New Geography

Category: Urban Issues

  • Charlotte’s Expanding Financial Web

    The takeover of Merrill Lynch by Charlotte-based Bank of America represents another step in the emergence of a true full-tilt competitor to New York as a financial capital. Already dominant in commercial banking, the acquisition places the North Carolina metropolis into the first ranks of cities in wealth management.

    Charlotte’s emergence has been remarkably rapid. When John Harris was growing up on a dairy farm outside Charlotte some six decades ago, it was still a sleepy little southern town. “It was a quiet kind of place back then,” he recalls. “We were a stepchild to the people back East.”

    Today, Charlotte is a stepchild no longer. Taking advantage of a traditional Southern sense of being under-estimated, the leadership in this region of some 1.5 million has worked to become not only a bigger place but an important one.

    “The stepchild always has to work harder,” explains Harris, one of the region’s leading real estate powers. “We’ve always known what it’s like to be ‘have nots,’ not the ‘haves.’”

    Like Houston, Charlotte represents a classic opportunity city, a place built by newcomers used to not getting too much respect. While other New York rivals like Chicago and San Francisco could seem cosmopolitan enough to be real contenders, Charlotte has emerged very much out of nowhere, in a charge led by people who, at least before the last decade or so, seemed like nobodies.

    Charlotte’s ascendancy has not been brought about by a well-developed hierarchy but by entrepreneurs like Bank of America’s Hugh McColl, many of whom came from smaller southern cities to Charlotte in the 1960s and 1970s. In the ensuing decades, through mergers and regional expansion, Charlotte has vaulted past not only its southern rivals but traditional banking power centers like Chicago, Pittsburgh and San Francisco.


    Although Charlotte had been home to banks for generations, two men dominated the city’s ascendancy, McColl and Wachovia’s Ed Crutchfield. Taking advantage of North Carolina’s liberal banking laws, these two dynamic leaders spent much of the 1980s and 1990s gobbling up other region’s banks, including the 1998 takeover of San Francisco’s greatest financial institution, the Bank of America.

    In the process, Charlotte basically wiped out most of its major competitors, and now has more than three times the assets of the remaining San Francisco banks. Today only New York stands ahead of Charlotte — and as the Merrill takeover suggests, what’s left of its humbled financial sector now sits in the crosshairs. Like other opportunity cities, Charlotte has the lure of greater affordability to lure younger talent to their city. The top flight multi-millionaire players may stay in New York and Greenwich for decades to come, but Harris and others believe more and more of the financial industry will continue to migrate to their city.

    “People come down here for the cost of living and the weather,” suggests Buffalo native Joe Riley, a recruiting consultant at Wachovia, who claims 50 percent of his recent hires hail from the Northeast and Midwest. “Everyone misses the food and culture, but it’s great to be in a growing city, and be a part of it.”

    Although banks are important, they are not the only major players. Equally important, Charlotte has become home to other big Fortune 500 employers such as Nucor Steel, Duke Power and Lowe’s. Unlike New York, San Francisco and Chicago, which are all rapidly losing their good blue-collar jobs, Charlotte continues to develop its industrial and warehousing sectors. Over the last 15 years, for example, the Charlotte area has added jobs at a 2.57 percent rate, compared to under one percent for New York, Los Angeles, San Francisco and Chicago.

    Reasonable housing costs and a diversified employment base, notes Harris, allows Charlotte to compete broadly not only at the top levels of management, but across the board far more than a more expensive metropolitan region. “It’s hard to be a mass employer in San Francisco,” he notes.

    Yet, despite the relative advantage of affordability, the financial industry will likely determine the city’s future. Much as Houston has used its port and the energy industry to move from an opportunity to a nascent world city, Charlotte’s business leaders feel that the clustering of financial and high-end business service firms in the area will take them to the next level.

    “Charlotte for years was not quite a world class city but a very large town,” notes real estate broker Louis Stephens. “But now it’s a very fine city that’s trying to be a world class city.”

    The appeal of the area can be seen in the migration numbers. Latino immigrants, for example, feature prominently in both lower-end service, construction as well as skilled trade. The region had among the fastest growth rate in immigration of any major U.S. region over the past decade.

    Equally important, the city, like much of the Carolinas, has emerged in the last decade as a primary draw for people fleeing the high costs and slow job growth of the Northeast. Prominent among these newcomers are a strong wave of educated migrants — since the mid-1990s it has ranked among the top two or three destinations per capita for those with college degrees.

    The popularity of Charlotte among younger educated workers has allowed large companies to find adequate trained staff. Perhaps more importantly — note this New York! — the town has been developing more sophisticated financial firms, including boutique capital market companies, even before the Merrill acquisition.

    Although both Bank of America and Wachovia have been hit by the problems afflicting investment banks everywhere, it would be not be surprising that in the next expansion, more of the action may shift from New York and San Francisco to Charlotte, largely due to its greater affordability. Like Houston after the 1980s energy bust, Charlotte may be well positioned to pick up the pieces even as the finance industry hits the skids.

    “You see a migration of talented educated people from the Northeast and the rest of the world,” notes one native entrepreneur, Tim Stump, who runs his own capital market firm in the city. “There’s increasingly an international dimension here that puts us past the regional playpen. We can play in the national and international market.”

    For all the big city talk among its elites, many Charlotteans understand that their city’s key competitive edge lies not in becoming not too much like New York. Of course, both natives and newcomers alike appreciate the city’s evolving cultural scene, its improving restaurants as well as some very charming, well-maintained urban districts within walking distance of the burgeoning downtown office district.

    But at the end of the day, Charlotte is not New York, and likely will never be. In this sense, history does not repeat itself. What it offers instead is the prospect of a quality of life — a nice house in a good neighborhood, decent schools, particularly in the affordable nearby suburbs, access to the countryside — that has become prohibitive for most in entrenched urban centers.

    “Many people come here kicking and screaming,” Tim Stump observes. “Then they get here and they realize it’s a lifestyle that is abundant and they don’t want to go.”

    “You see people get involved in the arts, the little league, that you have a quality of life where you work hard but you can also be involved in your church and your community. You can live a balanced kind of life here and still be very successful.”

    Joel Kotkin is the Executive Editor of Newgeography.com.

  • New York City Backyards

    There’s a very pretty slide show in this recent article in the New York Times showing different backyards throughout the city’s boroughs. No matter how small the area, there resides an amazing level of appreciation for having one’s own area of greenery.

    Though many planners call for increased density, many neighborhoods are in favor of “down-zoning.” You flip through this slide show and it’s easy to see why.

  • A Critique of ‘The Social Cost of NIMBYism’

    Matthew Kiefer knows NIMBYs (Not-in-my-backyard). His essay on the social function of NIMBYism may be the best description of the phenomenon I’ve read. It is a dispassionate, clinical assessment by a physician who has seen this condition too many times.

    Kiefer accurately diagnoses NIMBYism’s root causes. Homeowners’ hold a highly leveraged position in their largest asset and lack diversification against risk. New development, any threat to the status quo, is bound to make them queasy (Kiefer wrongly characterizes this risk aversion as irrational, though; risk tolerance is a preference like any other).

    Kiefer ultimately concludes that, despite its bad name, NIMBYism serves an important social function by mediating between new and old development:

    In an improvised and very democratic way, it forces mitigation measures to be considered, distributes project impacts, protects property values, and helps people adjust to change in their surroundings. It is a corrective mechanism that, if allowed to function properly, can even help to preserve a constituency for development.

    NIMBYism works, Kiefer argues, because it allows developers and neighbors to bargain. Allowing neighbors to influence project design mitigates the harshest impacts on the neighborhood, reducing the risk to property values. Requiring developers to provide in-kind benefits such as park improvements compensates the neighbors for the inconvenience new development inevitably brings. NIMBYism thus reconciles new development with old.

    This is where Kiefer and I part ways. Relying on bargaining between developers and NIMBYs would be efficient in a world where developers enjoyed all the benefits and neighbors bore all the costs of new development. But we live in a world where new development produces spillover benefits. New buildings and homes allow cities to grow, fueling their innovation and prosperity. Private side deals inevitably ignore these benefits.

    NIMBYism as bargaining
    In theory, bargaining between developer and neighborhood could ensure that the “right” projects get built. When a project’s benefits to the developer exceed the cost to the neighbors, the developer has an incentive to modify the design to placate the neighbors. When the project’s costs to the neighbors exceed its benefits to the developer, the neighbors have an incentive to reject the developer’s offers; the project dies on the drawing board.

    Even under the best of circumstances, some developments that ought to be built won’t be when neighbors hold a veto.

    First, developers cannot or will not compensate neighbors with cash. They must resort to barter which can be particularly hard with rich neighborhoods who might have all the parks, fountains and litter patrols they want.

    Second, giving neighbors control over the details of a development can be expensive, drawn out and contentious, especially once the lawyers get involved.

    Finally, neighborhood representatives are usually drawn from those who are most fervently anti-development. There are plenty of new developments — a drug store, for example — that the majority may silently welcome. But because those with an idiosyncratic hostility to new development run the show, the “neighborhood” insists on too much compensation.

    None of these would be an insurmountable objection if all that were at stake were the developer’s return on investment and the neighbors’ concern for their home values. Bargaining between developer and neighbor likely would work as well as any other system. But there is more at stake. New development often generates valuable benefits for the rest of us that don’t show up in the developer’s pro formas. The loss of these benefits is the real cost of NIMBYism.

    Cities and economies of scale
    Cities are all about economies of scale. These economies of scale fuel the innovation and prosperity that cities offer, and largely explain why America’s urbanized population has steadily increased as a percentage of the whole since 1800.

    Thanks to these economies of scale, metropolitan areas offer a variety and diversity of experiences unattainable in small towns and rural communities. We have known since Adam Smith that the division of labor is limited by the extent of the market. The larger the city, the bigger market; the bigger the market, the more diversification and specialization the market can support. It is for this reason that large cities offer more specialized restaurants and shops, more music and fine arts, more museums, more of virtually amenity, than small cities. If variety is what one is after, bigger is better.

    But NIMBYism systematically restrains the very growth that fosters these amenities. It does so principally by closing the door to new residents who might otherwise spark greater specialization and diversity. Recent economic research by Glaeser, Gyourko, Eischer, Cox, O’Toole and many others has demonstrated that overly restrictive land-use regulations reduce the supply of housing in markets like San Francisco and New York City, thereby driving up home prices. NIMBYism guarantees that these regulations have bite. In the process, NIMBYs keep their cities too small.

    Of course, cities offer more than specialized shops and restaurants. Cities make firms and workers more productive. There are tremendous returns to scale when firms and workers in an industry cluster together. Firms become more productive as their suppliers cluster nearby and as they gain access to a deeper pool of skilled labor. Workers become more productive, too: A software developer is more productive in San José than in Lubbock because a lot of learning takes place just by hanging around with other people in the same trade.

    When NIMBYs successfully fight off a new development, the developer simply looks elsewhere for a profitable opportunity. When we rely solely on bargaining between developers and neighbors to decide what gets built, we guarantee that too little gets built. This is how a city like San Francisco ends up with a median home price of $750,000 (even in 2008’s market). Cities like San Francisco and New York are too small. Institutionalized NIMBYism bears most of the blame.

    I do not mean to suggest that all growth is good. Kiefer cites examples — Washington’s Mt. Vernon and the Cape Cod National Seashore — where development certainly would inflict more harm than good but institutionalized NIMBYism protects too much. We are all the worse for it.

    Solutions?
    Having criticized Kiefer’s proposed solution, I suppose I should offer my own. But I do not have one. NIMBYism is a deep, structural market failure. It is the consequence of many people acting in a perfectly rational manner. This explains its persistence despite the undeniable damage it inflicts on consumers, firms and workers. If anyone does know how to fix this problem, he or she has yet to speak up.

    Chris Bradford is a 1992 graduate of the Yale Law School, where he was an Olin Fellow in Law and Economics. He is an attorney at Clark, Thomas and Winters, P.C. in Austin, Texas.

  • The Kids are All Ride

    My eldest child tells me that when she arrived at an East Coast college her classmates—many of whom had never visited LA—would ask, “Does your family live in the city, or outside of it?” Her answer, she says, was always long — really long — and of eye-glazing complexity.

    Anyone who has raised kids in the middle-class neighborhoods of multipolar LA might chuckle at the thought of trying to define urban or suburban. In “inner” San Fernando Valley Barbecue Belt communities like Encino, Sherman Oaks, and Studio City, your family can call for a Deli delivery at 2AM. You might run into entertainment industry executives or movie craft workers lunching at the local coffee shop; many of their offices and studios are right in the neighborhood, as are numerous other “knowledge worker” businesses. And you’re spitting distance (in LA terms, less than a half hour on the freeway) from downtown Hollywood the Getty, or UCLA. If you judge by the restaurant/ workplace/ club scene/ museum index alone, this part of town should qualify as “city,” not “suburb”.

    But you’re also likely to enjoy an unattached home: ranch (modest or luxurious), bungalow (tiny and deteriorating or spiffy and renovated), or McMansion. If you’re in an apartment, it’s likely to be garden style, not a high rise.

    The best of both worlds. Two geographies, joined at the hip? Not quite: it’s a marriage of convenience with a few downsides. First, you can’t talk about being an LA parent without talking transportation. Whether you are in the less dense communities of the valley, the hills, and the beach areas, or in the more urban-feeling neighborhoods like Hollywood, if you’re an LA parent you are tethered to your car.

    When the suburban car-dependent culture melds with urban fear of crime and nightmarish traffic, the end game can be the worst of both worlds.

    Everyone knows that LA’s geography sprawls, and one result has been limited public transportation. To take the subway, we need to drive to the station (8 miles, in our case), and then find parking. Buses are more prevalent, but often stop far from a journey’s start or finish.

    Think it’s just another LA whine about a walk further than curb to car door? I’m a native New Yorker who—I believe—feels more positively about public transportation than many who write for this site. But I challenge you to walk three quarters of a mile on a 108 degree day with a couple of little kids to catch a bus.

    For adolescents, a certain lack of independence is an inevitable result; for parents, the urge to infantilize is rampant. I can say without exaggeration that our first daughter never once stepped out our front door and walked to a specific destination. We lived in the hills — no shops or friends within a couple of miles — surrounded by country-like winding roads… packed with high speed commuter traffic. The local school was only about a mile away, but it was down a sidewalk-free canyon, often littered with dead dogs, cats, coyotes, and the occasional deer, mowed down at the nexus of city and country. Like many LA parents, we drove our kid everywhere.

    We tried a different approach with our second daughter: a street close to busses and the neighborhood’s main drag. Initially, the strategy didn’t work too well. Few of her fourteen-year-old friends would ride a bus. Some had never crossed a commercial street and were afraid to try, and a couple were not permitted to do so (yes, there’s a crosswalk and traffic light).

    The parental DDQ (Daily Drive Quotient) here is magnified by the Los Angeles Unified School District (LAUSD), which does not provide school buses for local kids to reach their district schools. A four mile round trip can become a 40-minutes-twice-a-day time warp. Walk? Sure, if your route has sidewalks; many don’t. Car pool? There’s a reason that school driveways are clogged with Navigators, Yukons and Suburbans. Working parents often need to get to work on time. That translates into the sought-after one-drive-per-week carpool. But only the biggest SUVs can accommodate five families. And for those with kids in two or three different schools, it’s two carpools and all chauffeuring all the time.

    Long commutes to school are a plague in many remote locations. But in Los Angeles, the school system is at the same time famously beset with typical urban education problems: a large poor and non–English speaking population, aging physical plants, and a mind-boggling administrative bureaucracy.

    Our kids attended public elementary school in Bel Air. Sounds classy, doesn’t it? Check out the rest rooms; make that singular (the second one did not function during either of their stints). The principal claimed that she could not find a janitor willing to drive to the relatively remote site for the part time job. Our kid’s second grade teacher asked parents to please bring in writing paper because “I would like them to do creative writing, and if everyone pitches in we can make it happen.”

    How could LAUSD be anything but dysfunctional? It’s a behemoth. The student population has now dropped to just below 700,000, but it still has more students than Vermont, Alaska, or Boston has total residents; its population is about twice that of Cincinnati.

    Los Angeles has numerous poor neighborhoods, but you don’t need to raise your children in Beverly Hills to incur the stratospheric costs common to elite cities. Many LA neighborhoods may look like déclassé small towns from the perspective of Malibu or Beverly Hills. But in a ‘real’ small town or city, a teenager on a night out might pay $3.50 for a grilled cheese sandwich with fries (I have a 2008 Wilkes Barre, PA receipt as documentation), instead of about $10 here. And housing costs here, even in extremely modest neighborhoods, and even during the current real estate cataclysm, soar above the national average.

    It’s not just the economics of child-raising in LA that suffer from a clash of suburban and urban. The social blend of the two geographies can also be uncomfortable. I’ve lived in Los Angeles for 25 years, and truly love many aspects of life here. But “it takes a village” are fighting words in a place where it can be a challenge to identify—let alone mobilize—the people next door.

    A neighbor on our street recently won a brand-sponsored contest for an ice cream Block Party. We walked over with our daughter and discovered that, as we had suspected, several other teenagers lived within a few houses.

    The older residents explained that ‘everyone here used to know each other, when we all had little kids the same age.’

    The teenagers, of course, went to a variety of schools; parents here often move their kids between private schools, public magnets, and district schools. They had a friendly chat and discovered some friends in common. But I don’t think they will ever meet again. If they do, it will undoubtedly be through some social network that’s irrelevant to the geography of this LA street.

    Zina Klapper is a writer and editor based in the Los Angeles area. She is a partner in Pop Twist Entertainment and a former editor of Mother Jones.

  • Keeping Kids Downtown – A Philadelphia Approach

    As children return to classes in Philadelphia this week, more than half of the kindergarteners attending three downtown public elementary schools will come from their immediate middle-income neighborhoods. Three private schools that also serve this area, drawing over 70 percent of their enrollment from downtown families, are bursting at the seams. Having doubled and tripled pre-school programs over the last half decade, each is now physically expanding to accommodate the 11,200 children, born to downtown parents between 2000 and 2005. But you don’t need birth or enrollment numbers to see what’s happening; just look for strollers, new toy and book stores, and parents and babysitters in the playgrounds.

    For almost two decades, journalists and academics have been heralding the return of the middle class to the downtown of American cities and their transformative effect on housing, retail and the use of public spaces. But there haven’t been many stories on children because, until recently, there haven’t been many kids downtown. Downtown markets have largely been driven by young, childless professionals and empty-nesters.

    In a detailed look at downtown demographics, Eugenie L. Birch’s “Who Lives Downtown” (The Brookings Institution, November 2005) also noted that the number of new housing units and residents downtown may be welcome, but still represent a quite small phenomena both in absolute and relative regional terms. As with any new product, most downtowns started with what’s easiest: catering to those who value proximity to work and have more interest in theaters and cafes than schools and playgrounds.

    In a typology of 45 central cities, Birch also highlighted five fully-developed downtowns – Boston, Midtown and Lower Manhattan, Chicago, and Philadelphia – which were relatively large (averaging 43,623 households), densely settled (averaging 23 households per acre) and were home to almost half of the nation’s downtown households. These cities share several characteristics: strong downtown employment, well-developed middle class neighborhoods with diverse housing options, and the fact that they’ve been at it awhile – adding households each decade since 1970. Terms like pioneers and early settlers went out of vogue in these cities more than thirty years ago.

    For mayors, business and civic leaders in places just beginning to repopulate downtown, these more developed places suggest an agenda for the coming decade. As cities got cleaner and safer in the 1990s, as employers sought more tech-savvy workers, downtown populations got larger and younger. In 2000, nearly a third of dwellers in the five fully-developed downtowns were between the ages of 25 and 34. It’s become a cliché to note how television programs like “Seinfield” and “Friends” reflected and influenced the attitude about cities among the generation that came of age in the 1990s. Well here’s another truism: when downtowns fill with young professionals who all have been watching “Sex and the City,” someone’s bound to get pregnant.

    The experience in Philadelphia is illustrative. Since the 1960s, the downtown population has been steadily growing. But as families had children, most moved to the suburbs. Some remained for pre-school, but the 2000 census counted 26 percent fewer 5-9 year olds downtown than the number of children under age five. But a citywide, ten-year tax abatement passed in 1997 altered the trend, prompting over 10,000 new units of city center housing and pushing downtown’s population over 90,000. Between 1970 and 2000 the number of 25-34 year-olds also doubled from 15 to 30 percent of downtown’s population.

    While young professionals and empty nesters initially defined the market, a 2006 survey of downtown residents found that 21.6 percent of 35-44 year olds and 22.3 percent of 45-54 year olds had children living with them. After deferring child-rearing for careers in downtown office buildings, hospitals and universities, a growing number were staying in town as they had children. A 2005 survey of 37 downtown day-care centers documented a 43 percent increase in enrollment.

    The state takeover of the Philadelphia school district in 2001 created an opening to capitalize on this trend. Like many big city school districts, the majority of Philadelphia public school students come from disadvantaged families. Underfunded schools were plagued by poor performance, inflexible bureaucracies and union rules. But the new School Reform Commission (SRC) was empowered and funded by the state to make dramatic change. A dynamic new superintendent, Paul Vallas, aggressively pushed diversified management, operating some schools as public, some as charter, contracting others out privately. But all schools were given new resources; principals were empowered to make change; and teachers and students were held equally accountable for improved performance.

    With school test-scores and public image rising, the Center City District (CCD), a business-supported improvement district, partnered with the Philadelphia School District on a downtown schools initiative. Recognizing that the primary mission of the public schools was to provide quality options for families with limited means and limited choice, both the SRC and the CCD saw advantages if public schools could capture a growing share of families who traditionally selected private schools or simply left the city.

    Working with school principals and parent groups, the CCD built websites for the first time for 13 elementary public schools in and adjacent to downtown. A master website, www.CenterCitySchools.com, highlights all public, private, charter and parochial schools that serve downtown and “the opportunity to be more involved in your child’s life through the unique shared experiences that come from working, playing, living and learning right here.” Ads placed in parent-oriented newspapers and civic association newsletters promote the website and school events. The CCD, school district and nearly all the private, parochial and charter schools participated in two well-attended school fairs in the fall of 2005 and 2006 that showcased the educational options available for parents.

    Five years on, the leadership of the school district has changed. But the momentum continues to build as energized parent groups this fall continue to reshape their schools, pushing for improvements to curriculum, arts programs and playgrounds. Demographic trends have provided an opportunity for Philadelphia and for all center cities to reinvent themselves again: this time as places for families and children.

    Paul R. Levy is President and CEO of the Center City District in Philadelphia. Information about the organization and reports on demographic and housing trends can be found on the website www.CenterCityPhila.org.

  • Cities, Children and the Future

    By Joel Kotkin and Mark Schill

    “Suburbs,” the great urbanist Jane Jacobs once wrote, “must be a difficult place to raise children.” Yet, as one historian notes, had Jacobs turned as much attention to suburbs as she did to her beloved Greenwich Village, she would have discovered that suburbs possessed their own considerable appeal, particularly for those with children.

    Although some still hold onto the idea that suburbs are bad places to raise children, in virtually every region of the country, families with children are far more likely to live in suburbs than in cities. Nearly all the leading locations in percentages of married couples are suburbs, from Midwestern towns like O’Fallon, Missouri to Sugarland, Texas, Naperville, Illinois and Highlands Ranch, Colorado.

    In contrast, many of the places with the lowest percentages of children are urban centers. This includes many of the most highly touted urban cores such as Manhattan, Boston, Portland, Seattle and San Francisco.

    This is particularly true among more affluent, middle class, educated family households. Despite the rise in the number of children in a few affluent locales, such as the upper east side of Manhattan, most middle class families tend to cluster outside the city core. Even in Manhattan the number of kids falls considerably below the national average after the age of five.

    So the question remains: are families important to the planners, developers and politicians who run our cities? Veteran geographer Dick Morrill wonders if they do. He sees many cities turning their backs on working and middle class families, long the ballast of urban society throughout the ages.

    Instead, many city planners, and urban developers have focused their attention on the growing ranks of the unattached: the “young and restless,” the “creative class,” and the so-called “yuspie” – the young urban single professional. These advocates suggest that companies and cities should capture this segment, described by one as “the dream demographic.”

    The other coveted urban demographic centers on the so-called “empty nester,” largely boomers who have already raised families. Developers, like luxury homebuilder Robert Toll, see a vast movement of such people from the suburbs to the inner city. “We are more hip-hop and happening than our parents,” he explains. “We want the sophistication and joy and music that comes with city dwelling, and doesn’t come with sitting in the burbs watching the day go by…”

    Yet although this strategy might work for a handful of cities, childless urbanism may have its limits. There is, for example, little evidence that many empty nesters — outside of the very rich — are moving en masse to center cities. The vast majority seem to be staying put in the suburbs while a considerable group heads further out into the periphery and beyond.

    This leaves the key demographic for cities to remain viable: the young and educated, one group that has shown a tendency to move into center cities. But there’s a problem with relying of ‘yuspies” in the long run — they get older and grow up. Right now, as Philadelphia’s Paul Levy suggests, most young couples leave once they start having children. If cities are to hold on to this population, he suggests, they must address the basics important to families, such as public safety, good schools and parks.

    This issue will become even more pressing in the next few years. As the current and very large millennial generation ages, they will begin to dominate the housing market. From all accounts, they tend to be family oriented. More than 80 percent thought getting married would make them happy, and some 77 percent said they definitely or probably would want children, while less than twelve percent said they likely would not.

    If cities cannot change to appeal to these young people once they enter their 30s and 40s, they will be hard-pressed to maintain, much less expand, the population gains made over the past decade. Once the Millennials are gone, the next generation of young people seems certain to be considerably smaller.

    In this sense, the Millennials represent the future hope for cities. The need to shift the focus beyond the denser downtowns and towards many outlying neighborhoods will become a necessity. These places — think of Queens in New York, South St. Louis or parts of the northwest Philadelphia — may see less glamorous and more “plain vanilla” than city centers but they already possess some of the basic prerequisites needed by family: relatively low density, work areas nearby, neighborhood shopping streets, churches, schools and parks.

    What will happen to the least child-friendly cities over the next generation? Imagine a city with fewer total residences, inhabited by fewer people, although with a significant increase in “luxury” dwellings. In the new urban landscape, high-rise towers for the rich predominate, some of them in refurbished office buildings that formerly employed the middle class. These now become the homes of the “creative class” and the nomadic rich.

    This is a city whose funds come largely from the global economy, but whose needs are cared for largely by low-wage workers who eke out their existence in the city, and reside in outlying areas. Ultimately, such a bifurcated society may limit the economic functions that can be carried out in these places. A small cadre of operatives, including the CEO and some senior staff, may remain ensconced in the glamour zone but companies dependent on a broader array of talent will continue to relocate to less exclusive places, either to the suburbs or to different regions.

    Such pressures have already helped Houston to replace New York and Los Angeles as the nation’s energy capital. In the future a place like Charlotte will continue its emergence and its drive for financial dominance. Charlotte, suggests local real estate developer, John Harris, can compete against an expensive metropolitan region not only at the top levels of management, but across the board. “It’s hard to be a mass employer in San Francisco,” he notes.

    In the end, the elite childless city can be seen as both the culmination of urban development and as a demographic dead end. Unable to lift up outsiders and absorb newcomers, these cities may be able to thrive as high end business hubs and elite playgrounds. But they seem unlikely to absorb more than a trickle of those Americans who may want to move into dense urban places over the coming decades. Instead, this cohort may look to those towns ready and still willing to accommodate families.

    Joel Kotkin is the executive editor of Newgeography.com.

  • New Urbanist Cities, Class and Children

    The United States has experienced a revolutionary change in social structure over the last 25 years, and this in turn has led to a significant change in settlement, especially the geography of many metropolitan areas.

    At the risk of over-generalization, our society has shifted from a structure based on economic class to one based more on education and social values. The major parties confusedly reflect these changes. One astounding feature of our society is that wealth inequality has returned, not just to the levels of 1928, but even to 1913, and yet there is almost no sense of outrage as a basis for the mobilization of the relative have-nots (this helps explain the peculiarity of the 2008 elections).

    Over this period, or somewhat longer, there has also been a deepening division of the population on what I’ll call the nature of educational outcomes. I used the word astounding above, and I’ll use it again to denote the scary inequality in factual knowledge and reasoning capacity of people, despite rising official levels of attainment. So there really is (as Rove et. al argued) an “intelligentsia” or intellectual elite. The hallmarks of this new “class” is higher education, environmentalism, liberalism or tolerance on social and cultural difference (religion, race, sexual preferences, etc) but also surprising affluence – almost what the word “liberal” meant in 19th and early 20th century Britain.

    In my sphere of urban geography and planning, these characteristics have led to a surprising consensus on a “New Urbanist” vision (very popular word) – a return to a lost golden age, pre-suburb and pre-automobile, and in fact ghastly for most people. The movement began back in the 1960s (anti-sprawl, anti-suburb, anti-car, pro urban village) and came to dominate intellectual thought on city form and planning practice by the 1980s, and has certainly been given extra impetus by the “peak oil” crisis following 2001.

    The urban geographic manifestation of this social and intellectual change has taken place through a revitalization and transformation of selected central cities, especially those with major universities.

    This has taken three main forms: first, gentrification (displacement of poor and minority families by more educated and affluent professionals), but including idealist students and empty-nesters (returning from the suburbs); second, redevelopment or “densification” through large-scale rezoning from single-family home and low-rise arterial businesses, to multi-story apartments (from row houses to high towers); especially in designated major urban centers, which, third, will be linked to the downtown by rail transit.

    While this movement has not, in fact, slowed the pace of suburban and exurban growth, even in cities where New Urbanist planning prevails, it has significantly altered several core urban cityscapes and concurrently, the social and economic structure of these cities. Typically lower and middle class families and minorities have been displaced out of the core, often to older suburbs, and been replaced by larger numbers of singles, or childless couples and empty nesters, many educated professionals. The shift of housing stock from single-family homes to apartments (rental or condo) is unattractive to many families, and often unaffordable, as higher density and parking constraints raise land and housing prices. The New Urbanist city is not childless of course, but relatively so, as many families are displaced or flee from the overpriced city.

    We next look at how New Urbanist visions have played out in a small sample of cities, by first comparing a few core cities which have pursued such planning with a few that have not, then compare the more New Urbanist cities with their suburbs, and finally look at how the New Urbanist cities have changed since 1990. I’ll conclude with some thoughts on what this means to the nature of people and place. Is the New Urbanist city the ideal future in a post-oil world, or a failed social experiment?

    Table 1 shows selected 2006 characteristics of four cities which are more affected by New Urbanist planning—Seattle, Portland, San Francisco and Boston and of three cities which have been less transformed: Dallas, Houston and Phoenix (but which have otherwise grown rapidly).

    Portland and Seattle more recently pursued New Urbanist goals, and San Francisco and Boston more indirectly and long-term, while Dallas, Houston and Phoenix are more market-driven. It’s pretty amazing that Seattle matches or even exceeds San Francisco as the least familial, with traditional families constituting less than one-fifth of households, and children under 15 making up less than 13 percent of the population. In contrast Dallas, and Phoenix have almost twice as high a share of families with children under the age of 15.

    Much higher shares of households are non-family (singles, or childless couples or unmarried partners) in the New Urbanist cities. Social, economic and housing characteristics differ markedly as well. Levels of educational attainment and of professional and managerial occupations are much higher, median house values are much higher and levels of commuting by single-occupant vehicles much lower.

    Portland is less “advanced” on New Urbanist measures, even commuting by SOV?, although it has strong planning, rail transit, and started much earlier than Seattle. The main difference seems to be the much higher share of single-family homes (60 percent) in Portland than in Seattle (48), and a less constraining urban growth boundary.

    Table 2 compares central city and suburban characteristics for five cities: Seattle, Portland, San Francisco, Dallas and Phoenix. The story is very simple. Suburban numbers for the New Urbanist cities are remarkably “normal” by U.S. metropolitan standards and are essentially like the central city and suburban values for Dallas or Phoenix. An intriguing feature of Dallas and Phoenix, compared to the New Urbanist metropolises, is that the suburbs still have higher status than the central cities (income, professional share, educational attainment). Seattle stands out, even more than San Francisco, as the only city with a higher city mean income than its suburbs. In other words, the distinctive feature of New Urbanist cities is the class shift, from gentrification and higher class redevelopment.

    Table 3 compares the 1990 and 2006 values for four cities: Seattle, Portland, San Francisco and Boston. It is not really a surprise that what this tells us is that these “New Urbanist” cities were already in 1990 very unlike such cities as Phoenix, Dallas or Houston. Even before the arrival of stronger New Urbanist planning tools, Seattle, Portland, San Francisco and Boston were rather non-familial, fairly highly educated and moderately high in transit use.

    It is true that each became a little less familial. Seattle and Portland were more affected by planning, with reduced single-family housing shares, and increased transit use. Portland grew more in population, reflecting a longer period than Seattle of planning denser urban settlement. Portland was also significantly less gentrified, in the sense of maintaining a higher share of less affluent households, although it had by far the highest housing price inflation — three times the change in the CPI (Consumer Price Index). According to critics of Portland’s planning, this is a consequence of a longer period of stronger growth controls. But Seattle, San Francisco and Boston house prices were also twice the rate of change in the CPI. Median incomes increased well above the CPI rate (U.S. 55 percent) in Seattle (100), San Francisco (95) and Boston (119), but much less in Portland (71), indicating less gentrification in the latter.

    What does all this mean? Does it matter if the New Urbanist cities are relatively childless/family unfriendly? Probably not, as there are nearby suburban jurisdictions more welcoming to families, more affordable and as rich in jobs. It is even likely that the New Urbanist planning was as much a reflection of the already “elitist” character of the cities, rather than being a cause of fundamental change. Even stranger, the New Urbanist planning seems to have responded to and pursued market preferences, although perhaps overzealously. That is, young professionals and empty nesters really wanted to live in the core and were willing to pay extra for the privilege.

    The main social cost of the transformation — in stark contrast to the stated goal of New Urbanist planning to recreate urban village communities of intense local interaction — is that real world neighborhoods with single family homes, city or suburban, with children in local schools, have a stronger sense of community in large part because of the relative permanence of home ownership.

    High density, New Urbanist core cities do encourage greater transit use, and use land more efficiently. Even if the majority of the population prefers suburban living or less dense central cities, will the end of the “age of oil” and concerns of global warming force the widespread adoption of new urbanism? I don’t think so, but that’s another story.

  • Understanding Phoenix: Not as Sprawled as You Think

    Phoenix may be one of the nation’s most misunderstood urban areas. The conventional wisdom is that Phoenix is one of the most suburbanized (or if the pejorative is preferred, “sprawling”) urban areas in the United States. Not so. According to 2000 U.S. Census data, Phoenix ranked number 10 in population density out of the 36 urban areas with more than one million in population.

    At this point it is appropriate to define terms. An urban area is an urban footprint, the area that would be outlined in lights from an airplane at night. Urban areas are also called urbanized areas or urban agglomerations. Urban areas do not include any rural territory — they are the continuously built up or developed territory. Urban areas are considerably different from metropolitan areas, a difference often missed by journalists and others. Metropolitan areas are labor markets, are defined using county or town (in the six New England states) boundaries and always include rural areas and more distant exurbs.

    The Phoenix urban area had a population density of 3,683 per square mile, with 2,907,000 residents living in 799 square miles. What may be even more surprising is that only one Eastern urban area — New York — was more dense and only one Midwestern urban area was more dense — Chicago. In the South, only the Miami urban was more dense than the Phoenix urban area. On the other hand, in the highly automobile-oriented newer West, six urban areas were more dense than Phoenix. Portland, despite local and international marketing efforts to portray that area as the ultimate example of urbanization, was not one of them. In 2000, Phoenix was nearly 10 percent more dense than Portland. As is shown below, this gap may have widened since 2000.

    All of that does not change the fact that Phoenix and its suburbs seem to stretch on forever. That is the nature of large urban areas. What makes Phoenix one of the nation’s most compact urban areas is that its population density declines from the center to the urban fringes at a much lower rate; the outer rings tend to be not much less dense than the inner city.

    This contrast can be best seen in comparison to the Boston urban area, widely perceived as one of the nation’s most dense urban areas. Nothing could be further from the truth. Central Boston, including such municipalities as Boston, Cambridge, and Somerville clearly fit this description and rank among the highest density areas in the United States outside the four highly urbanized boroughs of New York City. The densest part of the Boston urban area (in land area) has a population density of 28,000 — more than double that of Phoenix (nearly 14,000) and even more in comparison to Portland (12,000).

    But there is much more to an urban area than the urban core. The big difference is in the suburbs. Most Boston suburbs developed as low-density communities. Land restrictions, often imposed at the town and village level, are far tighter than in similarly sprawled part of the greater Boston area. Indeed, beyond the dense core and the inner suburbs, the sprawl is so extensive that the Boston urban area covers more land area than the Los Angeles urban area, which has nearly three times as much population. The outer suburbs of Boston also are slightly less compact than the outer suburbs of Atlanta — the world’s lowest density large urban area.

    Overall, the Phoenix urban area has a density that is more than 50 percent higher than that of Boston’s. A comparison of the population density profiles of the Phoenix, Portland and Boston urban areas illustrates these differences, with higher densities in Phoenix and Portland than in earlier developing, but much more suburban Boston.

    The key to the higher density of the Phoenix urban area (and other higher density urban areas of the West, such as Los Angeles, San Francisco, San Jose, Riverside-San Bernardino, Las Vegas and Denver) has to do with the greater power of the market in newer cities. In Boston, Washington, Philadelphia and a number of other Eastern and Midwestern urban areas, suburban land use regulations required large lot zoning creating far larger urban footprints than would have occurred otherwise.

    In the Phoenix urban area, comparatively dense development continues all the way to the urban fringe — and that densification seems to be accelerating. The U.S. Bureau of the Census American Community Survey indicates that the density of the Phoenix urban area (within its 2000 definition) rose 11 percent between 2000 and 2006. This is more than double the rate of densification nationwide. Only Riverside-San Bernardino, Atlanta, Houston and Las Vegas densified at a greater rate. Further, based upon the new data, the Phoenix urban area — John McCain’s political base — is now more dense than Senator Barack Obama’s Chicago region.

    Resources:

    2000 Urban Area Data

    Comparison of Atlanta and Boston urban areas

    Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris since 2002. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey.

  • The Phoenix Lament (with apologies to J. K. Rowling)

    Fifty years ago, Phoenix was Tiny Town in the Desert, smaller than Oshkosh or Santa Fe today. Now, it is larger than Philadelphia and the metro area has the bulk of Arizona’s population. That does not mean it gets any respect; on the contrary, it is, to many, a joke, with all of Los Angeles’ traffic and smog but without the ocean, the celebrities or the Lakers. When it surpassed the City of Brotherly Love, Pennsylvania newspaper columnists waspishly described the Valley of the Sun as ‘‘a loose accumulation of crummy vinyl-sided houses occupied by sunburned retirees who happen to share a zip code.”

    They went on to note that “Phoenix has no downtown. . .and neighborhoods? None to speak of… [it] doesn’t rate as an actual city. . .it’s more like a place where a lot of people happen to live. Phoenix would kill to have a walkable city the way we do.’’ More recently, an anonymous commentator in The Economist reported that crime and other social ills were turning the city into an inhospitable and ungovernable mess. Time to roll up those sidewalks and move on—oh, that’s right, there are none. The worst opprobrium is generally reserved for the audacity, or insanity, of growing a city in a desert. As a blogger on the Grist site recently wrote, Phoenix is “a poster child for environmental ills.”

    Phoenix is hardly perfect, and it certainly violates most traditional urban principles. A city of over three million, it possesses virtually no corporate headquarters. In a globalized world, Phoenix seems a nonentity, with virtually no corporate financial institutions. Home to the world’s sixth largest airport, it has few direct links to the rest of that world with the exception of a handful of daily flights to Toronto, Mexico City and London. This is the same airport that closed one summer when the temperature reached 122 degrees.

    So then, why do people keep moving here? It is usually best to follow the advice of sociologist Juliet Schor and try not to start with the assumption that people are idiots. So, let’s rationally examine what keeps the place growing. The first factor is the weather. There is none. For half the year, it is warm, and for half it is hot. It rarely snows, and there are no tornadoes or hurricanes. It rains and it floods, but the water disappears by the next day.

    The ground may be hot, but it’s also securely tethered—the earthquake risk is about as high as that for ice storms. This may seem trivial, but consider that liabilities from natural catastrophic events throughout the U.S. have exceeded $300 billion since 1988, and nearly three quarters of that can be attributed to tornadoes and tropical storms. Viewed this way, lots of people live in the wrong place but Phoenix is not one of them.

    But what about the folly of living in the desert? How sustainable is that? Well, more so that you might think. A home in Minneapolis has to be heated from zero 60 degrees to maintain comfort, and must use energy for six months, 24 hours a day. A home in Phoenix needs to be cooled for less than five months, typically for 12 hours a day, in order to bring the temperature down from 110 to 80 degrees. Cooling devices are more efficient, and use less energy.

    Research undertaken by Michael Sivak shows that the most energy efficient cities, like San Diego and Miami, are coastal, although these are also among the most vulnerable to catastrophic natural events. The least efficient are cold—Minneapolis, Chicago, Denver. In addition, Phoenix and Las Vegas come in right in the middle of the pack.

    What about water? Like its neighbor Las Vegas, Phoenix loves to display fountains and other water features. The largest of these is the Tempe Town Lake, an entirely artificial recreational pond that evaporates the equivalent of five-acre feet each day. Where does this water come from? Largely from the development of agricultural land devoted to intensive irrigation, which consumes far more water per acre than suburban houses. Of course, this cannot go on forever—if nothing else, evaporation is a waste. But when water is properly priced, creating a natural incentive for conservation, it will be used more appropriately.

    And what about the fundamental criticism, namely that Phoenix is a dreadful example of sprawl? Clearly Phoenix epitomizes a large, low-density city. But sprawl also occurs when people leave the downtown and move to the suburbs, as we see, for instance, in Detroit. In Phoenix, a growing population is filling up Maricopa County; we have few of the neglected areas that are common in many Northeastern and Midwestern cities.

    Overall, the average journey to work is comparable with other American metro areas. And most important, low-density development is cheap development. Phoenix remains one of the most affordable large housing markets in the country, even after housing speculators from California took their equity and drove up costs in Arizona and other parts of the West in 2005-07. Current estimates suggest that when the dust settles, the median new house price will once again fall below $200,000.

    Sprawl is perhaps one of the easiest insults to fling at any city. It is associated with everything from the collapse of civic life to the rise of obesity. Yet in Arizona, low-density development, which involves building large number of homes on raw land, is cheap development. Sprawl clearly involves the cost of new infrastructure, but that has to be placed against the high costs of renewing infrastructure in existing urban neighborhoods, which can involve deep excavation, specialized equipment and higher risks (like the cranes that keep collapsing in New York).

    In the end, Phoenix’s growth machine succeeds in offering a commodity that people need—an affordable home. Few families want to live in small expensive apartments—many want the amenities of a low-cost house, and in Phoenix, that can mean as little as $150,000. It is easy to demand an end to sprawl, as has been tried in California and Oregon, but the result frequently is to price single family homes out of reach for most households. In a society that offers little to its working and middle class in terms of necessities like health care, it seems uncaring to demand an end to affordable single family housing as well.

    Phoenix and its desert neighbors do not match up to the 19th century city. They lack the grand rail termini, the city halls, the cathedrals and the parks. The grandeur of the modernist era does not extend to these experiments in low-density private space—malls, office parks, homeowner associations. Yet they succeed brilliantly as bastions of successful low-cost development for middle class families. In the future they can also serve as laboratories for alternative energy usage, water recycling and, in time, more efficient transportation. The challenge is to let them change on their own terms, not make a vain effort to reconstitute them along the lines of older cities like New York, Chicago and Paris.

    Andrew Kirby is the editor of the interdisciplinary Elsevier journal “Cities.”This is his 20th year as a resident of Arizona.

  • Phoenix: Is John McCain’s Hometown Down for the Count?

    By Joel Kotkin and Mark Schill

    Much has been said about the rootlessness of our two Presidential aspirants, but both men have spent their political lifetimes representing real places and specific constituencies. Newgeography.com has already looked into the realities shaping Senator Barack Obama’s adopted hometown of Chicago. Now we turn to the city that has most shaped Senator John McCain’s career: Phoenix.

    In many ways, Phoenix today is what Chicago was in its earlier days: a rambunctious entrepreneurial town subject to sometimes wild swings in its real estate market. This has led some outsiders to predict that the city — known for its sprawling development — is now destined for a long-term decline, a notion that economist Elliot Pollack heartily rejects in his article for us.

    The current decline scenarios for Phoenix echo the “death of suburbia” mantra so eagerly adopted by much of the media and academia since the mortgage crisis and the steep rise in gas prices. A particularly wistful thought in the Great Lakes Region — Obama’s putative home base — is that lack of water will force wayward Midwesterns out of places like Phoenix and back up North where they belong.

    This is nothing new. Phoenix, as Pollack notes, has been down before, as recently as the early 1990s — and to quote the old Rodney Dangerfield line doesn’t “get much respect.” Indeed the entire Phoenician ethos has something to do with poking the folks back east (and sometimes us mild weather weenies here in California) in the eye. There’s a maverick, “you can knock me down but never knock me out,” quality that Senator McCain would no doubt relate to but this sentiment is more epitomized by the city’s greatest political figure, the late Senator Barry Goldwater.

    To many easterners, Phoenix has never been considered a respectable place to build a city. Arizona, to U.S. Senator Benjamin Wade, was “just like hell, all it lacks is water and good society.” Phoenix’s city fathers included “Jack” Swilling, an often inebriated Confederate Army deserter -turned -promoter, and a sturdy group of Mormon farmers, who shared Swilling’s outsider status, if not his taste for alcohol.

    Like Los Angeles, in Phoenix the Second World War accelerated the development of new technology and business service firms. Initially, the desire to base more production further from potentially vulnerable sites on the coasts brought several thousand skilled engineers and scientists to the area. However, later, the city itself — its low-density lifestyle, its brilliant sunshine, its lack of social constraints — brought waves of high-technology firms to the region.

    By the turn of the century, the city not only ranked among America’s fastest growing cities, but also as one of the most attractive to burgeoning high technology and business service firms. In its development pattern, Phoenix essentially followed the model of Los Angeles, but without the beaches, Hollywood or Caltech.

    Like its Californian counterpart, Phoenix epitomized all the clichés of plasticity and impermanence associated with the new American city. In addition, like Los Angeles before it, Phoenix gathered in ambitious newcomers seeking a better life. In the 2000 census, almost a third of residents had arrived only five years or less before.

    Local entrepreneur Deb Weidenhamer, who came to the Valley of the Sun in 1970 and opened an auction business, says the rapid growth and basic openness to newcomers has created unprecedented opportunities for her. “We came with nothing,” she recalls.” We came here because it had wealth that was increasing. You can find opportunities. People come here for a new start and come with ambitions. Longevity here does not matter here. You can be here ten years and it’s like you’re an old fogy – in the east coast you’d be like a newcomer.”

    Virtually all of Weidenhamer’s employees, she notes, also come from outside the region. They create what she calls a “multiplier” effect, with each person bringing new ideas and new energies. “In San Francisco or New York you would have to compete with entrenched companies. Here you can always market the new people,” she suggested at her crowded warehouse. “There’s always a new zip code to service.”

    Much less impressed, however, have been many leading urban thinkers, including many local dignitaries. Its sprawling array of separate districts and its relatively weak downtown has led some critics, like the prominent new urbanist Andres Duany, to conclude that Phoenix is a place where “civic life has ceased to exist.” Duany, like Ralph Waldo Emerson a century earlier, hailed Boston as an example of a superior kind of community.

    Yet for America’s urban future, it is likely that Phoenix, not Boston, or even Chicago, represents the predominant form of the multi-polar flexible metropolis. Like many older metropolis, Chicago and Boston have been either losing residents — particularly middle class families — or growing slowly over the last decade. At the same time, virtually all the fastest growing cities have been places like Phoenix – chock-full of kids and thirty-somethings. That tells you something. As Pollack puts it, “People vote with their feet.”