appeal where Trump does resemble the fascist leaders. His followers, like theirs, are people who feel left out of the calculations of the political class in both parties.

In this sense, he shares much with the nationalist parties on the rise across Europe, drawing support from the middle class disgusted by politicians kowtowing to identity and radical green politics, from voters who feel the ruling parties serve not their interests but their donors and well-heeled interests, and who, despite their protestations of comity with their concerns, actually hold their electorate in various shades of contempt.tired of being told that changes they can feel hurting them, are actually helping them, tired of electing politicians who then ask them: “Who are you going to be believe: Me or your lying eyes?”

Members of America’s white working and middle classes, argues Michael Lind, have become an outsiders, even pariahs in their own county: “Lacking any establishment advocates and sympathetic intellectuals, on left, right or center, many white working class Americans have therefore turned to demagogic outsiders like Trump. Where else are they to go?”

The Donald speaks not only to the their fears haunting the middle class, but also their pride: he wants them to be proud of the country’s past. Some insist the real Italian model may not Mussolini but a more contemporary figure, former Prime Minister Silvio Berlusconi. Like Trump Berlusconi was a successful entrepreneur and  also  a loudmouth.   who appealed to Italians by denouncing “political correctness” as well as the weakness and corruption endemic to the Italian state.   

If so, there’s some room for hope. Unlike Mussolini, Berlusconi never succeeded in overturning the constitutional order.

Whichever comparison is more apt, there’s little doubt that iIn the run-up to the seemingly inevitable, horribly depressing face-off with Trump, we can count on Hillary Clinton and her reliable press minions to keep raising these Italianesque models. Trump will be dressed as a fascist, or even a Nazi, for breaking with the politically correct consensus. Like Berlusconi, he will be investigated for his numerous moral lapses—both personal and business—and, by November, will be about as attractive to much of the electorate as Mitt Romney without his noblesse oblige or respectability.

American Donna

If Trump is tarnished, that’s a good thing. But ihis political demise would sadly t’s one that opens the door to another ugly Italian model, the less public but arguably more effective one followed by Hillary Clinton and much of the Democratic Party.

Clinton, notes journalist Jamelle Bouie  reflects  a machine model, with  control of the party itself as a goal.  Rather than an ideological figure, she “appeals to stalwarts and interest groups (like banks and industry) far more than voters who choose on ideology and belief.”

This approach approximates, more than anything, the structure—though not the actual violence—of the Mafia, with “families.” .These groups that represent distinct, sometimes interlocking, interests, each functioning with almost total dominion over its respective turf but able to process competing demands through a central “commission” like the New York based one founded in 1931—when organized crime, incidentally, was under assault by fascist Italy.

Under a second President Clinton, the Democrats will operate under a similar system, with Wall Street, tech oligarchs, greens, feminists, gays, African-Americans, public sector unions, universities, Latinos,  urban land speculators sitting around the table and her as il capo di tutti capi.

She won’t have much patience for legal niceties, having already pledged to circumvent Congress if they won’t do her bidding. What drives progressives crazy.  about the former Secretary of State is not centralism – they generally supported Barack Obama’s rule by decree – but the very pragmatism that grows naturally  out of this kind of familial structure.

These “families” have already played a critical role in helping bankroll the Clinton machine, both in the form of the family Foundation, whose donations have reached close to $3 billion,  and her campaign. Raising money from the oligarchy, as Bernie Sanders has noted,  makes it much less likely she will challenge their vital interests in a concertedfashion.go after their influence.

Under a Hillary Clinton Administration, the Commission will be far more important than either under her husband or Barack Obama. Unlike these two articulate and charismatic leaders, Clinton inspires little loyalty outside of the “families.” She will not, for example, tackle entrenched interests like the teachers’ unions, which, to his credit, President Obama has been willing to do.   

To be sure, a Commission-style government may not seem as scary as one run by an unpredictable and vulgar billionaire. Yet it could prove, in its own way, even more effectively authoritarian. Already critical Democratic “families” such as the universities, the tech world  and even the media have become centers of  censorship and ideological conformity.  Their cultural influence, already pervasive, is likely to become even greater.

And in choosing a Mafia model, Clinton is adopting a system that lasted longer than thefascisti and thrived through  systematic intimidation of its rivals.  A Clinton Commission  may not cause sleepless nights, as a prospective Trump Administration might , but it hardly represents an edifying future for this most, at least to date, successful of republics.

This piece first appeared in The Daily Beast.

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

Berluscony photo by alessio85 (flickr) [CC BY 2.0], via Wikimedia Commons

Rise of the Mixed-Use Monoliths

Tue, 03/22/2016 - 06:28

Density rules new development. From Florida to Texas to points west, city boosters herald a mixture of apartments and shops as an improvement on local 'density'. Dense development can be well designed, and can contribute to the form of a city, but the new density’s formulaic style is a crossbreed of strip shopping centers joined with 1980s apartment complexes. Instead of a newly walkable urban environment, we are spawning more traffic than ever, in uninspired, pricey, new trophy projects that adorn our busy highways and replace quirky, individualistic neighborhoods with soulless, mock historic monoliths.

The official name for the form of these developments is “urban mixed use,” but they are a far cry from city-center urbanity. Each new development is a variation on beige stucco and predictable planning. A mixed-use development is not a bad thing in and of itself; for every 200-unit mixed use development in the works, 200 acres of Florida’s wilderness is kept for future generations. Their repetitive nature, however, is depressing. Nowhere is this more evident than along the ten-mile Central Florida strip called US 17-92, where five of these developments are in various stages of life.

US highways 17 and 92 combine south of Orlando to create a six-lane artery running north through several towns before splitting up once again, 17 going northwest and 92 going northeast. One response to the highway is the eccentric, prosperous community of Maitland, with 17-92 as its main street.

Premodern Maitland still exists, from the unpainted vernacular architecture of the Holly Anna orange grove store all the way up to the last vestiges of Parker’s Lumber, a railside lumberyard that dates from the 1920s. Both signal an era when Maitland actually produced something. The town's rather elegant, light brick church tower and the angled, delicate columns of Maitland Plaza, an office complex, indicate Maitland’s midcentury phase, that once-hopeful era when architecture smiled at tailfins and speed.

Maitland, however, bought big into the new density storyline. At 17-92 and Lake Avenue the first in its collection was Victorian flavored, with a foil-lined particleboard tower thrust high over the empty storefronts lining the narrow sidewalk. Chunky columns rest between the storefronts, and thin-skinned apartments perch above whizzing cars.

That development sits across from the venerable Lake Maitland Terrace, a 1960s era resort-style campus sensibly buffered from the roar of traffic by green trees and a lawn. Lake Maitland Terrace has a waiting list, and is memorably well detailed in precast concrete, built to last. But living over a busy commercial strip is in vogue today, so we can’t seem to produce any more Lake Maitland Terraces. Instead, we have the empty mixed-use hulk across the street, harbinger of more to come.

And more have arrived, indeed. Maitland’s newer mixed-use experiments are beige neoclassical foam and stucco, looking vaguely like excrescences of Mediterranean and Victorian-town villages. The newest development-in-process promises “gathering… entertainment… living… swimming…” under the baleful stare of city hall’s recent stucco-and-foam tower looming in the background.

Enthusiasm for these places has worn off among long-time Central Floridians, and reality has set in. Each one resembles the last more and more, as developers fine-tune the machine that pumps out mixed-use developments with alarming regularity. The public is already suspicious of them, pointing to more congested traffic, rising prices, and the banishment of individual businesses in favor of the chain stores. Gone are entrepreneurs building businesses, replaced by minimum-wage clerks and a store manager working for the somewhere-out-of- state home office.

The design formula appears to mix a little bit of stacked stone (for authenticity’s sake), beige stucco smeared liberally over large, puffy columns, and a shopping-center canopy facing a parking lot. A narrow concrete sidewalk turns depressingly nasty when it gets to the apartment complex, where the outdoor entry corridor inevitably takes over – a no-man’s land of trash cans, aluminum mailboxes, and iron bar security gates. Apartment floor plans still have a couple variations on the one and two bedroom schemes, with living rooms that don’t quite fit the furniture found in Ikea.

Maitland, in particular, has succumbed to a mock-historical design aesthetic of boxy architecture, carriage lanterns, and scrolled gewgaws. This city, when left to its own design aesthetic, commissions monuments along US 17-92 that nicely reference its own original architecture, a 1930s art colony built in a fantasy Mayan style. Originality, however, is out with the builders of the new density.

Further north lies Altamonte Springs. Here, the developers went for an early Soviet Union period style, Floridified, with giant, pyramid-hatted apartments. These overlook Crane’s Roost, a pretty lake that is now over-engineered with parking along its banks. Planned with good intentions, the architecture falls apart upon closer inspection, its chief design innovation being a dark red three-story stucco wall along the sidewalk, perfect for absorbing the hot Florida sun. It almost makes me nostalgic for my 1980-vintage apartment complex with its slanted redwood siding and river-rock balcony.

What unites all of these developments is their earnest puffery. Each is styled with gaudy mascara and rouge to look like something it is not. This is the DNA inherited from their ancestor, the shopping center. They all have large fat columns, thickened corners, and Neanderthal eyebrows to give them a sense of heaviness. But if you watch them under construction, you will see lots of metal or wood studs: they are hollow inside.

Grafted onto this mask is an apartment block, but not one like the brownstones of old. These have no connection whatsoever to the street – no stoop or entry door on the sidewalk. Brownstones had architectural scale and character made famous by Ada Louise Huxtable; for example, she could date one by the lintels over the windows. No such luck here. The only decoration that adorns the exterior façade is a stucco control joint pattern.

It’s as if every movie has to have blockbuster special effects, and can’t just tell a good story with actors anymore. By contrast, these developments replace a midcentury minimalism of architecture with a now- lost delicacy. Lake Maitland Terrace wasn't special before the rise of mixed-use properties along the highway, but it was about itself, and nothing else: it didn’t pretend to be a Victorian main street or a Mediterranean hill town. With no special effects budget, it simply offered good views and workable, decent floor plans.

I don't believe that the hollowness marking the current taste in commercial development reflects the taste of everyone who actually uses it. Many of these places are vacant, a wave of retail space crashing upon us just in time for the online shopping trend. Welcome to the new America.

What can we, as local users, do to combat this? Humanize them, renovate them, and add our own local color as they get older. Steer them closer to our own specific pathways. A certain sidewalk here might get a sun shade or a trellis added to shade it, converting it from an oven to a lovely pocket park.

The spaces that we love in our town grew that way over time. We cannot let these hollow, mixed-use monoliths defeat or dispirit us. They are here to stay, and more are coming, so our job is now to take ownership of these buildings and start individualizing them. The sooner we can inflict the spirit of place upon them, they will cease being monstrosities, and become members of our own community of buildings.

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 Maitland by the author

Farewell, Grand Old Party

Sun, 03/20/2016 - 22:38

The increased likelihood of Donald Trump as the GOP presidential nominee, as evidenced by his win in Florida and other states last week, spells the end of the Republican Party as we have known it. Successful political parties unite interests under a broadly shared policy agenda. The Clinton Democrats may seem ethically challenged, condescending and bordering on dictatorial, but they share basic positions on many core issues and a unifying belief in federal power as the favored instrument for change.

In contrast, the Republican Party consists of interest groups that so broadly dislike each other that they share little common ground.

GOP libertarians want more social freedoms; social conservatives want less. Neocons hunger for war, while most other Republicans, both libertarian and constitutionalist conservatives, reject Bushian interventionism. The rising populist wave now inundating the party and driving the Trump juggernaut both detests, and is detested by, the party’s media, corporate and intellectual establishment.

Some “movement” conservatives are returning the favor, essentially blaming the white working class for their own failures. Among some on the right, it appears, capitalism and the law of the jungle are always noble, and those who fail to make the grade clearly are not. No surprise, then, that the new generation of voters seems more ready for socialism than for laissez faire.

Against weak and squabbling opposition, Trump has employed his crude persona, and equally crude politics, to dominate the primaries to date. But in the process he has broken not only the party structure, but also its spirit. Indeed, some of the party’s most promising emerging leaders, such as Nebraska U.S. Sen. Ben Sasse, have made it clear they cannot support a candidate who seems to have little respect for the Constitution, or any other cherished principle.

Read the entire piece at The Orange County Register.

Joel Kotkin is executive editor of He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, will be published in April by Agate. He is also author of The New Class ConflictThe City: A 

Photo by Gage Skidmore [CC BY-SA 3.0], via Wikimedia Commons

Rethinking America’s Cities’ Success Strategy

Fri, 03/18/2016 - 22:38

This piece is reprinted from a Kauffman Foundation series focusing on the role of cities in a new entrepreneurial growth agenda. Read the entire cities series here.

Most cities are economically weak actors with limited ability to affect the critical forces driving their economies. Furthermore, changes in the structure of the economy often have changed the composition of urban leadership in ways that break the link between personal and community success and create an additional bias in favor of subsidized real estate development as a civic strategy. Less dependent on the local market, this local leadership increasingly identifies with a global community and its concerns in ways that have lowered the civic priority placed on inclusive economic development and entrepreneurship. To change these trends, local leadership should focus on inclusive local economic success first and make policies that reflect that priority and address areas where local government can make an impact. Creating an entrepreneur- and business-friendly local regulatory environment is a key piece of this effort, and the delivery of high-quality basic public services is vital.

Cities as economically weak actors

One of the most important preliminary steps to designing and implementing policies that promote entrepreneurial growth is understanding the economic and competitive context within which such policies are made. The STEEP (Social, Technological, Economic, Environmental, and Political) forces model is one method of inventorying and categorizing a business’s or community’s external context. The table below summarizes some of the key STEEP forces that create both challenges and opportunities for communities today.

This list includes quite an array of profound and powerful forces that are difficult to understand and even more challenging to address. They are also primarily large macro forces that cities are not in a position to influence in a significant way, leaving most cities in a weak market position. Generally, local governments are weak actors and are more often market takers than market makers; they typically have limited scope for fundamentally transformative actions. Local policymakers must undertake efforts that respond to the economic context where there is a possibility of making an impact with the tools available.

Ramsin Canon, a progressive political commentator in Chicago, describes this challenge and Chicago’s lack of pricing power in an article about his city, titled, “Entrepreneur-in-Chief: The New Model City:”1

Why not raise property or luxury taxes, or institute a city income tax, to make up the deficit? Why not divert money from the TIF districts? …. Chicago is no longer a political community, it is an economic entity that is in competition with other cities in the region, in the state, across the world. In that mental framework, tax is cost, or price. You raise prices, you drive away your clients. In the case of the neoliberal city, the client is the developer, the investor, the employer. The federal government and the state are not going to give the city any real money; they are not investing in infrastructure, or education, or social welfare in any real way, the way they did up through the late 1970s and 1980s. The name of the game is “growth” through enticement of capital.— Ramsin Canon

While one may not agree with Canon’s politics, his economic analysis insightfully illustrates how even many large cities today have become structurally weak players in the economic market.

Most of the STEEP forces above have been discussed extensively elsewhere, but there are two under-appreciated and related items that deserve more consideration because of the impact they’ve had on local leadership: (1) the change in composition of local leadership resulting from the nationalization of the industrial base, and (2) the elite identification with global rather than local concerns.

Changes in local leadership resulting from the nationalization of industry

While talk of globalization is ubiquitous, less appreciated is the intermediate nationalization of many industries. Up until the 1980s, most cities’ commercial activities were conducted by local entities across a wide range of industries. In banking, for example, local banks dominated each city because state laws heavily restricted expansion. These banks were all independently owned, restricted to their home markets by branch banking rules, and limited in their activities by the Glass-Steagall Act. Similarly, most electric and gas utilities were local concerns due to restrictions from the Public Utilities Holding Company Act. And local and regional retailers, particularly department stores, were prominent and, often, dominant.

This industrial structure produced a class of leaders whose business and personal successes were tied closely to the economic success of the local community. The only way to make more loans or sell more electricity, for example, was to grow the local market. There was, therefore, a high degree of alignment between business leadership and community interest.

Beginning in the 1980s and especially the 1990s, however, deregulation and a wave of industrial rollups created a very different landscape ruled in many places by national players. The four largest banks in the country now hold about 45 percent of total national banking assets.2 There also has been significant utility consolidation. And, in retail and other industries, we have seen consolidation into a de facto “two towers” model, in which there are two large, national, primary players (e.g., Wal-Mart and Target, Home Depot and Lowe’s, Walgreens and CVS, and AT&T and Verizon).

As a result, there is no longer local ownership over these key businesses in most markets, and the executives running local markets are effectively branch managers. Even where local firms survived, they did so largely by becoming larger national or global entities themselves. There is now, therefore, less overlap between the interests of business leadership and community economic growth; the nationalization of industry weakened the linkage between personal success and community success for local civic leadership.

This broken link is exacerbated by the imbalance it created in the mindset of local business leadership. In the past, the business leadership was made up of a significant number of executives of operational-type businesses, such as banks and utilities, whose successes were tied closely to the success of the local market. Today, however, the businesses that continue to operate at the local level are primarily transactional businesses, including law firms (which are currently in early-stage consolidation), construction firms, architects, developers, and the “business” of politics. There are significant differences between operational and transactional businesses and their relationships to the community. While banks make money on the spread between what they pay for funding and what they charge for loans, lawyers, by contrast, get paid by the hour for work on specific matters. Bankers are making money while they are playing golf in the afternoon. Lawyers are only making money on the golf course if they are closing deals. Transactional business leaders’ interests are less closely aligned with the success of their communities.

Lawyers and other local transactional business leaders always have been very influential, but there are no longer as many powerful bankers and other operating industry executives to balance their perspective. This imbalance has led to a transactional growth mindset among local leaders, which leads to a theory of change for the local economies that favors real estate development. The change from an operational to a transactional mindset, in other words, has introduced an additional bias in favor of publicly subsidized real estate projects as a strategy for growth. These projects satisfy the needs of a large segment of the transactional leadership class of the community, as well as the politicians who love cranes and ribbon cuttings. More broadly, real estate development is now seen as economic development.

To be sure, major downtown development-type real estate projects, such as stadiums, malls, and convention centers, long have been popular for cities and may even be seen as populist projects. Mayors are under pressure to be seen as taking action to create jobs and growth, and, as this type of land development is within local control, it always will retain some popularity. Increasingly, however, these projects appear to be more pure play cronyism, with enormous subsidies bringing dubious public benefit. Cincinnati’s NFL stadium deal, for example, was described by The Wall Street Journal in a news (not editorial) item as “one of the worst professional sports deals ever struck by a local government.”3

Identification of local elites with global, rather than local, interests

In addition to weakening the link between the success of business leaders and that of their broader communities, the consolidation and globalization we’ve seen in many industries has resulted in a new affinity between the local elite and those who hold similar positions throughout the world. As business leaders and other elites are no longer as invested in their communities and have fewer economic ties to them, they identify primarily with their global class and have more loyalty to their global brethren in other places than to those who live in the same local region.

Saskia Sassen, a pioneer in research on what are now called “global cities,” identified this trend in her description of the bifurcation of these regions. The global city, in this view, is a kind of city within a city. Richard Longworth at the Chicago Council on Global Affairs noted a similar trend: “Globalization is disconnecting a city from its hinterland.”4 The global city of the Chicago Loop and North Side, for example, exists in an almost parallel universe to those left behind in the South and West Sides.

The term “elite” may seem inherently pejorative, but all systems have a group of leaders and agenda setters. At the local level, the elite includes prominent business, political, civic, academic, religious, and philanthropic leadership, as well as members of the media and cultural communities. The most educated strata of the community, or, more broadly, the upper middle class, also may be included. This group has best adapted to new economic realities and represents roughly the top 10 percent to15 percent of most communities, though higher in the largest urban centers.

While this elite group is now more disconnected from the rest of a community, attracting and retaining this stratum is now often seen as critical to a region’s success. Richard Florida’s “creative class” theory maintains the importance of this group to local economic growth. Similarly, CEOs for Cities, an urbanist organization, released a report called “The Young and the Restless,” which suggests that the youth portion of this group is fickle, demanding, and highly mobile. A failure to cater to their desires, the report indicates, might harm a city’s economic future severely.5 This phenomenon is the human capital side of Canon’s description of the city as an economic entity.

In this worldview, servicing the needs of the community’s elite and attracting more people like them is paramount to a particularly desired form of economic success. This strategy is not necessarily rooted in elitism or snobbery. Rather, communities facing enormous pressure from the STEEP forces above are looking to replicate models of success and finding their models in places like New York and San Francisco. While gentrification has been criticized, one can point to plenty of places where it has happened successfully. Meanwhile, there is little track record of success turning around non-elite portions of post-industrial cities. No wonder, then, that cities look to strategies that appear to offer the prospect of success, with the added benefit of some glamour, instead of going against the grain and trying to tackle problems that are much harder and lack obvious solutions.

The consequence of this worldview, however, is that local leadership prefers to implement policies that show that their city belongs in the global club, rather than focusing on primarily local concerns. The priorities of the global community are set in the world’s major cities, including London, New York, San Francisco, Paris, and Hong Kong, among many others. These communities are very different from workaday American cities. It’s difficult to see how the same policies would suit such diverse places as Los Angeles, Buffalo, Oklahoma City, and Portland equally. While there is a clear need to spend more money on transit in New York City, for example, spending large sums to attempt to retrofit smaller and entirely auto-oriented cities to transit makes little sense.

Furthermore, these major cities have, to some extent, market-making power, at least to a far greater degree than smaller localities do. A place like New York, for example, can implement the tactics that Canon says even Chicago cannot. It is no surprise that New York has far higher taxes than Chicago does, since New York has more marketplace leverage.

Following a global, rather than a local, piper works well in many cases. For example, most local tech startups around the country are following the same script that appears to be effective, including open collaboration, co-working, meetups and events, angel investors, local venture capital funds, and local marketing groups. Similarly, aspirational locals opening top-quality coffee shops and microbreweries legitimately enhance their communities.

This strategy can cause problems, however, as smaller cities may see quite different results when they try to prove their global bona fides by implementing the policies and priorities of global cities, especially those related to economic regulation and those that do not align with local needs. For example, America’s coastal cities are adopting very high minimum wages, and local progressives in cities with far less leverage than San Francisco often want to implement the same policy. Furthermore, it should be noted that global cities themselves are not without challenges, including growing inequality, which is an enormous problem in these places. In Chicago, we saw the juxtaposition of the opening of a gorgeous Riverwalk downtown on a Memorial Day weekend in which fifty-six people were shot and twelve of them killed.6

Perhaps the greatest disconnect between the elites’ concerns and the localities’ needs is in the area of climate change. The quintessential global problem, climate change is particularly ill-suited to be addressed at the local level. No city alone could make a material impact on climate change, even if it eliminated all of its carbon emissions. Nonetheless, climate change is a core concern of the global class, and the fact that this issue drives policy and regulatory mandates in many cities is a powerful illustration of city elites’ global identification. These policies don’t align well with many smaller cities’ weak market power, and, more importantly, these smaller cities are poorly positioned to thrive under these policies.

Even the global cities, in fact, have very particular economic structures and participate in specific global networks. Although globalization has produced a type of surface homogeneity among cities, Sassen points out that each city is truly unique. Similarly, Berkeley economist Enrico Moretti has identified a “great divergence” between cities.7 America’s cities are said to all look basically the same, but there are many different typologies, and each place has its own particular characteristics.

Ultimately, the identification of community elites with global communities rather than local communities leads policymakers to imitate other localities’ efforts instead of thinking about the unique policy priorities for a particular city that are based on its own indigenous history, economy, culture, demographics, and geography. Civic policy at the local level is dominated by “school solutions” that promote the same characteristics everywhere, often as a way of signaling that a city belongs in the “club.” While companies try very hard to convince their audiences that they are different and better than other companies in their industries,8 most cities try to look exactly the same as other cities that are considered cool, including offering bike lanes, coffee shops, microbreweries, a creative class, a food scene, and a startup culture. Even most cluster analysis seems to produce primarily a collection of the same five basic focus areas in every region (high tech, life sciences, green industry, advanced manufacturing, and logistics). Instead, local thinking should play a critical role in policy setting. Copying some good attributes can be helpful, but it’s hard to be successful with a collection of borrowed ideas. Cities need locally tailored policies and unique, indigenous thinking based on the cities’ singular histories, economies, cultures, demographics, and geographies.

How to think about local entrepreneurship and economic growth

In light of all these factors, it is unsurprising that economic results have been meager in the aggregate, but good in select high-end sectors. To improve results throughout the country, I propose that local governments should apply the guidelines listed below to their economic development policies.

  1. Local civic priorities should favor building a successful and inclusive local economy, including entrepreneurship, over global concerns and real estate development.
  2. Policies should be made considering the totality of the environmental context (STEEP).
  3. Policies should be oriented toward areas in which local governments can have the most impact, given the contextual constraints that have been identified.
  4. Policies should be designed to fit each city’s unique situation.

Because cities are all distinct, there is no one-size-fits-all solution. Some focus areas, however, do appear to be broadly applicable. For example, local communities can’t do much to affect global trade policy, but they largely can control local regulations and zoning. Reducing red tape is frequently discussed, but seldom accomplished to any significant degree. Rather than solely focusing on cutting regulations, local governments should make sure the operations of the regulatory structure are clear, predictable, transparent in their operations (not politicized), and timely. The most important factor of production in almost any business is management time and attention; owners and managers want to be able to get through compliance quickly so that they can focus on—or even simply start—their businesses.

Local governments also are directly responsible for delivering an array of basic and critical services, including parks, libraries, policing, and streets, among many others. Getting these basics right throughout a city or region, rather than simply having a few select world-class districts, is important to inclusive success. These core services provide the basic platform on which businesses operate and are the actual business of local government. They must be performed well.

There may be other appropriate actions, depending on each city’s particular local needs and opportunities. The key is to determine what policies and actions to undertake with a high priority on inclusive economic success for the local community based on where the best opportunities are for local actors to make a difference.

The most important shift that needs to occur in cities is one of mindset. The civic elite and upper middle class of our cities need to see their communities as the places where they live, not see themselves primarily as part of a community of their peers in other cities and around the world. They must ask themselves the oldest questions: Who is my brother? Who is my neighbor? And, local leadership needs to see all of the people of their community, not just the upscale portion of them, as those to whom they owe first allegiance.

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

  1. Canon, Ramsin. “Entrepreneur-in-Chief: The New Model City.” Gapers Block. January 4, 2013.
  2. Federal Deposit Insurance Corporation. 2012. FDIC Community Banking Study.
  3. Albergotti, Reed, and Cameron McWhirter. “A Stadium’s Costly Legacy Throws Taxpayers for a Loss.” The Wall Street Journal, July 12, 2011.
  4. Longworth, Richard. Caught in the Middle: America’s Heartland in the Age of Globalism.
  5. Coletta, Carol, and Joseph Cortright. “Wanted: The Young and Restless.” The Washington Post, February 13, 2006.
  7. Moretti, Enrico. The New Geography of Jobs.
  8. Apple, for example, once had an ad campaign called “Think Different.”

Photo by caruba

Mass Transit Expansion Goes Off The Rails In Many U.S. Cities

Thu, 03/17/2016 - 07:14

Journalists in older cities like New York, Boston or San Francisco may see the role of rail transit as critical to a functioning modern city. In reality, rail transit has been a financial and policy failure outside of a handful of cities.

In 23 metropolitan areas that have built new rail systems since 1970, transit’s share of commuting — including all forms, such as buses and ferries — has actually slipped a bit, from an average of 5.0 percent before the rail systems opened to 4.6 percent in 2013. The ranks of those driving alone continue to grow, having increased 14.4 million daily one-way trips since 2000, nearly double transit’s overall daily total of 7.6 million, according to Census Bureau data.

Virtually all the actual increase in rail commuting has occurred in the “legacy cities”: New York, Boston, San Francisco, Washington, Chicago and Philadelphia. These are older cities built around well-defined cores that were developed mostly before the automobile. Together the core cities of these metro areas, excluding the suburbs, accounted for 55% of all transit work trips in the nation in 2014, according to the latest American Community Survey data. Overall, transit’s work trip market share in these six metropolitan areas rose from 17 percent to 20 percent between 2000 and 2014. In the entire balance of the country, where most of the new rail systems have been built, transit’s market share is only 2.2 percent, up a scant 0.2 percentage points since 2000, according to Census Bureau data.

Manhattan alone, in fact, accounts for more than 40 percent of all rail commuters in the nation. New York is the only U.S. city where more than 20 percent of workers labor in the central business district (downtown). In most cities, the percentage is less than half of that, and in many others, even smaller. In Los Angeles, less than 3 percent of employment is downtown. In Dallas only 2 percent of metropolitan employment is downtown. In Houston, where numerous large companies maintain headquarters, it’s still only 6.4 percent.

For transit to work effectively, employment needs to be concentrated. This explains why between 2013 and 2014, New York accounted for a remarkable 88 percent of the total increase in train commuting. But what works for Brooklynites headed to Union Square does not generally work so well for people living in our increasingly dispersed metropolitan areas. Indeed in most cities — Dallas-Fort Worth, Houston, San Diego, and even the new urbanist mecca of Portland, according to 2015 American Community Survey data, where new transit lines have been put in, it has failed to increase the share of commuters who take public transportation, and in some cases the actual ridership has dropped.

It has even failed where cities are booming and their downtowns flourishing. Houston’s light rail system opened in 2004, but has done little to change the car-dominated commuting pattern of America’s energy capital. Between 2003 and 2014, Harris County’s population grew 23 percent, but transit ridership decreased 12%, according to American Public Transportation Association data. This means that the average Houstonian took 30 percent fewer trips on the combined bus and light rail system in 2014 than on the bus-only system in 2003.

The Next Great Transit City

Nowhere is the transit mania more profound than in Los Angeles, a city progressive blogger Matt Yglesias describes as “the next great transit city.”

There seems to be a conscious strategy of making auto commuting in Los Angeles and the rest of California so unpleasant as to force people into transit. Mayor Eric Garcetti has made bold predictions that commuting times will drop in half, largely by people moving from cars to trains. Of course this is folly, since transit commuting generally takes considerably longer than commuting by car. The Governor’s Office of Planning and Research has called for putting all California on “a road diet,” meaning that traffic will simply continue to worsen. This in a state which has among the worst roads in the country – 68 percent of which are in poor or mediocre condition.

Can rail solve or mitigate congestion? L.A. has already spent over $15 billion on rail yet this has proven less than effective in either boosting transit ridership or lessening congestion.

Since 1980 before the rail expansion the percentage of Los Angeles County commuters who take transit has actually dropped from 7.0 to 6.9 percent while the transit share of the combined statistical area has dropped from 5.1 to 4.7 percent. Even the total numbers of riders is heading down. Recently the transit booster Los Angeles Times published statistics that showed that there were now 10 percent fewer boardings on the Los Angeles MTA system than in 2006, and that the decline was accelerating.

One reason for the poor performance is that much of the train ridership turns out to have been former bus travelers in the first place, which limits actual gains there. Taxpayers, however, should be screaming about this switchero; the subsidy for new L.A. new bus riders, who tend to be the poorest of the poor, cost taxpayers $1.40 while the cost for a new rail rider was $25.82 over the period of 1994 to 2007. If you believe in transit as public good, clearly building more trains makes less sense than expanding bus operations.

But it’s not just a cost issue. Los Angeles is a vast and dispersed metropolis in which only one in five residents even lives within the city limits, and even much of the city — notably the San Fernando Valley — is essentially suburban in form. Transit travel takes much more time to get to work than the car, even on the region’s miserable roads and overcrowded freeways. With downtown only a minor employment center, people increasingly travel there for cultural events, sports or even a restaurant, not for work.

Other factors also seem to be contributing to the decline. One is the trend toward working at home; in 2014, the number of Angelinos working at home surpassed the number taking transit. Although this saves more energy, and produces less carbon than transit ridership, there is virtually no government support for this innovative approach to traffic reduction from the climate-obsessed state government.

Finally, there are now other options such as Uber and Lyft, which provide reasonably priced door to service, always available, often on short notice. Down the road, the path for transit looks even bleaker with the development of self-driving cars, which will make even long suburban commutes easier. Looked at objectively, the drive for a traditional transit dominated Los Angeles is on a collision course with reality.

 Taking Stock and Changing our Approach

In the alternative world that dominates our transit planners and retro-urbanists, nothing succeeds like failure. Some urban experts still predict that the Sun Belt cities are ripe for a huge infusion of rail transit, despite all evidence to the contrary.

Given what we know about the share of commuters using transit in most cities, pumping money into this form of transportation seems doubly wrong while other needs such as roads, schools, sewers and parks are neglected. Rather than try to fit all cities, and all parts of metropolitan areas, into a 19thcentury technology, maybe we should look to encourage 21st century innovation.

Clearly some of this is already with us, notably in the rise of services like Uber and Lyft which, for many, seems a far more effective way of getting around with your own car. Ride-sharing and services like Zipcar also provide new alternatives. And other innovations could be developed, with expanding shuttle and dial-a-ride services. In many big cities dedicated commuter buses, connecting the dispersed employment centers, would make great sense in cities such as Houston, which has many large employment centers, notes my Center for Opportunity Urbanism fellow, Tory Gattis.

But it’s changing work patterns that may provide the most promising opportunities to reduce traffic and reduce greenhouse gases. In the U.S., working at home, not transit, was the principal commuting alternative to the automobile in 39 of the 53 major metropolitan areas with populations over 1 million as of 2014, according to Census Bureau data. The share of work access accounted for by home workers rose by more than a third between 2000 and 2014, from 3.3 percent to 4.5 percent

Many of the most striking work at home share gains are taking place in the country’s leading technology regions, including Austin, Raleigh, the San Francisco Bay Area, Denver, Portland and San Diego. Millennials in particular, notes a recent Ernst and Young study, embrace telecommuting and flexible schedules more than previous generations did, in large part due to concerns about finding balance between work and family life.

All this suggests we need to revamp our ideas of transit, particularly in the newer, fast-growing cities. Trains may elicit a nostalgic smile about the good old days, but most Americans, and the vast majority of our cities, need to live not in the past but in an increasingly dispersed, and choice-filled reality. Time to embrace that future.

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

Photo: Atlanta MARTA train by RTABus (Own work) [CC-BY-SA-3.0], via Wikimedia Commons

The Foreclosure Crisis: At the Movies

Tue, 03/15/2016 - 22:38

If you haven’t seen The Big Short, the movie version of Michael Lewis’s fascinating book about the explosion of the housing bubble, you should see it for the entertainment value alone. The film tells an important story with humor, relative accuracy and strong acting.  It is so good that it has been nominated for an Academy Award for best picture. But the film largely ignores the experiences of the homeowners who signed notes and mortgages that backed the securities and derivatives that the film describes.  A decade later, millions of working-class homeowners are still suffering from results of the greed and recklessness so well documented by the movie.

Another recent film about the housing crisis, 99 Homes, released last spring to far less acclaim, details the pain and humiliation many suffered as their lives unraveled trying to make the payments on the predatory mortgage loans that backed those bonds. Payments on loans that never made sense became even more unsustainable when the Wall Street bubble caused housing values to crash, leaving many people with “under water” mortgages in which they owe more on their homes than they were now worth In my law practice, I try to help under water borrowers as they painstakingly work to piece their financial lives back together, stabilize their housing situation, and create a better future for their families.

The next time you walk your dog around the block in Las Vegas, Cleveland, Chicago, Daytona Beach, Toledo, or Jacksonville, keep in mind that it’s likely that the owner of every fourth house you pass probably owes more than the house is worth. Realty Trac reports that, as of the third quarter of 2015, 6,917,673 American homeowners owners are under water. In the Cleveland area, where I live and practice law, 27.2% of homes are worth less than the balance of the mortgage, the third highest rate in the U.S.  Nationally, among homes in the foreclosure process, over 50% of distressed and delinquent properties are significantly under water. With wages stagnant (the Economic Policy Institute pegs wage rate increase at 1.8% since 2000) and no home equity, many homeowners who are not already in default are just one furnace repair or roof replacement away from foreclosure.

Ironically, federal government policymakers have contributed to the lingering problem of under water mortgages. The Federal Housing Finance Agency (which was created by Congress to regulate Fannie Mae and Freddie Mac after taxpayers bailed them out) still prohibits those two quasi-governmental agencies, which hold many of these mortgages, from reducing principal when they modify delinquent loans. Principal reductions are also prohibited on loans insured by the Federal Housing Agency (FHA), a division of the Department of Housing and Urban Development, or those insured by the Veterans Administration or the United States Department of Agriculture. If homeowners can’t renegotiate these loans as the value of their houses decreases, they are even more likely to end out under water.

The Federal Government’s latest solution is to allow Fannie Mae, Freddie Mac, and FHA to sell pools of seriously defaulted loans to hedge funds at a discount. While the new policy would allow the hedge funds to reduce the principal on loans that they acquire, the servicers working for these investors have shown little enthusiasm for these potentially lucrative but logistically challenging loan modifications.  Instead, they have insisted on liquidating the properties that secure the mortgages.

Working-class homeowners seeking to modify their home loans have been further impaired by the shift of loan servicing rights from the major banks who agreed to clean up their business practices in the 2012 National Mortgage Settlement to smaller hedge fund backed loan servicers like Ocwen, Nationstar, Selene Finance, Fay Servicing, BSI, and others. These mortgage loan servicers operate on smaller margins with an often under-trained offshore workforce who fail miserably at properly re-underwriting distressed loans.

New regulations to the Real Estate Settlement Procedures Act ( RESPA and the Truth in Lending Act (TILA) promulgated by the Consumer Finance Protection Bureau set standards for mortgage loan servicing and create a private right of action for homeowners, and these policies may force servicers to become more responsive.  So far, though, there’s little evidence that servicers will change their practices. Rather, the industry seems to treat the prospect of paying money to persistent homeowners and their lawyers just a cost of doing business.

For those who have been forced from their homes by foreclosure over the past decade, the prospect of being pursued for a deficiency judgment remains. Reuters reported in 2014 that Fannie Mae was among the most aggressive investors in suing former homeowners for the difference between the balance on their loans and the price obtained by selling the property at auction.

The bottom line for working-class homeowners is that the real life consequences of the Wall Street fraud and avarice exposed in the Big Short and poignantly portrayed in 99 Homes will be with us for years to come.

Marc Dann is Managing Partner of the Dann Law Firm. He specializes in representing clients who have been harmed by banks, debt buyers, debt collectors, and other financial predators,  including a case that he recently argued before the Ohio Supreme Court. He has fought for the rights of thousands of consumers and brought class action lawsuits in both private practice and as Ohio’s Attorney General.

Japan Census 2015: Decline Less than Projected

Mon, 03/14/2016 - 22:38

Headlines were recently made recently as Japan finally experienced a long predicted official decline in population. This is widely expected to be the beginning of a long decline in population, which the National Institute of Population and Social Security Research has projected will drop Japan’s population from its present 127 million to 43 million by 2100 (Chart). This loss equals or exceeds the population of all but 15 of the world’s nearly 200 nations, including Germany, the United Kingdom and France.

Population projections are, of course, not an exact science. They can be accurate, or they can “miss by a mile.” The preliminary 2015 census figures indicate that the population loss since 2010 has been considerably less than predicted. Japan lost 950,000 residents since between 2010 and 2015,The previous 5-year census period had shown a gain of 280,000. Losing nearly a million population is a big deal. But losing 1.5 million would have been an even bigger deal, as had been projected by Japan’s National Institute of Population and Social Security Research. Over the past five years, Japan’s population loss was more than one-third less than expected (35 percent).

The big question is “why?” The most obvious answer is a combination of factors, such as   more births than projected or a falling death rate. The Japanese enjoy long lives. In 2013, there were more people aged 100 or above than in the United States, despite, Japan’s 60 percent lower population. More than one in eight of the world’s centenarians live in Japan, while only one in sixty of the world’s people is Japanese.

No analysis has been identified, nor is the detailed age data for such an analysis readily available. This is to be expected this soon after publication of the first census results. However, recent media reports indicate a continuing annual decline in births. The difference could also be the result of problems in the projection methodology.

Actual and Projected Population by Area

As had been the case in the last census period (2005-2010) Tokyo was the big winner. Tokyo prefecture (note), which contains the 23 ku (cities) that constituted the city of Tokyo until its mid-1940s dissolution as well as suburbs, was expected to gain 190,000 residents, but added 355,000. Overall, the four-prefecture area of Tokyo-Yokohama, which includes Tokyo, Kanagawa, Saitama and Chiba prefectures added more than 500,000 residents, compared to the expected 275,000. The gain in Tokyo-Yokohama was 1.4 percent, nearly double the 0.8 percent expected.

The other two megacities (over 10 million population) did not do so well. Osaka-Kobe-Kyoto (Osaka, Hyogo, Kyoto and Nara prefectures), which is larger than the Los Angeles-Riverside combined statistical area, lost 140,000 residents, nearly as many as the 164,000 projected. Osaka-Kobe-Kyoto was expected to lose 0.9 percent of its population, and nearly equaled that, at minus 0.8 percent.

Nagoya, including the prefectures of Aichi, Mie and Gifu, lost 13,000 residents, two-thirds the 19,000 projected. Nagoya lost 0.1 percent of its population, slightly better than the minus 0.2 percent projected.

The middle-sized metropolitan areas did better. The prefecture of Fukuoka, which includes the nation’s fourth largest metropolitan area, Fukuoka-Kitakyushu was expected to lose 0.5 percent of its population, Instead it managed a 0.5 percent gain. Hiroshima was expected to lose 1.2 percent of its population and lost only one-half that much (minus 0.6 percent).

The city of Sapporo, in Hokkaido prefecture, was a big winner more than doubling its projected 1.0 percent increase (Note 2). Sapporo had a population gain of 2.1 percent. Most of the Sapporo metropolitan area is in the city of Sapporo, and unlike many core municipalities, there is still room for greenfield development.

Sendai, in Miyagi prefecture was particularly hard hit by the great earthquake and tsunami of 2011. That makes Sendai’s population performance all the more impressive. Sendai was projected to suffer a population loss of 1.8 percent. Yet, its population loss was two thirds less, at 0.6 percent.

The balance of the nation even did better than expected. Outside the metropolitan areas listed above (and the city of Sapporo), Japan was expected to lose 2.7 percent of its population. The loss was somewhat more modest, at 2.4 percent.

Government Concern

Despite the better news out of the census, the government is taking the longer term population loss very seriously. Its Committee for the Future indicates that the prospect could be: “…impose a great burden on people that offsets economic growth, threatening to decrease the actual per-capita consumption level, or the metric for the actual quality and level of people’s lives.”

Even Tokyo, which has escaped the effects of population decline will be at risk, according to the Committee: The Tokyo Metropolitan area, while unable to avoid the effects of hyper-aging, will lose the vitality of a global city…”

The changing demographics are already evident in a near majority single person household population in the core Tokyo prefecture. In 2010, 46 percent of Tokyo prefecture households are single person, compared to just 32 percent at the national level, and 36 percent in Osaka prefecture, which has the second highest percentage, according to National Institute of Population and Social Security Research data. Moreover, Tokyo prefecture’s average household size, at 2.03 in 2010, was the lowest, by far in the nation, and well below the national average of 2.42. Like many core areas in the largest metropolitan areas around the world, Tokyo prefecture, less than the normal proportion of children is to be found.

The government has established a goal of increasing the fertility rate from the present 1.4 (children per woman of child-bearing age) to 1.80 by 2030 and 2.07 by 2040. This would mean a population of 102 million in 2060, compared to the 87 million that current trends suggest. This would also eventually stabilize at around 90 million, more than double the presently projected figure of 43 million.

Proposed government strategies have involved an array from expanding the use of paternity leave, making it easier for women to retain their jobs after childbirth, supporting better job security for younger people and extending to “support for matchmaking efforts by municipalities and local chambers of commerce.”

More recently, the government has even hinted at encouraging immigration, which is a radical proposal for a nation that has generally not been welcoming of a large influx of foreigners: “In February 2014, the Cabinet Office revealed that Japan will likely only be able to maintain a population of more than 100 million if it accepts 200,000 immigrants annually from 2015 and the total fertility rate recovers to 2.07 by 2030.”

There is much riding on Japan’s effort to halt or at least slow the decline of its  population. Other  nations, especially across East Asia and Europe, face similar difficulties, so Japan’s success or failure (and the latter seems more likely) could materially impact policies elsewhere in the decades to come.

Note 1: Tokyo prefecture is officially called the Tokyo metropolis, which has led many, including some researchers to imagine it to be the metropolitan area. It is simply a jurisdiction within a metropolitan area more than three times as large.

Note 2: The city of Sapporo is used, because Hokkaido prefecture is far too large to be a metropolitan area (labor market).

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

Photo: Sapporo (by author)

What Happens When Walmart Dumps You

Sun, 03/13/2016 - 22:38

The first knock on Walmart was that it gutted the mom-and-pop businesses of small-town America. So what happens to those towns when Walmart decides to leave?

What is the future of American retail? The keys might be found not only in the highly contested affluent urban areas but also in the countryside, which is often looked down upon and ignored in discussion of retail trends.

Yet these small towns, as well as middle- and working-class suburbs, have produced many of the dominant trends in American retail, from discount chains to super-stores. So, too, could these communities create a new trend, as some of the former innovators, such as Walmart, have begun to close stores, leaving some towns and villages bereft of convenient, affordable retail.

This year the world’s largest retail chain announced it was closing 154 stores, most of them “express” centers and other smaller stores that serve primarily small-town and urban markets, such as Oakland, California. The effect has been worst in poorer towns, notably in the Southeast and Appalachia, where there is little alternative retail in place.

Walmart’s move, driven by flagging sales and profits, represents a shift away from the very working-class and small-town customers who drove its rise. It also reflects a growing disinterest among retailers in serving the nation’s beleaguered middle and working classes. One in six Walmart customers, notes one University of Michigan study, received food stamps in 2013, with an estimated average household income of $40,000 or less.

In contrast, online shoppers, now a primary focus for Walmart, tend to be more affluent, with 55 percent of e-commerce shoppers living in households with incomes greater than $75,000. As Walmart and many other traditional “brick and mortar” stores have struggled with declining sales, online merchants have enjoyed an average growth of more than 11 percent annually since 2011. In this game, Walmart is clearly playing catch up.

The other big Walmart bet seems to be superstores, which compete directly with ascendant retailers such as Costco. Yet these moves are crushing for smaller towns, who are generally too small to accommodate large centers. Say what you will about Walmart—historically low wages, mediocre selection, less than attractive stores—the Arkansas-based juggernaut brought affordable products from around the world to thousands of small communities and suburbs. Before then, smaller communities often were forced to either travel great distances to more urban locations or shop at small, often overpriced local stores.

Back to the Futurem—and the Past?

Now once again small towns are threatened with becoming desiccated islands cut off from the high-precision magnificence of American retail. In some cases, they might even become “food deserts,” cut off even from reasonably priced grocery items. This includes not only small towns but some hard-luck suburbs near major cities.

No surprise then that some communities now resent Walmart for having essentially invaded Main Street, laid it to waste, and then abandoning it. Some places where Walmart have come in, such as Whitewright, Texas, a town of 1,600 in the northern reaches of the state, saw the retailer come in just last year, drive out of business some long-standing local stores, notably the longtime local grocery, and now, as part of its strategic change, leaving the town with little in the way of retail options.

Tales of “the Walmart effect” on small towns, of course, are legion. In exchange for access to more affordable goods, communities sacrificed much that was unique—the local haberdasher, the mom-and-pop mini-department stores, the one-of-a-kind hamburger joint. In the 40 years after the first Walmart opened in Rogers, Arkansas, in 1962, the number of specialty retailers declined by 55 percent nationwide. In the same time period, the number of retail chain store locations , including Walmart, nearly doubled. Research conducted at Iowa State University in the ’90s found that, after a Walmart opened in a town, sales at specialty stores—sporting goods, jewelry, and gift shops—dropped by 17 percent within 10 years.

Yet, fortunately, this may not prove to be the disaster that many predict. The new realities of retail, notably the inexorable shift toward online retail, suggests that rural communities and small towns are not as cut off as one might have expected. The ability to access Amazon in a small, remote Central Valley town in California is not much different from accessing Amazon in Los Angeles. For anyone even marginally computer literate, the retail world is more accessible than ever, but this time through a finger click than a stroll down the aisle.

The Proliferation of Channels

None of this suggests that the retreat of big boxes from smaller towns and some urban areas will be painless. Yet those who see this trend as the harbinger of the end of malls or Main Streets may be in for a surprise. Rather than die off, bricks-and-mortar shopping will change, adding new elements and moving from ever greater uniformity to more variety and differentiation, which are critical to independent business’s survival. Much of this change will take place in small towns, but also in suburban areas, which have long been the happy hunting ground of big boxes.

Why not in the big cities? One of the chief ironies of our times is that chains and their attendant sameness now define much of our most sophisticated urban core—Starbucks on every corner, global brands and restaurants serving the same trendy cuisine. The recovery of large cities, suggests New York researcher Sharon Zukin, has also made them more alike by “bringing in the same development ideas—and the same conspicuous textual allusions and iconic corporate logos inevitably affixed to downtown architectural trophies—to cities across the globe.” Efforts to make the city “safer and less strange to outsiders’ eyes”—tourists, expatriates, media producers, and affluent consumers—are making one global city barely indistinguishable from another.

At the same time suburbs and even smaller towns are becoming more diverse, and one of the chief causes of this diversity is the spread of millennials, with their own specific needs, into the peripheral areas surrounding core cities. This movement, once dismissed as inconceivable by some urbanists, is becoming more evident as census data show. And with more millennials entering their family-forming years, suggests economist Jed Kolko, this trend to suburbs and possibly smaller towns will only accelerate.

The other great game-changer has been the rapid movement of ethnic minorities, particularly immigrants and their descendants, to suburbia. Roughly 60 percent of Hispanics and Asians already live in suburbs; more than 40 percent of non-citizen immigrants now move directly to suburbs. Between 2000 and 2012, the Asian population in suburban areas of the nation’s 52 biggest metro areas grew 66.2 percent, while in the core cities the Asian population expanded by 34.9 percent. Of the top 20 cities with an Asian population of more than 50,000, all but two are suburbs.

As ethnics and millennials gather in suburbs and even small towns, we are starting to see the emergence of new retail forms in suburban areas. Orange County, California, for example, has long been seen as an area dominated by chains, and the largely suburban county is indeed sprinkled with scores of shopping centers, some of them massive, ranging from more working-class shopping centers in such cities as Orange or Santa Ana to more elite retail centers such as South Coast Plaza and Newport’s Fashion Island.

Yet at the same time, the area is seeing the growth of new, unique retail districts that appeal to millennials, ethnics, and their descendants. Anaheim, for example, heretofore known for Disneyesque blandness, now features a thriving Packing District, a converted fruit-packaging structure now filled with numerous vendors, most of them local products such as confectionary, ethnic food and locally brewed beer. Several other projects, many in former office parks, have opened in places like Costa Mesa, drawing large numbers of suburbanites to unique agglomerations of smaller stores.

Ethnic change is also transforming the retail environment in both suburbs and smaller towns. Throughout Southern California, Chinese, Korean, Vietnamese, and Mexican markets now proliferate. New developments in places like Irvine—now roughly 40 percent Asian—are filled with ethnic restaurants, shops, and boutiques. Similar trends can be seen in the emerging immigrant hubs, notably in Dallas-Fort Worth and Houston, but also in parts of New Jersey, Westchester, Northern Virginia, suburban Chicago, and in Seattle suburbs like Bellevue and Federal Way. Even the main street in Grand Island, Nebraska, home to meatpacking plants, is lined with, of all things, Honduran, Salvadoran, Mexican, and Haitian restaurants.

At the same time, numerous suburban communities, particularly those with old downtowns dating from their agricultural pasts, have revived their own Main Streets. These areas may have a Walmart or Target nearby, or even adjacent, but now they also sport shopping, restaurant, and other cultural options, as well as an opportunity for promenading, once an important small-town activity. The list of communities doing this extends from places in Southern California—such as the old towns of Orange, Fullerton, and Laguna Beach—to older eastern towns like Montclair, New Jersey; Rockville Centre on Long Island; Naperville outside Chicago; as well as Carmel, Indiana. We may not be returning to Bedford Falls before the onslaughts of banker Henry Potter in It’s a Wonderful Life (1946), but smaller towns and suburban shopping area may prove far better able to adjust to the digital age than many suspect.

Retail’s Increasingly Diverse Future

Despite the erosion from online sales, the country’s retail structure is not about to go away. Even though overall department stores are doing poorly, as are some malls, many are also doing well, particularly in ethnic areas and more affluent suburbs. The importance of brick-and-mortar retail is still compelling enough that even Amazon may soon build its own physical bookstores; several other online sites have already done so.

Of course, not all communities or Main Streets will thrive as the Walmarts and other large chains begin to cut back. There will indeed be many communities that continue to depopulate as younger people move away, and there is little hope that large retailers will come back to such places as markets dwindle and as more shoppers order online.

Yet not all small towns, much less suburbs, face such a difficult future. Many smaller communities, particularly in attractive parts of the country, are beginning to see a wave of migration from aging boomers, who arrive with both significant cash and also often well-developed consumer tastes. Far more seniors, for example, retire to rural or semi-rural communities (PDF) than to urban districts. In certain areas—for example, Rocky Mountains towns, parts of inland California, and the hill country of Texas—may find their retail base growing, even if this means very different kinds of stores and services.

Some small towns—and suburbs even more so—will be transformed by immigrants and millennials, who may want to set up their own unique shops along the very Main Streets once targeted by firms like Walmart. In wealthier communities, this may mean more boutiques and high-end restaurants. But among less affluent areas, other institutions, such as cooperatives—300 already nationwide and another 250 on the way, as well as farmers markets—could provide some of the products that many once found at Walmart.

These changes may prove far more positive in the long run than many anticipate. A future with a slightly lower Walmart or other big-box footprint poses not just a challenge to communities once seen as unable to resist mass retailing but also a once in a lifetime opportunity. As the retail world become more digitally focused, and less big-box-dominated, there is a golden opportunity to restore the geographic and local diversity that has seemed doomed for nearly a half-century, but now may enjoy a new burst of life.

This piece originally appeared in The Daily Beast.

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

Wal-Mart photo by Mike Kalasnik from Fort Mill, USA [CC BY-SA 2.0], via Wikimedia Commons

Suburban Sustainablity

Fri, 03/11/2016 - 22:38

There’s a philosophical debate about what is “sustainable.” The two dominant camps tend to advocate on behalf of either the hyper efficient dense city or bucolic rural self sufficiency. Personally, I’m not a fan of either.

The more finely tuned and efficient any system is the more vulnerable it is to disruption. There’s also an inevitable concentration of authority in large systems that doesn’t appeal to me.

The picturesque farm out in the country has a romantic allure, but the reality is mostly isolation, lack of economic opportunity, and a stifling culture.

Almost all of the built environment in North America is actually suburban which is neither fish nor fowl in terms of the urban/rural divide. And that isn’t going to change anytime soon.

At the moment suburbs have none of the efficiencies of the urban core and none of the productive capacity of the countryside. Suburban residents are just as dependent on large centralized systems as people living downtown. Where does suburban food come from? Energy? Water? Where does suburban trash go? Sewerage? Who owns everything? (If you have a mortgage… the bank, not you.) A small family farm in the country can manage all these things right at home on a tight budget. But the average tract house is no different from a high rise apartment.

That private vehicle that sits in the driveway appears to be a source of personal freedom unlike the city bus or subway. But the car is invisibly tethered to gas stations, pipelines, refineries, and ultimately to the oil fields of North Dakota, Venezuela, and Nigeria by way of massive corporations and no small amount of Big Government. Wall Street also finances these cars as well, so add that to the mix of dependencies. Suburbanites believethey’re more independent than city people. They aren’t.

Historically this tension between efficient urbanism and rural productivity was resolved by building compact medium density towns that were immediately surrounded by farmland. Economic opportunity, high culture, and great efficiencies were baked in to every level of the built environment. Take a fifteen minute walk from the center of town and you’ll find water, grain, grazing livestock, orchards, and all other essentials for supporting the population. A two thousand year old settlement like this one in Spain demonstrates pretty clearly that this is a sustainable model. But how does it relate to American suburbs?

The typical suburban home is surrounded by a modest patch of garden. Instead of growing a lawn (the largest single crop in North America) the land could be producing fresh food. Ornamental shrubs and specimen trees could just as easily be fruit bearing. No need to truck in refrigerated lettuce from 1,500 miles away. The supply chain is effectively reduced to a matter of feet. There’s no need for battery hens from a distant factory farm. This transforms a consumptive landscape into a productive property. No one is suggesting this is “self sufficient”. But it’s a huge step up from having a kitchen full of Lean Cuisine, Fruit Loops, and Go-Gurt from the supermarket.

In addition to home gardens suburbia is full of places that can be transformed into community gardens. Every church, school, and vacant parking lot is a potential veggie patch or orchard.

This solar water heater is the biggest bang for the green buck. A couple of tanks, some black boxes covered in glass, a little pump… and you’ve got free hot water for decades. The cheapest and greenest energy is always the power you don’t need to use in the first place.

A modest number of photovoltaic panels can often provide nearly all the electricity for a suburban home, particularly if the house was first fitted with high efficiency lights and appliances. Combine this with loads of insulation, solar hot water, and a food garden and a suburban home begins to resemble a small family homestead in the country.

The weakest aspect of suburbia has always been the impoverishment of the public realm. Suburbs are first and foremost about private space. In order to become more vibrant parts of the suburbs need to be activated with shared community spaces. These strip mall parking lot cafes may not resemble Paris, but they do the job in a straightforward cost effective manner. The food is good. The company is pleasant. Commerce and culture can start to take baby steps. If many more such places are allowed to gradually evolve and connect they might eventually turn in to something more refined and dynamic.

There will always be people who prefer to drive no matter what. And the suburbs do provide serious challenges when it comes to alternative forms of mobility. Public transit rarely works well in dispersed sprawling environments. Honestly, I don’t think it’s worth even trying to serve most suburban neighborhoods with transit. But knitting together the viable parts of suburbia with bike infrastructure is so incredibly cheap that it’s worth doing in places where people value the option. Most folks may still drive, but they may not need to do it nearly as often if walking and biking are at least reasonable options.

While I’m at it, I’d like to describe what isn’t sustainable. Massive solar arrays on suburban rooftops appear to be a step in the right direction. But look closer. This homeowner could have installed far fewer panels and spent the remaining money on added insulation and energy efficiency instead. But being frugal and productive was never really the goal here.

Next to the sterile lawn are all sorts of toys that run on liquid fuels. I’m not saying people shouldn’t have playthings. I’m saying these items are expensive and disposable and were almost certainly bought on credit. The extended cab pick up truck has never seen a sheet of plywood, an eight foot length of pipe, or a bale of hay. It’s sport. Not utility. The speed boat isn’t exactly built for fishing. This is standard suburban debt and consumption. It’s fragile and unlikely to hold up well over the long haul.

John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at He's a member of the Congress for New Urbanism, films videos for, and is a regular contributor to 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.

What Price Urban Density?

Thu, 03/10/2016 - 22:38

We regularly hear the argument that living in a compact city is more affordable than living in one that is more spread out. But what does the data actually show about the cost of housing in compact cities, and the cost of transport in these dense places? The relationship between those two expenses and the compactness of a city could tell us much about which kinds of places are most affordable, since those two costs together dominate household budgets.

Advocates of denser urban environments have developed an index to measure the effects of a range of aspects of city living, such as vehicle miles traveled, traffic safety, congestion, the cost of housing, the cost of transportation, and health outcomes, among many other issues. The index takes into account several metrics, such as density, street accessibility and the mix of land uses.

The index was conceived with the intent to study presumed negatives of city growth, and to make such growth “smarter.” Since the impulse to create it was advocacy-driven, it may lack objectivity. Notwithstanding this potential bias, and lacking alternative data, we used it as the default measure for our analyses, and consider our work a chance to test the validity and reliability of the index.

First, we looked at housing costs. Casual and investigative observers seem to agree that housing costs do rise with city compactness. A recent report on the effects of compactness determined that housing costs increased by 1.1% for every 10-point increase in the compactness index. Other researchers have come to similar conclusions, using only population density as an indicator.

Chart 1, which plots data from the 2015 Consumer Expenditure Survey, confirms this general agreement on the correlation between compactness and housing costs. But questions arise from the sharp differences between pairs of cities.

For example, Boston and Atlanta residents use the same percentage of their budgets — 33% — for housing. Yet Boston’s compactness index is at least 90 points higher: 37.4 for Atlanta, vs 126.9 for Boston. According to Smart Growth theory, that difference should bring housing expenditures for Bostonians to 43%, about the same level that is experienced by New Yorkers.

In another comparison, Boston and Miami differ little in compactness: 126.9 vs 112. Yet these two cities differ substantially in the percentage of household budget residents devote to housing costs - 33% vs 39%.

Clearly, in both these examples and in the chart above, compactness is but one of many factors and, perhaps, not the dominant one in the relationship between a city's housing costs and its compactness. Others need to be identified, quantified and incorporated. The trend, however, is indisputable: Greater compactness increases housing costs.

Do transportation costs follow the same trend?

According to theory, cities that are more compact offer more transport options, particularly public transit systems, some of which, like subways, outperform all other modes for time — especially work commute time — and provide travel options that are more affordable. Walking and biking may also be alternate means of mobility that help hold down household transport expenditures in compact cities. The association between density and high non-auto share of trips has already been demonstrated.

Consumer Expenditure Survey data from 2015, when plotted, confirms this assumption. Chart 2 shows a decreasing proportion of the household budget being used for transportation as a city’s compactness index increases.

However, as with housing costs, a close look at the differences between paired cities raises questions. Atlanta and Philadelphia share the same percentage of household budget expenditure on transport, 16%. Yet they differ by 70 points on the compactness index, 37.4 vs 109.05. Meanwhile, Washington and Seattle register an almost identical compactness index — 107.6 vs 104.6 — but the latter, contradicting theory, has transportation costs that are 3 percentage points lower, even though it lacks a subway. Both these cases demonstrate that the current model for measuring the impact of compactness needs fundamental refinements to improve its predictive value.

So far, the data show two countervailing trends: Housing costs rise with compactness, while transportation costs fall. This finding leaves the question of whether more compact cities are more affordable to live in, at least with respect to these two expenditures that consume about half of a household’s budget.

Using the same data from the CES for the 18 cities, we plotted the results of combining the two expenditures, as a percentage of the household budget.

Chart 3 shows an inverse, albeit weak, association of compactness with combined household expenditures of housing and transportation. It clearly does not indicate that more compact cities are more affordable for the average household. Upon a closer look the chart reveals some instructive surprises.

First, Atlanta appears among a group of five most affordable cities, even though it has by far the lowest compactness index (40.9) of all eighteen cities in the CES survey. According to traded wisdom, its transport costs, being almost entirely based on automobile travel, should overwhelm its housing expenditures.

Contradicting theory, Atlanta posts next to lowest average housing cost ($16,316/year), and also one but lowest transportation costs ($8,086/year). When considering that average income in Atlanta is on a par with that in Los Angeles ($69,821 vs $69,118), and that its compactness index is 80 points lower than LA’s, its comparative affordability challenges current thinking about compactness and its effects.

Second, four cities hover around the same point of the index (#110), yet they cover almost the entire gamut of budget percentage expenditure (49% to 54%) for combined housing-plus-transport costs. The same is true for five cities aligning around the #130 of the index.

It's apparent that current theory falls short of adequately explaining field data. A city planner would find little comfort in knowing that a fourfold range of compactness can be equated with the same level of affordability, or that the same level of compactness can be associated with a wide range of combined transportation and housing expenditures. If anything, these results suggest that, because average housing expenses are double those of transportation, a yet-to-be-determined density ceiling might be an effective means of increasing a city’s affordability.

The CES data is only a snapshot in time that may reflect transient conditions, such as gasoline prices, local inflated real estate markets, congestion levels that affect gas consumption, effectiveness and reach of public transit and so on. Variability in these factors will always affect the average transport and housing expenditures. A predictive model should be robust enough to handle such fluctuations, if it is to have practical value.

Yes, greater compactness is associated with higher housing costs and lower transportation costs. But, contrary to unsubstantiated assertions, when these are combined, the result is less — not more — overall affordability.

Fanis Grammenos heads Urban Pattern Associates (UPA), a planning consultancy. UPA researches and promotes sustainable planning practices including the implementation of the Fused Grid, a new urban network model. He is a regular columnist for the Canadian Home Builder magazine, and author of Remaking the City Street Grid: A model for urban and suburban development. Reach him at fanis.grammenos at

Flickr photo by Tim Bartel of a San Francisco neighborhood

Your City Is Not the Next Silicon Valley

Wed, 03/09/2016 - 15:35

“No man needs sympathy because he has to work, because he has a burden to carry,” began Theodore Roosevelt, the U.S. president from 1901 to 1910. “Far and away the best prize that life offers is the chance to work hard at work worth doing.”

No doubt, during Roosevelt’s time there was much work to do. In 1910, for example, nearly 40% of the country was still employed in agriculture. The percent of workers in industry—or manufacturing, construction, and mining—was at 30% and rising, driven by the revving of the Industrial Revolution.

So, 70% of the country’s workforce made a living through labor. They made food to eat and the steel, railroads, cars, bridges, and buildings that modernized America.

Cleveland was a prime benefactor. The manufacturing sector alone employed nearly 307,000 Clevelanders by 1967.

But things changed. Labor-intensive industries matured, which ultimately means taking less people to produce more output. The percentage of the American labor force employed in agriculture stands at 2%, down from nearly 70% in 1840. This doesn’t mean we eat less food, but that technological advances have made the food sector ultra-efficient.

Industry has been experiencing the same forces. Twenty percent of Americans are employed in manufacturing, mining, and construction. In the manufacturing sector, the national percentage is 8%, with Cleveland at 12%—down from 21% in 1990. Again, this doesn’t mean we don’t manufacture things— manufacturing output is at an all-time high nationally—it’s just that we need fewer people to produce more goods.

Okay, so where do people work? The simple answer is services, or those sectors that make up the economy outside of agriculture and industry. Think legal, marketing, business, technology, education, healthcare, and hospitality. For instance, 20% of the nation worked in services in 1840. By 1960 that number was over 50%, before reaching nearly 80% by 2010.

These numbers illustrate a shift in the U.S. economy over time, or from goods producing to service providing. To a large extent, these services are based on the production of ideas.

Writing in the Harvard Business Review, the University of Toronto’s Roger Martin dubs this change the “rise of the talent economy”. Martin notes that in the 1960s, 72% of the top 50 U.S. companies owed their wealth to “the control and exploitation of natural resources.” Today, however, only 10% of the nation’s top companies are industry-based. Instead, over 50% of America’s companies are talent-based, such as Google, Apple, and Microsoft.

“Over the past 50 years the U.S. economy has shifted decisively from financing the exploitation of natural resources to making the most of human talent,” writes Martin.

Enter Silicon Valley. As Pittsburgh was to steel and Detroit to cars, Silicon Valley has been to the talent economy, particularly technology. It was there that the top minds clustered to design new-age circuits and microprocessors in the 1950s and 60s. It was also there that the best software engineers went to birth the internet, search engine, and social media in the 1990s and 2000s.

On the backs of this talent came the wealth, not only the venture capital that has continually acted to “water” the region’s innovation, but also the rising wages of the workers. In fact, in Santa Clara, C.A., the county seat of Silicon Valley, the average salaried employee makes over $103,000 annually, approximately double that of Cuyahoga County employees and the U.S. workforce as a whole.

The successes of Silicon Valley have led many regions to devise their own strategy to be a technology hub. Simply, there existed an “old” economy, so how does a region transition into the “new” economy, primarily one embodied by the high-end services and start-up culture of Northern California?

Often, the tactics are rudimentary, like branding a part of your region as “Silicon X” so as to attract the components of a tech cluster. For instance, Philadelphia has “Philicon Valley” and New York has “Silicon Alley”, whereas New Orleans has “Silicon Bayou” and Portland has “Silicon Forest”. There’s “Silicon Swamp” in Gainesville, “Silicon Slopes” in Utah, “Silicon Harbor” in Charleston, and a variant of “Silicon Prairie” in Dallas, Chicago, Omaha, and Jackson Hole, Wyoming.

Then, once you brand a part of your region “Silicon X”, the next step is to get the story out. A recent piece in Charleston Magazine entitled “The Rise of Silicon Harbor” is illustrative on this front. The author opens the piece by explaining that in Charleston there are “three local tech companies, all within three miles of each other”. The author then quotes a media outlet that states Charleston’s “Silicon Harbor is on its way to becoming the East Coast counterpart to California’s Silicon Valley”.

This idea that your region can become the “next Silicon Valley”, well, its clickbait for online journalism—if only because folks wantto believe their hometown is the place of the future.

For example, a recent Huffington Post piece hints “You Might Be Living in the Next Silicon Valley”. “Could Detroit become the next Silicon Valley?” echoes the industry magazine CIO. Meanwhile, a NewYorker piece is titled “How Utah Became the Next Silicon Valley”, while an Oklahoma story is headlined “Vision proposal aims at Tulsa being the next Silicon Valley”.

Still, if everywhere is the next Silicon Valley, then nowhere is the next Silicon Valley. That’s the reality, and it’s important for cities to grasp it so they can plan their economic futures properly.

“When it comes to tech, nobody can simply create the next Silicon Valley,” explains Aaron Renn, a Senior Fellow at the Manhattan Institute.

“Just because a place has a number of startups doesn't mean it's destined to be a Silicon Valley,” Renn continued. “By all means celebrate a growing tech industry, but don't get carried away.”

But the bigger issue for regions looking for their economic future in Silicon Valley’s past is whether or not that’s even a sound strategy in the first place. Specifically, the tech economy is also a maturing, prone to the same job contractions, offshoring, and wage declines that hallmarked deindustrialization.

According to data compiled by the Institute for Strategy and Competitiveness, four out of the top five tech clusters in the United States lost jobs from 1998 to 2013. San Jose, CA, the metropolitan area comprising Silicon Valley, led the way in contraction, going from nearly 160,000 tech jobs in 1998 to fewer than 74,000 in 2013—a decline of 54%. Telling, automotive employment in Detroit declined by less over the same time period, at 32%.

These figures are in line with a new study out of Oxford University that found that while technology start- ups often create a lot of wealth, they are not good at creating many jobs. The study found that only 0.5% of the American workforce in 2010 were employed in industries that did not exist in 2000.

“What I think the Oxford study is saying is that you’re not getting the kind of job growth from these kind of high-tech, high-growth, high-profitability startups that you had in the past,” said economist Jim Pethokoukis in the industry magazine Re/code.

Why? A primary culprit is that tech jobs are becoming automated, just like farm and factory jobs before it. Specifically, tech companies over the last 15 years don’t need to hire as many people as they did in the 90’s because the software — loosely described as machines — is doing the work.

For Jim Russell, the economic development blogger at Pacific Standard, the aging of the tech industry— Russell uses the term “tech convergence”—has echoes in the decline of industry. Russell discusses his life growing up on the run from macroeconomics, going from Erie, PA, to Schenectady, NY, to Vermont as his father, a General Electric engineer, tried to keep ahead of the wave of contractions.

“He had an uncanny knack for moving our family just before the layoffs hit,” said Russell. “We were always racing to stay ahead of the economic restructuring.”

Russell, whose wife is in tech sales, is experiencing the same game of cat and mouse today.

“The tech industry enjoyed divergence until the end of the 1990s,” he’d note, explaining there were “fatter” times in emerging tech hubs like Boulder—where they’d lived.

“But then the bubble burst,” Russell explained, “resulting in massive layoffs. Good friends were out of work.”

Today, his family lives in Northern Virginia. That’s because it makes no economic sense for firms to house tech sales in Silicon Valley. This is partly due to the exorbitant cost of living in Northern California. But it is also due to the emergence of cloud computing, which has pushed tech everywhere— meaning tech hubs are increasingly nowhere.

This maturation of tech has Russell wondering “whether Silicon Valley is the next Detroit”.

Does this mean technology is no longer integral in regional economic growth? No. It just means the tech industry is changing. Detailing this change can both sharpen, if not make more realistic, a regional innovation strategy.

According to the Manhattan Institute’s Aaron Renn, the issues boils down to this: “Do you have proprietary industry to marry to tech?”

What Renn is getting at is the fact that tech in itself is a tool. It is by and large circuitry that allows access to information. But information is not knowledge. To give an example, information is the medical textbook, while knowledge is the application of information to become a heart surgeon. In other words, in what fields of applied knowledge can technology be tied to so as to further a given regional industry?

Most recently, tech has been tied to the entertainment or leisure industry. “Silicon Valley started with tech for the sake of tech: making computers, search engines, and software,” says Cleveland technologist Eamon Johnson. “Now it's 20-something dudes making solutions to replace what their mom did for them at home…laundry, food, rides around town, and recommendations on where to eat.”

According to Johnson, the coming evolution of innovation is to use the next generation of computing power to go beyond tech’s capacity to distract or consume.

“But techies need industry experts to give them problems so solutions can be worked on,” he says.

This exactly what is happening in Cleveland with healthcare. Cleveland observes, treats, and innovates within the field human health like few other regions worldwide. As a result, the field of medical technology, or medtech, is gaining some traction in the region.

This is evidenced by IBM’s recent acquisition of the Cleveland Clinic-spinoff Explorys, which is a “big data” health analytics firm. The company, based in Cleveland’s University Circle, is expanding its Cleveland office, perfecting its processes of how the region’s elite health “know-how” can be further mined through technology—thus creating more knowledge, and then more health innovation.

These kind of developments are important. Medtech is still a frontier industry, and it fits in well with Cleveland’s area of specialization. So there’s plenty of room for a first mover advantage if the region can gets its medtech playbook right.

Now, is medtech cool? Well that depends on your definition of “cool”. "You can work for a cool tech company with a texting app," said Explorys’ Charlie Lougheed to the Plain Dealer recently. "Or you can work for a company that improves health for millions of people."

Returning to Teddy Roosevelt: that is a lot of work, and a lot of work worth doing.

Richey Piiparinen is a Senior Research Associate who leads the Center for Population Dynamics at the Levin College of Urban Affairs at Cleveland State University. His work focuses on regional economic development and urban revitalization.

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