New Geography

Category: Urban Issues

  • The Urbanist’s Guide to Kevin Rudd’s Downfall

    The political execution of Prime Minister Kevin Rudd by his own Australian Labor Party colleagues was extraordinary, the first time a prime minister has been denied a second chance to face the voters.

    According to the consensus in Australia’s mostly progressive media establishment, Rudd fell victim to his “poor communication skills”, a somewhat Orwellian take since until recently he was hailed as a brilliant communicator. What went wrong?

    Certainly, Rudd’s style of communication was a factor. Yet the media’s disjointed interpretations avoid what, for them, is an inconvenient truth. As much as any defects in the man himself, Rudd’s linguistic meltdown can be traced to deep socio-economic divisions wracking today’s Australian Labor Party.

    Australia has its own version of the American red and blue state dichotomy. But with a much smaller, highly urbanised population, and only six states, the social fault line runs through major metropolitan regions rather than state boundaries. Left with a fractured support base, federal Labor often struggles to hold onto majority support. Rudd clearly underestimated the persisting social divide, and his obsession with a media driven solution was disastrous.

    In Australia, post-war suburbanisation and gentrification played out differently than in the US. Since in the 1970s, Australian cities have experienced a broad geographic sorting along class lines. On the one hand, rising land values and car ownership dispersed the old industrial core, and its working class population, to the middle and outer suburbs. On the other, a booming generation of university graduates, many immersed in the counter-culture, and employed in expanding government agencies, flooded into inner-city tenements.

    Lacking the racial frictions of some American cities, and typically adjacent to attractive harbour foreshores (Australia’s major cities are all coastal), these nineteenth century streetscapes were ripe for gentrification. Before long, all remnants of the old working class gave way to restaurants, upscale bars, coffee shops, cinemas, bookshops, art galleries and other favourite amenities of a new upper middle class.

    Over time, urban polarisation has far-reaching political consequences. While the new professional class voted Labor, and transformed the Labor Party in their own image, they dominated only a handful of electorates (electoral districts). Most of these are in the inner precincts of Sydney and Melbourne. The overwhelming majority of electorates are suburban or regional, populated by blue-collar, routine white-collar and self-employed private sector workers. Whether former inner-city residents, or newly arrived migrants, they embraced the suburban ideal of reward for work, free-standing homes on a quarter acre block and the prospect of upward mobility, particularly for their children. Later, social commentators labelled them “aspirationals”.

    Increasingly, inner-city elites and suburban aspirationals inhabited different worlds. By 1996, many aspirationals felt Labor had lost touch with their priorities. Apart from his poor record on inflation and interest rates, sensitive issues in the mortgage-belt, then Prime Minister Paul Keating became a champion of the elite’s obsession with race and gender. Having infiltrated Labor’s apparatus, progressives now seized control of the party’s policy agenda.

    Ultimately, Labor’s historic bond with working people was severed at the 1996 election, when masses of aspirational voters defected to the conservative John Howard. Howard retained their support over four terms in office. During this time they acquired another label – “Howard Battlers” (an antipodean variant of Reagan Democrats).

    Labor spent these years wavering between elite and aspirational programs, failing to reconcile their deep-seated differences. Successive leadership changes were a flop. Not until 2006, when Howard showed signs of running out of steam, was victory finally in sight. Leaving nothing to chance, the popular Rudd was installed as leader, and handed the task of herding both progressive and aspirational voters into Labor’s camp. Rudd’s strategy may have won him the election, but it bore the seeds of his destruction.

    On sensitive issues, Rudd resorted to an elaborate form of doublespeak: headline rhetoric crafted for aspirationals with policy small print pitched at progressives. He was confident enough in his mastery over the media cycle to pull this off. And he assumed aspirationals were too unsophisticated to catch on. He was proved wrong on both counts, but only after winning office.

    Take his handling of housing, transport and urban development. Housing affordability and traffic congestion loomed as hot topics in the 2007 election. Before the late 1990s, Australian cities had generally liberal approaches to land release and suburbanisation, and the motor vehicle was supreme. Urban planning was the province of state governments, which had long considered motorways the wave of the future, given the country’s increasingly dispersed patterns of residential, commercial and industrial development.

    As the century drew to a close, however, sentiment in the planning profession, including state officials, many now religiously green, shifted from growth to consolidation (“smart growth“) and the revival of rail transport. More recently, the climate panic accelerated this trend. On the whole, state governments, mostly Labor in the decade to 2007, proved compliant. Considering that Australian cities were experiencing high rates of population growth, in part due to very high levels of immigration, land values and house prices soared and roads, particularly in the middle to outer suburbs, couldn’t cope with traffic volumes. These problems were especially bad in Sydney. For the first time, many Australians feared that their children would never achieve the dream of home ownership.

    Leading up to the election, Rudd took to calling housing affordability “the ultimate barbeque stopper”, a subject on everyone’s lips. He convened a Housing Affordability Summit, and released a strategy paper. His campaign launch speech, weeks out from polling day, reminded voters that Labor had “put forward a national housing affordability strategy – so that we can keep alive the great Australian dream of one day owning your own home”. Rudd’s rhetoric on “infrastructure bottlenecks” was just as high-blown. “For 11 years”, he said repeatedly, “Mr Howard’s government has failed to provide leadership in developing our nation’s infrastructure”. References to traffic congestion were made in this context.

    But the policies didn’t match the rhetoric. Since elite sentiment was, by this stage, in the grip of climate alarmism, there was little way Rudd would address the root causes of these problems. Restricted land supply and urban growth boundaries, to contain Australia’s “ecological footprint”, combined with population growth, were driving up land values and inducing developers to bank their land holdings rather than release them. Rudd’s plan just tinkered around the edges. There were to be tax breaks on capped home saver bank accounts, subsidised rental accommodation for low income earners, and a massive boost in social housing stock. Conceived by activists who saw housing as a welfare issue, these measures did little for the mass of aspirationals or their children. A later boost to the existing “first home buyer grant” probably inflated prices further. Far from saving the great Australian dream, Rudd cast it into the dustbin.

    After the election, the small number of infrastructure projects selected for funding had limited potential to ease traffic congestion. In his landmark October 2009 speech on urban policy, Rudd had more to say on shifting motorists out of cars and onto trains than upgrading roads to improve traffic flows. For Sydney’s long-suffering commuters, there was no sign that “missing links” in the Orbital Motorway Network ring road would be completed.

    Well into 2010, house prices had been escalating for over a year, and mortgage interest rates began to creep up again, having been slashed during the financial crisis. More and more Australians thought Rudd’s performance, on a broad range of policy fronts, was falling short of his elevated rhetoric. He was “all talk and no action”. When his opinion poll ratings plummeted, with no revival in sight, Labor Party power-brokers feared their government would be thrown out after just one term, a first since 1932. Either Rudd or the Labor government had to go. They chose Rudd.

    John Muscat is a Sydney lawyer and co-editor of The New City (www.thenewcityjournal.net), a web journal of urban and political affairs.

    Photo by London Summit

  • The Changing Demographics of America

    Estimates of the United states population at the middle of the 21st century vary, from the U.N.’s 404 million to the U.S. Census Bureau’s 422 to 458 million. To develop a snapshot of the nation at 2050, particularly its astonishing diversity and youthfulness, I use the nice round number of 400 million people, or roughly 100 million more than we have today.

    The United States is also expected to grow somewhat older. The portion of the population that is currently at least 65 years old—13 percent—is expected to reach about 20 percent by 2050. This “graying of America” has helped convince some commentators of the nation’s declining eminence. For example, an essay by international relations expert Parag Khanna envisions a “shrunken America” lucky to eke out a meager existence between a “triumphant China” and a “retooled Europe.” Morris Berman, a cultural historian, says America “is running on empty.”

    But even as the baby boomers age, the population of working and young people is also expected to keep rising, in contrast to most other advanced nations. America’s relatively high fertility rate—the number of children a woman is expected to have in her lifetime—hit 2.1 in 2006, with 4.3 million total births, the highest levels in 45 years, thanks largely to recent immigrants, who tend to have more children than residents whose families have been in the United States for several generations. Moreover, the nation is on the verge of a baby boomlet, when the children of the original boomers have children of their own.

    Between 2000 and 2050, census data suggest, the U.S. 15-to-64 age group is expected to grow 42 percent. In contrast, because of falling fertility rates, the number of young and working-age people is expected to decline elsewhere: by 10 percent in China, 25 percent in Europe, 30 percent in South Korea and more than 40 percent in Japan.

    Within the next four decades most of the developed countries in Europe and East Asia will become veritable old-age homes: a third or more of their populations will be over 65. By then, the United States is likely to have more than 350 million people under 65.

    The prospect of an additional 100 million Americans by 2050 worries some environmentalists. A few have joined traditionally conservative xenophobes and anti-immigration activists in calling for a national policy to slow population growth by severely limiting immigration. The U.S. fertility rate—50 percent higher than that of Russia, Germany and Japan and well above that of China, Italy, Singapore, South Korea and virtually all the rest of Europe—has also prompted criticism.

    Colleen Heenan, a feminist author and environmental activist, says Americans who favor larger families are not taking responsibility for “their detrimental contribution” to population growth and “resource shortages.” Similarly, Peter Kareiva, the chief scientist at the Nature Conservancy, compared different conservation measures and concluded that not having a child is the most effective way of reducing carbon emissions and becoming an “eco hero.”

    Such critiques don’t seem to take into account that a falling population and a dearth of young people may pose a greater threat to the nation’s well-being than population growth. A rapidly declining population could create a society that doesn’t have the work force to support the elderly and, overall, is less concerned with the nation’s long-term future.

    The next surge in growth may be delayed if tough economic times continue, but over time the rise in births, producing a generation slightly larger than the boomers, will add to the work force, boost consumer spending and generate new entrepreneurial businesses. And even with 100 million more people, the United States will be only one-sixth as crowded as Germany is today.

    Immigration will continue to be a major force in U.S. life. The United Nations estimates that two million people a year will move from poorer to developed nations over the next 40 years, and more than half of those will come to the United States, the world’s preferred destination for educated, skilled migrants. In 2000, according to the Organisation for Economic Co-operation and Development, an association of 30 democratic, free-market countries, the United States was home to 12.5 million skilled immigrants, equaling the combined total for Germany, France, the United Kingdom, Australia, Canada and Japan.

    If recent trends continue, immigrants will play a leading role in our future economy. Between 1990 and 2005, immigrants started one out of four venture-backed public companies. Large American firms are also increasingly led by people with roots in foreign countries, including 15 of the Fortune 100 CEOs in 2007.

    For all these reasons, the United States of 2050 will look different from that of today: whites will no longer be in the majority. The U.S. minority population, currently 30 percent, is expected to exceed 50 percent before 2050. No other advanced, populous country will see such diversity.

    In fact, most of America’s net population growth will be among its minorities, as well as in a growing mixed-race population. Latino and Asian populations are expected to nearly triple, and the children of immigrants will become more prominent. Today in the United States, 25 percent of children under age 5 are Hispanic; by 2050, that percentage will be almost 40 percent.

    Growth places the United States in a radically different position from that of Russia, Japan and Europe. Russia’s low birth and high mortality rates suggest its overall population will drop by 30 percent by 2050, to less than a third of the United States’. No wonder Prime Minister Vladimir Putin has spoken of “the serious threat of turning into a decaying nation.” While China’s population will continue to grow for a while, it may begin to experience decline as early as 2035, first in work force and then in actual population, mostly because of the government’s one-child mandate, instituted in 1979 and still in effect. By 2050, 31 percent of China’s population will be older than 60. More than 41 percent of Japanese will be that old.

    Political prognosticators say China and India pose the greatest challenges to American predominance. But China, like Russia, lacks the basic environmental protections, reliable legal structures, favorable demographics and social resilience of the United States. India, for its part, still has an overwhelmingly impoverished population and suffers from ethnic, religious and regional divisions. The vast majority of the Indian population remains semiliterate and lives in poor rural villages. The United States still produces far more engineers per capita than India or China.

    Suburbia will continue to be a mainstay of American life. Despite criticisms that suburbs are culturally barren and energy-inefficient, most U.S. metropolitan population growth has taken place in suburbia, confounding oft-repeated predictions of its decline.

    Some aspects of suburban life—notably long-distance commuting and heavy reliance on fossil fuels—will have to change. The new suburbia will be far more environmentally friendly—what I call “greenurbia.” The Internet, wireless phones, video conferencing and other communication technologies will allow more people to work from home: at least one in four or five will do so full time or part time, up from roughly one in six or seven today. Also, the greater use of trees for cooling, more sustainable architecture and less wasteful appliances will make the suburban home of the future far less of a danger to ecological health than in the past. Houses may be smaller—lot sizes are already shrinking as a result of land prices—but they will remain, for the most part, single-family dwellings.

    A new landscape may emerge, one that resembles the network of smaller towns characteristic of 19th-century America. The nation’s landmass is large enough—about 3 percent is currently urbanized—to accommodate this growth, while still husbanding critical farmland and open space.

    In other advanced nations where housing has become both expensive and dense—Japan, Germany, South Korea and Singapore—birthrates have fallen, partly because of the high cost of living, particularly for homes large enough to comfortably raise children. Preserving suburbs may therefore be critical for U.S. demographic vitality.

    A 2009 study by the Brookings Institution found that between 1998 and 2006, jobs shifted away from the center and to the periphery in 95 out of 98 leading metropolitan regions—from Dallas and Los Angeles to Chicago and Seattle. Walter Siembab, a planning consultant, calls the process of creating sustainable work environments on the urban periphery “smart sprawl.” Super-fuel-efficient cars of the future are likely to spur smart sprawl. They may be a more reasonable way to meet environmental needs than shifting back to the mass-transit-based models of the industrial age; just 5 percent of the U.S. population uses mass transit on a daily basis.

    One of the urban legends of the 20th century—espoused by city planners and pundits (and a staple of Hollywood)—is that suburbanites are alienated, autonomous individuals, while city dwellers have a deep connection to their neighborhoods. As the 2001 book Suburban Nation puts it, once suburbanites leave the “refuge” of their homes they are reduced to “motorist[s] competing for asphalt.”

    But suburban residents express a stronger sense of identity and civic involvement than city dwellers. A recent study by Jan Brueckner, a University of California at Irvine economist, found that density does not, as is often assumed, increase social contact between neighbors or raise overall social involvement; compared with residents of high-density urban cores, people in low-density suburbs were 7 percent more likely to talk to their neighbors and 24 percent more likely to belong to a local club.

    Suburbs epitomize much of what constitutes the American dream for many people. Minorities, once largely associated with cities, tend to live in the suburbs; in 2008 they were a majority of residents in Texas, New Mexico, California and Hawaii. Nationwide, about 25 percent of suburbanites are minorities; by 2050 immigrants, their children and native-born minorities will become an even more dominant force in shaping suburbia.

    The baby boom generation is poised for a large-scale “back to the city” movement, according to many news reports. But Sandra Rosenbloom, a University of Arizona gerontology professor, says roughly three-quarters of retirees in the first bloc of boomers appear to be sticking close to the suburbs, where the vast majority reside. “Everybody in this business wants to talk about the odd person who moves downtown,” Rosenbloom observes. “[But] most people retire in place. When they move, they don’t move downtown, they move to the fringes.”

    To be sure, there will be 15 million to 20 million new urban dwellers by 2050. Many will live in what Wharton business professor Joseph Gyourko calls “superstar cities,” such as San Francisco, Boston, Manhattan and western Los Angeles—places adapted to business and recreation for the elite and those who work for them. By 2050, Seattle, Portland and Austin could join their ranks.

    But because these elite cities are becoming too expensive for the middle class, the focus of urban life will shift to cities that are more spread out and, by some standards, less attractive. They’re what I call “cities of aspiration,” such as Phoenix, Houston, Dallas, Atlanta and Charlotte. They’ll facilitate upward mobility, as New York and other great industrial cities once did, and begin to compete with the superstar cities for finance, culture and media industries, and the amenities that typically go along with them. The Wall Street Journal noted that commercial success has already turned Houston, once considered a backwater, into “an art mecca.”

    One of the least anticipated developments in the nation’s 21st-century geography will be the resurgence of the region often dismissed by coastal dwellers as “flyover country.” For the better part of the 20th century, rural and small-town communities declined in percentage of population and in economic importance. In 1940, 43 percent of Americans lived in rural areas; today it’s less than 20 percent. But population and cost pressures are destined to resurrect the hinterlands. The Internet has broken the traditional isolation of rural communities, and as mass communication improves, the migration of technology companies, business services and manufacturing firms to the heartland is likely to accelerate.

    Small Midwestern cities such as Fargo, North Dakota, have experienced higher than average population and job growth over the past decade. These communities, once depopulating, now boast complex economies based on energy, technology and agriculture. (You can even find good restaurants, boutique hotels and coffeehouses in some towns.) Gary Warren heads Hamilton Telecommunications, a call center and telecommunications-services firm that employs 250 people in Aurora, Nebraska. “There is no sense of dying here,” Warren says. “Aurora is all about the future.”

    Concerns about energy sources and hydrocarbon emissions will also bolster America’s interior. The region will be pivotal to the century’s most important environmental challenge: the shift to renewable fuels. Recent estimates suggest the United States has the capacity to produce annually more than 1.3 billion dry tons of biomass, or fuels derived from plant materials—enough to displace 30 percent of the current national demand for petroleum fuels. That amount could be produced with only modest changes in land use, agricultural and forest-management practices.

    Not since the 19th century, when the heartland was a major source of America’s economic, social and cultural supremacy, has the vast continental expanse been set to play so powerful a role in shaping the nation’s future.

    What the United States does with its demographic dividend—its relatively young working-age population—is critical. Simply to keep pace with the growing U.S. population, the nation needs to add 125,000 jobs a month, the New America Foundation estimates. Without robust economic growth but with an expanding population, the country will face a massive decline in living standards.

    Entrepreneurs, small businesses and self-employed workers will become more common. Between 1980 and 2000 the number of self-employed individuals expanded, to about 15 percent of the work force. More workers will live in an economic environment like that of Hollywood or Silicon Valley, with constant job hopping and changes in alliances among companies.

    For much of American history, race has been the greatest barrier to a common vision of community. Race still remains all too synonymous with poverty: considerably higher poverty rates for blacks and Hispanics persist. But the future will most likely see a dimming of economic distinctions based on ethnic origins.

    Since 1960, the proportion of African-American households at or below the poverty line ($22,000 annually for a family of four in 2008 dollars) has dropped from 55 to 25 percent, while the black middle class has grown from 15 to 39 percent. From 1980 to 2008, the proportion who are considered prosperous—households making more than $100,000 a year in 2008 dollars—grew by half, to 10.3 percent. Roughly 50 percent more African-Americans live in suburbs now than in 1980; most of those households are middle class, and some are affluent.

    The most pressing social problem facing mid-21st-century America will be fulfilling the historic promise of upward mobility. In recent decades certain high-end occupation incomes grew rapidly, while wages for lower-income and middle-class workers stagnated. Even after the 2008 economic downturn, largely brought on by Wall Street, it was primarily middle-class homeowners and jobholders who bore the brunt, sometimes losing their residences. Most disturbingly, the rate of upward mobility has stagnated overall, as wages have largely failed to keep up with the cost of living. It is no easier for poor and working-class people to move up the socio-economic ladder today than it was in the 1970s; in some ways, it’s more difficult. The income of college-educated younger people, adjusted for inflation, has been in decline since 2000.

    To reverse these trends, I think Americans will need to attend to the nation’s basic investments and industries, including manufacturing, energy and agriculture. This runs counter to the fashionable assertion that the American future can be built around a handful of high-end creative jobs and will not require reviving the old industrial economy.

    A more competitive and environmentally sustainable America will rely on technology. Fortunately, no nation has been more prodigious in its ability to apply new methods and techniques to solve fundamental problems; the term “technology” was invented in America in 1829. New energy finds, unconventional fuel sources and advanced technology are likely to ameliorate the long-prophesied energy catastrophe. And technology can ease or even reverse the environmental costs of growth. With a population of 300 million, the United States has cleaner air and water now than 40 years ago, when the population was 200 million.

    The America of 2050 will most likely remain the one truly transcendent superpower in terms of society, technology and culture. It will rely on what has been called America’s “civil religion”—its ability to forge a unique common national culture amid great diversity of people and place. We have no reason to lose faith in the possibilities of the future.

    This article originally appeared in Smithsonian Magazine

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

    Photo by clevercupcakes

  • Despite Transit’s 2008 Peak, Longer Term Market Trend is Down: A 25 Year Report on Transit Ridership

    In 2008, US transit posted its highest ridership since 1950, a development widely noted and celebrated in the media. Ridership had been increasing for about a decade, however, 2008 coincided with the highest gasoline prices in history, which gave transit a boost.

    Less reported was the fact that despite higher ridership, transit’s market share (of transit and motor vehicles) has fallen since the 1950s. In 1955, transit’s market share was over 10%. By 2005, transit’s share had dropped to 1.5%, but recovered only to 1.6% in 2008. Transit’s all time peak ridership was in 1945, driven up by World War II and gas rationing. It is thus not surprising that national transit ridership (boardings) declined 3.8% in 2009 as gasoline prices moderated.

    Market Share by Major Urban Area

    Demographia has released urban area roadway and transit market share estimates for 2008, based upon Federal Transit Administration and Federal Highway Administration data. The table below compares 2008 with 1983 market share data for 56 urban areas with a corresponding metropolitan area population of more than 900,000 (complete data).

    Urban Areas: Roadway & Transit Market Share: 2008
    Ranked by 2008 Transit Market Share
    With 25 Year (1983) Comparison
        2008 1983 Roadway Share % Change
    Rank Urban Area Roadway Share Transit Share:  Roadway Share Transit Share: 
    1 New York 89.0% 11.0% 87.7% 12.3% 1.5%
    2 San Francisco 95.0% 5.0% 93.7% 6.3% 1.4%
    3 Washington 95.5% 4.5% 96.1% 3.9% -0.6%
    4 Chicago 96.1% 3.9% 94.2% 5.8% 2.0%
    5 Honolulu 96.2% 3.8% 93.2% 6.8% 3.2%
    6 Boston 96.7% 3.3% 97.5% 2.5% -0.8%
    7 Seattle 97.2% 2.8% 97.6% 2.4% -0.4%
    8 Philadelphia 97.3% 2.7% 96.0% 4.0% 1.4%
    9 Portland 97.7% 2.3% 97.6% 2.4% 0.1%
    10 Salt Lake City 97.8% 2.2% 99.1% 0.9% -1.3%
    11 Los Angeles 98.1% 1.9% 98.1% 1.9% 0.0%
    12 Denver 98.2% 1.8% 98.5% 1.5% -0.3%
    13 Baltimore 98.3% 1.7% 97.7% 2.3% 0.6%
    14 Pittsburgh 98.6% 1.4% 97.3% 2.7% 1.3%
    15 Miami-West Palm Beach 98.7% 1.3% 98.8% 1.2% -0.1%
    16 Atlanta 98.8% 1.2% 98.0% 2.0% 0.8%
    16 Cleveland 98.8% 1.2% 98.0% 2.0% 0.8%
    16 Las Vegas 98.8% 1.2% 99.6% 0.4% -0.8%
    16 Minneapolis-St. Paul 98.8% 1.2% 98.8% 1.2% 0.0%
    16 San Diego 98.8% 1.2% 99.3% 0.7% -0.5%
    21 San Jose 99.0% 1.0% 99.0% 1.0% 0.0%
    22 Austin 99.1% 0.9% 99.7% 0.3% -0.6%
    22 Houston 99.1% 0.9% 99.0% 1.0% 0.1%
    22 Milwaukee 99.1% 0.9% 98.3% 1.7% 0.8%
    22 Sacramento 99.1% 0.9% 99.0% 1.0% 0.1%
    22 San Antonio 99.1% 0.9% 98.7% 1.3% 0.4%
    27 St. Louis 99.2% 0.8% 99.0% 1.0% 0.2%
    28 Buffalo 99.3% 0.7% 98.5% 1.5% 0.8%
    28 Providence 99.3% 0.7% 98.9% 1.1% 0.4%
    30 Charlotte 99.4% 0.6% 99.3% 0.7% 0.1%
    30 Cincinnati 99.4% 0.6% 98.7% 1.3% 0.7%
    30 Dallas-Fort Worth 99.4% 0.6% 99.4% 0.6% 0.0%
    30 Hartford 99.4% 0.6% 98.7% 1.3% 0.7%
    30 Orlando 99.4% 0.6% 99.7% 0.3% -0.3%
    30 Phoenix 99.4% 0.6% 99.4% 0.6% 0.0%
    30 Rochester 99.4% 0.6% 98.9% 1.1% 0.5%
    30 Tucson 99.4% 0.6% 98.9% 1.1% 0.5%
    38 Detroit 99.5% 0.5% 98.8% 1.2% 0.7%
    38 Fresno 99.5% 0.5% 99.3% 0.7% 0.2%
    38 New Orleans 99.5% 0.5% 97.4% 2.6% 2.2%
    38 Norfolk-Virginia Beach 99.5% 0.5% 99.2% 0.8% 0.3%
    38 Riverside-San Bernardino 99.5% 0.5% 99.6% 0.4% -0.1%
    43 Columbus 99.6% 0.4% 98.6% 1.4% 1.0%
    43 Louisville 99.6% 0.4% 98.9% 1.1% 0.7%
    43 Memphis 99.6% 0.4% 99.4% 0.6% 0.2%
    43 Tampa-St. Petersburg 99.6% 0.4% 99.5% 0.5% 0.1%
    47 Bridgeport 99.7% 0.3% 99.8% 0.2% -0.1%
    47 Jacksonville 99.7% 0.3% 99.4% 0.6% 0.3%
    47 Kansas City 99.7% 0.3% 99.4% 0.6% 0.3%
    47 Nashville 99.7% 0.3% 99.4% 0.6% 0.3%
    47 Raleigh 99.7% 0.3% 99.9% 0.1% -0.2%
    47 Richmond 99.7% 0.3% 99.1% 0.9% 0.6%
    53 Indianapolis 99.8% 0.2% 99.3% 0.7% 0.5%
    54 Birmingham 99.9% 0.1% 99.5% 0.5% 0.4%
    54 Oklahoma City 99.9% 0.1% 99.9% 0.1% 0.0%
    54 Tulsa 99.9% 0.1% 99.6% 0.4% 0.3%
    Unweighted Average 98.7% 1.3% 98.3% 1.7% 0.4%
    All Urban Areas Combined 98.4% 1.6% 97.5% 2.5% 0.9%
    Based upon passenger miles
    Core urban areas in metropolitan areas with more than 900,000 population in 2009.
    Derived from Federal Transit Administration and Federal Highway Administration data
    Los Angeles and Mission Viejo urban areas combined
    San Francisco, Concord and Livermore urban areas combined
    Historic transit market share data at http://www.publicpurpose.com/ut-usptshare45.pdf
    Maryland commuter rail (MARC) assigned to Washington, DC

    In 1983, transit systems started receiving support from federal taxes on gasoline. This was also the first year that the National Transit Database reported on the same annual basis as it does today. One justification for using funds from road users was the hope of attracting people from cars to transit. The national data above and the urban area below show that the overwhelming share of new travel has, nonetheless, continued to be captured by motor vehicles rather than transit. Among the 56 urban areas, 13 experienced gains in transit market share from 1983 to the peak year of 2008, while 37 posted losses and six had no change. Transit was able to capture only 0.9% of new urban travel between 1983 and 2008, while roadways captured 99.1%. (Note 1).

    The Top 10: Still a New York Story

    #1: New York: The nation’s predominant urban area remains New York, with an 11.0% transit market share. In 2008, 41% of the national transit ridership (passenger miles) was in New York, with much of it either in or focused upon New York City. The New York City Transit Authority, and a host of local public and private systems, principally serve New York City destinations and account for a remarkable 38% of the nation’s transit ridership. Even so, transit’s market share dropped from 12.3% in 1983. As a result, the roadway market share in New York increased 1.5% between 1983 and 2008, the fourth largest gain in the nation. Transit attracted 8.7% of the new demand between 1983 and 2008, while roadways attracted 91.3%.

    #2: San Francisco: San Francisco had the nation’s second highest transit market share in 2008, at 5.0%. This is a decline from 6.3% in 1983. Nonetheless, San Francisco moved up from 6th place in 1983. This produced a 1.4% increase in the roadway market share between 1983 and 2008, the fifth largest gain in the nation. Transit accounted for 2.2% of the new demand, while roadways attracted 97.8%.

    #3: Washington: Washington placed third in transit market share in 2008, at 4.5%. This represents a gain from 3.9% in 1983 and an improvement from 6th place. Washington was the only urban area among the top five to experience an increase in transit market share. Much of Washington’s transit increase was on its expanding Metrorail system and the MARC commuter rail system (most of the ridership on this Maryland based system commutes to Washington. Overall, transit in Washington has attracted 5.1% of new travel over the past 25 years, while roadways attracted 94.9% of new demand.

    #4: Chicago: Chicago ranked fourth in transit market share, at 3.9%. In 1983, Chicago had ranked 3rd, with a market share of 5.8. The roadway market share in Chicago increased 2.0% from 1983 to 2008, the third largest road travel gain in the nation. Transit attracted 1.3% of new demand over the period in Chicago, while roadways attracted 98.7%.

    #5: Honolulu: Honolulu ranked fifth in transit market share, at 3.8%. This is a significant drop from 1983, when Honolulu ranked 2nd in the nation, with a transit market share of 6.8%. Honolulu’s roadway market share gain was the largest in the nation between 1983 and 2005, at 3.8%. Transit ridership also dropped in Honolulu from 1983 to 2008, so that roadways accounted for all new travel.

    #6: Boston: Boston ranked sixth in transit market share in 2008, at 3.3%. This is a gain from 2.5% in 1983, when Boston ranked 9th. Much of Boston’s increase is attributable to its commuter rail expansion. Transit captured 4.1% of new demand, while roadways attracted 95.9%.

    #7: Seattle: Seattle’s principally all bus transit system ranked 7th in 2008 with a market share of 2.8%. This is an increase from 2.4% in 1983, when Seattle ranked 10th. Transit captured 3.1% of new travel over the past 25 years, while roadways accounted for 96.9%.

    #8: Philadelphia: Philadelphia slipped from the 5th largest transit market share in 1983 (4.0%) to 8th in 2008, at 2.7%. Philadelphia’s transit system, one of the most comprehensive in the nation, captured just 1.4% of new travel over the last quarter century, while roadways captured 98.6%.

    #9: Portland: Portland ranked 9th in transit market share in 2008, at 2.3%. This is a decline from 2.4% in 1983 and occurred despite opening the most extensive new light rail system in the nation over the period. Transit attracted 2.2% of new travel over the period, while roadways attracted 97.8%.

    #10: Salt Lake City: Salt Lake City, at 10th, is a new entrant to the top 10 transit market share urban areas, with a share of 2.2%. In 1983, Salt Lake City ranked 34th, with a transit market share of 0.9%. Even with this increase, however, roadways captured the bulk of new travel, at 96.2%, while transit attracted 3.8%, due to transit’s small 1983 base.

    Other Urban Areas: There were also notable developments among the urban areas that did not place in the top 10 in 2008 transit market share.

    Las Vegas: Las Vegas improved its ranking more than any other urban area, moving from 49th in 1983 to 16th in 2008 (in a tie with Atlanta, San Diego, Cleveland and Minneapolis-St. Paul). In 1983, Las Vegas had a transit market share of 0.4%, which improved to 1.2% in 2008. This was an especially notable achievement, because Las Vegas experienced substantial population growth over the period. During the period, Las Vegas established a 100% competitively contracted transit system, the only such transit system in the nation and has seen ridership expand by more than 10 times. Nonetheless, as in other gaining urban areas, such as Salt Lake City and Washington, the transit ridership base was so small that roadways captured nearly all the new demand, at 98.6% (transit obtained 1.4%).

    Atlanta: Atlanta both (1) was the fastest growing larger urban area in the developed world between 1983 and 2008 and (2) built the second most new rail capacity in the nation, in its expansion of the MARTA Metro (trailing only Washington’s Metro). Yet, Atlanta’s transit market share fell from 2.0% to 1.2% between 1983 and 2008, with transit attracting only 0.9% of new travel.

    New Rail Urban Areas: Transit market shares generally failed to increase in urban areas opening new light rail or metro systems over the period (excludes urban areas with new rail systems that were not open at the beginning of fiscal year 2008).

    • Six urban areas with new rail systems experienced market share declines, including Portland, Baltimore, Houston, Sacramento, St. Louis and Buffalo.
    • Four urban areas with new rail systems had static transit market shares, including Los Angeles, Minneapolis-St. Paul, San Jose and Dallas-Fort Worth.
    • Three urban areas with new rail systems experienced transit market share increases. The largest increase was in Salt Lake City (and the largest of any urban area). Denver and Miami-West Palm Beach also experienced increases.

    Where from Here? It might have been expected that transit would have attracted far higher ridership numbers when gasoline prices achieved such heights. Yet, nationally, transit market share increase was only from 1.5% to 1.6%, even as roadway demand was declining modestly.

    Transit’s principal marketing problem lies in its problem serving destinations outside downtown. Downtowns typically account for only 10% of urban area employment. Some trips in an urban cannot even be made on transit. For example, Portland’s extensive transit system connects only about two-thirds of the jobs and residences within the (Tri-Met) service area (Note 2). Further Tri-Met’s award deserving internet trip planner shows that some trips to outside downtown destinations can require more than two hours, even when light rail is used.

    Note 1: This data relates only to passenger transportation. Urban roadways, unlike transit, also carry a substantial amount of local and intercity freight, which is not reflected in this data.

    Note 2: According to Metro’s 2004 Regional Transportation Plan, 78% of the residences and 86% of the jobs in the Tri-Met service area were within walking distance (1/4 mile) of a transit stop. This means that approximately 67% of residences and jobs are within 1/4 mile of a transit stop (0.78 * 0.86). Metro’s plans envision this figure dropping to 59% by 2020 (this data does not include Clark County in Washington, part of which is in the urban area).

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

  • Immigrant Entrepreneurs Can Turbocharge Cleveland’s Flagging Economy

    In seeking to lure a Chinese lightbulb-maker to town, Cleveland leaders revealed both a vision and a blind spot.

    Cleveland Mayor Frank Jackson and his team should be given credit for recognizing the tremendous opportunity in attracting foreign direct investment, or “FDI,” and the new jobs that it provides.

    According to a 2008 report by the U.S. Chamber of Commerce, foreign firms employed more than 5.3 million U.S. workers through their U.S. affiliates and have indirectly created millions of additional jobs. More than 30 percent of direct hires are in manufacturing. In Ohio, 600 foreign-based corporations from 28 countries are operating 1,000 facilities and employing about 180,000 people.

    One exciting new trend is the rise in the annual number of foreign investment projects in the U.S. renewable energy sector, jumping from 4 projects in 2003 to over 40 in 2008.

    In its eagerness to attract a foreign company offering energy-saving light bulbs, however, City Hall fell into traps which may have been avoided if had it tapped the cultural resources at their fingertips.

    When Mayor Jackson’s administration waded into unfamiliar waters to partner with an LED light bulb company in Ningbo, China, no one thought to talk with Chinese-American entrepreneurs and professionals living in Northeast Ohio. These individuals are eager to assist the City in helping identify appropriate partners in China, supporting the due diligence, and generally advising on a culture that dates back to 5,000 B.C. and has only opened-up in recent decades.

    As reported by Crain’s Cleveland Business, local immigrants were not viewed as a resource.

    ‘Why weren’t we informed; we could have helped you?’ asked Hong Kong-born immigration attorney Margaret Wong….

    Ms. Wong made the statement last Thursday evening, May 20, in the Red Room, a conference room attached to Cleveland Mayor Frank Jackson’s office at Cleveland City Hall. She was there with a group of local small business owners, clergy and other civic leaders invited by the mayor to a meeting to enlist their support in his effort to bring Chinese lighting manufacturer Sunpu-Opto Semiconductor Co. to the city.

    Ms. Wong was asking chief of staff Ken Silliman why the Mayor, who was not present, hadn’t sought the assistance of people such as her and the others in the room sooner in his attempt to make Cleveland the U.S. beachhead of Sunpu-Opto, a maker of energy-efficient LED lighting.

    Mr. Silliman didn’t have a ready answer.

    The answer may be that in this region immigrants are often not viewed as a valuable resource to support the region’s business development, or viewed as people with the skills to help Northeast Ohio navigate the language, cultural and market barriers abroad.

    This must change.

    Yes, it is important that the City and the region aggressively pursue FDI, not only with passion, but also with skill, networks, and on-the-ground experience.

    To make these efforts successful, however, leadership should look to leverage the foreign-market experience of our immigrant entrepreneurs and innovators, particularly in relation to China and India, where booming economies, mounting foreign currency reserves, and relationship-based business culture create unique opportunities and challenges.

    Cleveland’s immigrants, some of whom enjoy business and governmental relationships in the homeland that go back generations, are eager to be a partner in revitalizing the city and the region. They are in a unique position to help our region capture our share of the $245 billion of foreign direct investment streaming into the U.S, to ramp-up our exports to global markets where 95% of the world’s consumers live, and to attract the world’s best and brightest innovators, entrepreneurs, and professionals driving a changing economy.

    There is precedent in leveraging ethnic and global networks for local development Northeast Ohio’s Jewish community, which enjoys extensive business, family and social ties in Israel, has helped the region attract tens of Israeli companies in recent years.

    What is needed now is a bold regional plan to take this formula for success to a larger scale, particularly targeting markets such as China where the government is encouraging its businesses to expand into the United States.

    The path to this global journey, however, should begin with a few short steps at home, launching a multi-purpose International Welcome Center which will help the region build a bridge to the world.

    The Welcome Center will not only provide a much-needed platform to coordinate local resources for attracting FDI, but it will also help educate the region on why the development of a global culture is an economic necessity and on what steps we can all take to welcome and partner with international resources, such as the immigrant talent living right now in Northeast Ohio.

    This represents a bit of conundrum. How do we recruit and welcome foreign companies, their executives, and their families, if we do not fully value our existing immigrant entrepreneurs and innovators? How do we attract foreign direct investment when overseas companies are feared as job-takers?

    In responding to the dichotomy of not welcoming immigrants while trying to lure foreign companies to Cleveland, Anne O’Callaghan, founder of the Welcome Center in Philadelphia said in her City Club of Cleveland speech last year:

    Do the region’s leaders think that foreigners should just stay in the homeland but still wire you their money?

    Northeast Ohio’s immigrant community is rich in technology, entrepreneurship, global market knowledge, and new wealth.

    To make a credible push to attract foreign companies which can establish manufacturing, research, and corporate headquarters in Northeast Ohio and in-source thousands of new jobs, the region can take a bold step forward by partnering with immigrants already here and put out the “welcome mat” for those who may arrive tomorrow.

    Richard Herman is a Cleveland lawyer, Co-Chair of TiE Ohio (The International Entrepreneur), and Co-Author of Immigrant, Inc. (Wiley & Sons, 2009).

    Photo by Caveman 92223 — On the 2010 US Tour

  • Millennial Surprise

    The boomer’s long domination of American politics, culture and economics will one day come to an end. A new generation–the so-called millennials–will be shaping the outlines of our society, but the shape of their coming reign could prove more complex than many have imagined.

    Conventional wisdom, particularly among boomer “progressives,” paints millennials–those born after 1983–as the instruments for fulfilling the promise of the 1960s cultural revolt. In 2008 the left-leaning Center for American Progress dubbed them “The Progressive Generation.” The center contrasted them favorably to the Xers, a cohort of 20 million fewer, and their “conservative views.”

    The case for the millennials’ left-leaning views can be traced to when the oldest millennials started to vote, in 2004. That year big loser John Kerry took the 18 to 29 vote by nearly 10 points. In the last election millennials supported Barack Obama over John McCain by a staggering 30 points. He outperformed McCain in every ethnic group, winning 54% of young white voters and a remarkable 76% of young Hispanics. Obama may still have won without millennial support, but only narrowly.

    This vote was shaped by important and perhaps lasting attitudes. Authors Morley Winograd and Michael Hais identified among these young voters a strong communitarian ethos, generally liberal social views and somewhat of a “green” agenda. They wrote that millennials’ embrace of the Democratic Party in 2008 could foreshadow a long-awaited leftward realignment paralleling that which occurred in the 1930s.

    Yet there are signs that millennial voters, if not shifting to the right, may have lost some of their progressive ardor. Recent polls suggest that younger voters are far less likely to vote this year than in 2008. Gallup reports that nearly half of voters ages 18 to 29 are not enthusiastic about turning up at the polls this November, a far higher number than senior or boomer voters.

    One reason for such a dramatic shift is likely the economy. The current recession has been very hard on younger workers–unemployment hits around 20% for workers between 16 and 24. The brunt of the recession has hit blue-collar, high school educated youths, but even the college crowd, the core of the Obama constituency, faces what appears to be dismal prospects in the years ahead.

    Not too surprisingly, a May Allstate-National Journal Heartland Monitor survey of voters 18 to 29 found only 45% of millennials still solidly behind the president’s economic agenda. This could have a depressing impact on the leftward lurch among millennials. Indeed one recent Harvard survey found only half of all young voters planned to vote Democratic for Congress this year, compared with 60% in 2006.

    If the downturn persists, we could see some changes in generational politics. In the 1970s a similarly dismal economy accompanied the boomers as they were entering the workforce in huge numbers. Then, as now, long-term unemployment and underemployment seemed the wave of the future.

    The hard times of the 1970s changed the politics of the boomers. The bungled presidency of Jimmy Carter did not do much for the credit of the Democratic Party. Boomers, who sided with Carter in 1976, ended up voting for Ronald Reagan in large numbers four years later. The relative prosperity of the Reagan years painted a basically conservative tinge to boomer voters, something that benefited both Republicans and more centrist Democrats like Bill Clinton.

    This change could occur again, but other factors may slow a rightward shift among millenials. Republican nativism–exemplified by the Arizona immigration law–may be a boon with boomer voters, who are overwhelmingly white (only one in four are non-white). In contrast, roughly two in five millennials are minority group members. The age group 18 and under is already majority “minority.”

    Another big factor will be social liberalism. On a host of critical issues–from interracial dating to gay marriage–millennials tend to be far more “progressive” than earlier generations. According to a recent Pew study, 63% of millennials believed society should accept homosexuality compared with only 48% of boomers.

    Millennials also tend to disapprove of such things as prayer in school compared with boomers or older generations. Although most express some religious commitment, there are more unaffiliated and basic non-believers than in previous generations. The GOP’s long-term embrace of a hard religious right positions will not pay off among millennial voters.

    Perhaps most troubling for Republicans–and this is a point emphasized by Winograd and Hais–are millennial views on government. Two-thirds, according to Pew, currently favor an expanded government role in the economy compared with roughly 40% of boomers. Not surprisingly, tea partiers, at least for now, are more likely to come from the older set than younger voters.

    Yet there is no lock for the Democrats. For one thing, expansive government is likely to be more attractive to those who are not yet paying taxes. As millenials head into their late 20s and early 30s, they may adopt different somewhat views. If the current public sector expansion proves ineffectual in creating jobs–after all not everyone can work for Uncle Sam–they could, like their boomer forebears, embrace a more private-sector oriented approach.

    More than anything else, both liberals and conservatives need to understand that this emerging generation may prove far less predictable than either side expects. Many “progressive” urbanists, for example, expect that most millenials will be happy to live in dense multifamily housing–largely as renters–as they enter their 30s. This is probably not altogether the case.

    Hais and Winograd argue that millenials may be more attracted to urban settings–as is often the case for younger, unmarried and childless people–than boomers and older generation. Yet their research also shows that more than twice as many–some 43%–identify suburbs as their “ideal place to live.” They embrace suburbs even more than boomers.

    Similarly, this generation also shares with the boomers a strong interest in homeownership–refuting the claim of some urban boosters that renting is the wave of the future. Instead they appear surprisingly traditional in terms of wanting marriage, kids and believing in following the rules. They may change things up, but still very much embrace the desire to achieve the “American dream.”

    In these and many ways, millennials are likely to continue redefining our society in ways that neither currently boomer dominated party will appreciate. Given the mess the boomers have left them, that may prove a difference worth celebrating.

    This article originally appeared in Forbes.com.

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

    Photo by rjason13

  • China’s Urban Challenge: Balancing Sustainable Economic Growth and Soaring Property Prices

    Today, Beijing seeks to balance strong economic growth and soaring prices amidst a severe global crisis and debt turmoil in advanced economies. The challenge is colossal – to provide urban space for more than 600 million people in the coming decades.

    For months, the famous hedge fund wizard, James Chanos, has been predicting a severe Chinese property slump. As he puts it, “Dubai times 1,000 – or worse,” with the “potential to be a similar watershed event for world markets as the reversal of the U.S. subprime and housing boom.”

    The contrarian investor Chanos made his fortune on Wall Street by foreseeing the collapse of Enron and other high flying companies whose stories were “too good to be true.” He is not the only skeptic on China, but certainly one of the most prominent and articulate. And yet, China’s real estate market is very different from those of the U.S. or Dubai.

    In Dubai, the problem had to do with too much leverage. In China, consumers buying residential properties are required to put down 30 percent before taking out a mortgage. For a second home, the down payment is 50 percent, irrespective of their net worth. Home purchase is predicated on affordability.

    In the pre-crisis U.S., perverse incentives were magnified by low interest rates, sometimes minimal down payment and loans to those with poor credit histories. Excessive debt was sliced, repackaged and securitized into mortgages. Banks and ratings agencies engaged in unethical conduct. Appropriate regulatory oversight was absent.

    In the long-run, the containment of rapid price increases is vital for China’s economic growth and social cohesion. In the short-run, volatile price fluctuations are difficult to avoid in the large urban centers. These large agglomerations are evolving into “global cities”, which are driven not just by local conditions, but by global trade and investment.

    Soaring prices
    In “China bubble” predictions, Chinese property markets are typically portrayed as unitary or homogeneous. Yet, there is huge variation among cities and regions. In 2009, the urban GDP per capita was highest in Shenzhen reaching almost US$13,800 USD, whereas in Hefei it was about US$6,100.

    Until recently, the concern for the soaring prices in the property markets has been focused primarily on the high-end segment of the first-tier cities. Since the 1980s, the economic ripple effect of the successful first-tier cities – such as Shenzhen, Beijing, and Shanghai – has been spreading into new generations of Chinese cities.

    By the early 2000s, second-tier cities – from Suzhou and Shenyang to Chengdu and Chongqing – attracted significant attention with investments from global corporate giants. Third-tier cities – from Ningbo and Fuzhou to Wuxi and Harbin – have been following in the footprints, while inspiring still others, such as Kunming and Hefei.

    Yet for the most part soaring prices characterize primarily residential properties – almost exclusively the high-end segment of the most prosperous first-tier cities.

    In March, property prices in 70 Chinese cities soared by a record 11.7 percent from the previous year. In response, the government rolled out a series of measures to curb the domestic housing market amid concerns over asset bubbles.

    In early May, the People’s Bank of China raised the reserve requirement ratio for major banks by half a percentage point. Property stocks were expected to face further decline. Following Beijing and Shenzhen, the Shanghai municipal government released regulations for the property sector to curb housing speculation and soaring prices.

    Some observers worried that tightening policies may deter property developers from starting new projects and purchasing land, thereby cutting the supply and pushing up prices next year. And yet, despite these measures, housing prices rose 12.8 percent in April from a year earlier. At the same time, China’s urban fixed-asset investment increased by 26.1 percent year-on-year to $684.63 billion. The growth rate was 4.4 percentage points lower from the same period of 2009.

    As public concern over “skyrocketing housing prices” continued to simmer, the real estate tycoon Ren Zhiqiang was hit by a shoe at a forum in Dalian. The attacker was fuming over soaring housing prices.

    Last month, home prices in 70 Chinese cities rose by 12.4 percent year-on-year. The growth rate was 0.4 percentage points lower than in April, as property sales in first-tier cities (including Beijing, Shanghai and Shenzhen) contracted following the string of government measures. New home prices rose 15.1 percent year-on-year, down 0.3 percentage points from April.


    In a bid to curb soaring prices, the government has tightened scrutiny of developers’ financing, curbed loans for third-home purchase, raised minimum mortgage rates and tightened down-payment requirements for second-home purchases.

    By early summer, new home sales in Beijing were down 70 percent. Property transactions in Shanghai slumped around 70 percent and in Shenzhen by 62 percent month-on-month in May.

    Why have prices soared so frantically and what could be done about it?

    Toward new developments and new business models
    In the West, the great urban centers – from Paris to New York City and Tokyo – evolved into great metropolises in a century or two. In China, the first-tier cities – such as Shenzhen, Beijing, and Shanghai – are morphing into global cities in barely decades.

    Understandably, the residents of the first-tier cities would like to own an apartment in their home city. However, these cities also attract the wealthy across China, prosperous investors in East Asia and multinational property companies worldwide.

    Additionally, the high price-to-rent ratios have been driven by speculation, the desire for long-term investment, and few investment instruments.

    Even buyers contribute to soaring prices. To facilitate the marriage of their son or daughter, parents are often willing to devote their savings to real estate. As the young couple and their parents put income and savings into a purchase of a single apartment, excessive prices are driven even higher.

    In addition to great demand, the soaring prices reflect supply dilemmas. Currently, residential real estate development is geared to high-end and high-margin properties, which ensure a significant cash flow for cities. In the leading cities, the direct and indirect GDP contribution by real estate can amount to some 25-35 percent of the GDP; in other cities, this contribution is relatively higher. Ironically, luxury developments support local incomes, which maintain economic growth nationwide.

    As long as high-end real estate offers high margins where affordable housing does not, regional governments, which possess the land rights, have an incentive to prioritize luxury projects.

    The government seeks to sustain real estate market development and thus to support growth critical for China’s economy. It also seeks to ensure affordable housing vital to Chinese people. As debt problems are escalating in the West, reconciling these goals – economic growth and affordable housing – poses a difficult challenge.

    A shift towards affordable mass-market – reportedly only 10 percent of total residential sales – is critical. In the current business model, high margins come from a very narrow high-end segment of the market. This made sense in the early days of Chinese real estate when only few wealthy people could afford a home.

    Today, far more Chinese are able and willing to acquire a home. A new era requires a new business model, which can be based on the broad middle-class segment of the market.

    Conclusion: China is not Japan déjà vu
    In China’s property markets, some argue that the risks are now so great that a decade of little or no growth, as Japan experienced in the 1990s, can no longer be dismissed. They see parallels with Japan in the late 1980s, when authorities responded to the export slump caused by the revaluation of the yen after the 1985 Plaza Accord. As Tokyo adopted a low interest rate policy to boost an expansion in domestic demand, it also created conditions for a massive economic bubble.

    Yet, contemporary China’s situation is very different. First of all, in China, there remains a large shortage of residential property that meets new living standards.

    In Japan, property price increases were more than 30 percent in the latter half of the 1990s. In China’s prosperous coastal cities, they have been around 12 percent in 2003-2009.

    In Japan, the health of the banks deteriorated rapidly with the asset bubble. In China, the share of non-performing loans declined from almost 20 percent to less than 2 percent in the 2000s.

    In Japan, the asset bubble occurred after the eclipse of the high-growth era. Instead of a potential growth rate of 3-4 percent, China, assuming stability in the international and domestic operating environment, may enjoy relatively high growth for another decade or two. In such circumstances, even rapid price fluctuations in the first-tier cities can be tolerable, even if they are not preferable.

    Ultimately the difference between Japan and China is reflected by demand. Japan in the 1980s was already highly urbanized and its city population was plateauing. In China, the situation is very, very different.

    Today, there are some 360 million urban residents in China. In the next three decades, the figure is expected to grow to 970 million. What Beijing is trying to achieve is unique in history – to create urban space to more than 610 million people, within a single generation.

    In such an environment, periods of overheating will occasionally be accompanied by dramatic price increases.

    China, the urbanization rate is about 45 percent, whereas in Japan and other advanced countries it is more than 80 percent. As these nations reflect very different levels of economic development and different levels of individual prosperity, their real estate markets are different as well.

    Despite its rapid pace of expansion, China’s real estate is still at a very preliminary stage. The marketplace is so colossal that there are no precedents, no simple models.

    Yet the prospects for a robust growth remain intact. The key will be not to allow that growth to become threatened by a property bubble – while providing affordable housing for the rapidly-expanding new middle-class.

    Dr. Dan Steinbock is Research Director of International Business at India, China and America Institute (USA) and Senior Fellow at Shanghai Institutes for International Studies (China). The brief is part of the author’s ongoing project on emerging megapolises worldwide. A highly abbreviated version of the brief has been published by China Daily, China’s leading English-language daily in May.

    Photos and Illustrations: Dan Steinbock and China’s National Bureau of Statistics

  • Planning’s Cultural Cringe?

    First it was Portland, Oregon, touted as a poster child for urban planning in Australia. Now, Vancouver, Canada, is the comparison, and are we seeing another incarnation of Australia’s infamous cultural cringe?

    Advocates of higher density and the “brawl against sprawl” in Australia frequently cite overseas cities as model case studies. Portland, Oregon, was for a long time cited as a good example of pro-density housing strategies which sought to limit ‘sprawl’, to promote public transport by investing in things like light rail, and to promote cycling and a range of other planning ‘solutions’ that would sound remarkably familiar in Australia.

    The truth about Portland, however, didn’t match the hype of its city planners. Much of the boosterism focused on the mostly downtown area of Portland. Like Melbourne, or Sydney, this is its own municipality, with its own Mayor and its own planning officials. As they aggressively sold a story about the virtues of their planning strategy for the city core, they omitted the inconvenient broader metropolitan facts as they went.

    The story of the real Portland, including the surrounding suburban areas, is different than what these policy promoters would have you believe. Portland today, despite hundreds of millions invested in a new light rail system and the promotion of inner city housing density, has fewer public transport trips as a percentage of total travel than in 1980. Urban Growth Boundaries introduced by Oregon State in the 1970s led to housing price pressures which eventually excluded the middle and working class. Leading US city demographer Joel Kotkin describes it as an ‘elite city’ which is ‘remarkably white, young and childless.’ And as international housing market expert Wendell Cox has pointed out, the suggestion that Portland has much to crow about in terms of urban consolidation doesn’t match the official statistics. Portland is as guilty of ‘sprawl’ as Los Angeles.

    The same can be said of Vancouver. Touted by its city officials as a paragon of virtue in planning policy, the Vancouver story is almost entirely limited to its geographically confined downtown. Here, in the wake of overbuilding of office properties in the downtown core, city officials rezoned excess commercial capacity to permit high density residential housing in what we would call the CBD. This ‘living first’ strategy produced a wave of new residential development which saw the core population grow by 20,000 people to around 60,000, and to potentially 90,000 by 2015. Redundant waterside areas have been coverted into residential precincts, and commuting by public transport, cycling or walking are favoured over private vehicles.

    Taken in isolation, the Vancouver story could start to sound convincing. But there are some glaring omissions. The City of Vancouver is home to around 600,000 people. The downtown area – the subject of much of the planning hype – is home to 60,000 people. The broader metro region, based on the same sorts of urban definitions we might use for Brisbane, or Sydney or Melbourne, is home to 2 million people. There is precious little said about the lives of the 1.4 million people who aren’t residents of the City of Vancouver, or the more than 1.9 million who don’t live in the revitalized urban core.

    For these Vancouverites, life isn’t a rosy as the planning hype would have you believe. The most glaring omission about life in Vancouver is that it also happens to be one of the world’s least affordable cities in which to live. According to both the Reserve Bank of Canada and Demographia, Vancouver’s housing rates as severely unaffordable, eating up some three quarters of the region’s median pre-tax household incomes. The problem is so chronic that it has prompted an online game “Crack Shack or Mansion” where visitors are asked: “Can you tell the difference between a crack shack and a Vancouver, BC mansion, listed for one or two million dollars?” Play the game yourself, it’s an eye opener. [A Crack Shack, for the uninitiated, is a den of inequity where illegal drugs are produced].

    That’s hardly the sort of model city you’d want to tout as a planning example we could learn from. The other glaring omission from the planning fairy tale of Vancouver is that life in the city core is vastly different from the overwhelmingly suburban conditions of the vast majority. To the south of Vancouver’s downtown lies an endless suburban grid of detached housing, with limited parklands or open space. Check it out for yourself on Google Maps or Google Earth. Jump into Google Street View and take a walk down a typical Vancouver street. Do that with a housing price list from “Crack Shack or Mansion” in hand and then convince me this is a model for any Australian city.

    A final glaring omission is the climate. This from the official Living in Canada website: “Snow depths of greater than 1 cm are seen on about 10 days each year in Vancouver compared with about 65 days in Toronto. Vancouver has one of the wettest and foggiest climates of Canada’s cities. At times, in winter, it can seem that the rain will never stop.” Summers aren’t so bad though: for two months of the year, the average daily maximum even exceeds 20’c!

    So Vancouver as the next poster child of planning for any Australian city is looking shaky. It’s hopelessly unaffordable (and we have enough problems of our own in that regard), the quality of its majority suburban environment is lower than the standards we already enjoy, and the climate could not be less similar.

    The same can be said of other city-regions often described as examples of how Australian cities could develop. Copenhagen, Paris, or Venice have all in their time been selectively extolled as models for Australian urban planning.

    Maybe this fascination with irrelevant urban models stems from a form of cultural cringe? Whatever the reason, the analogies can be dangerous, especially when they omit the more essential economic or lifestyle based criteria such as housing affordability, share of economic wealth amongst a city/region’s residents, or climate and lifestyle factors.

    It might instead be more helpful if Australian planners referring to overseas examples also kept in mind some of these pragmatic metrics. For example, benchmarking cities with more affordable housing markets than ours and with strong local economies where wealth and standards of living are enjoyed across a wide spectrum of society would produce some very different case studies. Factor in similar climate patterns (which largely dictate recreational and lifestyle behavior) to our own and the choice of comparable cities reduces further.

    We might even start to find that our own cities offer plenty of examples of ‘getting it right.’ Instead of this cultural groveling we could start to define the things we like most about our own existence and plan ways of replicating that, rather than imposing on our cities forms of existence that, appealing as elements might be, are incapable of replication in the Australian context.

    Ross Elliott is a 20 year veteran of property and real estate in Australia, and has held leading roles with national advocacy organizations. He was written and spoken extensively on housing and urban growth issues in Australia and maintains a blog devoted to public policy discussion: The Pulse.

    Photo by ecstaticist

  • Time to Dismantle the American Dream?

    For some time, theorists have been suggesting that it is time to redefine the American Dream of home ownership. Households, we are told, should live in smaller houses, in more crowded neighborhoods and more should rent. This thinking has been heightened by the mortgage crisis in some parts of the country, particularly in areas where prices rose most extravagantly in the past decade. And to be sure, many of the irrational attempts – many of them government sponsored – to expand ownership to those not financially prepared to bear the costs need to curbed.

    But now the anti-homeowner interests have expanded beyond reigning in dodgy practices and expanded into an argument essentially against the very idea of widespread dispersion of property ownership. Social theorist Richard Florida recently took on this argument, in a Wall Street Journal article entitled “Home Ownership is Overvalued.”

    In particular, he notes that:

    The cities and regions with the lowest levels of homeownership—in the range of 55% to 60% like L.A., N.Y., San Francisco and Boulder—had healthier economies and higher incomes. They also had more highly skilled and professional work forces, more high-tech industry, and according to Gallup surveys, higher levels of happiness and well-being. (Note)

    Florida expresses concern that today’s economy requires a more mobile work force and is worried that people may be unable to sell their houses to move to where jobs can be found. Those who would reduce home ownership to ensure mobility need lose little sleep.

    The Relationship Between Household Incomes and House Prices

    It is true, as Florida indicates, that house prices are generally higher where household incomes are higher. But, all things being equal, there are limits to that relationship, as a comparison of median house prices to median house prices (the Median Multiple) indicates. From 1950 to 1970 the Median Multiple averaged three times median household incomes in the nation’s largest metropolitan areas. In the 1950, 1960 and 1970 censuses, the most unaffordable major metropolitan areas reached no higher than a multiple of 3.6 (Figure).

    This changed, however, in some areas after 1970, spurred by higher Median Multiples occuring in California.

    William Fischel of Dartmouth has shown how the implementation of land use controls in California metropolitan areas coincided with the rise of house prices beyond historic national levels. The more restrictive land use regulations rationed land for development, placed substantial fees on new housing, lengthened the time required for project approval and made the approval process more expensive. At the same time, smaller developers and house builders were forced out of the market. All of these factors (generally associated with “smart growth”) propelled housing costs higher in California and in the areas that subsequently adopted more restrictive regulations (see summary of economic research).

    During the bubble years, house prices rose far more strongly in the more highly regulated metropolitan areas than in those with more traditional land use regulation. Ironically many of the more regulated regions experienced both slower job and income growth compared to more liberally regulated areas, notably in the Midwest, the southeast, and Texas.

    Home Ownership and Metropolitan Economies

    The major metropolitan areas Florida uses to demonstrate a relationship between higher house prices and “healthier economies” are, in fact, reflective of the opposite. Between August 2001 and August 2008 (chosen as the last month before 911 and the last month before the Lehman Brothers collapse), Bureau of Labor Statistics data indicates that in the New York and Los Angeles metropolitan areas, the net job creation rate trailed the national average by one percent. The San Francisco area did even worse, trailing the national net job creation rate by 6 percent, and losing jobs faster than Rust Belt Pittsburgh, St. Louis, and Milwaukee.

    Further, pre-housing bubble Bureau of Economic Analysis data from the 1990s suggests little or no relationship between stronger economies and housing affordability as measured by net job creation. The bottom 10 out of the 50 largest metropolitan areas had slightly less than average home ownership (this bottom 10 included “healthy” New York and Los Angeles). The highest growth 10 had slightly above average home ownership (measured by net job creation). Incidentally, “healthy” San Francisco also experienced below average net job creation, ranking in the fourth 10.

    Moreover, housing affordability varied little across the categories of economic growth (Table).

    Net Job Creation, Housing Affordability & Home Ownership
    Pre-Housing Bubble Decade: Top 50 Metropolitan Areas (2000)
    Net Job Creation: 1990-2000 Housing Affordability: Median Multiple (2000) Home Ownership: Rate 2000
    Lowest Growth 10  7.4%                                2.8 62%
    Lower Growth 10 14.9%                                3.1 63%
    Middle 10 22.8%                                3.2 64%
    Higher Growth 10 30.9%                                2.6 61%
    Highest Growth 10 46.9%                                2.9 63%
    Average 24.7%                                2.9 62%
    Calculated from Bureau of the Census, Bureau of Economic Analysis and Harvard Joint Housing Center data.
    Metropolitan areas as defined in 2003
    Home ownership from urbanized areas within the metropolitan areas.

    Home Ownership and Happiness

    If Gallup Polls on happiness were reliable, it would be expected that the metropolitan areas with happier people would be attracting people from elsewhere. In fact, people are fleeing with a vengeance. During this decade alone, approximately one in every 10 residents have left for other areas.

    • The New York metropolitan area lost nearly 2,000,000 domestic migrants (people who moved out of the metropolitan area to other parts of the nation). This is nearly as many people as live in the city of Paris.
    • The Los Angeles metropolitan area has lost a net 1.35 million domestic migrants. This is more people than live in the city of Dallas.
    • The San Francisco metropolitan area lost 350,000 domestic migrants. Overall, the Bay Area (including San Jose) lost 650,000, more people than live in the cities of Portland or Seattle.

    Why have all of these happy people left these “healthy economies?” One reason may be that so many middle income people find home ownership unattainable is due to the house prices that rose so much during the bubble and still remain well above the historic Median Multiple. People have been moving away from the more costly metropolitan areas. Between 2000 and 2007:

    • 2.6 million net domestic migrants left the major metropolitan areas (over 1,000,000 population) with higher housing costs (Median Multiple over 4.0).
    • 1.1 net domestic migrants moved to the major metropolitan areas with lower house prices (Median Multiple of 4.0 or below).
    • 1.6 million domestic migrants moved to small metropolitan areas and non-metropolitan areas (where house prices are generally lower).

    An Immobile Society?

    Florida’s perceived immobility of metropolitan residents is curious. Home ownership was not a material barrier to moving when tens of millions of households moved from the Frost Belt to the Sun Belt in the last half of the 20th century. During the 2000s, as shown above, millions of people moved to more affordable areas, at least in part to afford their own homes.

    Under normal circumstances (which will return), virtually any well-kept house can be sold in a reasonable period of time. More than 750,000 realtors stand ready to assist in that regard.

    Of course, one of the enduring legacies of the bubble is that many households owe more on their houses than they are worth (“under water”). This situation, fully the result of “drunken sailor” lending policies, is most severe in the overly regulated housing markets in which prices were driven up the most. Federal Reserve Bank of New York research indicates that the extent of home owners “under water” is far greater in the metropolitan markets that are more highly restricted (such as San Diego and Miami) and is generally modest where there is more traditional regulation, such as Charlotte and Dallas (the exception is Detroit, caught up in a virtual local recession, and where housing prices never rose above historic norms, even in the height of the housing bubble). Doubtless many of these home owners will find it difficult to move to other areas and buy homes, especially where excessive land use regulations drove prices to astronomical levels.

    Restoring the Dream

    There is no need to convince people that they should settle for less in the future, or that the American Dream should be redefined downward. Housing affordability has remained generally within historic norms in places that still welcome growth and foster aspiration, like Atlanta, Dallas-Fort Worth, Houston, Indianapolis, Kansas City, Columbus and elsewhere for the last 60 years, including every year of the housing bubble. Rather than taking away the dream, it would be more appropriate to roll back the regulations that are diluting the purchasing power and which promise a less livable and less affluent future for altogether too many households.

    —

    Note. Among these examples, New York is the largest metropolitan area in the nation. Los Angeles ranks number 2 and San Francisco ranks number 13. The inclusion of Boulder, ranked 151st in 2009 seems a bit curious, not only because of its small size, but also because its advantage of being home to the main campus of the University of Colorado. Smaller metropolitan areas that host their principal state university campuses (such as Boulder, Eugene, Madison or Champaign-Urbana) will generally do well economically.

    Photograph: New house currently priced at $138,990 in suburban Indianapolis (4 bedroom, 2,760 square feet). From http://www.newhomesource.com/homedetail/market-112/planid-823343

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

  • L.A.’s Economy Is Not Dead Yet

    “This is the city,” ran the famous introduction to the popular crime drama Dragnet. “Los Angeles, Calif. I work here.” Of course, unlike Det. Sgt. Joe Friday, who spoke those words every episode, I am not a cop, but Los Angeles has been my home for over 35 years.

    To Sgt. Friday, L.A. was a place full of opportunities to solve crimes, but for me Los Angeles has been an ideal barometer for the city of the future. For the better part of the last century, Los Angeles has been, as one architect once put it, “the original in the Xerox machine.” It largely invented the blueprint of the modern American city: the car-oriented suburban way of life, the multi-polar metropolis around a largely unremarkable downtown, the sprawling jumble of ethnic and cultural enclaves of a Latin- and Asian-flavored mestizo society.

    Yet right now even the most passionate Angeleno struggles to feel optimistic. A once powerful business culture is sputtering. The recent announcement of Northrop Corp.’s departure to suburban Washington was just the latest blow to the region’s aerospace industry, long our technological crown jewel. The area now has one-fourth as many Fortune 500 companies as Houston, and fewer than much-smaller Minneapolis or Charlotte, N.C.

    Other traditional linchpins are unraveling. The once thriving garment industry continues to shift jobs overseas and has lost much of its downtown base to real estate speculators. The port, perhaps the region’s largest economic engine, has been mismanaged and now faces severe threats from competitors from the Pacific Northwest, Baja, Calif., and Houston. Although television and advertising shoots remain strong, the core motion picture shooting has been declining for years, with production being dispersed to such locations as Toronto, Louisiana, New Mexico, Michigan, New York and various locales overseas.

    Once a reliable generator of new employment, over the past decade L.A. has fared worse than any of the major Sun Belt metros–including hard-hit Phoenix–losing over 167,000 jobs between 2000 and 2009. Historic rival New York notched modest gains, while the rising big metro competitors, Dallas and Houston, enjoyed strong and steady growth. L.A. may not be Detroit, and probably never will be, but its once proud and highly diversified industrial base is eroding rapidly, losing one-fifth of all its employment since 2004. In contrast to the rest of the country, unemployment still continues to rise.

    To give you an idea how much L.A. has sunk, look to this year’s Forbes best city rankings, which measures both short- and mid-term job growth. Once perched in the upper tier of major cities, Los Angeles now ranks a pathetic 59th out of 66 large metro areas, far below not only third-place Houston and fourth-place Dallas but also New York and even similar job-losing giants like San Francisco and Philadelphia.

    It takes a kind of talent to sink this low given L.A.’s vast advantages: the best weather of any major global city, the largest port on this side of the Pacific, not to mention the glamour of Hollywood, the Lakers and one of the world’s largest and most diverse populations of creative, entrepreneurial people.

    Jose de Jesus Legaspi, a prominent local developer, pins much of the blame for this on what he describes as “a parochial political kingdom”–with Antonio Villaraigosa, mayor since 2005, wearing the tinsel crown. A sometimes charming pol utterly bereft of economic acumen, Villaraigosa is a poor manager who is also highly skilled at self-promotion. His idea of building an economy revolves around subsidizing downtown developers and pouring ever more funds into the pockets of public sector workers. No surprise then that L.A. suffers just about the highest unemployment rate of any of the nation’s 10 largest cities outside Detroit. One in five county residents receive some form of public aid.

    But the real power in L.A. today is not so much Villaraigosa but what the Los Angeles Weekly describes as a “labor-Latino political machine,” whose influence extends all the way to Sacramento. These politicians represent, to a large extent, virtual extensions of the unions, particularly the public employees.

    The rise of the Latino-labor coalition does stir some pride among Hispanics, but it has proved an economic disaster for almost everyone who doesn’t collect a government paycheck–L.A.’s city council is the nation’s highest paid–or subsidy. Although perhaps not as outrageously corrupt as the Chicago machine, it is also not as effective. L.A.’s version manages to be both thuggish and incompetent.

    According to an analysis by former Mayor Richard Riordan, the city’s soaring pension liabilities will grow by an additional $2.5 billion by 2014, by which date the city will probably be forced to declare bankruptcy.

    So is the city of the future doomed for the long term? Not necessarily. Although Latino politicians and “progressive” allies strive to derail entrepreneurialism, our grassroots remains stubbornly entrepreneurial. This is particularly true of Latino and other immigrant businesspeople in Los Angeles. In 2006, for example, roughly 10% of the foreign born population was self-employed, almost twice the percentage of the native born.

    To be sure, much of this activity takes place in smaller area municipalities–Burbank, Glendale, Lynwood, Monterey Park–that are mercifully outside the reach of the City of Los Angeles, which accounts for somewhat less than half of L.A. County’s 10 million people. But as Legaspi, who came to L.A. from Zacatecas, Mexico, in 1965, points out, ethnic enterprises–Armenian, Iranian, Israeli, Korean, Chinese as well as Mexican and Salvadoran–continue to thrive even within the city limits. You rarely find in L.A. the kind of desolation found in dying cities like Detroit or Cleveland or even large swaths of New York or Chicago.

    All this suggests there’s still hope for Los Angeles to blossom further as a hub for international trade, global culture and fashion. But to achieve that goal the city needs a government that will nurture its grassroots rather than stomp or extort them. “Los Angeles is a potential great world city, but it needs to be ruled like a world city,” Legaspi points out. Until that happens, our putative city of the future will exist more as dreamscape than reality.

    This article originally appeared in Forbes.com.

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

    Photo by k.landerholm

  • Florida: Amendment 4 Pushes the Reset Button on Development

    by Richard Reep

    Like a heroin addict going cold turkey, Florida appears poised to get off the growth drug this coming fall. If massive overbuilding, unemployment, depopulation, and a tourist-chasing oil slick weren’t enough, Florida’s voters are in the mood to vote yes on a referendum called Amendment 4, which would make every future change to the state’s comprehensive plan subject to voter approval, rather than be reviewed through a representative public process. The referendum capitalizes on short-term voter outrage over everything. But in the long term, Florida will likely languish in the twilight of missed opportunities as businesses relocate elsewhere to avoid risky, lengthy public campaigns to build their presence in this state.

    Between 1845 and 2009 Florida became the fourth most populous state in the nation. Because of its immense desirability, land developers have become legitimate partners in Florida politics, and have dictated much of its growth management legislation in the modern era. A byproduct of this process, however, has been increasing resentment among those who came for affordability and a low-density lifestyle, as cow pastures and orange groves got mowed down for subdivisions and malls.

    Traffic and congestion, which many migrants thought they would magically leave behind up north, came with them. Since before the 1980s, the popular press has published article after article about citizens who came for the good life, only to see nature replaced by concrete. Many who came seemed genuinely puzzled about this transformation, as if they expected that human activity would have no noticeable impact.

    Laissez-faire politicians kept the debate from becoming a serious topic, for the land seemed limitless, and the state’s leadership preferred not to dignify this seeming selfishness with a response. The response to those who wanted to lock the door after they had arrived was silence. This time around, emotions have acquired a larger momentum in the form of Amendment 4. Those who support it, such as writer Dori Sutter of the Orlando Sentinel, claim that Florida is overbuilt and has the ability “to create jobs and revenue and to accommodate population growth of more than 80 million people.”. In other words, Sutter’s point is that the current growth management model will accommodate an additional 60 million people over Florida’s current population – if the future immigrants are content to use this model exactly as it is drawn today, with no exceptions.

    Right now is an opportune moment for Florida to clean up its act. Voters might be more likely to approve housekeeping moves to repurpose abandoned properties and improve the aesthetics of the built environment. This kind of activity, however, depends upon businesses moving in, and most business owners handle enough risk without adding a political campaign to their plates. If Florida resembled, say, Europe in its sense of place, then Amendment 4 would be a stroke of genius.

    As it is, Amendment 4 would be the mother of all reset buttons, and voters who push this button in November would freeze the state’s built environment at its worst, not its best. This pause would bifurcate the state’s economic pathway away from the previous course of growth for growth’s sake, and set the stage to diversify the economy and allow Floridians to discover their own destiny through direct democracy. As such, it represents a grand experiment in process, replicating New England-style town hall debates over the nature and the future of the community.

    In the long term, however, this new pathway is far from guaranteed to make for a better process. For one thing, rational facts and figures hold little stock compared to emotional appeals during an election campaign, and every change to the built environment will face as many detractors as it will supporters. Decision-making will likely result in as many bad calls as the process does now.
    Property development is a complex, high-stakes game involving many public and private players. Emotional appeals to voters will tend to reduce this process to matters of style and aesthetic appeal, glossing over technical issues. And, when these matters are put to broad votes, safe pathways will likely win over innovative pathways and inventive ideas, further miring the state in the past. This is why property development has historically been left to the government to handle, with representative democracy in the form of public development commissions, and limited participation by way of public hearings.

    Those who want to put every 7-11 and office building to the vote recognize the change that it would make to Florida’s growth management process, as well as to the state itself. This season of voter outrage seems to be the moment to punish Florida’s favorite villain, the evil developer, as well. Florida seems to have hit an impasse where the current process has yielded an unfavorable product. While citizen input has largely gotten the state where it is today, the results are widely viewed as unsatisfactory.
    Currently, no compelling argument has been put forth against Amendment 4. Homebuilders and developers protest that the process is fine as it stands. Citizen boards, administrative review boards, and public hearing stakeholders are made up of Floridians who approve a Comprehensive Plan every five years, and then review changes to the Comprehensive Plan when landowners request these changes to suit their needs. Sophisticated and complex, this process already involves environmental protection, detailed technical work, and deep pockets.

    Those put in charge of growth management find it hard to say “no” when the state’s property tax coffers, (along with sales taxes) fund much of the public realm. Since growth — development — funds much of the state government’s activities, growth management acts as a financial conduit, one hardly likely to be restricted by those in charge of it. Saying “no” is just not part of the process.

    If the process represents a public conversation about how a city or a region should grow, disgust with the conversation has risen to new levels. Floridians are in the mood for grand solutions: witness last October’s vote in Miami for Miami 21, a form-based zoning code that replaces the zoning process with a product, a Master Plan, of sorts, for the city. Miami 21 appears to be stopping the conversation by limiting future generations’ ability to influence the pathways on which the city may economically develop.

    Amendment 4, rather than reforming the process, also tries for a grand solution. Public debate will be characterized by posturing and politicizing, hardly conducive to rational discussion of complex, technical issues. Where growth is already been well-managed, this might be acceptable, as these regions will organically fine-tune their infrastructure. Where growth has been poorly managed, however, lack of services, traffic congestion, and patchwork development patterns will punish residents and governments alike with declining property values and reduced quality of life.
    The long-term consequences will inexorably reshape Florida’s future, and income from activities other than real estate development will have to be considered for the very first time in Florida’s history. Gaming – already looming large in Florida’s future – is one possibility. A state income tax is a distant possibility, although a state with a large, low-wage service population will likely be unsatisfied with this kind of shot in the arm.

    Thomas Jefferson said, “The government you elect is the government you deserve,” and Florida’s government managed growth in a way that Floridians deserve. Today, with profound disgust at the result, voters appear poised to start over, this time without the government’s help. If growth is no longer Florida’s favorite drug, then with Amendment 4 the state will suffer through cold turkey as businesses relocate elsewhere. A diverse, robust economy may or may not result from this dramatic change. If it does, then Florida will truly get the state that it deserves, and emerge stronger from the depths to which it has sunk. If, however, this move cripples the state’s recovery, then politicians will have some hard work ahead to reestablish trust among voters, and adapt the state’s revenue system and growth management system to a new, no-growth public mentality.

    Flickr photo of a vintage Florida postcard by Mary-Lynn

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