New Geography

Category: planning

  • Is It Game Over for Atlanta?

    With growth slowing, a lack of infrastructure investment catching up with it, and rising competition in the neighborhood, the Capital of the New South is looking vulnerable.

    Atlanta is arguably the greatest American urban growth story of the 20th century. In 1950, it was a sleepy state capital in a region of about a million people, not much different from Indianapolis or Columbus, Ohio. Today, it’s a teeming region of 5.5 million, the 9th largest in America, home to the world’s busiest airport, a major subway system, and numerous corporations. Critically, it also has established itself as the country’s premier African American hub at a time of black empowerment.

    Though famous for its sprawl, Atlanta has also quietly become one of America’s top urban success stories. The city of Atlanta has added nearly 120,000 new residents since 2000, a population increase of 28% representing fully 10% of the region’s growth during that period. None of America’s traditional premier urban centers can make that claim. As a Chicago city-dweller who did multiple consulting stints in Atlanta, I can tell you the city is much better than its reputation in urbanists circles suggests, and it is a place I could happily live.

    Yet the Great Recession has exposed some troubling cracks in the foundations of Atlanta’s success. Though perhaps it is too early to declare “game over” for Atlanta, converging trends point to a possible plateauing of Atlanta remarkable rise, and the end of its great growth phase.

    Growth Is Slowing

    As with many other boomtowns, in Atlanta growth itself has been among the biggest industries. Construction particularly played a big role in its economy. The housing crisis cut the legs from under Atlanta’s real estate machine. Though prices didn’t collapse, new home building did. From 2005 to 2009 Atlanta’s number of annual building permits fell by 66,352, the biggest decline of any metro area.

    Atlanta grew strongly in the 2000s, with growth of over 1.2 million people, a 29% rise that beat peer cities like Dallas and Houston. But look at the recent past and see a very different dynamic. Domestic in-migration has cratered, only reaching 17,479 last year, or 0.32%. While migration did slow nationally last year due to the economy, Dallas and Houston continued to power ahead. Dallas added 45,241 people (0.72%) and Houston added 49,662 (0.87%). Even Indianapolis added 7,034, but that’s 0.42% on a smaller base, meaning Atlanta is actually getting beat on net migration by a Midwest city; its in-migration rate is about on par with Columbus, Ohio, another healthy Midwest metropolis..

    The collapse in in-migration should be very worrying to Atlanta’s leadership. No new people, no new housing demand, thus no construction jobs. It should come as no surprise that Atlanta’s 10.8% unemployment rate is well ahead of the 9.7% national rate.

    The Infrastructure Brick Wall

    Last July, Judge Paul Magnuson ruled that Atlanta had been illegally taking water from Lake Lanier, the principal source of the region’s water supply. The ruling may not stick but it nevertheless has brought into focus the long term insufficiency of the water supply for Atlanta. Lake Lanier almost ran dry during a recent drought, but has since recovered in the recent wet years. The problem is more political than environmental. Atlanta has not appreciably expanded its water sources in 50 years despite all that growth.

    Atlanta has a myriad of infrastructure problems. It suffers some of the highest water and sewer rates in the nation, double those of New York City. And these are only going to get worse as the city embarks on a multi-billion dollar Clean Water Act Compliance program. This is an ominous sign for a city whose attractiveness is in large part due to its low costs. As Councilwoman Clair Muller put it, “I’m not sure being No. 1 in the country for water and sewer rates is a good selling feature for Atlanta.”

    But the biggest infrastructure issue for Atlanta is transportation. Atlanta is famous for its bad traffic and attendant pollution. Its freeways are among the world’s widest, but this disguises the extent to which the roadway infrastructure is woefully insufficient. Atlanta has a simple beltway and spoke system similar akin to Indianapolis and Columbus, much smaller cities. Other big cities like Houston, Dallas, Minneapolis, and Detroit have much more elaborate systems. In particular, rather than relying on a single ring road, these cities have webs of freeway with multiple “crosstown” routes.

    But Atlanta’s greatest road problem lies in the lack of arterial street capacity. Atlanta’s suburban arterial network is mostly former winding country roads, many of which have never been upgraded to handle the traffic demands on them. Most upgraded streets are radial routes, not crosstown ones, which forces even more traffic onto the overloaded freeway network.

    For those who prefer transit, Atlanta hasn’t invested there either. It built the MARTA heavy rail system as an extremely forward looking transportation investment, mostly in the 1970s and early 80s. This was built before Portland’s system and is far better than light rail to boot. But there has been almost no expansion of the network. The state of public transport has been largely frozen for some time. Meanwhile, Dallas, Houston, Phoenix, and others have invested billions.

    Competition Is Here

    Bad traffic congestion and other infrastructure ills didn’t matter much when Atlanta was the only game in town. For a long time, anyone who needed a presence in the Southeast found Atlanta the easy default answer. In many cases it was the only real possibility.

    That’s no longer true. Atlanta is now surrounded by upstart, much faster growing cities such as Charlotte and Raleigh-Durham in North Carolina, Nashville, Tennessee and Charleston, South Carolina – all in many ways now have the ambitions once characteristic of Atlanta.

    Atlanta’s problem lies in its insufficient differentiation from these other places. Other than the airport, a clear major asset to Atlanta, what do you actually lose by moving to Charlotte or Nashville? Your commute is likely to be less. Except for certain groups – African Americans or gays – the city seems to be losing allure.

    These other cities also have the talent to compete for a lot of the business Atlanta used to pick up without working for it. The new head of the Atlanta Regional Commission declared Atlanta’s love affair with the edge city high rises all but over. Planners always talk like this, but it is still a startling sentiment to hear in Atlanta, formerly the most boosterish of cities. That’s the sound of a city losing its mojo. Meanwhile, Charlotte chamber of commerce chief Bob Morgan says, “To understand Charlotte, you have to understand our ambition. We have a serious chip on our shoulder. We don’t want to be No. 2 to anybody.” That’s the way Atlanta used to talk.

    Caught in the Middle

    Atlanta does seem to realize it’s in a different competitive world. It must elevate its game and upgrade its product. Like Chicago and other growth stories before it, as Atlanta got big and rich, it decided it needed to get classier as well. To go for quality, not just quantity. And to embrace a more urban future for its core.

    But it might be too little, too late. Atlanta is urbanizing, but despite the huge influx of people into the city, it’s not there yet. Atlantic Station got built and attracted lots of press, but numerous other mixed use projects were killed by the poor economy. Ambitious projects like the Beltline park and transit project lack funding.

    Atlanta is left as a sort of “quarter way house” caught between its traditional sprawling self and a more upscale urban metropolis. It offers neither the low traffic quality of life of its upstart competition, nor the sophisticated urban living of a Chicago or Boston.

    Here too, Dallas and Houston continue to power ahead of Atlanta. Both are seeing significant urban infill and are also making major investments in cultural infrastructure that far outstrip those of Atlanta. For example, Dallas just opened a showplace performing arts complex, with buildings by the likes of Norman Foster and Rem Koolhaas. Houston has emerged as a dynamic multi-cultural city. Both have a long way to go, but are in a much stronger growth position to pull it off.

    Atlanta at Maturity

    Cities, like companies, go through a life cycle. There’s the youthful founding, the explosive growth phase, then maturity and, for some, decline. Chicago and Detroit were two of the huge growth stories of the industrial era, for example. Atlanta, Houston, and Dallas have been three of the boomtowns of the current age. Like other cities before them, that growth will come to an end one day. It is then that we’ll see if, like Chicago and New York, they will succeed as mature regions and truly take their place in the pantheon of great American cities, or, like Detroit or to a lesser extent Philadelphia, will decline or stagnate.

    Atlanta is far from dead, but it may be facing the beginning of the end of its growth cycle. If so, this will be the true test and measure of the greatness of that city. Will Atlanta make the grade? And how?

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

    Photo by james.rintamaki

  • The Real State of Metropolitan America

    The week opened with an important report on metropolitan demographics by the Brookings Institution, only to be followed by the Census Bureau’s annual report on migration, which contained a different message than the Brookings report. We offer yet a third analysis, since both the Brookings and the Census Bureau reports classify up to one-sixth of suburban population as not being in the suburbs.

    Brookings: The new Brookings State of Metropolitan America report examined trends in the 100 largest metropolitan areas using Census Bureau data between 2000 and 2008 (the census and the American Community Survey). Brookings highlighted findings that some “primary cities” were experiencing an increase in white population, while the rest of the metropolitan area (which it called suburbs) was becoming more diverse. Not uncharacteristically, the core city oriented press took the bait and embellished a bit on the findings. MSNBC characterized the report as indicating that “many younger, educated whites move to cities for jobs and shorter commutes.” Brookings, which largely shares and encourages the urbanist media spin, calls this movement of young, educated whites from suburbs to the cities “bright flight.”

    Brookings also expanded is previous finding that the majority of people in poverty live in suburbs to note that a majority of Hispanic and African-Americans now live in the suburbs. This is really not all that surprising, since suburban areas continue to grow faster and comprise the overwhelming share of metropolitan population.

    Census Bureau: Just a day or two later, the Census Bureau published its annual analysis of migration in the nation. The basis of this report is the Current Population Survey, which like the American Community Survey is conducted by the Census Bureau. The Census Bureau report received considerably less press attention than the Brookings report, perhaps it would be hard to characterize any of its findings as being consistent with the favored “death of the suburbs” line. The previous annual editions back to the beginning of the decade indicate little difference from the 2008-2009 migration trends in the current report.

    The Census Bureau analysis indicates that, almost regardless of the category, many more people are moving from “principal cities” to what it refers to as “suburbs.”

    • Every ethnic group is moving to the suburbs in greater numbers than to principal cities. Three times as many Hispanics are moving from principal cities to the suburbs as from the suburbs to principal cities. The same is true for twice as many African-Americans and Asians. Whites are moving to the suburbs at 1.5 times the rate of their moving to principal cities (Figure 1).
    • Every age group but one is moving to the suburbs at substantially above the rate of movement to the principal cities. There is strong movement among people aged from 20 to 25 to the suburbs rather than the principal cities (Figure 2). The one exception was that among people over 85 years of age, not exactly the epitome of the “bright flight” cited by Brookings and the media.
    • The overwhelming migration from principal cities to the suburbs, rather than from suburbs to principal cities was characteristic across all income categories.
    • There is, in reality, little “bright flight” to report. Among people with college and graduate degrees, nearly twice as many moved from principal cities to suburbs as moved from suburbs to principal cities (Figure 2). While the Census report does not provide mobility information on educational attainment by age, there was strong movement of young adults to the suburbs (noted above).


    The trends in the Census report are consistent with the domestic migration trends that we have previously reported.

    What is a Suburb? There are significant problems with definition of the term “suburb in each of the reports.

    The Office of Management and Budget (OMB), which establishes metropolitan area criteria switched to the “principal city” terminology for the 2000 census, partly to make it clear that principal cities were not inner cities or central cities. The criteria designates as principal cities, the largest in each metropolitan area, any city over 250,000 and any city with more than 50,000 population in which total employment exceeds the workforce.

    Among the 52 major metropolitan areas (those with more than 1,000,000 population), OMB designates 230 principal cities. The Census Bureau report calls everything outside a principal city a suburb. In fact, most of the principal cities are themselves suburbs, developed since World War II as urban areas and expanded outward from their cores.

    For example, principal city Schaumburg, Illinois is located well outside the core city of Chicago and contains a large suburban employment center (“edge city”). Bellevue, the large suburban employment center in the Seattle area is a principal city and not called a suburb by the Census Bureau. Cerritos, California is one of the 25 principal cities of the Los Angeles metropolitan area. Cerritos used to be called Dairy Valley, since it consisted largely of dairy farms until the middle 1950s.

    The Brookings report, in recognition of this problem, calls its non-suburbs primary cities and limits them to no more than three for any metropolitan area. Still, many suburbs are designated as primary cities and not counted in the suburban data, such as Mesa, Arizona (Phoenix), Arlington, Texas (Dallas-Fort Worth), and Cary, North Carolina (Raleigh).

    Suburban versus core analysis needs to be considerably more precise to be meaningful. It would be best to define the characteristics of the core and analyze metropolitan areas at the census tract level, rather than at the city level. However, the data at the city level is far more accessible and is thus predominantly used.

    What is a Core City? Even so, it is important to recognize that there are substantial differences among core cities (which are, broadly speaking, the only parts of urban areas that are not suburbs). Core cities may be divided into three broad categories:

    Pre-World War II Core Cities: These are core cities that have essentially the same boundaries as in 1950. There are 21 Pre-World War II Core Cities in the major metropolitan areas (See Table 2 below). These were largely built before the automobile became dominant, and once were predominately walking and transit cities. New York, Chicago, Boston, Philadelphia and San Francisco are probably the best examples.

    Pre-World War II Core Cities with Suburbs: Many pre-World War II core cities either included wide swaths of vacant developable land in 1950 or annexed substantial amounts of vacant or suburban land after 1950. These cities have cores that are similar to the Pre-World War II Core Cities, but also include suburbs that are little different than the inner suburbs outside the city. For example, in 1950, Los Angeles contained substantial amounts of non-urban land in the San Fernando Valley, which was eventually covered with suburban development. Other cities, such as Milwaukee, Portland, Seattle, Austin and Houston annexed considerable suburban land after 1950. These annexations did not always result in increased population. For example, Salt Lake City doubled its land area between 1950 and 2000, yet retained essentially the same population. Milwaukee nearly doubled its land area, yet lost 40,000 residents.

    Suburban Core Cities: A number of core cities developed predominantly after World War II and as a result, have little, if any pre-World War II core. The largest of these is Phoenix, which recently passed Philadelphia to become the nation’s 6th largest city. San Jose, Charlotte, Orlando and Las Vegas are also examples of Suburban Core Cities.

    Another Perspective: The following analysis (expanded version available here) is offered to indicate general trends in suburbs when non-suburban areas are defined to exclude demonstrably suburban areas. (This may sound circular, but both Brookings and the Census Bureau define some suburban areas as non-suburban.)

    Table 1
    Population Trends: Metropolitan Areas Over 1,000,000: 2000-2008 by Geography
    2000
    2008
    Change
    %
    Metropolitan Areas   152,382,483      166,564,617     14,182,134 9.3%
      Core Cities     43,818,674        45,922,606        2,103,932 4.8%
         Pre-WW2 Core Cities      20,172,850       20,219,342            46,492 0.2%
         Pre-WW2 Core Cities with Suburbs     18,472,298       19,723,295       1,250,997 6.8%
         Suburban Core Cities (Post WW2)        5,173,526          5,979,969          806,443 15.6%
      Suburbs   108,563,809      120,642,011     12,078,202 11.1%
        Suburbs Classified by OMB as Principal Cities    17,968,287       19,334,689       1,366,402 7.6%
        Suburbs Not Classified as Principal Cities    90,595,522     101,307,322    10,711,800 11.8%
    Calculated from US Bureau of the Census Data
    For classification of core cities, see Table 3
    2008 Population of "Suburbs Classified as Principal Cities" is slightly understated because there are no late official estimates for 7 "census designated places." (which are not cities): 2000 estimates used.

    Generally, suburbs continue to grow much faster than the core cities (Table 1 and Figure 3). Between 2000 and 2008:

    • Suburbs added 12.1 million residents, growing 11.1%.
    • Core cities added 2.1 million residents, growing 4.8%. The greatest growth was in the Post War (Suburban) Core Cities, at 15.6%. The Pre-War Core Cities with Suburbs grew 6.8% and the Pre-War Cities grew 0.2% (Figure 4).



    Virtually all of the core city growth was in the more suburban core cities, which is another indication that suburbanization is continuing. Further, the principal cities that are really suburban grew at a rate of 7.6%, more than double that of the core cities. This would seem to indicate that the migration data from the Census Bureau indicating a continued migration to the suburbs is, if anything, materially understated (by classification of some suburbs as principal cities).

    At the same time, the demographic trends and prospects in the nation’s core cities are better than in the past. The rampant lawlessness that drove so many out of the cities in the 1970s has been replaced by law enforcement strategies developed under former New York mayor Rudi Giuliani. Core cities would become more attractive to future residents with serious reform of school performance and business regulation. Until that occurs, however, it seems unlikely that the movement from the cities to the suburbs will be reversed.

    The city-centric media, with its faith-based demographics, continue to announce the demise of the suburbs. However, until migration data shows a net movement from the suburbs to the core cities, it will remain little more than disingenuous hype. At this point, it is not even close. From 2000 to 2008, suburban counties in major metropolitan areas gained 2,000,000 domestic migrants, while the core counties lost 4,600,000 domestic migrants (Note).

    Note: Domestic migration data is reported at the county level and is thus not available for core cities, except where they are coterminous with counties (Such as New York, San Francisco, Baltimore and Washington).

    Table 2
    Metropolitan Areas and Core Cities
    Metropolitan Area Core City (ies) Type of Core City
    Atlanta-Sandy Springs-Marietta, GA  Atlanta Pre-WW2 Core City with Suburbs
    Austin-Round Rock, TX  Austin Pre-WW2 Core City with Suburbs
    Baltimore-Towson, MD  Baltimore Pre-WW2 Core City
    Birmingham-Hoover, AL  Birmingham Pre-WW2 Core City with Suburbs
    Boston-Cambridge-Quincy, MA-NH  Boston Pre-WW2 Core City
    Buffalo-Niagara Falls, NY  Buffalo Pre-WW2 Core City
    Charlotte-Gastonia-Concord, NC-SC  Charlotte Pre-WW2 Core City with Suburbs
    Chicago-Naperville-Joliet, IL-IN-WI  Chicago Pre-WW2 Core City
    Cincinnati-Middletown, OH-KY-IN  Cincinnati Pre-WW2 Core City
    Cleveland-Elyria-Mentor, OH  Cleveland Pre-WW2 Core City
    Columbus, OH  Columbus Pre-WW2 Core City with Suburbs
    Dallas-Fort Worth-Arlington, TX  Dallas Pre-WW2 Core City with Suburbs
    Denver-Aurora-Broomfield, CO  Denver Pre-WW2 Core City with Suburbs
    Detroit-Warren-Livonia, MI  Detroit Pre-WW2 Core City
    Hartford-West Hartford-East Hartford, CT  Hartford Pre-WW2 Core City
    Houston-Sugar Land-Baytown, TX  Houston Pre-WW2 Core City with Suburbs
    Indianapolis-Carmel, IN  Indianapolis Pre-WW2 Core City with Suburbs
    Jacksonville, FL  Jacksonville Pre-WW2 Core City with Suburbs
    Kansas City, MO-KS  Kansas City Pre-WW2 Core City with Suburbs
    Las Vegas-Paradise, NV  Las Vegas Suburban Core City (Post -WW2)
    Los Angeles-Long Beach-Santa Ana, CA  Los Angeles Pre-WW2 Core City with Suburbs
    Louisville/Jefferson County, KY-IN  Louisville Pre-WW2 Core City with Suburbs
    Memphis, TN-MS-AR  Memphis Pre-WW2 Core City with Suburbs
    Miami-Fort Lauderdale-Pompano Beach, FL  Miami Pre-WW2 Core City
    Milwaukee-Waukesha-West Allis, WI  Milwaukee Pre-WW2 Core City with Suburbs
    Minneapolis-St. Paul-Bloomington, MN-WI  Minneapolis Pre-WW2 Core City
    Minneapolis-St. Paul-Bloomington, MN-WI  St. Paul Pre-WW2 Core City
    Nashville-Davidson–Murfreesboro–Franklin, TN  Nashville Pre-WW2 Core City with Suburbs
    New Orleans-Metairie-Kenner, LA  New Orleans Pre-WW2 Core City
    New York-Northern New Jersey-Long Island, NY-NJ-PA  New York Pre-WW2 Core City
    Oklahoma City, OK  Oklahoma City Pre-WW2 Core City with Suburbs
    Orlando-Kissimmee, FL  Orlando Suburban Core City (Post -WW2)
    Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Philadelphia Pre-WW2 Core City
    Phoenix-Mesa-Scottsdale, AZ  Phoenix Suburban Core City (Post -WW2)
    Pittsburgh, PA  Pittsburgh Pre-WW2 Core City
    Portland-Vancouver-Beaverton, OR-WA  Portland Pre-WW2 Core City with Suburbs
    Providence-New Bedford-Fall River, RI-MA  Providence Pre-WW2 Core City
    Raleigh-Cary, NC  Raleigh Suburban Core City (Post -WW2)
    Richmond, VA  Richmond Pre-WW2 Core City with Suburbs
    Riverside-San Bernardino-Ontario, CA  Riverside Suburban Core City (Post -WW2)
    Rochester, NY  Rochester Pre-WW2 Core City
    Sacramento–Arden-Arcade–Roseville, CA  Sacramento Pre-WW2 Core City with Suburbs
    Salt Lake City, UT  Salt Lake City Pre-WW2 Core City with Suburbs
    San Antonio, TX  San Antonio Pre-WW2 Core City with Suburbs
    San Diego-Carlsbad-San Marcos, CA  San Diego Pre-WW2 Core City with Suburbs
    San Francisco-Oakland-Fremont, CA  San Francisco Pre-WW2 Core City
    San Francisco-Oakland-Fremont, CA  Oakland Pre-WW2 Core City
    San Jose-Sunnyvale-Santa Clara, CA  San Jose Suburban Core City (Post -WW2)
    Seattle-Tacoma-Bellevue, WA  Seattle Pre-WW2 Core City with Suburbs
    St. Louis, MO-IL  St. Louis Pre-WW2 Core City
    Tampa-St. Petersburg-Clearwater, FL  Tampa Pre-WW2 Core City with Suburbs
    Tucson, AZ  Tucson Suburban Core City (Post -WW2)
    Virginia Beach-Norfolk-Newport News, VA-NC  Norfolk Pre-WW2 Core City with Suburbs
    Washington-Arlington-Alexandria, DC-VA-MD-WV Washington Pre-WW2 Core City
    See: Core City Classification Definitions

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”

    Photograph: Suburban core city: Phoenix

  • Australia: Housing Soars Down Under

    Finally, an important turning point has been reached for Australians in the housing market: on 22 April 2010 the Council of Australian Governments endorsed a new housing supply and affordability agenda.

    The shift in attitude is long overdue. The population of Australia has passed the 22 million mark and is growing at 2.1 per cent per annum. Until now, planning policies based on higher densities have been seen as the solution for this population increase. Such policies are variously euphemistically termed “smart growth”, “urban consolidation” or, more recently, “urban renewal”.

    The deleterious results of high-density policies on both people and the environment are becoming more and more apparent. Australian cities, especially Sydney, are starting to exhibit the downside effects of what might be the most aggressive high-density policies in the world. The general public has not yet comprehended how tight the link is between these restrictive planning policies and the increasing prevalence of community problems.

    The Australian strategy of high-density has had two components. The first has been to artificially strangle the land supply. Residential land release in Sydney has been reduced from a historic average of 10,000 lots per year to less than 2,000, thereby radically reducing the number of dwellings available from greenfield sites.

    The second component of the high-density strategy has required each municipal council to submit a rezoning plan that increases population density to government satisfaction; otherwise, that municipality is adversely impacted. These tactics force high-density onto communities originally designed for low densities.

    Smart-growthers claim a plethora of benefits resulting from high-densities. But any clear-headed examination shows that high-density is detrimental to the public good. Greenhouse gas emissions per person are greater in high-density. The policy overloads infrastructure; choking traffic congestion and longer travel times result. Sewers overflow, electricity supply reaches a breaking point, and there are chronic water shortages. Concrete, tiles and bitumen replace trees, gardens and public open space. Sustainability is adversely affected.

    And, of course, high-density policies create land shortages that result in unaffordable housing. This is the darkest side to the impetus for Smart Growth. The resulting increase in the overall cost of housing is sobering. Even the global financial crisis had very little effect on house prices in Australia. Prices continue to rise, and the Australian Federal Government has become concerned about the impact of increasing housing costs on the economy. The Governor of the Australian Reserve Bank has said that the price of a marginal block of land is too high for a time when interest rates are low and credit is available , and similar sentiments have been expressed by other officials.

    Time series data for Australian cities shows a strong correlation between inadequate land release and excessive housing cost. The land component of the price of a dwelling in Sydney has increased from 30% to 70%. It is apparent that strangling the release of land on the outskirts in order to force high-density has resulted in a shortage and, in the face of ever-increasing demand, the price of land has risen dramatically.

    The 6th Annual Demographia Housing Affordability Survey of six countries portrays a widespread relationship between high housing cost and overly restrictive planning. In the chart below, housing cost is measured as years of family income needed to purchase a house. This year the picture is somewhat complicated by the collapse of the housing bubble in some prescriptive jurisdictions resulting in a substantial reduction of previous high prices.


    Median house price divided by gross annual median household income.

    Only about seven per cent of Australians wish to live in apartments. In spite of this, smart growth policies have resulted in apartments being the only type of housing available to most new entrants to the housing market. These apartments command higher prices than otherwise would be the case, due to an inadequate supply of competing single-residential housing resulting from the scarcity of available sites. This provides the potential for apartment developers to make large profits. Such profits provide the resources for developers to make large donations to the political parties.

    Over the previous five years, the ruling New South Wales Labor Party received donations from the development industry of $9 million, while the Liberal opposition party netted $5 million. These donations exceeded the total contributions to all political parties over the same period from the gambling, tobacco, alcohol, hotel, pharmaceutical and armaments industries combined.

    Numerous documented cases show a large donation being made shortly before permission is granted for a particular development. In response to long-term escalating public anger, the New South Wales Government in December 2009 passed legislation to prohibit donations from property developers. However, the public cynically consider this will not solve the problem and that “donations” will be given in other ways.

    In the face of criticism, state governments maintain that recent land releases have been sufficient. The New South Wales Minister of Housing has stated that land for 131,000 homes has been released in Sydney. Yet the shortage continues to get worse. One reason is the tortoise-like progression of the rezoning process.

    Another is market manipulation. As the Demographia survey points out, governments flag well in advance which greenfield areas will be zoned for developments. Sellers then realise they are cushioned from competition and can command higher prices for their land. Purchasers – developers — know they can pay substantial premiums compared to what would be the case if land release were not so predictable.

    It appears that developers (both government and private) then carefully control the rate at which these greenfield sites are made available to home buyers. It has been reported that the Melbourne government development agency is sitting on a stockpile of 25,000 house blocks that have been zoned for residential approval, but is selling just 700 per year. Private developers and landholders currently hold almost 70,000 house blocks, yet only 1400 of these are available to the market . In the current situation of high demand, it is evident that housing land is being drip fed onto the market, thus keeping prices high.

    The Council of Australian Governments seems to have taken cognisance of this situation, as the review will examine large parcels of land “to assess the scope for increasing competition and bringing land quickly to the market”.

    The Council’s review indicates a welcome change in thinking. Up to now it has not been generally recognised that planning policies are a significant factor in excessive housing cost. Other adverse effects of these policies still need to be acknowledged. One hopes that this review will represent the beginning of a broader appreciation of the downside of high-density policies.

    Photo: A strip of ‘Sydney Lace’in Balmain, Sydney, New South Wales

    (Dr) Tony Recsei has a background in chemistry and is an environmental consultant. Since retiring he has taken an interest in community affairs and is president of the Save Our Suburbs community group which opposes over-development forced onto communities by the New South Wales State Government.

  • The New E.D. — Environmental Density

    Developers often have an E.D. problem and are not even aware of it. No, not the type of E.D. temporarily cured with Viagra. Environmental Density — E.D. — is the measurement of the impact of man made construction on a site. In simple terms, E.D. is the average per acre volume of impervious surface due to land development construction. It has two very important impacts, one environmental, and one financial. One acre of land is 43,560 square feet. The lower the E.D. — square foot of impervious surface area divided by 43,560 — the lower the surface area of manmade structures that divert rain run-off, and the less environmental damage.

    Some municipalities have impervious surface limitations in their regulations. These limitations can be counter to human benefits. For example, a developer faced with the limits of allowed impervious surface area would rather not propose a walking system; the regulations could mean a choice between walkways and homes. E.D., on the other hand, is not an imposed limit, but a way to measure the efficiency of the neighborhood design.

    Don’t bother searching the internet for opposing articles on E.D., because we invented the term’s use in relationship to modern land development right here at www.newgeography.com.

    From a financial perspective, the lower the volume of manmade stuff, the lower the development cost. The savings translate into more money that can be spent on higher quality development and/or a drop in the cost of housing and commercial construction. In other words higher quality development at more affordable prices. This affects everyone, worldwide.

    It doesn’t matter if the site is a New Urban “Smart Growth” design, a subdivision in “Garage Grove Acres”, or a Prefurbia neighborhood. E.D. is the number that can easily indicate the direct environmental impact of land development. The E.D. is essentially the Efficiency of Development.

    Assuming that New Geography readers are not all engineers, I’ll use some simple examples of E.D.:

    If the design is wasteful (eliminating waste in design is NOT a subject taught in land planning schools – but it should be), then costs and environmental impacts increase. Nobody but the paving and earthwork contractors being paid to build excessive infrastructure gain from wasteful development. The developer’s profit decreases and the city’s maintenance cost escalates from having to maintain excessive infrastructure… forever. We all pay for this!

    In an urban high density development which has a very large ratio of hard surface area to organic ground (sometimes the E.D. reaches 100%), there are often opportunities to lower the inorganic percentage. Green roofs (landscaped rooftops) have an impact on E.D. because, in theory, the rainfall is held in soils that water landscaping. However, this assumes existing building structures can handle the additional weight and can be modified to properly maintain an organic area. Organic space on ground level benefits 100% of the population, as opposed to a green roof many stories above the pedestrian ways. So for the purposes of this article we will define all rooftops (urban or suburban) as negative impact square footage. Walks, streets, and driveways are all hard surface areas that divert rain. Organic areas absorb rain. Run-off from hard surface area negatively affects the environment.

    Velocity is another problem. Run-off travels on hard surfaces at a much higher rate than it does on landscaped ground. The worst rates are found where there are long runs of straight street with rain traveling along gutters; curved design slows it a bit . Velocity builds momentum as more rain collects in gutters, inlets and sewer pipes. Eventually this wall of water reaches the end of developed land and spills into a natural system, carrying pollutants into major bodies of water. That oil slick on your driveway can be carried to environmentally sensitive areas hundreds or thousands of miles away in a heavy downpour.

    Lower the E.D. ratio and some magnificent things happen.

    A gain in organic space can reduce the disruption of the earth — the moving of dirt — which can significantly lower development costs, as well as provide surface run-off conduits which cost much less than sewer pipe. The designer must learn how to identify waste, and then take the steps to reduce it. This adds an additional element in the initial planning stages, but an extra day or two in design could reduce development costs by hundreds of thousands of dollars.
    Rooftop surface can be reduced by building up, not out. The trend to build single level housing for the empty-nester market results in sprawling homes with terrible E.D. ratios, and it adds to the costs of the structures; roofs and foundations certainly are not cheap. Sprawling homes require longer streets to be reached, another increase in costs and environmental damage. A residential elevator is about $14,000 (installed) for a two story home, and $22,000 for three floors . By using them, builders can construct compact structures and plummet the E.D. ratio.

    Paved areas can be reduced by changing regulations to allow vast, commercial parking areas, shared. by users that have different peak times. Some cities use progressive thinking, and allow this simple technique to lower the E.D. ratio of a region. Paved areas built to municipal standards are incredibly expensive, making the E.D. ratio even more critical.

    When we developed Performance Planning Systems we wanted to create the tools to easily determine E.D. while still in the initial design phases, as well as to provide the education to recognize waste and teach how it can be reduced. E.D. relies on this new technology; tracing accurate space for the calculations would have been too tedious and time consuming in the past. Environmental Density, unlike impervious surface limits, does not impede efforts to create great neighborhoods. It’s not a restriction on what can be built, but a measure of a design’s efficiency that can benefit builders, developers, and environmentalists.

    Rick Harrison is President of Rick Harrison Site Design Studio and Neighborhood Innovations, LLC. He is author of Prefurbia: Reinventing The Suburbs From Disdainable To Sustainable and creator of Performance Planning System. His websites are rhsdplanning.com and performanceplanningsystem.com.

  • Growing America: Demographics and Destiny

    Over the next four decades, American governments will oversee a much larger and far more diverse population. As we gain upward of 100 million people, America will inevitably become a more complex, crowded and competitive place, but it will continue to remain highly dependent on its people’s innovative and entrepreneurial spirit.

    In 2050, the U.S. will look very different from the country in 2000, at the dawn of the new millennium. By mid-century, the U.S. will no longer be a “white country,” but rather a staggering amalgam of racial, ethnic and religious groups, all participants in the construction of a new civilization whose roots lie not in any one country or continent, but across the entirety of human cultures and racial types. No other advanced, populous country will enjoy such ethnic diversity.

    The implications of this change will be profound for governments-perhaps in ways not now commonly anticipated. Many “progressives” believe a more diverse, populous nation will need more guidance from Washington, D.C., but a more complex and varied country will increasingly not fit well into a one-size-fits-all approach.

    Although the economic crisis of 2008 led to a rapid rise of federal power, there has been a stunning and largely unexpected push-back reflected, in part, by the tea party movement. Some states have passed laws that seek to restrict federal prerogatives on a host of issues. More importantly, public opinion, measured in numerous surveys, seems to be drifting away from major expansions of government power.

    Of course, most Americans would accede to the federal government an important role in developing public works, national defense and regulations for health and safety. But generally speaking, they also tend to believe that local communities, neighborhoods and parents should possess the power to craft appropriate solutions on many other problems.

    This also reflects our historical experience. From its origins, American democracy has been largely self-created and fostered a dispersion of power; in many European countries, and more recently in parts of Asia, democracy was forged by central authorities.

    Other periods of massive government intervention, most notably after the New Deal and the Great Society, also elicited reactions against centralization. But the current push-back’s speed and ferocity has been remarkable. Yet the often polarizing debate about the scope of federal power largely has ignored the longer-term trends that will promote the efficacy of an increasingly decentralized approach to governance.

    Perhaps the most important factor here is the trajectory of greater growth and increasing diversity of who we are and how we live. Not only are Americans becoming more racially diverse, but they inhabit a host of different environments, ranging from dense cities to urbanized suburbs, to smaller cities and towns, that have different needs and aspirations.

    Americans also are more settled than any time in our history-partially a function of an aging population-and thus more concerned with local developments. As recently as the 1970s, one in five Americans moved annually; in 2004 that number was 14 percent, the lowest rate since 1950. In 2008, barely one in 10 moved, a fraction of the rate in the 1960s. Workers are increasingly unwilling to move even for a promotion due to family and other concerns. The recession accelerated this process, but the pattern appears likely to persist even in good times.

    Americans also prefer to live in decentralized environments. There are more than 65,000 general-purpose governments; the average local jurisdiction population in the United States is 6,200-small enough that nonprofessional politicians can have a serious impact on local issues. This contrasts with the vast preference among academic planners, policy gurus and the national media for larger government units as the best way to regulate and plan for the future.

    Short of a draconian expansion of federal power, this dispersion is likely to continue. Roughly 80 to 90 percent of all metropolitan growth in the last decade took place on the periphery; at the same time, the patterns of domestic migration have seen a shift away from the biggest cities and toward smaller ones. As Joel Garreau noted in his classic Edge City, “planners drool” over high-density development, but most residents in suburbia “hate a lot of this stuff.” They might enjoy a town center, a paseo or a walking district, but they usually resent the proliferation of high-rises or condo complexes. If they wanted to live in buildings like them, they would have stayed in the city.

    Attempts to force major densification in these areas will be fiercely resisted, even in the most liberal communities. Some of the strongest anti-growth hotbeds in the nation are areas like Fairfax County, Va., with high concentrations of progressives-well educated people who might seem amenable to environmentally correct “smart growth”-advocating denser development along transit corridors. As one planning director in a well-to-do suburban Maryland county put it, “Smart growth is something people want. They just don’t want it in their own neighborhood.”

    The great long-term spur to successful dispersion will come from technology, as James Martin first saw in his pioneering 1978 book, The Wired Society. A former software designer for IBM, Martin foresaw the emergence of mass telecommunications that would allow a massive reduction in commuting, greater deconcentration of workplaces and a “localization of physical activities … centered in local communities.”

    Technology would allow skilled people to congregate in communities of their choice or at home. Today not only knowledge workers but also those in construction trades, agriculture and other professions are home-based, conducting their operations out of trucks, vans or home offices.

    Many leading-edge companies now recognize this trend. As much as 40 percent of IBM’s work force operates full time at home or remotely at clients’ businesses. Siemens, Hewlett-Packard, Cisco, Merrill Lynch and American Express have expanded their use of telecommuting, with noted increases in productivity.

    At the same time, employment is shifting away from mega-corporations to smaller units and individuals; between 1980 and 2000, self-employed individuals expanded tenfold to include 16 percent of the work force. The smallest businesses, the microenterprises, have enjoyed the fastest rate of growth, far more than any other business category. By 2006 there were some 20 million such businesses, one for every six private-sector workers.

    Hard economic times could slow this trend, but recessions have historically served as incubators of innovation and entrepreneurship. Many individuals starting new firms will have recently left or been laid off by bigger companies, particularly during a severe economic downturn. Whether they form a new bank, energy company or design firm, they will do it more efficiently-with less overhead, more efficient Internet use and less emphasis on pretentious office settings. In addition, they will do it primarily in places that can scale themselves to economic realities.

    Simultaneously the Internet’s rise allows every business-indeed every family-unprecedented access to information, something that militates against centralized power. Given Internet access, many lay people aren’t easily intimidated into accepting the ability of “experts” to dictate solutions based on exclusive knowledge since the hoi polloi now possess the ability to gather and analyze information. Even the powerful media companies are rapidly losing their ability to define agendas; there are too many sources of information to mobilize mass opinion. The widespread breakdown of support for climate change is a recent example of this phenomenon.

    Once the current drive for centralization falters, support for decentralization will grow, including progressive communities that now favor a heavy-handed expansion of federal power. Attempts to impose solutions from a central point will be increasingly regarded as obtrusive and oppressive to them, just as they would to many more conservative places like South Dakota. In the coming era, in many cases, only locally based solutions-agreed to at the community, municipal or state level-can possibly gather strong support.

    This drive toward dispersing power will prove critical if we hope to meet the needs of an unprecedentedly diverse and complex nation of 400 million. New forms of association-from local electronic newsletters to a proliferation of local farmers markets, festivals and a host of ad hoc social service groups-are already growing. Indeed, after a generation-long decline, volunteerism has spiked among Millennials and seems likely to surge among downshifting baby boomers. In 2008, some 61 million Americans volunteered, representing more than one-quarter of the population older than 16.

    It’s these more intimate units-the family, the neighborhood association, the church or local farmers market-that constitute what Thomas Jefferson called our “little republics,” which are most critical to helping mid-21st-century America. Here, our nation of 400 million souls will find its fundamental sustenance and its best hope for the brightest future.

    This article originally appeared in GOVERNING Magazine.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo by slynkycat

    May 3, 2010

  • How Tough Times May Lead to Better Architecture

    By Richard Reep

    While Ben Bernanke fantasizes about the Recovery, most people in the building industry – especially in overbuilt Florida – will correct this gross error immediately and emphatically. The recession may be over for the Fed Chairman, but unemployment in the design and construction professions is probably in the 25-30% range, matching that of the Great Depression.

    Even so, tiny glimmers of light shine in what many design professionals call the “microeconomy” of building – small commercial renovations, house additions, tenant improvements, and other projects normally too small to even be counted. Although they lack the whallop, or the profits of big stuff – hotels, hospitals, or new towns – these do count, and are anecdotally turning towards local vernacular design and even contemporary architectural design as a strategy to beat the system, possibly pointing the way for the future.

    Architectural styles are a slow-moving parade of fashions, too often divorced from climate, regional characteristics, or the cultural backgrounds of those who choose them. For most commercial and residential architecture that sprang up around neighborhoods, a mix of Victorian and Spanish Mediterranean styles seemed to be universally implemented by developers trying to please the largest quantity of people in the shortest period of time. Homes with terra cotta tiles and beige arches seemed to lurk behind bland Victorian Main Streets that sprouted everywhere from Montana to Alabama, betrayed by skin-tight fixed windows and paper-thin detailing. As branding elements, these styles nationalized what was once regional and climate-specific design.

    Once again, we seem to be repeating history. In the 1870s and 1880s, suburbs began in many cities, and for the first time homeowners could choose custom-designed houses rather than production homes. Relative peace and prosperity begat a rush to consumerism matched only by our recent ambitions, and the Victorians became well known for an architecture and interior design style that promoted fussy detailing, the display of ornate and exotic materials, and homes overlaid with a frenzy of patterned wood siding, stained glass, carved woodwork, and high-pitched rooflines so that even the roof shingles could be a place to show off wealth. Furniture makers and material suppliers invented new products to feed the demand for consumer goods.

    Yet this all crashed right at the turn of the 20th century, mostly because of the economic transitions suffered going back to the Panic of 1893. Suppressed until that time, modernism came out as a style in the Edwardian era that was much more sensitive to the modest budgets of homeowners building in the 20th century. Even Frank Lloyd Wright, whose career was famously independent of the vagaries of fashion, conceded that affordability was part of the appeal of his style – his “usonian” architecture reveled in simplicity and he took low-budget commissions to prove that good design need not be cluttered with doodads.

    Today, after a similar consumerist run-up, residential architecture is suffering from a similar hangover, as we recover from the granite countertops and carved stone lions of the pre-recession era. These egregious displays of affluence may be gone for a long, long time. But people are still going about the business of adjusting their homes and businesses to suit their needs – and there is a steady microeconomy of residential and small commercial construction.

    Cost, however, is the single overriding factor in most small projects today, and a focus on localism favors the budget. For one thing, a region’s vernacular style usually responds best to the climate, and typically employs materials that can be locally sourced – no stone from Chinese quarries is necessary. In Florida, for example, the vernacular style suspends the floor over a crawl space and includes deep roof eaves extending over the walls – both in response to the combination of harsh sun and heavy rains that task the building envelope. The benefit of this style is lower construction cost (gone are all the elaborate carved woodworking pieces, the high rooflines with multiple dormers and turrets) and also lower energy costs.

    Other clients are waking up to the simple fact that contemporary architecture costs less. Like the Edwardians before who developed a taste for the modern, owners building homes and additions in today’s economy have a newfound simplicity in their styles. With a few choice materials around the entry, some simple, strong lines, and a restrained approach to details, contemporary architecture is making a comeback in the residential market. Midcentury modern, a residential style all but forgotten in the McMansion era, was particularly suited to the returning GIs after World War 2 who desired a home but possessed the most modest of budgets. This affordability is the key driving factor to the rise of this style, and is also a naturally “green” architectural style because of what it does without. Modernist Mies Van Der Rohe’s dictum “less is more” can mean here that less ornament and fussy detailing means more money in the owner’s pocketbook at the end of the day.

    Even more interestingly, house additions and remodeling still seems to exist in this economy. Owners are taking advantage of the construction market’s reduced material costs, are building in more home offices, and enlarging their homes to accommodate a multigenerational lifestyle – parents living at home, or grown children living at home. Larger family clusters within single residences point to reduced mobility, and an evolving, relatively easy re-densification of suburbs that have been winnowed by a plethora of empty nesters.

    This new respect for budget has some naturally green outcomes, as families cluster together to save money and energy, and home offices save commuting. By adapting a home in a budget conscious way, taking advantage of vernacular architecture and developing a taste for simple, clean design, many owners are unconsciously working with sustainable strategies already. If sustainability means the preservation of future generation’s choices, then by conserving money and aggregating closer together, owners have already implemented their own sustainability policy.

    Green design should be seen as a grassroots response to the local climate, rather than a prescriptive code forced down from above. And it can produce a magnificent architecture in a timeless style. No federal program or international design guru can impact this like the microeconomy; instead people are making pragmatic choices, and once again discovering that the local vernacular architecture has a lot of good, commonsense clues about how to live a sustainable lifestyle.

    Richard Reep is an Architect and artist living in Winter Park, Florida. His practice has centered around hospitality-driven mixed use, and has contributed in various capacities to urban mixed-use projects, both nationally and internationally, for the last 25 years.

    Photo by cliff1066™

  • Drew Carey and John Stossel Tell Cleveland to Learn From Houston

    What started as a humble video segment for Reason TV has mushroomed into a lot of positive PR for Houston (and less than positive for Cleveland).  It started with famous actor and comedian Drew Carey working with the libertarian Reason Foundation on a video series about saving Cleveland, his hometown.  Houston is held up as a “best practice” example for land use regulation.  There are lots of suggestions and positive comparisons to Houston on red tape (minutes 29:20 thru 32), zoning (37:30), and opportunity (47:50). Yours truly has a short cameo at 38:55. (If you want to be able to jump around, the trick is to start playing it, then hit Pause. You’ll see the grey loading indicator continue to download the video. Come back later after it’s fully loaded and you’ll be able to jump to any point you like.)
    After the series was released to the internet and Forbes declared Cleveland the Most Miserable City in America, John Stossel at FOX Business News picked it up.  A friend of mine loaned me a DVD of the 45 minute show (thanks Nolte), but I haven’t been able to find it online.  There are shorter segments about it here and here.  The first one jumps right into talking about Houston 16 seconds in, and the second one jumps into Houston around 40 seconds and 58 seconds in.  The Cleveland newspaper writes about the show here.
    Unfortunately, one of the professors he has on the show to present the other side brings up another one of those Houston myths that just won’t die: that you can build anything next to anything, including a strip club next to a day care center or school.  No, we have narrow nuisance and SOB regulations to prevent that.   We also have private deed restrictions. You don’t have to prescriptively control everything to prevent the worst-case scenarios.
    Then Bill O’Reilly picks up the story in an interview with Stossel (hat tip to Jessie):

    STOSSEL: People go to where the weather is good. We already have…

    O’REILLY: Well, you can’t blame the city for the weather. I mean, look at Chicago. Great city, bad weather. Boston, come on. You can’t blame the city for the weather.
    STOSSEL: You can rank them for that. And you can blame the politicians for saying we’re going to raise taxes to build our wonderful projects, and that’s going to make things better. The cities that prosper like Houston are the cities that have fewer rules and lower taxes.
    O’REILLY: But remember Houston used to be the crime capital? They cleaned that place up pretty well.
    STOSSEL: But Cleveland has 22 zoning categories. Houston has none.
    O’REILLY: Twenty-two zoning categories? Very hard.
    STOSSEL: In Cleveland, to start a business, a politician bragged, “We could get you in there in just 18 months.” In Houston, one day.
    O’REILLY: One day? The problem with no zoning is you can have, you know, the No-Tell Motel right next to you. And…
    STOSSEL: You could. But that rarely happens. And it’s not an ugly city, Houston.
    O’REILLY: No, I didn’t say it was ugly. Who said it was ugly?
    STOSSEL: Lots of people. No zoning. The city planner said it will be ugly. You will have…
    O’REILLY: We have a lot of Houstonians watching “The Factor,” and I love going to Houston. All right. There you are, the Forbes magazine list, and Stossel laying it down.

    We’ve come a long way.  Five or ten years ago, you couldn’t find many people – including libertarians – that were willing to hold Houston up as a land-use model in public because our reputation was so bad.  But now they do, and it’s (slowly) changing our national reputation for the better.

    This post originally appeared at HoustonStrategies.com

  • The Best Cities For Jobs

    This year’s “best places for jobs” list is easily the most depressing since we began compiling our annual rankings almost a decade ago. In the past–even in bad years–there were always stalwart areas creating lots of new jobs. In 2007’s survey 283 out of 393 metros areas showed job growth, and those at the top were often growing employment by at least 5% to 6%. Last year the number dropped to 63. This year’s survey, measuring growth from January 2009 to January 2010, found only 13 metros with any growth.

    Mike Shires at the Pepperdine School of Public Policy, who develops the survey, calls it “an awful year.” Making it even worse, the source of new jobs in almost all areas were either government employment or highly tax payer-funded sectors like education and health. This year’s best-performing regions were those that suffered the smallest losses in the private economy while bulking up on government steroids.

    So far the recovery has favored the government-dominated apparat and those places where public workers congregate.After all, besides Wall Street, public-financed workers have been the big beneficiaries of the stimulus, with state and local governments receiving more than one-third of all funds. Public employment grew by nearly 2% over the past three years, while private employment has dropped by 7%.

    Read how we pick the best cities.

    Private sector workers have also seen their wages decline, while those working for the various levels of government have held their own. Federal workers now enjoy an average salary roughly 10% higher than their private sector counterparts, while their health, pension and other benefits are as much as four times higher.

    Not surprisingly government workers, according to a recent survey, are more likely to see the economy improving than those engaged in the private sector. It’s not so pretty a picture on Main Street; personal bankruptcy filings rose 23% in the year ending in March.

    Small Is Still Beautiful

    Despite these differences, some patterns from previous years still persist. The most prominent is the almost total domination of the top overall rankings by smaller communities. With the exception of Austin, Texas, all the top 10 growers–and all the net gainers–were small communities. Americans have been moving to smaller towns and cities for much of the past decade, as well as jobs, and this recession may end up accelerating the trend.

    At the top of the list stands No. 1 Jacksonville, N.C., whose economy grew 1.4%, paced by 3.3% growth in government jobs. Fast growth, however, is not a stranger to this Southern community, whose employment base has grown 22.8% since 1998. The area includes the massive Marine Base at Camp Lejeune, a beehive of activity since the U.S. started waging two wars in Afghanistan and Iraq. Fort Hood-Temple-Fort Hood in Texas came in fourth place overall with Fayetteville, N.C., home to the Army’s Fort Bragg, placing sixth and Lawton, Okla., home of Fort Sill, close behind at No. 7. Similar explanations can apply to war economy hot spots Fort Stewart (No. 20 overall) and Warner Robbins (No. 26), both in Georgia.

    But perhaps nothing captures the current zeitgeist more than the presence, at No. 23, of Hanford-Corcoran, Calif. A large Air Force base and a state prison have bolstered Hanford-Corcoran’s economy, which shows that even in the Golden State–an economic basket case whose unemployment keeps rising–a large concentration of government jobs still guarantees some degree of growth.

    Not all our top-ranked small stars got their stimulus from Uncle Sam. Energy-related growth explains strong performances from Bismarck and ag-rich Fargo, N.D., at Nos. 2 and 8, respectively. You can also credit some energy-related growth to the high standing of Morgantown, W.Va., (No. 17) and Anchorage, Alaska, (No. 18), which have benefited from consistently high prices of oil and other sources of energy.

    Texas at the Top of Big Cities

    Our list of best places among big cities is dominated this year, as last, by Texas, with the Lone Star State producing fully half of our top 10. This year, like last, the No. 1 big city (those with a more than 450,000 non-farm jobs) was Austin, Texas, which enjoys the benefits of being both the state capital and the home to the University of Texas, as well as a large, and growing, tech sector.

    But the Texas story also includes places that do not enjoy Austin’s often overwrought “hip and cool” image. Broad-based economies, partly in energy, have paced the growth of No. 2 San Antonio, No. 3 Houston, No. 5 Dallas and No. 7 Fort Worth. Other consistent big-city Southern performers include No. 8 big metro Raleigh-Cary, N.C., as well as two ascendant Great Plains metropolises, No. 9 Omaha and No. 11 Oklahoma City. None of these places were too hard-hit by the mortgage meltdown, and they all have retained reputations as business-friendly areas.

    The other big winner among the large areas is an obvious one: No. 6 ranked greater Washington, D.C. While most American communities suffer, our putative Moscow on the Potomac has emerged as the big winner under Barack Obama and the congressional centralizers. Remarkably, federal employment in the area has grown at a smart pace throughout the recession. One partial result: Washington office space is now–for the first time ever–more expensive than that in Manhattan. Northern Virginia, home to many beltway bandit companies, ranks No. 4 on our list.

    The Eds and Meds Economy

    With the productive economy outside energy only now getting its footing, the biggest relative winners have been what could be called the “eds and meds” economies. This includes de-industrialized places such as Pittsburgh (ranked a surprising No. 13), Rochester, N.Y., (ranked No. 17) and Buffalo, N.Y. (No. 20). If you have few more factory jobs to lose, little in-migration and a huge collection of institutions relatively immune to the economic turndown, you have a better chance to look good in bad times. The stimulus tilted more toward education and health than to construction and infrastructure, something that has worked to the favor of these cities.

    We can see this in New York City, whose huge and growing concentration of colleges and hospitals helped propel it to No. 10 among the big regions, its best ranking ever, despite losing almost 130,000 jobs. This is all the more remarkable since the Big Apple was the epicenter of the financial collapse, although that also made it the prime beneficiary of the federal bailout and Wall Street’s boom. Soaring salaries for hedge fund managers and new hires at financial firms could be pacing new growth in the city’s elaborate service industry, from toenail painters, restaurateurs and psychologists to dog walkers and yoga instructors.

    The health of the eds and meds economy, however, has even been enough to lift some traditional bottom-dwelling sad sacks, such as No. 14’s Philadelphia, to unfamiliar, if rather relative, heights. With private-sector growth weak everywhere, cities with lots of big hospitals, universities and nonprofit foundations look better for the time being than they have in a generation.

    The Road Ahead

    We expect our list to change next year, but how it will do so will depend as much on politics as economics. The current policy approaches–with healthy increases in government employment and strong support for education–have worked relatively well for taxpayer-financed economies including those with a strong “eds and meds” sectors. State universities, now confronted with the real pain of the recession felt by state taxpayers, are already crying for heavy increases in federal support.

    But if Congress takes a turn to the center, or even right, after November, the advantageous position of the favored government-supported sectors may erode. Particularly vulnerable will be state workers, whose current federally sanctioned reprieve could be terminated if voters force legislators to start addressing concerns over the huge governmental deficits both locally and nationally. Given D.C.’s unique ability to print money, Washington and its environs will likely continue to expand, as they did under the spendthrift Bush regime, but many state and local governments may be forced onto a stringent diet.

    On the other hand, a welcome return to basic growth in overall economy would further boost those relatively low-cost areas–notably in Texas, the Great Plains and the Intermountain West–that have in recent years enjoyed the strongest trajectory in the non-government related sectors, including natural resource-based industries . These places have pro-business regulatory and tax regimes, lots of available land and affordable housing, which will attract new businesses and workers to their areas.

    This change could also benefit some places, such as Silicon Valley, parts of Southern California and the Pacific Northwest, which despite high costs still retain globally competitive, tech-related sectors. A resurgent job market in these areas would erase the current apparent advantage enjoyed by “eds and meds” based economies in favor of those places that will serve as the real incubators for a revived private sector economy. With the resumption growth, hopefully, our economy next year will begin resembling the more capitalist, competitive one we have enjoyed in the past.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.

    Photo: kiril106

    April 20, 2010

  • The Millennial Metropolis

    Back in the 1950s and 60s when Baby Boomers were young, places like Los Angeles led the nation’s explosive growth in suburban living that has defined the American Dream ever since. As Kevin Roderick observed, the San Fernando Valley became, by extension, “America’s suburb” – a model which would be repeated in virtually every community across the country.

    These suburbs – perfectly suited to the sun-washed car culture of Southern California – have remained the ideal for most Americans. And they remain so for the children of Boomer and Generation X parents, Millennials,(born 1982-2003), who express the same strong interest in raising their families in suburban settings.

    According to the most recent generational survey research, done for Washington-based think tank, NDN, by Frank N. Magid Associates, 43 percent of Millennials describe suburbs as their “ideal place to live,” compared to just 31 percent of older generations. In the same survey, a majority of older generations (56%) expressed a preference for either small town or rural living. This may reflect the roots of many older Americans, who are more likely to have grown up outside of a major metropolis, or it may indicate a desire of older people for a presumably simpler lifestyle.

    By contrast, these locations were cited by only 34 percent of Millennials as their
    preferred place to live. A majority (54%) of Millennials live in suburban America and most of those who do express a preference for raising their own families in similar settings. Even though big cities are often thought of as the place where young people prefer to live and work, only 17 percent of Millennials say they want to live in one, less than a third of those expressing a preference for suburban living. Nor are they particularly anxious to spend their lives as renters in dense, urban locations. A full 64 percent of Millennials surveyed, said it was “very important” to have an opportunity to own their own home. Twenty percent of adult Millennials named owning a home as one of their most important priorities in life, right behind being a good parent and having a successful marriage.

    This suggests that some of the greatest opportunities in housing will be in those metropolitan areas that can provide the same amenities of suburban life that Los Angeles did sixty years ago. In this Millennials are just like their parents who moved to the suburbs in order to buy their own home, with a front and back yard, however small, in a safe neighborhood with good schools.

    Given the fact that nearly four in five Millennials express a desire to have children, cities that wish to attract Millennials for the long-term will have to offer these same benefits. These Millennial metropolises also will need to be built with the active participation of their citizens, using the most modern communication technologies, to create a community that reflects this generation’s community-oriented values and beliefs. Metropolises that wish to attract Millennials, will also need to include them in their governing institutions. Such cities will have a leg up on those run by closed, good old boy networks that don’t reflect the tolerance and transparency Millennials believe in.

    The passion of Millennials for social networking and smart phones reflects their need to stay in touch with their wide circle of friends every moment of the day and night. In fact, 83 percent of this generation say that they go to sleep with their cell phone. This group-oriented behavior is reflected in the efforts of Millennials to find win-win solutions to any problem and their strong desire to strengthen civic institutions. Seventy percent of college age Millennials have performed some sort of community service and virtually every member of the generation (94%) considers volunteer service as an effective way to deal with challenges in their local community.

    The other key characteristic of the Millenial metropolis will be how it carves out a safe place for children. The Boomer parents of Millennials took intense interest in every aspect of their children’s lives, earning them the sobriquet “helicopter parents” because of their constant hovering. Now the Generation X “stealth fighter parents” of younger Millennials are turning the Boomer desire to hover and talk into a push for action and better bottom line results.

    This can already be seen in cities like Los Angeles where a parent revolution is successfully challenging the entrenched interests in the Los Angeles Unified School District (LAUSD).

    The idea began with a website, www.parentrevolution.org, that offered a bargain to parents willing to participate in a grass roots effort to improve individual schools. The organizers, led by Ben Austin, a long time advocate on behalf of Los Angeles’s kids, promised that if half of the parents in a school attendance district signed an online petition indicating their willingness to participate in improving their local school, they would “give you a great school for your child to attend.”

    This process has worked both in working class areas like East Los Angeles’ Garfield High School and the Mark Twain Middle School in affluent West LA. With the backing of the parents, Austin went to the Los Angeles school district and demanded that they either put the management of the school “out to bid,” or his organization would be forced to respond to the parent’s demands by starting a charter school in competition with the LAUSD school. Since each child has seven thousand dollars of potential state funding in their back pack, a newly enlightened LAUSD agreed to these demands. When 3000 parents showed up to demonstrate their support of the concept, the school district voted 6-1 to adopt a policy mandating competitive bids eventually be issued for the management of all 250 “demonstrably failing schools” as defined by federal education law.

    The key to building the Millenial metropolis will be to accommodate such changes. Places like Dallas, Houston, Austin, or Raleigh-Durham that have survived the Great Recession reasonably well now are focusing on producing open, accessible communities with good schools and safe streets. These communities appear best positioned to take advantage of the next bloom of urban growth. Of course the ability to provide America’s next great generation with good jobs and a growing economy will also be required if any metropolis wants to attract Millennials. But with the right leadership and a sustained effort to focus on the basics of family living, almost any city has the opportunity to become a leader in the rebirth of America’s Millennial Era metropolises.

    Morley Winograd and Michael D. Hais are fellows of the New Democrat Network and the New Policy Institute and co-authors of Millennial Makeover: MySpace, YouTube, and the Future of American Politics (Rutgers University Press: 2008), named one of the 10 favorite books by the New York Times in 2008.

    Photo: Papalars

  • Queensland: Housing Relief on the Horizon?

    Queensland might be thought of as the Florida of Australia. Like Florida, Queensland is the “Sunshine state.” For years, Queensland has been the fastest growing state in the nation, just as Florida has been the fastest growing large state in the United States. The Gold Coast in Southeast Queensland might be characterized as Miami Beach on steroids.

    Both states have also faced housing difficulties. With its smart growth land rationing policies, house prices escalated wildly in Florida and then collapsed as America’s “drunken sailor” lending policies came home to roost. Queensland has had similar “urban consolidation” land rationing policies and the same house price escalation has occurred. However, the price bust did not follow, because lending standards were more strict. This is because adults were in charge of finance in Australia instead of the cartoon characters that drove policy in the United States. Australian lenders at least asked borrowers if they had a job and checked their pulse.

    But there are still housing problems in Queensland. The Urban Development Institute of Australia Queensland has just released its two Richardson reports that, among other things, suggest that restrictions on housing are increasing household sizes. In recent years, only one new house has been produced for each new resident, which compares to an average household size of 2.5. Presumably younger people are living longer with their parents and perhaps, with the strong foreign immigration to Australia, there is substantial “doubling up,” as houses are shared by people who would not otherwise live together, such as multiple families (internationally, census authorities define a household as all of the people living in a single house).

    Median lot prices and median house prices have risen strongly in Queensland, which has led to a decline in housing construction and a loss of construction jobs. The report recommends allowing more housing development on greenfield sites and developing additional infrastructure on the urban fringe where more housing would be developed. Finally, the report urges that the state establish benchmarks for the time it takes to approve and build greenfield developments.

    The Richardson reports are just another indication that the severity of the housing crisis and its causes is more broadly understood in Australia. Queensland would do well to follow its recommendations.

    Photo: Gold Coast