New Geography

Author: Joel Kotkin

  • Sacramento 2020

    Even in the best of times, Sacramento tends to be a prisoner to low self-esteem. The region’s population and economic growth have been humming along nicely for the past decade, drawing ever more educated workers from overpriced coastal counties, but the region’s leaders have often seemed defensive about their flourishing town.

    So perhaps it’s not surprising that the mortgage meltdown, which has hit the area hard, has sparked something of an identity crisis. Yet in trying to cope with hard times, it’s important that the region not lose its focus on what paced Sacramento’s past success: its ability to offer affordable, high-quality, largely single-family neighborhoods for middle class families.

    Sadly, the dominant narrative among many planners, politicians and developers in Sacramento today is to try to shed the family-friendly image. There’s a growing consensus that low-density neighborhoods are passé and that the region’s future success lies in retrofitting the region along a high-density, centralized model. Suburban areas like Rancho Cordova or Elk Grove, some believe, are destined to become the “the next slums” as middle-income homeowners, fleeing high gas prices, flock to the urban core.

    Although a healthier downtown with reasonable density is good for the entire region, the high-density focus does not make a good fit for a predominately middle class, family-oriented region such as Sacramento. Unlike an elite city like San Francisco, Sacramento’s growth has been fueled by an influx of educated, family-oriented residents – the populations that have been fleeing such high-priced places where the housing supply is constrained.

    Long-term demographic trends, and perhaps common sense, suggest that most people do not move to Sacramento to indulge in a “hip and cool” urban lifestyle. If someone craves the excitement, bright lights and glamorous industries of a dense city, River City pales compared with places like San Francisco, New York or Los Angeles.

    The fact Sacramento has fared far better than these cities over the past 15 years suggests the region’s recent problems lie not in a lack of downtown condos and nightlife, but with a housing market that, as in much of California, has been totally out of whack. Once a consistently affordable locale, by the mid-1990s Sacramento’s housing prices jumped almost nine times income growth, an unsustainable pace seen in a few areas such as Riverside, Miami and Los Angeles.

    As a result, the refugees from the coastal counties who had been coming to Sacramento for affordable housing stopped arriving. Net migration to the region, more than 36,000 in 2001, fell to less than 1,000 in 2006.

    Ultimately only a housing market correction will again lure the people who have come to Sacramento seeking single-family houses – the type of home favored by about 80 percent of Californians – back to the region. Evidence that these people, or current suburbanites, might flock back to the core city is thin at best. The failures of such high-profile projects as The Towers and the region’s stagnant rental market do not suggest a seismic shift toward denser living.

    One key reason has to do with patterns of job growth. Since 2000, suburban communities in the largest metropolitan areas have added jobs at roughly six times the rate of the urban cores.

    This pattern has had profound and often counterintuitive effects on commuting distances. Planners and journalists tend to think of cities in traditional concentric rings, with distance from the core as the key measurement of distance from jobs. But in most regions, the vast majority of employment is outside the core. Even in Sacramento, a state capital, only about 1 in 10 jobs are in the city center. Exurban employment growth since 2000 has been the fastest regionally, expanding at nearly twice the rate for Sacramento County.

    This means commuting distance – and thus exposure to higher gas prices – reflects more than proximity to the central core. In such diverse regions as Los Angeles and Chicago, the shortest average commutes exist both in the affluent inner-city neighborhoods and those suburbs and exurbs, where much of the employment growth has clustered. People who live in Irvine or Ontario in Southern California, or in the western suburbs of Chicago, for example, actually have shorter commutes than those residing in the barrios around downtown Los Angeles or in the Windy City’s fabled South Side.

    These trends suggest a radically different response to high gas prices than the knee jerk downtown-centric approach now widely supported. Instead of cajoling people downtown, perhaps it would make more sense to accelerate employment growth in those suburban and exurban areas where the region’s skilled work force is increasingly concentrated.

    These suburban nodes, both in and outside of Sacramento County, may very well become more important in the near future. With the state facing a perpetual budget deficit, state government – the dominant employer in the central city – may not expand and even could contract in years ahead. Perhaps a wiser approach would be to focus on the biotech, electronics and other firms, many concentrated in suburban areas, as the region’s best hope for the creation of new high-wage jobs.

    Does this mean the region should invite unbridled, uncontrolled growth to the periphery? Not in the least. Successful suburban communities – think of Clovis outside Fresno or Irvine or Valencia in Southern California – provide a high quality of life to their residents. This suggests the need for greater investments in such things as developing lively town centers, expansive parks, wildlife and rural preserves, as well as maintaining good schools, which are often the key factor for families deciding where to live.

    This vision focuses not on one selected geographic area but on a broad spectrum of places across the region. It concentrates not exclusively on dense urban neighborhoods but on fostering a series of thriving villages from close-in city neighborhoods to places like Folsom, Roseville and even Elk Grove. Ultimately the suburb needs not to be demonized, but transformed into something more than bedrooms for a central core.

    In terms of reducing vehicle miles driven, a greater emphasis on telecommuting, including by state employees, would likely also do more than an expanded, very expensive light-rail system. Although more than 12 percent of commuters to and from downtown take transit daily, less than 2 percent of those commuting elsewhere do so. Given the structure of the suburban regions, with multiple nodes of work and a weak bus-feeder system, notions of turning Sacramento into a transit mecca like New York or even San Francisco are far-fetched at best.

    The central city will continue to maintain important functions, not only as a state capital but as a physical and cultural hub. But there needs to be recognition that “hip and cool” dense urbanity does not constitute the core competence of this region. For the foreseeable future, Sacramento’s advantage against its coastal competitors will lie in providing affordable and highly livable modest-density neighborhoods for California’s increasingly diverse middle class.

  • Millennials: A Quick Overview

    Perhaps nothing will shape the future of the country more than the emergence of the so-called Millennial generation. They have already put their stamp on the election, as Carl Cannon suggests in his insightful article in Reader’s Digest, becoming a key driver for Senator Barack Obama’s Presidential run.

    But as Morley Winograd and Michael Hais, authors of the best-selling “Millenial Makeover,” point out, the Millennial generation — roughly those born between 1983 and 2003 — represent far more than a rerun of 60s’ generation liberalism. They share as well many traditionalist views about home, family and religion that may impact the nation’s geography and attitudes on everything from race relations to suburbia for decades to come.

    Not everyone is thrilled with the current celebration of Millennials. Some, like the insightful Lisa Chamberlain point out that many of the optimistic predictions made for her generation — the so-called Xers — turned out to be off target. She maintains that powerful outside influences, such as high energy prices, may constrain the normative optimism widely identified with the Millennials.

    But however they might turn out, one thing is certain: by the sheer weight of numbers the Millennials will shape the nation in profound ways. By 2010 this generation will be entering adulthood and will equal or surpass the boomers. They will become the new force in the housing market, forming the base for a new wave of homeowners.

    Although it is far too early to predict where they will settle, authors Winograd and Hais argue, the first groups of older Millennials appear to be following their predecessors to the suburbs. They point out that this group values homeownership even more than earlier generations, seems more amenable to living near their parents and have expressed strong interest in raising children.

    Of course, other factors, as Lisa Chamberlain argues, could force the Millennials to live more in dense urban areas. The imposition of draconian planning regimes — in part based on the idea that suburbs promote global warming — could leave them with little other choice. And finally land prices could force suburban developers to densify and all but eliminate the single-family residence.

    But history suggests none of this is likely. People will locate in those areas that provide quality of life, affordable housing and economic opportunity. Our snapshot of educated Millennials between 25 and 30, which may be considered the vanguard of that generation, shows a preference for the generally affordable Western and Sunbelt regions like Charlotte, Austin, Denver, Portland, Riverside-San Bernardino, Phoenix and Dallas.

    One place on balance the older Millennials are not going: the big metropolitan areas of California and the Northeast. In 2006, New York, Los Angeles, Chicago, Philadelphia, the San Francisco Bay Area and Boston all lost more educated Millennials than they gained. As the impact of the financial meltdown shifts to these cities, particularly the financial centers, this trend could accelerate, particularly in the New York area.

    Yet in the end, predicting the future is a tricky business. In the hippy heyday of 1968 few people would have expected the Boomers to follow their parents into suburbia and, as a group, flock to the banner of Ronald Reagan and become the bulkwark of a great conservative resurgence. That’s why, while it’s always good to tap as much good data as possible, prognostication remains more as an art than a science.

    Joel Kotkin is Executive Editor of www.newgeography.com.

  • Jerry Brown’s War on California Suburbs

    In the 1960s, California Gov. Edmund Gerald “Pat” Brown laid the foundation for building modern, suburban California with massive new highway projects and one of the most significant public water projects in history. The resulting infrastructure gave us broad, low-density developments with room for millions of Californians to have a home with a backyard and two cars in the driveway.

    Those were the good old days. Today, Pat Brown’s son Jerry is waging war on the very communities his father helped make possible. Why? Global warming.

    Jerry Brown has been a fixture of the state’s politics for more than three decades. He was elected governor in 1974 and four years later earned the moniker “Governor Moonbeam” for his interest in creating a space program in California. In 1998, he was elected mayor of Oakland, a working-class city across the bay from San Francisco. And in 2006, he was elected attorney general. Today he is mulling a run for governor in 2010, when he will be 72.

    In the meantime, Mr. Brown is taking aim at the suburbs, concerned about the alleged environmental damage they cause. He sees suburban houses as inefficient users of energy. He sees suburban commuters clogging the roads as wasting precious fossil fuel. And, mostly, he sees wisdom in an intricately thought-out plan to compel residents to move to city centers or, at least, to high-density developments clustered near mass transit lines.

    Mr. Brown is not above using coercion to create the demographic patterns he wants. In recent months, he has threatened to file suit against municipalities that shun high-density housing in favor of building new suburban singe-family homes, on the grounds that they will pollute the environment. He is also backing controversial legislation — Senate bill 375 — moving through the state legislature that would restrict state highway funds to communities that refuse to adopt “smart growth” development plans. “We have to get the people from the suburbs to start coming back” to the cities, Mr. Brown told planning experts in March.

    The problem is, that’s not what Californians want. For two generations, residents have been moving to the suburbs. They are attracted to the prospect, although not always the reality, of good schools, low crime rates and the chance to buy a home. A 2002 Public Policy Institute of California poll found that 80% of Californians prefer single-family homes over apartment living. And, even as the state’s traffic jams are legendary, it is not always true that residents clog roads to commute to jobs in downtown Los Angeles or other cities.

    Ali Modarres, associate director of the Edmund G. “Pat” Brown Institute of Public Affairs at California State University Los Angeles, believes the density-first approach is ill-suited for areas like L.A. County, where most residents and jobs are dispersed among subregional “nodes.” Research by Mr. Modarres, co-author of the powerful book “City and Environment,” demonstrates that people living in nodes — Pasadena, Torrance, Burbank and Irvine — often enjoy considerably shorter average commutes than do a lot of inner-city residents. Many of these people commute through tangled traffic to get to jobs on the periphery.

    “I have no problem trying to find solutions on global warming,” Mr. Modarres told me, “but I doubt these kinds of solutions are going to do anything. The whole notion that through physical planning you can get a lot of people to abandon their cars is pretty iffy.”

    Mr. Modarres also points out that forcing developers to build near transit lines, a strategy favored by “smart-growth advocates,” does not mean residents will actually take the train or bus. A survey conducted last year by the Los Angeles Times of “transit oriented development” found that “only a small fraction of residents shunned their cars during rush hour.”

    There is also little punch behind the science used to justify the drive to resettling the cities — and plenty of power behind the argument that suburbs are better for Mother Earth. Several prominent scholars — including University of Maryland atmospheric scientist Konstanin Vinnikov, University of Georgia meterologist J. Marshall Shepard and Brookings Institution research analyst Andrea Sarzynski — have found there is little evidence linking suburbanization to global warming, pointing out that density itself can produce increased auto congestion and pollution.

    The antisuburbanites also ignore evidence that packing people together in cities produces “heat islands.” Temperatures in downtown Los Angeles sometimes reach as much as three degrees centigrade higher than outlying areas. Recent studies in Australia have shown that multistoried housing generates higher carbon emissions than either townhomes or single-family residences because of the energy consumed by common areas, elevators and parking structures, as well as the lack of tree cover.

    In the short run, while being “tough” on climate change appears popular, an assault on the preferred lifestyle of suburban voters may not. These voters aren’t likely to appreciate being castigated as ecological evildoers, especially by people who generally house themselves in spacious splendor.

    A report by the Los Angeles Weekly’s Dave Zahniser — entitled “Do as We Say, Not as We Do” — found that a lot of prominent “smart growth” advocates in Los Angeles live in large single-family homes, some of them long hikes from mass transit. Mr. Brown himself, not long ago, moved from a loft in crime-ridden downtown Oakland to a bucolic setting in the Oakland Hills.

    At a time when political trends favor Democrats, a hypocritical jihad against basic middle-class aspirations may not be the best strategy. Mr. Brown would be better off embracing telecommuting and other ideas to cut suburban commutes that accommodate the majority’s dreams and preferences. He might have learned that from his father. Instead he’s gone from wanting to launch people into space to opposing people who move to the suburbs.

    This article first appeared in the Wall Street Journal.

  • The New Boom Towns

    The steep hike in gas and energy prices has created a national debate about the future of American metropolitan areas — mostly about the reputed decline of suburbs and edge cities dependent on cars. But with all this focus on the troubles of traditional suburbs, one big story is overlooked: the rapid rise of America’s energy-producing metropolitan areas.

    In many of the nation’s strongest regional economies, $5 a gallon gas is less a threat than a boon. From Houston and Midland in Texas, to a score of cities across the Great Plains, today’s energy crisis is creating new wealth and new jobs in a way not seen since, well, the energy crisis of the 1970s.

    This reflects a global trend that is turning once out-of-the-way places, like Dubai and Alma Alty, into glittering high-rise cities. Other energy- and commodity-rich places are undergoing a similar boom — from Moscow and St. Petersburg in Russia, to Calgary and Edmonton in Canada and Perth in Australia.

    What all these places have going for them is control of what Kent Briggs, former chief of staff for Utah’s late Gov. Scott Matheson, once called “the testicles of the universe.” These cities base their wealth not on clever financial technology, cultural attributes or university-honed skills but on their position as centers of the global commodities boom.

    In the process, there has been a shift in the balance of economic power away from financial and information centers like New York, Los Angeles, Boston, Chicago and San Francisco. These cities are deeply vulnerable to the national financial and mortage crises. New York, according to David Shulman, former Lehman Brothers managing director, faces upward of 30,000 to 40,000 layoffs in its financial sector. San Francisco in the last quarter gave away a Transamerica Pyramid’s worth of office space.

    In contrast, things have never looked better for cities now riding the energy and commodity boom. By far the biggest winner is Houston, whose breakneck growth has been fueled by its role as the world’s premier energy city. As with Dubai, this is less a function of the city’s proximity of actual deposits (though the Gulf of Mexico represents one of the most promising energy finds in North America), than to its premier role as the technical, trading and administrative center of the worldwide industry.

    This prominence is, in historic terms, relatively recent. As late as the 1980s “oil bust,” notes historian Joe Feagin, Houston’s energy sector remained “a colony of New York,” where many of key industry corporate and financial decision-makers still lived.

    Yet, today, Houston’s national, even global dominance, of the energy business is palpable. With the lure of low-cost office space and housing stock, as well as myriad personal ties among executives and leading engineers, Houston managed to consolidate its position as the predominant center of the oil and gas industry. In 1960, Houston had barely one of the nation’s large energy firms, ranking well behind New York, Los Angeles and even Tulsa; today it has 16, more than all those cities combined.

    High wages offered by energy firms — annual salaries for geologists average $132,000 or more; while blue-collar workers make roughly $60,000 — have attracted a new generation of skilled executives and technicians to the region, which also enjoys a far lower cost a living than many other major cities. Areas like River Oaks, Galleria and Energy Corridor are home to well-educated, upwardly mobile workers in their late 20s and 30s. The area is growing at a time when these workers are, according to recent census numbers, leaving places like San Francisco, New York, Los Angeles and Boston.

    “People from other areas say that you guys don’t make much down there,“ said Houston executive recruiter Chris Schoettelkotte. “[But] the guys from L.A. make the same amount of money in the same field here. We pull them from Wharton, the Ivy League and Stanford and they get paid through the nose… Houston can get the talent.”

    Houston’s status as energy capital is also propelling it into the ranks of first-tier cities. Today, Houston has the third largest representation of consular offices. It ranks behind only Los Angeles and New York, and has outstripped traditional commercial centers like San Francisco and Chicago.

    It’s energy, along with the port and growing airport, that makes the Texas city a world capital. “When I go overseas people put Houston with New York and L.A.,” said Houston salvage entrepreneur Charlie Wilson. “In many cases, Houston is considered to be at the top of the world class because of oil. If you’re in China, you’re looking at Houston because of the oil.”

    But Houston is not alone in benefiting from the rising price of energy and other commodities. According to the new Inc./Newgeography.com job growth rankings other energy cities include Dallas — home of Exxon Mobil –- as well as smaller Texas burgs like Midland, Odessa and Longview.

    This is a dramatic turnaround for places like Midland. Until recently, said Midland oilman Mike Bradford, wildcatters had held back from drilling, because they feared the high oil prices would not last. Now they are convinced that the energy market has broken free of OPEC control and prices will remain high. “We think high [oil and gas] prices are for real — and we’re going nuts,” said Bradford, who also sits on the Midland County Commission.

    But you don’t have to be in Texas to be part of an energy boomtown. Bakersfield, Calif., oil capital, is also thriving, despite the hard times throughout the Golden State because of the mortgage crisis. Alaskans, who now receive more than $1,600 per capita from the state’s Permanent Fund Dividend, twice what they received in 2005, are likely to see their wealth increase. If there’s an expansion of drilling there, look for Anchorage and other Alaskan cities to enjoy even flusher times.

    Another hot spot is in the Great Plains. Energy production and high commodity prices are pacing the economies of regional centers like Des Moines; Billings, Mont.; Cheyenne, Wy., and Sioux Falls, S.D. In Bismarck, Grand Forks and Fargo, N.D., where incomes are surging, there’s a sense that these are the best of times. One sure sign: The energy boom — coal, oil, wind as well as biofuels — has produced a a billion-dollar state surplus for North Dakota.

    The energy and commodity boom is changing the face of these small cities in key ways. Fargo, the butt of sophisticated jokes with the Coen Brothers’ movie, now boasts a first-class arena, fine restaurants, a luxurious boutique hotel and a thriving arts scene.

    Grand Forks has a growing condo market. Scores of smaller cities — like Bismarck and Dickinson – are also showing signs of a new quasi-urban sophistication. After decades of demographic stagnation, some of these towns are seeing healthy population gains.

    Rising unemployment is not a problem here; a looming labor shortage is. In some markets, there are signing bonuses and $12-an-hour wages at fast-food business.

    If energy prices hold firm, and particularly if the nation begins to ramp up energy production, we can see the boomtimes extend to energy-rich Utah, Colorado, New Mexico and Louisiana. These can mean more growth in already healthy economies like Albuquerque, Salt Lake City and Denver; but also for long hard-pressed New Orleans and other Gulf Coast cities.

    Finally there’s another group of potential winners: areas that have been selected to produce the energy-efficient vehicles of the future. Even as Detroit, Flint and Ft. Wayne, Ind.,– producers of SUVs and trucks — suffer, many cities in the mid-South, like Nashville, Huntsville and Chattanooga, Tenn., seem certain to gain as Nissan, Toyota, Volkswagen and other foreign producers ramp up production.

    Perhaps the ultimate example of “world turned upside down” by energy prices may end up being Mississippi, long a perennial loser in the economic sweepstakes. But this week, Toyota announced it would start building its popular hybrid Prius in Blue Springs, Miss., in late 2010. That’s just outside Tupelo, Elvis’ birthplace.

    We may not see a reappearance of the King — but for many people this resurgence is just as stunning.

    None of this, however, suggests that San Francisco, Los Angeles or New York are about to be eclipsed by Houston — much less Fargo or Tupelo. But if the history of cities tells us anything, places well-positioned for growth industries tend to emerge as ever more serious players.

    It worked for industrial cities like Chicago, which emerged from obscurity in the late 19th Century; or later for high-tech centers like San Jose, Austin and Boston. If energy and commodity prices stay high for another decade, we may have to get used to a shift in the power of places across the American landscape.

    Joel Kotkin is a presidential fellow in urban futures at Chapman University and the author of “The City: A Global History.” He is executive editor of the website newgeography.com. This article first appeared at The Washington Independent.

  • Where Are the Best Cities to Do Business?

    Our comprehensive annual guide to which places are thriving — even in an economy many consider in recession.

    By Joel Kotkin and Michael Shires

    What a difference a year and a deflated housing bubble makes. Inc.com’s 2008 list of the Best Cities for Doing Business, created in conjunction with Newgeography.com, uncovered some of the most dramatic changes since we started this ranking back in 2004. Five major trends were immediately revealed; trends that are shaping the business environment right now across the country and will continue to over the next several years.

    The list focuses on short- and long-term job growth. It tells us precisely not just where jobs are being created — a sure sign of economic vitality — but where the momentum is shifting. For entrepreneurs, this suggests what may be the best places to locate or expand your business.

    The Bubble and the Fall of the Sunshine Boys

    Since the list’s inception, Florida has been the standout state in each of our size-based categories — small, midsize, and large. But not this year. Now, Florida is the state that fell back to earth. Stung by plummeting construction employment and the mortgage finance crisis, many of our former highfliers across the state are hurting. Ft. Lauderdale, last year’s No. 3 among the large metros, dropped 24 places. West Palm Beach, No. 6 last year, dropped to No. 41. And Jacksonville, No. 12 in the large category, fell seven places.

    The fall, however, was much more devastating for the smaller communities, such as Ft. Myers-Cape Coral. The area ranked No. 1 last year in the midsize category but plummeted 42 places this year. Lakeland-Winter Haven, down 45 places, Deltona-Daytona Beach, down 49, Palm Bay-Melbourne, down 53, and Bradentown, down 65, fared even worse. In even smaller towns, the scenario was bleaker. Ft. Walton Beach dropped 85 places and Naples-San Marco Island, No. 4 last year, plummeted 105 places, the most of any metro in our survey.

    “We’re the foreclosure capital of America,” admits Bill Valenti, founder and CEO of Florida Gulf Bank, founded in 2001 in Fort Myers on the once booming west coast of the Sunshine State. Many of the people that moved into the area bought relatively expensive homes expecting continued asset appreciation to make up for the fact that many jobs in the area pay modest or low wages. Now the area has seen median house prices drop from $320,000 to $223,000 in two years. “Something had to give and it did.”

    Although Florida’s fall was by far the biggest, the housing collapse has also humbled high fliers in other states as well. Last year’s No. 1 among the large metros, Las Vegas, dropped seven places while No. 2, Phoenix, dropped 12; the other big Arizona city, Tucson, No. 12 last year among the midsize category, fell 34 places. Midsize Reno, No. 8 last year and previously No. 1, dropped 21 places.

    Outside Florida, the sharpest pain was felt in California. Property-driven economies in Oakland, Santa Ana-Anaheim, Sacramento, and Riverside-San Bernardino all dropped by around 20 places or more. The big enchilada, Los Angeles, fell another eight places from its already mediocre 48th ranking last year. Almost every city below LA on the list is either a Rustbelt disaster or a perennially underperforming Northeastern big city.

    If this trend continues to play out, California’s problems could be worse than those in Florida. When the bubble corrects, Florida still can boast relatively low costs, no income taxes, and a favorable business climate in addition to warm weather. By contrast, California’s land use laws, high taxes, and massive $20 billion state deficit don’t bode well for the future of the state, suggests Bill Watkins, executive director of the University of California at Santa Barbara’s Economic Forecast Project. “There’s a lot of uncertainty,” he says. “If you are expanding or starting a business, there’s not a lot of reason now to come to California.”

    The Texas Ascendancy Continues

    While California is struggling, says Los Angeles-based architect David Hidalgo, Texas is thriving. Hidalgo just completed a large Latino-themed shopping center in Ft. Worth and sees more of his business coming from the Lone Star State. “That’s where the opportunities are,” he says. “Its costs, regulation, and infrastructure drive you to Texas.”

    Our rankings certainly bear out Hidalgo’s assertion. In many ways Texas has become the new Florida, dominating the top of the list. Among the largest metro areas, a remarkable five of the top 12 best places to do business are from the Lone Star State, ranging from Austin (No. 2) and Houston (No. 4) to Ft. Worth (No. 9) and Dallas (No. 12). Among the small cities, Midland, now ranks No. 1, up 10 places from last year. Odessa and Longview, both big gainers, round out the Texas stronghold on the top portion of the list.

    Texas’ boom reflects solid growth in a variety of industries, from energy and agriculture to manufacturing and trade. “The big difference for Texas is we did not rely on the real estate bubble,” suggests Bill Gilmer, a Houston-based economist for the Federal Reserve. “Our gains are based on jobs elsewhere and that has insulated us pretty well.”

    Here Come the Carolinas

    The other big winners this year are concentrated in the Carolinas. Like Texas, these two states are being fed by varied economies. Certainly, technology companies have been a factor here, many of them in Raleigh-Cary, N.C., which ranked No. 1, up six places, on our list of largest metro areas. Finance has played a large part, too, with Charlotte (No. 5), up 18 places, emerging as the big but low-cost, family-friendly alternative to the New York financial center.

    Demographics are a big part of the story here. Our analysis from Praxis Strategy Group shows that Raleigh and Charlotte, are among the biggest magnets for young, educated workers, particularly those in their late 20s and early 30s.

    “People are coming here for basic reasons and taking their families with them,” observes Sociologist John D. Kasarda, director of the Kenan Institute at the University of North Carolina at Chapel Hill. “They are coming for jobs, particularly from the Northeast, and an affordable quality of life.”

    To some extent, Kasarda adds, Raleigh and Charlotte are well-known success stories, but he points to wider, less documented successes in the region. Driven by gains in tourism, logistics, manufacturing, and technology, more and more midsize Carolina cities are joining the party. These emerging players include Charleston, S.C. (No. 6); Asheville, N.C. (No. 7); Durham, N.C. (No. 11); Greenville, S.C. (No. 18); and Columbia, S.C. (No. 19). These cities made considerable gains over last year and should be seriously considered for new business opportunities.

    The Pacific Northwest-Intermountain West Surge Continues

    Like last year, the northwestern quarter of the country did very well. Three of the top 11 big metro areas in the region between the foggy West Coast and the high mountains, including Salt Lake City (No. 3), Seattle (No. 10) and Portland, Ore. (No. 11), all gained ground. This ascendancy was even more evident at the midsize level, with the success of cities such as Provo-Orem, Utah (No. 1); Tacoma, Wash. (No. 2); Ogden, Utah (No. 8); Boise, Idaho (No. 12); and Spokane, Wash. (No. 14). Small cities, including St. George, Utah (No. 2), Coeur d’Alene, Idaho (No. 3), Bend, Ore. (No. 7) and Grand Junction, Colo. (No. 9), also saw gains.

    In many ways, the gains here parallel those in the Carolinas. Places like Salt Lake City, Seattle, and Portland, according to the Praxis Strategy Group analysis, all continue to gain educated residents from other parts of the country. The lure, in many cases, lies with strong and diverse job growth and low housing prices compared to coastal California and the Northeast.

    Seattle continued its strong growth, notes economist Paul Sommers, due largely to the success of two companies — Microsoft and Boeing. These companies have been expanding, providing high-wage jobs, and attracting skilled talent to the area. Another key advantage in this high energy cost environment: the Northwest’s prodigious supplies of cheap and clean hydroelectric power. This helps everyone, from people building airplane parts to dot-com firms sucking copious amounts of electricity to run their servers.

    Some of the other areas in this vast region benefit from what might be called “grey power.” Older, often more educated and affluent, baby boomers are flocking to the smaller towns and cities in this region, bringing capital and, in some cases, entrepreneurial know-how. Like the Carolinas, the area between the foggy Pacific Coast and the Rockies seems poised for sustained growth.

    Revenge of the Superstars?

    Perhaps the most surprising shift in the 2008 rankings, and in some ways the most subtle, has been the improvement in a host of very expensive, highly regulated urban regions that Wharton economist Joe Gyourko calls “superstar cities.” For many years these cities — New York, San Francisco, San Jose, Boston — have clustered at the bottom of our growth-oriented list, all suffering big losses from the 2000-2001 dot-com bust.

    This year has seen the revenge of the “superstars.” Although not surpassing Texas, the Carolinas or the Northwest, these elite cities have made a strong showing. In just one year, New York (No. 22) propelled itself 21 places while San Francisco (No. 29) and San Jose (No. 33) gained at least 25 places, and Boston (No. 40) went up 19 places.

    The main reason for this modest, but significant turnaround, suggests David Shulman, former managing director of Lehman Brothers, is simple: the powerful financial sector expansion of the past few years. These are all cities where big money plays a big role, either financing new dot-com start-ups or simply serving as the places where multimillion-dollar bonuses are spent on a host of high-priced services.

    Yet, Shulman notes, these gains may be short lived. The impact of the subprime and mortgage meltdown hit first in places like California and Florida, and is only beginning to affect the major financial centers. Spurred by the credit crisis, Shulman fears new regulations will limit financial innovation and wipe out whole sections of industries like mortgage-backed securities and some derivatives.

    “A lot of these gains are going to rewind,” suggests Shulman. “New York is losing jobs as we speak. Anyplace with exposure to financial services is going to suffer over the next two years.”

    Joel Kotkin is a presidential fellow at Chapman University and executive editor of Newgeography.com

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

  • Is Manufacturing Weighing Down the U.S. Economy?

    The answer may surprise you.

    Ever since we started ranking the Best Cities for Doing Business in 2004, the bottom rung of the rankings has been largely dominated by older industrial cities where factories have long been abandoned and once booming economies have dried up. The 2008 list bears this sobering fact; among the largest regions surveyed, Detroit sits on the bottom at No. 66, with Warren Troy-Farmington Hills, Mich., Cleveland, Providence, R.I., Philadelphia, and the New York twins — Rochester and Buffalo — doing only slightly better.

    The same pattern can be seen on the lists of midsize and small cities, where the bottom rankings consist largely of former industrial towns along the Great Lakes belt, including Ohio, Michigan, and Indiana. Dayton, Ohio, falls last at No. 96, lying at the bottom of the midsize list of cities. Among the small metros, Battle Creek, Mich., languishes at No. 173, with Michigan cities Saginaw and Flint doing only slightly better.

    So given this persistent underperformance, is manufacturing weighing down the U.S. economy? The answer may surprise you. Even though the industrial towns dominated by what used to be called the Big Three automakers (General Motors, Ford, and Chrysler) and their suppliers have been devastated by slumping sales, a host of other manufacturing regions have emerged as strong performers. For the most part, the largest beneficiaries of these changes are located either in the Intermountain West — the region between the Rocky Mountains and the Sierra Nevada, and the Sun Belt region stretching across the southern bottom of the country. Here, U.S. car makers are not well represented and smaller communities with a host of specialized industrial companies have expanded in the face of tough times.

    For example, large metros, such as Las Vegas (No. 8), Houston (No. 3) and Salt Lake City (No. 4), have attracted specialized industrial companies from high-cost, high-regulation locales like California, including aerospace, electronics, and industrial equipment. All these areas have experienced industrial job growth since 2000; Las Vegas alone has seen its number of manufacturing jobs grow by more than 30 percent.

    But much of the action is in smaller areas. Many of them, like Midland, Texas, (No. 1); Longview, Texas, (No. 11); and Morgantown, W.Va., (No. 15), are tied to energy production. Such places have experienced 15 percent or more industrial job growth since 2000.

    Another hot spot is in the Great Plains. Many cities in the region have attracted sophisticated manufacturing firms in technology, farm machinery, and electronics as well as an expanding number of energy-based companies ranging from oil, gas, and coal to wind power. Grand Forks and Fargo, N.D., No. 56 and No. 28 respectively, have experienced a quiet industrial boom, increasing their manufacturing jobs by more than 14 percent since 2000.

    Already home to numerous agricultural implement firms, the largest manufacturer in Grand Forks is LM Glasfiber, a Danish manufacturer of propeller blades for windmills. Since the North Dakota office opened in 1999, it has expanded from 20 to 900 employees. Plant Manager Ralph Sperrazza says he appreciates the loyalty and dedication of the employee base, many of whom are returnees from larger metropolitan areas such as Minneapolis.

    One effect of LM, local economic development officials reveal, has been a notable tightening of the labor market and an increase in wages in Grand Forks. The same result, notes North Dakota State Economist Larry Leistritz, is occurring elsewhere in the region as other core industries, ranging from energy and office furniture to farm equipment, have enjoyed rapid growth.

    “These are the best times we’ve seen in many decades,” Leistritz beams. “And it is being felt broadly across the entire society.”

  • Suburbia’s Not Dead Yet

    While millions of American families struggle with falling house prices, soaring gasoline costs and tightening credit, some environmentalists, urban planners and urban real estate speculators are welcoming the bad news as signaling what they have long dreamed of — the demise of suburbia.

    In a March Atlantic article, Christopher B. Leinberger, a visiting fellow at the Brookings Institution and a professor of urban planning, contended that yesterday’s new suburbs will become “the slums” of tomorrow because high gas prices and the housing meltdown will force Americans back to the urban core. Leinberger is not alone. Other pundits, among them author James Howard Kunstler, who despises suburban aesthetics, and New York Times columnist Paul Krugman, see the pain in suburbia as a silver lining for urban revival.

    Not so fast. The “out of the suburbs, back to the city” narrative rests more on anecdote than demographic or economic fact. Yes, high gas prices and rising sub-prime mortgage defaults are hurting some suburban communities, particularly newly built ones on the periphery. But the suburbs remain home to a majority of Americans and a larger proportion of U.S. families — and people aren’t leaving those communities in droves to live in cities. Even with economic growth slowing, many suburbs, exurbs and smaller towns, especially those whose economies are tied to energy, are continuing to do better than most cities in terms of job creation and population growth.

    The ominous predictions that the end of suburbia is at hand echo those in the 1970s, when there was also a run-up in gasoline prices. Then it was neo-Malthusians such as biologist Paul Ehrlich, the author of “The Population Bomb,” who argued that the idea of suburbia was unsustainable because it eats up so much land and energy. But suburban growth continued as people bought more fuel-efficient cars and companies moved jobs to the periphery, which cut commuting times. Contrary to pundits’ forecasts, during this decade of high energy prices, the country’s urban populations, for only the first time in recent history, actually fell, according to a census analysis by economist Jordan Rappaport at the Federal Reserve Bank of Kansas City.

    But today’s gas prices, at more than $4 a gallon, are the highest ever, and the prospects of them significantly dropping any time soon are slight. The conditions for an exodus from suburbia to the cities would seem ideal once again.

    Nevertheless, since 2003, when gas prices began their climb, suburban population growth has continued to outstrip that of the central cities, with about 90% of all metropolitan growth occurringin suburban communities, according to the 2000 to 2006census. And the most recent statistics from the annual American Community Survey, which is conducted by the U.S. Census Bureau, show no sign of a significant shift of the population to urban counties, at least through 2007.

    The flat condominium markets in most large urban markets are another sign that people are not streaming into cities from the suburbs and buying. Many condo projects in such cities as Los Angeles, Chicago, Miami and San Diego have either been canceled or converted into rentals, with many units remaining vacant. As a Southern California condo developer told me recently, lower house prices are not going to make people more disposed to buying apartments.

    But the biggest reason the suburb-to-city narrative is not following the script of the urban boosters and theorists has to do with employment. Living close to your workplace makes sense, not only because it cuts commuting costs and reduces greenhouse-gas emissions — by saving time, it also gives people more time for family and leisure activities.

    The problem for many cities is that they lack the jobs for people to move close to. Since the 1970s, the suburbs have been the home for most high-tech jobs and now the majority of office space. By 2000, only 22% of people worked within three miles of a city center in the nation’s 100 largest metro areas.And from 2001 to 2006, job growth in suburbia expanded at six times the rate of that in urban cores, according to an analysis of Bureau of Labor Statistics by the Praxis Strategy Group, a consulting firm with which I work.

    A desire to live closer to their jobs doesn’t mean that people have to move to the inner core, particularly if that’s not where the jobs are. Of the 20 leading job centers in Southern California by ZIP Code, none are downtown. The central core does remain an important job center, but it accounts for barely 3% of regional employment. Among those who work downtown, some may shift from cars to public transit, although many will simply buy a more fuel-efficient car and stay put in the suburbs.

    For residents who live in suburban areas with large concentrations of employment — Burbank, Ontario and West L.A. — commutes to work can be shorter than those experienced by their inner-city counterparts, according to Ali Modarres, a professor of geography at Cal State Los Angeles. Commutes in these communities, on average, are less than 25 minutes, while in high-density areas, such as Pico-Union, they average 35 minutes.

    The relative and continuing health of these suburban employment centers would seem to preclude any large-scale flight to cities. But urban areas with limited or shrinking employment opportunities, and suburbs that bet on housing to sustain their economies, will continue to have trouble attracting residents either because of a scarcity of jobs or long commutes at a time of expensive gas.

    The suburb-to-the-city narrative faces other obstacles. By the early part of the next decade, the large millennial generation born since the early 1980s will begin to form families, and they will, as have previous generations, probably seek open space and good schools for their children — and that means they will settle in the suburbs. And there is no census evidence suggesting that immigrants have reversed their decade-old pattern of moving to the suburbs.

    The growth of telecommuting, fed by technological advances, further ensures that suburbia has a future. By 2006, the expansion of home-based workers had grown twice as quickly as in the previous decade. And by 2015, according to demographer Wendell Cox, there will be more people in the country working electronically from home full time than are taking public transit.

    More numerous will be those who work at home part time. Nearly 29 million Americans telecommute at least once a month, according to WorldatWork, a nonprofit consultancy. At many companies — IBM, Sun Microsystems and AT&T among them — upward of 30% of their employees work from home. In some regions, such as the San Francisco Bay Area and Los Angeles, almost one in 10 workers are part-time telecommuters, according to a 2004 study done by Resources for the Future, a Washington-based think tank.

    Continuing high energy prices will likely change the nation’s geography, but not in ways some urban theorists are predicting. Rather than cramming more people and families into cities, they may instead foster a more dispersed, diverse archipelago of self-sufficient communities. From here, that looks like a far more pleasant scenario not only for suburban and exurbanites but for urban dwellers who don’t want to live under dense conditions reminiscent of 19th century industrial cities or the teeming metropolises of the contemporary Third World.

    Joel Kotkin is a presidential fellow in urban futures at Chapman University and executive editor of NewGeography.com

  • Is Narcissus also a success story?

    In sharp contrast with its arch-rival, Los Angeles, San Francisco historically has won plaudits from easterners. Writing in his 1946 landmark work, Inside USA, John Gunther compared “tranquil and mature” San Francisco with LA, a city he loathed as “the home par excellence of the dissatisfied.” The City by the Bay, he wrote, “possesses a incomparable quality of charm” unsurpassed by any American city.

    But no group extols San Francisco’s virtues more than San Franciscans. Indeed when journalist Neil Morgan wrote about the place he labeled it “Narcissus of the West.” Perhaps nothing exemplified this self-reflecting modality than the old tendency to refer to the place simply as “The City,” as if, in real terms, there was no other.

    Over the past few decades, this combination of urban charm and narcissism has transformed San Francisco. The city I got to know as a young journalist in the early 1970s working for the alternative weekly San Francisco Bay Guardian was already changing. Areas once habituated by old-fashioned bohemians (i.e., those without trust funds) – North Beach, Union Street – already were being displaced by new age enthusiasts, investment bankers and young corporate executives.

    But still, in the 1970s, San Francisco remained very much a city of neighborhoods, each one very much a world unto itself. If the east face of the city – North Beach, Russian Hill, Downtown, Chinatown, Fisherman’s Wharf – was being transformed into a kind of high-end theme park, much of the western ends of the city, as well as places such as the Mission and Potrero Hill, remained bastions of ethnic diversity, middle and working class families.

    As our articles editor Andy Sywak, who is also editor of the Castro Courier neighborhood newspaper, points out in his first rate analysis, this San Francisco still exists, although it may be holding on for its life. Demographically, San Francisco has changed in ways that may well signal the future for at least a series of American urban geographies – Portland, Seattle, Boston, DC and even Manhattan come to mind – that although quick to celebrate diversity are in many ways becoming increasingly less so.

    In some ways, this may be the curse of too-good looks. Ever since Haight-Ashbury caught on as the epicenter of the 1960s hippy movement, San Francisco has lured ever more affluent and well-educated people. In the process, the price of real estate has skyrocketed, making the city virtually unaffordable for almost everyone outside the upper middle class. Once known as a rough, brawling union town, San Francisco likely now boasts the highest percentage of people living off wealth – rents, dividends, interest – of any major American city.

    A recent study by the Public Policy Institute of California showed that virtually every income group from households making $50,000 to $150,000 a year dropped between 2002 and 2006. In contrast, households making between $150,000 and $200,000 surged 52 percent and those earning even more expanded by 40 percent. Housing prices, although slightly off last, have more than doubled since 2002 to nearly $800,000; it takes an income near $200,000 to afford a median priced home.

    This upper class shift has fostered, indeed encouraged, a strange form of ultra-liberal politics. Perhaps no major American city wears its leftism on its sleeve more than San Francisco. When it comes to imposing “green” controls and standards, as well as any embracing gender and cultural liberalism, The City is not to be outdone.

    But such lifestyle liberalism should not be confused with traditional urban reform, which focused on how to expand the benefits of urban life and economy to broad sections of the population. To maintain and even expand this largely childless city – San Francisco has the lowest percentage of children per capita of any major American city – major reform of city institutions, notably schools, no longer commands priority. Instead, efforts can be concentrated in consolidating what University of Chicago urban theorist Saskia Sassen calls “the urban glamour zone.”

    In this sense, San Francisco is a place that combines the characteristics of an exclusive resort, with extremely expensive real estate and concentrations of high-end amenities, with an exclusive economy based on elite services fields such as finance, media and design. Even in hard times, its real estate economy can be propped up by purchases by the wealthy, both full and part-timers, who wish to imbibe The City’s urban charms.

    Increasingly – and likely more the case in the future – these wealthy people (and their progeny) will settle in San Francisco more for lifestyle than purely economic reasons. Instead of nurturing the traditional middle class, the city can depend on the kind of young temporary sojourners (remarked upon by our Adam Mayer, who recently moved back to the Bay Area) to provide relatively low-cost skilled labor as well as the legions of waiters, toenail painters, dog walkers, performance artists and the like.

    Such an urban economy, of course, also requires people willing to do very hard labor – busboys, janitors, cleaning ladies, gardeners – many of whom will have to commute from distant locales to service the “needs” of the cognitive elites. The one impoverished constituency tolerated in the new order, the homeless, will incongruously now share the glamour city with the glitterati. This is why, notes the great California historian and San Francisco native Kevin Starr, The City has become “a cross between Carmel and Calcutta.”

    Can such a society work, and, if so, is its model applicable elsewhere? Certainly you must be a place with inherent attractions to the wayward and affluent. Seattle, Portland, Boston as well as Manhattan could also evolve in this direction, and may already being doing so. It’s difficult, however, to see such an economy working out so well in other less powerfully attractive urban centers, particularly those with large concentrations of poverty.

    But for a lovely place like San Francisco the trajectory is not entirely negative. As the country’s population expands to 400 million in 2050, there will be a growing, albeit small niche, for high-cost places that appeal to those with requisite high-end skills or at least the right heredity.

    We can see this with the economy. Even as it has lost corporate headquarters, manufacturing and other generators of middle-class jobs, San Francisco’s appeal to high-end workers and as an entertainment center – Dr. Starr dubs his hometown “a theme park for restaurants” – has helped secure its position as kind of PR office, party town and alternative hip location for the far less charming, if more productive, nerdistan further south.

    San Francisco already has twice successfully hitched itself to the Valley’s surge, first in the late 90s dotcom surge and more recently in the Google-centric 2.0 boom. The city’s total jobs likely have not recovered their 2000 levels, but there has been a notable improvement over the last two years.

    The future progress, however, may prove more difficult. Although the administration of Mayor Gavin Newsom has trumpeted what it claims as a major economic as well as demographic turnaround, the inevitable popping of the 2.0 bubble could wreak some damage. Already layoffs in the hard-hit financial sector – some of it tied to the venture capital industry – last quarter saw tenants give up almost a Transamerica Pyramid’s worth of space.

    The picture is at least murky on the demographic side. Yet although state population numbers record a return to population growth, the census numbers, which we rely on at NG, are less impressive, recording a loss of roughly four percent since 2000.

    These competing claims will not be fully resolved until after the 2010 census. But population growth may be somewhat beside the point. San Francisco’s emerging identity is not as a bustling, growing city that attracts middle class families. Instead, its destiny – or karma as locals may prefer to see it – may be to lure the wealthy, the well-educated and talented to the communal self-celebration that long has stood the trademark of the place they call The City.

  • Perspective on Chicago: From City of Big Shoulders to Entertainment Machine?

    After decades of living in the shadows not only of New York, but such emergent regions as Los Angeles, the San Francisco Bay Area, Atlanta, Houston and Dallas, Chicago suddenly seems to be on a roll. It may be very close to placing its “favorite son” – Senator Barack Obama – as our next President, with all the enormous increase in prestige and patronage that entails. It could win the 2016 Olympics. And recently, Fast Company, the trendoid business magazine for the perennially hip and cool, named it America’s “city of the year.”

    How you view Chicago’s rise has much to do with who you are. For many working and middle class Chicagoans, the changes in recent years have been far from favorable, as our blogger Steve Bartin points out. Job growth has been slow, the schools have emptied out as many families have moved to the suburbs. But for those at the apex of society – notably condo developers, well-connected politicos, the cultural elite and a rising African-American upper class – this renewed Chicago represents truly a great city of opportunity.

    This shift in identity is quite a change for what was once seen as “the city of big shoulders.” Unlike patrician Boston or mercantile cosmopolitan New York, Chicago can be seen as the quintessential American city – a bit rough at the edges, productive and unpretentious. It emerged the biggest and fastest growing of the Midwestern boomtowns of the late 1800s. A settlement of barely 350 in 1835, it mushroomed to 100,000 at the time of Abraham Lincoln’s election in 1860, and housed over a million forty years later.

    Chicago was elemental – its industry bigger, its politicians more corrupt, its criminals seemingly more lethal and better organized. So, too were its business leaders. Chicago, one speculator wrote following the panic of 1837, “resounded with the groans of ruined men and the sobs of defrauded women who entrusted all to greedy speculators.” Undaunted, the city’s elites proved relentless in their ambition, lobbying Washington and Wall Street for dominant position in the burgeoning east-west trade. St. Louis businesspeople, noted the Chicago Tribune in 1868, “wore their pantaloons out sitting and waiting for trade to come to them” while Chicago’s “wore their shoes out running after it.”

    Our focus on Chicago shows that this spirit of opportunistic boosterism has not been lost. The excellent piece by Carol Eisenberg on Muckety.com – part of this package – reveals the remarkable unanimity among the city’s business, political and cultural elite under the regime of the second Mayor Richard Daley. The impressive recovery of the city’s central core, and surrounding waves of gentrification, have turned the city into a favorite role model for younger cities from Los Angeles to Miami looking to prove their urban bona fides.

    This marks a dramatic change in popular perceptions of Chicago. A Swedish visitor in 1850, described it as “one of the most miserable and ugly cities” in America. Later, it was known as an industrial powerhouse; when Berlin in the early 1870s developed as a major manufacturing center, it was christened “Chicago on the Spree.” Yet by then Chicago was also developing a softer side: it was home to the reform efforts of Jane Addams, whose focus on rough ghetto neighborhoods inspired others around the country. Rebuilding after the devastating fire of 1871, the city also embarked on an ambitious program of civic improvement, constructing over the next three decades a major library system, a new home for the Arts Institute, the Field Columbian Museum and a large expansion of the University of Chicago.

    It is this more gilded, elegant Chicago – home of arguably the nation’s and even the world’s greatest collection of 20th Century high-rise structures – that foreshadows the current city. The success of Millennium Park, the powerful if now fading condo boom, the city’s newfound celebratory culture (think Oprah Winfrey and Barack Obama), its growth in fine restaurants, nightclubs and other entertainments has persuaded some observers like the University of Chicago’s Terry Nichols Clark to declare that Chicago is indeed the model city of the future.

    Clark’s new urban vision sees a city that marries upper crust with proto-bohemian elements, providing a spectacle for the well-to-do and distracted. Such cities may no longer serve as a vehicle for class mobility, but as an “entertainment machine” for the privileged. For these elite residents, the lures are not economic opportunity, but rather “bicycle paths, beaches and softball fields,” and “up-to-the-date consumption opportunities in the hip restaurants, bars, shops, and boutiques abundant in restructured urban neighborhoods.”

    Clark and other observers give much of the credit to the political regime of Mayor Richard J. Daley, under whose auspices Senator Obama has enjoyed his meteoric rise. But this is not a partisan issue. Conservative author Joseph Epstein, a usually restrained observer, also is in the Daley cheering section,

    Looking behind this celebratory consensus, long-time Chicago observer Steve Bartin sees a far less pretty picture. Corruption, he notes, has not diminished under the younger Daley – new revelations are certain to tarnish Senator Obama’s clean image. Nor can the economic performance of the city be seen as widely successful as it appears to luxury real estate developers. Jobs have languished, Bartin points out, and many others are threatened by technology and the shift of employment to the suburbs as well as more affordable Sunbelt cities.

    Of course, as in other large American cities, Chicago’s real estate market has provided a boon for developers and the high-wage earning elites, including a rising African-American professional class. But many observers, including Bartin, point out that it has not been so good for the poor, who have been often displaced and economically marginalized. At the same time, the middle class, particularly those with children, continue to flee to the suburbs, keeping population growth stagnant or even negative. Roughly half of all white families (as of 2005) leave when their children reach school age.

    The editors at Newgeography.com welcome Chicagoans and other observers to post their comments on this collection – or just their comments – to our new site. We invite controversy, but require politeness and respect among combatants.

    Joel Kotkin is the Executive Editor of Newgeography.com.

  • Joel Kotkin