New Geography

Category: Policy

  • Levittowns of the Future

    This essay is part of a new report from the Center for Opportunity Urbanism called "America’s Housing Crisis." The report contains several essays about the future of housing from various perspectives. Follow this link to download the full report (pdf).

    “…a social revolution was being made, not by storming barricades, but by leaping over them.”

    Seven decades ago, the great post- war American suburbanization began. The seminal development was Levittown, built on potato fields in Nassau County, outside New York City. This archetypical development, with its small houses and modest lots, helped launch a suburbanizing trend that has accounted for virtually all of the population growth in the nation’s largest metropolitan areas. Today’s new houses are at least three times the size of the early Levittown houses, but they reflect the continued preference for suburban communities over the last half century.

    This essay examines the great Post-War suburbanization, incubated in Levittown and its revolutionary impact on American civilization. At the same time, there is no doubt that racial exclusion was part of the formula, abetted not only by people, communities and developers, but worst of all by governments themselves, especially the federal government. These regrettable exclusionary policies at the time also characterized virtually every walk of American life.

    Yet, for the most part, millions— now including millions of minority households—are better off than they would have been without the great suburbanization. As Professional Builder magazine put it:

    At a time when few working people could afford a home, Levitt helped them realize their dream, starting with servicemen and women returning from the war.

    Levitt brought mass production techniques to home building, following in the mold of Henry Ford, who made automobiles inexpensive enough for middle-income households. The higher quality detached housing with yards could not have been built at low enough prices without such techniques, nor could it have been offered at such prices without the additional advantage of less expensive urban fringe land.

    As home ownership expanded, perhaps the most important result was class mobility. In this period the
    American middle class expanded as never before and home ownership skyrocketed.

    This might seem cause for celebration, but an influential group of planners and intellectuals damned it from the very start. These, whom this essay will refer to as the retro-urbanists, tend to idealize the pre- automobile city, which has largely been replaced not only in the United States but in virtually all high income countries. German academic Thomas Sieverts called these views “criticism rooted in an ideological concept of the city.”

    As retro-urbanists have sought to stop or even reverse suburbanization, people stubbornly have continued to choose the suburbs overwhelmingly,
    not materially moved by the nostalgia so often keenly evident among pundits and planners. So far these efforts have achieved only modest gains, mostly in a handful of states, where the retro-urbanists have had sway, but at great cost to the middle class. \

    In the meantime, however, the housing affordability represented by Levittown and most of the suburban development since World War II has  had its reward in a “property owning democracy,” which legendary urban planner Peter Hall of University College, London described as a principal objective of public policy.

    THE SITUATION IN 1946

    The America of 1946 was much different than today. The United States had just emerged from the world’s most destructive war, emerging as the dominant world power and producer (the latter principally because other competitors had experienced massive destruction). Yet, despite this position, Americans in 1946 experienced a far lower standard of living and greater level of poverty than today.

    World War II had made it possible, finally, for the nation to emerge from  the Great Depression, which had been characterized by unprecedented levels of unemployment and economic stagnation.

    Housing was overcrowded, especially in the cities and living standards were far below present standards.

    Michael J. Bennett describes the situation:

    “Home was usually a three or four story tenement or apartment house, a two, three or four-decker for as many families or a single-family shotgun house with tiny rooms off
    a single corridor, so-called because the shotgun could be fired down the corridor without hitting anyone. Only the better-off live in fairly spacious houses on the outskirts of town. Even those houses, however, had small tiny front lawns and were separated from each other by little more than a hedge between gravel or partially paved driveway.”

    Bennett goes on to indicate that only the very rich took showers in the morning, “because they were the only ones with showers” and that “Many families had to share toilets and sinks as well as tubs with people living on the same floor.”

    The nation’s returning soldiers, in unprecedented numbers, would experience a better America, with better lives. There was also a concern among policymakers that the failure to facilitate opportunities for returning soldiers could result in social upheaval or even revolution in the worst case. Some noted the social disruptions that occurred following World War I, in countries like Russia and Germany. There was great interest in trying to ensure that this did not happen in America.

    Just before the end of the war, Congress passed and President Roosevelt signed the Servicemen’s Readjustment Act of 1944, called the “GI Bill of Rights,” which provided assistance to veterans, especially improving access to housing and access to higher education. At the same time, the Federal Housing Administration was aiding home purchases for households not eligible for the “GI Bill.”

    LEVITTOWN AND THE GREAT POST-WAR SUBURBANIZATION

    America’s status as an urban nation was still relatively new as it headed into World War II. The US urban population had not exceeded that of rural areas until the 1920 census. By 1940, the urban population was approximately 57 percent, according to Census Bureau data, well below the 81 percent of 2010. In the following seven decades almost all of the nation’s population growth would occur in America’s urban areas.

    Following the legacy of the New Deal, it was expected that new housing would be largely provided by government. The home ownership rate had dropped to 44 percent from its peak of 48 percent in 1930.ix It was assumed that the new
    housing would be for renters rather than for homeowners. The reality turned out much different.

    One entrepreneur is widely heralded as having blazed the trail for the suburbanization that emerged following World War II, William Levitt, and his company Levitt and Sons. A home builder before the war, in 1947 he established the legendary Long Island, New York, community of Levittown. Levitt revolutionized homebuilding in the United States after having applied factory building techniques to the provision of wartime (defense) housing.

    Levitt began to build rental housing on the suburban fringe of New York City, but switched to owned housing as federal programs and his house production techniques together create auspicious conditions for selling single family houses.

    In 1947, Levitt marketed four different models. Eventually the seven square mile development would contain more than 17,000 new houses. The houses were small, at 750 square feet. There were
    four rooms, the kitchen, the living room and two bedrooms, all on a single floor. The houses, however could be expanded, which many households did. There were no garages. The houses were sold for approximately twice the average wage earner’s annual pay.

    Little more than a decade after the first house was occupied, Levittown achieved a population of 65,000 (1960 census). This was near the peak of Levittown’s population, since with virtually all of the land occupied and a future of declining household size, reductions in population were inevitable. By 2010, the population had dropped to 52,000. However Levittown remained a vibrant community from the beginning and remains so today.

    Levitt took the concept to other metropolitan areas as well. A Levittown featuring somewhat larger houses was developed in the Philadelphia suburbs of Willingboro township in Burlington County, New Jersey and in Pennsylvania’s Bucks County.

    In an essay entitled “Levittown: The Archetype for Suburban Development,” historian Joshua Ruff said that: “… Levittown was about more than just the houses,” adding that it was the “…largest and most influential housing development of its time..”

    Lakewood: Another important suburban community was Lakewood, located near Long Beach in the Los Angeles metropolitan area.xi The Lakewood development included 17,500 houses built between 1950 and 1953.
    The houses were between 825 square feet and 1,050 square feet.xii Lakewood, which claimed to be the largest planned housing development ever, included a regional shopping center.

    However, despite such important early developments, most of the new suburban housing around the nation was built by smaller home builders in the decades to come.

    THE CONSUMER RESPONSE

    The new suburban communities were exactly what returning soldiers and other Americans wanted. As historian Joshua Ruff put it:

    Patience had been killed by 15 years of economic depression, war and an epidemic housing shortage. People wanted the full package—the affordable house, the new appliances, the suburban lifestyle—and they wanted it right away.

    Kenneth Fox, of Yale University, wrote that: “The suburban development that began in the 1940s was revolutionary in two ways: it changed the type of community millions of Americans live in, and it transformed the national social class structure.”

    The American middle class was about to undergo an unprecedented expansion. Before, as author Studs Terkel put it:
    “The suburb, until [about 1946], had been the exclusive domain of the ‘upper class.’ It was where the rich lived. The rest of us were neighborhood folk. At war’s end, a new kind of suburb came into being.”

    According to Fox: “Eventually, suburban cultural changes and white- collar status aspirations fused and produced a shift in the basis of social class differentiation. Income and style of living supplanted occupation and economic status as the parameters defining the major social classes. A broad middle class emerged, encompassing more than one half the metropolitan population in the 1970s.”

    Indeed, according to Fox, middle- class became defined more as lifestyle,
    rather than origins: “Increasingly, and the family that chose to buy a home in a reputedly middle-class community, behave in a middle-class matter, and maintain all appearances of the middle class, could gain acceptance in the middle class, regardless of the parents occupations.”

    Levittown chronicler Barbara Kelly noted a connection between home ownership and upward mobility, indicating that it conveyed “defacto membership in middle class.” She added: “…during the years in which  the government was most active in promoting home ownership, there was a marked expansion of the American middle class, which consisted largely of the definition of its parameters.”

    Harvard historian Robert Fishman noted the rising affluence: “For the first time in any society, the single-family detached house was brought within  the economic grasp of the majority of households.” The US may have been first, but it is not alone in having democratized prosperity.

    Bennett characterized the advances, noting that “…a social revolution was being made, not by storming barricades, but by leaping over them.”

    And despite claims to the contrary, most of the new suburban residents came from migration to the large metropolitan areas, not from core cities. The new suburbanites were as likely to be from a small town or the countryside as a big city.

    HOUSING AFFORDABILITY: WHAT MADE IT POSSIBLE

    It was the affordability of such housing that made these improvements possible. Housing remained affordable across the nation in the decades to come, with some important exceptions.

    According to the US censuses of 1950 through 1970 median house values in the largest metropolitan areas were generally 3.0 or less times the median household income (the “median multiple”), with only two having a higher average (both 3.1).

    At the same time, there were differences in housing affordability. As would be expected, some parts of the country were more attractive than others. Therefore, it is not surprising that house prices in the coastal California metropolitan centers of Los Angeles, the San Francisco Bay Area and San Diego were less affordable, but still remained at or below the 3.0 median multiple standard, in part due to higher incomes.

    The housing bubble and bust were to come later, during which the losses in housing affordability were even greater.

    Home Ownership

    The government role here was crucial. By 1960, homeownership had reached 62 percent, well above the 44 percent  of 1940. In the following three and half decades, the home ownership rate varied up and down in a range of from 62 percent to 66 percent (Figure).

    Then, as mortgage eligibility was relaxed during the housing bubble, the home ownership rate rose to nearly
    69 percent. Following the housing bust, it had fallen to below 64 percent by 2015.

    Some retro-urbanists have characterized the comparatively recent experience of the housing bubble and bust as indicative of an overall failure of postwar US housing programs. Nothing could be further from the truth.

    In fact, US housing programs had been instrumental in producing a significant increase in homeownership and the creation of a much broader middle-class. The evidence remains “the 60 to 65 percent level of home ownership of the 35 years preceding 1995 was sustained. Meanwhile, even after the housing bust, home ownership remains a priority among American households,xxvi including younger people. Even after the Great Recession, the aspiration for home ownership remains strong. Polling by the Demand Institute (operated by The Conference Board and Nielson) found that 77% of respondents considered home ownership “an excellent investment” (Figure).

    THE RETRO-URBANIST RESPONSE

    It might be expected that there would be popular and widespread acclamation of this success. Surely, the results were consistent with the principal priorities of a progressive society, at least in the historic sense, to improve the standard of living and reduce poverty.

    Yet, this was not to be. Retro-urbanists, including many planners, architects and other thought leaders were nothing less than appalled. In reaction to this, the very first words in the preface of Herbert J. Gans’ The Levittowners: Ways of Life and Politics in a New Suburban Community, read: “This book is about a much-maligned part of America, suburbia…”xxix he continues to indicate that these observers of suburbia are similar to literary writing, “which often boils down to cataloguing … Shortcomings from the author’s perspective.”

    Kelly characterizes the criticisms as “…a form of pseudo-intellectual disdain for suburban life in general, with Levittown serving as its archetype.”

    For example, in 1964, architect Peter Blake declared in God’sOwn Junkyardthat the suburban pattern developing in the United States is “making life there only slightly less tolerable than on tenement streets.”

    He continued: “The results are palpable: children play in the street; parents spend most of their time maintaining a front garden they can’t use; the community has to maintain long roads and long utility lines to service its strung-out houses; and the suburbs go broke.” Blake also says that “America’s suburbia is now functionally, aesthetically and economically bankrupt.”

    Dr. Charles Winslow, professor of public health at Yale University said that the “inferior type of small house being provided by speculative builders to meet the veterans demands [were] dollhouses that out slum the slumming is of our prewar slums…” He also said that “families living in these houses might suffer serious mental and physical ills.” 

    Social commentator Paul Barker describes the intensity of the criticisms, noting that “suburban” is a “sneer- word” to architects and planners.xxxvi He also says: “Those who oppose suburbia usually have highly doctrinaire views about how other people should live.” While Sieverts refers to an ideological concept of cities, Barker characterizes it as theological: “Almost all architectural and planning commentaries, in the press or in government publications, still speak of the suburban as an evil that must somehow  be cast out.”

    These kinds of criticisms have often been supported in the press.

    Historian Joshua Ruff dismisses Lewis Mumford’s complaint that Levittown
    was a “uniform environment from which escape is impossible” as “ignoring the architectural sameness (block after
    block of overcrowded apartments) many new suburbanites were fleeing from in Manhattan, Brooklyn and Queens.”

    But, despite their influence and access to the press, the retro-urbanists have been consistently ignored by households making home purchase decisions. As Barker put it, “…such critics are outnumbered many, many times by the millions for whom suburbia is a land of pleasantness, friendship and hope.”xl Moreover, the retro-urbanists did not understand the desires of suburbanizing households. As Gans put it, they came “…for a house and not a social environment.”

    In the final analysis, as Journalist Edward Humes wrote: “But the veterans who snapped up these new houses were coming from a different outlook, a different place—from boarding houses and cramped apartments and lives that just a few years earlier had offered little hope of college or homeownership or lasting financial security.”

    Households continued to move to the suburbs and suburbanization continued to attract nearly all population growth in the major metropolitan areas.

    The Right and Wrong of Suburbanization

    Ruff provides a short summary of the positive and negative perceptions with respect to Levittown (which also apply
    to the great post-war suburbanization): “But Levittown was about more than just the houses. As the largest and
    most influential housing development  of its time, it became a postwar poster child for everything right (affordability, better standard of living) and wrong (architectural monotony, poor planning, racism) with suburbia.”

    As for the “right” that Ruff refers to, it is hard to imagine more important benefits than a dispersion of wealth, affordability and a better standard of living. These are fundamental domestic public policy objectives long held by much of the nation’s leadership, including liberals. A nation of homeowners, “President Franklin D. Roosevelt believed, “of people ho own a real share in their land, is unconquerable.”

    The case for the “wrong” is less clear. Architectural monotony does not negate the imperative to improve the standard of living and reduce poverty. Moreover, architectural monotony is in the eye of the beholder and clearly was of no more than secondary interest to the millions who overwhelmingly chose the suburbs. The very rowhouses that are now so widely celebrated by retro-urbanists were themselves originally stretches of identical structures with little differentiation. Planning that results in better affordability (and an improved standard of living) is good and effective, not “poor.” Finally, as noted above, the racism concern is valid, but is a more general indictment of the nation at the time and has now been moderated by a flood of minority residents to suburbia.

    According to Kelly: “For all the faults attributed to them by their critics, the houses of the postwar subdivisions had widespread appeal. They may have been small and repetitious to their observers, but to their owners they represented something more than basic shelter—they were an opportunity to build a better life, a first step on the road to success. It is at that level that the housing programs of the 1940s made their greatest achievement.”

    THE NEW CITY

    The postwar suburbs developed because they could. History had made it possible and thus virtually inevitable.

    Throughout history, people have routinely adopted new techniques and technologies that made their lives better. Nostalgia did not prevent people from abandoning outhouses for indoor plumbing or iceboxes for refrigerators. People prefer better lives and greater comfort and accept technological  advance as soon as it is affordable. It is  not surprising that people found better lives and comfort preferable to nostalgia and an “ideological concept of the city.”

    Indeed, the city was revolutionized.

    Levittown chronicler Barbara Kelly added that the postwar subdivision suburbs had “evolved into a new form  of city,” while Thomas Sieverts characterized the “strange urban—rural landscape as a new form of city.”

    The suburbs gradually became more independent of the core city, as employment was dispersed throughout the metropolitan area. They were no longer subordinate to the core cities, the legacy cites of the pre-war era. Jon
    C. Teaford of Purdue University wrote that the term: “…‘suburb’ had become a misnomer. Economically and socially periphery is no longer a subordinate dependent of the center and thus no longer a candidate for the prefix sub[emphasis in original]” Similarly, J. John Palen of Virginia Commonwealth University wrote: “Whatever everyone thinks about suburbs, it is now indisputable that they no longer sub [emphasis in original].”

    More than three decades ago, Robert Fishman of the University of Michigan suggested:

    “In my view, the most important feature of the postwar American development has been the almost simultaneous decentralization of housing, industry, specialized services and office jobs; the consequent breakaway of the urban periphery from the center it no longer needs; and the creation of the decentralized environment…”

    He went on to propose a new conception of the city (metropolitan area):

    “The true center of this new city is not some downtown business district
    but in each residential unit. From that central starting point, the members of the household create their own city from the multitude of destinations that are within suitable driving distance.”

    Even “suitable commuting distance” became less of a concern for many, as Alvin Tofler’s”electronic cottage” became a reality for many as working at home expanded, facilitated by improved telecommunications. Today, in the majority of American metropolitan areas, more people work at home than take transit.

    THE PLANNING RESPONSE

    Long before Levittown, there were strong criticisms of the suburbs reaching back into the 19th century and even to the 17th and 18th.

    However, it took the interwar building boom to marshal political  forces to implement planning restrictions intended to stop the growth of the suburbs. Under the Town and Country Planning Act of 1947, Britain’s liberal land-use policies were replaced by urban containment policies that have only become stronger over the years. Greenbelts (urban growth boundaries) were imposed around the cities of England, leaving little land for new residential development.

    The result has been a severe and on- going housing crisis, with house prices having doubled or tripled compared to their pre-urban containment relationship to incomes.lv This is to be expected, since prices tend to rise where the supply
    of a desired good or service (in this case land) is restricted, while demand continues unabated. Not even depressed metropolitan areas like Liverpool and Glasgow have escaped the cost escalation.

    There is broad agreement among economists and even planning advocates that higher land prices occur within urban containment boundaries. lvi Planners expected that construction of higher density housing would negate the higher land price impact on house prices. Moreover, urban containment planning regimes have routinely included periodic reviews to expand land supply housing affordability. As the discussion below indicates, these approaches have failed as losses
    in housing affordability have been pervasive in more restrictively regulated metropolitan areas.

    It took longer, but similar planning strategies have been adopted in many parts of the US. Their spread, however, has been slowed by America’s federal structure,lvii which did not lend itself to overnight imposition of urban containment policy. Even 70 years after World War II, the radical land use regulatory regime of the United Kingdom has been implemented in only parts of the United States.

    Nonetheless, there were important adoptions of Great Britain style urban containment policy. Things began to change, especially in California and Oregon in the 1970s.

    In California, restrictions were placed on the incorporation of new suburban municipalities that made it more difficult for development to extend from existing municipalities into unincorporated areas.lviii At the same time there were various environmental and land-use regulatory changes that made it more difficult to develop new housing. The net impact of this was fairly immediate house price increases relative to incomes. These housing affordability losses were recognized early some urban planning experts, such as David Dowell  at University of California, Berkeleylix and Bernard Friedan at MIT.lx California’s housing affordability, which had been similar to that of the rest of the nation, began to deteriorate markedly, and by 1980 had reached unprecedented severity.

    Urban containment policies were also enacted in states such as Washington, Florida, Tennessee, New Jersey and Maryland. Local initiatives significantly strengthened land use regulations, such as in the Virginia and Maryland counties of the Washington, DC-VA-MD-WV metropolitan area and the New York metropolitan area.

    By 2000, house prices in some markets had reached five times incomes, nearly double their 1970s ratios. This is consistent with the economic principle that restricting supply tends to result in higher prices, all else equal.

    The tragedy of the housing bust was to follow. Households were lured by
    mortgage products that back-loaded costs so that the greatly inflated prices could seem affordable. The more restrictive  land use regimes could not respond with sufficient supply to meet the increased demand. By the middle 2000’s the highest median multiples reached over 10 in the coastal California metropolitan areas, with some other metropolitan areas exceeding 5.0.

    These price factors led to mortgage defaults, corporate bankruptcies, and a recession so severed that it is called the Great Recesion. It was by far the worst economic reversal since the 1930s. Through the Great Recession, the
    US housing market sent ripples of economic disruption throughout the international economy.

    There were massive house price losses across the nation, with the largest losses where house prices had risen the most. Yet, the house price increases relative to incomes quickly resumed. By 2014, median multiples had reached 8.0 or above in the San Francisco, San Jose, San Diego and Los Angeles metropolitan areas. Housing was also severely unaffordable in the New York, Boston, Miami, Riverside-San Bernardino, and Seattle metropolitan areas and was approaching similar severity in the Denver and the Portland metropolitan areas (Figure).

    The housing distortion was so great that California’s cost adjusted poverty rate became the highest in the nation, 50 percent above that of Mississippi. Despite a California Legislative Analyst’s report documenting the association between regulation and housing affordability losses, the state has continued to strengthen regulation.

    Tomas Rivera Institute raised concerns about the impact of compact development on minority housing affordability:

    Whether the Latino homeownership gap can be closed, or projected demand for homeownership in 2020 be met, will depend not only on the growth of incomes and availability of mortgage money, but also on
    how decisively California moves to dismantle regulatory barriers that hinder the production of affordable housing. Far from helping, they are making it particularly difficult for Latino and African American households to own a home.

    At the same time, throughout most of the country the historic housing affordability was preserved. Even through the housing bubble many major markets remained at or below the 3.0 housing affordability standard. There were also significant house price increases in some liberally regulated markets, but most remained at or below a 3.0 median multiple (such as Atlanta and other Less Restrictive Markets in the Figure above “Middle-Income Housing Affordability”).

    Finally, even in metropolitan areas with strong policies discouraging suburban development and favoring urban core development, most growth continues the periphery. For example, in Portland more than 95 percent of that growth between 2000 and 2010 was in suburbs and exurbs. In San Francisco, 88 percent of the growth was in the suburbs and exurbs.

    TOWARD A MORE ELITIST AMERICA?

    The present preference in planning for urban containment policy threatens to reverse 70 years of social progress. As house prices rise relative to incomes — a phenomenon clearly associated with of urban containment policy — home ownership will be increasingly limited to the more affluent. Paul Barker asks why the strong land use regulations  have survived. Answering his own question, he says that: “The short answer is that it protects the haves against the have-nots.” Robert Bruegmann of the University of Illinois, Chicago provides similar commentary, in chronicling the conversion of suburbs to abodes of the middle class:

    “… Cities have sprawled from time immemorial and for a wide variety of reasons. As long as only a small number of the wealthiest and most powerful families occupied the most
    land in the most attractive locations, there was very little sustained organized protest. Whenever a newly affluent or empowered part of the population started to enjoy this privilege, there was a backlash.”

    Matthew Rognlie at the Mass- achusetts Institute of Technology has suggested that virtually all of the increased inequality identified by French economist Thomas Picketty has been in the housing sector. He suggests that:

    “… the literature studying markets with high housing costs finds that these costs are driven in large part by artificial scarcity through land use regulation …. A natural first step to combat the increasing role of housing wealth would be to re-examine these regulations and expand the housing supply.

    Jason Furman, Chairman of the White House Council of Economic Advisers called for regulatory relief in a recent address on housing affordability and the consequences of high prices on the economy.

    With high house prices and further hedges against property value depreciation in local regulations, some individuals are priced out of the market entirely, and homes in highly zoned areas also become even more attractive to wealthy buyers.
    Thus, in addition to constraining supply, zoning shifts demand outward, exerting further upward pressure on prices…

    Worse of all, these restrictions are largely unnecessary. Better policies can secure a future for the next generation every bit as promising as the generations since World War II came to expect. The words of Presidential candidate Adlai Stevenson in 1952 are as relevant today as then: “Who shall say that the American dream is ended?”

    LEVITTOWNS FOR THE FUTURE

    But there is a solution. Levitowns can still be built. For example, a review of four metropolitan areas shows that new, entry level detached housing can be purchased for from 2.0 to 2.5 times median household incomes in Atlanta, Columbus, Houston and Indianapolis. This is only slightly above the two times average earnings typical in Levittown, when few families had more than one wage earner. Moreover, today’s prices include a garage, and the houses are at least 50 percent larger. Implementation of recommendations in Section 9 could increase the number of new houses that replicate Levittown affordability today.

    A number of policy proposals could improve the potential for improving housing affordability, particularly in the starter home market following the “trail” blazed by Levittown and other early postwar suburbs. These could restore, in the short term, the promise of Levittown for today’s threatened middle-class.

    The first two relate to the stringency of metropolitan land use planning systems, since experience has demonstrated that the administration of urban containment policies not succeeded in maintaining housing affordability. Until these policies are reformed, new Levittowns are simply not likely to be built.

    Recommendation #1

    To retain housing affordability, liberally regulated metropolitan areas should not adopt restrictive housing
    regulations, such as urban containment.

    As is indicated above, urban containment policies have been virtually inextricably linked to the loss of housing affordability. The theory that the higher land prices inside an urban containment boundary will be offset by lower construction prices has proven to be entirely elusive in practice.

    Recommendation #2

    Wherever there is urban containment policy, it can be expected that housing affordability will further deteriorate. This approach needs to be reformed.

    A road map has been provided by the Productivity Commission of New Zealand. In seeking to address the
    severe housing affordability in Auckland, the Productivity Commission has recommended that greenfield land for development be opened up in greater volume once prices have become unduly distorted. As the Commission indicated: “”Where large discontinuities emerge between the price of land that can be developed for housing and land that cannot be developed, this is indicative of the inadequacy of development capacity being supplied…”

    The Productivity Commission’s recommendation for an “event- driven trigger” to open more land for development also could be adopted at the state or metropolitan area level in the United States. This would require establishment of annual housing affordability targets.

    Recommendation #3

    Metropolitan areas with urban containment policies should consider establishing “special housing areas” outside their urban containment boundaries in order to facilitate housing that is affordable to middle income households.

    These new developments could be authorized by governments to allow development of land and housing at prices similar to those, relative to incomes, that prevailed in the early suburban developments, such as Levittown. These districts should be within metropolitan areas (labor markets) and would provide advantages not only to aspiring families, but also to land owners whose land has been rendered worthless from a development perspective by urban containment policy. Limits on land prices should be set, with development proceeding only when land owners are willing to sell for prices within such limits. Generally similar proposals have been made by the New Zealand government (special housing areas), and by United Kingdom government housing researcher Kate Barker. This approach would also be similar in some respects to the successful municipal utility districts in Texas.

    Recommendation #4

    Governments, land developers and homebuilders should examine approaches for liberalizing regulation on starter homes, toward the end of implementing less costly delivery of housing.

    Cost increasing factors such as delays in permitting, more expensive materials requirements and designs (such as favored architectural styles, including “new urbanist” designs) and other requirements that increase costs for starter homes should be reviewed. This would be appropriate in all markets and should be conducted consistent with appropriate health and safety standards. Wherever feasible, reforms should be implemented.

    CONCLUSION

    The legitimate purpose of planning is not so much better cities, but better lives for their inhabitants. This requires housing that is affordable and maximizes discretionary incomes and a reduction in poverty.

    Planning can only be justified by the extent to which it improves people’s lives. Suburbanization, through entrepreneurship and liberal planning accomplished this, and created the Great American Middle Class after the Second World War.

    As Herbert Gans suggested a half century ago:

    “… whatever its imperfections, Levittown is a good place to live. Consequently, it is much less important to plan for new or improved suburban community and to make sure that more people are able to live in suburbs like those now being built. Specifically, the most urgent priority is to make the benefits of suburban living available to the poor and nonwhite families, now condemned to slum ghettos, who want to give their children
    and themselves a better life beyond the city limits."

    Gans further expressed concern that there needed to be a place in the suburbs for lower middle income households: lxxvi

    …The ideal solution is more, better and more variegated new towns in suburbs, but the first priority in the years to come is more communities for the less affluent.”

    Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and 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 served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

  • Education and Economic Growth

    It is an article of faith among California’s political class that insufficient higher educational opportunities are a constraint on California’s economic and job growth.  Just about every California economic development document includes a discussion of California’s desperate need for more college graduates.

    Unfortunately, the facts disagree with the faith.  California is educating far more people than it is creating jobs for them to take.  In the past 10 years, California’s public higher education system alone issued 2,455,421 degrees.  Over the same period, the state saw a net increase of only 1,136,642 jobs.

    That’s right.  California granted more than twice as many post-high-school degrees as net new jobs.

    We can quibble about the numbers, but the conclusion does not change. The number of degrees includes 871,922 community college degrees, including a conservative estimate of 94,000 in 2015, because data are not yet available.

    If we exclude community college degrees, California’s university and state college systems still granted 1,583,499 degrees, a much greater number than new jobs.  Some of those represent one person earning multiple degrees, but more than 28 percent of students would have to have earned multiple degrees for the number of college graduates to be less than the number of net new jobs.

    These numbers don’t include California’s private colleges and universities, of which there are many.  The University of Southern California, for example, granted 14,633 degrees in June 2015.

    You cannot escape the conclusion that California job growth lags the rate at which the state creates college degrees.  College graduates are a significant California export.

    Of course, not all of California’s new jobs require college degrees.  For example, almost 31 percent (351,926) of California’s net new jobs over the past 10 years were in the Leisure and Hospitality sector.  Very few of those jobs require a college degree.

    So, why is everybody saying that higher education is a constraint on California’s growth?

    Part of the reason is that education ranks with motherhood and “tolerance” on California’s pantheon of virtues, particularly among the highly educated political class, and education — notably the teachers’ unions — has a powerful lobby, perhaps the most powerful in California.

    Part of it is a poor understanding of statistics.  People observe that, on average, college graduates earn far more than non-graduates and conclude that education creates higher income, completely ignoring the self-selection bias: The lowest-ability student in your high school didn’t go to college, because he was the lowest-ability student. The highest-ability student went to college because she would have been bored beyond measure holding up a “slow” sign in a construction zone.  Repeat after me: correlation does not imply causation.

    Then, even after all this pumping out of graduates, there remain persistent shortages of qualified Californians to fill some jobs. Of course there are.  Nobody expects San Jose to produce all the geniuses that drive Silicon Valley’s innovation. Why should we expect them to all come from California?  These are very special jobs requiring very special skills. In this situation, large numbers work to employers’ advantage.  If the entire world is your source of these special workers, you have a much better chance of finding exactly who you need, or pay what you prefer.

    The forecasting industry is a big part of the problem. It is easy to find forecasts such as this Georgetown University report that says by 2020, a whopping 65 percent of all U.S. jobs will require post-secondary education. It is just as easy to find forecasts that robots will take away all of our jobs— including in the so-called “knowledge” sector.

    Long-term forecasts are extraordinarily unreliable. Long-run forecasts of necessary skill sets for future jobs are even more unreliable. They are completely dependent on assumptions that frequently prove wrong. Famously bad long-term forecasts include Time Magazine 1966 statement that “Remote shopping, while entirely feasible, will flop.” and Western Union rejecting the telephone in 1876 as having “… too many shortcomings to be seriously considered as a means of communication.”

    Forecasts of increasing demand for educated workers seems to be contrary to observation. Because of computers, a McDonalds’ worker doesn’t need to know how to make change, or the price of any product. All they need to know is what a product looks like and how to push a button.

    What we appear to be seeing is what my colleague Dan Hamilton calls a “hollowing out of the middle.”  Technology has increased demand for very-high-skilled people, as we see in the Silicon Valley, and it’s increased the demand for low-skilled people, as in the McDonalds example. It’s also reduced demand for many people in between, that is, the middle class.

    Focusing excessively on higher education creates problems while doing no good. It is ridiculous to attempt to give 65 percent of young people a college degree. You cannot achieve that goal without reducing the quality of the graduates, which reduces the value of the degree for the better students.  This would be repeating what California has done with high school diplomas. Graduation requirements have been reduced to the point that the degree is meaningless for almost all purposes. 

    Increasing supply at any educational level will not make new jobs appear; in fact, many of those workers are likely to go to where there are jobs and basic costs, particularly housing, are more reasonable.  A recent study by Cleveland State University documents the ongoing migration of educated Millennials from high-cost places with few opportunities to places with lower costs of living. 

    Yet rather than into look how to create better paying jobs across the board, the education lobby — including many now at universities — have a perfect motivation to support more spending on, well, they and their friends. If we did achieve a 65 percent college graduate rate, we’d hear the policy wonks calling for more advanced degrees.

    So, we ask, why we are creating so many more college graduates than jobs for college graduates?  I think it’s because we’ve promised our young people an education to match their abilities. That’s fair.  Government is providing a service for citizens. If it provides an educated workforce for Arizona and Texas, well that’s an unintended consequence.

    We also need to ask, why is California not creating jobs for our educated young people? That’s another discussion, with lots of reasons. But, creating more college graduates is not among the answers to that question. Focusing on it diverts energy and resources from the real challenges to California’s economic growth.

    Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org.

  • Demographics and Commodities Crash Slowing Growth of Poorer Countries

    Changing demographics and the commodities crash have slowed down the development of poorer countries.

    Perhaps it all started with a turn in China’s demographics. Demand growth for commodities has declined sharply from recent years and has resulted in a crash of global prices. Copper is down 54% from its post 2008 peak and down 25% this year alone. Crude oil is down 67% and 39% in the same time spans. In addition to softer demand, prices were negatively impacted by jumps in supply, most notably from shale energy producers in the United States.

    Impact of the 2011-15 Commodities Crash

    If this massive price correction tells us anything, it is that the world is looking more vertical again. Aspiring economic powers of two or five years ago are grappling with the recessionary effects of lower prices for oil, natural gas, copper, iron ore and nearly every other commodity. If, per Warren Buffett’s impeccable quip, “you don’t know who is swimming naked until the tide goes out”, the commodities tide has gone out of the emerging markets boom and many were haplessly exposed in the raw.

    Screen Shot 2015-12-23 at 9.12.52 AM

    Swimming naked in this context means an economy that was overly dependent on one or two drivers of growth. In the case of Russia, it was too dependent on energy. Brazil, too dependent on copper, iron ore and other commodities. And in both cases, not enough effort was made to diversify the economy and to implement needed reforms during the good times. The curse of cyclical wealth is that in good times, there seems to be no compelling reason for reforms. Why tinker with something that appears to be working? And in bad times, it is more difficult to implement those same reforms. Why create even more uncertainty in a time of uncertainty?

    (click table to enlarge)

    Screen Shot 2015-12-23 at 12.27.39 PM

    Leo Abruzzese of the Economist Intelligence Unit writes that “in 2016 rich countries will account for their largest share of global growth in this decade.” The EIU estimates that the eight largest rich economies will contribute 43% of global growth, while the eight largest emerging markets contribute 34%. These are respectively the highest and lowest shares in several years and they represent a big reversal from 2013 when the rich eight contributed 31% of global growth and the emerging eight as much as 47%. See chart in this article.

    Among the flag bearers of emerging markets, Russia has suffered a crisis and a recession caused by the decline of energy prices and some foreign sanctions imposed during the Ukraine conflict. As shown in the table, Russia’s compound average real GDP growth has slowed from 6.1% in 2001-05, to 3.5% in 2006-10 and to 1.4% in 2011-15. The more recent two five-year periods both include a crash in the price of oil from over $100 to less than $40. The economy is expected to contract 2.7% this year. Russia’s problems are partly due to demographics because its population is shrinking and its dependency ratio is rising. But other reasons for the slowdown include a dearth of innovation and a business climate which discourages inward investment.

    Screen Shot 2015-12-22 at 6.19.32 AM

    China’s impressive real GDP growth printed at or near double digit annual rates for the entire decade 2002-11 but this growth has tapered starting in 2012 to an estimated 7.1% in 2015 and probably lower next year. As discussed here, China managed to capture a very large demographic dividend thanks to sound policymaking that encouraged trade and investment. But its dependency ratio has now bottomed and started to climb. In response, China can avoid a prolonged decline by adopting reforms that encourage innovation and investment.

    Brazil is in the midst of a contraction made worse by corruption scandals at leading companies such as Petrobras and BTG Pactual. The demographic picture is mixed but there will be little to cheer about before reforms are enacted to reduce corruption and encourage investment. The alternative is to wait for the next commodity bull market but this could take years to materialize.

    India looks best among the BRIC countries in part due to its more favorable demographics and to the promise of accelerated reforms under prime minister Modi. We discussed India’s demographics and the prospects for investments and legislative reforms in previous posts here and here.

    Outside of the BRIC countries, countries with favorable demographics could over time pick up the torch and lead a revival of emerging markets. These include Pakistan, Indonesia, the Philippines, Nigeria and other countries of sub-Saharan Africa. Because of its booming working-age population, Africa holds the most promise but also presents the biggest challenge. See previous posts on Africa discussing policymaking, education, demographics, trade and infrastructure.

    “Science is the Cause”

    Meanwhile, the immediate result of the emerging market slowdown is that we are now at some distance from the optimistic visions put forth by, among others, Thomas Friedman in The World is Flat: A Brief History of the Twenty-First Century (2007) and Fareed Zakaria in The Post-American World and the Rise of the Rest (2009), books that trumpeted the rise of emerging markets economies in the 21st century. Zakaria summed it up in a supporting Newsweek article:

    It is an accident of history that for the last several centuries, the richest countries in the world have all been very small in terms of population. Denmark has 5.5 million people, the Netherlands has 16.6 million. The United States is the biggest of the bunch and has dominated the advanced industrial world. But the real giants—China, India, Brazil—have been sleeping, unable or unwilling to join the world of functioning economies. Now they are on the move and naturally, given their size, they will have a large footprint on the map of the future.

    This quote is full of peremptory élan but it deserves to be examined in some detail because in my view, it reveals the main error in the author’s thesis and blurs the corrective factors that now require our attention. After all, how robust was this vision of the “Post-American world” if a very predictable cyclical downturn in commodity prices is sufficient to put it on hold and defer it for years? Contrast Zakaria’s thought with the following excerpt from Winston Churchill’s speech Fifty Years Hence in 1931:

    When we look back beyond a hundred years over the long trails of history, we see immediately why the age we live in differs from all other ages in human annals. Mankind has sometimes travelled forwards and sometimes backwards, or has stood still even for hundreds of years. It remained stationary in India and in China for thousands of years. What is it that has produced this new prodigious speed of man? Science is the cause. Her once feeble vanguards, often trampled down, often perishing in isolation, have now become a vast organized united class-conscious army marching forward upon all the fronts towards objectives none may measure or define. It is a proud, ambitious army which cares nothing for all the laws that men have made; nothing for their most timehonoured customs, or most dearly cherished beliefs, or deepest instincts. It is this power called Science which has laid hold of us, conscripted us into its regiments and batteries, set us to work upon its highways and in its arsenals; rewarded us for our services, healed us when we were wounded, trained us when we were young, pensioned us when we were worn out. None of the generations of men before the last two or three were ever gripped for good or ill and handled like this.

    Zakaria emphasized demographics while Churchill focused on the importance of science and innovation. Both are key components of growth. Some European countries such as Denmark and the Netherlands may not weigh much demographically but their contributions to the advancement of science and philosophy easily exceed those emanating from many populous nations.

    As often discussed on this page, demographics are an important driver of the economy, but they are only one of several important drivers, the others being innovation, productivity, health, governance and institutional strength. Demography is not destiny but it is a part of destiny. It cannot alone deliver sustainable economic growth and it can at times impact the economy adversely. In the present case, a turn in demographics is one of the reasons for China’s slowdown and the resulting fall in commodity prices.

    It is true that China, India and to a lesser extent Brazil are demographic giants. But it does not follow that their economic progress was unnaturally held back for centuries, while diminutive populations raced ahead due to a temporary fluke of history. Those smaller populations had innovation and a conducive context going for them. In order to be sustainable beyond one economic cycle, or even one economic super cycle, strong growth requires innovation, reliable institutions, good governance, political plurality and low corruption.

    It is still early in the century, but for now, the rise of the rest seems to have stalled. The questions going forward are: is this merely a pause in the development of poorer nations or is it the beginning of an unfortunate reversal? What can be done to build upon the past boom and to put these nations and others back on the growth trajectory?

    Sami Karam is the founder and editor of populyst.net and the creator of the populyst index™. populyst is about innovation, demography and society. Before populyst, he was the founder and manager of the Seven Global funds and a fund manager at leading asset managers in Boston and New York. In addition to a finance MBA from the Wharton School, he holds a Master’s in Civil Engineering from Cornell and a Bachelor of Architecture from UT Austin.

    Shanghai photo by flickr user Sprengben.

  • Live from Honolulu: HART Rail, a Megaproject Failure in the Making

    Typically very few people pay attention to the goings on in the small state of Hawaii. How bad can possibly things get there? Well, a lot of people recall Boston’s Big Dig, the nation’s largest infrastructure fiasco with a final price tag of about $15 billion. What if I tell you that tiny Honolulu is building a rail system that’s expected to cost at least one-half the cost of the Big Dig? On a per-capita basis it would be the nation’s largest infrastructure fiasco by far.

    Honolulu rail, managed by Honolulu Area Rapid Transit (HART), is a 1970s style 20 mile, all-elevated heavy-rail guideway with third rail power delivery and light rail-sized cars limited to about 650 passengers per two-car combination; it has an ability to run only up to four cars for peak period service. It is the worst design possible because it combines an intrusive and expensive infrastructure including 21 elevated stations, and a low passenger carrying capacity with over 60% of it as standing passengers.

    Despite the preponderance of evidence that Honolulu’s rail will do little to mitigate the severe congestion on the island of Oahu, the project did garner marginal (50.6%) public support on a 2008 referendum. Despite a couple major lawsuits, it completed the Federal Full Funding Grant Agreement process in 2012.  Local political preference (e.g., why build a $1 Billion taxpayer project when you can get away with a $5 Billion project? … also known as “the gravy train”) stands among the major causes of this megaproject failure in progress.

    What’s a megaproject failure? An infrastructure project that exhibits at least two out of three bad outcomes: 1) Large cost overruns, 2) Long project delivery delays, and 3) Much lower usage than forecast.  Well known megaproject failures include the Chunnel Tunnel/Eurotunnel that suffered all three failures, and Boston’s Big Dig that suffered failures 1 and 2 in a big way. Tren Urbano in San Juan, Puerto Rico is a peer project that HART rail will likely match in failure-to-meet-targets. Tren Urbano’s actual construction cost was 80% over the planned estimate, and its ridership has been only one quarter of what was projected! HART rail and Tren Urbano were planned by the same consultant (PB) and had the same oversight (FTA.)

    At the end of 2015, five miles of the HART guideway, and the rail yard appear to be substantially complete. HART, the voter approved “independent authority” that runs the project with many of its budget strings controlled by the city council, claimed a 25% project completion in December 2015, although 15% is a more realistic estimate based on what has been physically constructed so far. Several segments and columns have suffered large cracks, concrete delamination and segment misalignment [1], and safety lapses were alleged at the Ansaldo rail yard [2]. In less than two years, the guideway construction company (Kiewit) submitted 40 work change orders and recently demanded a $20 million price adjustment. But this is nothing compared to the total escalation of cost figures.

    First, let’s review some highlights of the project’s development between 2004 and 2015.

    • 2004: Newly elected mayor Hannemann asserts that 34 miles of rail will cost $2.7 Billion.
    • Mid-2006: Hannemann switches to the Minimum Operating Segment: 20 miles will cost about $3 B.
    • Late-2006: Alternatives Analysis sets the cost at $4.6 B (this figure and all figures below include FTA-mandated contingency funds).
    • Spring 2008: Hawaii legislature approves a 0.5% tack-on to Hawaii’s GET tax that applies to every transaction. Against expectations, Republican Governor Linda Lingle opted to save her political career and let the tax stand without a veto. The rail tax is expected to generate about $2 B. The gravy train has thus been established.
    • Summer 2008: Mayor Hannemann up for reelection gives a helicopter ride to Senator Oberstar who then says that the Feds will give Honolulu $900 M. Hannemann declares that “the train has left the station.”
    • 2009: President pro tempore Senator Inouye of Hawaii joins the rail party. FTA is strong-armed to pay $1.55 B.
    • 2010: The cost is up to $5.4 Billion not counting the error of locating an insufficient distance from an airport runway. A $150 M realignment is necessary to reroute the guideway one block over.
    • 2010: Outgoing Governor Linda Lingle releases an independent financial analysis of the project by IMG and Thomas Rubin which concluded that construction cost will likely be more than the $5.4 B projection, ridership projections were both very high and would require passenger loads significantly higher than that of any U.S. transit operator, future rail renewal and replacement costs were ignored, operating subsidies were significantly understated, and many projected revenues were significantly overstated.  Mayor Carlisle dismissed the report as “a product of rail opponents.”
    • 2011: Mayor Carlisle performs a “ceremonial groundbreaking” but only utility relocation occurs afterwards. The project still aims for a 2019 completion.
    • 2012: Both a National Environmental Policy Act (NEPA) and a Hawaiian burial ground desecration lawsuit are filed, the former in federal court the latter in state court. Only the second lawsuit causes minor construction restrictions in areas where archeological surveys had not been done.
    • 2012: Construction accelerates at the casting yard and the first piers appear in the middle of prime agricultural land. The first four miles of the project are on agricultural land. Carlisle loses in the primary. Two Democrats, Kirk Caldwell (pro rail) wins the mayor race over past governor Ben Cayetano (anti rail.) Although some frame it as another victory for the rail project, Cayetano’s battles with unions during his eight years in the governor’s office were a major cause of his loss.
    • Mid-2014: 9th Circuit court appeal ends unsuccessfully for the plaintiffs of a NEPA-based suit.
    • December 2014: HART reveals a $910 projected deficit and asks for more tax monies.
    • December 2015: HART proposes to open 10 miles of service in 2018.

    One of the flaws in megaproject development is strategic misrepresentation, or cleverly worded lying to the public and decision makers such as the HART board members and the Honolulu city council members, none of whom have any expertise in large infrastructure projects and rail in particular. Project advocates such as the FTA turned a blind eye to facts and in 2009 they presented to the people of Hawaii Figure 1, a gem of strategic misrepresentation [4] which simply fit the political line that the proposed 20-mile rail will cost $4.6 billion as applicable during the 2008 rail referendum.  Notice that the FTA cost development in Figure 1, line labeled MEAN, goes against decades of real world evidence of a project’s cost escalation as it moves from planning to construction (e.g., Dr. Bent Flybjerg’s summaries of infrastructure megaprojects [3]). This FTA-sponsored report contains one point of truth: There is a 10% chance that HART rail will cost about $10 B.


    Figure 1. HART expected cost over time.

    One would think that only three years into construction, with only about 15% of the project completed and only about half of the project gone to bid, HART would be sitting comfortably on a pile of money generated by a general excise tax surcharge being collected since 2007 (about $140 M per year) plus $1.55 B from the full funding grant agreement. Nothing could be further from the truth. In late 2014 HART announced a $910 M expected shortfall and successfully lobbied the Hawaii legislature to extend the 0.5% surcharge from end of 2022 to end of 2027.

    In another move of strategic misrepresentation, rail planners pretended that the rail is like an electric car, e.g., one buys an EV, then goes homes and plugs it in. Likewise, HART builds rail, which plugs into the city grid for free.  However, rail’s 30 MW to 50 MW power draw is a major requirement. The utility’s reaction was unpleasant for HART [5] which is now negotiating another expensive arrangement. The combined cost of substations, power generation and the (still in limbo) airport utility relocation tasks are likely to cost about $500 M bringing the known total to approximately $7 B with none of the 21 stations constructed nor the second half of the project gone to bid.

    HART rail’s cost development is plotted in Figure 2. The second half of the project includes the challenging construction through urban Honolulu which is one of the densest US cities. There are now peripheral discussions to terminate the project at a large transit bus and handicapped van terminal at Middle Street, which is approximately at the 16th mile of the rail route. This is a welcome possibility because Honolulu will be spared of the heavy construction and debilitating lane and road closures at its downtown and near Waikiki which will be deleterious to general economic activity and tourism.


    Figure 2. Actual and expected cost plot.

    As the project cost creeps above $7 B (for a city of just one million people), with an expected payoff of about 1% in congestion reduction [6], and the dramatic re-arrangement of TheBus as a feeder to the rail [7], one can begin to outline some of the major consequences such as:

    • Minimal ridership like Tren Urbano in San Juan, PR. Furthermore, San Juan’s average income and auto ownership are much lower to those of Honolulu (i.e., Honolulu has far fewer transit dependent commuters than San Juan.)
    • Destruction of prime agricultural land on Oahu. After years in legal battles, the state Supreme Court approved B.R. Horton’s proposed 12,000 suburban Ho’opili development which includes two rail stations. Although HART makes a big deal out of Transit Oriented Development, Horton’s own EIS reveals that each station will generate the equivalent of only two busloads of passengers for the rail in the peak hour. This approval is proof that development that does not pass traffic congestion standards simply gets … a rail pass.
    • The huge opportunity cost. With $7 B and counting, Honolulu could have actually reduced traffic congestion by more than 25% and reduced its dependency on oil by over 40%. Honolulu burns oil to produce electric power and as a result its electricity cost is 300% above US average. Instead of switching power generation and fleet fueling to natural gas, island policies emphasize oil-generated electric cars and electric trains!

    Finally, looking at the bigger picture for Honolulu which includes a $5 B consent decree with the EPA for secondary sewer treatment, increasing dependency on imports, including 90% of food, with prices escalated by the Jones Act requirements, and the nation’s fifth worst unfunded pension liability according to The Economist [8], the future is worrisome: At best Honolulu will experience large increases in taxes and congestion, at worst those plus bankruptcy.  One thing is certain.  This textbook megaproject failure orchestrated by business interests and unions, supported by misguided environmentalism and enabled by enterprising politicians got Honolulu railroaded [9].

    Panos D. Prevedouros is Professor and Chair, Department of Civil and Environmental Engineering, University of Hawaii at Manoa.

    Photo by super-structure (Jason Coleman), “Honolulu Murals”.

    REFERENCES AND CLARIFICATIONS
    [1] HawaiiNewsNow, Large Cracks Develop along Rail Line, http://www.hawaiinewsnow.com/story/28827333/large-cracks-develop-along-rail-line, 2015.
    [2] HawaiiNewsNow, Rail Whistleblower Suit Filed, http://www.hawaiinewsnow.com/story/30203942/exclusive-rail-whistleblower-suit-filed, 2015.
    [3] Bent Flyvbjerg, et al. Delusion and Deception in Large Infrastructure Projects: Two Models for Explaining and Preventing Executive Disaster, California Management Review Vol. 51, No. 2 Winter 2009.
    [4] FTA, Project Management Oversight Program, Honolulu High-Capacity Transit Corridor Project, July 2009 (Final)
    [5] KHON2, Tension Escalates over Rail’s Power Supply and Who Will Pay for It, http://khon2.com/2015/11/11/tension-escalates-over-rails-power-supply-and-who-will-pay-for-it-2/, 2015.
    [6] Past mayors and HART have been eager to misuse the EIS statistic that rail is projected to remove 40,000 cars from the streets.  The actual statistic says that rail may reduce car trips by 40,000. Total car trips on Oahu when rail is completed are projected to be four million.  HART rail may provide a 1% reduction.
    [7] TheBus is one of America’s best bus transit systems and has a 6% commuting trip share in Honolulu. Many of its routes will be eliminated or terminated at HART stations. According to the EIS, the subject routes are: B, C, E, 3, 9, 11, 20, 43, 53, 73, 81, 90, 91, 92, 93, 94, 96, 97, 98A, 101, 102, 103, 201 and 202 many of them are popular peak hour express routes.
    [8] The Economist, Pensioners Are Pushing Many Cities and States towards Financial Crisis, http://www.economist.com/news/united-states/21582282-pensioners-are-pushing-many-cities-and-states-towards-financial-crisis-who-pays-bill, 2013.
    [9] Randy T. Simmons, et al., Bootleggers, Baptists, and Political Entrepreneurs: Key Players in the Rational Game and Morality Play of Regulatory Politics, The Independent Review, v. 15, n. 3, Winter 2011.

  • Cleveland Renaissance Fair

    So much talk of the Cleveland comeback with our downtown building boom and Republican National Convention-fueled makeover makes it difficult not to think about our mid-1990s civic renaissance. In 1995, The New York Times headline proclaimed ” ‘Mistake by the Lake’ Wakes Up, Roaring” as downtown’s stadiums and lakefront development created a “new face and new style of a city that for a long time had little panache.”

    But it wasn’t just the media who became enchanted with our freshly minted charms — even the scholars were feeling it. The academics, however, had a Lake Erie-sized caveat. There was a divide in the region’s comeback, noted the authors of the 1997 study “The Rise and Fall and Rise of Cleveland,” with areas separated by characteristics of “capital investment and disinvestment, industrialization and deindustrialization, suburbanization and ghettoization, white flight and a black underclass, the growth of services, and a [high-skill and low-skill] dual economy.”

    Prophetic then, those words serve as a warning now. The paradox of Cleveland’s comeback, if not an urban American comeback, is that the more a city returns, the greater the number who get left behind.

    Rob English splits his time between Baltimore and Cleveland. He has been doing so for nearly three years.

    A former Army infantryman, he serves as supervising organizer for the Greater Cleveland Congregations, a network of local faith and community-based organizations working for social justice. His experience in Baltimore since 1997 gives him a different perspective on his work in Cleveland today. “You have to meet people where they’re at, listen to them, and find ways to act in their mutual interest,” he says.

    English marched with the Cleveland group in late May after the Michael Brelo trial verdict to demand comprehensive criminal justice reform. As the demonstrators from about 40 religious congregations walked arm-in-arm along downtown streets to City Hall and the Justice Center, it was peaceful — unlike what happened in Baltimore a month earlier. There, the death of 25-year-old Freddie Gray in police custody prompted violent social unrest.

    “Baltimore is about seven to 10 years ahead of Cleveland,” says English.

    Odd as it sounds, what English means is that Baltimore’s economic resurgence has been longer in the making — and that may be a good thing for Cleveland.

    Baltimore’s signature project, the cleanup and rehabilitation of Baltimore’s Inner Harbor with its world-class aquarium and science center, began in the 1980s. Oriole Park at Camden Yards, an architectural model for Progressive Field, opened in 1992.

    With the beautification came a change in the city’s demographics. Today, nearly 27 percent of Baltimore residents have college degrees, compared to 16 percent in Cleveland. Baltimore’s median income ($41,385) is $15,000 higher than here. Cleveland’s poverty rate sits at 35 percent, 12 percentage points more than Baltimore.

    But the benefits in Charm City are not evenly distributed. White city residents earn nearly double that of black city residents. Baltimore also had the ninth worst wage disparity between high- and low-income workers in the nation, according to the Martin Prosperity Institute. So, while the physical redevelopment is apparent in the eyes of all Baltimoreans, the effect is uneven in their temperaments.

    English, 46, recalls a talk he had with an African-American woman from East Baltimore several years back. She could see the Inner Harbor off in the distance from her neighborhood.

    “Let me tell you about my anger,” she told him. “Every morning when I wake up and take the kids to the bus stop, every morning I look down and see the harbor, and every morning I get angrier.”

    Her experience is more than an isolated one, says English. In Baltimore, people saw aspects of the city improve year after year. Yet so many weren’t a part of it. Eventually tensions built, and the Freddie Gray incident ignited it.

    “Now, Cleveland is beginning a renaissance,” English says. “But there is room to come together so you’re not two cities.”

    ——–

    Thomas P.M. Barnett’s book The Pentagon’s New Map is more than a decade old. But its message is no less relevant.

    “Disconnectedness defines danger,” he argues.

    For the expert geostrategist, the world is split between two types of geographies: the Core, where “globalization is thick with network connectivity, financial transactions, liberal media flows, and collective security,” and the Gap, or areas disconnected from globalization and defined by poverty, low education rates and “the chronic conflicts that incubate the next generation” of instability.

    “We ignore the Gap’s existence at our own peril,” concludes Barnett.

    It is a useful model in understanding what’s occurring in Northeast Ohio.

    Consider that, according to a Brookings Institution study, Cleveland and Seattle led the nation with the biggest percentage increases in high-income households from 2012 to 2013. Yet, research from Rutgers University revealed Cleveland also has one of the largest increases in neighborhoods with concentrated poverty since 2000.

    This division is further evident when mapping the concentration of Northeast Ohio residents with college degrees. Higher educated areas are centered in downtown, Ohio City, Tremont, Detroit Shoreway and AsiaTown, which have each seen double-digit percentage increases in residents with college degrees since 2000, as well as along the lakeshore, near University Circle and in various suburban and exurban clusters. Meanwhile less educated areas are grouped in the city of Cleveland outside the urban core and in the rural exurbs.

    Simply, areas of Cleveland that are revitalizing are part of the globalizing Core. The isolate neighborhoods, or those experiencing higher levels of violence and poverty, comprise the Gap.

    In fact, for a number of quality of life indicators, outcomes in various East Side neighborhoods are below that of developing nations. A recent PolitiFact article showed that infant mortality rates were worse in select East Cleveland neighborhoods than in North Korea, Uzbekistan, Zimbabwe and the Gaza Strip.

    According to data by Case Western Reserve University, homicide rates for sections of the city are similarly comparable. In 2010, homicide rates in Ward 1, comprising parts of the southeast side, and Ward 9, which entails Glenville, are similar to Guatemala and El Salvador.

    What’s happening here is not unlike cities such as Chicago, Baltimore, Miami and Brooklyn, New York, where the spatial patterns of having and not having mean poverty gets pushed together, not alleviated. When cities evolve as separate and unequal, they create a deepening sense of alienation and marginalization.

    “The economic and social frustration could be expressed in more recourse to violence,” says Mark Joseph, director of the National Initiative on Mixed-Income Communities at Case Western Reserve University.

    Revitalizing neighborhoods have more “eyes on the street,” says Joseph, who examined the effect in the Second City while at the University of Chicago. And more vigilant policing can “push gangs into more constrained areas of the city and into more conflict with each other.”

    In the first nine months of 2015, for example, there was a 40 percent increase in gun homicides compared to 2014.

    “As we are seeing in our city, innocent bystanders suffer the consequences as well as those directly targeted,” Joseph says.

    In a span of a month, a 5-year-old, a 3-year-old and a 5-month-old were all victims of drive by shootings from gang violence that has boiled over in various East Side neighborhoods.

    After the youngest, Aavielle Wakefield, was killed, Cleveland police chief Calvin Williams stood at the crime scene on East 143rd Street in Cleveland’s Mount Pleasant neighborhood. It was night. The street was lit by the television crews. With Mayor Frank Jackson by his side, the chief demurred about the senseless tit for tat, the need to catch the perpetrators.

    Suddenly, his face went from firm to fragile. “To the family … it’s tough … it’s tough,” he said in tears. “This should not be happening to our city. And we got to do something about it.”

    ——–

    “I have looked into the eyes of children soldiers overseas,” says English, who served a platoon leader stationed in Somalia. “I see the same look in Cleveland and Baltimore. That is what decades of disinvestment has created in our urban areas. It’s got to stop.”

    Click to Enlarge

    English was in Baltimore in April when the riots erupted about 20 miles away from the harbor. The city was on needles. English and a few co-workers received alerts about young people near Mondawmin Mall turning violent.

    The message was to go where the rioting was occurring, with the intent to stem the unrest.

    When English arrived, a CVS was being looted and burned. As a community organizer, English attempted to do what organizers do: connect to the disconnected. But he wasn’t succeeding.

    “I looked at the young people in the eyes,” he recalls. “I lost my soul. I couldn’t connect with them.”

    Anthony Body, a 29-year-old Glenville resident and member of the Cleveland Community Police Commission, sees similarities here.

    “There is a sense of hopelessness,” he says.

    Isolation fuels the cycle of disenfranchisement. Without exposure to positive outcomes, there can only be so much progress. Body says due to the lack of role models in his neighborhood people were influenced by the lifestyle of rappers, drug dealers and the garbage man.

    “There is nothing wrong with being a garbage man,” he says. “But in order to choose Option B, you had to be exposed to Option B.”

    The realities of his neighborhood have taken a personal toll. Body has lost at least one family member or friend to violence every year since 2006.

    “All the trauma. The trauma of no job, the trauma of violence — the lack of family or social support — the schools,” he says, “it all drags on you when you try to better your life, so that when difficulty hits, you just go back to what you know.”

    No doubt, the persistence of violence is not just a Cleveland problem, but a national one. Homicides are up sharply in Washington, D.C., Milwaukee, St. Louis and Baltimore.

    On a mid-October trip to Ohio, FBI director James B. Comey wondered aloud: After years of declining violent crime in cities, why the uptick? “I’m not here announcing any big initiative or program,” Comey said, “but we have a lot of smart people who we brought on board after 9/11 who may be able to help look at the issue differently.”

    Cheap heroin from Mexico and the turf battles to supply what has become a nationwide heroin epidemic was one likely scenario, he offered.

    “What we’re in the midst of is a drug war,” says Hough resident and writer Mansfield Frazier, who likens today’s violence to the St. Valentine’s Day Massacre that left seven men dead in Prohibition-era Chicago.

    For Khrystalynn Shefton, a housing development manager at the Famicos Foundation — a community development corporation in Glenville and Hough — this drug war is not just an urban problem, but an everyone problem. It’s limiting the potential for struggling neighborhoods to appreciate.

    Shefton tells the story of a friend who lives off Rockefeller Park in a beautifully renovated home in Glenville. On a recent Sunday, she was enjoying tea in her sunroom. “A guy pulls up, straps up and does heroin in front of her house,” Shefton says. When he was done, the man left down Martin Luther King Jr. Boulevard to head toward Interstate 90 and back to the suburbs.

    “The pain for me in this renaissance is that as a city we have not figured out that ‘I am my brother’s keeper,’ ” she says. “It’s all connected — the ills in the suburbs and the city.”

    The roots of urban violence run deeper than the existence of a drug war. In September, the Cincinnati Enquirer investigated the Queen City’s rise in gun violence. What Cincinnati was witnessing ran counter to conventional wisdom that crime goes up in bad economic times and down in good times, offered Mayor John Cranley.

    “This is the best economy we’ve had since the Great Recession and yet crime is up,” Cranley explained. “So it’s more likely to be linked to social and cultural than economic reasons.”

    Of course, one could argue that the violence is linked to social and cultural issues stemming from economic reasons. Simply, the economy has changed rapidly since so many worked in the plants. Good economic times have been divorced from so many people, if not a generation of so many people.

    The Georgetown Public Policy Institute found that four out of the five jobs lost since the Great Recession required a high school degree or less. “The shift in the workforce from less-educated to more-educated has been a slow and steady process,” notes the authors.

    In the early 20th century, Cleveland was a magnet for European immigrants, Puerto Ricans and African-Americans because industry needed labor to produce economic growth. Manufacturing built our middle class. It enabled people to move up.

    In 1990, for example, more than 50 percent of Cuyahoga County’s African-American residents lived in heavily segregated East Side city neighborhoods, while today that number is down to 30 percent.

    That said, large-scale launchpad industries for formerly blue-collar communities are now nonexistent. Cleveland lost its old magnetism. But the children and grandchildren of the city’s factory-floored forefathers remain.

    And they are idle. Thirty-eight percent of Cleveland’s males are not in the labor force. In black majority neighborhoods such as Union Miles, Central and Glenville, those numbers approach 50 percent.

    When English first began canvassing Rust Belt cities, the Texas native was amazed at the number of black men standing on the corners. In Baltimore, he got to know many of them.

    “We have always been on the corners,” English recalls one of them telling him. “The difference then is that we had lunch pails, and we were waiting for a ride to the steel mills.”

    While English has been making that point for years, corporate and civic leadership in Baltimore are just now coming around to it, he says. “The unrest in Baltimore and the day-to-day violence in Cleveland — it’s a jobs issue.”

    Body, a good neighbor ambassador supervisor with the Northeast Ohio Sewer District, echoes the sentiment. “People where I live just want opportunity,” he says. “They want to work. Every generation up to recently had [opportunities to work] handed down, somewhere in between it stopped being handed down.”

    Body, who earned a business degree from Malone University while on a football scholarship, considers himself blessed. His parents and higher education taught him critical-thinking skills. He became better prepared for today’s economy. He found his place — and Glenville is a part of it.

    “I’m still playing the dozens and breaking bread with my community,” he says. “I’m trying to express to folks there is another way.”

    But too many of them can’t see it, he says. “The feeling in most folks is disappointment for not being able to join with it.”

    ——–

    There is an understanding in geopolitics that everything local is global. What you see happening on the corner is tied together, whether that’s a vacant house and a skeletal factory or a condo development and state-of-the-art medical research facility.

    It is correlated to Cleveland’s relationship with and relevance in the world. One set of aesthetics are birthed by severing from our economic past, and the other birthed from ties to our economic future.

    In between these aesthetics are people.

    Yes, a younger, more educated generation has found aspiration in Cleveland’s core. Yet to think Cleveland can come back by deepening the pattern of isolation versus prosperity is to ignore a basic tenant of modernization: With evolution comes progress — not just economically, but humanly.

    Cleveland’s rebirth is in its infancy. The city is still alive in the shadows of all it has lost, making it possible for a consciousness to be reborn right.

    Part of this entails learning from the lessons of Baltimore. There, like in Cleveland, the city’s economic transformation is largely spearheaded by the education and medical sectors centered around Johns Hopkins University and Johns Hopkins Hospital in East Baltimore.

    Recently, in the face of Baltimore’s social unrest, the two institutions joined in an initiative called HopkinsLocal. The point is simple: Tackle social and health issues in Baltimore by engaging the city’s poorest residents and preparing the unprepared. By 2018, they plan to fill 40 percent of targeted positions by hiring from within the city’s most distressed communities. In all, it is one of the more robust buy local anchor institution policies in the nation.

    Locally, programs to do something similar with anchor institutions have been developed, particularly the Evergreen Cooperatives. The worker-owned co-ops based in Cleveland’s East Side are contracted out to sell local goods and services to global institutions such as the Cleveland Clinic. While innovative, the efforts need scaling. Discussions are happening in Cleveland to do just that.

    For English, the urgency couldn’t have come too soon.

    “It’s a generational moment,” he says. “In the future, people will look back to now and ask, ‘How did we respond?’ “

    This piece first appeared in Cleveland Magazine.

    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.

  • Why High Taxes Aren’t the Only Reason GE Left Connecticut

    General Electric, unhappy with a recent corporate tax increase in Connecticut, has now announced that it is relocating to Boston’s south waterfront. Indeed Connecticut’s tax climate is bad, ranking 44th according to the Tax Foundation, but GE’s move points to much bigger problems in the state.  I examine this in my new piece over at City Journal. Here’s an excerpt:

    For decades, nearby New York City’s pain was Connecticut’s gain. New York was a grim, dangerous, failing city that almost went bankrupt in the 1970s. More than 100 Fortune 500 companies fled during that era, many heading to suburban New Jersey and Connecticut—including GE, which moved in 1974 from 570 Lexington Avenue to Fairfield, Connecticut. The same story played out in cities across America, with corporations fleeing dying downtowns for the safety of the suburban office campus.

    Today, cities are back. The policing revolution—helped by the waning of the crack epidemic—made cities safe again. Core public services were slowly restored, parks were rebuilt, and transit systems were cleaned up and refurbished. Investment started returning. The structure of the economy changed, too. Starting in the 1990s, technology radically transformed the business world and is now a major industry in its own right. The financial industry was deregulated. Globalization drove demand for new types of business services, reinforcing the need to stay on top of a constantly shifting landscape. People with advanced, specialized knowledge are the ones who help companies innovate now. These employees work in highly interactive ways that benefit from clustering together—disproportionately in urban areas like New York, Chicago, and Boston.

    Click through to read the whole thing.

    Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.

    Photo: The former General Electric/Remington facility in Bridgeport, CT. The buildings have been demolished in recent years.

  • Is California’s Economy Swell?

    Every now and then, something happens to cause California’s comfortable establishment to celebrate the state’s economy.  Recent budget surpluses and jobs data have provided several opportunities, never mind that these are hardly summary statistics.  They don’t tell the complete story.

    The celebrants conveniently ignore California’s nation-leading poverty, huge inequality, persistent negative domestic migration, and the fact that with about 12 percent of the nation’s population, California is home to about 30 percent of the nation’s welfare recipients.

    A recent Next 10 report, prepared by Beacon Economics, has provided another opportunity for celebration.  The Los Angeles Times’ coverage of the report is here.  Their reporter, Chris Kirkham, provides a straight-forward summary, including charts not in the original report and quotes from people who might not be expected to be mindless cheerleaders.  Full disclosure: He tried to interview me, but I was unavailable.

    My favorite coverage was a celebratory piece at The National Memo, by one Froma Harrop, titled High Taxes, Regulations, and a Swell Economy.  Try telling the children of one of the several families living in a single-family home, children with little prospect of ever living a middle-class lifestyle, that California’s economy is swell.  Try telling that to the huge numbers of long-term unemployed in California’s Central Valley, or one of the many people who, like Martin Saldana, have been poorly served by California’s swell economy.  California’s economy might be swell, but only for a portion of the population.

    Harrop, and apparently large numbers of California’s comfortable establishment, don’t appear to care much about their less-fortunate fellow citizens.  She’s channeling Marie Antoinette when she says “OK.  Those who can’t pay the price—or who want bigger spaces—can and often do consider other parts of the country.”

    Right.  What about all the people who provide services to California’s wealthy coastal residents in places like Monterey and Santa Barbara?  What about counties like Napa and Ventura that insist, by law, that land be set aside for agriculture, an industry that employs thousands, but can’t survive and pay wages that would allow a respectable standard of living in these high-cost counties?

    This time the celebration turns out to be about nothing.  The Next 10 report is seriously flawed.  The first hint of weakness is on the first page of the actual report, page 4 of the document, where they say “This analysis is trying to show….”  Serious analysis attempts to answer questions, not support a pre-conceived opinion.

    The next clue is Table 1.  In a report filled with time series, the authors present data on one point in time, say that California has the fourth highest net job growth rate, and conclude all is good.  Why would they do that?  Could it be that the time series doesn’t support the narrative?

    Actually, they used the only recent year where California performed significantly better than the United States.  Here’s the data in time series.  It’s similar to a chart in the Los Angeles Times’ piece.  We compare California’s net job creation rate with that of the United States:

    Doesn’t look so spectacular, does it? 

    Maybe the rankings would look better?  Below is a chart of California’s ranking going back to 1977.  Remember, one is good, 50 is bad:

    The narrative isn’t supported here either.  California has only ranked in the top 20 twice since 2006, and over that time it’s been in the bottom 20 three times.  Indeed, California has been in the top ten only once since 2001.  That was the data point they used in their analysis.

    The report has other weaknesses.

    Consider the charts 4a through 4f.  Combined, they purport to show that for California, firms of all ages were net job creators every year.  There is no year where they show firms of any age group having net job losses.  Given the well-documented massive California job losses in the past few recessions, this is simply unbelievable. 

    Indeed, a close look at the charts yields apparent internal inconsistencies.  Chart 4e is an example.  In 2002, 2009, and 2010 job destruction rates were far greater than job creation rates, but somehow they report that net job creation rates managed to remain positive in each of these years?  For the record, we built a chart using aggregate data that show net job loss rates for all California establishments of -2.2, -5.8, and -3.1 for the years 2002, 2009 and 2010, respectively:

    California’s apologists don’t do themselves any favors by resorting to such shoddy and misleading work.  California has had some good job years recently.  It also has some huge strengths.  These include a world-leading venture capital infrastructure, a world-leading climate, and a fantastic location between Asia and the massive American consumer market.

    California has some huge challenges too, including the poverty, inequality, and limited opportunity for minorities.  Ignoring these challenges and exaggerating the state’s strengths is a guarantee that California will never be the land of opportunity that it was — or could be.

    Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org.

  • New Report: Building Cities for People

    This is the introduction to a new report: “Building Cities for People” published by the Center for Demographics and Policy. The report was authored by Joel Kotkin with help from Wendell Cox, Mark Schill, and Ali Modarres. Download the full report (pdf) here.

    Cities succeed by making life better for the vast majority of their citizens. This requires less of a focus on grand theories, architecture or being fashionable, and more on what occurs on the ground level. “Everyday life,” observed the French historian Fernand Braudel, “consists of the little things one hardly notices in time and space.” Braudel’s work focused on people who lived normal lives; they worried about feeding and housing their families, keeping warm, and making a livelihood.

    Adapting Braudel’s approach to the modern day, we concentrate on how families make the pragmatic decisions that determine where they choose to locate. To construct this new, family- centric model, we have employed various tools: historical reasoning, Census Bureau data, market data and economic statistics, as well as surveys of potential and actual home-buyers.

    This approach does not underestimate the critical role that the dense, traditional city plays in intellectual, cultural and economic life. Traditional cities will continue to attract many of our brightest and most capable citizens, particularly among the young and childless. But our evidence indicates strongly that, for the most part, families today are heading away from the most elite, more congested cities, and towards less expensive cities and the suburban periphery. (See report appendix “Best Cities for Families”)

    New York, San Francisco, and Los Angeles long have been among the cities that defined the American urban experience. But today, families with children seem to be settling instead in small, relatively inexpensive metropolitan areas, such as Fayetteville in Arkansas and Missouri; Cape Coral and Melbourne in Florida; Columbia, South Carolina; Colorado Springs; and Boise. They are also moving to less celebrated middle-sized metropolitan areas, such as Austin, Raleigh, San Antonio and Atlanta.

    Traditional cities will continue to attract many of our brightest and most capable citizens, particularly among the young and childless. But our evidence indicates strongly that, for the most part, families today are heading away from the most elite, celebrated cities, and towards less expensive cities and the suburban periphery.

    Download the full report (pdf).

  • What Does It Mean to Bring Buffalo Back?

    Prior to the holidays City Journal published  my major essay on Buffalo in their fall issue.  Here’s an excerpt:

    Local planner Chuck Banas observes that while Buffalo’s regional population today is roughly the same as it was in 1950, the urbanized footprint of the region has tripled. “Same number of people, three times as much stuff to pay for” is the quip—and it’s true. Physical capital must either be maintained at great cost in perpetuity or ignored and allowed to become a drag on the city. Between 1980 and 2011, according to the University of Buffalo Regional Institute, Buffalo-area governments issued permits for almost 60,000 new single-family homes—while regional population declined. Given the gargantuan scale of state aid to the region, this is clearly not market-rate development.

    While Buffalo’s urban advocates agree that investing in sprawl is misguided, they’re less critical about new construction in the urban center. The city’s $550 million light-rail line was an epic civic folly, yet Buffalo is currently reconstructing a downtown station on the line. More ill-conceived spending lies ahead. The region’s long-range transportation plan projects a need for an additional $100 million in capital expenditures through 2040, just to keep the existing line running—plus more operating subsidies every year. Seen in this light, neither cranes on the skyline nor bulldozers paving the countryside are necessarily good signs for Buffalo.

    I learned a lot in Buffalo and it stimulated my thinking about post-industrial cities generally. What is the best way to bring some of these places back? What does it even mean for them to be back?  If you wanted to inject a billion dollars of state or federal money into them, where would it most profitably be spent? These and other questions are ones I’ll be looking at in more detail during 2016.

    Read the entire piece at City Journal.

    Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.

  • Seeing the West as Worse

    “Hey-hey, ho-ho, Western culture’s got to go.

    – Slogan from 1988 Stanford University protest led by Jesse Jackson.

    In the aftermath of San Bernardino and Paris massacres, our cognitive leaders – from President Obama on down – have warned Americans not to engage in what Hillary Clinton has described as “a clash of civilizations.” But you can’t have a real clash when one side – ours – seems compelled to demean its traditions and values.

    Leaders in America and Europe don’t want to confront Islamic fundamentalism, or other nasty manifestations of post-Western thinking, because they increasingly no longer believe in our own core values. At the same time, devoted to the climate issue, they are squandering our new energy revolution by attempting to “decarbonize,” essentially leaving the field and the financial windfall to our friends in Riyadh, Moscow, Tehran and Raqqa.

    Western ethos deconstructed

    As the great 15th century Arab historian Ibn Khaldun observed, societies that get rich also tend to get soft, both in the physical sense and in the head. Over the past two centuries, Western societies, propelled by the twin forces of technology and capitalist “animal spirits,” have created a diffusion of wealth unprecedented in world history. A massive middle class emerged, and the working class received valuable protections, not only in Europe and America, but throughout parts of the world, notably East Asia, which adopted at least some of the Western ethos.

    Read the entire piece at the Orange County Register.

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

    Photo by Payton Chung from DCA, USA (Polar bear protestUploaded by AlbertHerring) [CC BY 2.0], via Wikimedia Commons