New Geography

Category: Suburbs

  • Suburban Nations: Canada, Australia and the United States

    Professors David L. A. Gordon of Queens University (Canada) and Paul Maginn and Sharon Biermann of the University of Western Australia have now shown Australia to be a largely suburban nation. This follows on Professor Gordon’s work with colleagues in 2013 that came to the same conclusion on Canada based upon 2006 census data. By using census tract data, rather than municipality data, Gordon, et al were able to avoid the misleading but readily accessible jurisdictional analysis (central city versus suburbs) that equated large low-density central municipalities like Calgary and Edmonton, with more compact and dense municipalities like Vancouver and Montreal (or New York with Phoenix). The Gordon, et al criteria is illustrated in Figure 1.

    Broadly following the Gordon et al research, in the Spring of 2014, I published a similar “City Sector Model” using postal code tabulation areas (zip codes) for the major metropolitan areas of the United States. That criteria is illustrated in Figure 2.

    This article compares the Gordon findings in Canada and Australia and contrasts them with my findings in the United States.

    The Gordon Research: Canada and Australia

    In Australia, as in Canada, Professors Gordon, Maginn and Biermann divided metropolitan areas into four classifications at a small area level. The research called the urban core classification "active core," to note the greater dependence of residents on walking and cycling for commuting to work. They divided suburban areas into transit and auto suburban areas, and designated the more rural areas of metropolitan areas as exurban. In both countries, they used the functional or economic definition of cities, which is metropolitan areas or labor market areas (Note 1).

    Gordon, Maginn and Biermann’s analysis shows that Australia’s 27 metropolitan areas are 13 percent “active core”, nine percent transit suburbs, 69 percent auto suburbs and 10 percent exurban. This is nearly the same as the previous research on the 2011 Census of Canada which revealed 12 percent active core, 11 percent transit suburbs, 69 percent auto suburbs and eight percent exurban for all 33 metropolitan areas.

    The Major Metropolitan Areas (Over 1,000,000 Population) In the smaller number of Australian metropolitan areas with more than 1,000,000 population, the “active cores” are only slightly larger than those in Canada (12.4 percent of the metropolitan population versus 11.8 percent). But Canada’s major metropolitan areas has larger “transit suburbs” by a 12.2 percent to 10.0 percent margin. The “auto suburban” figures are virtually the same, with Australia at 70.5 percent and Canada at 70.7 percent. Finally, Australia has a slightly larger “exurbs,” at 7.2 percent compared to Canada’s 5.2 percent (Figures 3 and 4).

    Comparing to the United States

    In the United States, the City Sector Model uses somewhat different criteria. Gordon’s central classifications (“active core” and “transit suburb”) parallel the City Sector Model’s “urban core: CBD” and “urban core: inner ring.” Gordon’s “auto suburban” and “exurban” also roughly parallel the two “suburban” and the exurban City Sector Model classifications.

    Perhaps the largest difference between the two models is in the treatment of commuting. Professor Gordon’s approach is to classify the two central areas based on 50 percent higher than each metropolitan’s area average shares of walking, cycling and transit journey to work travel. The City Sector Model uses an across-the-board minimum 20 percent market share (transit, cycling and walking combined), to replicate a division between more dense pre-World War II development and the automobile oriented suburbs that followed.

    Comparing to the United States

    Of course, it is to be expected that the United States, with the lowest density built-up urban areas (called population centers in Canada and urban centres in Australia) would be even more suburban than Australia and Canada . This is indicated by the data (see Demographia World Urban Areas).

    There are large differences in the two more central classifications. In Australia, the two central areas have 22.4 percent of the metropolitan area population, somewhat less than Canada’s 24.0 percent. In the United States the two central areas have a smaller 14.8 percent of the metropolitan area population (Figure 5).

    Various factors account for this difference. There were, for example, huge urban core population losses   in the United States, but not in Canada and Australia. Another cause is the much earlier motorization of the United States, which by 1929, according to economist Robert Gordon, had achieved 0.9 vehicles per household and had 90 percent of the world’s registered vehicles (Note 2). With this unparalleled market penetration, the U.S. had a several decade long head start in automobile oriented suburbanization. Canada equaled the 1929 U.S. automobile market penetration in the middle 1950s and Australia in the middle 1960s.However, in the suburban classification, the metropolitan areas of the three nations were very similar. The US automobile suburb share of the population, at 68.8 percent was within two percentage points of both Canada and Australia. However, like the urban core, the suburbs showed considerably different results, with the United States having a 16.4 percentage exurban share, compared to approximately 10 percentage point lower shares in both Canada and Australia.

    Part of difference in the exurbs is the larger geographic size of U.S. metropolitan areas, which are far less representative in capturing the genuine labor market. The building geographical blocks used by the U.S. Office of Management and Budget are simply too large for sufficient preciseness. This is illustrated by the Riverside-San Bernardino metropolitan area, which covers an area about the same size as the Canadian province of New Brunswick or the Australian state of Tasmania. By contrast, in Canada, Statistics Canada uses municipalities to construct metropolitan areas, while Australia uses “Statistical Areas Level 4,” which are generally smaller than US counties (Note 3). When the boundaries of a metropolitan area are far larger than the actual commuting shed (as often happens in the United States), more people will be in the metropolitan area.

    At the same time, these results must be interpreted carefully, since there are differences in the criteria and geographical building blocks of metropolitan areas in all three nations.

    Comparison of Population Growth

    Professor Gordon’s research in both nations shows suburban growth   far out stripping growth in the central areas. In Canada, nearly 84 percent of major metropolitan area population growth between 2006 and 2011 was in the “auto suburbs” and “exurbs” (Figure 6). In Australia (27 metropolitan areas), the “auto suburbs” and “exurbs accounted” for nearly 78 percent of population growth (Figure 7). In the United States, the suburbs and exurbs accounted for over 85 percent   (Figure 8).

    Suburban World

    Contrary to planning preference for dense urbanization, suburbanization has occurred virtually wherever people can afford cars. This is even true in Europe, Japan and China. For example, the municipality of Paris continues to languish with a population a quarter below its level of 135 years ago (1881). The 8 million resident urban area growth since that time has been in the suburbs , which now cover more than 25 times the area of the ville de Paris (the central municipality). Other examples, such as the core municipalities of Copenhagen (from 1950), Barcelona and Milan (from 1970) have suffered significant population losses while all metropolitan area growth has been in the suburbs. There are many similar examples around the world.

    Even with the differing definitions, the data in Canada, Australia and the United States is remarkably similar. Of course, not all suburbs are the same, but it should not be surprising that the organic growth of cities continues on their edges.

    Note 1: For further information see: Paul Cheshire, Max Nathan and Henry G. Overman of the London School of Economics in their recent book, Urban Economics and Urban Policy: Challenging Conventional Policy Wisdom.

    Note 2: See Robert J. Gordon, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War, page 374, reviewed at http://www.newgeography.com/content/005364-robert-gordons-notable-history-economics-and-living-standards.  

    Note 3: The larger size of US exurbs is illustrated by the 11,400 square kilometer average areas outside the principal urban areas (exurbs) of US metropolitan areas. In Australia, the average outside the principal urban centres is 6,500 square kilometers, while in Canada the average area outside the principal population centres is 4,600 square kilometers (data based on metropolitan areas with more than 1,000,000 population).

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). 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.

    Photo: Brisbane, Australia Inner Suburbs (by author)

  • Edward Hopper’s Rockford

    I had dinner in Rockford, Illinois recently with Jennifer and Michael Smith of the City Smiths. You will never find a more charming, kind, and industrious couple. Any town would be lucky to have such passionate and engaged citizens.

    Rockford has good bones: a diversified economy, a well educated population, a bountiful rural hinterland, and ready access to Chicagoland. I’ll blog about that some other time with selected photos I took yesterday afternoon. But it’s breakfast time here in Chicago and I thought I’d do something a little different for the moment. I’m posting photos of the drive away from the restaurant in downtown Rockford as I made my way toward the Interstate after dinner.

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    My conversations with people all across the country tend to focus on the quality of the downtown core, the prosperous suburban landscape, the public schools, the dynamics of municipal finance, the palace intrigue of local politics, blah, blah, blah. And then, inevitably, I hop in the car and head out through the reality of what every American town actually is.

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    This drive-thru Edward Hopper dreamscape goes on for miles in every direction. Pound for pound this is what constitutes the bulk of the built environment – or at least what passes for the public realm. This is where we all get our transmissions repaired, take our meals, have our hair done, and buy our groceries. This is where a significant proportion of the population works each day. This is our tax base. This is our infrastructure burden. At the very least this is what we all pass through on our way to other places.

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    Forget downtown. It’s a tiny speck on the map compared to the endless buffet of strip malls and parking lots that have engulfed it. Let go of the ideaof comfortable homes set in pristine leafy cul-de-sacs. These muffler shops and fast food outlets are the lion’s share of what we’ve created for ourselves. There’s so much of this stuff everywhere that these establishments will continue to define our communities for the next couple of generations. We’ll need to maintain them, reinvent them, or deal with the consequences of letting them decline. I don’t hear people talk much about that process, most likely because no one’s thinking about it. These places aren’t worthy of consideration.

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    It’s easy to get excited about restoring a magnificent Beaux-Arts theater and contemplate the economic benefits of a reinvigorated historic downtown. It’s equally tempting to shine up a mid-century residential gem to its original Mad Men condition. But what exactly becomes of a defunct gas station that’s already devolved to a scratch and dent used car lot? How do you polish that turd? Keep in mind, the town just spent a few million bucks improving the road that serves this fine specimen of local commerce. Now multiply this place by thousands of similar properties.

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    A newly resurfaced parking lot, some fresh paint, a green lawn and some flowers… Is that the solution? How much lipstick can you put on a pig?

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    This isn’t the kind of conversation that gets much traction at city council meetings. It’s hard to rally civic spirit around the Family Dollar parking lot. But whether we realize it or not our towns will sink or swim based on how well we manage this banal landscape of disposable schlock.

    John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He’s a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.

    All photos by Johnny Sanphillippo

  • “There Can’t Be a Successful Indianapolis Without a Successful Indiana”

    Back in 2008 or 2009 I gave a Pecha Kucha presentation in Indianapolis in which I said:

    “Cities can’t survive on gentrification alone. The broad community has to be a participant in its success. That’s why I’m somewhat down on the notion of the creative class. It’s good as far as it goes, but it’s a self-consciously elitist vision. Where’s the working class in that?

    Arguing among ourselves [city vs. suburbs] is like beggars fighting over table scraps. We need to build the city up without tearing the suburbs down.

    There can’t be a successful Indianapolis without a successful Indiana….While [metro] Indy has 25% of the states’ population, it has 60% of the state’s population growth and 80% of its economic growth. That’s not healthy. Like it or not, we’re dependent on the state for critical infrastructure funds and other things. So our challenge is how to bring the rest of the state along with us.”

    I’ve long been an advocate for the restoration what I call the commonwealth, the idea that we rise and fall together as a people and all have skin the game. This idea has gone by the wayside to say the least.

    It may well be that American society has become irredeemably tribalized. I hope not. At a minimum, there are significant sized groups with fundamentally incompatible ideas of the public good. There’s a lot to unpack in that statement, but not today.

    Richard Florida has talked about a “great reset” of the economy. Clearly we need some sort of institutional reset to contain or resolve these differences. We’ve done this before in creating the original Constitution to replace the Articles of Confederation, fighting a Civil War and redefining the federalism of that constitution, the New Deal era changes, and perhaps others.

    What that looks like, I don’t know. But if we are to reach it without even more severe upheavals, it’s likely to involve some renewed form of federalism, agree to disagree, live and let live, etc – and on durable basis, not just an opportunistic and self-interested one.

    This will involve painful change and difficult decisions. One of them is that we must be willing to give others the freedom to make choices for themselves and their communities that we fundamentally disagree with.

    To the extent that we believe all of the big decisions of our society are morally determined, and thus not properly the subject of political debate, this means we are in a winner take all world. If you want that world, you’d better be really sure you are right and sure you are going to win – because you face ruination if you’re wrong on either count.

    It also means that we need to figure out how to have both love and accountability towards all of our citizens. Right now that means that rural white Republicans in victory cannot ignore the continued urgent need to integrate urban black America into full participation in middle class success and to address other aspects of what Richard Florida has labeled the “new urban crisis.”

    It also means that working class whites must be challenged to change. I have made no secret in these pages that these communities too often have sabotaging traits that really aren’t necessary to cling to – such as the disparagement of ambition for better.

    But urban and left leaning populations, including minority groups, need to likewise address travails of the white working class, and be willing to make painful changes of their own.

    To be honest, I’m not optimistic. But I am hopeful. The future hold possibilities for ill that we cannot know – but it likewise holds the possibility for good things we can’t yet imagine.

    Aaron M. Renn is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and an economic development columnist for Governing magazine. He focuses on ways to help America’s cities thrive in an ever more complex, competitive, globalized, and diverse twenty-first century. During Renn’s 15-year career in management and technology consulting, he was a partner at Accenture and held several technology strategy roles and directed multimillion-dollar global technology implementations. He has contributed to The Guardian, Forbes.com, and numerous other publications. Renn holds a B.S. from Indiana University, where he coauthored an early social-networking platform in 1991.

    Photo: By Daniel Schwen (Own work) [CC BY-SA 4.0], via Wikimedia Commons

  • Sydney Lurches to Housing Affordability Disaster

    Now and again Australia erupts in controversy about housing affordability. Each time it follows the same course. Some new statistic or media story confirms that prices are out of control. A senior politician is prompted to call for deregulation and more supply, and is backed-up by the property industry. Then come progressive policy wonks saying no, the issue is high investor demand stimulated by tax concessions. Next emerge the welfare lobby, calling for tax reform as well as more social housing and “inclusionary zoning”. After a round of claims and counter-claims, it all fizzles out.

    From the surveyed general public to the Reserve Bank, almost everyone agrees Sydney has a critical problem. The wrangling isn’t over whether to reduce prices, but how. And that depends on where you fit in the city’s system of interests with a stake in property development and construction.

    Conflict of interests

    Generally, these fall into three groups, with their distinct agendas.

    First, the producers and beneficiaries of Big Projects; large-scale housing and urban renewal schemes, particularly high-end apartment developers, top-tier architectural practices, urban planners, rail transport engineers and “sustainability” consultants. Joining them are governments levying value-based property charges, financial institutions with large home mortgage books, and media groups dependent on luxury apartment advertising. “Three of the biggest forces pushing up dwelling prices (the banks, state governments and councils) are like drug addicts”, writes Robert Gottliebsen, “they are hooked on keeping dwelling prices at the current levels or increasing them further”.

    The high-land-value coalition’s agenda encompasses residential densification, preferably on infill or brownfield sites, transit-oriented-development (TOD), and a tendency to CBD-centrism. On the whole, they are supply-solution advocates and support tax concessions.  

    Second, progressive policy analysts and welfare advocates, closely aligned with the university system and highly educated knowledge-worker elite. They, too, promote inner-urban infill development, higher core and middle-ring densities, and public amenities associated with TOD. While the Big Project coalition is mostly driven by finances, cultural-lifestyle factors loom large for knowledge-welfare types. Hence their demands for more housing near “consumer city” localities crammed with trendy bars, pubs, nightclubs, restaurants, cafes, art galleries, theaters, museums and cinemas. This plays into “creative-class” perspectives on economic growth and an aversion to suburbanization as “unsustainable”. Some of them are supply-solution sceptics, leaning toward demand-management, and most are aggressive critics of tax concessions. They urge more social housing schemes and inclusionary zoning, which Big Project lobbies oppose (with good reason; the evidence suggests it reduces supply and raises prices).  

    Third, fringe or greenfield detached house builders, the mass of low-to-middle income industrial or routine service workers, low-level government employees, marginal small traders, in industries like retail, wholesale, logistics, transport, distribution, manufacturing, construction and trades. This worker-trader class is particularly sensitive to input costs, including the impact of high land values on commercial rents. Many rely on real estate as security for financing and gravitate to homes, offices and plant in low-cost, peripheral, auto-oriented regions like Greater Western Sydney.

    There is some overlap between the groups, with elements of the Big Projects coalition, architects, urban planners, sustainability consultants and engineers, crossing over to the knowledge-welfare elite. Apartment developers routinely deploy creative-class and green arguments for proposals which are integrated into broader densification—TOD zoning and infrastructure arrangements.

    Past affordability eruptions were blown off course by the tax issue. Eventually, Labor embraced reform of negative gearing and CGT concessions as policy, urged on by think tanks like Grattan Institute and McKell Institute, prominent knowledge-welfare voices. Yet according to their own estimates, prices would fall by a measly 2 and 0.49 per cent respectively.

    Considering that Sydney prices have escalated by a staggering 64 per cent since 2012, the focus on tax reform is a distraction. Economists like Judith Sloan and Stephen Koukoulas maintain that if there are any tax impacts at all, they are secondary to supply constraints rather than vice versa.

    Most of the Big Projects coalition and worker-trader class subscribe to a supply-solution in principle. But there are differences on what this means in practice. An explicit apportionment of new housing between brownfield-infill sites and greenfield development was dropped from the NSW Government’s A Plan For Growing Sydney. An outcome is achieved by focusing on 14 Priority Growth Areas and Precincts, only 5 of which contain substantial greenfield potential.

    Growth Areas inside established built-up localities are Rhodes East, St Leonards and Crows Nest, Greater Parramatta to Olympic Peninsula, Sydney Metro Northwest, Sydenham to Bankstown Corridor, Western Sydney Employment Area, Epping and Macquarie Park, Arncliffe and Banksia, and Ingleside Precinct. The outer, peripheral areas with most capacity for new land release or greenfield development are North West Growth Area, South West Growth Area, Greater Macarthur Growth Area, Western Sydney Growth Area and Wilton New Town, which lie within seven Local Government Areas (LGAs); Blacktown, The Hills, Camden, Campbelltown, Liverpool, Penrith and Wollondilly Shire.  

    Under A Plan for Growing Sydney, the authorities are planning for an additional 1.6 million people and 664,000 dwellings across the Sydney metropolitan region by 2031. According to NSW Department of Planning “state and local government area household and implied dwelling projections” to 2031, Blacktown LGA will have 48,300 new dwellings, The Hills LGA 28,650, Camden LGA 38,250, Campbelltown LGA 19,450, Liverpool LGA 32,400, Penrith LGA 20,900 and Wilton New Town, in Wollondilly Shire, 16,000 dwellings. In other words, these fringe priority areas are to accommodate an additional 203,950 dwellings, or around 30 per cent of the extra 664,000 dwellings across metropolitan Sydney.

    Of course, not all construction in the 7 peripheral LGAs will be on new land, so the share of total dwellings on greenfield sites will be even lower. The Urban Development Institute of Australia (UDIA) estimates that Sydney greenfield lot production is running at 11,600 a year and will reach 12,355 a year in 2017/18. If achieved, that translates to 185,325 or 27 per cent of the 2031 metropolitan dwelling forecast (equating a fringe lot to a single dwelling). 

    This month, the Department of Planning released accelerated forecasts totaling 184,300 new houses and apartments across the 33 metropolitan LGAs by 2021. Of these, 8,350 are assigned to The Hills LGA, 13,600 to Blacktown LGA, 11,800 to Camden LGA, 6,700 to Campbelltown LGA, 8,050 to Liverpool LGA, 6,600 to Penrith LGA and 1,450 to Wollondilly Shire. Together, these represent 30 per cent of the metropolitan total. Large increases are channeled into established areas, including 21,450 in Parramatta LGA, 18,250 in Sydney LGA (covering the CBD and surrounds), 12,200 in Canterbury-Bankstown LGA and 10,000 in Bayside LGA. NSW Planning Minister Rob Stokes boasted “we are getting the balance better … getting over the greenfield issue was the biggest thing that needed to be done”. The targets were to be fleshed out in Draft District Plans administered by a new planning politburo, the Greater Sydney Commission (GSC).  

    Within days, however, the GSC announced its own strategy and targets. The total housing target is distributed to 6 Districts across the city, Central, North, West Central, West, South West and South, rather than Priority Growth Areas. Based on a metropolitan total target of 725,000 dwellings for 2 million more people, each Draft District Plan nominates a 20 year target to 2036. The South West District contains 4 of the peripheral LGAs with most potential for greenfield construction, Camden, Campbelltown, Liverpool and Wollondilly. Its 20 year housing target is 143,000 dwellings, or 19 per cent of the metropolitan total. Of the other 3 LGAs with most greenfield potential, Penrith accounts for just part of West District’s target of 41,500 dwellings or 5 per cent of the metropolitan total, while Blacktown and The Hills are in West Central District, which is dominated by Parramatta LGA with minimal new land release capacity.

    Higher the density, higher the prices

    Suppression of greenfield development reflects a view that location and density don’t condition the benefits of supply. Yet this is contrary to a body of economic analysis on the land value impacts of urban containment. Citing LSE economist Paul Cheshire, commentator Phil Hayward gives a cogent account of this in “The Myth of Affordable Intensification”.

    Hayward explains that the more density allowed, the higher the average housing unit price becomes. Cheshire put this down to a bidding-war at the margins of each income-level cohort of society for slightly more space. The less average space available per household, the more intense is the bidding-war effect. Site development potential in an urban land market with a regulatory limit on land supply, writes Hayward, seems to capitalise into site values. When the market allows people to consume as much space as they want, the bidding-war effect is absent.

    Urban land economists like Cheshire and Alan Evans at Reading University consider housing a complex good … consisting of many attributes bundled into one composite good. The land base is a particularly important attribute. With rising population and incomes, restrictions on the quantity of land at the periphery ratchet up values across the whole urban region. The evidence that fixed urban growth boundaries put upward pressure on land and thus house prices is clear. While no formal boundary is proposed for Sydney, delimited Priority Growth Areas and GSC Districts have the same effect, operating as land value traps. Between 2009 and 2014, the Sydney median greenfield lot price ballooned from $269,000 to $339,750, reports the UDIA, even though lots released per annum rose from 2503 to 8597.

    To subdue prices, Cheshire argues in a 2009 paper, it isn’t enough to rezone and release enough residential land to meet anticipated demand:

    If we are to provide stable prices … what we need to predict is the effective demand for housing and garden space given that it is the quantity of land that the system allocates. Then we have to allocate not just the quantity of land predicted as being compatible with price stability but more. Not all the land allocated as available for development will actually be developed. One rule of thumb suggested is that this implies allocating 40 per cent more land than the estimated demand indicates is needed.

    In Sydney’s case, the authorities aren’t just failing to supply a buffer of land above population and demand projections. Worse, their targets and greenfield-infill ratio are shaped by bureaucratic value judgements on where people should settle, rather than land markets.

    On top of this, proximity to amenities is another housing attribute which capitalises into prices. Advocates of TOD demand more housing near public transport hubs, or, better coordination of land use and transport infrastructure, as they put it. But evidence from the US suggests that land values within 800 metres of mass transit can rise by up to 120 per cent. Adjacent property prices can rise by 32 to 45 per cent. 

    Opponents of fringe development object that the housing will be too far from jobs, assuming monocentricity or concentration of jobs in the urban core. Yet the Long-Term Public Transport Plan For Sydney found that of the jobs supposedly in centres, 37.1 per cent were actually spread over 33 dispersed locations. Only the CBD with 12 per cent and South Sydney with 2.5 per cent had more than two per cent of the total. The other 62.9 per cent were scattered randomly.  

    Investigating whether outer suburban workers have extra long commutes, in fact, Alan Davies concluded average commute times don’t vary a lot geographically within large Australian cities. Peter Gordon of the University of Southern California has researched commute times in American cities over decades, reporting remarkable stability of travel times across inner and outer metropolitan sectors despite population growth. Many individual households and firms ‘co-locate’ to reduce commute time, he explains, and this spatial adjustment [is easier] in dispersed metropolitan space.

    One advocate of inner-ring densification denied that it relies on price-hiking growth boundaries, claiming that relaxing floor space regulations in an Alonso-type model will give the same [densification] effect, with infinite city size. However, the Alonso model incorporates an artificial assumption of monocentricity. Higher paying professional jobs may locate closer to the core, on average, than lower paying jobs. But it’s lower paid workers who are most in need of cheaper housing. Recently, Grattan Institute’s John Daley wrote “it’s important that new supply is focused on the inner and middle rings – 2-20km out of the CBD – of our large cities … new developments on the edge tend to be a long way from where additional jobs are being created”.

    In other words, he propagates the myth of monocentricity and implies that worker-trader jobs don’t count.

    NSW Treasurer Gladys Berejiklian has announced that residential construction activity in NSW has hit an all-time high. But if that construction is funneled into increasingly expensive sites, Sydneysiders face a recurring home ownership nightmare.

    This is an edited version of an article first published on The New City.

    John Muscat is a co-editor, along with Jeremy Gilling, of The New City, a web journal of urban and political affairs.

    Photo: Photograph by Gnangarra [CC BY 2.5 au], via Wikimedia Commons

  • The Future of Racial Politics

    From its inception, the American experiment has been dogged by racial issues. Sadly, this was even truer this year. Eight years after electing the first African-American president, not only are race relations getting worse, according to surveys, but the electorate remains as ethnically divided as in any time of recent history.   

    Donald Trump has emerged in most media accounts as the candidate of Anglo voters, with a margin of 21 percentage points over Hillary Clinton among that segment of the electorate. Clinton’s embrace of “identity” politics may have played a role in turning off many of these white non-Hispanic voters, who might otherwise had voted Democratic.

    Many Democrats maintain still, with some justification, that as demographics evolve over the next decade, the increasingly diverse electorate will reward their identification with racial minorities. The country, and the electorate, seem destined to become ever less white in the coming decades.  Between 2000 and 2015, the nation’s population makeup became increasingly minority, from 31 percent to 38 percent. This trend will continue, with the country conceivably becoming 45 percent non-white by 2030 and 53 percent by 2050.

    White Men Can’t Jump, But They Can Still Vote

    It may well be that Democrats this year jumped the demographic gun. Even as the white population diminishes, it retains a dominant influence in elections. One reason: Whites tend to vote more. Most critical, the African-American share of the electorate, which reached record highs with Barack Obama atop the ticket,  actually dropped by a percentage point in 2016. Latino turnout, widely seen as a surge that would elect Clinton, represented  about the same percentage –11 percent — in 2016 as in 2012.  

     Thesedynamics keyed the Trump victory, particularly in heavily white working-class precincts in the Midwest, Pennsylvania and Florida, where he secured his electoral victory. Many of the pivotal states’ electorates remain very white indeed. In Wisconsin, for example, more than 80 percent of voters are white, and most of them are not residents of liberal college towns like Madison. This is also the case for Pennsylvania, where more than 75 percent of voters are Caucasian. Even Florida – itself a very diverse state — still has a heavily white electorate, accounting for more than 55 percent of voters.  

     These patterns will remain critical past what might be seen as their sell-by date for two critical reasons. One has to do with the concentration of minority voters. Nearly 60 percent of African-Americans live in Southern states where Trump won by dominating a very conservative white electorate. Other minority voters are clustered in big cities in the Northeast, which are not remotely contestable for Republicans.

     Latino voters, and also Asians, are likewise heavily concentrated, particularly in California,   now essentially a non-GOP zone, as well as the similarly politically homogeneous Northeastern cities and Chicago. To be sure, Latinos are also critical in Texas, and Asians too (increasingly so), but for now the Texas white population still outvotes them by a considerable margin.

     Another problem for the much-ballyhooed “emerging Democratic majority” lies in one stubborn fact: The elderly, most of whom are white, are not dying out quickly enough for Democrats to win. Although the extension of life spans may have slowed, or even slightly reversed in some demographic segments, seniors are clearly living longer than before.  

    The Limits of Identity Politics    

    Ignoring the reality of economic decline in the states that swung to Trump, some observers maintain that the increased conservatism among white working-class voters reflects deep-seated racial antagonisms. But this does not explain the considerable movement  of these voters, particularly in the Rust Belt, from support for Obama to support for Trump, as seen in such places as Youngstown, Ohio, Wheeling, W.Va., Macomb County, Mich., and Erie, Pa.

    The Democratic Party made things easier for Trump by adopting identity politics as its mantra. This is particularly maddening when charges of racism are leveled by affluent professionals, academics and bureaucrats, many from elite universities, who are themselves privileged.

    To their credit, some  progressives suggest shifting away — at least in the short run — from identity politics. But racial determinism may now be too central to their ideological core. Bernie Sanders’ campaign spokesperson Symone Sanders, for example, said that when it comes to picking a new leader for the  Democratic National Committee, whites need not apply.    

     Matthew Yglesias, always an excellent window on progressive dogma, insists that “there’s no other kind of politics” but identity politics; Democrats, he asserts, simply need “to do it better.” Progressives seem about as ready to ditch racialist politics  as Southern segregationists were willing to abandon Jim Crow in 1948.

    The Coming GOP Crisis

    For Republicans, identity politics is the gift that keeps giving, but the question is for how long. If you want a nightmare racial scenario for the GOP, just look at California. Since 1994, when the state passed Proposition 187, a measure widely perceived as anti-Hispanic, the Anglo population has dropped by more than 2 million as the state has added 9 million people, including more than 7 million Hispanics. Minorities now account for 62 percent of the population, compared to 43 percent in 1990. The shift in the electorate has been slower but still significant. In 1994, 49 percent of the electorate was Democratic and 37 percent Republican. Due in large part to ethnic change, by 2016 the Democratic margin was 45 percent-26 percent.

    In California this surge in minority voters has accompanied a gradual erosion of the white population, a large portion of which has left for other states. The Golden State  also has gone out of its way to encourage immigration of undocumented aliens by offering them driver’s licenses, subsidized health care and  financial aid for college; 74 percent of all California children under 15 are  now minorities, compared to 66 percent in 2000, and  25 percent of them live below the poverty line. This is 2.5 times the white non-Hispanic rate in California.  

    Despite largely positive results outside the blue coastal states, potentially the biggest long-term problem facing Republicans is in a dominant aspect of geography:  suburbia. Trump lost   some largely affluent suburban areas like Orange County, where 55 percent the population is Latino or Asian, up from 45 percent in 2000.  Perhaps most emblematic of potential GOP problems was Trump’s — and the GOP’s —  loss of Irvine, a prosperous Orange County municipality that is roughly 40 percent Asian.

    Republicans should be even more worried about trends in Texas, where Latinos are already close to a plurality and the Asian population is surging. There are still enough conservative whites to win elections in Texas — Trump won by 10 percentage points — but the margins will continue to shrink. This trend can already be seen in Houston’s sprawling, increasingly multiracial suburbs. Trump, for example, lost solidly middle-class Fort Bend County, by some estimates among the most diverse in the country, which voted Republican in every presidential elections since 1968.

    If this pattern continues, the die may indeed be cast for the GOP. As most minorities now live in the suburbs — a trend that continues to increase — a loss of suburban voters, given the total Democratic lock on inner city electors, would be too much for rural and small-town whites to overcome.  Simply put, by 2030, losses in the multicultural suburbs could make dreams of progressive long-term dominance all but inevitable.

    How Republicans Can Withstand the Racial Shift

    Republicans must reverse these trends if they don’t want to go the way of the dinosaur. They can take some limited satisfaction in knowing that Trump did somewhat  better than Mitt Romney or John McCain among Hispanics and blacks  as well as improving slightly among Asians.

    To expand on these modest gains, Republicans need to focus not on race but economics.  Our recent study for the Center for Opportunity Urbanism demonstrates clearly that minorities generally do far better in red states than in blue ones, based on such factors as income, homeownership, entrepreneurship and migration. Minorities all continue to move in ever larger numbers to red states because their economic climate and regulatory regime work better for them.

    Conservatives can make a case that Barack Obama’s progressive agenda actually favored the highly affluent, who tend to be disproportionately white.  According to a 2016 Urban League study,  African-American levels of economic equality are lower now than in 2009, surely a disappointment for a black middle class so understandably proud of Obama’s elevation.

    The best role model for the GOP could be in Texas. Latinos in the Lone Star State generally do better than their counterparts in California — as measured by homeownership, marriage rates, incomes — and also tend to vote more conservatively. In 2014, for example, Republican Gov. Greg Abbott won 44 percent of Texas Latinos. In contrast, that same year Democratic Gov. Jerry Brown won 73 percent of the Latino vote in California.  

    Other factors, notably upward mobility among  Latinos, African-Americans and Asians, could play a transformative role. As they continue to move to the suburbs, buy houses and start businesses, they may become less likely to support a high-regulation, high-tax and redistributionist agenda. Since 2000, more than 95 percent of the minority growth (black, Asian and Hispanic) in the 52 largest metropolitan areas has been in suburban and exurban areas. Trump did much better among college-educated black males, for example,  than those with no college education — 16 percent vs. 11 percent.

    If more minorities enter the middle class, particularly under Trump, this  could provide an opening for Republicans, just as occurred after the World War II when Italian, Irish, Polish and other eastern European voters moved to the suburbs and assimilated, even intermarried, after years of living apart. A message that targets the middle class aspirations of minorities could be more effective in the long run than appealing merely to xenophobic sentiments shared by an inexorably diminishing population.

    Critically, in the coming  decades, the vast majority of Latinos and Asians will be native-born. They will have spread out increasingly not only within regions but to more conservative parts of the country, notably Texas and the Southeast. At the same time, the population of undocumented workers, the least assimilated and generally the poorest demographic, is already declining, down by 300,000 since 2008. If it continues to decline, which may be likely under Trump, immigration may soon fade away as a primary issue for Latinos.

    Perhaps even more critical, however, may be the growing trend toward intermarriage among minorities. Among second-generation Latinos and Asians, interracial marriage is creating what could become an increasingly fluid racial identity. Intermarriage involving African-Americans is also on the upswing. The new generation of ethnic hybrids, most with one Anglo parent, will no longer be easily pigeon-holed ethnically. Overall, 15 percent of marriages were between partners of different ethnic groups in 2012.

    These are all opportunities to succeed, but the GOP can only prolong itself if it finds a way to reach minority voters based on an appeal of economic mobility. Whether they take this tack, or simply play for time until white voters lose their primacy, may determine whether it is the stupid party that some suggest, and one that, even at its great moment of opportunity, is destined to remain permanently so.

    Ultimately, Republicans could build on Trump’s economic message by demonstrating its efficacy for minority voters. This may be the party’s only hope in the future, given the demographic trends. The competition could also encourage Democrats to focus more on “bread and butter” issues. If future presidential campaigns are waged over key economic issues, rather than pitting ethnicities against one another, the nation will be both unified and stronger.

    This article first appeared on Real Clear Politics.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, was published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). 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.

    Photo: Steve White, Creative Commons

  • Babes In Trumpland: The Coming Rise Of The Heartland Cities

    Contrary to the media notion that Donald Trump’s surprising electoral victory represented merely the actions of unwashed “deplorables,” his winning margin was the outcome of rational thinking in those parts of the country whose economies revolve around the production of tangible goods.

    And their economies stand to gather more steam in the years ahead.

    Trump’s victory was largely minted in the suburbs and smaller cities of the new American Heartland, from Pittsburgh to Omaha to Dallas-Ft. Worth. The heartland regions depend on agriculture, home construction, manufacturing and energy, all of which could benefit from the policies of the new presidential administration and Republican Congress. In contrast, Hillary Clinton favored extending the Obama administration’s policies on fossil fuels and housing that may win support in the dense progressive bastions of the East and West coasts, but were viewed with alarm by many tied to heartland industries, some of which have been under pressure from a global decline in commodity prices.

    Trump’s pro-fossil fuel stance may be anathema in the coastal cities, but will have a very positive effect on the many cities in the “oil patch” that extends from Texas’ Permian Basin to North Dakota, Ohio and western Pennsylvania. This is not just a matter of roughnecks out on the Gulf or West Texas; many of the 100,000 or so jobs lost in the energy industry over the past few years were located in major cities, such as Houston, where many of the employees are both well-educated and dwell close to the urban core.

    Most important of all, manufacturing matters in the heartland in ways that no longer resonate in coastal areas, particularly New York and San Francisco. Since 2000, two of America’s historic centers for manufacturing, Los Angeles and New York together have lost over 600,000 manufacturing positions. Trump’s call for more U.S. industrial jobs could turn out a swan song, but every job that stays in America due to his cajoling is more likely to benefit people in suburban St. Louis or Detroit than Manhattan or Malibu.

    Building on Momentum

    Critically, Trump’s election comes at a time when heartland cities already had economic momentum, including in the Rust Belt.

    The stock, real estate and tech booms on the coasts, as well as increased regulation and taxation there, have made interior cities increasingly attractive to relocating companies and migrants. This is most evident in Texas’ leading metropolitan areas — Dallas-Ft. Worth, Austin, San Antonio and, until recently, Houston — which have consistently led the nation in job and population growth.

    When California companies like Apple look to add middle-class jobs, they don’t often do it in the Golden State, but in more affordable places like Austin. Every big Texas city in recent years can show you a big scalp from my adopted home state: Occidental to Houston, for example, or Toyota America and Jacobs Engineering to Dallas.

    Similar patterns can be seen in the rapid expansion of such smaller cities as Nashville, Charlotte, Columbus, Salt Lake City — all in states that Trump won handily. These cities have developed impressive central cores, but have seen larger scale growth on their periphery. Resilient Great Plains cities like Fargo, Omaha and Sioux Falls have spiffed up and attracted investments in everything from tech and financial services to health care.

    Other industries, such as financial services and business and professional services, are also moving increasingly to heartland cities, and some are building impressive presences in health care.

    Voting With Their Feet

    Perhaps the most underreported, but significant shift towards heartland cities has been a human one. Before, educated people generally clustered in favored blue cities such as San Francisco, New York, Boston, Washington, D.C., and Chicago. This thesis was well documented by urban analyst Richard Florida in his “Rise of the Creative Class.”

    Yet when Richard and I were together in Kansas City last month we were treated to a tour of the region’s ascendant neighborhoods, both in the city and in adjacent parts of Kansas.Cities like Kansas City have seen their downtown residential populations surge, but the vast majority of growth there, as well as in the rest of heartland, tends to be on the periphery.

    As growth in New York and other “hip” cities has slowed, populations are shifting to less expensive ones. Research by demographer Wendell Cox has found that since 2010 over 1.45 million people net have moved from Clinton states to those that favored Trump.

    This increasingly includes young people, according to research conducted at Cleveland State University. There has been a sea change in the migration patterns of educated millennials since 2010, with faster growth in heartland cities than the Bay Area, Washington or New York.

    The biggest drivers for migration to Trumpland tends to be housing prices and rents. Housing prices across the New heartland overall Is 3.4 times the median household income (this is a price-to-income ratio called the “median multiple”). This compares to 7.5 times in California and 4.3 times in the Northeast Corridor (Washington to Boston).Given the choice between more expensive locales on the coasts and less expensive ones in the interior, many people have begun to flock to places like Des Moines, Omaha, Indianapolis and Columbus.

    These trends may become more pronounced when the bulk of millennials enter their 30s and begin to start families and buy homes. Derek Thompson of the Atlantic observes: “The great irony of national migration is that media headquarters overwhelmingly reside in the same dense urban areas that other Americans are desperately trying to escape (or cannot afford).”

    A similar trend may soon take place among immigrants. The Trump campaign may have sought to demonize some of the foreign born, notably the undocumented and Muslims, but many of the cities now growing their immigrant populations most rapidly are in the heartland.

    Houston has been gaining more foreign-born residents than Los Angeles; Dallas now has a higher share of foreign-born residents than Chicago.

    Now the immigrants are expanding to other mid-American outposts such as Nashville, Indianapolis and Columbus. Trumpian politicians may seek to exploit xenophobic sentiments, but metropolitan boosters across the heartland are quick to promote their appeal with foreign-born residents, seeking their entrepreneurial energy and enriching cultural influences. When in Nashville, boosters take you not just to the old country music haunts, but to thriving Kurdish, Somali,  and Mexican enclaves.

    Can Trumpland take success?

    Yet for Trump and his allies in the Republican Party, the resurgence of heartland cities will also bring with it risks. Some of those who now find their future in Kansas City or Houston also bring with them attitudes shaped in blue states, something some progressives are counting on. They may have escaped the worst aspects of ultra-high taxes and abusive regulations, but sometimes this does not stop them from wanting to repeat the old patterns in their new homes.

    the core cities in most of the larger heartland metropolitan areas are either deep blue, as is the case in the Great Lakes, or are turning blue, including Dallas and Houston. The suburbs, particularly the new, further out ones, have remained deeply conservative, but this also could change over time as more young people and immigrants migrate there. Heartland success could undermine some of the very reasons for their resurgence.

    Success also has strange impacts on people’s thinking, and ultimately a resurgent heartland, populated by newcomers and immigrants, could take a very different turn in the decades ahead.

    But this can only happen if Democrats somehow learn to craft their appeal to places outside their current deep-blue bastions. Trump may have won in large part due to the misfortunes heaped on these in the past, but, unless challenged, he ultimately may further consolidate his base by riding on the ascendancy.

    This piece first appeared in Forbes.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, will be published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by Max Goldberg from USA (Trump Cedar Rapids) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

  • How the Left and Right Can Learn to Love Localism: The Constitutional Cure for polarization

    The ever worsening polarization of American politics—demonstrated and accentuated by the Trump victory—is now an undeniable fact of our daily life. Yet rather than allowing the guilty national parties to continue indulging political brinkmanship, we should embrace a  strong, constitutional solution to accommodating our growing divide: a return to local control.

    Such an approach would allow, within some limits, local constituencies to follow their own course, much as the Founding Fathers suggested, without shaking the fundamentals of the federal union. Localism, as I label this approach, would address the sentiments on both right and left by reversing the consolidation of central power in Washington.

    What Americans across the political spectrum need to recognize is that centralizing power does not promote national unity, but ever harsher division. Enforced central control, from left or right, polarizes politics in dangerous ways. The rather hysterical reaction to Trump’s election on the left is a case in point, with some in alt-blue California calling for secession from the union. Had Clinton and the Democrats won, we would have heard other secessionist sentiment, notably in Texas.

    This is no way to maintain a “United” States. Under Obama, conservative states resisted ever expanding federal executive power; now it’s the progressives’ turn to worry about an overweening central state. Some blue states are already planning to go on their own in such areas as health care and somewhat less plausibly, immigration. Progressives may also face potential federal assaults on such things as legal marijuana by a now GOP-controlled central government.

    Do people want Washington to rule everything? The real issue is not the intrinsic evil of government itself, but how we can best address society’s myriad problems. For decades, many progressives have embraced an expansive central government as the most effective method of changing society for the better. Yet it is far from clear that most Americans prefer that alternative. A rough majority in November cast their votes for either Trump, who attacked President Obama’s executive orders, or libertarian Gary Johnson, a candidate with an even stronger localist tendency. Since 2007, the percentage of people who favored expanding government has dropped from 51 to 45 percent.   

    In contrast, localism is widely embraced by a broad majority of the American public. By 64 percent to 26 percent, according to a 2015 poll—Americans say that they feel “more progress” on critical issues take place on the local rather than the federal level. Majorities of all political affiliations and all demographic groups hold this same opinion.  

    The preference for localism also extends to attitudes toward state governments, many of which have grown more intrusive in recent years. Some 72 percent of Americans, according to Gallup, trust their local governments more than they do their state institutions; even in California, where executive power has run riot, far more people prefer local control to that of Sacramento.  

    Critically, millennials, notes generational analyst Morley Winograd, generally  favor community-based, local solutions to key problems. Indeed, a recent National Journal poll found that less than a third of millennials favor federal solutions over locally-based ones. They are also far less trusting of major institutions than their Generation X predecessors. 

    Any party, right or left,  that wishes to expand federal power will face broad political headwinds. Roughly half of all Americans, according to a 2015 Gallup poll, now consider the federal government “an immediate threat to the rights and freedoms of ordinary citizens”; in 2003, only 30 percent felt that way. The federal bureaucracy is held in such low regard that 55 percent of the public says “ordinary Americans” would do a better job of solving national problems.

    The election of Trump and his “deplorables” is leading more progressives, after years of cheering on President Obama’s ever increasing policy of rule by decree, to seek ways of preserving their own progressive bubble. Cheerleaders for Barack Obama’s imperial presidency, such as The New Yorker, are now embracing states’ rights with an almost Confederate enthusiasm. There are increasing plans to promote new progressive measures, for example on energy as a means to counter the nefarious, anti-planetary intentions of the new monarch.

    Yet in reality, progressivism and localism are hardly incompatible. The progressive Justice Louis Brandeis invoked the notion that the states, not the federal government, should serve as “laboratories of democracy,” empowering them to “try novel social and economic experiments without risk to the rest of the country.”  

    This more decentralized progressive approach was also expounded by David Osborne in his 1990 book, Laboratories of Democracy. Notably, Osborne’s book featured a foreword by the then-governor of Arkansas, Bill Clinton. The future president praised “pragmatic responses” to key social and economic issues by both liberal and conservative governors. Such state-level responses, he correctly noted, were critical in “a country as complex and diverse as ours.”

    Localism also has fans among grassroots leftists. Some embrace the ideal of localism as a reaction against globalization and domination by large corporations. For example, grassroots progressives often support local merchants and locally produced agricultural products. Some have adopted localist ideas as an economic development tool, an environmental win, and a form of resistance to ever-greater centralized big business control.   

    Yale Law professor Heather Gerken makes the case that progressive social causes like racial integration, gay marriage, marijuana legalization, and others have historically tended to be adopted first at a local level before spreading to other areas. Gerken argues that it’s necessary for cities and states to have these powers so that local “cities upon a hill” of social reform can be allowed to flourish and lead by example.

    With Trump and the GOP ensconced in Washington for a likely four more years, more progressives can be expected to adopt Gerken’s strategy. Longtime Washington insiders such as Brookings’ Bruce Katz already have made a strong pitch for a supplanting federal control with a regional approach. Although this usually leads to the dominance of regions by well-connected urban elites, Katz’s approach at least leaves smaller cities and towns free to govern themselves.  

    President-elect Trump needs to recognize there is no great clamor to replace one “imperial president” for another. The authoritarian tendencies of some of his key allies, notably Senator Jeff Sessions, to perhaps overturn state marijuana, abortion and gay rights measures would simply extend, in different fields, the pernicious federalization of daily life. This is not exactly a consistent message for a party that often promotes itself as the voice of “liberty” and local choice.

    We have already seen some harbingers of right-wing centralism on the state level, notes analyst Aaron Renn, where conservative state legislators contravene the progressive agenda of their core cities. Already in some states such as North Carolina and Texas, conservative legislatures have overturned actions adopted by certain cities on issues as diverse as transgender bathrooms and fracking. A better solution would be to allow blue places to reflect their values on as many issues as possible, while granting to conservative places the same right.

    When it comes to preserving the character of our communities, there is often no red or blue. We choose places for their character and, if they need to change, this is preferably shaped along the lines favored by local residents. What may be fine with residents of Portland or Brooklyn does not necessarily work for people in suburban reaches of Dallas, Houston, or, for that matter, New York. As far as I am concerned: vive le difference!

    Localism, of course, is not a panacea for all issues, some of which are indeed better addressed on a larger scale. And some basic rights need to be protected from local overreach. But overall, nothing is more basic to the American identity than, whenever feasible, leaving control of daily life to local communities, and, as much as practical, to individuals and families. Effective policy can only be shaped where there exists a “common civic culture” of shared values, something far more evident today on the local than the national level.

    In his drive to make America “great” again, the new president needs to revitalize our flagging democracy not by doubling down on federal power but by empowering local communities to determine what’s best for them. Anything else gives us a choice between ideological despotisms that can only enrage and alienate half of our population by forcing down their throats policies they can’t abide, and, in most cases, should not be forced to accept.

    This piece first appeared in The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, will be published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

  • San Antonio: Growth and Success in the Mexican-American Capital

    This essay is part of a new report from the Center for Opportunity Urbanism titled “The Texas Way of Urbanism“. Download the entire report here.

    For decades, as many U.S. cities declined, and others became overly exclusive, cities in Texas evolved into places of opportunity. Due in large part to liberalized economic policies, the state’s “Big Four” metro areas — Houston, Dallas, Austin and San Antonio — consistently rank among the nation’s leaders in population growth and job growth, experiencing the rapid urbanization once common among America’s legacy cities. In a state once defined by cowboy towns, these metros have become intense human and business agglomerations, growing more global and ethnically diverse in the process.

    In many ways, the newcomer to these ranks of opportunity cities is Texas’ oldest urban area, San Antonio. In recent decades, San Antonio has been considered the underdog of the foursome, able to outshine other Texas cities in professional basketball, but not in economic or cultural reputation. Houston, a mega wealthy oil town, has reached remarkable heights in health care, luxury shopping and housing development. Dallas has emerged as a mid-American banking center. Austin has become Texas’ yuppie capital, full of educated techies who are turning the city into “Silicon Hills.” But San Antonio, as America’s northernmost gateway with Mexico, has been viewed as a magnet for poor immigrants and thus a place of low incomes and education levels.

    “There has been a long perception of San Antonio as a poor city with a nice river area,” says Rogelio Sáenz, dean of the public policy school at the University of Texas-San Antonio. “Even today, despite being the seventh-largest city in the country, many people outside Texas have little information about our city.”

    But as I discovered while living in San Antonio for six weeks this spring, these negative stereotypes are outdated. Thanks to a commitment toward growth by the city’s political and business establishment, San Antonio in 2016 offers a much more diverse urban profile, catching up to some degree with Texas’ other major cities and surpassing many in other states.

    The leading cause has been a good economy. San Antonio first grew thanks to a few key sectors, most notably its voluminous military presence, which earned it the nickname “Military City USA.” But its economy has diversified recently, seeing growth in sectors that benefit both from proximity to the military and from the broader Texas growth machine. The city’s financial industry has been propelled by providing banking for service members. The tech industry, which had overlooked San Antonio for trendier cities like Austin and San Francisco, now has a presence here; since 2010, San Antonio’s information sector has expanded by over 15 percent, placing the city 17th among the 70 largest U.S. metros in a 2016 Forbes magazine survey. The city has even seen manufacturing growth, as corporations take advantage of Texas’ corporate welfare and proximity to Mexico’s supply chains. Along with San Antonio’s more traditional economic drivers, such as health care and tourism, this expanding private sector has turned the city into a jobs engine.

    And this is impelling people to move here, creating a more interesting demographic mix. The city’s historic ties to Mexico have long cemented it as the Mexican-American capital, viewed as much a part of “northern Mexico” as of the United States. It remains a majority-Hispanic city, but this, rather than being a liability, has infused San Antonio with a young, energetic population, making it a case study for how an increasingly diverse America can function. This includes “Tejanos” — native Texans of Mexican descent — and the more recent increase in Mexican nationals, professional-class immigrants escaping the violence in their homeland. Meanwhile, people throughout the U.S. seeking well-paying jobs and low living costs — including young white professionals, African Americans, Asian Americans and immigrants of every variety — are flooding into San Antonio.

    This explosive job and population growth has bred all the familiar elements underpinning an urban renaissance. Indeed, just like in other rapidly growing Texas cities, there is a certain buzz about San Antonio, as it has become denser, more global and more cosmopolitan than when I previously visited in 2007. The new developments emerging in and around downtown fuel restaurants and bars that are slammed during weekends with everybody from international jet-setters to Tejano ranchers in cowboy hats. This imprint has extended to outlying areas, where new country clubs and luxury shops spring up on formerly virgin land.

    Yet amid this new shine sits a more traditional culture. Just as parts of modern-day San Antonio were built during the first stirrings of civilization within Texas, the city is dominated by families who have lived here for generations, instilling a small-town, community feel. This combination of old and new — which extends across a landscape largely built by, and for, people of Mexican descent — is what makes San Antonio the most compelling of Texas’ urban success stories.

    Evolution into the Mexican-American Capital

    San Antonio’s Hispanic ties date to the late 1600s, when Spanish explorers mixed with the native Yanaguana population.115 The Spanish founded the city in 1718, built several missions, including the Alamo, and by 1773 made San Antonio de Bexar the capital of Spanish Texas.

    By the 19th century, these religious structures were transformed into forts, as San Antonio became a prime battleground for Spain’s imperial ambitions. The city suffered from numerous battles in the early 1800s, with Spain defending its territory against ragtag armies of Anglos and natives. In 1821, Spain granted independence to Mexico,relinquishing much of modern Mexico and the U.S. Southwest, and San Antonio became the new nation’s foremost northern entryway.116 Several years later, Mexico adopted a constitution, but leaders soon violated it by forming a centralized government even more oppressive than Spain’s.

    In response, many Texas towns, which were peripheral Mexican territory anyway, revolted, and San Antonio became ground zero in the Texas war for independence. This climaxed in February and March 1836, when 200 defenders encamped inside the Alamo held out nearly two weeks against a several-thousand-man Mexican militia that ultimately overwhelmed and killed them. Texas seceded soon after and became a republic, before the U.S. annexed it in 1845.

    In following decades, rail connections made San Antonio an industrial crossroads. Culturally, it enjoyed influences from European and American frontiersmen and indigenous people from Mexico. By 1900, San Antonio had 53,000 residents, making it Texas’ largest city.

    San Antonio’s major step forward, however, came during the Mexican revolution of 1910, an event supported by city residents. In 1876, Porfirio Diaz became Mexico’s president, overseeing a multi-decade dictatorship. In 1910, a popular dissident candidate named Francisco Madero ran for president and was imprisoned. After his family posted bail, Madero fled to San Antonio, joining other expats fomenting revolution. They organized an armed struggle that lasted for decades within Mexico, causing a refugee surge. From 1900-30, the Mexican population in the U.S. grew from 100,000 to 1.5 million, and San Antonio’s total population more than quadrupled, with refugees viewing it as a safe and culturally familiar city.

    “At that time, San Antonio was the center, not Los Angeles,” T.R. Fehrenbach , a Texas-based historian, told the San Antonio Express-News in 2010. “San Antonio was the capital of the Latin American world outside of Latin America.”

    Newcomers consisted largely of Mexico’s business elite. For example, the grandparents of former San Antonio mayor Henry Cisneros, and the parents of famed former local congressman Henry Gonzalez, came to San Antonio during this period. The influx of Mexican business savvy helped make San Antonio a modern city.

    After slowing during the Great Depression, San Antonio resumed growth during World War II. From its inception, San Antonio was a military city, the linchpin in the defenses of Texas. This continued following statehood, as San Antonio became a prime location for military installations. Fort Sam Houston, which still sits on the city’s east side, was founded in 1845. Kelly Air Force Base opened during World War I. Other military functions would follow, and by World War II they were running on all cylinders.

    The large civilian workforce that flooded into San Antonio during this time created severe labor shortages in rural areas. The federal government responded with the Bracero Program. From 1942-64, 4.6 million Mexican agricultural guest workers entered the U.S.121 Like with past Mexican migrations, many gravitated to San Antonio, and by 1970 the dusty old Spanish colonial outpost had become a 654,000 person city.

    Postwar Economic Growth and Political Equality

    Since then, the region has added an average of approximately 300,000 new residents per decade. Much of the influx has resulted from the organic movement between America’s colder and warmer climes. But much also stemmed from local sources and initiatives.

    Economic growth and job creation are enhanced by transportation systems that allow people to reach employment and other destinations throughout the metropolitan area. Metro San Antonio has a highly ranked roadway system, with comparatively light traffic congestion. San Antonio ranks 10th in per-capita freeway capacity among the 53 U.S. metropolitan areas with 1-million-plus populations. This contributed to San Antonio’s ranking of 22nd best in overall traffic congestion delay among 172 urban areas in 30 nations, according to the 2015 Tom Tom Traffic Index. The metropolitan area has two freeway beltways (ring roads), like a number of other cities.

    Like Texas’ other cities, San Antonio has also benefited from pro-growth state policies. Texas has no income tax and has the fifth-lowest overall state tax burden. Texas routinely ranks near the top in surveys tracking ease of doing business. Such liberalization has produced statewide in-migration of people and businesses, mostly to the major metros.

    But the city’s establishment has also embraced the growth agenda. This is because San Antonio, says Cisneros, who in 1981 became the first Hispanic mayor of a large U.S. city, perceives itself as an opportunity zone for Hispanics.

    “For a good part of its history, San Antonio was a poor city,” he suggests. The establishment has responded by making economic development “the central current of San Antonio’s political discourse and electoral politics … [giving] us the basis on which we decide other questions.”

    This has meant, on one hand, subsidizing a number of flashy projects. San Antonio’s famed River Walk, first restored in 1941, has been serially expanded to connect key downtown tourist spots. San Antonio hosted the World’s Fair in 1968, rebranding itself as the northernmost Latin American gateway into the United States. And public money was used to retain the San Antonio Spurs, who proceeded to win five NBA titles, putting the city on the map perhaps more than anything else.

    But growth has mainly occurred because local and regional officials embraced the unsexy projects needed to enhance San Antonio’s infrastructural footprint. For example, the city pumps water from the vast Edwards Aquifer that spans central Texas. Thus San Antonio has more reliable water access — and cheaper water rates — than other cities, who rely on surface-level infrastructure and are more subject to droughts.

    In the 1970s, San Antonio joined its municipal energy company — CPS Energy — with a south Texas regional nuclear power network. Unlike other cities that joined, CPS entered the partnership to generate its own power, rather than renting it from a third party, making it the nation’s largest city-owned utility for gas and electricity. This has helped the company eradicate the middle man, selling energy to San Antonio residents and businesses at 10 percent to 20 percent less than in Dallas and Houston.

    Another area has been key to San Antonio’s political development and the rise of Hispanics. From 1955-75, San Antonio’s City Council was controlled by the Good Government League, a mostly white group that endorsed pro-business candidates. The group fought patronage politics, but was exclusionary in nature. In the early 1970s, San Antonio became ground zero for La Raza Unida, a national movement dedicated to increasing Hispanic representation within government. Working against the GGL, the movement organized voter drives throughout the early 1970s, and by 1977 had helped inspire council elections by district, rather than at-large. This meant that following the 1977 election, the majority-minority city had filled five of 10 council seats with Hispanics and another seat with an African American. This diversity at City Hall has continued.

    But, according to Michael Cary, a writer for the San Antonio Current, the political establishment has still championed the pro-growth leanings of the GGL, thus merging two constituencies that otherwise remain divided. This merger was embodied by Cisneros, who was elected to council in 1975 and later served four terms as mayor.

    “Cisneros broke with the liberal Chicano ranks and ran on the West Side Good Government League ticket,” wrote Cary, serving “as a bridge between Anglos and Hispanics.”

    The former mayor agreed that this unity remains intact, thanks to the citywide “political consensus” favoring growth.

    “We’re not going to do it with welfare, we’re not going to do it with income maintenance, we’re not going to do it remaining contentious and divided,” Cisneros said, summarizing the Latino and Anglo establishments’ attitudes. “We’re going to do it if we come around a single theme — jobs.”

    Diversifying Economy

    This approach has powered San Antonio near the top on various growth and prosperity metrics. Since 2000, San Antonio has been No. 8 among the 50 major U.S. metro areas in population growth rate.

    Critically, this growth has been due largely to Latinos. Since 2000, the area has been among the leaders in net Hispanic population growth, adding over 400,000 residents. Economic prosperity explains much about why people are coming. Over this time, San Antonio has been No. 6 in job growth rate among these metros, and the highest income growth among major metropolitan areas since 2005, according to Forbes magazine. When comparing Hispanic populations in the 53 largest metros, San Antonio has been one of only four to see median household income gains since 2000 and has the 15th-highest median household income for Hispanics when adjusted for living costs. According to the Kauffman Foundation, San Antonio is No.10 in startup activity, and the area unemployment rate is nearly two percentage points below the national average. The Milken Institute ranked San Antonio No. 12 among its best-performing major metros, although it has ranked higher in previous years.

    The backbone of this growth is an economy that has strengthened and diversified. In 2011, Mario Hernandez, former CEO of the San Antonio Economic Development Foundation, wrote about how San Antonio was evolving beyond its “big three” industry sectors — tourism, military and health care. His points have only strengthened since.

    Among the original big three, military remains the strongest. According to a study by the city government, San Antonio “is home to more Department of Defense students and active runways than any other military installation.” The metro area also includes 55,000 military retirees. The military has a $27.7 billion economic impact and employs 189,148 people. Lackland Air Force Base and Fort Sam Houston are by far the area’s largest employers, at 37,000 and 32,000 workers, respectively, while other significant installations include Randolph Air Force Base and Camp Bullis (the names of all four begin with the moniker “Joint Base San Antonio”). There is also a special relationship between the military and the city’s Hispanics, who have historically viewed military service as an opportunity for well-paying jobs, free educations and integration into mainstream American society.

    Bioscience and health care is another vast sector, having grown from $12 billion to $30.6 billion in annual economic impact since 2003.136 The industry employs 164,000, or one of six San Antonians.137 In many ways, the sector is an outgrowth of the military, as medical workers receive training for — and often operate on — personnel preparing for, or returning from, battle. Following the federal Base Realignment and Closure Commission’s report in 2005, many of the Pentagon’s medical functions were concentrated in San Antonio, infusing billions of dollars into the city. This was highlighted by the new Medical Education and Training Campus built at Fort Sam Houston, the world’s largest facility for military medical education, research and training. The center’s students often apply their knowledge at nearby Camp Bullis, a site that specializes in combat training. Just down the block within Fort Sam Houston, meanwhile, is Brooke Army Medical Center, an inpatient hospital that is the military’s largest health care organization.

    Yet the military’s medical functions only scratch the surface of San Antonio’s health care sector, with much of the private and nonprofit institutions located on the northwest side. The city benefits from the South Texas Medical Center, the Baptist, Methodist and University Health Systems, the University of Texas Health Science Center, the Children’s Hospital of San Antonio, and numerous other hospitals, research labs and medical startups.

    Tourism has been the city’s third economic staple, employing one in eight San Antonians. This is centered on traditional attractions like the Alamo and the River Walk, and outlying lures like Six Flags and SeaWorld. The impact will surely expand, because last year San Antonio’s five former Spanish missions were given UNESCO World Heritage status.

    Aside from the big three economic drivers, San Antonio is expanding into manufacturing, aviation, finance, technology and education, all tied somewhat to the military. While not traditionally a manufacturing city, San Antonio is now Texas’ fourth-largest manufacturing market, with the industry accounting for 57,000 jobs. One notable coup came when San Antonio, thriving on the corporate relocation momentum throughout Texas, compelled Toyota to build its largest manufacturing plant on the city’s south side in 2003. There was a combination of factors involved — the state offered $133 million in corporate welfare; the city government made infrastructure upgrades; local entrepreneurs stepped up to create a supply chain; and the city is proximate to the strong truck-buying markets in Texas and Mexico. As The Rivard Report, a local news website, noted 10 years later, “the company’s total direct investment in the plant has reached $2.1 billion, with $1.5 billion or more invested by the supplier community.”

    The aviation industry, an offshoot of both the military and manufacturing, has also grown exponentially in recent decades. Key to this has been Port San Antonio. In 1995, following the Cold War’s end, Kelly Air Force Base was closed. A government entity was created to repair and lease out the vast space to private companies, and the port has become a profitable facility, avoiding the graft and waste endemic in other American ports. Port San Antonio, which is located not near water but near heavily trafficked I-35, is dedicated to heavy industrial and aerospace uses and includes tenants like Boeing, Lockheed Martin and StandardAero, although it also houses cybersecurity and IT companies.

    The military has also brought growth to San Antonio’s financial industry, specifically through the rise of niche companies that loan to military members, who are traditionally seen as higher risk. The granddaddy of them all is USAA, a Fortune 500 firm headquartered in northwest San Antonio that employs 17,000. Significant mainstream banking institutions include JP Morgan Chase, which employs 5,000 locals, and Frost Bank, based in San Antonio. By year’s end, the latter company will break ground on a new 23-story downtown headquarters.

    The military has driven tech growth, as well. Some of this $10 billion impact is generated by federal agencies that contract with local IT and cybersecurity firms, making San Antonio No. 2 in the country in concentration of data centers. Much of the rest comes from a more subdued private startup scene, which has benefited from the city establishment’s focus on tech, and the energy of one man, city native Graham Weston. In 1998, Weston co-founded Rackspace, a cloud computing company in northeastern San Antonio that employs 3,300 and is valued at $3.29 billion. Weston has since made it his mission to grow a tech scene downtown, renting out incubator space and filling it with small organizations that collaborate on ideas, including Weston Urban, the 80/20 Foundation, Geekdom, Techstars and Tech Bloc.

    Lastly, the military — and San Antonio’s wider network of STEM enterprises — is inspiring educational growth. While San Antonio has historically enjoyed several small, renowned liberal arts schools, it more recently strengthened its public higher education. A University of Texas branch opened in 1969, and a Texas A&M branch followed in 2009. UT San Antonio, has an enrollment of 28,000. Its cyber security program is ranked first in the nation by tech industry professionals, meaning that graduates can plug into the region’s tech and military scene. The local community college system, Alamo Colleges, has partnered with Port San Antonio to establish workforce development programs, and the general focus for its roughly 60,000 students is on aerospace, manufacturing and IT.

    One industry in San Antonio that has not been particularly strong — likely to the benefit of the others — is local government. In many major U.S. cities, the largest employers are some combination of city governments, county governments and various civil service authorities. In San Antonio, the city government is the ninth-largest employer at 9,145.

    But perhaps the biggest economic driver has been population growth itself, with the city proper adding 325,000, and the metro area growing by 673,000 since 2000, creating a greater demand for housing, cars, services and food. San Antonio’s most inspiring private-sector story provides a window into that growing consumption. The region’s largest private employer, at 20,000 people, is H-E-B, a San Antonio-headquartered supermarket chain. Founded in 1905 by Florence Butt, who opened a small shop in nearby Kerrville, it has skyrocketed under her grandson Charles’ leadership, largely by remaining based in one of America’s consistently fastest-growing states. H-E-B has 316 stores in Texas and 52 in Mexico, and is one of America’s most highly
    valued companies, at $22 billion.

    Demographic Momentum

    So which groups are driving this population increase? The San Antonio area , at 63.2 percent, is the most Hispanic major MSA in the country, well ahead of Miami MSA at 43.8 percent. San Antonio’s Hispanic population largely consists of Tejanos, a south Texas term describing native Texans of Mexican descent. According to Pew Research Center data, 89.6 percent of San Antonio’s Hispanic population is Mexican. This is the largest share among Texas’ Big Four cities. But, notably, San Antonio has by far the lowest percentage of Hispanics who were foreign-born. While the share of foreign-born Hispanics is 32.4 percent in Austin and around 45 percent in Houston and Dallas — not to mention 42 percent in Los Angeles and New York City, 54 percent in Washington, D.C., and 66 percent in Miami — it is only 17 percent in San Antonio. This is because many of them have lived in San Antonio for generations.

    Additional Mexican-American influxes originate from Texas border towns like Laredo, Brownsville, McAllen, and other parts of the Rio Grande Valley. Tejanos have traditionally viewed San Antonio as a destination for jobs, education and entertainment. At the same time, the city is a short drive from their families. This proximity is important, explains Stephanie Reyes, a public-affairs staffer at the San Antonio Chamber of Commerce and a Brownsville native.

    “In most Hispanic cultures, [families] want you to stick around, they want to see you grow, especially if there’s that possibility of you raising a family elsewhere that they’re not going to get to take part in, seeing them grow up or seeing them every weekend. Here in San Antonio, [south Texas Tejanos] have that opportunity.”

    Nonetheless, there is still a lot of Mexican immigration into San Antonio, although the profile has changed. The stereotypical Mexican entering the city postwar was the poor agricultural worker. More recently, San Antonio has seen an explosion of professional-class Mexican migrants from major cities like Monterrey, five hours south on I-35. This group’s wealth has made them targets for kidnappings in their homeland. So they have moved to the U.S., with over 50,000, according to a Los Angeles Times report, coming to San Antonio, thanks to its proximity and ingrained Mexican culture. They have worked in white-collar professions and inhabited north-side gated communities, becoming known for lavish consumption. This is evident on any weekend in the upscale north-side mall of La Cantera, where parking lots are jammed with luxury cars and the walkways with Spanish-speaking shoppers in designer clothing.

    Javier Paredes, a local architect who grew up in Morelia, Mexico, epitomizes some of these trends. Eight years ago, his mother, an influential mining broker, was kidnapped and forced to reveal company secrets. After her release, the family settled together near downtown San Antonio, because of the city’s cultural familiarity.

    There has also been substantial in-migration from many races and places throughout America. San Antonio has become, like the other Texas cities, a major lure for domestic migrants. This is in stark contrast with major ocean coastal cities such as New York, Los Angeles and Chicago.

    This domestic growth was displayed in a map by Manhattan Institute senior fellow Aaron Renn, showing which parts of America people net are leaving for San Antonio. There are only a handful of areas that had positive net migration from San Antonio, most notably Austin, 80 miles to the northeast. Meanwhile, whole swaths of the country — including much of California, Cascadia, Florida, the Southwest, the Northeast and the Rust Belt — are pushing people out and into San Antonio.

    This is particularly true for the young. Once an area that had trouble holding onto younger educated people, the region has now emerged as one of the fastest-growing destinations for them, outpacing in terms of growth such traditional “brain gain” centers as New York City, Boston and San Francisco. From 2010-13, San Antonio had the second-highest percentage growth among college-educated persons ages 25-34, and the fastest growth rates over that period for 20-to-29–year-olds of all education levels.

    The reasons are multifaceted: Some people may be seeking warmer weather, better amenities or a historical setting. More likely, migrants are drawn to San Antonio for pragmatic reasons. The cost of living is relatively low, highlighted by median home prices that, at $131,000, are $55,000 below the national median. San Antonio also has strong employment opportunities and companies desperate to hire, explaining the wage growth.

    These low housing prices explain much of San Antonio’s relatively low cost of living. According to the Council For Community and Economic Research, San Antonio’s living costs are less than half those of New York or San Francisco, and considerably less even than sunbelt boom towns such as Houston, Dallas-Ft. Worth, Austin, and Phoenix.

    “We don’t have enough people,” says Tony Quesada, editor-in-chief of the San Antonio Business Journal, “so we wind up importing talent from other parts of the country.”

    Then there are quality-of-life factors: Average one-way commute times are several minutes below the U.S. average, at 22 minutes. And, once drivers get off the city’s highways, they will likely be strolling through any number of quiet, secluded neighborhoods.

    But complementing these factors is an attraction that you hear repeatedly during interviews and will find anecdotally while navigating the streets — “comfort.” San Antonio is a big city with a small-town feel, where people are friendly, and community relations are tight. This was reaffirmed in July, when Travel + Leisure magazine named San Antonio America’s Friendliest City, based on reader surveys.

    Former mayor Cisneros called this dynamic the city’s “secret sauce,” claiming that it has helped unify whites and Hispanics, as well as competing factions of the business and political communities. The sentiment was echoed by outsiders, including 31-year-old real estate developer Juan Cano. By his mid-twenties, he’d grown frustrated with San Diego’s traffic, high costs and mediocre job market. So he studied what city he should relocate to, and, after combining several economic and quality-of-life factors, chose San Antonio.

    He said the best thing he’s encountered in his seven years here is the city’s homey atmosphere.

    “What San Antonio beats people out on is not weather, is not number of activities or amenities; but what they beat out other cities and states on is congeniality,” he said. “People here really care about how your day is going.”

    Cano agrees with Cisneros that this openness also bolsters the business climate, including for small entrepreneurs like him, looking to make connections.

    Formation of a New Kind of City

    Of course, growth doesn’t occur in a bubble; when various factors drive lots of people into an area, there will be tangible changes at street level. A traditional urban commentator might guess that such growth would produce infill densification, as it did for the coastal cities that boomed during America’s industrial era.

    And to some degree, such “buzz” is now felt in Texas’ opportunity cities, including San Antonio. While its downtown remains largely for tourists, adjacent areas are growing more vibrant and cultured, thanks to millennial population growth and city-funded enhancements. The River Walk has been extended north and south of downtown, sparking mid- and high-rise development. Along the “Southtown” portion of the route, new condos mix with historic homes and mostly unpretentious nightlife. Along the route’s northern portion, the city pursued a public-private partnership to create the Pearl District, a mixed-use, master-planned development that has become one of America’s leading warehouse revitalization stories. Other interior neighborhoods — North St. Mary’s, Tobin Hill and the Market Square area in west downtown — are slowly filling in.

    But if San Antonio is showing some welcome growth in its inner ring, the city’s trajectory continues further outward, primarily to the north. This section of town long was the exclusive white area, while lower-income Mexican-American families dominated the west and south sides, and African Americans the east side. This segregated pattern still defines San Antonio, although things are changing.

    Stone Oak is the prototypical example: Once a stretch of undeveloped Texas Hill Country extending north from the state Highway 1604 loop circling the central city, it has become a gargantuan master-planned community of 31,000 residents in just two decades.159 It features densely packed single- and multifamily housing and retail rolling for miles.

    Stone Oak accommodates much of San Antonio’s new money, which is to say that it is one-third Hispanic. The community is populated by health workers, techies, staffers at nearby UTSA and most notably, Mexican nationals.

    Growth is even occurring in the historically hyper exclusive suburbs carved out within San Antonio’s city boundaries, like Alamo Heights and Terrell Hills. According to Sáenz, these areas were once forbidden to minorities. Today, there is a Hispanic presence in both suburbs, and generally throughout San Antonio’s north side. This suggests that the city is providing upward mobility for large portions of its Hispanic population.

    Future Challenges

    Cities that enjoyed the rapid growth now experienced by San Antonio have also suffered the downsides. New York, San Francisco and Los Angeles, among others, are economically dynamic and culturally interesting, yet overwhelmed by overloaded infrastructure, service failures, growth-killing regulations and patronage-ridden political machines that only worsen these problems. When I asked community leaders how San Antonio could avoid this fate in coming decades, two answers surfaced.

    The first was that San Antonio needed to continue expanding infrastructure, a point emphasized by local billionaire and Spurs owner Red McCombs. This could mean everything from doubling down on housing and highway construction to exploring 21st-century solutions like green energy. While there have been recent expansions, the San Antonio-Austin corridor lacks a top-notch airport, which may explain why neither city has had the same success attracting corporations as had Houston and Dallas. In other cases, however, the city is taking the initiative in infrastructure growth. In May, the San Antonio Water System board approved the takeover of the Vista Ridge Pipeline, a new project that will diversify the water supply. San Antonio also recently launched SA2020, a plan designed to improve the city on 58 quality-of-life indicators.

    Fortunately, San Antonio is in a financial position for such expansion; while other U.S. cities’ pension debts have prevented them from even providing well-paved streets. San Antonio has among the lowest per capita unfunded pension liabilities of any major city. For six consecutive years, the city has received a perfect bond rating. It also has a population, said McCombs, while overlooking the downtown skyline from his north-central office, that understands intuitively the connection between capital investment and prosperity.

    “You give Texans a good reason for paying taxes,” he said, “and they’ll pay them.”

    Secondly and perhaps even more critically, San Antonio needs to continue mobilizing its minority population, mainly by improving its K-12 education system. While there are countless success stories here, there are also Mexican-Americans and African Americans who have lived in multigenerational poverty on the city’s west, south and east sides, and low-skilled, non-English-speaking immigrants are still arriving. Many of their neighborhoods, while certainly nicer than most urban American slums, are nonetheless rundown and have lower-performing public schools than those in outlying areas. The city and the state have taken several recent measures to address the problem, including a city voter-approved sales tax increase for Pre-K schooling, and charter school expansion.

    Other K-12 measures have been more innovative. The SA Works program, for example, is a partnership between the city and the Chamber of Commerce to connect high school and college students with local companies and other supporting agencies, who then offer internships and job-shadowing opportunities.

    In June, a partnership was launched between the San Antonio Independent School District and H.E.B. to open five specialty schools that will plug students into the local employment scene.

    If San Antonio continues embracing new ideas to address its infrastructure and education challenges, it will remain a regional growth engine, and an example for other cities. America, after all, is slated to become 23 percent Hispanic by 2035. San Antonio represents an extreme early version of this demographic shift, and an example of how it can work.

    “San Antonio,” concluded Cisneros, is “driven by the understanding that jobs and incomes are the way we’re going to progress, and, in fact, we have. I see it in the quality of restaurants, the [more diverse] crowd at the Spurs [games], in the retail mix of the city, the integration in neighborhoods, with Latinos and African Americans moving into neighborhoods once beyond their reach. Intermarriage. It’s almost as if a new culture has emerged. … It’s one culture adapting the things that it likes about another culture.”

    These same economic and cultural improvements can be observed in other big Texas cities, suggesting that they are the outcome of liberalized polices. San Antonio, as the Mexican-American capital, has long been the underdog of the four great Texas cities. But today its Latino character is proving to be yet another asset, contributing a unique wrinkle within Texas’ broader urban growth story.

    Scott Beyer is a Forbes columnist and cross-country traveler who covers U.S. urban issues. For three years, he’s circling America to live for a month each in 30 cities, starting from Miami and ending in New York City. The point is to write a book about revitalizing cities through Market Urbanism — which is the intersection of classical liberal economics with urban issues. But he also writes articles on multiple other city subjects.

    Top photo: Zereshk [GFDL, CC-BY-SA-3.0 or CC BY 2.5], via Wikimedia Commons

  • The Texas Urban Model

    This essay is part of a new report from the Center for Opportunity Urbanism titled "The Texas Way of Urbanism". Download the entire report here.

    The future of American cities can be summed up in five letters: Texas. The metropolitan areas of the Lone Star state are developing rapidly. These cities are offering residents a broad array of choices — from high density communities to those where the population is spread out — and a wealth of opportunities.

    Historically, Texas was heavily dependent on commodities such as oil, cotton, and cattle, with its cities largely disdained by observers. John Gunther, writing in 1946, described Houston as having “…a residential section mostly ugly and barren, without a single good restaurant and hotels with cockroaches.” The only reasons to live in Houston, he claimed, were economic ones; it was a city “…where few people think about anything but money.” He also predicted that the area would have a million people by now. Actually, the metropolitan area today is well on the way to seven million.

    It would no doubt shock Gunther to learn that Texas now boasts some of the most dynamic urban areas in the high income world. Approximately 80 percent of all population growth since 2000 in the Lone Star state has been in the four largest metropolitan areas. People may wear cowboy boots, drive pickups and attend the big rodeo in Houston, but they are first and foremost part of a great urban experiment.

    The notion of Texas as an urban model still rankles many of those who think of themselves as urbanists. Most urbanists, when thinking of cities of the future, keep an eye on the past, identifying with the already great cities that follow the traditional transit dependent and dense urban form: New York, London, Chicago, Paris, Tokyo. And yet, within these five urban areas, there are large, evolving, dynamic sections that are automobile oriented and have lower density.

    Measuring Employment Success

    Since 2000, Dallas and Houston have increased jobs by 31 percent, growing at three times the rate of increase in New York and five times as rapidly as Los Angeles. Texas’ smaller but up-and-coming metropolitan regions are also thriving, with San Antonio and Austin, for example, boasting some of the most rapid job growth in the country.

    This growth is not all at the low end of the job market, as some suggest. Over the past fifteen years Texas cities have generally experienced faster STEM (Science, Technology, Engineering and Math-related) job growth than their more celebrated rivals. Austin and San Antonio have grown their STEM related jobs even more quickly than the San Francisco Bay Area has grown theirs, while both Houston and Dallas-Fort Worth have increased STEM employment far more rapidly than New York, Los Angeles or Chicago.

    The Texas cities also have enjoyed faster growth in middle class jobs, those paying between 80 percent and 200 percent of the median wage at the national level. Since 2001, these jobs have grown 39 percent in Austin, 26 percent in Houston, and 21 percent in Dallas-Fort Worth, a much more rapid clip than experienced in San Francisco, New York or Los Angeles, while Chicago has actually seen these kinds of job decrease.

    Recent Pew Research Center data illustrates that between 2000 and 2014, out of the 53 metropolitan areas with populations of more than 1,000,000, San Antonio had the second largest gain in percentage of combined middle-income and upper-income households; the percentage of households in the lower-income segment dropped. Houston ranked 6th and Austin ranked 13th, while Dallas-Fort Worth placed 25th, still in the top half.

    Much of the credit for this growth in jobs goes to the state’s reputation for business friendliness. Texas is consistently ranked by business executives as the first or second leading state. Needless to say, New York, California and Illinois do not fare nearly as well. The Texas tax burden ranks 41st in the country. Compare this to New York, which has the highest total state tax burden, Texas rates are also far lower than those in New York, neighbors Connecticut and New Jersey, or in California.

    The Demographic Equation

    No surprise, then, that people are flocking to the Texas cities. Over the last ten years, Dallas-Ft. Worth and Houston have emerged as the fastest growing big cities of more than five million people in the high-income world, growing more than three times faster in population than New York, Chicago, Los Angeles or Boston. Among the 53 US major metropolitan areas, four of the top seven fastest growing from 2010 to 2015 were in Texas.

    Foreign immigration, a key indicator of economic opportunity, is now growing much faster in Texas’ cities than in those of its more established rivals. Between 2000 and 2014 alone, Texas absorbed more than 1.6 million foreign born citizens. In numbers, that’s slightly less than California took in, but in proportion to Texas’ population it is 60 percent more.

    During that same time period the Latino population of Austin grew by 90 percent; Dallas-Fort Worth and Houston each grew by about 75 percent. In contrast, the Latino population in Los Angeles grew only 17 percent.

    Houston now has a far higher percentage of foreign born residents than Chicago does. Dallas-Ft. Worth draws even with Chicago in that measurement, with an immigrant population that has grown three times as fast as that of the Windy City since 2000.

    Economic opportunity explains much of the difference. Texas’ vibrant industrial and construction culture has provided many opportunities for Latino business owners. In a recent measurement of best cities for Latino entrepreneurs, Texas accounted for more than one third of the top 50 cities out of 150. In another measurement, San Antonio and Houston boasted far larger shares of Latino-owned businesses than Los Angeles, which also has a strong Latino presence.

    Texas is not a totally successful environment for minorities. Poverty levels for blacks and Hispanics remain high, and education levels lag in Houston, Dallas-Fort Worth and San Antonio. But the key factor is that Texas cities present superior prospects for upward mobility.

    Domestic Migration Trends

    Since 2000, Dallas-Ft. Worth has gained 570,000 net domestic migrants, and Houston has netted 500,000. In contrast, the New York area has had a net loss of over 2.6 million people, while Los Angeles hemorrhaged a net 1.6 million, and Chicago nearly 900,000. Dallas-Fort Worth, Houston, Austin and San Antonio were all among the top eleven in total net domestic migration gains. The smaller Texas cities have also experienced large gains in migrants.

    Many newcomers come from places — notably, California — where many Texans once migrated. Between 2001 and 2013, more than 145,000 people (net) have moved from greater Los Angeles to the Texas cities, while about 80,000 have come from Chicago and 90,000 from New York.

    As Dallas Morning News columnist Mitchell Schnurman says, “If oil prices don’t go up, Texas can always count on California — and New York, Florida, Illinois and New Jersey.”

    Creating the Next Generation of Urbanites

    Texas urban growth has occurred more or less in conjunction with market demand, without the strict controls and grandiose ‘visions’ that dominate planning in New York and California. Overall housing prices in Texas cities remain, on average, one-half or less than those in coastal California cities such as San Francisco, San Jose, San Diego and Los Angeles. They are a third below those in New York, and have not experienced the huge spikes in housing inflation seen elsewhere in the Northeast Corridor, such as in Boston.

    The lower house prices in Texas facilitate greater aspirations to home ownership, particularly among young people. The financial leap from renting to owning is far less daunting in Texas than it is the Northeast, or in some western US cities.

    These lower prices have been a boon to ethnic minorities, who make up an ever-growing percentage of the population in cities nationwide. Latinos and African-Americans are far more likely to be home owners in Texas cities than in New York, Los Angeles, Boston or San Francisco.

    A review of US Department of Commerce Bureau of Economic Analysis data indicates that housing costs are responsible for virtually all of the cost-of-living differences between the nation’s approximately 380 metropolitan areas. Consequently, it is far cheaper to live in Texas cities — even Austin — than in Boston, New York, Los Angeles, San Diego, Chicago and, most of all, the San Francisco and San Jose metropolitan areas.

    Some observers lament that, due to market forces, the vast majority of Texas metropolitan growth — nearly 100 percent — has taken place in the suburbs and exurbs. Yet the Texas cities mirror nationwide experiences: there is essentially no difference between the share of metropolitan development in the Texas suburbs and the share in most other areas. The average share for all major metropolitan areas is 99.8 percent, including in Portland, Oregon, the much ballyhooed model for densification.

    Ironically, dense housing development has grown more rapidly in Texas cities than it has in California, where the state has tried to mandate dense development. Building permit rates indicate that Texas cities have led the nation in both low density single family housing and in high density multifamily development. Between 2010 and 2015, Texas’ largest cities held three of the top five positions among the 53 major metropolitan areas in the issuance of multifamily building permits. Austin led the nation in these permits, while Houston and Dallas-Fort Worth had higher multifamily building permit rates than San Jose, Denver, Portland, Washington, or Los Angeles. At the same time, these three Texas cities also were in the top 10 in single-family building permits. Who occupies these new residences? Between 2010 and 2014 Texas cities, led by Austin and San Antonio, experienced higher rates of growth among college educated 25 to 34 year olds than did traditional ‘brain centers’ like New York, Boston, Chicago and even San Francisco. During the tech boom of the late 1990s, more people moved from Texas to the Bay Area than vice versa; in the current one, the pattern is reversed. A recent San Jose Mercury poll found that one-third of all Bay Area residents hope to leave the area, primarily citing high housing costs and overall cost of living.

    As young people mature, Texas’ major urban areas provide them with an array of choices. Texas city-dwellers, unlike many New Yorkers or San Franciscans, do not need to choose between living a middle class family lifestyle or staying in a city they love. Texas housing policies that allow organic growth driven by the market are attractive to young people seeking to establish careers or families, and to those who are already newly-established.

    These trends will have a long-term demographic impact, and suggest a continuing Texan ascendency. According to the American Community Survey’s ranking of elementary-age school children per family, Austin, Dallas-Fort Worth, Houston and San Antonio rank in the top six among the 53 major metropolitan areas. By comparison, Chicago ranks twenty-second, Los Angeles twenty-seventh, New York thirty-sixth, and San Francisco 45th.

    The Lone Star State is already home to two of the nation’s five largest metropolitan areas, the first time in history that any state has so dominated the nation’s large urban centers. At its current rate of growth, Dallas-Ft.Worth, could surpass Chicago in the 2040s, as would Houston a decade later. By 2050 the Lone Star state could dominate America’s big urban centers even more than it does now.

    Joel Kotkin is executive editor of NewGeography.com. He is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The Human City: Urbanism for the rest of us, will be published in April by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). 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.

    “Welcome To Texas” flickr photo by David Herrera is licensed under CC BY 2.0

  • Tearing Down American Dream Boundaries: An Imperative

    Donald Trump’s election victory has been widely credited attracting households who have been “left behind,” by stagnating or declining income and lost jobs. But the left-behind also includes many households whose    standards of living are being reduced by the rising cost of housing. This is not about affordable housing for low-income households, itself very important, but a crisis among  middle-income households  no longer able to afford their own homes in some parts of the nation.

    Indeed, the lack of middle-income housing affordability has been associated with migration from more expensive to less expensive areas. Moreover, more people have been fleeing the states that supported Secretary Clinton, with their inferior housing affordability, and moving to those that supported Donald Trump (a net 1.45 million gain  in just  the last five years), where housing affordability is generally better.

    The differences in house prices are stunning. Between 1969 and 2014, the gap between the highest and lowest cost major metropolitan (over 1,000,000 population) housing markets had expanded 260 percent. This increase has been largely driven by markets that have become more restrictively regulated. In the more lightly regulated rental market the gap between the highest and lowest expanded only 30 percent, just one-ninth the change in the house price gap.

    In some highly regulated markets, notably California, it has become all but impossible to build the consumer-favored detached housing in the suburbs associated with the “American Dream.”

    In recent decades, California house prices have risen to as much as triple the costs relative to household incomes that exist in much of the rest of the country. A dense mesh of environmental regulation has been implemented,   far stronger than EPA regulations. Large parts of metropolitan areas are now off-limits for efficient housing tract construction, prohibited by “urban growth boundaries,” which can be characterized as “American Dream Boundaries.”

    Progressive politicians, dominant in California, talk incessantly about housing affordability, but blindly pursue policies that will make things even worse. It should not be surprising that the housing-cost adjusted poverty rate in California is the worst in union, underperforming even Mississippi. It should also not be surprising that Californians of every age group, including Millennials, are leaving state in larger numbers than they are being attracted.

    The San Francisco Bay Area’s two large metropolitan areas (San Jose and San Francisco) are the most unaffordable in the nation and rank fourth and seventh most unaffordable in the Demographia International Housing Affordability Survey among major metropolitan areas in nine nations. House prices have more than tripled relative to incomes since radical land-use regulation began. The problem is not a shortage of land. The Bay Area has more than enough developable land to accommodate up to four times the population. The shortage is in the amount of land governments allow to be developed. As a result, the Bay Area has become a rigged market that excludes many middle-income households by making housing unaffordable. This may be a boon for older property owners, but the burden falls most heavily on households that are minority or young. California’s housing affordability crisis is a profound public policy failure.

    The problem extends beyond California, especially to places like Oregon, Washington, Hawaii, Colorado, Maryland, and northern Virginia. The net effect is that households pay much more the necessary for housing and have a lower standard of living that is necessitated by government policy. It is no wonder that people think the future is less bright for their children.

    Moreover, no one should be misled by planning fantasies that backyard “Granny flats” or high-rise apartment towers are the answer. They have their market, but it does not include most aspiring households. Government has no business lowering living standards by forcing house prices up.

    A mortgage on a median priced house requires a qualifying income approximately double the median household income in San Diego, Los Angeles, San Francisco and San Jose (10 percent down payment assumption). In much of the country, by contrast, housing remains affordable, as in the past. A median income household can comfortably afford the median priced house in metropolitan areas like Dallas-Fort Worth, Atlanta and Kansas City.

    More Jobs and Economic Growth

    But beyond the lower standards of living attributable to American Dream Boundaries, building fewer detached houses than households demand has an important economic cost.

    Research by Chang-Tai Hseih of the University of Illinois, Chicago and Enrico Moretti at the University of California indicates that the gross domestic product was $2 trillion less than would have been expected in 2009, largely due to housing regulation. Matthew Rognlie of the Massachusetts Institute of Technology found that the widening inequality gap found by French economist Thomas Piketty was largely due to housing and suggested expanding the housing supply and re-examining land-use regulation.

    Jason Furman, President Chairman of President Obama’s Council of Economic Advisors has shown that single family houses make 2.5 times the contribution of apartment units to the gross domestic product. This fact eluded President Obama’s Department of Housing and Urban Development, which has spent years roaming the country inducing local officials to implement the policies like those noted above that make housing less affordable.

    But, as Furman’s data indicates, the detached housing Americans overwhelmingly prefer is better for the economy. This means more good jobs in building homes, economic ripple effects and additional revenues for local governments.

    Yet, seven years after the  Great Recession, California’s detached house construction rate is barely one half the national average.

    Much of this has to do with a planning philosophy called “smart growth,” often accompanied by prohibitions on new housing on the urban fringe. But there is nothing smart about policies that raise the price of houses for struggling families. Nor is there anything smart about reducing people’s standards of living. The more important priorities of facilitating better standards of living and reducing poverty are turned on their head by such myopic policies.

    It is time to restore priorities that put people first. Building the housing that people want would not only improve living standards, but would also boost the economy. The American Dream Boundaries need to be torn down.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). 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.

    Photograph: Suburban Kansas City (by author)