New Geography

Author: Joel Kotkin

  • Political, Economic Power Grow More Concentrated

    Generally speaking, we associate the quest for central government control to be very much a product of the extremes of left and right. But increasingly, the lobby for ever-greater concentration of power – both economically and politically – comes not from the fringes, but from established centers of both parties and media power.

    Recently, for example, an article by Francis Fukuyama, a conservative-leaning intellectual, called for greater consolidation of federal power, most particularly, the Executive Branch. Ironically, Fukuyama’s call for greater central power follows a line most often adopted by “progressive” Democrats, who seek to use federal power to enforce their views on a host of environmental, economic and social issues even on reluctant parts of the country.

    This rush to concentrate powers in Washington seems odd, given the awful rollout of the Affordable Care Act, which seems almost like a parody of a government-managed big program, overly complex and almost impossible to implement. ACA has led even some honest liberals, like the New York Times Tom Edsall, to wonder if “the federal government is capable of managing the provision of a fundamental service through an extraordinarily complex system?”

    To give the Left credit, many liberals would have preferred something less complex, perhaps like the single-payer system, that perhaps would be less amenable to confusion, and exemptions for privileged groups, like congressional staffs. But President Obama and his Democratic allies chose to work with many powerful interests, notably pharmaceutical companies and health insurers, who are in position to capitalize on this bizarre and, in many ways, inexplicably complicated, health care “reform.”

    Other cautionary tales of overcentralization of federal power abound. Recent scandals like NSA eavesdropping and IRS political targeting, would have offended progressive defenders of civil liberties. However, with a favorite Democrat in the Oval Office, and conservatives the primary victims of abuse, their response has been far more muted than if, say, Mitt Romney was president.

    Top-down economy

    Equally critically, many progressives also increasing favor a more centralized economy. With a few brave exceptions, notably Vermont’s feisty socialist Sen. Bernard Sanders and incorrigibles such as Ralph Nader, there have been too-few voices willing to challenge the growing corporatization of the Democratic Party and the ongoing concentration of power in ever-fewer hands.

    Historically, progressives made much about their objections to both government abuse and unrestrained corporate power. After all, progressives (as well as populists) pushed the earliest restraints on trusts and other large corporate combinations. But, now, the very people Theodore Roosevelt defined more than a century ago as the “malefactors of great wealth” have won powerful friends in the progressive camp.

    Take, for instance the growing concentration of banking assets. Over the past 40 years, the asset share of the top five banks has grown from 17 percent to more than 50 percent of the total. This, however, is not enough for some progressive thinkers. Liberal pundits, like Matt Yglesias and Steve Rattner, in fact, think it would be better if we got rid of most smaller financial institutions.

    Some of this is Washington-New York “we know best” elitism at its worst. These are the institutions and individuals that a studied corporatist and influence peddler like Rattnerwould identify with, naturally. Yglesias, for his part doesn’t like small banks in part because they are run by “less-bright and not-as-good guys” as the benevolent geniuses on Wall Street, who almost cracked up the world economy.

    This confluence of large government and big business can be seen in the flow of funds to the Center for American Progress, the Obama-friendly think tank whose head, John Podesta, was just named the president’s latest chief of staff. The center’s primary funders include a who’s who of big corporations, including Apple, AT&T, Bank of America, BMW of North America, Citigroup, Coca-Cola, Discovery, GE, Facebook, Google, Goldman Sachs, PepsiCo, PG&E, the Motion Picture Association of America, Samsung, Time Warner, T-Mobile, Toyota, Visa, Wal-Mart and Wells Fargo.

    These donations reflect a growing lurch of bigger businesses toward the corporatist Democrats; this is particularly true in such fields as media, telecommunications, high technology and health care, where looming environmental and labor reforms are perceived as less a threat than among smaller firms.

    Rise of regulators

    Most worrisome, the increased focus on bigness has engendered growing support for what amounts to government by administrative diktat. As Fukuyama and others argue, our present messy system, particularly Congress, seems incapable of meeting challenges facing the country. This leads to a notion that we need a new “top down” solution through the exercise of greater executive power.

    As is increasingly the case, any attempt to push back against centralization elicits a torrent of name-calling. Objecting to a more expansive federal government, suggests some, smacks of “neo-Confederate” ideology, a charge particularly loaded when the agglomeration of power in Washington is being led by our first African-American president.

    These assaults mask a more dangerous reality: a dismissal of democracy and embrace of authoritarian solutions. Former Obama budget adviser Peter Orszag and the New York Times’ Thomas Friedman have argued that power should shift from contentious, ideologically diverse elected bodies – subject to pressure from the lower orders – toward credentialed “experts” operating in Washington, Brussels or the United Nations. These worthies regard popular will as lacking in scientific judgment and societal wisdom.

    There is no adequate political response to this dangerous tendency. Republicans talk about abuse of power, but, when in office, seem more than willing to indulge in it (with the run-up to the Iraq war and with the Patriot Act). Similarly, few Republicans seem to understand that economic concentration – favored by their remaining friends on Wall Street and the corporate community – tends inevitably to lead to the political variety.

    So far, Republicans have been forced to choose between their own corporatists, who simply favor shifting government largesse to their favorite causes, such as defense or farm subsidies, and the Tea Party movement, whose members often oppose virtually any government initiative, for example, infrastructure improvement, even at the local level, something sure to limit their appeal to a wider electorate.

    Growing distrust

    Yet the situation is far from hopeless. Obama’s ineffective rule has done little to vouch for centralized government. Trust in governmental institutions – the White House, Congress, the courts – is at the lowest ebb in decades. The percentage of people who see the federal government as being too powerful, notes Gallup, has surged from barely 50 percent, when President Obama took power, to well over 60 percent today, the highest level ever recorded.

    In such a climate, some thoughtful liberals, such as Yale’s Jacob Hacker, suggest that progressives should avoid embracing an authoritarian, top-down ruling philosophy. “The Democrats have the presidency now,” he suggests, “[but] they won’t hold it forever.” They are essentially “feeding a beast” that, at some date, may turn against them with a vengeance.

    This suspicion of “top down” solutions also extends even to one of the most critical parts of the Democratic base: the millennial generation. Although they have been a core constituency for Barack Obama, they appear to be drifting somewhat away from their lock-step support, with the presidential approval level, according to a recent study by the Harvard Institute of Politics, now under 50 percent.

    Much of the problem, notes generational chronicler Morley Winograd, lies with millennials’ experience with government, which to them often seems clunky and ineffective. The experience with the ACA is not likely to enhance this view, Winograd suspects. “Millennials,” he notes, “have come to expect the speed and responsiveness from any organization they interact with that today’s high tech makes possible. Government, on the other hand, is handcuffed by procurement rules and layers of decision-making, from deploying much of this technology to serve citizens. The result is experiences with government, from long lines at the DMV office to the botched website rollout for Obamacare, causes millennials to be suspicious of, if not downright hostile to, government bureaucracies.”

    It may be here, in the meshing of technology and public purpose, that we may find a new focus that is neither reflexively hostile (as some Tea Partiers appear) to government per se or simply interested in expanding the list of self-interested political clients. The key to future effective government lies not so much in its radical downsizing as in dispersing power to the local level, something that fits both into the mentality of the new generation and the decentralist traditions that have animated our history.

    This story originally appeared at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Barack Obama photo by Bigstock.

  • Neither Party Dealing with More-Rigid Class Structure

    President Obama’s most-recent pivot toward the issue of “inequality” and saving the middle class might be seen as something of an attempt to change the subject after the health care reform disaster. As the Washington Post’s reliably liberal Greg Sargent explains, this latest bit of foot work back to the “old standby” issues provides “a template for the upcoming elections, one that allows Dems to shift from the grinding war of attrition over Obamacare that Republicans want to the bigger economic themes Dems believe give them the upper hand.”

    True, there’s something mildly risible about appeals to populism offered by a president whose economic record looks more like Herbert Hoover than Franklin Roosevelt. Some 95 percent of the income gains during President Obama’s first term flowed to barely 1 percent of the population, while incomes have declined for 93 percent of Americans. As one writer at the left-leaning Huffington Post put it, “[T]he rising tide has lifted fewer boats during the Obama years – and the ones it’s lifted have been mostly yachts.”

    Diminished prospects – what some describe as the “new normal” – now confront a vast proportion of the population, with wages falling not only for noncollege graduates but also for those with four-year degrees. Overall, median incomes for Americans fell 7 percent in the decade following 2000 and are not expected to recover, according to some economic models, until 2021.

    This decline has infected the national mood. Today, more middle- and working-class Americans predict that their children will not do better than they have done.Overall, almost one-third of the public, according to Pew, consider themselves “lower” class, as opposed the middle class, up from barely one-quarter who thought so in 2008.

    It’s not surprising, then, that the vast majority of Americans believe the president’s economic policy has been a dismal failure, at least for the middle and working classes. Federal Reserve monetary policy, in particular, appeared to favor the interests of the wealthy over those of the middle, yeoman class. “Quantitative easing,” notes one former high-level official, essentially constituted a “too big to fail” windfall for the largest Wall Street firms, and did little for anyone else. Faith in the economy, despite the soaring stock market and increased price of assets, has remained weak. Americans by a 2-1 margin rate the economy negatively.

    These realities helped spark both the Tea Party and the Occupy movements and underpin the support for such disparate figures as Sarah Palin and Elizabeth Warren. At the same time, outrage at our current economy has undermined public esteem for almost every institution of power – from government and large corporations to banks and Wall Street – to the lowest point ever recorded.

    Money goes to money

    This repudiation reflects the fact that neither major political party seems ready to address the emergence, over time, of a class structure more rigid, and arguably less-penetrable, than in the past. Increasingly, wealth adheres to those who are best-positioned, by hereditary wealth and education, to take advantage in the evolving economy. In contrast, those born with fewer resources, even if they work hard, find moving up in society increasingly difficult.

    To be fair, this problem well predates Barack Obama or the current Congress. Middle-class incomes have been declining, particularly compared with those of the wealthy, since the 1970s, with the decline persisting even in the relatively prosperous 1990s, with young workers starting out at incomes one-fourth lower than those of their parents.

    Yet, solutions proposed to date by Obama and his fellow Democrats have done little to reverse this trend, in fact, worsening it. Whatever suffering they ameliorate, a growing reliance on food stamps and extended unemployment insurance, as Walter Mead points out, often ends up creating an unhealthy dependence on the state and fails to address the cultural issues associated with long-term poverty.

    Some Obama proposals, like increasingly affirmative action, seem more like a nod to favored party constituencies than an elixir for the economy. Others, such as an increased minimum wage, promise benefits for some, but could also dry up sources of employment, particularly for part-time and new market entrants, particularly young workers.

    Overall, “blue” policies, as currently constituted, have not been notably effective in reducing poverty or increasing upward mobility. Locales with the nation’s greatest levels of inequality, and the most rapid decline of the middle classes, are generally found in progressive bastions,such as New York and California.

    Capitalism undercut

    But let’s be clear: There is not much here that the Right should be giddy about. The inability of market capitalism to provide more people with a higher standard of living, and increased opportunity, undermines the fundamental promise of free markets. The spread of prosperity from 1950-2000, bolstered conservative, even libertarian, perspectives as the middle class and property ownership expanded. Now, with homeownership in decline and middle-class incomes stagnating, the appeal of “democratic capitalism” marketed by the Right has been somewhat diminished.

    To address this challenge, conservatives need to acknowledge that economic inequality and rising class divisions stand as our nation’s existential political issue. Yet for the most part, their response has been largely to cut benefits to the poor amid hard times. Perhaps since they do not acknowledge the emerging credibility crisis facing capitalism, they feel little reason to address it.

    This story originally appeared at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • The Metro Areas With The Most Economic Momentum Going Into 2014

    America’s economy may be picking up steam, but it remains a story of parts, with the various regions of the country performing in often radically divergent ways.

    To identify the regions with the most momentum coming out of the recession, we turned to Mark Schill, research director for the Praxis Strategy Group, who crunched a range of indicative data from 2007 to today for the nation’s 52 largest metropolitan statistical areas. To gauge economic vitality, we used four metrics: GDP growth, job growth, real median household income growth and current unemployment. To measure demographic strength we looked at population growth, birth rate, domestic migration and the change in educational attainment. All factors were weighted equally.

    Our assumption is that strong local economies attract the most people and create the best conditions for family formation, which in turn generates new demand. Strong productive industries drive demand for such things as heath care, business services and retail, as well as single-family houses, a critical component of local growth and still the aspirational goal of the vast majority of Americans. This, of course, depends on economic factors, which drive perceptions of better times and provide the income necessary to qualify for a mortgage.

    Our results are based on metrics often overlooked in assessments that are focused primarily on either asset inflation — stocks or out-of-control housing prices — or are built around anecdotal, cherry-picked data from, for example, just one part of a metropolitan region. Despite all the attention lavished on places like Manhattan or Chicago’s central core, virtually all the fastest-emerging economies coming out of the recession are either in the Southeast, Texas, the Great Plains or the Intermountain West. Of our top 10 metro areas, only one is on the east or west coast: 10th-ranked San Jose/Silicon Valley.

    Most of the strongest local economies combine the positive characteristics associated with blue states — educated people, tech-oriented industries, racial diversity — with largely red, pro-business administrations. This is epitomized by our top-ranked metro area, Austin, Texas, which has enjoyed double-digit growth in GDP, jobs, population and birthrate since 2007. The Texas capital has a very strong hipster reputation, attracting many of the same people who might otherwise end up in Silicon Valley or San Francisco, but it also boasts the low taxes, light regulation and reasonable housing prices that keep migrants there well past their 30s.

    As has been the case for most of the past five years, Texas cities are clearly the place to be in terms of job creation, wealth formation and overall growth. All the other major Lone Star cities place highly on our list, including second-place San Antonio and Houston (fourth). Clearly many parts of the Sun Belt have not died off, as many Eastern pundits gleefully predicted during the recession. The migration of Americans southward, thought by the Eastern press to have petered out, has resumed, particularly to Texas and Sun Belt cities with strong economies.

    One critical factor propelling growth has been the energy revolution, which is rapidly transforming big swathes of middle America into a production hub for fossil fuels and the best place to secure cheap electric power. Besides the Texas cities, other energy capitals doing well including Salt Lake City (No. 3) and Denver (No. 7) — both of which also boast burgeoning tech sectors — as well as Oklahoma City (No. 8).

    One canary in the coalmine suggesting future dynamism is a rising share of highly educated people in the population. Places like Nashville, Denver and Salt Lake are all getting smarter faster, increasing their numbers of educated people faster than “brain” regions such as Seattle (14th), San Francisco (22nd), Boston (26th), New York (31st), Chicago (40th) and Los Angeles (44th). Another survey looking at areas that have gained the most young college graduates since 2006 found similar trends, with Nashville, New Orleans, Dallas, Austin, San Antonio and Houston among the leaders. More important still, in these high- growth cities, educated labor is not tethered to the current social media bubble, but to more diverse industries such as medical services, energy, manufacturing and business services.

    Other evidence of these areas’ dynamism includes high rates of birth and family formation. After several years of declines, the nation’s fertility rate now appears to be rebounding somewhat, with some demographers predicting we may on the cusp of a “birth bounce,” in part as millennials start entering their 30s. Certainly this welcome trend will accelerate if the economy continues to gain strength.

    So where will these new families likely settle? With the exception of  Washington D.C. (12th), virtually all the areas with the fastest projected rates of household formation are in the Sun Belt, led by Houston, which is expected to add 140,000 new households by 2017, the largest increase in the nation, nearly twice as many as much larger New York. Indeed despite some of the most active homebuilding in the nation, the energy capital clearly needs more homes; sales have been so strong that it has now reached the lowest inventory in recent history.

    Critically, most of these cities embrace growth, whether in their urban cores or suburban peripheries. In contrast, some strong economies, such as San Jose and San Francisco, are also among the most restrictive in terms of new construction, leading to ever escalating prices that tends to force 30-somethings and families out of the region. High housing costs also play a depressing role in always hyped New York, as well as Los Angeles and Chicago; all suffer high rates of domestic out-migration and depressed household formation. Chicago is now projected to have virtually no job growth next year, not a good sign in an economy that remains well below its 2007 employment level.

    What other regions are likely to lag, even amid a strengthening recovery? The list includes Sun Belt metro areas where the housing bubble hit hardest and job growth has not revived, such as Las Vegas (51st) and Riverside-San Bernardino, Calif. (49th). In these cities real per capita household income remains almost 20% below 2007 levels. With fewer people able to afford new homes, these areas have roughly 8% fewer jobs than five years ago.

    Other bottom-dwellers include several industrial cities where even a resurgence in manufacturing has failed to erase the catastrophic losses suffered in the recession. Detroit ranks dead last at 52nd; Providence, R.I., 50th; and Cleveland 48th. All three have fewer people than in 2007 and at least 5% fewer jobs than.

    These differentials between regions could widen further in the future, as the impact of the energy revolution deepens and the current social media craze begins to die down. This happened after the first dot-com bust at the beginning of the last decade, sending roughly half of California’s tech workers out of the industry or out of the state.

    Sky-high housing costs, coupled with stricter mortgage restrictions, could accelerate the development of new, less pricey tech centers, including Seattle, New Orleans (16th) and Pittsburgh (19th). Once the venture capital punch bowl is removed, it is likely the surviving social media firms will need to find more affordable places to locate, if not their leading researchers, at least much of their marketing and administration.

    Looking across the board, it seems likely that the best places to look for work, or invest, will be those that have diversified their economies, kept costs down and attracted a broad cross-section of migrants from other parts of the country. These may not all be the favored cities of the media, or the pundit class, but they are the places offering a variety of positives to residents at every stage of life. These balanced regions are the places employers and families are most likely to flock to. Such places have not only transcended the worst effects of the recession, but seem primed to take advantage of a nascent expansion that could redraw the map of the country.

    2014 Regions to Watch Index
    Rank Region (MSA) Score GDP Growth, 2007-2012 Job Growth, Aug-Oct 07-13 Population Change, 07-12 Unemplymt Rate 2013 Median Real Hshld Inc Growth, 07-12 Dommestic Mig Rate 10-12 Birth rate, 10-12 Pt Change in Educ. Attain Rate, 07-12
    1 Austin 82.8 21.7% 11.8% 16.3% 5.4% -5.4% 17.0 14.2 2.2%
    2 San Antonio 69.7 11.2% 6.2% 11.1% 6.2% 0.4% 9.2 14.2 2.2%
    3 Salt Lake City 69.4 10.7% 3.7% 8.3% 4.4% -5.3% 0.8 17.0 3.0%
    4 Houston 67.7 12.3% 9.2% 11.5% 6.3% -4.7% 5.2 15.3 1.9%
    5 Nashville 64.4 11.5% 6.5% 8.4% 6.7% -8.4% 7.0 13.3 4.0%
    6 Dallas 62.9 9.3% 6.4% 10.2% 6.2% -6.0% 6.9 14.7 1.7%
    7 Denver 62.1 6.6% 3.4% 9.4% 6.6% -5.7% 8.2 13.4 3.4%
    8 Oklahoma City 61.4 9.2% 5.3% 8.1% 5.1% -3.1% 7.1 14.3 0.7%
    9 Raleigh 58.8 8.9% 2.9% 14.9% 6.8% -6.3% 10.9 13.2 0.6%
    10 San Jose 58.2 15.3% 2.6% 7.3% 6.7% -2.2% -1.3 13.4 2.7%
    11 Portland 55.9 23.6% -0.7% 7.1% 7.1% -7.1% 4.8 12.2 2.5%
    12 Washington 55.3 8.0% 2.9% 9.1% 5.6% -4.2% 2.3 13.8 0.9%
    13 Minneapolis 54.0 6.1% 1.2% 4.7% 4.7% -6.3% 0.0 13.0 2.6%
    14 Seattle 52.3 9.0% 0.8% 7.5% 5.8% -7.2% 3.9 12.6 1.6%
    15 Columbus 49.6 2.2% 2.5% 5.6% 6.2% -6.2% 1.4 13.5 1.7%
    16 New Orleans 49.2 8.6% 3.7% 11.9% 7.1% -16.7% 6.1 13.2 1.1%
    17 Baltimore 49.2 8.2% 1.9% 3.2% 7.2% -5.1% 0.1 12.2 3.0%
    18 Louisville 48.4 5.6% 0.7% 4.0% 7.9% -3.4% 0.2 12.7 2.9%
    19 Pittsburgh 46.7 4.6% 2.6% 0.1% 6.7% -0.1% 1.4 10.0 2.9%
    20 Richmond 46.7 4.8% -0.2% 4.9% 6.0% -9.7% 2.4 12.0 2.4%
    21 San Francisco 46.3 3.7% -1.0% 6.5% 6.4% -8.1% 2.3 11.9 2.2%
    22 Indianapolis 45.9 3.3% 1.5% 5.6% 7.1% -11.9% 1.1 14.2 1.9%
    23 Charlotte 45.6 4.5% 1.9% 10.1% 8.5% -11.0% 7.8 13.0 0.9%
    24 Grand Rapids 45.0 -2.4% 3.6% 2.4% 6.6% -6.7% 0.9 13.3 1.9%
    25 Kansas City 44.9 3.9% -1.1% 4.3% 6.5% -8.0% -1.1 13.6 1.9%
    26 Boston 44.9 7.6% 3.0% 4.3% 6.4% -4.9% -0.1 11.2 1.1%
    27 Virginia Beach 42.0 2.2% -1.5% 2.2% 6.0% -7.8% -3.4 13.4 1.8%
    28 Phoenix 41.7 -4.8% -6.3% 7.8% 7.0% -14.5% 4.8 13.7 2.6%
    29 Birmingham 41.4 0.7% -6.5% 2.7% 5.8% -10.5% -1.7 13.7 2.6%
    30 Buffalo 41.4 2.0% 1.0% -0.3% 7.3% 1.2% -2.5 10.5 2.5%
    31 San Diego 40.6 -1.0% -1.9% 6.8% 7.3% -11.8% 0.2 14.3 1.3%
    32 Philadelphia 39.1 1.9% -1.9% 2.3% 8.1% -6.9% -2.4 12.3 2.8%
    33 Atlanta 38.9 -0.5% -1.5% 7.7% 8.1% -13.7% 3.2 13.6 1.2%
    34 New York 38.9 1.9% 1.6% 3.1% 7.9% -6.1% -5.8 12.7 1.9%
    35 Milwaukee 37.6 0.3% -3.8% 2.4% 7.1% -8.6% -2.9 13.1 2.0%
    36 Jacksonville 37.6 -5.4% -3.3% 5.4% 6.6% -16.2% 3.5 12.8 2.1%
    37 St. Louis 35.8 0.2% -3.6% 1.5% 7.2% -10.1% -3.7 12.3 2.6%
    38 Cincinnati 35.6 1.3% -3.4% 2.1% 7.0% -9.0% -3.0 12.9 1.4%
    39 Tampa 33.5 -3.4% -2.4% 4.3% 6.9% -14.0% 5.9 10.9 1.0%
    40 Chicago 33.0 0.2% -2.5% 2.0% 9.1% -9.7% -5.9 13.2 2.5%
    41 Orlando 32.9 -5.7% -2.0% 8.1% 6.6% -18.3% 7.4 12.0 -0.2%
    42 Rochester 32.8 -2.2% 0.2% 1.0% 6.9% -9.3% -3.2 11.0 1.6%
    43 Miami 32.3 -4.3% -3.9% 6.3% 7.4% -14.4% 3.8 11.6 0.9%
    44 Memphis 31.2 -4.0% -5.8% 3.0% 9.6% -9.8% -1.7 14.5 1.7%
    45 Los Angeles 31.1 -2.5% -4.6% 3.3% 8.9% -10.9% -3.2 13.5 1.8%
    46 Hartford 29.1 -6.9% -1.0% 1.3% 8.0% -6.4% -5.0 10.0 2.2%
    47 Sacramento 26.4 -6.0% -7.9% 5.5% 8.3% -14.1% 0.8 12.9 0.5%
    48 Cleveland 25.1 -1.9% -5.5% -1.3% 7.0% -12.1% -5.8 11.0 1.7%
    49 Riverside 23.6 -9.0% -8.1% 7.0% 10.1% -18.5% 2.3 14.9 0.4%
    50 Providence 23.4 -0.4% -4.2% -0.1% 9.1% -9.4% -4.3 10.5 1.4%
    51 Las Vegas 21.6 -10.4% -8.6% 7.1% 9.6% -20.1% 1.5 13.8 0.7%
    52 Detroit 18.3 -6.0% -5.6% -1.9% 9.7% -13.5% -4.7 11.5 1.8%

    Analysis by Mark Schill, Praxis Strategy Group, mark@praxissg.com
    Data Sources: Bureau of Economic Analysis, Bureau of Labor Statistics, U.S. Census Population Estimates Program, U.S. Census American Community Survey

    This story originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • The Blue-Collar Heroes of the Inland Empire

    The late comedian Rodney Dangerfield (nee Jacob Cohen), whose signature complaint was that he “can’t get no respect,” would have fit right in, in the Inland Empire. The vast expanse east of greater Los Angeles has long been castigated as a sprawling, environmental trash heap by planners and pundits, and its largely blue-collar denizens denigrated by some coast-dwellers, including in Orange County, who fret about “909s” – a reference to the IE’s area code – crowding their beaches.

    The Urban Dictionary typically defines the region as “a great place to live between Los Angeles and Las Vegas if you don’t mind the meth labs, cows and dirt people.” Or, as another entry put it, a collection of “worthless idiots, pure and simple.” Nice.

    In reality, the people who live along the coast should appreciate the “909ers” since they constitute the future – if there is much of one – for Southern California’s middle class. The region has suffered considerably since the Great Recession, in part because of a high concentration of subprime loans taken out on new houses. Yet, for all its problems, the Inland Empire has remained the one place in Southern California where working-class and middle-class people can afford to own a home. With a median multiple (median house price divided by household income) of roughly 3.7, the area is at least 40 percent less expensive than Los Angeles and Orange County, making it the region’s last redoubt for the American dream.

    Without the 909ers, Southern California would be demographically stagnant. From 2000-10, according to the census, San Bernardino and Riverside counties added more than 1 million people, compared with barely 200,000 combined for Los Angeles and Orange counties. And, despite the downturn that impacted the Inland Empire severely and slowed its growth, the area since 2010 has continued to grow more quickly, according to census estimates, than the coastal counties.

    Families & foreign-born

    Perhaps nothing illustrates the appeal of the region better than the influx of the foreign-born. In the past decade, Riverside and San Bernardino counties grew their foreign-born population by more than 300,000. In contrast, Los Angeles and Orange added barely one third as many. The rate of foreign-born growth in the Inland Empire, notes demographer Wendell Cox, was roughly 50 percent, while Los Angeles and Orange counties managed 2.6 percent growth. The region, once largely white, now has a population that’s 40 percent Latino, the single largest ethnic group.

    And then there’s families. As demographer Ali Modarres has pointed out, the populations of Los Angeles, as well as Orange County, are aging rapidly while the numbers of children have dropped. In contrast, families continue to move into the Inland Empire, one reason for its relatively vibrant demography. Over the past decade, while Orange County and Los Angeles experienced a combined loss of 215,000 people under age 14 – among the highest rates in the U.S. of a shrinking population of children – the Inland Empire gained more than 20,000 under-14s.

    For these basic demographic reasons, the Inland Empire remains critical to Southern California’s success. And there are some signs of progress. Unemployment has plummeted from more than 13 percent to 9.6 percent, higher than in Orange County but considerably better than Los Angeles’ 10.2 percent. There are also some signs of growth, as signaled by some new residential development, and interest in the area from overseas investors.

    Coastals call shots

    The long-term outlook, however, remains clouded, in large part, because of state and regional economic policies that undermine the very nature of the predominately blue-collar 909 economy. This reflects in part the domination of the state by the coastal political class, concentrated in the Bay Area but with strong support in many Southern California coastal communities. The Inland Empire, where almost half the population has earned a high school degree or less, compared with a third of residents in Orange County, is particularly dependent on the blue-collar employment undermined by the gentry-oriented direction of state regulatory policy.

    Losses of jobs in these blue-collar fields, notes economist John Husing, have helped swell the ranks of poor people in the area, from roughly 12 percent of the population to 18 percent over the past 20 years. Part of the problem lies in a determination by the state to discourage precisely the kind of single-family-oriented suburban development that has attracted so many to the region. The decline of construction jobs – some 54,000 during the recession – hit the region hard, particularly its heavily immigrant, blue-collar workforce. This sector has made only a slight recovery in recent months. Ironically, the nascent housing recovery could short-circuit further gains by boosting housing prices and squashing any potential longer-term recovery.

    Other state policies – such as cascading electricity prices – also hit the Inland Empire’s once-promising industrial economy. With California electricity prices as much as two times higher than those in rival states, energy-consuming industries are looking further east, beyond state lines.

    Indeed, according to recent economic trends, job growth is now occurring fastest in places like Arizona, Texas, even Nevada, all of which compete directly with the Inland Empire. As the nation has gained a half-million manufacturing jobs since 2010, such jobs have continued to leave the region. Had the regulatory environment been more favorable, notes economist John Husing, the Inland Empire, with industrial space half as expensive that in Los Angeles and Orange, would have been a major beneficiary.

    Finally, there is a major threat to the logistics industry, which has grown rapidly over 20 years, adding 71,900 jobs from 1990-2012, a yearly average of 3,268. The potential threat is posed by the expansion of the Panama Canal, and the resulting expansion of Gulf Coast ports, all of which could reduce these positions dramatically in coming decades. Husing suggests that attempts by the regional Air Quality Management District to slow this industry’s expansion is a “a fundamental attack on the area’s economic health.”

    Keys to rebound

    Can the Inland Empire still make another turnaround, as it did after the previous deep regional recession 20 years ago? Some, such as the Los Angeles Times, see the key to a rebound in boosting transit, something that, despite huge investment, accounts for barely 1.5 percent of the IE’s work trips, even less than the 7 percent in Los Angeles or 3 percent in Orange County.

    This “smart growth” solution remains oddly detached from economic or geographic reality; more transit usage may be preferable in some ways but can only constitute a marginal factor in the near or midterm future. What the Inland Empire needs, more than anything, is an economic environment that spurs middle-class jobs, notably in logistics, manufacturing and construction.

    Equally important, the area needs to focus more on quality-of-life issues that may attract younger, educated workers, increasingly priced out of the coastal areas. This means a commitment to better parks and schools, attractive particularly to families. This approach has helped a few communities, such as Eastvale, near Ontario, become new bastions of the middle class.

    Without a resurgence in the Inland Empire, all of Southern California can expect, at best, to see the area age and lose its last claim to vitality. This should matter to everyone in Southern California whether they live there or not. Without the 909ers, we are not only without the butt of jokes from self-styled sophisticates, we will have lost touch with the very aspirational dynamic that has forged this region throughout its history. It’s time maybe to give them some respect.

    This story originally appeared at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • What is a City For?

    The attached report is derived from a speech given last spring in Singapore at the Singapore University of Technology and Design. The notion here is to lay out a new, more humanistic urban future, not one shaped primarily by large developers, speculators and transient global workers. Singapore was a particularly difficult case to look at since it has no room to spread out, something we still have in much of the rest of the world. Yet the city has been very innovative in the development of open space, and its public housing agency, the Housing Development Board, has worked hard to accommodate the needs of families. I have been struck by how people in different countries want the same things: safety, space, privacy, convenience, and affordable housing. The speech is a call to reconsider our urban priorities and make the city responsive to its denizens.

    Download the full .pdf document.

    Introduction

    What is a city for? In this urban age, it’s a question of crucial importance but one not often asked. Long ago, Aristotle reminded us that the city was a place where people came to live, and they remained there in order to live better, “a city comes into being for the sake of life, but exists for the sake of living well” (Mawr, 2013).

    However, what does “living well” mean? Is it about working 24/7? Is it about consuming amenities and collecting the most unique experiences? Is the city a way to reduce the impact of human beings on the environment? Is it to position the polis — the city — as an engine in the world economy, even if at the expense of the quality of life, most particularly for families?

    I start at a different place. I view “living well” as addressing the needs of future generations, as sustainability advocates rightfully state. This starts with focusing on those areas where new generations are likely to be raised rather than the current almost exclusive fixation on the individual. We must not forget that without families, children, and the neighbourhoods that sustain them, it would be impossible to imagine how we, as a society, would “live well.” This is the essence of what my colleague, Ali Modarres and I call the ‘Human City’.

    Living well should not be about where one lives, but how one lives, and for whom. Families can thrive in many places, but these bearers of the next generation are not the primary focus of much of the urbanist community. I am referring here to urban neighbourhoods like in Singapore or in the great American cities, as well as the country’s vast suburbs. These are not necessarily the abodes of the glittering rich, or the transitory urban nomadic class, who dominate our urban dialogue, but a vast swath of aspiring middle- and working- class people. They are not necessarily the places that hipsters gravitate to, or lure people thinking of a second or third house.

    Download the full .pdf document.

    Published by the Lee Kuan Yew Centre For Innovative Cities

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • Where Working-Age Americans Are Moving

    Barrels of ink and money have been devoted to predictions of where Americans will migrate, particularly younger ones. If you listen to big developer front groups such as the Urban Land Institute or pundits like Richard Florida, you would believe that smart companies that want to improve their chances of cadging skilled workers should head to such places as downtown Chicago, Manhattan and San Francisco, leaving their suburban office parks deserted like relics of a bygone era.

    A close look at recent migration data shows that a significant number of younger people do indeed prefer urban life and can endure, temporarily at least, the high housing costs that go with it. However, the data also show that as they age, Americans continue, in general, to shift to suburbs, and later smaller communities, looking to buy homes and start families. Last week we explored an expert analysis of these trends by demographer Wendell Cox that showed distinctly different migration patterns from 2007 to 2012 among different age groups. (See: “The Geography Of Aging: Why Millennials Are Headed To The Suburbs“) In this article we will look at the metro areas that they went to.

    Our analysis is based on 15-year age cohorts of the working-age population: people who in 2007 were 15-29, 30-44 and 45-59. We looked at the changes in the population numbers of these cohorts five years later in 2012 in the 51 U.S. metropolitan statistical areas with a population over 1 million.

    Youth Magnet Cities

    Most attention tends to go to the youngest of these cohorts, which aged from 15-29 in 2007 to 20-34 in 2012. It includes students, the unmarried and childless — people in the earliest stages of their careers. This is historically the age group most likely to move from one region to another. Although the vast majority of this cohort live in suburbs or smaller towns, our research does show sizable increases in their numbers in many of the larger, expensive cities, particularly those with strong economies.

    From 2007 to 2012, tech-heavy cities generally saw the biggest growth in numbers in this age group. The San Francisco metro area placed first among the largest U.S. metro areas with a 20.7% increase in its population in this age group. Young people, it should be expected, tend to be less sensitive to ultra-high rents (particularly if they work for a successful company or their parents subsidize them). It was followed by Seattle (20.3% growth), Washington, D.C. (18.1%), and Austin, Texas (18.1%).

    But tech centers were not the only gainers. Some up-and-coming metro areas, notably Orlando, Las Vegas and New Orleans, also registered high levels of youth migration.

    In contrast many of the country’s large “hip and cool” cities did not fare nearly as well. Despite its endless self-promotion as a youth magnet, New York placed 19th (8.6% growth, though in absolute numbers in gained the most in this demographic, 323,000), while Los Angeles was 31st and Boston 22nd. Chicago, the much hyped (and hoped for) magnet for the young promoted by the Urban Land Institute in a recent Wall Street Journal article, places 41st – its population in this demographic actually dropped 0.6%. The lowest rungs are dominated by the traditional Rust Belt hard-luck cases: Cleveland (47th), Buffalo (48th), Rochester (49th), Detroit (50th) and last-place Riverside-San Bernardino, which lost 9.4% of its population in this age cohort from 2007 to 2012.

    View Full List Gallery at Forbes: The Cities Where Working-Age Americans Are Moving

    But Where Do They Go After 35?

    As we explained in the last article, perhaps the most important group to watch is the one that aged from 30-44 in 2007 to 35-49 in 2012. This is the group just ahead of the millennials, and the one most likely to provide hints of where the millennials will move as 20 million enter their 30s over the next decade: the dreaded (at least for some) age of marriage, settling down and, in most cases, starting families. This group has shown remarkably different proclivities than the younger cohort. For one thing, they are not going to San Francisco, which drops to 30th place in this cohort – the city lost a net 0.7% of the age group from 2007 to 2012. Other high-cost urban areas also did very poorly with this demographic, including Boston (40th, -2.3%), New York (45th, losing a net 3.9%, or 161,000 people), San Jose (46th), Los Angeles (47th) and Chicago (49th, -5.2%).

    Who wins this group may be critical, since these are people entering their prime who earn more than younger cohorts, particularly in this economy. Census Bureau data indicates that average household incomes are 28% higher where heads of households are 35-45 years old than those in the 25-34 cohort. The gap grows to 34% against householders who are 45 to 54. This group seems very sensitive to both job markets and housing prices. With the exception of the Washington, D.C., area (No. 6), whose government-driven economy continues to flourish, virtually all the top 10 cities enjoy strengthening private-sector economies and relatively low housing prices. At the top of the list is the New Orleans area, whose population in this age group rose 19.3% from 2007 to 2012. The Big Easy’s gains are related, at least in part, to the return of people who fled after Katrina, but it also reflects a newfound demographic vitality backed by substantial economic improvements. It is followed by Miami, San Antonio and Raleigh. Houston and Oklahoma City also did well.

    These are the cities that will appeal most to aging millennials, suggests generational chronicler Morley Winograd. Older millennials, he notes, tend to be very interested in home ownership, family and being good parents. The tough economic times they face, plus often crushing college debt, will force many of them to move not to “luxury cities” where they could never afford a home suitable for child-raising, but to places that are, as he puts it, “less expensive and certainly downscale from the places where they grew up.”

    Mature Adult Markets

    The migration patterns are similar, although not uniformly so, in the next cohort, aged between 50 and 64 in 2012. Mostly still working, and earning close to peak wages, this generation tended to move to less expensive cities as well. New Orleans also ranks first, with a 7.9% gain in this cohort from 2007 to 2012. Low housing costs are another factor in New Orleans’ rebound. You can say much the same for other Sun Belt metro areas, such as San Antonio (third in this demographic with a 7.3% gain), No. 4 Tampa-St. Petersburg (5.0%), No. 5 Austin and No. 7 Oklahoma City.

    Interestingly, the California rankings in this cohort are almost the mirror image of the youth brigade. Riverside-San Bernardino, last in the youth list, for example, ranked second, while Sacramento, 43rd on the youth list, seems to get more appealing as people age. In the 30something group, the area rises to 32nd, and boasts a strong ninth place ranking in growth in the 50-64 cohort (+2.0%).

    Editorialists at local papers, such as the Sacramento Bee, are obsessed with increasing density and luring hipsters. Yet the California capital region, while not drawing many younger people, does very well in luring adult migrants from the far more expensive, and denser, Bay Area and Los Angeles-Orange County. In contrast, in this cohort, San Francisco ranks 40th with a 4.4% decline in population, Los Angeles-Orange County 44th (-5.6%), and San Jose 49th (-7.3%).

    The Upshot For Investors And Companies

    A look at these three working-age cohorts suggests a far more complex, and possibly perplexing, challenge to both companies and regions. our demographic analysis suggests the movement of the youngest workers to “hip, cool”cities that is so celebrated by ULI and other professional urban boosters faces some serious time constraints, particularly as workers age.

    High-profile companies such as Google (itself located in very suburban Mountain View) seek outposts in places like downtown Chicago or New York, where youthful labor, often less expensive, is readily available. But most companies in technology — particularly those with an engineering focus as opposed to social media — depend heavily on older, skilled workers, most of whom live in suburbs. Much the same can be said of professional services, and finance and industrial companies.

    This may explain in part why, despite the claims made by urban boosters, office space construction and absorption is currently considerably stronger in suburbs than in the core cities. A recent Costar report says suburban San Jose, Sacramento, San Jose, Austin, Kansas City and Charlotte are enjoying particularly strong net office absorption. This trend, largely ignored in the media, may accelerate in the future.

    The key again is millennials as they enter their 30s. Like previous generations, many will end up either living in suburbs, or moving to less expensive cities as they get ready to buy homes and start families. The notion that “everyone” wants to move, and more importantly stay, in expensive core cities no doubt appeals to journalists based in places like Washington, D.C., San Francisco or Manhattan. But the actual reality is far more complex and more favorable to the continued dispersion of the workforce. Banking on the shifting tastes of 20somethings only works for so long; in the end, only a minority of workers remain Peter Pans, living their youthful urban dreams well into their 40s and 50s.

    View Full List Gallery at Forbes: The Cities Where Working-Age Americans Are Moving

    This story originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Unemployed woman photo by BigStockPhoto.com.

  • Downsizing the American Dream

    At this time of year, with Thanksgiving, Hanukkah and Christmas, there’s a tendency to look back at our lives and those of our families. We should be thankful for the blessings of living in an America where small dreams could be fulfilled.

    For many, this promise has been epitomized by owning a house, with a touch of green in the back and a taste of private paradise. Those most grateful for this opportunity were my mother’s generation, which grew up in the Great Depression. In her life, she was able to make the move from the tenements of Brownsville, Brooklyn, first to the garden apartments of Coney Island and Sheepshead Bay, and, eventually, to a mass-produced suburban house on Long Island.

    This basic American dream of upward mobility may not, according to the pundit class, planners and many developers, be readily available for my children. Indeed, in the years since the 2007 housing bust, there’s been a steady stream of commentary suggesting a future that resembles the past, where most people were renters and, in urban centers, lived chock-a-block in crowded apartment buildings.

    The advocates for a return to this not-so-great past are a diverse lot, spanning the ideological spectrum from the free-market Right to the green, regulation-loving Left. Many on the right, such as economist Tyler Cowen, suggest that the era of the “average” American is now past, and that most of us will have to dial down our expectations about how we live, particularly in costly places such as California. The blessed 15 percent might aspire to live high on the hog, and even in luxury, but for the rest of us it’s eating rice and beans, and living small. Goodbye, Levittown, and back to Brownsville.

    Some in the financial community also salivate at the possibilities contained in downgrading the American dream. The very people who rode the mortgage boom and left millions of homeowners to deal with the consequences, now hail the ushering of what Morgan Stanley’s Oliver Chang has dubbed a “rentership society.” Rather than purchasing a home, the middle class is now being downgraded into either renting a foreclosed home snatched by the Wall Street sharpies or being stuffed into small, multifamily housing.

    In either case, the financial hegemons win, since they, essentially, get to have someone else to pay their mortgages. As for society, it’s a losing proposition. Rather than the yeoman with his own place, and the social commitment that comes with it, we now have the prospect of a vast lower class permanently forced to tip its hat to – and empty its wallet for – its economic betters. This is the fate ardently hoped for by many urbanists, who see a generation of permanent renters as part of their dream of a denser America.

    One would expect that this diminution of the middle class would offend liberals, who historically supported both the expansion of ownership and the creation of a better life for the middle class. But today’s liberals – or progressives – share Wall Street’s enthusiasm, albeit for different reasons, for renting and ever-greater densities.

    This reverses the policies of the New Deal and its successors. Half of postwar suburban housing, notes historian Alan Wolfe, depended on some form of federal financing. In fact, the progressive position increasingly is worse than that of free-market conservatives and their Wall Street allies. The Right sees profit in densification and renting, but would likely support other options if they seemed advantageous. In contrast, the progressive Left increasingly sees the single-family home and ownership – what made middle-class people like my mother lifelong Democrats – as outdated, even destructive.

    This can be seen in the writings of progressive thinkers like Richard Florida, who, in the midst of the mortgage crisis, proclaimed homeownership as “overrated” and urged Americans to give up the dream of owning their own digs, particularly in the much-disrespected suburbs. In Florida’s “creative age,” the proper aspiration is to live in a dense, expensive city, such as San Francisco or Manhattan, where only a fraction of the population can conceivably own their residence.

    To accommodate this vision, we inevitably get back to a world that looks similar to that of the tenement era. Already, in part due to regulatory policies making new construction prohibitively expensive, there is severe overcrowding in New York, the Bay Area and throughout Southern California. According to the Center for Housing Policy and National Housing Conference, 39 percent of working households in the Los Angeles metropolitan area spend more than half their incomes on housing, along with 35 percent in the San Francisco metro area and 31 percent in the New York City area. The national rate is 24 percent, itself far from tolerable.

    What we are witnessing today is oddly reminiscent of the Brooklyn of my mother’s childhood. She and her four siblings generally lived in three or fewer rooms, sharing her bed with her sisters until she got married. Yet, over time my mother’s generation did well, and all my relatives were able to ascend into the middle class, or even better, by the late 1950s. Most bought homes on Long Island, although one purchased a co-op in Brooklyn.

    Today, our cognitive betters embrace a more déclassé vision, with fewer families, more singles and less focus on upward mobility. Indeed, some, particularly among the environmental community, actually embrace downward mobility. Millennials, by not buying homes and cars, and perhaps also not growing into family life, are portrayed by the green magazine Grist as “a hero generation” – one that will march willingly, even enthusiastically, to a downscale future.

    How will we live in this brave new America? It won’t be exactly a return to the tenements that housed Depression era families, but will involve much smaller, less-communal arrangements. To serve the hip and cool youthful urban crowd, planners embrace microunits of 200-300 square feet. These are either being built or planned in such cities as Seattle, New York, San Francisco, Santa Monica and Portland. Soon, they will become something every second-tier wannabe burg will want to duplicate in their often madcap drive to ape cool cities’ hip urbanism.

    Such units may make developers’ mouths water with anticipation of ever more profitable cramming. But in the process, they will be further encouraging the shift away from housing for married couples, not to mention, children. Families do not make up the prime market for dense housing; married couples with children constitute barely 10 percent of apartment residents, less than half the percentage for the overall population.

    And what if you can’t afford a trendy “pad” in a hip downtown? The urban advocates embrace another dismal back-to-the-future solution: the boarding house. It’s time, argues the Atlantic recently, to jettison our “middle-class norms of decency” governing housing and bring back the boarding house of the 19th and early 20th centuries.

    All said, this is a dismal future being dialed up for the next generation, largely by boomer ideologues and their developer allies. It’s not clear, fortunately, that the millennials will willingly go along. This gives us hope that, when families celebrate the holidays decades from now, they still will have as much to be thankful for as did my mother’s generation, or for that matter, my own.

    This story originally appeared at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • The Geography Of Aging: Why Millennials Are Headed To The Suburbs

    One supposed trend, much celebrated in the media, is that younger people are moving back to the city, and plan to stay there for the rest of their lives. Retirees are reportedly following suit.

    Urban theorists such as Peter Katz have maintained that millennials (the generation born after 1983) show little interest in “returning to the cul-de-sacs of their teenage years.” Manhattanite Leigh Gallagher, author of the dismally predictable book The Death of Suburbs, asserts with certitude that “millennials hate the suburbs” and prefer more eco-friendly, singleton-dominated urban environments.

    Green activists hope this parting of the ways between the new generation and the preferences of their parents will prove permanent. The environmental magazine Grist even envisions “a hero generation” that will escape the material trap of suburban living and work that engulfed their parents.

    Less idealistic types, notably on Wall Street, see profit in this new order, hoping to capitalize on what Morgan Stanley’s Oliver Chang dubs a “rentership society”; in this scenario millennials remain serfs paying rent permanently to the investor class.

    But a close look at migration data reveals that the reality is much more complex. The millennial “flight” from suburbia has not only been vastly overexaggerated, it fails to deal with what may best be seen as differences in preferences correlated with life stages.

    We can tell this because we can follow the first group of millennials who are now entering their 30s, and it turns out that they are beginning, like preceding generations, to move to the suburbs.

    We asked demographer Wendell Cox to crunch the latest demographic data for us to determine where people have moved by age cohort from 2007 to 2012. The data reveals the obvious: People do not maintain the same preferences all their lives; their needs change as they get older, have children and, finally, retire. Each stage leads them toward somewhat different geographies.

    As it turns out, the vast majority of young people in their late teens and 20s – over 80 percent — live outside core cities. Roughly 38 percent of young Americans live in suburban areas, while another 45 percent live outside the largest metropolitan areas, mostly in smaller metro areas.

    To be sure, core urban areas do attract the young more than other age cohorts. Among people aged 15 to 29 in 2007, there is a clear movement to the core cities five years later in 2012 — roughly a net gain of 2 million. However, that’s only 3 percent of the more than 60 million people in this age group.

    Surprisingly, most of this movement to the urban centers comes not from suburbs, but from outside the largest metro areas, reflecting the movement of people from areas with perhaps lower economic opportunity. It also is likely reflective of the intrinsic appeal of metro areas to younger, single people, as well as the presence of many major universities and colleges in older “legacy cities.”

    Here’s how the geography of aging works. People are most likely to move to the core cities in their early 20s, but this migration peters out as people enter the end of that often tumultuous decade. By their 30s, they move increasingly to the suburbs, as well as outside the major metropolitan areas (the 52 metropolitan areas with a population over 1,000,000 in 2010).

    This pattern breaks with the conventional wisdom but dovetails with research conducted by Frank Magid and Associates that finds that millennials prefer suburbs long-term as “their ideal place to live” by a margin of 2 to 1 over cities.

    Based on past patterns, by the time people enter their 50s, the entire gain to the core cities that builds up in the 20s all but dissipates, as more people move to suburbs and to outside the largest metropolitan areas.

    Similarly millennials have not, as some hope, given up on home ownership, something closely associated with suburbia. Magid’s surveys of older, married millennials found their desire to own a home was actually stronger than in previous generations. Another survey by the online banking company TD Bank found that 84 percent of renters aged 18 to 34 intend to purchase a home in the future, while another, by Better Homes and Gardens, found that three in four identified homeownership as “a key indicator of success.”

    These attitudes, particularly among the older edge of the millennials, is particularly critical, as these are the first of this largest generation in American history to enter full adulthood. Indeed the peak of the millennial generation is already in their mid-20s, and by the end of the decade, the vast majority of the roughly 42 million millennials will be entering their 30s, with some approaching their 40s. This group of mature millennials (adding in the 20-24 cohort) is expected to expand by 22.5 million in the next 10 years. They are likely to prove wrong the argument that, with boomers entering their sunset years, there will be no one to buy their houses.

    In contrast, the next wave of young people — now under 10 — will be about 1.7 million less numerous. These “plurals” are likely to stay in the suburbs for the next five to 10 years, and some wil start moving into core cities as they enter their 20s, but in decidedly fewer numbers.

    Perhaps the most salient fact driving these migratory patterns is family formation. Our analyses of cities around the world have shown definitively that people with children tend to avoid urban cores, even in the most gentrified environments. Manhattan, Washington, D.C., San Francisco and Seattle tend to have the lowest numbers of children per capita.

    These trends can be seen on a nationwide basis. Among the cohort of children under 10 in 2007, the number who lived in core cities as of 2012, when they were 5 to 14 years of age, was down by 550,000. Families are the group most likely to move either to the suburbs or smaller towns. This movement, plus the high degree of childlessness in large urban cores, suggests that many of those who are leaving the core cities in their early 30s are parents with young children.

    And what about the older cohorts, notably the baby boomers, who, along with millennials, dominate the nation’s demography? The shift out to the suburbs and to outside the larger metropolitan areas does not stop with the child-bearing years but gains more traction with age, peaking in the early 60s. At this stage, only half as many seniors, on a percentage basis, live in core cities compared to people in their early 20s. Overall, the core cities are home to approximately 15% of the U.S. population, but that falls to under 12% of the population in the 64- to 79-year-old demographic.

    This is not to say that most older people leave the suburbs. Almost 40 percent of seniors remain in suburban areas. Nevertheless there is some movement among the senior population, and among aging boomers, not “back to the city” as common alleged but actually towards the non-metropolitan areas, where costs are often lower and the pace of life slower. Among those now in their 60s, nearly half live outside the major metropolitan areas, four times as many as live in the urban core.

    What do these finding suggest about the geography of aging? First, it makes clear that many people’s preferences change as they age: In aggregate there is a slight tendency toward core cities in the late teens and 20s, and then, to suburbs and outside the major metropolitan after that. Second, it seems clear that older Americans leave core cities all the way to their 70s rather than cluster there, as is often maintained in the media.

    The demographic picture that emerges is complex, but suggests the best way for metropolitan areas to “lure” people — and companies — may be to encourage a wide range of housing lifestyles, ranging from inner city to suburban and exurban/rural. The urban pundit class may never change their preferences or abandon their claims of a secular “back to the city” trend, but in aggregate, people, it appears, do tend to change preferences as they age, something rarely acknowledged but certain to shape our geography for decades to come.

    This story originally appeared at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • Silicon Valley is No Model for America

    Its image further enhanced by the recent IPO of Twitter, Silicon Valley now stands in many minds as the cutting edge of the American future. Some, on both right and left, believe that the Valley’s geeks should reform the nation, and the government, in their image.

    Increasingly, the basic meme out of the Valley, and its boosters, is that, as one venture capitalist put it: “We need to run the experiment, to show what a society run by Silicon Valley looks like.” The rest of the country, that venture capitalist, Chamath Palihapitiya, recently argued, needs to recognize that “it’s becoming excruciatingly, obviously clear to everyone else, that where value is created is no longer in New York, it’s no longer in Washington, it’s no longer in L.A. It’s in San Francisco and the Bay Area.”

    But do we really want these people in control? Not if we care at all about privacy, social justice, upward mobility and the future of our democracy.

    In control

    Let’s start with the Valley’s political agenda, which is increasingly enmeshed with that of the Obama-led Democratic Party. The scary thing about the Valley’s political push is not its ideology, which is not particularly coherent, but its unparalleled potential to dominate the national political agenda.

    Joe Green, a former roommate of Facebook founder Mark Zuckerberg and head of the Valley lobbying group FWD.us, made this clear in a memo leaked to the political site Politico. Green contended that “people in tech” can become “one of the most powerful political forces” since they increasingly “control” what he labeled “the avenues of distribution.”

    Some liberals might be thrilled by the prospect of having such powerful allies, but not if they retain any concern, for example, for civil liberties. This is not merely a matter of informing people, as traditional media does, but using technology to penetrate the private lives of every individual consumer, largely for the economic gain of those “people in tech.”

    There certainly seems no desire to curtail their ongoing invasion of people’s privacy. Facebook, for example, recently disabled a key feature in its website to guarantee privacy. The Huffington Post has already constructed a long list of Google’s more-egregious violations. No surprise, then, that Silicon Valley firms have been prominent in trying the quell bills addressing Internet privacy, in both Europe and closer to home.

    Increasingly, the oligarchs see invasive technology as something of their divine right, as well as a source of unlimited profits. As Google boss Eric Schmidt put it: “We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”

    Tax avoiders

    Perhaps more shocking for many liberal friends of the Valley folks is their attitude toward paying taxes. Here, the tech firms appear to have developed at least as much skill at manipulating the political system as the financial system. The New York Times recently described Apple as “a pioneer in tactics to avoid taxes,” while Facebook paid no taxes last year, despite making a profit of over $1 billion. For its part, Google avoided paying $2 billion by putting its revenue in a shell company in Bermuda.

    OK, you can argue that the Valley tech types are a bit arrogant, dismissive of privacy rights and greedy. But is all that offset by their benefit to the economy? Tech industry boosters, such as UC Berkeley’s Enrico Moretti, extol the virtues of the “technigentsia,” claiming they constitute the key to a growing economy. This is also the conventional wisdom in both parties, among both Left and Right and throughout the media.

    Yet, over the past decade, the Valley’s record on job creation is far from superlative. From 2000-12, Valley tech companies lost well over 80,000 jobs in high-tech manufacturing. Even with the current surge in hiring, Silicon Valley’s employment in fields related to science, technology, engineering and mathematics has still not recovered all the earlier losses, according to estimates by Economic Modeling Specialists Inc.

    You hope your kid may get a good job at Facebook or Google. Well, increasingly those being sought by Valley employers are not the sons and daughters of the American middle – much less, working – class. A recent study by the left-leaning Economic Policy Institute points out that many Valley tech firms would rather hire “guest workers” – now accounting for one-third to one half of all new IT job holders. These workers are valued partly because they will work for less, and do not mind living in crowded, overpriced apartments as much as do native-born Americans.

    The Valley defends its expanding the ranks of what Indians often refer to as “technocoolies,” based on an alleged critical shortage of skilled workers in the STEM fields. But, as EPI demonstrates, this country is producing 50 percent more information-technology graduates each year than are being employed, so the preference for foreign guest workers seems more tied to finding cheaper, more-pliable workers.

    Even worse, those kinds of tech jobs being created in the Valley produce opportunities only for a narrow subset of highly skilled, or well-connected, employees. As industrial jobs – the mainstay of the Valley’s heavily minority working and middle classes – have cratered, most new jobs in the Valley, according to an analysis by the liberal Center for American Progress, earn less than $50,000 annually, far below what is needed to live a decent life in this ultrahigh-cost area.

    New Feudalism

    Rather than a beacon for upward mobility, the Valley increasingly represents a high-tech version of a feudal society, where the vast majority of the economic gains go to a very select few. The mostly white and Asian tech types in Palo Alto or San Francisco may celebrate their IPO windfalls, but wages for the region’s African American and large Latino populations, roughly on third of the total, have actually dropped, notes a recent Joint Venture Silicon Valley report, down 18 percent for blacks and 5 percent for Latinos, from 2009-11.

    Meanwhile, the poverty rate in Santa Clara County since 2001 has soared from 8 percent to 14 percent; today one of four people in the San Jose area is underemployed, up from a mere 5 percent just a decade ago. The food-stamp population in Santa Clara County, meanwhile, has mushroomed from 25,000 a decade ago to almost 125,000 last year. San Jose, the Santa Clara County seat, is also home to North America’s largest homeless encampment, known as “the Jungle.”

    What the Valley increasingly offers America is an economic model dominated by the ultrarich, and generally well-educated, with few opportunities for working-class people, women and minorities. As Russell Hancock, president of Joint Venture Silicon Valley, recently acknowledged, “Silicon Valley is two valleys. There is a valley of haves, and a valley of have-nots.”

    This is a far cry from the kind of aspirational place for middle- and working-class people that the Valley represented just a decade or so ago. Instead, the Valley, and its urban annex San Francisco, increasingly resemble a “gated” community, where those without the proper academic credentials, and without access to venture funding, live a kind of marginal existence in crowded housing, or are forced to commute to distant jobs as servants to the Valley’s upper crust.

    This exclusive future is being further enhanced by gentry liberal policies – as opposed to traditional social democratic policies – widely embraced by the Valley leadership. Instead of looking to spark growth in construction, logistics, manufacturing and other traditional sources of middle-class employment, the Valley’s leadership generally embrace “green” policies that limit suburban homebuilding, drive up energy prices and otherwise make it impossible for businesses capable of offering better paying blue-collar, or even middle-management work.

    None of this suggests that the Valley does not have a critical role to play in the recovery of the American economy. Just like Wall Street, Beverly Hills or, for that matter, Newport Beach, clusters of well-connected and well-educated people play a critical role in taking risks in investment and innovation, whether it involves technology, finance, fashion or media. Yet given their dangerous hubris, disdain for privacy rights, lower rates of tax compliance and minimal ability to create middle-class jobs, the Valley’s elite should not be held up as supreme role models, much less the hegemons, of the Republic. That is, unless we have decided that we wish to live in a high-tech, 21st century version of a highly ossified, feudal society.

    This story originally appeared at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • The Revolt Against Urban Gentry

    The imminent departure of New York’s Mayor Michael Bloomberg, and his replacement by leftist Bill DeBlasio, represents an urban uprising against the Bloombergian  “luxury city” and the growing income inequality it represents. Bloomberg epitomized an approach that sought to cater  to the rich—most prominently Wall Street—as a means to both finance development growth and collect enough shekels to pay for services needed by the poor.

    This approach to urbanism draws some of its inspiration from the likes of Richard Florida, whose “creative class” theories posit the brightest future for “spiky” high cost cities like New York.  But even Florida now admits that what he calls  “America’s new economic geography” provides “ little in the way of trickle-down benefits” to the middle and working classes.    

    Some other urbanists don’t even really see this as a problem. Harvard’s Ed Glaeser, a favorite of urban developers, believes De Blasio should celebrate the huge gaps between New York residents as evidence of the city’s appeal; a similar argument was made recently about California by an urban Liberal (and former Oakland Mayor) Jerry Brown, who claimed the state’s highest in the nation poverty rate reflected its “incredible attractiveness”.

    Couched in progressive rhetoric, the gentry urbanists embrace an essentially neo-feudalist view that society is divided between “the creative class” and the rest of us. Liberal analyst Thomas Frank suggests that  Florida’s “creative class” is numerically small, unrepresentative and self—referential; he describes them as  “members of the professional-managerial class—each of whom harbors a powerful suspicion that he or she is pretty brilliant as well.”

    The Voters rebel.

    The revolt against this mentality surfaced first in New York perhaps because the gaps there are so extreme. Wall Streeters partied under Bloomberg, but not everyone fared so well. The once proudly egalitarian city has become the most unequal place in the country, worse even than the most racially divided, backward regions of the southeast.  In New York, the top 1 percent earn roughly twice as much of the local GDP than is earned in the rest of country. The middle class in the city is rapidly becoming vestigial; according to Brookings its share of the city’s population has fallen from 25 percent in 1970s to barely sixteen percent today.   

    De Blasio rode this chasm between “the two cities” to Gracie Mansion, but his triumph represents just part of a growing urban lurch to the left. Voters in Seattle, for example, just elected an outright Socialist who promptly called on Boeing workers to take over their factory. More reasonably, she is also campaigning for a $15 an hour minimum wage, a reaction against the surging inequalities in that   historically egalitarian Northwest city.

    Similarly  San Franciscans turned down a new luxury condo development along their waterfront, in large part because it was perceived as yet another intrusion of the ultra-rich. Even as the city enjoys its most recent tech bubble, resentment grows between the tech elites, including those traveling on private buses to Silicon Valley, and ordinary San Franciscans, struggling to cope with soaring housing costs.

    The New Urban Demography

    Bloomberg’s “luxury city” was ultimately undermined by its own demographic logic. Bloomberg’s gentry urbanist policies have undermined New York’s private sector middle class, a group that was critical to his own early rise to power and even more decisive in electing his predecessor, Rudy Giuliani. This same group of middle class voters, largely clustered in the San Fernando Valley, also drove the election of Richard Riordan in Los Angeles in 1993 and his comfortable re-election four years later. But the private sector middle class

    The fading of the old middle class came with the rapid decline of industries, like manufacturing and logistics that once employed them.  Since 2000, the New York metropolitan region has lost some 1.9 million net domestic migrants, the most of any  in the country. $50 billion in lost revenue has bled out of the city along with the people departing. Florida alone, the largest destination has gained almost $15 billion in income. Other major cities, notably Los Angeles and Chicago, have suffered similar losses since the 1970s, notes Brookings, as middle income neighborhoods have declined while both poor and very affluent areas have grown.    

    Becoming the ultimate playground to the rich made things worse for most middle class New Yorkers by imposing higher costs, particularly for rents. In fact, controlling for costs the average New York paycheck (costs) is among the lowest in the nation’s 51 largest metro areas, behind not only San Jose, but Houston, Raleigh, and a host of less celebrated burgs. A big part of this is the cost of rents. According to the Center for Housing Policy and National Housing Conference , 31 percent of New York’s working families pay over 50% of their income in rent, well above   the national rate of 24 percent, which itself is far from tolerable.

    Conditions for those further down the economic scale, of course, are even worse. The urban poor in New York, Chicago, Los Angeles or Philadelphia , notes analyst Sam Hersh, find their meager resources strained by high prices not  common in less fashionable cities like Buffalo or Dallas. “In some ways,” he notes, “ the low cost of living in “unsuccessful” legacy cities means that quality of life is in many cases better than in those cities widely regarded as a success.”

    The dirty little secret here is the persistence of urban poverty. Despite the hype over gentrification, urban economies—including that of New York—still underperform their periphery. Nearly half of New York’s residents, notes the Nation are either below the poverty line or just above it. Just look at the penultimate symbol of urban renaissance, Brooklyn. The county (home to most of my family till the 1950s) suffers a median per capita income in 2009 of just under $23,000, almost $10,000 below the national average (PDF).

    Marquee cities haven’t “cured poverty” or exported it largely to the suburbs, as is regularly claimed. Cities still suffer a poverty rate twice as high as in the suburbs. Demographer Wendell Cox notes that  some 80% of the population growth over the past decade in the nation’s 51 largest cities came from the ranks of those with lower incomes, most likely the children of the entrenched poor as well as immigrants.

    The resilience of poor populations has occurred even as there has been a much ballyhooed surge into some cities of younger people, primarily single, often well-educated, childless and less traditional in their values. This demographic shift has further pushed urban politics to the left as singles, particularly women, have become, next to African-Americans, the most reliable Democratic constituency.

    By the time these young people get older and develop more interest in issues like schools, parks and public safety, Census data suggest they leave in cities large numbers, depriving them of a critical source of political, social and economic stability. By the age of 40, according to the most recent data, going up to 2012, more desert the core city than ever came there in the first place.   

    Urban Politics Left Turn

    This new demography—essentially a marriage of rich, young singles and the poor—has created an urban electorate increasingly one-dimensional, and less middle class, not only in economic status, but also, perhaps more importantly, in attitude. This can be seen in the very low participation rates in de Blasio’s victory in New York, where under one quarter of the electorate voted in the election compared to some 57 percent in the 1993 Giuliani vs Dinkins race. Historically, middle class voters were the most reliable voters and their decline has led to record low participation not only in New York, but also in Los Angeles, where new Mayor Eric Garcetti was elected with the lowest turnout, barely twenty percent, in a contested election in recent memory.

    The decline in voter participation occurs as cities are becoming ever more one-party constituencies. Two decades ago a large chunk of the top twelve cities were run by Republicans, but today none are. America’s cities have evolved into a political monoculture, with the Democratic share growing by 20 percent or more in most of the largest urban counties.

    Under such circumstances the worst miscues by liberals are largely ignored or excused as politics and media take place in a kind of left-wing echo chamber. Even the meltdown of the healthcare law, which has hurt the president’s approval rating in national polls, seems to have not impacted his popularity in urban areas.  

    In New York and other cities this shift leftward, ironically, has been enabled by the successes of Bloomberg and other pro-business pragmatists whose successful policies on issues like crime have shifted the political agenda to other matters. “This election is not going to be about crime, as some previous elections were,” de Blasio told National Journal last month. “It used to be in New York you worried about getting mugged. But today’s mugging is economic. Can you afford your rent?”

    Policy Directions.

    With crime a less urgent issue and no sizable right or even centrist voting blocs, urban leaders can now push a set of initiatives—for example on policing—that would have been unthinkable in the New York of Rudy Giuliani or Los Angeles under Riordan. There are also likely to be fewer pushes for education reform, a critical issue for retaining the middle class, since most left-wingers, like de Blasio, largely follow the union party line.

    This is not to suggest that we should long for a return to the Bloombergian  “luxury city.” The gentrification-oriented policies did indeed foster the evolution of  two cities, one preserved by tax increment funding and donations by wealthy and businesses and another, heavily minority city, notes analyst Aaron Renn facing budget constraints, the closing of schools, parks and other facilities  

    But revoking these policies alone does little to expand the middle class and diminish social inequality. A more direct step would be to boost the minimum wage in cities—as suggested by Seattle’s firebrand socialist council member and endorsed by the new Mayor— for the vast numbers of working poor who labor in hotels, fast food restaurants and other service businesses.  This, to his credit, is what Richard Florida suggests as part of his proposed “creative compact” to boost the pay workers who work in service jobs for his dominant “creatives.”

    This policy does address inequities but it may also have the effect of reducing overall employment as companies seek to downsize and automate their operations. Although conceived to help the working poor, it could further reduce job opportunities for those most in need of work.

    Can Social Media Save New York?

    The key issue is how to expand high wage jobs in cities with high rents and costs of living. One approach, embraced by many urban boosters, is to lure social media firms. Tech companies tend to concentrate in denser urban areas and are also a good fit with urban left-wing politics as they tend to be dominated by young, alternative lifestyle types.

    However, this is a risky proposition, given the historic volatility of these companies. After the last bubble, Silicon Alley suffered a downward trajectory, losing 15,000 of its 50,000 information jobs in the first five years of the decade.

    Although some claim, in a fit of delusion, that the city is now second to the Silicon Valley in tech this ignores the long-term trends. In fact, since, since 2001, Gotham’s overall tech industry growth has been a paltry 6% while the number of science, technology, engineering, and math related jobs has fallen 4%. This performance pales compared not only to  the Bay Area, but a host of other cities ranging from Austin and Houston to Raleigh, Salt Lake and Nashville.

    The chances of Gotham becoming a major tech center are further handicapped   by a severe lack of engineering talent. On a per capita basis, the New York area ranks 78th out of the nation’s 85 largest metro areas, with a miniscule 6.1 engineers per 1,000 workers, one seventh the concentration in the Valley and well below that of many other regions, including both Houston and Los Angeles.

    Finally for most cities, and particularly in New York, Los Angeles and Chicago, the rise of social media has been a mixed blessing. Whatever employment is gained in social media has been more than lost by declines in book publishing, videos, magazines and newspapers—all industries historically concentrated in big cities. Since 2001 newspaper publishing has lost almost 200,000 jobs nationwide, or 45% of its total, while employment at periodicals has dropped 51,000,or 30%, and book publishing, an industry overwhelmingly concentrated in New York, lost 17,000 jobs, or 20% of its total.

    Restoring the Aspirational City

    Instead of waiting for the social media Mr. Goodbars to save the day, or try to force up wages by edict, cities may do better to focus on preserving and even bolstering existing middle-income jobs. In New York, for example, more emphasis needs to be placed on retaining mid-tier white collar jobs, which have been fleeing the city for more affordable regions, including the much dissed suburbs.    

    New York’s middle class has been a primary victim of the wholesale desertion of the city by large firms.  In 1960 New York City boasted one out of every four Fortune 500  firms; today it hovers around 46. And even among those keeping their headquarters in Gotham,  many have shipped most of their back office operations elsewhere. Amidst a record run on Wall Street, the financial sector’s employment has fallen by 7.4 percent since 2007. The city’s big employment gains have been mostly concentrated in low-wage hospitality and retail sectors—service jobs that often don’t provide benefits and are vulnerable to fluctuations in the market.

    Other potential sources of higher wage jobs include those tied to   international trade, logistics and, in some areas, manufacturing. Many progressive theorists denigrate these very industries, which tend to pay higher than average wages across the board. Traditional employment sectors like these  have   bolstered urban economies in Houston, Oklahoma City, Dallas-Ft. Worth and Charlotte.  

    Equally important, cities need to shift away from the gentry urbanist fixation on the dense urban core and focus on more diverse neighborhoods. As more workers labor from home, and make their locational decisions based on factors like flexible hours and time with family, cities need to stop viewing neighborhoods as bedrooms for downtown, and begin to envision them as their own generators of wealth and value. The era of the office building has already peaked, and increasingly employment, even in cities, will become dispersed away from the cores.

    Sadly, it’s doubtful the new left-wing urban leaders will embrace these ideas, in some part due to pressure from the “green” lobby. Though he was elected based on a message that assailed the city’s structural inequality, ulitimately de Blasio   may end up more dependent on Wall Street than even his predecessor since his plans to fund expanded social and educational programs depend squarely on extractions from the hated “one percent.”

    What our cities need is not a return to theatrical leftism or hard left redistributive policies, but a new focus on improving the long-term economic prospects of the middle and aspirational working class. Without this shift, the new leftist approach will fail our cities as much, if not more so, than the rightfully discredited gentry urbanism it seeks to supplant.

    This story originally appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Photo by Mike Lee