New Geography

Category: Demographics

  • From Jurisdictional to Functional Analysis of Urban Cores & Suburbs

    The 52 major metropolitan areas of the United States are, in aggregate, approximately 86 percent suburban or exurban in function. This is the conclusion from our new City Sector Model, which divides all major metropolitan zip codes into four functional categories, based on urban form, population density and urban travel behavior. The categories are (1) Pre-Auto Urban Core, (2) Auto Suburban: Earlier, (3) Auto Suburban: Later and (4) Auto Exurban. It is recognized that automobile-oriented suburbanization was underway before World War II, but it was interrupted by the Great Depression during the 1930s and was small compared to the democratization of personal mobility and home ownership that has occurred since that time.

    For decades there has been considerable analysis of urban core versus suburban trends. However, for the most part, analysts have been jurisdictional, comparing historical core municipalities to the expanse that constitutes the rest of the metropolitan area. Most core municipalities are themselves substantially suburban, which can mask (and exaggerate) the size of urban cores.

    The Queen’s University Research

    The City Sector Model is generally similar to the groundbreaking research published by David L. A. Gordon and Mark Janzen at Queen’s University in Kingston Ontario (Suburban Nation: Estimating the Size of Canada’s Suburban Population) with regard to the metropolitan areas of Canada. Researchers used travel behavior (journey to work data from the 2006 census) and density for classifying metropolitan areas into four sectors, (1) Active Core, (2) Transit Suburbs, (3) Auto Suburbs, and (4) Exurbs. The active core was that portion of metropolitan areas with a high share of work trip travel by walking and cycling. I covered the research in a newgeography.com article last autumn.

    Gordon and Janzen concluded that the metropolitan areas of Canada are largely suburban. Among the major metropolitan areas of Canada, the Auto Suburbs and Exurbs combined contain 76 percent of the population, somewhat less than the 86 percent we found in the United States.

    The City Sector Model follows the same general approach as the Queens University research, although there are important differences. For example, the City Sector Model is principally aimed at identifying the Pre-Auto Urban Core component of the modern metropolitan area and does not identify an active core.

    All US Major Metropolitan Area Growth Has Been Suburban and Exurban

    Virtually all population growth in US metropolitan areas (as currently defined) has been suburban or exurban since before World War II (the 1940 census). The historical core municipalities that have not annexed materially and were largely developed by 1940 have lost population. As a result, approximately 110 percent of their metropolitan area growth has occurred in suburbs and exurbs. Further, among the other core municipalities, virtually all of the population growth that has occurred in annexed areas or greenfield areas that were undeveloped in 1940 (Figure 1).

    Identifying the Pre-Auto Urban Core

    The City Sector Model is not dependent upon municipal boundaries (the term "city" is generic, and refers to cities in their functional sense, metropolitan areas, or in their physical sense, urban areas). Not being constrained by municipal boundaries is important because core municipalities vary substantially. For example, the core municipality represents less than 10 percent of the population of Atlanta, while the core municipality represents more than 60 percent of the population of San Antonio. The City Sector Model applies data available from the US Census Bureau to estimate the population and distribution of Pre-Auto Urban Cores in a consistent manner.

    At the same time, the approach is materially different from the Office of Management and Budget (OMB) classification of "principal cities." It also differs from the Brookings Institution "primary cities," which is based on the OMB approach. The OMB-based classifications classify municipalities using employment data, without regard to urban form, density or other variables that are associated with the urban core. These classifications are useful and acknowledge that the monocentric nature of US metropolitan areas has evolved to polycentricity. However, non-urban-core principal cities and primary cities are themselves, with few exceptions, functionally suburban.

    The City Sector Model Criteria

    Due to media and academic interest in the Pre-Auto Urban Core, a number of data combinations were used to best fit the modeled population to that of the core municipalities that have virtually the same boundaries as in 1940 and that were virtually fully developed by that time (the Pre-War & Non-Suburban classification in historical core municipalities). A number of potential criteria were examined, and the following were accepted (Figure 2).

    The Auto Exurban category includes any area outside a principal urban area.

    The Pre-Auto Urban Core category includes any non-exurban with a median house construction date of 1945 or before and also included areas with a population density of 7,500 per square mile (2,900 per square kilometer) or more and with a transit, walk and cycling journey to work market share of 20 percent or more.

    The Auto Suburban Earlier category included the balance of areas with a median house construction date of 1979 or before.

    The Auto Suburban Later category later included the balance of areas with a median house construction date of 1980 or later.

    Additional details on the criteria are in Note 1

    Results: 2010 Census

    The combined Pre-Auto Urban Core areas represented 14.4 percent of the population of the major metropolitan areas in 2010 (2013 geographical definition). This compares to the 26.4 percent that the core municipalities themselves represented of the metropolitan areas, indicating nearly half of their population was essentially suburban.

    The Auto Suburban: Earlier areas accounted for 42.0 percent of the population, while the Auto Suburban: Later areas had 26.8 percent of the population. The Auto Exurban areas had 16.8 percent of the population (Figure 3).

    The substantial difference between US and Canadian urbanization is illustrated by applying an approximation of the Gordon-Janzen criteria, which yielded an 8.4 percent Pre-Auto Urban Core population. The corresponding figure for the six major metropolitan areas of Canada was 24.0 percent. This difference is not surprising, since major Canadian urban areas have generally higher densities and much more robust transit, walking and cycling market shares. Yet, the Gordon-Janzen research shows Canada still to be overwhelmingly suburban (Note 2).

    Population Density: As would be expected, the Pre-Auto Urban Core areas had the highest densities (Figure 4), at 11,000 per square mile (4,250 per square kilometer). The Auto Suburban: Earlier areas had a density of 2,500 per square mile (1,000 per square kilometer), while the Auto Suburban: Later had a population density of 1,300 per square mile (500 per square kilometer), while the Auto Exurban areas had a population density of 150 per square mile (60 per square kilometer)).

    Individual Metropolitan Areas (Cities)

    The metropolitan areas with the highest proportion of Pre-Auto Urban Core population are New York (more than 50 percent), and Boston (nearly 35 percent), followed by Buffalo, Chicago, San Francisco-Oakland, and Providence, all with more than 25 percent (Table).

    Table
    City Sectors: 2010
    Major Metropolitan Areas
    City (Metropolitan Area) Pre-Auto Urban Core Auto Suburban: Earlier Auto Suburban: Later Auto Exurban
    Atlanta, GA 0.5% 14.9% 70.7% 13.8%
    Austin, TX 1.8% 15.7% 62.5% 20.0%
    Baltimore, MD 16.2% 41.8% 19.9% 22.0%
    Birmingham, AL 0.0% 42.1% 24.6% 33.3%
    Boston, MA-NH 34.2% 49.7% 3.2% 12.9%
    Buffalo, NY 28.8% 51.6% 3.1% 16.5%
    Charlotte, NC-SC 0.0% 10.0% 38.4% 51.6%
    Chicago, IL-IN-WI 25.8% 45.0% 18.3% 10.9%
    Cincinnati, OH-KY-IN 10.1% 38.8% 24.3% 26.8%
    Cleveland, OH 22.2% 46.8% 10.5% 20.6%
    Columbus, OH 5.0% 28.7% 37.5% 28.9%
    Dallas-Fort Worth, TX 0.3% 34.4% 43.0% 22.4%
    Denver, CO 3.1% 42.9% 42.4% 11.6%
    Detroit,  MI 6.3% 60.6% 16.1% 16.9%
    Grand Rapids 3.8% 32.9% 15.3% 48.1%
    Hartford, CT 11.1% 58.6% 1.1% 29.2%
    Houston, TX 0.3% 34.2% 48.9% 16.6%
    Indianapolis. IN 4.6% 28.0% 41.8% 25.6%
    Jacksonville, FL 0.0% 26.4% 48.2% 25.4%
    Kansas City, MO-KS 5.4% 37.6% 26.3% 30.6%
    Las Vegas, NV 2.4% 17.5% 76.7% 3.5%
    Los Angeles, CA 10.4% 76.4% 5.2% 8.0%
    Louisville, KY-IN 8.1% 45.4% 25.6% 20.8%
    Memphis, TN-MS-AR 1.8% 40.6% 34.3% 23.3%
    Miami, FL 1.4% 51.4% 44.8% 2.4%
    Milwaukee,WI 22.1% 52.0% 10.4% 15.5%
    Minneapolis-St. Paul, MN-WI 12.7% 31.6% 33.8% 22.0%
    Nashville, TN 0.0% 25.0% 36.1% 38.9%
    New Orleans. LA 10.6% 49.9% 7.0% 32.4%
    New York, NY-NJ-PA 52.4% 35.3% 5.6% 6.7%
    Oklahoma City, OK 2.5% 35.1% 31.6% 30.8%
    Orlando, FL 0.0% 16.1% 50.5% 33.4%
    Philadelphia, PA-NJ-DE-MD 24.6% 51.1% 15.1% 9.2%
    Phoenix, AZ 0.0% 29.4% 51.7% 18.8%
    Pittsburgh, PA 15.7% 56.1% 4.8% 23.4%
    Portland, OR-WA 9.3% 36.7% 39.5% 14.6%
    Providence, RI-MA 25.5% 47.7% 2.8% 24.0%
    Raleigh, NC 0.0% 7.5% 54.4% 38.1%
    Richmond, VA 4.5% 38.8% 38.0% 18.8%
    Riverside-San Bernardino, CA 0.0% 29.1% 29.4% 41.4%
    Rochester, NY 11.1% 46.9% 7.7% 34.3%
    Sacramento, CA 1.6% 38.0% 40.2% 20.1%
    St. Louis,, MO-IL 11.7% 39.9% 25.7% 22.8%
    Salt Lake City, UT 4.6% 47.9% 38.4% 9.1%
    San Antonio, TX 0.1% 39.7% 42.6% 17.6%
    San Diego, CA 1.2% 61.6% 30.3% 6.9%
    San Francisco-Oakland, CA 25.7% 55.5% 7.6% 11.2%
    San Jose, CA 0.1% 77.7% 9.1% 13.1%
    Seattle, WA 7.8% 38.9% 40.2% 13.0%
    Tampa-St. Petersburg, FL 0.0% 44.8% 39.7% 15.5%
    Virginia Beach-Norfolk, VA-NC 1.5% 44.4% 37.7% 16.4%
    Washington, DC-VA-MD-WV 15.9% 29.2% 36.2% 18.7%
    Overall 14.4% 42.0% 26.8% 16.8%

     

    It may be surprising that many of the major metropolitan areas are shown with little or no Pre-Auto Urban Core population. For example, five metropolitan areas have virtually no Pre-Auto Urban Core population, including Phoenix, Riverside-San Bernardino, Tampa-St. Petersburg, Orlando, Jacksonville, and Birmingham. By the Census Bureau criteria of 1940, two of these areas were not yet metropolitan and only Birmingham (400,000) had more than 250,000 residents.  Many of the newer and fastest growing metropolitan areas were too small, too sparsely settled or insufficiently dense to have strong urban cores before the great automobile suburbanization that followed World War II. Further, many of the Pre-Auto Urban Cores have experienced significant population loss and some of their neighborhoods have become more suburban (automobile oriented). Virtually no urban cores have been developed since World War II meeting the criteria.

    Thus, no part of Phoenix, San Jose, Charlotte and a host of other newer metropolitan areas functionally resembles the Pre-Auto Urban Core areas of metropolitan areas like Chicago, Cincinnati, or Milwaukee. However, new or expanded urban cores are possible, if built at high enough population density and with high enough transit, walking, and cycling use. 

    Examples of three differing metropolitan areas are provided. Philadelphia (Figure 5) is a metropolitan area with a strong Pre-Auto Urban Core, which is indicative of an older metropolitan area that has been among the largest in the nation since its inception, Seattle (Figure 6) is a much newer metropolitan area, yet exhibits a larger Pre-Auto Urban Core than most. Phoenix (Figure 7) may be the best example of a post-War metropolitan area, with virtually no Pre-Auto Urban Core. In 1940, the Phoenix metropolitan area had only 120,000 residents and could be 40 times that large by 2020. Virtually all of Phoenix is automobile-oriented. Even three years after opening its light rail line, 88 percent of Phoenix commuters go to work by car and only two percent by transit, virtually the same as in 2000.

    Despite the comparatively small share of the modern metropolitan area represented by the Pre-Auto Urban Core in the City Core Model, the definition is broad and, if anything over-estimates the size of urban core city sectors. The population density of Pre-Auto Urban Core areas is below that of the historical core municipalities before the great auto oriented urbanization (11,000 compared to 12,100 in 1940) and well above their 2010 density (8,400), even when New York is excluded. The minimum density requirement of 7,500 per square mile (not applied to analysis zones with a median house construction data of 1945 or earlier) is slightly less than the density of Paris suburbs (7,800 per square mile or 3,000 per square kilometer) and only 20 percent more dense than the jurisdictional suburbs (suburbs outside the historical core municipality) of Los Angeles (6,400 per square mile or 2,500 per square kilometer). Some urban containment plans require higher minimum densities, not only in urban cores but also in the suburbs.

    In describing the Canadian results, Professor Gordon noted that there is a tendency to “overestimate the importance of the highly visible downtown cores and underestimate the vast growth happening in the suburban edges.” That is true to an even greater degree in the United States. 

    —–

    Note 1:

    The City Sector Model is applied to the 52 major metropolitan areas in the United States (over 1 million population). The metropolitan areas are broken into principal urban areas, with all other areas considered to be exurban. The principal urban areas also include the Concord urban area and the Mission Viejo urban area, which are adjacent to and included in the San Francisco and Los Angeles urban areas respectively. As a result, some smaller urban areas, such as Palm Springs (Riverside-San Bernardino metropolitan area), Lancaster (Los Angeles metropolitan area) and Poughkeepsie (New York metropolitan area) are considered exurban. Areas with less than 250 residents per square mile (100 per square kilometer) are also considered exurban, principally for classification of large areas on the urban fringe that have a substantial rural element.

    The Pre-Auto Urban Core includes all non-– exurban areas in which is the median house (single-family or multi-family) was built is 1945 or before. Three density levels were considered, 10,000, 7,500 and 5,000 per square mile (4,000, 2,900 and 2,000 per square kilometer). The lower 5,000 per square mile was examined to test the extent to which such a low density would increase the urban core population. This density, less than the entire urban area (urban core and suburban) of the Los Angeles, San Francisco, San Jose and New York urban areas would have, at the most raised the urban core population to 21.5 percent of the metropolitan population, even with a modest 10 percent transit, walking and cycling market share (Figure 8)

    The pre-auto urban core specification results in a 2010 population for the metropolitan areas with Pre-war and non-suburban historical core municipalities within one percentage point of the actual total, excluding the far higher density case of New York.

    The analysis showed that a lower transit, walking and cycling market share at a 7,500 per square mile floor (2,900 per square kilometer) would substantially increase the Pre-Auto Urban Core category population, while diluting its urban core nature. More than one-half of the increase would be in Los Angeles which has added literally millions of residents in high density suburban areas that are as automobile oriented as suburbs elsewhere.

    The analysis zones (zip codes) have an average population of 19,000, with from as many as 1,000 zones in New York to 50 in Raleigh.

    Note 2:

    An approximation based on the Gordon and Janzen approach would indicate an urban core population of only 8 percent in the major metropolitan areas of the United States. This approximation results in a modeled population for the metropolitan areas with pre-war and non-suburban historical core municipalities of less than one-half the actual 2010 population.

    This Queen’s University research comparison in Figure 8 is referred to as an approximation, since it applies an overall transit, walking, and cycling market share for the six major metropolitan areas, instead of a factor corresponding to each metropolitan area (the Gordon and Janzen approach).

    The differences in transit market share relative to the US are substantial. This may be best shown by considering Calgary, which with a population of 1.2 million in 2011 would have ranked as the 47th largest metropolitan area if it were in the United States. Yet, Calgary would rank second only to the New York metropolitan area in transit market share if it were in the United States. Even so, Calgary is found to be the most suburban of Canada’s major metropolitan areas in the Queen’s University research and Statistics Canada data from 2011 indicates strong domination of urban travel by the automobile.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Photo: Los Angeles

  • From Anecdotes to Data: Core & Suburban Growth Trends 2010-2013

    According to the Wall Street Journal, there are "Signs of a Suburban Comeback." This is a turnaround from the typical media coverage of US population estimates in recent years, which have more often than not heralded a "return to the cities" generally more rooted in anecdote than data.

    There were always at least two problems with the "return to the city" thesis. First of all, most people who live in the suburbs came from areas outside metropolitan areas and they couldn’t return to where they had never lived (see Cities and Suburbs: The Unexpected Truth). More importantly, in every year for which there is data, the net inward migration to suburbs has been far greater than to the core counties, which have nearly always had net outward migration (see Special Report: 2013 Metropolitan Area Population Estimates. Under these conditions, there could not have been net migration from the suburbs to the core municipalities.

    Historical Core Municipalities: The Differences

    I have classified historical core municipalities based on their extent of automobile oriented suburbanization (Figure 1). The break point is World War II, after which the great automobile suburbanization occurred in the United States. There had been automobile oriented suburbanization before 1940. During the 1920s, annual rates of suburban growth exceeded five percent in the 14 metropolitan areas with more than 500,000 population. The decade of the Great Depression (1930 to 1940) saw annual growth rates drop three quarters (Note). By the end of World War II, transit had seen its motorized urban travel market share restored to 35 percent, equal to early 1920s levels, a figure that has since fallen to under two percent. 

    Historical Core Municipalities: Improving Trends

    Even so, in recent years, the core municipalities have done better than in the past. The nightmare that occurred between 1970 and 1990 seems to be over in many places. This has made it feasible for an increase in core living by many Millennials and singles. However, even this has been exaggerated by anecdotal research that dominates the media. More than 80 percent of Millennials live outside the core municipalities, where they are less visible to the anecdote-driven media.

    On a percentage basis, the historical core municipalities of the 52 major metropolitan areas (more than 1,000,000 population) managed to grow 3.4 percent between 2010 and 2013, more than the suburban rate of 3.1 percent. This is probably the first time this has occurred in any three year period since the end of World War II.

    But the core municipalities now contain such a small share of major metropolitan area population that the suburbs have continued to add population at about three times the numbers of the core municipalities (Figure 2). Indeed, if the respective 2010-2013 annual growth rates were to prevail for the next century,  the core municipalities would house only 28.0 percent of the major metropolitan area population in 2113 (up from 26.4 percent in 2013).

    Despite the publicity to the contrary, only six core municipalities added more population than suburbs in the same metropolitan areas between 2010 and 2013. These were New York, San Antonio, Columbus, San Jose, Austin, and New Orleans, all except New York with substantial suburbanization within their city limits. The core municipalities did better in percentage gains, with 19 gaining faster than the suburbs, compared to 33 suburban areas growing faster than the core municipalities.

    Core Municipality Growth

    Most of the 2010 to 2013 core growth occurred in municipalities with a larger suburban component. The core municipalities that have little suburban development ("Pre-War & Non-Suburban") had 43 percent of the core population in 2010. Yet they attracted only 27 percent of the growth (Figure 3). The two other categories, which include large areas of functional suburbanization (low density and strong automobile orientation) attracted 73 percent of the core population (Figure 3). These include suburbanized pre-War core municipalities, such as Los Angeles, Seattle, and Atlanta. They also include cores that are nearly all suburban, with nearly all of their population growth having occurred during the great automobile suburbanization (such as Austin, Sacramento, Phoenix, and San Jose).

    Core Municipalities: Top Gainers

    New York led the core municipalities by adding 230,000 new residents between 2010 and 2013. This was 56 percent of the population growth among the "Pre-War & Non-Suburban” core municipalities. The core municipality accounted for 60 percent of the population growth in the metropolitan area. However, domestic migrants continued to move away from New York City. Core municipality losses were 215,000 from 2010 to 2013, while the suburbs, with more than 55 percent of the population, lost less than a third as many (70,000).

    Houston gained 96,000 new residents between 2010 and 2013, followed by Austin (95,000), Los Angeles (92,000), and San Antonio (82,000).  Houston, Los Angeles, and San Antonio each have large suburban areas within their city limits, while the core municipality of Austin is virtually all automobile-oriented. The sixth through 10th positions were taken by Phoenix, Dallas, San Jose, Denver, and San Diego, all with substantial suburbanization.

    The largest core municipality population gains were in Austin (12.0 percent), still recovering New Orleans (10.1 percent), Denver (8.3 percent), Washington (7.4 percent), and Orlando (6.1 percent). Seattle, Raleigh, Atlanta, San Antonio and San Jose rounded out the top ten. Among the 10 fastest growing core municipalities, all but Washington have large automobile-oriented suburban components.

    There was also bad news. Detroit continued its population slide, now down to 689,000 from its 1950 peak of 1,850,000. This 62.76 percent loss, however, is not the worst among major US core municipalities. St. Louis still holds that title, having fallen from 857,000 in 1950 to 318,000 in 2013, a loss of 62.84 percent. However, one more year of losses at the 2010-2013 rates will transfer this dubious title to Detroit.

    Suburban Areas: Top Gainers

    The largest suburban gains were in Dallas-Fort Worth (325,000), Houston (296,000), Washington (269,000), Miami (245,000) and Los Angeles (211,000). Atlanta, which had virtually set the world standard for suburbanization before the Great Financial Crisis, managed to re-emerge with the sixth fastest largest suburban increase (208,000).

    Measured on a percentage basis, Texas dominated the suburban gains. The suburbs of Houston added 7.8 percent to their population between 2010 and 2013. Austin added 7.7 percent, San Antonio added 6.6 percent, and Dallas-Fort Worth 6.2 percent. The only non-Texas entry in the top five was Raleigh, which, like Austin, posted a 7.7 percent increase.

    The metropolitan area and historical core municipality data is summarized in the Table.

    Table: Metropolitan Area & Historical Core Municipality Population: 2010-2013
    Metropolitan Area Historical Core Municipality
    Rank Metropolitan Area 2010 2013 % Change 2010 2013 % Change
    1 New York, NY-NJ-PA 19.566 19.950 2.0% 8.175 8.406 2.8%
    2 Los Angeles, CA 12.829 13.131 2.4% 3.793 3.884 2.4%
    3 Chicago, IL-IN-WI 9.461 9.537 0.8% 2.696 2.719 0.9%
    4 Dallas-Fort Worth, TX 6.426 6.811 6.0% 1.198 1.258 5.0%
    5 Houston, TX 5.920 6.313 6.6% 2.099 2.196 4.6%
    6 Philadelphia, PA-NJ-DE-MD 5.965 6.035 1.2% 1.526 1.553 1.8%
    7 Washington, DC-VA-MD-WV 5.636 5.950 5.6% 0.602 0.646 7.4%
    8 Miami, FL 5.565 5.828 4.7% 0.399 0.418 4.6%
    9 Atlanta, GA 5.287 5.523 4.5% 0.420 0.448 6.6%
    10 Boston, MA-NH 4.552 4.684 2.9% 0.618 0.646 4.6%
    11 San Francisco-Oakland, CA 4.335 4.516 4.2% 1.196 1.244 4.0%
    12 Phoenix, AZ 4.193 4.399 4.9% 1.446 1.513 4.7%
    13 Riverside-San Bernardino, CA 4.225 4.381 3.7% 0.210 0.214 1.8%
    14 Detroit,  MI 4.296 4.295 0.0% 0.714 0.689 -3.5%
    15 Seattle, WA 3.440 3.610 5.0% 0.609 0.652 7.2%
    16 Minneapolis-St. Paul, MN-WI 3.349 3.459 3.3% 0.668 0.695 4.1%
    17 San Diego, CA 3.095 3.211 3.7% 1.307 1.356 3.7%
    18 Tampa-St. Petersburg, FL 2.783 2.871 3.1% 0.336 0.353 5.1%
    19 St. Louis,, MO-IL 2.788 2.801 0.5% 0.319 0.318 -0.3%
    20 Baltimore, MD 2.711 2.771 2.2% 0.621 0.622 0.2%
    21 Denver, CO 2.543 2.697 6.1% 0.600 0.649 8.2%
    22 Pittsburgh, PA 2.356 2.361 0.2% 0.306 0.306 0.0%
    23 Charlotte, NC-SC 2.217 2.335 5.3% 0.787 0.823 4.5%
    24 Portland, OR-WA 2.226 2.315 4.0% 0.584 0.609 4.4%
    25 San Antonio, TX 2.143 2.278 6.3% 1.327 1.409 6.1%
    26 Orlando, FL 2.134 2.268 6.3% 0.238 0.255 7.2%
    27 Sacramento, CA 2.149 2.216 3.1% 0.466 0.480 2.8%
    28 Cincinnati, OH-KY-IN 2.115 2.137 1.1% 0.297 0.298 0.2%
    29 Cleveland, OH 2.077 2.065 -0.6% 0.397 0.390 -1.7%
    30 Kansas City, MO-KS 2.009 2.054 2.2% 0.460 0.467 1.6%
    31 Las Vegas, NV 1.951 2.028 3.9% 0.584 0.603 3.4%
    32 Columbus, OH 1.902 1.967 3.4% 0.787 0.823 4.5%
    33 Indianapolis. IN 1.888 1.954 3.5% 0.820 0.843 2.8%
    34 San Jose, CA 1.837 1.920 4.5% 0.946 0.999 5.6%
    35 Austin, TX 1.716 1.883 9.7% 0.790 0.885 12.0%
    36 Nashville, TN 1.671 1.758 5.2% 0.601 0.634 5.5%
    37 Virginia Beach-Norfolk, VA-NC 1.677 1.707 1.8% 0.243 0.246 1.4%
    38 Providence, RI-MA 1.601 1.604 0.2% 0.178 0.178 0.0%
    39 Milwaukee,WI 1.556 1.570 0.9% 0.595 0.599 0.7%
    40 Jacksonville, FL 1.346 1.395 3.6% 0.822 0.843 2.5%
    41 Memphis, TN-MS-AR 1.325 1.342 1.3% 0.647 0.653 1.0%
    42 Oklahoma City, OK 1.253 1.320 5.3% 0.580 0.611 5.3%
    43 Louisville, KY-IN 1.236 1.262 2.1% 0.597 0.610 2.1%
    44 Richmond, VA 1.208 1.246 3.1% 0.204 0.214 4.8%
    45 New Orleans. LA 1.190 1.241 4.3% 0.344 0.379 10.1%
    46 Hartford, CT 1.212 1.215 0.2% 0.125 0.125 0.2%
    47 Raleigh, NC 1.130 1.215 7.4% 0.404 0.432 6.9%
    48 Salt Lake City, UT 1.088 1.140 4.8% 0.186 0.191 2.5%
    49 Birmingham, AL 1.128 1.140 1.1% 0.212 0.212 -0.1%
    50 Buffalo, NY 1.136 1.134 -0.1% 0.261 0.259 -0.9%
    51 Rochester, NY 1.080 1.083 0.3% 0.211 0.210 -0.1%
    52 Grand Rapids, MI 0.989 1.017 2.8% 0.188 0.192 2.3%
    Total 169.512 174.942 3.2% 44.739 46.258 3.4%
    In Millions: Data from US Census Bureau

     

    Normalcy Knocks?

    Ken Johnson, the frequently quoted University of New Hampshire demographer told the Wall Street Journal, "The slowing growth in these urban cores and the increasing gains in the suburbs may be the first indication of a return to more traditional patterns of city-suburban growth." These patterns are of long standing. Nearly all urban population growth since World War II has been suburban, whether within or outside the core municipalities. It should not be surprising that suburban growth dropped during the second greatest economic decline in a century and has been slow to recover during the Great Recession and the Great Malaise that has followed. The one-quarter suburban growth rate drop was more modest than during the Great Depression, but still substantial. Should genuine prosperity return, it will likely be accompanied by a renewal of more robust suburban growth.

    Note: Core municipality growth also dropped in the 1930s, as the high rate of migration from rural to urban areas in the 1920s was interrupted due to the economic reversal.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

  • Is Something Wrong With Chicago’s Suburbs?

    I previously talked about Connecticut becoming a suburban corporate wasteland as well as the rise of the executive headquarters in major global city downtowns. What we see is that high end functions have shown anecdotal signs of re-centralizing, while the more bread and butter – though still often well-paying – jobs are heading to less expensive suburban locales in places like Austin, Charlotte, and Salt Lake City. These leaves expensive and business hostile suburbs around global cities, like most of those in Connecticut, in a tough spot.

    Suburban Chicago isn’t as expensive or business hostile as say Connecticut or New Jersey, but there are so many stories about businesses leaving it that I can’t help but wonder if something is seriously wrong there.

    First, downtown Chicago has attracted a number of marquee executive headquarters locations like Boeing, MillerCoors, and now ADM. The suburbs have only picked up a handful of smaller operations, like Mead Johnson Nutritionals.

    Second, a number of suburban companies have relocated (or announced relocations of) headquarters to downtown. This includes a Sara Lee spinoff, the old Motorola cell phone division, United Airlines, and Gogo Internet. What distinguishes this from the executive headquarters relocations is that some of these involved big numbers of jobs. I believe there were about 3,000 United Airlines employees and about 2,500 Motorola ones.

    Third, even companies that haven’t moved their headquarters have opened downtown offices or relocated operations there. Walgreens moved its e-Commerce operations to the Loop and BP relocated some employees, for example.

    Fourth, some suburban based companies have simply abandoned the Chicagoland area outright. Office Max comes to mind, which is moving 1,600 jobs to Boca Raton. Sears is having a slow-motion going out of business sale.

    Two recent news articles this week reinforce to me the lack of competitiveness of Chicago’s suburbs. First, when Toyota announced it was relocating its headquarters from Los Angeles and Cincinnati to suburban Dallas, Greg Hinz at Crain’s Chicago Business asked why Chicago wasn’t even on the list of candidate cities for this operation.

    I believe Toyota wanted to be in the South. But if you look at where they located, namely the suburb of Plano, you’ll see that this is why Chicago is off the list. Chicago’s suburbs have been losing these types of corporations, not gaining them. If you’re going to choose a suburban location, why would you pick Schaumburg over Plano? You probably wouldn’t unless you had a major reason to be in Chicagoland, such as having a primarily Midwest presence or if your company was founded in the area.

    What this shows is that while Chicago’s stellar Loop environment is great for executive headquarters type operations, the suburbs lack appeal to people looking to build a greenfield operation from out of town. This hurts the region’s ability to attract large scale employers like Toyota.

    Then yesterday Crain’s reported that Walgreens is looking at relocating its entire headquarters downtown in the old Main Post Office building. This isn’t a done deal by any means, but the fact that a company I’d always considered dyed-in-the-wool suburban would consider this is incredible. (Investors have been pressuring Walgreens to move its HQ overseas, but like Aon’s re-domicle to London, even if it happened it might not involve many jobs, especially since the pharmacy business in the United States is so radically different from that in the rest of the world).

    So unlike in even other global cities, Chicago’s suburbs can’t even seem to hang on to large scale employers within the region. I don’t want to overstate a trend here, but this would be at least the third company moving thousands of jobs downtown. That’s huge and I don’t see it happening anywhere else at this scale.

    Which raises the question of what might be wrong with Chicago’s suburbs. They can’t seem to be competitive for greenfield operations like Toyota, and they are losing some marquee established employers. I took a quick peek at suburban vacancy rates, and it looks like at first glance every major sub-market is over 20% and there was net negative absorption last year (do some further research before quoting me on that). Is there a big problem going on out there?

    I’ve long observed that while Chicago has some great residential suburbs, its business suburbs are weak. Places like Schaumburg and Oak Brook are just generic, unattractive edge cities of a typology that, like the enclosed mall, appears falling out of favor. Chicago seems to lack the kind of suburb that combines residential appeal with a strong business presence and a significant regional amenity draw. Only Naperville would seem to fit the bill here.

    So while Chicago’s suburbs are not super-high cost by global city standards, and Illinois isn’t the worst when it comes to taxes and a poor business climate by any means, those suburbs appear to have a serious competitiveness issue. It’s a major concern that regional suburban business centers should look to address. As other edge city environments around the country like Stamford (one part of Connecticut I would say has significant strengths) and Tyson’s Corner upgrade themselves, Chicago’s suburbs are only going to fall further behind.

    Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

    Photograph: Outer suburbs of Chicago (by Wendell Cox)

  • Reversing American Decline

    Across broad ideological lines, Americans now foresee a dismal, downwardly mobile future for the country’s middle and working classes. While previous generations generally did far better than their predecessors, those in the current one, outside the very rich, are locked in a struggle to carve out the economic opportunities and access to property that had become accepted norms here over the past century.

    This deep-seated social change raises a profound dilemma for business: Either the private sector must find a way to boost economic opportunity, or political pressure seems likely to impose policies that will order redistribution from above. It is doubtful the majority of Americans will continue to support an economic system that seems to benefit only a relative few. Looking at our unequal landscape, one journalist recently asked: “Are the bread riots finally coming?”

    By 2020, according to the Economic Policy Institute, almost 30% of American workers are expected to hold low-wage jobs, with earnings that would put them below the poverty line to support a family of four. The combination of high debt and low wages has some projections suggesting millennials may have to work until their early 70s.

    But our new pessimism and widening class divide stems not only from the concentration of wealth and power, but from the persistence of weak economic growth.

    Neo-populist groups on the left and the right have risen to employ political pressure to try and assure a decent quality of life. Ideologically robust liberals, like New York Mayor Bill de Blasio, have emerged as national symbols of a movement in which cities have pushed strong moves like a $15 minimum wage (Seattle) and benefits for workers. Ironically, these are often the same places where wealth is most intensely concentrated and where the middle class has shrunk as a newly dominant, Obama-aligned Clerisy of public employee unions, government officials, academics and artists has gained the preponderance of political power.

    The same sense of limited opportunity that drives the new progressives also motivates the popularity of libertarian and Tea Party activism on the right. Instead of state intervention, these groups have been attracted to the notion that removing barriers to economic growth will increase social mobility more effectively than redistribution by political fiat.

    But these economic arguments that could generate more widespread support have been married with increasingly unpopular, often backward-looking social agendas that have allowed the Clerisy to portray them as fringe movements.

    This has allowed Obama, de Blasio and others shape a new conversation centered on inequality, rather than growth. Oddly enough, it’s a model that relies on Europe’s example even as the continent’s own economic prospects appear dismal, and mainstream political parties there are registering their lowest levels of popular support in decades.

    Though it can help some in the short run, there is little reason to think that more redistribution by the state would improve material conditions over the long term for our working and middle classes, let alone expand them. Rather, it might end up expanding our underclass of technological obsolete and economically superfluous dependents. The 50-year War on Poverty, for example, has achieved few gains since the 1960s despite fortunes spent. Instead, the only significant gains in poverty reduction, at least among those working, have come when both the economy and the job market expand, as they did during the Reagan and Clinton eras.

    Clearly, as both those Presidents recognized, the best antidote to poverty remains a robust job market.

    Yet even this progress has not helped the poorest of the poor, many of whom are marginally, if at all, connected to the workplace. Since 1980, the percentage of people living in “deep poverty”-with an income 50% below the official poverty line — has expanded dramatically. Despite now spending $750 billion annually on welfare programs, up 30% since 2008, a record 46 million Americans were in poverty in 2012.

    It is possible that, as Franklin Roosevelt warned, a system of unearned payments, no matter how well intended, can serve as “a narcotic, a subtle destroyer of the human spirit” and reduce incentives for recipients to better their own lives.

    The activist welfare-based philosophy, following the European model, would likely include not only historically poor populations, but part-time workers, perpetual students, and service employees living hand to mouth, who can make ends meet largely only if taxpayers underwrite their housing, transportation and other necessities. This trend towards an expansive welfare regime could be bolstered by our falling rates of labor participation — now at its lowest level in at least 25 years, and showing no signs of an immediate turnaround.

    And the European model shows little evidence of the benefits of redistribution given the persistently high rates of unemployment, particularly among the young, across most of the EU; indeed much of the continent’s youth are widely described as a “lost generation.” Pervasive inequality and limited social mobility have been well-documented in larger European countries, including France, which has one of the world’s most evolved welfare states. It is even true in Scandinavia, often held up as the ultimate exemplar of egalitarianism, but where the gap between the wealthy and other classes have increased in Sweden four times more rapidly than in the United States over the past 15 years.

    To be sure, progressive, or even ostensibly socialist approaches can ameliorate the worst impact of economic decline on lower-income people. But under left-wing governments — Socialists in France, New Labour in Britain and the Obama Administration in the U.S. — class chasms have increased markedly under leaders who insist their policies will reduce inequality. Much the same has occurred in countries with more conservative approaches.

    In the absence of a focus on growing economies more rapidly and broadly, both political philosophies fall short.

    But maintaining the prospect of upward mobility is central to the very idea of America. For generations, the surplus working class populations of the world have flocked here in search of opportunities unavailable in their home countries. In contrast, there remain few places for America’s aspirational classes to go.

    Fortunately, the capitalist system, particularly under democratic control, allows for the possibility of reform. Take Great Britain, the homeland of the industrial revolution. In response to mass poverty and serious public health challenges during the 19th century, social reform movements led by the clergy and a rising professional class organized to address the most obvious defects caused by economic change. It is one of history’s great ironies that at the very time that Karl Marx was composing Das Kapital in the library at the British museum, life was rapidly improving for the British working class. Far from having “exhausted its resources” and precipitating all-out class war, the inequality so evident in mid-19th Century Britain began to narrow through natural economic forces and the growing power of working-class organizations. The working-class revolution in Britain, which Friedrich Engels insisted “must come,” never did.

    Similarly, the Depression, brought on by what Keynes called “a crisis of abundance,” was addressed more by measures to spur mass demand than relying on redistribution. The New Deal, and then the Second World War, expanded government support for public works, education and housing, as well as infrastructure and research and development. Programs enacted then and after the war also encouraged widespread property ownership.

    This state expansion was generally aimed at increasing economic opportunity-for example, by developing technologies that could stimulate new industrial sectors, new firms, and create new wealth. Today’s, on the other hand, is simply transferring income from one group to another.

    Whatever criticisms can be made of mid-century America, during this period the nation transformed what had been a strongly unequal country into one where the blessings of prosperity were more broadly shared. In the 1950s, the bottom 90% held two-thirds of the wealth here. Today they barely claim half.

    Sparking beneficial economic growth requires a shift in priorities, and thus presents a challenge to the new class order dominated by Wall Street, the tech oligarchy and their partners in the Clerisy. It is not enough merely to blame the so-called 1%, but to shift the benefits of growth away from the current hegemons, notably in the very narrow finance and high-tech sectors, and towards those involved in a broad array of productive enterprise.

    The American economy’s capacity for renewal remains much greater than widely believed. Rather than a permanent condition of slow growth, the United States could be on the cusp of another period of broad-based expansion, spurred in part by its rapidly growing natural gas and oil production — a once-in-a-lifetime opportunity as cheap and abundant natural gas is luring investment from manufacturers from Europe and Asia, and providing good-paying American jobs.

    This, along with growth in manufacturing, could spark better times for the middle class, as would the re-igniting of single-family home construction.

    If America really wants to confront its growing class divide, it needs to spark such broad-based economic growth, rather than simply feathering the nests of the already rich, privileged and well-connected.

    This story originally appeared at New York Daily News..

    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 photo by BigStockPhoto.com.

  • Population Growth as the Cure for the Incredible Shrinking City?

    The 1957 sci-fi classic The Incredible Shrinking Man reads like a Rust Belt city script. In it, the lead actor is afflicted with the anti-natural: shrinkage in a world of growth. The rest becomes existential. From the movie review blog “Twenty Four Frames”:

    He hates being a scientific experiment and a spectacle for the media. He is no longer the everyday 1950′s image of the middle class, white picket fenced American man. Instead, he now fights for survival in his own house where everyday objects are now the enemy to his existence. Finally, he must face the biggest question of all. If he continues to shrink, will he eventually even exist?

    Such is the mood behind revitalization efforts in shrinking city America, particularly the Rust Belt. There, population decline has been occurring for decades. It still occurs. The Cleveland metro lost nearly 83,000 people from 2000 to 2012. The Pittsburgh metro lost over 67,000. This is in contrast to the region’s “greenfield economies”—defined as “the set of conditions that flow from building on new territory or exploiting new markets vs. the redevelopment of old places”. For example, the geographically-expanding Columbus metro added 260,000 people from 2000 to 2012. The top feeder region into Columbus was Greater Cleveland.

    The dynamics behind these demographic patterns are fairly intuitive. Population gains and losses are a factor of a region’s employment picture. Cleveland Fed economist Joel Elvery explains:

    Urban economists like to divide a regional economy into two sectors: tradable and nontradable. The tradable sector produces goods and services that are sold outside of the region; the nontradable sector produces goods and services for use in the region…If the industries that make up the tradable sector are growing nationally, then the region will most likely grow. If the tradable sector is struggling, eventually the region will also struggle.

    In the case of Cleveland, one of the region’s main tradable sectors is manufacturing. That said, technological advances in manufacturing means it takes less people to make a product. In the 1950s an auto worker made on average seven cars per year. A worker can make 28 today. The effect of the increased productivity is a loss of jobs. The effect of job loss is a declining population.

    Put a fork in the Rust Belt, right?

    Not exactly. Figure 1 shows the metro per capita income for Cleveland, Pittsburgh, and Columbus. The metros’ incomes were even around 2003, but then Pittsburgh and Cleveland began diverging from Columbus around 2005. Of importance here is that Pittsburgh and Cleveland have had higher per capita income growth than Columbus despite their declining population. This goes against the grain of traditional urban development thinking in which growth is god.

    Figure 1: Source, US Bureau of Economic Analysis via Telestrian

    Looking at real per capita income at purchasing power parity (PPP), or income adjusted for inflation and how far a dollar goes in a given metro, the trends hold. The map below shows the real per capita income (PPP) for all metros for the United States. Notice Greater Cleveland and Greater Pittsburgh stand out, with values at or above $42,000 a year. In fact, in ranking the nation’s largest metros (over 1 million people), the highest real per capita metros were Hartford, Boston, and San Francisco, followed by Pittsburgh 6th and Cleveland 11th. Not bad for “dying” metros. Columbus clocked in at 28th, while peer Rust Belt metro Detroit was 44th out of 51.

    Map: Map of real per capita personal income adjusted for inflation (in 2005 chained dollars) and regional purchasing power. In thousands of dollars (2011). Source, U.S. Bureau of Economic Analysis via Telestrian.

    Why is greater per capita income growth happening in the Rust Belt compared to Columbus? We have to keep in mind that a rising per capita income is not necessarily associated with a robust economy, particularly for regions that have flat or declining populations. Specifically, a metro, such as Cleveland, can gain in per capita income simply due to a significant out-migration of low- and middle-income workers. Such a scenario could prove problematic if the area’s total personal income is decreasing across time, because then the overall economy is contracting.

    But this is not the case. Figure 2 shows the total personal income for the three metros from 2000 to 2012. Both Cleveland’s and Pittsburgh’s total personal income levels increase despite declining populations. This effect has been called “growth without growth” by the Brookings Institution, and it occurs when a workforce is becoming more educated and productive at the same time overall population declines.

    Figure 2: Source, US Bureau of Economic Analysis

    This is what is happening in the Cleveland metro. Data from a new study I co-authored with Jim Russell out of the Center for Population Dynamics at Cleveland State University showed that from 2000 to 2012, Greater Cleveland gained over 63,000 educated residents, while simultaneously losing nearly 74,000 residents without a college degree. Over two-thirds of this brain gain occurred between 2006 and 2012. The fastest growing cohort was for college-educated Greater Clevelanders 65 and plus—a 30% increase. The number of Greater Clevelanders with a college degree aged 25 to 34 increased by 23%. Conversely, the vast majority of the out-migration was made by people aged 35 to 44 without a 4-year degree.

    This population dynamic is partly the result of Cleveland’s restructuring from a labor- into a knowledge-based economy. Specifically, growing tradable industries, like STEM and health care employment—which have driven job growth in Cleveland—are able to attract and retain skilled residents, whereas slower-growth industries are “pushing” less skilled workers elsewhere. Many of these non-degreed workers find a better return on investment in areas that are gaining in population, particularly if they are employed in the local consumer economy. Think laborers and much of the service class. This notion is supported by the fact that from 2000 to 2011, the average income of a person that moved from Greater Cleveland to Greater Columbus was $38,000 a year. Such a re-positioning of less-educated workers partly explains that while the Columbus metro is gaining on Greater Cleveland in total income, it is not the case with per capita income. Notes the Cleveland Fed: “Per capita income growth [in Columbus] is under increasing pressure to continue rising as population growth exceeds income growth”.

    So yes, Cleveland shrinks. But it is not about brain drain, but about rational choice theory. And while population loss is troubling for any city, it is in many respects a necessary demographic result as a region like Greater Cleveland transitions from brawn- to brain-intensive work.

    Think of this as a “one step at a time” approach to the existential plight that is the incredible shrinking city—meaning Cleveland’s migration needs are currently about quality, not quantity. This is because economic growth is not likely to be achieved through an increase in local consumption. Local jobs are created from emerging tradable industries, not vice versa—five service jobs are made for every new high-skill job in fact. And emerging industries are created via human capital, not consumer demand.

    “Consumer demand does not necessarily translate into increased employment,” writes John Papola in Forbes. “That’s because ‘consumers’ don’t employ people. Businesses do.”

    So where does Cleveland go from here?

    It needs to look to Pittsburgh. The sister Rust Belt city has had a human capital formation that has been nothing short of astonishing. University of Pittsburgh economist Chris Briem calculated that the metro ranked fifth in the nation when it came to the percentage of young adult workers with a bachelor’s degree, behind only Boston, San Francisco, D.C., and Austin. What’s more, Greater Pittsburgh ranked first for the highest concentration of young adult workers with a graduate or professional degree.

    “Change in the Pittsburgh economy is reflected in many ways,” writes Briem, “but probably no more profoundly than in the educational attainment of its workforce”.

    Greater Cleveland doesn’t perform too shabbily either, ranking 17th in the nation in the number of young adult workers with a bachelor’s degree, and 7th in the nation for young workers with a graduate or professional degree, ahead of knowledge hub darlings Seattle and Austin.

    In other words, Cleveland’s got something to build on: the quality of its young adult workforce. So instead of dumping money on brain drain boondoggles, or expending significant public expenditure on things like hotels and casinos that intend to drive economic growth from consumption on up, the region needs to pull out all the stops on growing a critical mass of talent. Because, as my colleague Jim Russell puts it, “talent is the new oil”.

    Eventually, once the region’s new economy sectors are revved up, then job growth for both skilled and less skilled work will increase, making the region amenable to population gain. This is the case in Pittsburgh, where population loss has recently turned into a slight gain after decades of decline (See Figure 3).

    Figure 3: Source, American Community Survey, Bureau of Economic Analysis

    But until that growth happens the Rust Belt will be stubbornly mired in its existential crisis. Shrinking, struggling, and wishing on silver bullets and outdoor chandeliers. But maybe there is room for measured hope. More exactly, we shrink therefore we are?

    "I was continuing to shrink, to become… what? The infinitesimal? What was I? Still a human being?,” wonders the incredible shrinking man in the film’s closing monologue. “Or was I the man of the future?”

    Well, considering what the cost of living is doing to the coasts, maybe the notion of Pittsburgh as the city of the future isn’t so farfetched. The Clevelands of the world would be wise to wager so, and then model accordingly.

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

    Top image: Courtesy of Universal Pictures

  • Thinking About Housing in the Northwest

    With one of the most successful economies in the nation, the real estate news in the Pacific Northwest is positive and gives hope for a housing sector recovery, albeit at different rates in different markets. CNNMoney reports that from the third quarter in 2012 to the third quarter in 2013, the median home price in the Seattle-Bellevue and Everett area increased by 13.7%. The forecast for changes from the third quarter in 2013 to the third quarter in 2014 is another 5.2%. Tacoma’s (Pierce County) housing prices did not grow as quickly, with an increase of 9.3% from 2012 to 2013, but it is expected to witness a sharper increase in 2014, with a healthy 8.6% change from the third quarter of 2013 to 2014. 

    As rosy as the real estate picture is, we should also remember that in the second quarter of 2013, as housing values began to climb in both markets, median family incomes were already too low compared to median home prices. In Seattle, the ratio of median home prices to median family income was 4.7, and in Tacoma it was 3.6. That made Tacoma a relatively affordable city. However, an expected increase of 8.6% in home values, without a corresponding increase in median family incomes will not do much for its affordability.

    Without a major change in its employment structure that might lead to higher incomes for current and future residents of Tacoma, the differential in home prices could make Tacoma a residential destination for Seattle employees finding this city comparatively more affordable. Living half an hour from work, but paying significantly less for housing, is a great incentive, especially for young, single or double income, and childless families. For them, a two-bedroom condo with a view of Commencement Bay may do the job. For Tacoma residents whose median family income is about $20,000 less than their Seattle counterparts, rising home values may prove to be a challenge that cannot be easily overcome without a higher number of well-paying jobs that keep pace with rising home values.

    Regional patterns of housing affordability

    It is no longer news to anyone that most unaffordable cities rely on their less costly neighbors to house their working populations. The city of Los Angeles relies on the vast sprawl of its own suburbs and the Inland Empire. San Francisco does the same by having people commute from the larger urban region, all the way from the San Joaquin Valley.

    The relationship between Seattle and other cities in King and Pierce Counties already follows the same script. Morning commutes into Seattle and afternoon rush hour traffic heading out of Seattle do not require statistics. The numbers are felt by anyone driving during those hours. However, two maps will help paint a vivid picture of the regional urban dynamics created by the unholy triangle of housing market price differentials, economic development patterns, and the resulting spatial mismatch between home and work places. 

    Maps for median housing values and commuting patterns in King and Pierce Counties clearly show that a good number of people who work in unaffordable regions of King County (including Seattle) rely on more affordable housing elsewhere. As the map of commuting patterns illustrates, for Pierce County, this starts right at the county border, where housing prices are lower (compared to median household incomes). This has already turned certain portions of Pierce County into bedroom communities, feeding economic growth elsewhere. In other words, job-rich areas are resolving their housing problems by pushing their employed populations to other areas, where home prices are more affordable. However, will the growth of housing demand in areas outside employment centers translate to increased housing values in previously affordable regions and push long-time residents out of the housing market?

    To answer this question, we need to engage in a more detailed level of analysis.


    Micro-geographies of affordability

    In order to get a better sense of housing affordability patterns, we can rely on a simple indicator called median multiples (the ratio of median housing value to median household income). While this measure has its critics, it is easily understandable. The basic premise is that when median housing value exceeds median household income more than three fold, an area becomes unaffordable.

    A few years ago, Wendell Cox used this method to identify the least affordable cities in the nation. He used the following table to classify various cities in the U.S.:

    Demographia
    Housing Affordability Ratings

    Rating

    Median Multiple

    Severely Unaffordable

    5.1 & Over

    Seriously Unaffordable

    4.1 to 5.0

    Moderately Unaffordable

    3.1 to 4.0

    Affordable

    3.0 or Less

    Median Multiple: Median House Price divided by Median Household Income

     

    The map of median multiples for King and Pierce Counties reveals a pattern of housing affordability that indicates a looming problem as the housing market recovers. As of Census 2012, almost all Seattle and Bellevue areas were unaffordable, with median multiples exceeding 5. Comparatively speaking, Tacoma has had more affordable housing areas (with more census tracts with median multiples ranging from 3 to 4).  Between Tacoma and Seattle, areas such as Federal Way have more affordable housing for the income levels found there. Tacoma’s North East community, adjacent to Federal Way, has higher housing values matching residents’ income levels. Given the commuting patterns, this region is clearly home to many who work elsewhere, earn better incomes, and spend a smaller portion of it on their homes.


    In some areas, where median multiples exceed 5, current residents may have purchased their houses when prices were lower. In other words, at one point in time, the median multiple had a lower value. Under such conditions, residents have accumulated substantial equities, allowing them to sell in a more expensive market. However, the next group of occupants will need substantially higher incomes to afford these houses. With the potential arrival of a sellers’ market, any transition in the composition of homeowners will also coincide with a shift to higher socioeconomic status.  

    Given the overall housing affordability patterns, it is clear that with the looming hike in home prices, the last of the semi-affordable housing pockets in the region extending from Seattle to Tacoma could vanish quickly. Clearly, the well-paid employees in King County could choose to live in Pierce County, enjoy the views, but struggle with traffic up and down I-5. They could even benefit from a publicly funded transportation system. But this won’t resolve the growing traffic and the emerging spatial mismatch between housing and employment. At this point the entire urban region from Seattle to Tacoma should focus on job-housing balance, where the quantity and cost of housing are comparable to employment volume and average salaries paid. To be truly ‘green,’ decision makers need to think regionally. Passing housing or employment problems to neighboring cities is not the best approach to sustainability.

    As for Tacoma, like any other urban region on the fringes of a major metropolitan area, the city has a few options moving forward. First, it could act as a satellite city and build more houses for people who work in the larger urban region. Second, it could imagine itself as a major urban center with little interest in being a “second city.” In that case, it needs to focus on economic development, bringing more well-paying jobs that are suitable for its current and future residents, and build houses that are affordable for the types of incomes generated in the area. This strategy requires coordination between housing and economic development that reduces the spatial mismatch between housing and employment and improves the job-housing balance. This will help both housing and transportation conditions. That will also keep Tacoma affordable and make it unpretentiously ‘green.’

    The National Association of Home Builders ranks Tacoma 103rd for housing affordability on a list of 224 cities. Spokane ranks 62 and Seattle 202 on the same list. Tacoma should aspire to appear on the list of the top 50 most affordable cities by 2020, and be recognized for the quality of life and employment opportunities it offers to current and future residents.

    Ali Modarres is the Director of Urban Studies at University of Washington Tacoma.  He is a geographer and landscape architect, specializing in urban planning and policy. He has written extensively about social geography, transportation planning, and urban development issues in American cities.

  • Urban Core Jurisdictions: Similar in Label Only

    The fortunes of U.S. core cities (municipalities) have varied greatly in the period of automobile domination that accelerated strongly at the end of World War II. This is illustrated by examining trends between the three categories of "historical core municipalities" (Figure 1). Since that time, nearly all metropolitan area (the functional or economic definition of the city) growth has been suburban, outside core municipality limits, or in the outer rings of existing, core municipalities.   

    Approximately 26 percent of major metropolitan area population is located in the core municipalities. Yet, many of these municipalities include large areas of automobile orientation that are anything but urban core in their urban form. Most housing is single-detached, as opposed to the much higher share of multi-family in the urban cores, and transit use is just a fraction of in the urban cores.

    Even counting their essentially suburban populations, today’s core municipalities represent, with a few exceptions, a minority of their metropolitan area population. The exceptions (San Antonio, Jacksonville, Louisville, and San Jose) are all highly suburbanized and have annexed land area at a substantially greater rate than they have increased their population.

    According to the 2010 census, using the 2013 geographic definitions, core cities accounted for from five percent of the metropolitan area population in Riverside-San Bernardino to 62 percent in San Antonio (Figure 2).

    International Parallels

    These kinds of differences are not limited to the United States. For example, the city (municipality) of Melbourne, Australia has little more than two percent of the Melbourne metropolitan area population. Indeed, the city of Melbourne is only the 23rd largest municipality in the Melbourne metropolitan area and has a population smaller than a single city council district in Columbus, Ohio.

    These virtually random variations in core city sizes lead to misleading characterizations. For example, locals sometimes point out that San Antonio is the 6th largest city in the United States. True, San Antonio is the 6th largest municipality in the United States, but the genuine, classically defined city – the broader metropolitan area that is the urban organism – ranked only 26th in size in 2010. The suburbs and exurbs, as defined by municipal jurisdictions, are smaller than average in San Antonio, but the city itself stretches in a suburban landscape up to more than 15 miles (24 kilometers) beyond its 1950 borders.

    Core municipality mayors have been known to travel around the as representatives of their metropolitan areas. In some cases core municipality mayors represent constituencies encompassing the entire metropolitan area (such as Auckland or soon to be major metropolitan Honolulu). Others have comparatively small constituencies. For example, the mayor of Paris presides over only 18 percent of the metropolitan area population, the mayor of Atlanta 8 percent, the mayor of Manila 6 percent, Melbourne 2 percent and Perth, Australia just 0.5 percent (Figure 3).

    Core Municipalities in the United States

    A remnant of U.S. core urbanization is evident within the city limits of municipalities that were already largely developed in 1940 and have not materially expanded their boundaries. These are the Pre-World War II Core & Non Suburban category of core municipalities. Between 1950 and 2010 these core municipalities lost a quarter of their population, dropping from 24.5 million residents to 19.3 million (Figure 4). All but Miami lost population. Despite improved downtown population fortunes, the last decade saw a small further decline of 0.2 percent overall. Only two legacy cities, New York and San Francisco, now exceed their peak populations of the mid-20th Century.

    Again, this is the typical pattern internationally. Throughout the high-income world, the urban cores that have not expanded their boundaries and had little greenfield space for suburban development have had declining in population for years. My review of 74 high income world core municipalities that were fully developed in the 1950s and have not annexed materially showed that only one had increased in population by 2000 (Vancouver). Since that time, a few that had experienced more modest declines have recovered to record levels, such as Munich and Stockholm. Most others, such as London, Paris, Milan, Copenhagen and Zurich remain below their peak populations.

    In the United States, most of the strong growth has taken place in the "Pre-World War II & Suburban" classification, doubling from 10.1 million residents to 20.4 million since 1950. These include core cities with strong pre-war cores, but which have either annexed large areas or already contained large swaths of rural territory at that time (like Los Angeles, with its San Fernando Valley, which was largely agricultural) that later became heavily populated.

    Many of these core cities experienced population declines within their 1950 boundaries (such as Portland, Seattle and Nashville between 1950 and 1990). Los Angeles, however, has been the exception. The more highly developed central area (as defined by the city Planning Department) within the city limits has increased in population by one-third since 1950. The continuing suburbanization of the city of Los Angeles, however, is indicated by the fact that the central area’s share of city population has fallen from 68 percent to 47 percent.

    The "Post-World War II & Suburban" core cities are much smaller and their metropolitan areas are nearly all suburban. These include metropolitan areas like Phoenix and San Jose. The population of these metropolitan areas has increased more than seven fold, from 700,000 to 5.2 million.

    Land Area: The differences between the three historical core municipality classifications are most evident in land area. Among the "Pre-World War II & Non-Suburban" cores, land areas were almost unchanged from 1950, with much of the difference reflected in Chicago’s O’Hare International Airport annexation. In contrast, the "Pre-World War II & Suburban" cores more than tripled in size, adding an area larger than Connecticut to their city limits. The percentage increase was even larger in the "Post-World War II & Suburban" cores which covered 10 times as much land in 2010 as in 1950 (Figure 5).

    Population Density: Over the 60 year period, the population density of the "Pre-World War II & Non-Suburban" cores dropped from 15,300 per square mile to 11,400 (5,900 per square kilometer to 4,400). The "Pre-World War II & Suburban" and "post-World War II & Suburban" cores started with much lower densities and then fell farther. The core city densities in these municipalities are approximately one-half the population densities of Los Angeles suburbs (Figure 6).

    The Need for Caution

    All of this indicates the importance of caution with respect to core versus suburban and exurban comparisons. For example, Atlanta, which represents only 8 percent of the urban organism (metropolitan area) in which it is located is not comparable to San Antonio, with its 62 percent of the metropolitan population. These distinctions are important when we talk about different regions.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Chicago photo by Bigstock.

  • Special Report: America’s Emerging Housing Crisis

    This is the executive summary from a new report, America’s Emerging Housing Crisis, published by National Community Renaissance, and authored by Joel Kotkin and Wendell Cox. Download the report and the supplement report below.

    From the earliest settlement of the country, Americans have looked at their homes and apartments as critical elements of their own aspirations for a better life. In good times, when construction is strong, the opportunities for better, more spacious and congenial housing—whether for buyers or renters—tends to increase. But in harsher conditions, when there has been less new construction, people have been forced to accept overcrowded, overpriced and less desirable accommodations.

    Today, more than any time, arguably, since the Great Depression, the prospects for improved housing outcomes are dimming for both the American middle and working classes. Not only is ownership dropping to twenty-year lows, there is a growing gap between the amount of new housing being built and the growth of demand.

    Our still-youthful demographics are catching up with us. After a recession generated drought, household formation is again on the rise, notes a recent study by the Harvard Joint Center for Housing Studies. In some markets, there isn’t an adequate supply of affordable housing for the working and middle classes. Overall, according to the research firm Zelman and Associates, the country is building barely one-third the number needed to meet the growth in households. Overall inventories of homes for sale are at the lowest level in eight years.

    The groups most likely to be hurt by the shortfall in housing include young families, the poor and renters. These groups include a disproportionate share of minorities, who are more likely to have lower incomes than the population in general. This situation is particularly dire in those parts of the country, such as California, that have imposed strong restrictions on home construction. California’s elaborate regulatory framework and high fees imposed on both single- and multi-family `housing have made much of the state prohibitively expensive. Not surprisingly, the state leads the nation in people who` spend above 30 percent, as well as above 50 percent, of their income on rent.

    Sadly, the nascent recovery in housing could make this situation even more dire. California housing prices are already climbing far faster than the national average, despite little in the way of income growth. This situation could also affect the market for residential housing in other parts of the country, where supply and demand are increasingly out of whack.

    Ultimately, we need to develop a sense of urgency about the growing problem of providing adequate shelter. As a people we have done this many times — with the Homestead Act, and again, after the Second World War, with the creation of affordable “start-up” middle- and working class housing in places like Levittown (Long Island), Lakewood (Los Angeles), the Woodlands (Houston) and smaller subdivisions, as well as large scale cooperative apartment development in places like New York. Government policy should look at opportunities to create housing attractive to young families, which includes some intelligent planning around open space, parks and schools. It is important to ensure that a sufficient supply of affordable housing is allowed throughout metropolitan areas, for all income groups.

    Nothing speaks to the nature of the American future more than housing. If we fail to adequately house the current and future generations, we will be shortchanging our people, and creating the basis for growing impoverishment and poor social outcomes across the country.

    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.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

  • The Evolving Urban Form: Philadelphia

    Philadelphia was America’s first large city and served as the nation’s capital for all but nine months between the inauguration of George Washington is the first president in 1789 and the capital transferred to Washington, DC in 1800.

    Before the early 1900s, the United States Census Bureau had not developed a metropolitan area (labor market area) concept. However, the website peakbagger.com has attempted to define earlier metropolitan areas based on concepts similar to those used today. In the case of Philadelphia, this is important, because it was somewhat unique in having virtually adjacent, highly populated suburbs that make comparisons of municipal populations (the only population data available) misleading.

    The Nation’s Largest City

    According to municipal population data, New York had become the largest municipality in the United States by the time of the first census, in 1790. Philadelphia was ranked second. However, a list of the top 24 urban places in 1790 shows two Philadelphia suburbs, Northern Liberties and the Southwark district. When peakbagger.com includes these suburbs, Philadelphia rises as the largest city (metropolitan area) in the nation in the 1790 and 1800 censuses. The New York metropolitan area is shown as rising to number one in 1810, a position it is held for 200 years and may last for much longer in light of the much slower growth rate recently for Los Angeles.

    Soon the Nation’s 9th Largest City?

    Those were the glory days. In the years since 1800, Philadelphia has been falling in population rank. The Philadelphia metropolitan area was displaced first by Chicago in 1900, according to the metropolitan district estimates of the US Census Bureau. In 1940, Philadelphia was demoted to fourth place by Los Angeles. Philadelphia held fourth position until 2006, when Dallas-Fort Worth raced past it. Then just a few years later (2010), Houston knocked Philadelphia down to 6th place. The downward trend could accelerate rather quickly. At current growth rates (2010 to 2013), Philadelphia would be passed by Washington and Miami by the time of the 2020 census. The Atlanta metropolitan area would also pass Philadelphia if its population growth rate is restored to pre-Great Recession rates. Philadelphia should start the next decade as either the 9th or 10th largest metropolitan area in the nation.

    Population Growth in the Philadelphia Metropolitan Area

    The Philadelphia metropolitan area is unusual in being divided between four states. The core city of Philadelphia is located in Pennsylvania. Directly across the Delaware River are the suburban counties of New Jersey. Wilmington, formerly the largest metropolitan area in Delaware has been incorporated into the Philadelphia metropolitan area (New Castle County). Maryland’s Cecil County is also included in the metropolitan area.

    All of Philadelphia’s population growth since 1950 has been in the suburbs. In that year, the city of Philadelphia peaked at 2,072,000 residents. This was a healthy increase from the 1,930,000 in the 1940 census. However, this represented a decline from 1,951,000 in 1930 and shadowed massive population losses that would follow after 1950 (Cleveland and St. Louis also lost population between 1930 and 1940).

    By 2000, the city’s population had dropped 27 percent to 1,518,000. This could prove its modern low, as the population recovered to 1,526,000 in the 2010 census and was estimated by the Census Bureau at 1,553,000 in 2013.

    The suburbs of the metropolitan area as presently defined added nearly 2.6 million residents between 1950 and 2013. However, the metropolitan area only grew by 2.1 million residents because of the more than 500,000 loss in the city of Philadelphia. The inner ring suburbs, counties abutting Philadelphia County in Pennsylvania and New Jersey gained 1.8 million residents, while the outer suburbs gained nearly 800,000 residents (Figure 1).

    Domestic Migration

    Philadelphia has continued to lose domestic migrants to other areas of the country. Between 2010 and 2013, approximately 50,000 net domestic migrants left the Philadelphia area. Of this, 22,000 left the city of Philadelphia and 28,000 left the suburbs. The rate of domestic migration loss was 0.8 percent in the metropolitan area, 1.4 percent in the city of Philadelphia and 0.6 percent in the suburbs (Figure 2).

    Employment

    Within the metropolitan area, the commercial primacy of the core city of Philadelphia also has been reduced. Philadelphia has long been known for having one of the largest central business districts in the United States. The most recent census tract data from the CTPP indicates that Philadelphia has the sixth largest business district in the United States, with approximately 240,000 jobs. This represents only 8.7 percent of the metropolitan area employment, a figure slightly above the 8.4 percent average of the 52 major metropolitan areas (those with more than 1 million residents).

    The development of Philadelphia’s "center city" business district may have been stunted by city regulations that prohibited buildings to exceed the height of City Hall, topped off by a statue of city founder William Penn. At nine floors and approximately 550 feet (165 meters), City Hall was briefly the tallest building in the world in the early 1900s. City Hall remained a dominant feature of the skyline until the late 1980s, when One Liberty Place, with its 61 floors rose to 945 feet (290 meters). There are now 8 buildings taller than City Hall. Construction will soon begin on a new office and hotel tower , which at 1,120 foot tall (340 meters), 59 floor building would be the tallest building in the United States outside New York and Chicago (and taller, by 20 feet than Wilshire Grand now under construction in Los Angeles).

    Transportation

    I have described the city of Philadelphia as a "transit legacy city," which along with New York, Chicago, San Francisco, Boston, and Washington account for 55 percent of all the transit commuting destinations in the United States. This is nearly 10 times the share of jobs that are located in these six municipalities (not metropolitan areas).

    Philadelphia, like the other five other transit legacy cities has an extensive urban rail system. Philadelphia has commuter rail lines extending outward to suburban locations in Pennsylvania, New Jersey and Delaware. There are also two Metro lines (subway lines) and electric trolley lines. This transit system delivers 44 percent of commuters to "center city" jobs. This represents more than 40 percent of the transit commuting in the Philadelphia metropolitan area. Transit’s market share to work locations outside downtown is relatively small at 6.0 percent.

    The nation’s first long intercity tollway (the Pennsylvania Turnpike) passes through the Philadelphia metropolitan area. This route, in connection with the New Jersey Turnpike, the Ohio Turnpike, the Indiana Toll Road and the Chicago Skyway provided freeway equivalent access between the New York, Philadelphia, Pittsburgh, Cleveland and Chicago metropolitan areas in the middle 1950s, before the interstate highway system was authorized.

    Philadelphia’s stagnant population growth is typical for the Northeast, which continues to lose domestic migrants to the rest of the nation. It seems likely to continue. In the two decades following 2020, Phoenix and Riverside-San Bernardino are projected by the US Conference of Mayors to pass Philadelphia. This would push Philadelphia down to 12th place, compared to the 4th ranking it had at the beginning of the 21st century. Quite a ride down for the City of Brotherly Love, and its surrounding region.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Photo: Philadelphia City Hall by Max Binder

  • The Best Cities For Jobs 2014

    As the recovery from the Great Recession stretches into its fifth year, the locus of economic momentum has shifted. In the early years of the recession, the cities that created the most jobs — sometimes the only ones — were either government- or military-dominated (Washington, D.C.;  Kileen-Temple-Fort Hood, Texas), or were powered by the energy boom in Texas, Oklahoma and the northern Great Plains.

    Now the recovery has shifted to a new group of cities that have benefited from the boom on Wall Street and the parallel IPO surge in Silicon Valley — call them asset inflation cities. Last year the S&P 500 clocked its biggest rise since 1997, helped by aggressive monetary easing by the Federal Reserve and a return to the stock market by investors who had retreated to the sidelines after the financial crisis. The high times have brought on a surge in IPOs: 2013 was the busiest year for public offerings in over a decade, and the pace has if anything quickened this year, with healthcare and technology offerings leading the way. M&A has also surged, with some very impressive valuations in the tech sector, such as Facebook’s $19 billion purchase of 50-person What’s App. The biggest beneficiaries employment-wise: the Bay Area, Silicon Valley and New York City.

    View the Best Cities for Jobs 2014 List

    Our rankings are based on short-, medium- and long-term job creation, going back to 2002, and factor in momentum — whether growth is slowing or accelerating. So the top of our list includes both cities that have had the most striking comebacks since the Great Recession as well as those that have consistently created jobs over the long haul. We have compiled separate rankings for large cities (nonfarm employment over 450,000), which are our focus this week, as well as medium-size cities (between 150,000 and 450,000 nonfarm jobs) and small cities (less than 150,000 nonfarm jobs) in order to make the comparisons more relevant to each category. (For a detailed description of our methodology, click here.) Small cities, as a rule, show more volatility than their larger counterparts since the decision of one major business to expand or contract can have an enormous effect on a relatively tiny employment base. (Check back next week for our ranking of mid-size and small cities).

    Big Money, Big Gains

    Yet even among the largest metropolitan areas, shifts in the economy can have a dramatic impact. This is clearly the case with the two metro areas that top our list this year, first-place San Jose-Sunnyvale-Santa Clara, Calif. (aka Silicon Valley), where the number of jobs surged 4.3% last year, and San Francisco-San Mateo-Redwood City, where employment expanded 3.6%. Before the current tech boom, largely centered on social media companies, these metro areas were lagging badly. In 2010, San Jose ranked 47th on this list out of the 66 metro areas with more than 450,000 nonfarm jobs and San Francisco was 42nd.

    The information sector has driven this remarkable change in fortunes. Since 2008, the number of information jobs in the San Jose area has risen 37% to 60,800, while in San Francisco, employment in that category has grown 28% to 52,300 jobs. This has been accompanied by strong increases in such high-wage fields as professional and business services, where Silicon Valley has clocked 10% growth, and San Francisco twice that, adding 42,500 jobs, since 2008.

    The housing bubble helped to launch New York City from its doldrums a decade ago (it rose from 54th on our list of the Best Cities For Jobs in 2005 to 22th in 2008). In recent years, New York has been well served by Washington’s bailout of the financial sector, which accounts for roughly 15% of the metro area GDP — the Big Apple climbed to 10th place in our ranking in 2010 and to seventh this year. This is in good part a result of asset inflation; the number of finance jobs in New York has actually declined in recent years, but with a lot of extra spending money in the pockets of the city’s relatively high concentration of wealthy people, some jobs are being created. Most of the growth has been in hospitality, health and education and retail, fields that do not generally offer top salaries. New York City has also seen steady growth in information jobs — although at only a third the rate of Silicon Valley — as well as professional and business services.

    Bring On The Usual Suspects

    Many of the other metro areas at the top of our 2014 list have been adding jobs consistently over the past decade. Some are also beneficiaries of the high-tech boom, though mostly as a result of big West Coast companies deciding to site new offices in these attractive locations. In third place is perennial high-flyer Austin-Round Rock-San Marcos, Texas, where the number of jobs grew 4.1% last year, and 13.7% since 2008. Raleigh-Cary N.C. places fourth (3.9%/7.2% over the same time spans). These metro areas routinely attract people and companies from California and the Northeast with lower taxes and real estate costs that, on an income basis, are as much as half those in the asset-rich areas.

    Unlike the asset-based economies, which ebb and flow with the markets, these and the other usual suspects have a record of consistent growth not only in jobs but also population. This reflects the more blue-collar economic foundation of many of these cities, based on energy, manufacturing and logistics — sectors that tend to create higher-paid blue- and white-collar jobs. Growth has continued in these areas throughout all the changes in the economy, which has encouraged long-term migration and investment.

    Viewed over the last five years, for example, fifth-place Houston has expanded its total employment by 218,000 jobs, growing at the same rate as both the San Francisco and San Jose metro areas—an impressive feat given that it is almost 20 percent larger than the two Silicon Valley cities combined. But an arguably bigger difference can be seen in demographics. The Houston metro area’s population has grown over 50% faster since 2010 than the Bay Area regions, and roughly twice as fast as New York. Houston is on track this year to build more new housing units than the entire state of California. This combination of rapid population and job growth – the former itself a major source of jobs in construction and services — can be seen in places such as No. 6 Nashville-Franklin-Murfreesboro, Tenn.; No. 10 Denver-Aurora-Broomfield, Colo.; and No. 14 Charlotte-Gastonia-Round Hill, N.C.

    The Sun Belt Bounces Back

    Perhaps the biggest surprise on this year’s list is the resurgence of the Sun Belt metro areas that were hardest hit by the housing bust. Ever since, the Northeast-centric pundit class has been giddily predicting these cities’ demise. Strangled by high energy prices, cooked by record droughts, rejected by a new generation of urban-centric millennials, the Atlantic proclaimed this vast southern region to be where the American dream has gone to die.

    But the data show that many of these metro areas are in the midst of a powerful comeback. Take Orlando-Kissimmee, Fla., ranked eighth this year, up 23 places from last year. Similarly Phoenix has risen 17 places from last year to 22nd and is way up from its 51st place ranking in 2010.

    Perhaps even more surprising  is the resurgence of 17th-place Riverside-San Bernardino, Calif., which ranked near the bottom of the big city table at 63rd in 2010. Now foreclosures have dropped and job growth has picked up. In fact, the Inland Empire is now doing considerably better in job creation than Southern California’s older urban regions, including Los Angeles-Long Beach (37th), Santa Ana-Anaheim-Irvine (34th) and San Diego-Carlsbad-San Marcos (32nd).

    Bringing Up The Rear

    Many large cities continue to lag. Philadelphia, despite being close to New York and its considerable urban amenities, ranks 51st, with paltry 0.9% job growth since 2008. Not much better off, despite its connections to the Obama White House, is Chicago, which places 47th. Not only is the Windy City not adding many jobs (0.5% growth since 2008) but every county in the area, according to recent Census numbers, is losing migrants to other parts of the country.

    But Chicago is certainly doing better than the host of old industrial cities that continue to dominate the nether reaches of our survey. These include last-place Camden, N.J.; second to last Detroit-Livonia-Dearborn, Mich.; Cleveland-Elyria- Mentor, Ohio (62nd), Kansas City, Mo. (61st), Newark-Union, N.J. (60th), and St. Louis (59th). All these cities, apart from Kansas City, have occupied the bottom of our list for nearly a decade now, and seem unlikely to move up in the immediate future.

    View the Best Cities for Jobs 2014 List

    What’s Next

    It seems clear that as long as the tech and financial sectors retain their momentum, New York and the Bay Area should continue to fare well. But if asset growth slows, these areas could slip quickly.

    The Texas cities and the other usual suspects are probably a better bet to continue to generate new jobs, but they too face challenges. If the economy slows down energy prices will follow, hampering growth in energy meccas like Houston, Dallas and San Antonio. A surge in interest rates could undermine the comeback of the Sun Belt cities, which remain highly dependent on housing and construction-related economic activity.

    But overall, for reasons ranging from housing costs to business climate, we expect the usual suspects to remain high on our list of the best cities for jobs for years to come, in part due to their growing populations. What remains unknown is how the evolving industrial structure of the economy will affect the slower-growing cities along the coasts whose fortunes have tended to ebb and flow in recent years.

    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.

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

    Photo: Market Street, San Francisco by Wendell Cox.