Author: Joel Kotkin

Malls Washed Up? Not Quite Yet

Maybe it’s that reporters don’t like malls. After all they tend to be young, highly urban, single, and highly educated, not the key demographic at your local Macy’s, much less H&M.

But for years now, the conventional wisdom in the media is that the mall—particularly in the suburbs—is doomed. Here a typical sample from The Guardian: “Once-proud visions of suburban utopia are left to rot as online shopping and the resurgence of city centers make malls increasingly irrelevant to young people.”

To be sure, there are hundreds of outmoded malls, long-in-the-tooth complexes most commonly found in working-class suburbs and inner-ring city neighborhoods. Some will never come back. By some estimates, something close to 10 to 15 percent of the country’s estimated 1,000 malls will go out of business over the next decade; many of them are located in areas where budgets have been very tight, with locals tending to shop at “power centers” built around low-end discounters such as Target or Walmart.

But the notion that Americans don’t like malls anymore is misleading. The roughly 400 malls that service more-affluent communities—like those typically anchored by a Bloomingdale’s or Nordstrom—recovered most quickly from the recession, and now appear to be doing quite well.

To suggest malls are dead based on failure in failed places would be like suggesting that the manifest shortcomings of Baltimore or Buffalo means urban centers are not doing well. Like cities, not all malls are alike.

Looking across the entire landscape, it’s clear the mall is transforming itself to meet the needs of a changing society but is hardly in its death throes. Last year, vacancy rates in malls flattened for the first time since the recession. The gains from e-commerce—6.5 percent of sales last year, up from 3.5 percent in 2010—has had an effect, but bricks and mortar still constitutes upwards of 90 percent of sales. There’s still little new construction, roughly one-seventh what it was in 2006, but that’s roughly twice that in 2010.

Shopping in stores, according to a recent study from A.T. Kearney, is preferred over online-only by every age group, including, most surprisingly, millennials, although many of them research on the web, then visit the store, and sometimes then order on line. The malls that are flourishing tend to be newer or retrofitted and are pitched at expanding demographic markets. These “cathedrals of commerce” in the past tended to reflect the mass sameness of mid-century America; those in the future focus on distinct niches—ethnic, income, even geographical—that are not only viable but highly profitable.

This leaves us with a tale of two kinds of malls. One clear dividing line is customer base. In the ’80s and before, malls succeeded fairly universally, notes Houston investor Blake Tartt. But now it’s a matter of being in the right place. “Everything has changed and you have to be with the right demographics,” he suggests. “It’s not so much about the mall but the location that matters.”

Old malls in declining areas, notes a recent analysis by the consultancy Costar, do truly face a “bleak future” and should look to be converted into apartments, houses, corporate headquarters, or churches.

In contrast, affluent urban areas are becoming an unexpected hotspot for malls—even outlet malls are opening open in the urban core. You now see gigantic malls in places like Manhattan: the Shops on Columbus mall in Manhattan, the world’s fifth-most profitable mall, looks inside like it was teleported from Orange County, California, or, god forbid, Long Island.

This is not unusual across the world. Malls are on the march in many of the world’s biggest cities, including Istanbul, Mumbai, Singapore, and Dubai. Today Asia is the site of seven of the world’s 10 largest malls, in places like Beijing, Dubai, and Kuala Lumpur.

In the developing world, malls grow as local shopping streets either gentrify or decay. This is particularly true in fast-growing developing countries where malls are often seen as an escape from hot, humid, dirty and even dangerous urban environments. Indian novelist and Mumbai blogger Amit Varma suggests that these folks like malls “because they are relatively clean and sanitized” as opposed to the city’s pollution-choked, beggar-ridden and often foul-smelling streets.

Ethnic Malls

Within the U.S., demographic change is creating opportunities for a new breed of mall-maker. Across the country, savvy investors and developers have been buying older malls, which tended to serve either Anglo or African-American customers, and shifting them instead to focus on fast-growing ethnic markets. Such malls can now be found in traditional Latino areas such as Southern California and Texas, but they also exist in Atlanta, Las Vegas, Oklahoma City, and Charlotte, places that have recently become major hubs for immigrants.

“We had a terrific recession,” notes Los Angeles-based mall maven Jose Legaspi, who has developed 12 such malls around the country. “You do well if you target specific niches that are growing. You can’t make it with a plain vanilla mall. We are creating in these places a Hispanic downtown.”

Fort Worth’s 1.2 million-square-foot La Gran Plaza, which Legaspi manages, epitomizes the advantages of such marketing. When investor Andrew Segal bought the mall in 2005, it was a failing facility that primarily serviced a working-class Anglo population. Barely 15 percent of the mall’s tenants were both open and paying rent.

Segal quickly recognized that the area around the mall—like much of urban Texas—was becoming more diverse, in this case largely Latino.

Segal and Legaspi redid the once prototypical plain vanilla mall to look more like a Northern Mexican town plaza, a design pattern developed by Los Angeles architect David Hidalgo. Latino customers are drawn to amenities like large and comfortable family bathrooms, an anchor supermarket, mariachi music shows, and even Catholic masses. There is also a “swap meet” that accommodates small vendors, something that Legaspi sees as essential to creating “a carnival of retail experiences.” By 2008, when the face-lift was complete, the mall achieved 90 percent occupancy. Today La Gran Plaza is effectively “full,” says Segal, who is considering a further expansion of the mall.

The viability of ethnic malls in hard times demonstrated their viability in better ones. When Dr. Alethea Hsu opened her Diamond Jamboree Center in Irvine, California, the state was reeling from the recession. Yet from the time she opened in 2008, her mall, which focuses on Orange County’s large and expanding Asian population, has been fully occupied. It includes various realty offices, hair salons, medical offices, a Korean supermarket, and a small Japanese department store, all primarily aimed at a diverse set of Asian customers. The biggest problem—for those interested in choosing among various kinds of Chinese, Vietnamese, Korean, or Japanese cuisine—is not that it’s deserted but that it’s often difficult to get a parking space.

Be sure of this: The ethnic mall is no flash in the pan, at least as long as immigrants pour into this country. By 2000, one in five American children already were the progeny of immigrants, mostly Asian or Latino; today they make up as much as one-third of American kids. These kids, and their own offspring, not to mention Anglo or African-American friends, have been brought up with food and fashion tastes that often originate in Mexico, Taiwan, Japan, Korea, or China. When I was a kid growing up in New York, you went to Chinatown or Little Italy for an ethnic infusion. Now you get in your car, park, and get options not so dissimilar than what you would find—usually in a mall—in Mexico City, Mumbai, or Singapore.

The World According to Rick

For most of America, says Los Angeles developer Rick Caruso, the future lies in replicating the function that Main Street once served. Rather than simply a center for instant consumption and transactions, the mall is a social meeting point, says Caruso, who has 10 developments under his belt. To make it all work means adding often unconventional amenities such as live entertainment or the lighting of Christmas trees and the Chanukah menorah.

This is part of a broader mall trend in which developers see their properities as community and entertainment centers, an approach adopted now by mainstream mall developers such as Westfield, whose projects are increasingly open-air and built around amenities such as health clubs and trendy restaurants and cafes.

The ultimate example may be the Caruso-owned Grove, a giant open-air mall that lies next to the Farmers’ Market, one of the oldest and beloved shopping areas in Los Angeles. The world’s eighth-most profitable mall, the Grove is laid out like a Disneyesque Main Street and is particularly appealing to families and tourists. Overall, the Grove now ranks among L.A.’s leading tourist attractions. This reflects both the development’s pleasant, pedestrian-oriented design as well as proximity to the Farmer’s Market, which remains, as has been traditional, largely a collection of small, idiosyncratic stalls.

A sense of place is what makes the Grove—and, to a lesser extent, Caruso’s other developments—work. Located in the Miracle Mile district of L.A., it attracts a huge urban population that includes old Jewish shoppers from the immediate area as well as the growing ranks of hipsters, tourists, and the rest of the vast diversity that is Los Angeles. Caruso’s other centers, like the Commons in suburban Calabasas and The Promenade in Westlake, may lack global appeal but they succeed as anchors of their communities. Without developed, large historic downtowns, these communities still need a central place, and for them, the malls, however imperfectly, come closest to delivering it.

In today’s environment, Caruso suggests, a mall has to offer something that online retailers, power centers, or catalogs cannot provide: a social experience. “You have to differentiate yours, offer a place for people to gather for holidays. People are yearning for a place to connect with each other. We are not building just town centers, but the centers of towns.”

Ironically these malls are fulfilling a role that some urbanists have denounced the suburbs for lacking. “What do most urbanists want?,” asks David Levinson, director of the Networks, Economics, and Urban Systems Research Group. “A lively, pedestrian realm, clean, free of automobiles, with a variety of activities, the ability to interact with others and randomly encounter friends and acquaintances. This is what the shopping mall gives.”

The New Town Center: With Suburban Revival, New Hope for Malls

The notion of dead malls has been connected to a similar idea about the inevitable demise of the suburbs, which appeared possible at the height of the recession, but has since been shown to be largely false. Suburbs may not be booming as in the ’90s, but they are now growing as fast as core cities, and constitute more than 70 percent of all new population and 80 percent of new job growth since 2010.

Surprisingly, the most recent numbers suggest that the outer suburbs and exurbs, once consigned to Hades by the new urbanist crowd, have begun to roar back. Millennials, as they get older, notes Jed Kolko, now seem to be moving to what he calls “the suburbiest” areas farther out on the periphery.

It is in these areas that malls may have their greatest future. In communities like Irvine, where the Spectrum development has become the de facto downtown, or Sugar Land, a highly diverse outer suburb of Houston, the “town center” is essentially a mall in brick, made to look like an old Main Street but filled with chain stores and specialty restaurants. Many residents of fast-growing communities like Sugar Land, which has 83,000 residents, are relative newcomers, and for them such town centers are the focus of their communities.

It is time to dispense with the twin memes of mall- and suburb-bashing, and begin appreciating and improving how most Americans live and shop. The malls of the future indeed may be very different in many ways—more segmented by income and ethnicity, more entertainment- and experience-oriented. But they will continue to serve an important focus for most American communities. And at a time when many of our most celebrated cities have themselves become giant malls (is there any place on Earth more boring than the area around Times Square?), the future of malls may prove brighter, and even more transformative, than commonly imagined.

This piece first appeared at The Daily Beast.

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

Photo: “Thegrove“. Licensed under CC BY-SA 3.0 via Wikipedia.

June 7, 2015
The Changing Geography of Racial Opportunity

In the aftermath of the Baltimore riots, there is increased concern with issues of race and opportunity. Yet most of the discussion focuses on such things as police brutality, perceptions of racism and other issues that are dear to the hearts of today’s progressive chattering classes. Together they are creating what talk show host Tavis Smiley, writing in Time, has labeled “an American catastrophe.”

Yet what has not been looked at nearly as much are the underlying conditions that either restrict or enhance upward mobility among racial minorities, including African-Americans, Latinos and Asians. In order to determine this, my colleague at Houston-based Center for Opportunity Urbanism Wendell Cox and I developed a ranking system that included four critical factors: migration patterns, home ownership, self-employment and income.

We found, for all three major minority groups,   that the best places were neither the most liberal in their attitudes nor had the most generous welfare programs. Instead they were located primarily in regions that have experienced broad-based economic growth, have low housing costs, and limited regulation. In other words, no matter how much people like Bill de Blasio talk about the commitment to racial and class justice, the realities on the ground turn out to be quite different than he might imagine.

Southern Comfort

Perhaps the greatest irony in our findings is the location of many of the best cities for minorities: the South. This is particularly true for African-Americans who once flocked to the North for both legal rights and opportunity. Today almost all the best cities for blacks are in the South, a region that has enjoyed steady growth and enjoys generally low costs. Indeed, of the top 15 cities for African-Americans, 13 are in the old Confederacy starting with top-ranked Atlanta, No. 2 Raleigh, No. 4 Charlotte, No. 6 Virginia Beach-Norfolk, No. 7 Orlando, No. 8 Richmond (a distinction it shares with Miami and San Antonio), as well as   four of Texas’ large metro areas: No. 12 Houston, No. 13 Dallas-Ft. Worth and No. 8 San Antonio. The only two other metros are “inside the Beltway”: the metropolitan expanses of Washington and, surprisingly, Baltimore.

What accounts for this? Well, in Washington and Baltimore, the obvious answer is the federal government. Roughly one in five black adults works for the government, and are far more likely to have a public sector job than non-Hispanic whites, and twice as likely as Hispanics. These are not the people who rioted in the inner city; most of them live in prosperous suburbs surrounding these cities. But outside the Beltway region, the explanations tend towards more basic economics, like job creation, low housing prices and better opportunities for starting businesses.

Ironically, blacks – 6 million of whom moved to the North during the great migration — are once again voting with their feet, but back to the same region in which, for so long, they were so harshly oppressed.   Between 2000 and 2013, the African-American population of Atlanta, Charlotte, Orlando, Houston, Dallas-Fort Worth, Raleigh, Tampa-St. Petersburg and San Antonio all experienced growth of close to 40 percent or higher, well above the average of 27 percent for the nation’s 52 metropolitan areas with more than 1 million residents.

In contrast, the African-American population actually dropped in five critically important large metros that once were beacons for black progress: San Francisco-Oakland, San Jose, Los Angeles, Chicago and Detroit. In many cases, most notably in San Francisco, blacks have become the unintended victims of soaring housing prices and rampant gentrification, with little option to move to the also high-priced suburbs.   Today, suggests economist Thomas Sowell, the black population of the city itself is half that of 1970; the situation has changed so much that former Mayor Gavin Newsom even initiated a task force to address black out-migration.

Yet if many African-Americans can be seen “going home” to their native region, the South is also doing well among ethnic groups that have historically had little attachment to Dixie. For Latinos, now the nation’s largest ethnic minority, seven of the top 13 places are held by cities wholly or partially in the old Confederacy, led by No. 1 Jacksonville, Fla., as well as No. 4 Houston, No. 6 Virginia Beach, No. 7 Dallas-Ft. Worth, No. 9 Austin, No. 12 Tampa and #13 Orlando.The majority of newcomers to the South, notes a recent Pew study, are classic first-wave immigrants: young, 57 percent foreign-born and not well educated — but they see the South as their land of opportunity.

In Florida, no stranger to Latino populations, Tampa-St. Petersburg, Orlando and Jacksonville all experienced Hispanic growth rates since 2000 between 100 and 150 percent, well above the average of 96 percent among the 52 metropolitan regions. Lower housing costs and better prospects for advancement drive this change. Despite their historically large populations in Texas, Latino populations still grew at a rapid rate in Houston, at 68 percent, Dallas-Ft. Worth at 70 percent and Austin, 83 percent. “You go where the opportunities are,” explains Mark Hugo Lopez, associate director of the Pew Hispanic Center in Washington, D.C.

Asian-Americans, although their economic and educational performance tends to be better than other minorities, follow a surprisingly similar pattern. Seven of the top 10 regions for them also were in the South, as well as two others, Washington and Baltimore, that abut the old Confederacy. Most of the best metros for Asians were in the Sunbelt, starting with No.1 Riverside-San Bernardino, Calif., No. 2 Richmond, No. 4 Raleigh, No. 5 Houston, No. 7 Dallas-Ft. Worth, No. 8 Austin, No. 9 Las Vegas, No. 12 Phoenix, No. 13 Atlanta and No. 15 Jacksonville.

Like African-Americans and Latinos, Asians are voting for these places with their feet. Although Asian migration still is largely to California, that’s not where Asians are increasingly moving. Since 2000, Asian population growth in their traditional hubs like Los Angeles, San Francisco and San Jose was roughly one-third what was seen in the top Asian cities.

The New Geography of Racial Opportunity

Perhaps the biggest determinant of immigrant and minority opportunity has to do with home ownership. In the aftermath of the housing crash, minorities, notably blacks and Hispanics, suffered tremendous losses. This exacerbated the largest cause of the wealth gap  between minorities and whites: the extent of homeownership, which represents the key asset class for most Americans.

Whereas older whites may have been able to benefit from wildly inflated home values, the results for minorities, who are generally younger and newer to the market, are less satisfactory. One useful comparison can be drawn between two adjacent metropolitan regions, Los Angeles and Riverside-San Bernardino. House prices in Los Angeles are roughly twice as high, based on income; not surprisingly, minority home ownership is much lower there. Black homeownership in Riverside-San Bernardino (an area known as the Inland Empire) is over 40 percent, 10 points higher than in L.A.; for Asians it is 14 percent higher, and for Latinos the percentage difference with L.A. is more than 20 points.

Some of the worst results — in terms not only homeownership but income — are ironically in those part of the country that purport to be most sympathetic to minority interests. In New York, Los Angeles and San Francisco, between 25 and 30 percent of African-Americans own their own home. In Atlanta it’s nearly 50 percent and well over 40 percent in most of the other Dixie metro areas.

This is not likely to change soon. Black incomes in these Southern cities, where there is a much lower cost of living, are roughly the same as they are in super-blue New York, Los Angeles, Boston or San Francisco. Much the same pattern can be seen for both Latinos and Asians, with the exception of San Jose, where Silicon Valley employment keeps their household income well north of $100,000 annually.

Policy Implications

What this study shows us is, if nothing else, the relative worthlessness of good intentions. As we have seen over the past 50 years, the expansion of transfer payments, while critical to alleviating the worst impacts of poverty, have not generally been best at promoting upward mobility for African-Americans and, increasingly, Latinos. If higher welfare costs and political pronunciamentos were currency, New York, Los Angeles, Boston and San Francisco would not be, for the most part, stuck in the second half of our rankings.

Ultimately what really matters are the economics of opportunity. Many of the cities that scored best for all three groups — the Washington, D.C. area, Houston, Dallas-Fort Worth, San Antonio and Austin — have enjoyed stronger than normal economic growth over the past decade. In the areas around the nation’s capital, government employment has been a critical factor; in the other areas more generalized business growth has taken the lead. In contrast, notes University of Washington demographer Richard Morrill , many regions that have seen rapid de-industrialization and slow housing growth have developed “barbell” economies based on a combination of ultra-high-wage industries, like technology and finance, and low-end service jobs.

There are other policy implications. Blue state progressives are often the most vocal about expanding opportunities for minority homeownership but generally support land use and regulatory policies, notably in California, that tend to raise prices far above the ability of newcomers — immigrants, minorities, young people — to pay. Similarly blue state support for such things as strict climate change regulation tends to discourage the growth of industries such as manufacturing, logistics and home construction that have long been gateways for minority success.

Given the persistence of racial tensions, this data begins to give us a clearer understanding of what actually works for America’s emerging non-white majority. Denunciations of racism, police brutality and xenophobia may be all well and good for one’s sense of justice. But if you want actually to improve the lives of minorities, we might consider focusing instead on policies that promote economic opportunity, keep living costs down, and allow for all Americans to enjoy fully the bounty of this country.

This piece first appeared at Real Clear Politics.

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

Photo “asian american” by flicker user centinel.

May 29, 2015
U.S. Foreign Policy a Series of Unforced Errors

President Obama, as a fan and occasional player of basketball, should know about “unforced errors.” Those are the kind of thoughtless, bonehead plays where you lose the ball without a defender swatting it or toss a pass somewhere into the higher seats. If you want to review how this is done, I recommend re-watching the recent Clippers versus Rockets series – if you have the stomach for it.

Lately, America has become proficient in creating such unforced mistakes. At a time when the U.S. economy has been out-performing most competitors – resurging in everything from energy and manufacturing to tech – we appear to be slipping ever more into pessimism and fear of decline. Even the reliably pro-Obama New York Times conveys concerns of seeing the U.S. in a tailspin, losing influence in a world that now increasingly looks to authoritarian regimes, such as China and Russia, for leadership and support.

The Great Unforced Error

You can’t blame Obama for the biggest of all the unforced errors, the disastrous invasion of Iraq. Rather than the “mother of all battles,” in Saddam Hussein’s phrase, it turned out to be the mother of all mistakes. In the end, at great human and financial expense, we turned a country run by a weakened, slightly buggy dictator into a nest of jihadi fanatics fighting Iran’s allies for control of the country. Americans have to watch as Iranian commanders direct the battles on the ground and take the bulk of the credit for successes.

Read the entire piece at the Orange County Register.

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

May 26, 2015
How California Became a Blue-State Role Model

California, once disdained as zany, insubstantial and politically unreliable, has now become a favorite of the blue state crew. From culture and technology to politics, the Golden State is getting all sorts of kudos from an establishment media traditionally critical of our state.

For example, the New York Times recently ran two pieces, one political and the other cultural, that praised this state for its innovation and cool – even in the midst of a horrendous drought.

And to be sure, it’s nice to be a pet – at least I hope that’s what our dog Roxie feels. But we may want to understand why those who traditionally lambasted California now grant us their favors. Although some praise is deserved – both the economy and the cultural scene in California have improved somewhat – much of this shift reflects changes in the political and media culture itself.

How a writer looks at California can be increasingly predicted by the writer’s political orientation. For liberals, the nasty California that produced both Richard Nixon and Ronald Reagan has been supplanted by a cooler, greener and more socially progressive state. If you are on the Right, California is beloved for reasons of nostalgia; for the Left, California is where the future once again is being shaped. Those of us more in the middle are simply unsure of what to think.

Read the whole thing at the Orange County Register.

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

Photo courtesy of the National Archives.

May 11, 2015
Some Progressives Grow Disillusioned with Democracy

Left-leaning authors often maintain that conservatives “hate democracy,” and, historically, this is somewhat true. “The political Right,” maintains the progressive economist and columnist Paul Krugman, “has always been uncomfortable with democracy.”

But today it’s progressives themselves who, increasingly, are losing faith in democracy. Indeed, as the Obama era rushes to a less-than-glorious end, important left-of-center voices, like Matt Yglesias, now suggest that “democracy is doomed.”

Yglesias correctly blames “the breakdown of American constitutional democracy” on both Republicans and Democrats; George W. Bush expanded federal power in the field of national defense while Barack Obama has done it mostly on domestic issues. Other prominent progressives such as American Prospect’s Robert Kuttner have made similar points, even quoting Italian wartime fascist leader Benito Mussolini about the inadequacy of democracy.

Read the whole thing at The Orange County Register.

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

May 6, 2015
America’s Cities Mirror Baltimore’s Woes

The rioting that swept Baltimore the past few days, sadly, was no exception, but part of a bigger trend in some of our core cities towards social and economic collapse. Rather than enjoying the much ballyhooed urban “renaissance,” many of these cities are actually in terrible shape, with miserable schools, struggling economies and a large segmented of alienated, mostly minority youths.

We are witnessing an unwelcome reprise of the bad old days of the late ’60s, when much of American core cities went up in smoke. Already this year there have been serious disturbances in St. Louis as well as neighboring Ferguson. There’s also been a cascading of urban violence in cities such as Chicago, where the murder rate in 2013 exceeded that of the Capone era. Overall, the geography of fear remains very much what it was a half century ago. The most dangerous places in in the U.S. in terms of violent crime tend to be heavily black cities, led by Detroit, Oakland, Memphis, St. Louis, and Cleveland. Baltimore ranks sixth.

Of course not everything is as it was. Some cities, notably New York and Los Angeles, are much safer today, and there remains a strong pull for younger people, particularly the well-educated, to move to core cities, at least in their 20s. Black urban professionals enjoy opportunities that were rare a generation ago to reach the highest levels in our most elite cities.

But, as Baltimore makes clear, we are still very far from what Aaron Ehrenhalt has labeled the “great inversion,” in which our cities change into affluent redoubts while the suburbs devolve into future slums. In reality, this is very far from the truth: cities are, if anything, becoming more bifurcated than ever, with a large, and seemingly unmovable, population that has benefited little from the gentrification of some urban neighborhoods, including some in Baltimore itself.

The Persistence of Concentrated Poverty

Perhaps the biggest sign of how limited the urban renaissance has been is to look at the growth of precisely the kind of highly concentrated poor areas like those that blew up in Baltimore. Yet although the suburbs’ share of poverty may have increased, the average poverty rate in the historical core municipalities in the 52 largest U.S. metro areas remains at 24.1 percent, more than double the 11.7 percent rate in suburban areas—despite a considerable urban turnaround in this period.

David S. Holloway/Getty

In fact, neighborhoods suffering entrenched urban poverty (PDF) actually grew in the first decade of the new millennium, increasing in numbers from 1,100 to 3,100 and in population from two to four million. In other words, poverty spread but also became far more intense in cities. “This growing concentration of poverty,” note urban researchers Joe Cortright and Dillon Mahmoudi, “is the biggest problem confronting American cities.”

Certainly Sandtown-Winchester—where Freddie Gray, whose death sparked the riots, grew up—fits this mode. As the liberal Think Progress website explains, more than half of that neighborhood’s people between the ages of 16 and 64 are out of work and the unemployment rate is double that for the rest of the city. Median income is below the poverty line for a family of four, and nearly a third of families live in poverty. About a quarter to a third of the buildings are vacant, compared to 5 percent in the city as a whole.

Yet the people in these neighborhoods do not represent the majority of black America. Besides the gap between blacks and whites, there is also a growing one among African-Americans themselves. This is painfully obvious in the Baltimore region which, extending to the Washington, D.C., suburbs, has some of the highest black wages and homeownership rates of any of the county, and ranks among the best places for African-Americans in a new study I co-authored for the Center for Opportunity Urbanism.

In fact, five of the ten wealthiest black communities in America are in Maryland. Needless to say, residents in those towns are not rioting. There is an increasingly enormous gap between entrenched poor communities, such as those in Baltimore, and a rapidly expanding black suburban population. Barely half of the 775,000 African-Americans in the Baltimore metropolitan region live in the city, and those outside do far better than inside the city limits. In the last decade, suburban Baltimore County added160,000 blacks, far more than moved into the city (PDF). The black suburbanites not only make more money than their urban counterparts but their life expectancy (PDF) is at least eight years longer.

These trends can be seen nationwide. In the last two decades of the 20th century, more blacks moved into the suburbs than in the previous 70 years, a trend that continues unabated. The 2010 Census indicated that 56 percent of African Americans in major metropolitan areas live in the suburbs. This movement was particularly marked among families with children; the number of black children living in cities like New York, Oakland, Atlanta, Los Angeles all dropped precipitously, as families sought out safer streets, better schools, and more affordable space.

The Changing Nature of Urban Economies

African-Americans came to Baltimore and other northern cities in large part to work in the steel, port, and other blue collar, industrial businesses that flourished in mid-century America. Yet most of those jobs are now gone, leaving behind those who must scramble to find work in the growth industries of today—education, technology, medical services. This is the case in almost all heavily black cities, not only in the Northeast, but the Midwest and even parts of coastal California. But today’s star urban industries, notably technology and high-end business services, employ few working class blacks. African-Americans, for example, occupy only the tiniest sliver of jobs—roughly 2 percent—in Silicon Valley. Nor have African Americans done well in the tech boom, driven by software-related firms more likely to staff themselves with Indian technocoolies than boys up from the ’hood. Between 2009 and 2011, earnings dropped 18 percent for blacks and 5 percent for Latinos, according to a 2013 Joint Venture Silicon Valley report.

Overall the places where these industries have grown often produce not more opportunities for poor people or minorities but rather a subtle form of “ethnic cleansing.” A recent report from the Urban League, for example, pointed out that the very cities most praised as exemplars of urban revival—San Francisco, Chicago and Minneapolis—also suffer the largest gaps between black and white incomes. Notwithstanding the rhetoric, much of the “hip cool” world increasingly consists of monotonic “white cities” with relatively low, and falling, minority populations, such as San Francisco, Portland, and Seattle. These places are achingly political correct in theory, but are actually becoming whiter and less ethnically diverse as the rest of the country diversifies. The situation has changed so much that former MayorGavin Newsom even initiated a task force to address black out-migration.

Inverting the Inversion

Baltimore proves that the “great inversion,” insofar as it exists at all, positively affects a relatively small part of the urban population, particularly in historically black cities. Cities may well have become a popular abode for the young, well-educated, and the rich (usually white), but they also contain another, usually much larger population of those, mostly minorities, who have been left behind in the urban evolution. Midwestern urban analyst Pete Saunders describes Chicago in this manner: “one third San Francisco, two thirds Detroit.”

This is precisely what we see in Baltimore and many traditionally black cities. Everything that does not work in cities today—education, for example, and sometimes law enforcement—most directly affects minorities and the poor. Crime may be down overall in many cities, but not necessarily in predominately minority neighborhoods. As blogger Daniel Hertz has demonstrated, violent crime has actually increased since the early ’90s in several large, predominately African-American Chicago neighborhoods.

Clearly what we are seeing then is not an urban kumbaya you see in TV ads for fast food and web services, but a hardening of class and racial divisions. Suburban poverty and crime may have increased in recent years, but they are not nearly as entrenched on the periphery as they are in the city. Places like inner Baltimore function essentially as a kind of dead-end, a cul-de-sac for dreams of a better future.

The Changing Geography of African-American Opportunity

We are witnessing a very unwelcome resurgence of racial tensions over the past six years, with concern about racism at the highest level since the Rodney King riots in 1992. Today, particularly in the divisive aftermath of Ferguson and other police-related controversies, two in five Americans feel race relations have gotten worse since President Obama took office, while only 15 percent thought they had gotten better.

How do we reverse this ugly trend? Sadly it takes more than good intentions and handouts. To be sure, the initial Great Society programs helped reduce chronic black poverty. But the poverty rate was already dropping: in the prosperous early ’60s, black poverty plummeted from 56 percent to 34 percent; in contrast, in the years after President Lyndon Johnson launched the war on poverty, it dropped only slightly, to 32 percent. But by the ’70s this progress—despite the implementation of such programs as affirmative action—slowed to a crawl, in large part due to cascading social problems, particularly in industrial cities like Baltimore.

Many progressives have blamed conservatives starting with President Reagan for the conditions that still prevail for many African Americans. Yet it turns out that expansive era was pretty good for blacks, if not for their leaders. Even as poverty spending growth slowed, the poverty rate dropped in the Reagan years to around 30 percent for African-Americans. Similarly the economic boom of the Clinton era saw even greater progress, with poverty dropping to 25 percent. It began to rise again, albeit slowly, during the tepid recovery of the Bush era, but then began to rise more steeply during the Great Recession, and through the slow, and also tepid, recovery of the Obama years.

Clearly an improved economy is more important than ramping up social spending. Indeed, according to USC’s Luke Phillips, states. like New York, Massachusetts , California and Illinois spend almost twice as much on welfare payments than do states like North Carolina, Texas, or Florida, both in terms of GDP and state spending. Yet the best results for African Americans in our Center for Opportunity Urbanism study were found overwhelmingly in the former Confederacy, states generally not well known for their generosity to the poor or interest in racial redress.

This is leading to a stunning reversal in black migration patterns. Between 1910 and 1970 six million African Americans migrated from the South to the North in what became known as the Great Migration. But since World War II the migration has changed course: ambitious blacks now head toward the suburbs, or the South. Between 2000 and 2013, the African American populations of Atlanta, Charlotte, Orlando, Houston, Dallas-Fort Worth, Raleigh, Tampa-St. Petersburg, and San Antonio all experienced growth of close to 40 percent or higher, well above the average of 27 percent for the 52 metropolitan areas.

“Blacks who have relocated tend to be either retirees or well-educated, well-off middle-agers with children,” John Giggie, associate professor of history and director of graduate studies at the University of Alabama in Tuscaloosa, toldBET.com. They move to the South not because they like the politics (most probably don’t) but because they seek economic progress. Part of the reason may be that sunbelt cities have more broad based opportunites for middle and working class residents than have the increasingly post-industrial economies of California and the Northeast corridor.

Our leadership class, black and white, misses all this. Sending Al Sharpton, President Obama’s highly publicized advisor, to Baltimore hardly bodes well for improving things on the ground. A little bit of catharsis, perhaps, but at some point you need to deal with reality.

It would be far better if some CEOs or investors—American, Asian, or European—came to the old Chesapeake city bearing plans for expanding jobs and opportunities. That, at least, would begin to address the economic and social isolation that, inevitably, finds its expression in fires on the street. Good jobs and the prospect of a better future—not good intentions—is what ultimately matters.

This piece first appeared at The Daily Beast.

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

Photo by Voice of America, Victoria Macchi

May 3, 2015
When it Comes to Technology Privacy, the Eyes Have It

Back when integrated circuits were safely ensconced in missiles, spacecraft and machine tools, information technology could take us to the moon or build better cars, but – as long as they didn’t blow us up – they didn’t seem destined to strip away the last of our humanity. But as information technology has emerged as a factor in everyday life, the threat to our autonomy and privacy as individuals has mounted.

This comes at a time when many, particularly the young, worship technology as a new kind of secular god. In a poll of British people, about as many said they trust Google to have their interests at heart as they do God. Apple, in particular, notes Brett Robinson, writer of “Appletopia,” has adherents who back their products with “fanatical fervor.”

Yet while information technology may bring many blessings, it also threatens our basic freedoms. Such concerns have existed for years, particularly in science-fiction novels like Yevgeny Zamyatin’s 1924 classic, “We,” which described a society where technology served to curb personal privacy and autonomy. Four decades ago, computer industry pioneer Willis Ware warned that the new communication technology, rather than simply making information more universally available, could also increase the “intensive and personal surveillance” of individuals.

Read the entire piece at The Orange County Register.

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

Photo by Android Open Source project [Apache License 2.0, GPL or CC BY 2.5], via Wikimedia Commons

April 29, 2015
Southern California Housing Figures to Get Tighter, Pricier

What kind of urban future is in the offing for Southern California? Well, if you look at both what planners want and current market trends, here’s the best forecast: congested, with higher prices and an ever more degraded quality of life. As the acerbic author of the “Dr. Housing Bubble” blog puts it, we are looking at becoming “los sardines” with a future marked by both relentless cramming and out-of-sight prices.

This can be seen in the recent surge of housing prices, particularly in the areas of the region dominated by single-family homes. You can get a house in San Francisco – a shack, really – for what it costs to buy a mansion outside Houston, or even a nice home in Irvine or Villa Park. Choice single-family locations like Irvine, Manhattan Beach and Santa Monica have also experienced soaring prices.

Market forces – overseas investment, a strong buyer preference for single-family homes and a limited number of well-performing school districts – are part of, but hardly all, the story. More important may be the increasingly heavy hand of California’s planning regime, which favors ever-denser development at the expense of single-family housing in the state’s interior.

Read the entire piece at The Orange County Register.

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

Photo by Downtowngal (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

April 22, 2015
The Big Idea: California Is So Over

California has met the future, and it really doesn’t work. As the mounting panic surrounding the drought suggests, the Golden State, once renowned for meeting human and geographic challenges, is losing its ability to cope with crises. As a result, the great American land of opportunity is devolving into something that resembles feudalism, a society dominated by rich and poor, with little opportunity for upward mobility for the state’s middle- and working classes.

The water situation reflects this breakdown in the starkest way. Everyone who follows California knew it was inevitable we would suffer a long-term drought. Most of the state—including the Bay Area as well as greater Los Angeles—is semi-arid, and could barely support more than a tiny fraction of its current population. California’s response to aridity has always been primarily an engineering one that followed the old Roman model of siphoning water from the high country to service cities and farms.

But since the 1970s, California’s water system has become the prisoner of politics and posturing. The great aqueducts connecting the population centers with the great Sierra snowpack are all products of an earlier era—the Los Angeles aqueduct (1913), Hetch-Hetchy (1923), the Central Valley Project (1937), and the California Aqueduct (1974). The primary opposition to expansion has been the green left, which rejects water storage projects as irrelevant.

Yet at the same time greens and their allies in academia and the mainstream pressare those most likely to see the current drought as part of a climate change-induced reduction in snowpack. That many scientists disagree with this assessment is almost beside the point. Whether climate change will make things better or worse is certainly an important concern, but California was going to have problems meeting its water needs under any circumstances.

Not Meeting the Challenges.

It’s not like we haven’t been around this particular block before. In the 1860s, a severe drought all but destroyed LA’s once-flourishing cattle industry. This drought was followed by torrential rains that caused their own havoc. The state has suffered three major droughts since I have lived here—in the mid ’70s, the mid ’80s and again today—but long ago (even before I got there) some real whoppers occurred, including dry periods that lasted upwards of 200 years.

This, like the threat of earthquakes, is part of the price we pay to live in this most beautiful and usually temperate of states. The real issue is how to meet this challenge, and here the response has been slow and lacking in vision. Not all of this is to be blamed on the greens, who dominate the state politically. California agriculture, for example, was among the last in the nation to agree to monitoring of groundwater. Farmers have also been slow to adjust their crops toward less water-dependent varieties; they continue to plant alfalfa, cotton, and other crops that may be better grown in more water-rich areas.

Many cities, too, have been slow to meet the challenge. Some long resisted metering of water use. Other places have been slow to encourage drought-resistant landscaping, which is already pretty de rigeur in more aridity-conscious desert cities like Tucson. This process may take time, but it is already showing value in places like Los Angeles where water agencies provide incentives.

But ultimately the responsibility for California’s future lies with our political leadership, who need to develop the kind of typically bold approaches past generations have embraced. One step would be building new storage capacity, which Governor Jerry Brown, after opposing it for years, has begun to admit is necessary. Desalinization, widely used in the even more arid Middle East, notably Israel, has been blocked by environmental interests but could tap a virtually unlimited supply of the wet stuff, and lies close to the state’s most densely populated areas. Essentially the state could build enough desalinization facilities, and the energy plants to run them, for less money than Brown wants to spend on his high-speed choo-choo to nowhere. This piece of infrastructure is so irrelevant to the state’s needs that even many progressives, such as Mother Jones’ Kevin Drum, consider it a “ridiculous” waste of money.

And there needs to be, at least for the short term,an end to dumping water into San Francisco Bay for the purpose of restoring a long-gone salmon run, or to the Delta, in order to save a bait-fish, the Delta smelt, which may already be close to extinct. This dumping of water has continued even as the state has faced a potentially crippling water shortage; nothing is too good for our fish, or to salve the hyper-heated consciousness of the environmental illuminati.

The Political Equation

The biggest reason California has been so slow, and uncharacteristically feckless, in meeting this existential challenge lies with psychology and ends with political power. The generation that built the sinews of modern California—most notably the late Governor Pat Brown Sr., the current governor’s father—sprang from the old progressive spirit which saw in infrastructure development a chance not only to create new wealth, but also provide opportunity to working- and middle-class Californians.

Indeed, if you look at California’s greatest achievements as a society, the Pat Brown legacy stands at the core. The California Aqueduct turned vast stretches of the Central Valley into one of the most productive farming regions in the world. The freeway system, now in often shocking disrepair, allowed for the construction of mass suburbia that offered millions a quality of life never experienced by previous generations. At the same time the development of energy resources—California still boasts the nation’s third-largest oil production—helped create a huge industrial base that included aerospace, semiconductors, and a host of specialized industries, from logistics to garment manufacturing.

In contrast, Jerry Brown has waged a kind of Oedipal struggle against his father’s legacy. Like many Californians, he recoiled against the sometimes haphazard and even ugly form of development that plowed through much of the state. Cutting off water is arguably the most effective way to stop all development, and promote Brown’s stated goal of eliminating suburban “sprawl.” It is typical that his first target for cutbacks this year has been the “lawns” of the middle–class suburbanite, a species for which he has shown little interest or tolerance.

But it’s not just water that exemplifies the current “era of limits” psychology. Energy development has always been in green crosshairs and their harassment has all but succeeded in helping drive much of the oil and gas industry, including corporate headquarters, out of the state. Not building roads—arguably to be replaced by trains—has not exactly reduced traffic but given California the honor of having eight of the top 20 cities nationally with poor roads; the percentage of Los Angeles-area residents who take transit has, if anything, declined slightlysince train-building began. All we are left with are impossible freeways, crumbling streets, and ever more difficulty doing anything that requires traveling.

The Road to Feudalism

These policies have had numerous impacts, like weakening California’s industrial sector, which cannot afford energy prices that can be twice as high as in competing states. Some of those who might have worked in the factories, warehouses, and farms of California now help swell the numbers of the welfare recipients, who remarkably make up one-third of the nation’s total. As recently as the 1970s and ’80s, the percentage of people living in poverty in California wasbelow the national average; California today, based on cost of living, has thehighest poverty rate in the country.

Of course, the rich and entitled, particularly in Silicon Valley have achieved unprecedented riches, but those middle-class Californians once served by Pat have largely been abandoned by his son. California, long a relative beacon of equality and opportunity, now has the fourth-highest rate of inequality in the country. For those who, like me, bought their first home over 30 years ago, high housing prices, exacerbated by regulation, are a personal piggybank. But it’s doubtful either of my daughters will ever be able to buy a house here.

What about “green jobs”? California leads in total number of green jobs, simply by dint of size, but on a per-capita basis, a recent Brookings study notes, California is about average. In wind energy, in fact, California is not even in first place; that honor goes to, of all places, Texas, which boasts twice California’s level of production. Today even  The New York Times has described Governor Jerry Brown’s promise about creating a half-million green jobs as something of a “pipe dream.” Even surviving solar firms, busy in part to meet the state’s strict renewable mandates, acknowledge that they won’t be doing much of the manufacturing here, anyway.

The Cost of Narcissism

Ultimately this is a story of a state that has gotten tired, having lost its “animal spirits” for the policy equivalent of a vegan diet. Increasingly it’s all about how the elites in the state—who cluster along the expensive coastal areas—feel about themselves. Even Brown knows that his environmental agenda will do little, or nothing, to combat climate change, given the already minimal impact of the state on carbon emissions compared to escalating fossil fuel use in China, India and elsewhere. But the cosmopolitan former Jesuit gives more priority to his spiritual service to Gaia than the needs of his non-affluent constituents.

But progressive narcissism is, as some conservatives assert, not the main problem. California greens are, to be sure, active, articulate, well-organized, and well-financed. What they lack is an effective counterpoint from the business class, who would be expected to challenge some of their policies. But the business leadership often seems to be more concerned with how to adjust the status quo to serve privileged large businesses, including some in agriculture, than boosting the overall economy. The greens, and their public-sector allies, can dominate not because they are so effective as that their potential opposition is weak, intimidated, and self-obsessed.

What we are witnessing the breakdown of a once-expansive, open society into one dominated by a small group of plutocrats, largely in Silicon Valley, with an “amen” crew among the low-information donors of Hollywood, the public unions, the green lobby, and wealthy real estate developers favored by Brown’s pro-density policies. This coalition backs Brown and helps maintain the state’s essentially one-party system. No one is more adamant about reducing people’s carbon footprint than the jet set of Silicon Valley or the state’s planning elite, even if they choose not to live in a manner that they instruct all others.

This fundamentally hypocritical regime remains in place because it works—for the powerful and well-placed. Less understandable is why many Hispanic politicians, such as Senate Leader Kevin de Leon, also prioritize “climate change” as his leading issue, without thinking much about how these policies might worsen the massive poverty in his de-industrializing L.A. district—until you realize that de Leon is bankrolled by Tom Steyer and others from the green uberclass.

So, in the end, we are producing a California that is the polar opposite of Pat Brown’s creation. True, it has some virtues: greener, cleaner, and more “progressive” on social issues. But it’s also becoming increasingly feudal, defined by a super-affluent coastal class and an increasingly impoverished interior. As water prices rise, and farms and lawns are abandoned, there’s little thought about how to create a better future for the bulk of Californians. Like medieval peasants, millions of Californians have been force to submit to the theology of our elected high priest and his acolytes, leaving behind any aspirations that the Golden State can work for them too.

This piece originally appeared at The Daily Beast.

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

Los Angeles aqueduct photo by BigStockPhoto.com.

April 19, 2015
Why California’s Salad Days Have Wilted

“Science,” wrote the University of California’s first President Daniel Coit Gilman, “is the mother of California.” In making this assertion, Gilman was referring mostly to finding ways to overcoming the state’s “peculiar geographical position” so that the state could develop its “undeveloped resources.”

Nowhere was this more true than in the case of water. Except for the far north and the Sierra, California – and that includes San Francisco as well as greater Los Angeles – is essentially a semiarid desert. The soil and the climate might be ideal, but without water, California is just a lot of sunny potential, but not much economic value.

Yet, previous generations of Californians, following Gilman’s instructions, used technology to build new waterworks, from the Hetch Hetchy Dam to the L.A. Aqueduct and, finally, the California State Water Project and its federal counterpart, the Central Valley Project. These turned California into the richest farming area on the planet and generated opportunities for the tens of millions who came to live in the state’s cities and suburbs.

Read the entire piece at The Orange County Register.

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

Photo of Lake Palmdale California Water Project by Kfasimpaur (Own work) [Public domain], via Wikimedia Commons

April 13, 2015