New Geography

Category: Urban Issues

  • The Unrest In Hong Kong And China’s Bigger Urban Crisis

    The current protests in Hong Kong for democracy reflects only part of the issues facing Chinese cities, as they grow and become ever more sophisticated. In just four decades, China has gone from 17.4 percent to 55.6 percent urban, adding nearly 600 million city residents. And this process is far from over: United Nations projections indicate that over the next 20 years, China’s urban population will increase by 250 million, even as national population growth rates slow and stall.

    Overall this transition has been spectacularly successful. As it has urbanized, China, following the lead of Hong Kong, has become a much richer country, expanding its share of global GDP from 2 percent in 1995 to 12 percent in 2012.

    China now boasts four megacities of over 10 million people, the most of any country. The population of Shanghai, a cosmopolitan world city decades before the Communist takeover of the country, has expanded almost 50% since 2000, and the ancient capital Beijing and the southern commerce and industrial hub of Guangzhou have grown nearly as rapidly. The U.N.’s growth projections suggest that the future list of megacities will include Chongqing, Tianjin and Chengdu.

    Shenzhen, one of the four current megacities, epitomizes the speed of China’s urbanization. A small fishing village along the Hong Kong border with a few factories when I first visited three decades ago, the city rose as the focus of Deng Xiaoping’s first wave of modernization policies. In 1979 it had roughly 30,000 people; now it is a thriving metropolis of 13 million whose population in the past decade grew 56%. Its rise has been so recent and quick that the Asia Society has labeled it “a city without a history.”

    Shenzhen has not only grown but thrived over the past three decades, as was evident on my most recent trip. In contrast to the often impoverished slum cities of the developing world, China’s cities have grown much as Britain’s did in the 19th century, upon the back of rapid expansion of manufacturing and trade. This sets Chinese urbanization apart from India‘s; manufacturing’s share of Indian GDP is half that of China. In the process, Chinese cities have become more tied to the global economy, exposing its people to international trends, as well as greater affluence. This is exactly what has happened earlier in Hong Kong, setting the stage for some of the recent unrest. At the same time, the leading cities of the West are, for the most part, barely growing, and much of that by dint of immigration. With plunging birthrates and generally anemic economies, the great cities of the Europe and North America are hardly likely to blaze a brash urban trail; they are more concerned with retaining what they can from their historical inertia. There is no city in the West — even Houston and Dallas-Fort Worth — that approaches the dynamism one now finds in China.

    The Coming Chinese Urban Economic Crisis

    China’s successful urban transformation now faces a challenge as the country’s export-led economy weakens. Labor costs are soaring and young adults, some four times as many of whom have attended college than those who came of age a decade ago, have little interest in factory work. At the same time, many of China’s most successful and talented people are seeking out lives abroad; two-thirds of the country’s affluent residents, according to one survey, are considering migrating overseas.

    The labor crunch is most intense in China’s coastal cities, home to most of the urban population. These face greater competition from less expensive urban areas further west, such as Chongqing and Chengdu. But even these areas are facing a labor shortage, forcing companies to fill their ranks with not necessarily voluntary student laborers. There is also growing competition as well in labor-intensive industries like textiles from cheaper cities in places like Vietnam, Indonesia and Bangladesh.

    Recent attacks by Beijing on multinationals, charging them for corruption and anti-trust violations, could make things worse. For political reasons, the government has decided to persecute the very companies that account for half of Chinese exports, charging corruption and anti-trust violation. China, where ironically the public is more favorable than most Westerners to large corporations, now faces an investment downturn as foreign companies look for safer havens such as in Mexico or to come back to the U.S.

    The logical solution to this challenge, particularly for coastal Chinese cities, is to move up the value chain, much as Hong Kong and Singapore have already done. This means a greater reliance on finance, business services and technology. Shenzhen, for example, looks to Silicon Valley as a role model. But their attempt is taking place in an urban environment very different than that nurtured in California suburban garages. Instead we see typically immense infrastructure projects like the 15 square kilometer Qianhai development near the city’s main port. Qianhai hopes to lure service and tech employment from pricier, and for now, more unstable Hong Kong.

    But in many cases, high-value industries depend on open access to information, something Beijing clearly sees as a threat to the political order; China’s great Internet Firewall is getting, if anything, higher and more difficult to breach, to the detriment of local knowledge workers. Government authorities realize that Hong Kongers’ access to western media, movies and culture makes them less pliable than those, even in neighboring Shenzhen, where access to major foreign publications, Google and many websites is highly restricted.

    Health And Demographics

    China is not only urbanizing, but doing it at extreme levels of density; barely four to six percent of all new floor space in the country goes to single-family houses. Even on the suburban periphery, there are few low-rise apartment buildings and even fewer houses; much of the construction, particularly for rural migrants, is also substandard, with buildings erected so close that sometimes residents of one can shake the hands of those next to it.

    This has created a series of health problems. Dense urbanization, notes a recent Chinese study, has led to more obesity, particularly among the young, who get less exercise, and spend more time desk-bound. Stroke and heart disease have become leading causes of death.

    Perhaps the best known result from intensified urbanization can be seen outside any window: pervasive air pollution. Beijing and Shanghai rank among the most polluted major cities in the world, just behind Delhi. This problem has become so severe that it has led, even in authoritarian China, to grass-roots protests, many of them targeted at new industrial plants and other facilities near cities such as Shanghai, Dalian, and Hangzhou.

    More serious still has been the impact on birth rates. Even though the government has been relaxing its long-held “one child” policy, the density of Chinese cities continues to help suppress birthrates. This relationship between density and low fertility can also be seen in similarly crowded Singapore, Taiwan and Hong Kong, where there is no official limit on having more than one child. In Hong Kong some 45% of middle-class couples have abandoned the idea of having children, not surprising since the cost of raising a child is now estimated at over $700,000, more than twice than in the United States.

    Given high prices relative to incomes, and dense conditions, Chinese cities appear to follow the same pattern, which over time is almost certain to slow economic growth as the population of elderly grows and the workforce shrinks. Already, notes National University of Singapore demographer Gavin Jones, the fertility rate of women in Shanghai has fallen to 0.7, among the lowest ever reported, well below the “one child” mandate and barely one-third the number required simply to replace the current population. Overall, the Chinese urban fertility rate is a weak 1.08.

    The Future

    Rather than look at the current unrest in Hong Kong as a singular example, we should understand that many problems faced in the former British colony are increasingly felt as well in mainland China. As cities reach middle class status and land prices soar, they need to move up the value scale, but this is very difficult to do under a fundamentally authoritarian system.

    While authoritarian structures can work in an industrial city, they may be less effective in a more information-based economy, in which companies need to adjust to rapidly changing attitudes and trends. The problem here is that, in an authoritarian state, controls over information are often deemed mandatory; in a sense, in an information-dependent economy, this is like trying to run a car with watered down gasoline. At the same time, the health effects of dense urbanism, and the massive pollution of the surrounding countryside, augur poorly for many of the largest Chinese cities, which will be forced to compete not only with more open economies, but with lower-cost cities across the developing world.

    Ultimately, China, whose urban growth has been a great success story, now must consider changing development patterns, perhaps looking at lower density and more dispersed development. One promising sign is that China’s smaller cities, particularly in the West, are now growing faster — with encouragement from Beijing authorities — than megacities. Recently released 2014 population estimates indicate reductions in the annual growth rates of both Shanghai and Beijing.

    Ultimately, a shift towards dispersion — both within regions and between them — could have a many positive effects. It would allow people more living space, and if employment also was also spread out, a quicker and less rigorous commute, with related benefits gained in time and energy conservation. It would greatly help families and children by reducing the need for parents to migrate for work, separating as many as one in five Chinese families.

    Clearly, new models are clearly called for, ones that look not only at bulking up cities, but humanizing them. This may be imperative if Beijing would like to avoid the prospect of a future characterized by an aging, alienated and increasingly unhealthy population.

    This piece first appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Photo by Pasu Au Yeung.

  • Opportunity Urbanism: Creating Cities for Upward Mobility

    This is the introduction to a new report commissioned by the Greater Houston Parnership and HRG and authored by Joel Kotkin with help from Tory Gattis, Wendell Cox, and Mark Schill. Download the full report (pdf) here.

    Over the past decade, we have witnessed the emergence of a new urban paradigm that both maximizes growth and provides greater upward mobility. We call this opportunity urbanism, an approach that focuses largely on providing the best policy environment for both businesses and individuals to pursue their aspirations.

    Although contrary to much of the conventional wisdom about cities and regions, this is not a break with traditional urbanism, but instead a reinforcement of old traditions. Long ago, Aristotle reminded us that the city was a place where people came to live, and they remained there in order to live better. “A city comes into being for the sake of life, but exists for the sake of living well.”  In the end, opportunity urbanism rests on the notion that cities serve, first and foremost, as engines to create better lives for its residents.

    The Houston and Luxury Models

    We have focused on the Houston metropolitan area because in many ways it reflects the idea of opportunity urbanism more closely than any major metropolitan area. Across a broad spectrum—income growth, new jobs, housing starts, population growth and migration—no other major metropolitan region in the country has performed as well over the past decade. This was among the first major metropolitan regions to replace the jobs lost in the recession, and has experienced by far the largest percentage job growth since, with Dallas-Ft. Worth second.

    In many ways, opportunity urbanism contrasts with the prevailing urban planning paradigm—variously called new urbanism or smart growth—which seeks to replicate the dense, highly concentrated mono-centric city of the past. At the core of this approach is the notion that policies of forced density, through regulatory mandates and often subsidies, are critical to attracting both young, educated people and the global business elite.4 This approach describes the successful city, in the words of former New York Mayor Michael Bloomberg, as “a luxury product.”

    This notion of the “luxury city” can be seen to have worked, at least for some, in well-appointed older cities such as New York, San Francisco and Boston. Unlike most American cities, these boast long-established dense cores and transit-oriented commuter sheds. They possess great amenities tied to their past, from world class art museums and universities, to charming historic districts, parks and public structures.

    But this model of urbanism does not fit the profile of most American metropolitan regions, which tend to be far more recent in their development, more dispersed and overwhelmingly auto-dominated in terms of commuting. Indeed, most of the fastest growing regions in this country—Houston, Dallas-Ft. Worth, Oklahoma City or Atlanta—function in a highly multi-polar model, that contrasts sharply with that of cities like New York, Boston or Chicago.

    Prospects for Upward Mobility

    The luxury paradigm has worked for some in some cities, but has failed, to a large extent, in providing ample opportunities for the middle and working classes, much less the poor. Indeed, many of the cities most closely identified with luxury urbanism tend to suffer the most extreme disparities of both class and race.

    If Manhattan were a country, it would rank sixth highest in income inequality in the world out of more than 130 countries for which the World Bank reports data. New York’s wealthiest one percent earn a third of the entire municipality’s personal income-almost twice the proportion for the rest of the country.

    Indeed, increasingly, New York, as well as San Francisco, London, Paris and other cities where cost of living has skyrocketed—are no longer places of opportunity for those who lack financial resources. Instead they thrive largely by attracting people who are already successful or living on inherited largesse.

    They are becoming, as journalist Simon Kuper puts it, “the vast gated communities where the one percent reproduces itself.”  

    Not surprisingly, the middle class is shrinking rapidly in most luxury cities. A recent analysis of 2010 Census data by the Brookings Institution found that the percentage of middle incomes in metropolitan regions such as New York, Los Angeles and Chicago has been in a precipitous decline for the last thirty years, due in part to high housing and business costs. A more recent 2014 Brookings study found that these generally high-cost luxury cities—with the exception of Atlanta—tend to suffer the most pronounced inequality: San Francisco, Miami, Boston, Washington DC, New York, Chicago and Los Angeles. Income inequality has risen most rapidly in the very mecca of luxury progressivism, San Francisco, where the wages of the poorest 20 percent of all households have actually declined amid the dot com billions.

    Like other large cities, Houston also suffers a high level of inequality, but its lower costs have helped its middle and working class populations to enjoy a higher standard of living than their luxury city counterparts. The promise of the opportunity urbanism model also can be demonstrated by lower income disparities between racial groups, higher GDP growth, less expansion of poverty and the greater production of high-paying mid-skilled jobs. In these aspects, opportunity cities like Houston greatly out-performed their often more celebrated rivals.

    How to Measure “Living Well”

    We leave this introduction with one statistic that most encompasses the success of the Houston opportunity model and exposes the weakness of smart growth: the cost-of-living adjusted average paycheck.

    Despite the assertions of Paul Krugman, among others, that the Texas urban economy is based on low wages, the fact is Harris County’s average household income is above the national average; close to that of Boston. But once the cost of living is factored in, Houston does far better for its citizens compared to any of the legacy cities. Houston, with Dallas-Ft. Worth a strong second, is able to provide its citizens the highest standard of living, as measured by average annual adjusted wages, of any major metro in America. This is different than subjective “quality of life,” but includes such basics as jobs, housing and overall cost of living.

    Download the full report (pdf) here.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • Metropolitan Housing: More Space, Large Lots

    Americans continue to favor large houses on large lots. The vast majority of new occupied housing in the major metropolitan areas of the United States was detached between 2000 and 2010 and was located in geographical sectors associated with larger lot sizes. Moreover, houses became bigger, as the median number of rooms increased (both detached and multi-family), and the median new detached house size increased.

    These conclusions are based on an analysis of small area data for major metropolitan areas using the City Sector Model. City Sector Model analysis avoids the exaggeration of urban core data that necessarily occurs from reliance on the municipal boundaries of core cities (which are themselves nearly 60 percent suburban or exurban, ranging from as little as three percent to virtually 100 percent). It also avoids the use of the newer "principal cities" designation of larger employment centers within metropolitan areas, nearly all of which are suburbs, but are inappropriately joined with core municipalities in some analyses. The City Sector Model" small area analysis method is described in greater detail in the Note below.

    Increase in Detached Housing

    America’s preference for detached housing was evident across the spectrum of functional city sectors between 2000 and 2010. Overall, there was a 14% increase in detached housing in the major metropolitan areas. Among the major metropolitan areas (over 1 million population), the number of occupied detached houses rose the most (35%) in the later or generally outer suburbs and exurban areas (24%). Detached houses increased 2.8 million in the later suburbs and 2.5 million in the exurban areas. A smaller 50,000 increase was registered in the earlier or generally inner suburban areas. Most surprisingly, there was also a small increase (20,000) in the number of detached houses in the functional urban cores (Figure 1).

    Smaller Increase in Multi-Family Housing

    The increase in detached housing dwarfed that of new multi-family housing (owned and rented apartments). The increase in detached housing in the major metropolitan areas was six times that of multi-family housing. Overall, there was a four percent increase in multi-family housing in the major metropolitan areas, less than one-third the increase in detached housing.  There were slight decreases in the number of multi-family houses in both the urban cores and the earlier (generally inner) suburbs. At the same time, there has been a healthy increases in the number of multi-family houses in the later suburbs and exurbs, where the growth rates exceeded the increase in major metropolitan population (11%). In the later suburbs, multi-family housing increased 29% and in the exurbs the increase was 14% (Figure 2).

    Larger Houses, Larger Lots

    Yet overall, houses were getting bigger. The median number of rooms per house rose from 5.3 in 2000 to 5.6 in 2010. Increases in median rooms were registered in each of the city sectors (Figure 3). Nationally, the median size of new detached housing edged up five percent between 2000 and 2010. (By 2013, median new house size had increased another 17 percent to a record 2,384 square feet).

    Lots also were getting bigger. Nearly all of the population growth (99 %) was in the later suburbs and exurbs between 2000 and 2010, where population densities are much lower and lots are larger than in the earlier suburbs and the urban core (Figure 4).

    The preponderance of  urban planning theory over the past decade has been based on the notion that people would increasingly seek houses on smaller lots. For example, Arthur C. Nelson of the University of Utah predicted that the demand for housing on conventional-sized lots (which Professor Nelson defines as more than 1/8 acre, which is smaller than the smallest lot size reported by the Census Bureau) would be only 16% in the major metropolitan areas of California by 2010, relying in part on stated preference survey data. In fact the revealed preferences — in other words what people actually did — was four times the predicted demand (64%) in the conventional-lot-dominated later suburbs and exurbs of California’s largest metropolitan areas between 2000 and 2010. This is despite California’s regulatory and legal bias against detached housing on conventional lots (See: California’s War Against the Suburbs). Outside California, later suburban and exurban detached housing represented 77% of new housing demand over the period.

    Planning and Preferences

    Urban cores and multi-family housing are favored by urban planning policy. Yet, large functional urban cores (high density and high transit market share, as defined in the City Sector Model, Note below) are few and far between, with only seven exceeding 500,000 population, a modest number equaled or exceeded by approximately 100 metropolitan areas. Overall, the functional urban cores of major metropolitan areas lost more than 100,000 residents between 2000 and 2010, while suburban and exurban areas gained more than 16.5 million. Predictably, the housing forms typical of the later suburbs and exurbs made strong gains. The preferences of planning are not those of people and households.

    ————-

    Note: The City Sector Model allows a more representative functional analysis of urban core, suburban and exurban areas, by the use of smaller areas, rather than municipal boundaries. The more than 30,000 zip code tabulation areas (ZCTA) of major metropolitan areas and the rest of the nation are categorized by functional characteristics, including urban form, density and travel behavior. There are four functional classifications, the urban core, earlier suburban areas, later suburban areas and exurban areas. The urban cores have higher densities, older housing and substantially greater reliance on transit, similar to the urban cores that preceded the great automobile oriented suburbanization that followed World War II. Exurban areas are beyond the built up urban areas. The suburban areas constitute the balance of the major metropolitan areas. Earlier suburbs include areas with a median house construction date before 1980. Later suburban areas have later median house construction dates.

    Urban cores are defined as areas (ZCTAs) that have high population densities (7,500 or more per square mile or 2,900 per square kilometer or more) and high transit, walking and cycling work trip market shares (20 percent or more). Urban cores also include non-exurban sectors with median house construction dates of 1945 or before.

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    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Photo: Northern Suburbs of Minneapolis-St. Paul (by author)

  • America’s Newest Hipster Hot Spot: the Suburbs?

    It’s an idea echoed everywhere from “Friends” to “Girls”: Young people want to live in cities. And, we’re told, a lot of them (at least the cool ones) do.

    It’s a common assumption. But it’s also wrong.

    Between 2010 and 2013, the number of 20- to 29-year-olds in America grew by 4 percent. But the number living in the nation’s core cities grew 3.2 percent. In other words, the share of 20-somethings living in urban areas actually declined slightly.

    This trend has occurred in supposedly hot cities like San Fransisco, Boston, New York and D.C., notes demographer Wendell Cox. Chicago and Portland, Ore., both widely hailed as youth boom-towns, saw their numbers of 20-somethings decline, too.

    To some extent, this is an economic problem. Millennials can’t always afford the most popular cities, which have gotten increasingly expensive and unequal.  It doesn’t help that most young people, even with college degrees, are experiencing steadily dropping annual earnings. And their careers are progressing more slowly too.

    But it’s not just that. According to the most recent generational survey research done by Magid and Associates, 43 percent of millennials describe the suburbs as their “ideal place to live,” compared to 31 percent of older generations.

    Only 17 percent of Millennials identify the urban core as where they want to settle permanently. Another survey, by the Demand Institute (funded by the Conference Board and Neilsen), found that 48 percent of 20-somethings hoped to move to the suburbs one day. And contrary to popular myth, they hoped to own a single-family home. Sixty-one percent seek more space.

    These findings may actually understate the suburban preference. As people age, particularly entering the child-bearing period between 30 and 50, they long have displayed a distinct tendency to move to suburban areas.

    And why not?

    A lot of the amenities that once drew people to gritty cities are popping up in the suburbs instead.

    The New York Times documents a trend of people moving from Manhattan and Brooklyn to the verdant suburbs of the Hudson Valley. Increasingly, those towns boast art house films, vegan restaurants and other hip accoutrements.

    Incipient hipster suburbs can also be found in places like Montclair, N.J., Claremont, Calif., and even Irvine, whose Millennial population last decade grew more than four times as much as that of downtown Los Angeles. Once a foodie desert, Irvine and its surrounds now boast dim-sum houses, Vietnamese, Korean, sushi and California cuisine restaurants.

    That’s thanks to another trend: Immigrants are bypassing cities and moving to the suburbs in droves, according to Brookings. And they’re bringing good, cheap ethnic food along with them.

    Nowhere are these changes more marked than among Asians, now the nation’s largest source of new immigrants. For example, in the New York metropolitan area, the Asian population grew both in numbers and in percentage far more rapidly in the suburbs than in the core city in the past decade. Nationwide, the Asian population in suburbs jumped by almost 2.8 million, or 53 percent, while that in core cities grew 28 percent.

    A great American ethnic culinary tour today would take you not to Manhattan, San Francisco, Hollywood or Chicago, but to places like the San Gabriel Valley, roughly 10 miles east of downtown Los Angeles. This highly suburban region of strip malls and giant food palaces arguably boasts the largest, and most diverse, collection of Asian restaurants in the nation.

    A CNN survey of America’s top 50 Asian restaurants located seven in the area, the most of any region. That includes foodie havens like New York City. Three others were  in the heavily Asian suburbs of Silicon Valley.

    As Tyler Cowen noted, the best places to find distinctive ethnic cuisine in Greater Washington is not in the urban core but in far-flung suburban strip malls, where rents are cheap, parking is adequate and there’s a built-in community of eaters craving home.

    Much the same can be said for Asian markets, temples or schools. Sugarland, some 22 miles further west of downtown Houston, is home to one of the nation’s largest Hindu temples. The largest Hindu temple in the world is now under construction in Robbinsville, N.J. — an exurb of New York some 60 miles south of Manhattan.

    Indeed, in large parts of America, many successful malls are those that are getting “ethnicized.” A prime example is La Gran Plaza on the outskirts of Fort Worth, Tex., where a once-failing mall is now booming, converted to look like an old village in Northern Mexico, with loads of restaurants, markets, wedding and quincenara shops and a huge swap-meet.

    This is in addition to live music and, on some Sundays, Catholic Mass.

    As their demographics change, so too do the functions of suburbs. No longer mere bedroom communities, they are becoming economic centers of their own. Despite the constant hype about the new appeal of downtown locations, jobs continue to follow the migration of middle-class families. Having been widely written off for dead, suburban office space also  began to recover last year at a much quicker rate than in  city centers, according to the office consultancy Costar. Overall, suburbs already account for close to three quarters of the nation’s office inventory.

    Suburbia is not the city’s antithesis, but its natural extension, particularly as young people morph towards adulthood.  Rather than vilify suburbs as fundamentally inefficient, deadening and wasteful, its time to focus on how to improve the preferred environment for work, interaction and raising the next generation for most Americans. Cities have changed too, of course, in many cases for the better. But the suburbs are evolving as well. And all indications suggest that they are likely to retain their preeminence as Americans’ preferred places to settle down.

    This piece first appeared at The Washington Post.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

  • The New Donut

    Former Indianapolis Mayor Bill Hudnut used to like to say that “you can’t be a suburb of nowhere.” This is the oft-repeated notion has been a rallying cry for investments to revitalize downtowns in America for three decades or so now. The idea being that you can’t have a smoking hole in your region where your downtown is supposed to be. This created a mental based on a donut. You can’t let downtown become an empty hole. For reason that will become apparent soon, I call this model “the old donut”.

    Filling in the hole became every city’s mission. Pretty much any city or metro region of any size has pumped literally billions of dollars into its downtown in an attempt to revitalize them. This took many forms ranging from stadiums to convention centers to hotels to parking garages to streetcars to museums and more. It’s popular today to subsidize mixed use development with a heavy residential component.

    These efforts have paid off to a certain degree. Most big city downtowns have done very well as entertainment and visitor districts, eds and meds centers, etc. More recently we’ve seen an influx of residents, even in places where the overall city or even region has struggled or declined. Cleveland added about 4,000 net new downtown residents in the 2000s. St. Louis added 3,000. With most cities in some stage of an apartment building spree consisting of a few thousand units, these numbers should only improve.

    Key weaknesses remain in private sector employment (declining in most places) and retail (not enough high income residents yet). And other than the tier one types of cities like Chicago, few places seem to have reached a sustainable market rate development level yet – pretty much everything is getting public assistance. Yet its pretty evident that most larger downtowns have made huge strides and are experiencing overall reasonable health.

    In short, the donut hole has been filled in. Where does that leave us? I’d argue with a paradigm I call “the new donut”:



    In this model, the old donut is inverted. What used to be the ring of health – the outer areas of the city and the inner suburban regions – are now struggling. Whereas the downtown is in pretty good shape, and the newer suburban areas are booming. (You might add in a fourth outer ring with troubles – these were the exurbs where very low-end housing proliferated because development standards were very low).

    You see this in the population figures. Wendell Cox cranked the numbers and found that major metro areas gained 206,000 residents in the two mile radius from the center, but lost 272,000 residents from the 2-5 mile ring. Growth picked up strongly beyond that arc. This is the new donut area, though the start and end of it vary by metro and some have thicker rings of challenge than others.

    We’ve got three decades of experience in downtown revitalization, but much less in dealing with this newer challenge zone. I’ve said that suburban revitalization may prove to be the big 21st century “urban” challenge. This is where it is happening in many cases. These areas have an inferior housing stock (often small post-war worker cottages or ranches), sometimes poor basic infrastructure, and are sometimes independent municipalities that, like Ferguson, MO, are often overlooked unless something really bad happens. Unlike the major downtown, they are often “out of sight, out of mind” for most regional movers and shakers.

    What’s more, while downtown provides a concentrated location for massive public investment, this more spread out area is too big to fix by throwing money at it. And how many stadiums and convention centers does a region need in any event?

    This is where we need to be doing a lot of thinking about how to bring these places back, look at what’s being done, etc. And also, given the inequality in the country, to try to think about ideas that don’t involve gentrification. One project that appears to be in this kind of zone, for example, is Atlanta’s Beltline project, though there’s a gentrifying aspect to this one. Regions that figure this one out will be at a big advantage going forward.

    Aaron M. Renn is an independent writer on urban affairs and the founder of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile, where this piece originally appeared.

  • The Cities That Are Benefiting The Most From The Economic Recovery

    It is painfully clear that the current U.S. economic recovery has been a meager one, with the benefits highly concentrated among the wealthiest. The notion that “a rising tide” lifts all boats has been sunk, along with the good ship middle class.

    Geographically as well, the recovery has been concentrated in a relative handful of regions. Nationwide, real per capita GDP rose a meager 3.8% from 2010 through 2013, according to new Bureau of Economic Analysis numbers. An analysis of the data by urban expert Aaron Renn shows that a handful of metropolitan areas have enjoyed much faster growth. For the most part, these are areas that have cashed in on the current technology or energy booms, and in some cases, both. Also, surprisingly, there have been some very good gains in some of the nation’s long-distressed industrial heartland metro areas, as the combination of energy development and a resurgent automobile industry have boosted regional GDP.

    Tech Capitals

    Of the nation’s 52 largest metropolitan statistical areas, many of the top performers have strong tech economies, led by the No. 2 metro area on our list, San Jose-Sunnyvale-Santa Clara, aka Silicon Valley, where real per capita GDP expanded 11.5% from 2010-13. Perhaps more surprising is the strong, tech-fuelled performance of No. 3 Portland-Vancouver-Hillsboro, Ore., where real per capita GDP grew 9.2%. The prime contributor has been the robust performance of late of Intel, the state’s largest private employer, which employs about 17,000 in Portland’s western suburbs around the town of Hillsboro, the company’s largest concentration of workers anywhere.

    Other less heralded tech centers have also performed well, including No. 4 Columbus, Ohio (8.2% growth), and No. 8 Salt Lake City (7.3%), both of which are also benefiting from the surge in oil and gas production. Among smaller cities with strong tech communities, Fargo, N.D., and Provo-Orem, Utah, have enjoyed better than 10% real per capita GDP growth since 2010.

    Energy Regions

    Per capita growth in the energy states has been even more impressive. Placing first on our big cities list is Houston-the Woodlands-Sugarland, Texas, where per capita GDP rose 13.2% from 2010-13, a major achievement in a region whose population continues to grow rapidly. Zooming out to all 381 U.S. MSAs, no places come close to the two Texas oil towns that rank first and second overall, Midland (sizzling 38.8% growth since 2010) and Odessa (34.1%). Both lie in the Permian basin, an oil-rich geological formation that was first tapped in the 1920s and has seen a marked revival in production recently due to advances in extraction techniques like horizontal drilling and fracking. Also notable, the southern Texas town of Victoria clocked over 21% growth.

    Among the largest metro areas, energy hubs also did well, including Oklahoma City (7th, 7.5%) and Dallas-Ft. Worth-Arlington (13th,  6.5%) and the San Antonio area (16th), which is benefiting from a gusher in the Eagle Ford Shale play. Economist estimate its development has pumped $87 billion into the south Texas economy.

    Rust Belt Revives

    The booms in tech and energy are well-known. But the most surprising wrinkle in our survey of per capita GDP growth is the revival of auto manufacturing, which benefits both from technological improvements and lower energy costs. Among the larger metro areas, the key winners have been Grand Rapids-Wyoming (fifth, 7.8%) and Detroit (tied for ninth, 7.2%), as well as the surprising 15th place ranking for Cleveland-Elyria.

    These gains are heartening, but the real question may be how long this will continue. In part, the strong 2010-13 numbers reflect a recovery from very poor economic performance that has stretched on for decades, and population losses, which tend to skew per capita GDP numbers upwards. But signs of health in the nation’s long disdained midsection deserve applause.

    Surprising Laggards

    The recovery has not lifted most regions, just as it has not helped most Americans. Per capita income growth has been slow in most of the nation’s largest cities outside Texas. Given the enormous financial bailout from the federal government, as well as the massive spike in stock and real estate prices, one would have expected far better performance from New York, which ranks a middling 33rd out of the 52 largest MSAs, with below average 2.3% growth since 2010.

    Chicago-Naperville-Elgin ranked 26th; Los Angeles-Long Beach-Anaheim, 38th, and  Philadelphia, 40th. Perhaps the biggest disappointment is 51st place Washington D.C.-Arlington-Alexandria, which had been a high-flier through the Recession amid strong federal spending. Per capita GDP since 2010 has fallen 3.4%. This disturbs some pundits, such as Richard Florida, but no doubt Washington’s fall from grace would be widely welcomed by most Americans.

    And What About Poverty

    Increasingly, many question not only the relative lack of growth, but that the growth we are experiencing is doing very little for the vast majority of Americans. Former Clinton adviser Bill Galston has noted that this recovery has “left almost everybody” out.

    No group has been harder hit than the poor. The nation’s population below the poverty line has expanded a full percent since 2010. An analysis by demographer Wendell Cox shows that poverty declined in just seven of the nation’s 52 largest metropolitan areas from 2010-13: Louisville, Ky.; Oklahoma City; Nashville, Tenn.; Columbus Ohio; Grand Rapids; and Texas’ Austin and San Antonio.

    Most of the areas with the strongest growth in per capita GDP posted smaller than average increases in poverty. In Houston the share of the population living in poverty rose 0.6% from 2010-13 to 16.4%, 11th highest among the nation’s biggest metro areas.

    The results in California suggest strongly that the tech boom has not done much to relieve poverty in the Golden State, despite the much ballyhooed “California comeback” trumpeted by the likes of Paul Krugman. In reality it’s poverty, not prosperity, that’s on the march in most California cities outside the Bay Area. Since 2010, the percentage of the population of San Diego living in poverty has grown 1.3% to 15.2%, while that of Riverside-San Bernardino rose 1.7% to 18.2%, the third highest rate among the 52 largest metro areas in the country. Meanwhile the poverty rate in Los Angeles, the state’s dominant urban region, has risen 1.8% to 17.6% (fifth worst), and Sacramento, the state capital, has seen a 2.0% increase in poverty to 16.6% (10th).

    This suggests that, for the most part, what has passed for growth has been too meager to reduce poverty. In many places, even ones growing rapidly, such as the Silicon Valley hub of San Jose, the number of poor continue to increase. Since 1999, poverty in the valley has jumped  from 7.6% to 10.5%. This also likely is a low figure, given the extraordinarily high cost of living in the Bay Area, as well as the rest of coastal California. According to the Census Bureau, California’s poverty rate is the highest in the nation when adjusted for the state’s exorbitant cost of housing.

    For the most part, poverty has been reduced, or at least has grown less, in lower-cost regions that have ties to the energy and manufacturing revival, which tend to create opportunities for middle- and working-class residents. Until we figure out how to get growth whose benefits are widely shared, and reduce poverty, the one measurement likely to go up is cynicism about the efficacy of our current economic policies.

    Real Metropolitan Area GDP Per Capita (2010-2013)
    Rank Metropolitan Area 2010 2013 2010-2013 Change
    1 Houston-The Woodlands-Sugar Land, TX  $  63,816  $    72,258 13.2%
    2 San Jose-Sunnyvale-Santa Clara, CA  $  89,806  $  100,115 11.5%
    3 Portland-Vancouver-Hillsboro, OR-WA  $  63,025  $    68,810 9.2%
    4 Columbus, OH  $  50,370  $    54,493 8.2%
    5 Grand Rapids-Wyoming, MI  $  41,248  $    44,482 7.8%
    6 Charlotte-Concord-Gastonia, NC-SC  $  51,819  $    55,802 7.7%
    7 Oklahoma City, OK  $  45,993  $    49,441 7.5%
    8 Salt Lake City, UT  $  57,790  $    62,008 7.3%
    9 Nashville-Davidson–Murfreesboro–Franklin, TN  $  50,464  $    54,112 7.2%
    10 Detroit-Warren-Dearborn, MI  $  46,314  $    49,653 7.2%
    11 Pittsburgh, PA  $  48,710  $    52,053 6.9%
    12 Cincinnati, OH-KY-IN  $  48,841  $    52,063 6.6%
    13 Dallas-Fort Worth-Arlington, TX  $  57,032  $    60,730 6.5%
    14 Birmingham-Hoover, AL  $  46,108  $    49,034 6.3%
    15 Cleveland-Elyria, OH  $  52,169  $    55,430 6.3%
    16 San Antonio-New Braunfels, TX  $  37,202  $    39,280 5.6%
    17 San Francisco-Oakland-Hayward, CA  $  75,103  $    78,844 5.0%
    18 Seattle-Tacoma-Bellevue, WA  $  71,404  $    74,701 4.6%
    19 Minneapolis-St. Paul-Bloomington, MN-WI  $  59,168  $    61,711 4.3%
    20 Sacramento–Roseville–Arden-Arcade, CA  $  43,905  $    45,764 4.2%
    21 Austin-Round Rock, TX  $  50,094  $    52,110 4.0%
    22 Denver-Aurora-Lakewood, CO  $  59,284  $    61,595 3.9%
    23 Phoenix-Mesa-Scottsdale, AZ  $  43,156  $    44,803 3.8%
    24 Boston-Cambridge-Newton, MA-NH  $  71,936  $    74,643 3.8%
    25 San Diego-Carlsbad, CA  $  55,921  $    57,955 3.6%
    26 Chicago-Naperville-Elgin, IL-IN-WI  $  55,727  $    57,752 3.6%
    27 Providence-Warwick, RI-MA  $  41,698  $    42,994 3.1%
    28 Louisville/Jefferson County, KY-IN  $  46,710  $    48,048 2.9%
    29 Tampa-St. Petersburg-Clearwater, FL  $  39,066  $    40,153 2.8%
    30 Buffalo-Cheektowaga-Niagara Falls, NY  $  41,497  $    42,550 2.5%
    31 Baltimore-Columbia-Towson, MD  $  55,907  $    57,294 2.5%
    32 Indianapolis-Carmel-Anderson, IN  $  58,590  $    60,038 2.5%
    33 New York-Newark-Jersey City, NY-NJ-PA  $  67,499  $    69,074 2.3%
    34 Riverside-San Bernardino-Ontario, CA  $  26,509  $    27,094 2.2%
    35 St. Louis, MO-IL  $  47,876  $    48,738 1.8%
    36 Milwaukee-Waukesha-West Allis, WI  $  55,767  $    56,734 1.7%
    37 Miami-Fort Lauderdale-West Palm Beach, FL  $  44,386  $    45,145 1.7%
    38 Los Angeles-Long Beach-Anaheim, CA  $  58,211  $    59,092 1.5%
    39 Kansas City, MO-KS  $  52,916  $    53,677 1.4%
    40 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD  $  58,696  $    59,339 1.1%
    41 Memphis, TN-MS-AR  $  46,534  $    47,014 1.0%
    42 Richmond, VA  $  50,977  $    51,498 1.0%
    43 Rochester, NY  $  44,825  $    45,202 0.8%
    44 Atlanta-Sandy Springs-Roswell, GA  $  51,830  $    52,178 0.7%
    45 Virginia Beach-Norfolk-Newport News, VA-NC  $  48,395  $    48,708 0.6%
    46 Raleigh, NC  $  51,820  $    51,673 -0.3%
    47 Las Vegas-Henderson-Paradise, NV  $  43,351  $    43,079 -0.6%
    48 Jacksonville, FL  $  42,068  $    41,752 -0.8%
    49 Hartford-West Hartford-East Hartford, CT  $  68,005  $    66,870 -1.7%
    50 Orlando-Kissimmee-Sanford, FL  $  47,023  $    45,855 -2.5%
    51 Washington-Arlington-Alexandria, DC-VA-MD-WV  $  76,035  $    73,461 -3.4%
    52 New Orleans-Metairie, LA  $  61,325  $    56,943 -7.1%
    Analysis by Aaron M. Renn

     

    This piece first appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Photo by w:Flickr user Bill Jacobus [CC-BY-2.0], via Wikimedia Commons

  • Battle of the Upstarts: Houston vs. San Francisco Bay

    “Human happiness,” the Greek historian Herodotus once observed, “does not abide long in one place.” In its 240 years or so of existence, the United States has experienced similar ebbs and flows, with Boston replaced as the nation’s commercial capital first by Philadelphia and then by New York. The 19th century saw the rise of frontier settlements—Cincinnati, Pittsburgh, Cleveland, and finally Chicago—that also sought out the post position. In the mid 20th century, formerly obscure Los Angeles emerged as New York’s most potent rival.

    Today we are seeing yet another shuffling of the deck among American regions. New York remains the country’s preeminent city, but its most powerful rivals are likely to be neither Chicago nor Los Angeles, but rather two regions rarely listed in the hierarchy of influential regions: the San Francisco Bay Area and Houston.

    Making of a new pecking order

    The Bay Area does not rank among the 20 top global cities in most studies, such as the 2014 A.T. Kearney listings. In the respected rankings of the London-based Globalization and World Cities Network, the Bay Area stood below not only Chicago, which is considered an “alpha” global city, but also such places as Toronto and Mexico City.

    Yet such rankings vastly underestimate the power now being wielded by the San Francisco region. As the headquarters for the largest concentration of cutting edge tech firms in the world, the Bay Area increasingly shapes the operations of companies from manufacturing and marketing to retail and media. And given that roughly half the nation’s venture capital is still being lavished on area start-ups, it is not surprising that Silicon Valley ranks number one in the world as a place to launch tech ventures, according to the Startup Genome.

    Tech dominance, according to a recent study on global cities conducted by my firm NewGeography, explains why the San Francisco Bay Area nudges out much larger Los Angeles for bragging rights on America’s Pacific Rim. Technology leaders, including Intel, Apple, Oracle, Google, and Facebook, are based in Silicon Valley, while Asian global tech firms such as Samsung also have North American headquarters there. Top technology firms from other cities often have their key R&D functions in the Bay Area. Even a frugal firm like Wal-Mart is enlarging its Silicon Valley presence.

    The current social media bubble will surely pop, but as Michael S. Malone and others have noted, the Bay Area’s preeminence will likely continue, fueled by its unique concentration of engineers, entrepreneurs, and risk capital. As a lure for the ambitious, Silicon Valley and San Francisco are replacing Wall Street. Google alone has 1,200 employees who formerly worked for large U.S. investment banks, and migration from the Big Apple to California is now at its highest level since 2006.

    Much of the appeal of the Bay Area is a result of happy coincidence of history and geography. The Bay Area—where I went to school and got my start in journalism, and where parts of my family have resided since the ’50s—has been blessed with excellent higher education and is centered around what is arguably America’s most beautiful city. Good weather, beautiful vistas, and access to nature have made the Bay Area a natural lure for people who can afford to live wherever they want.

    The Energy Capital

    Houston, where I have been working as a consultant, hardly qualifies as one of the most physically attractive or temperate cities. San Francisco may well have been, as Neil Morgan suggested a half century ago, “the Narcissus of the West,” but Houston, in most accounts, has been widely disparaged as hot, steamy, ugly and featureless. Yet despite this, its ascendency is no less compelling than that of the Bay Area.

    Houston’s trump card, like the Bay Area’s, resides in its control of one strategic industry, in this case energy. The majority of traded foreign oil majors, such as London-based Shell and British Petroleum, have their U.S. headquarters in Houston, and even companies based elsewhere boast a significant Houston presence. For example, Exxon, although it has its headquarters in Dallas-Fort Worth, is opening a massive Houston campus that will be home to 10,000 employees. Additionally, a majority of the world’s largest oil services companies, such as Baker Hughes, Schlumberger, and FMC Technologies, are based in Houston.

    Altogether, more than 5,000 energy-related companies call Houston home. The city employs three times more people in energy than its second place rival, Dallas-Ft. Worth, and more than the next five cities combined. This growth is likely to accelerate because foreign companies, notably from Germany, have begun buying up energy firms in the area, including Siemens’s recent $7.6 billion dollar purchase of the Dresser Rand Group, an energy equipment firm.

     Houston has added more than 10 percent more jobs since 2008, almost twice the increase in the Bay Area. Since 2000 Houston’s employment figures have shot up 32 percent, while the Bay Area has grown by barely 4 percent. And it’s not just energy that’s driving things—Houston is now the nation’s largest export port and boasts the world’s largest medical center. It has also become, by some measurements, the most ethnically diverse (PDF) region in the country. In the last decade, for example, Houston increased its foreign-born population by 400,000, second only to New York and well ahead of much larger Los Angeles.

    The big losers: LA and Chicago—but also New York

    In the past century New York and Los Angeles have dominated American media. This is being severely undermined by the Bay Area’s digital economy. Since 2001, notes Mark Schill at Praxis Strategy (where I am a senior fellow), book, periodical, and newspaper publishing—all traditionally concentrated in the New York area—have lost some 250,000 jobs, while Internet publishing and portals generated some 70,000 new positions, many of them in the Bay Area or Seattle.

    Google and Yahoo are already among the largest media companies in the world. (Yahoo now refers to itself as a digital media company rather than a technology company). With the ubiquity of its iTunes platform, Apple exercises ever greater control over consumer distribution of entertainment products such as music and video; Netflix, Hulu, and YouTube could become the studios of the future. This could shift global media decision-making from its familiar New York-Los Angeles axis to the Bay Area.

    This is particularly bad news for Los Angeles, whose grip on the entertainment industry was weakening even before Silicon Valley’s rise. Since 2004, LA’sentertainment industry lost roughly 11 percent of its jobs, as production shifted to Canada, Louisiana, and other locales.

    The decline in media employment comes on the heels of a rapid industrial decline—the area has lost more than 90,000 aerospace jobs since the end of the Cold War. The situation is so dismal that a report issued by many of the region’s top business and political leaders concluded that the city “is barely treading water while the rest of the world is moving forward.”

    Chicago’s situation is arguably even worse, but it is more threatened by Houston, which has already passed the Windy City in numbers of corporate headquarters. Since 2010, when U.S. industry began recovering, Houston manufacturing employment expanded by more than 17 percent, compared to flat growth in Chicago.

    “Houston is the Chicago of this era—like the old Chicago,” remarks David Peebles, who runs the Texas office of Odebrecht, a $45 billion engineering firm based in Brazil. “In the ’60s you had to go to Chicago, Cleveland, and Detroit. Now Houston is the place for new industry.”

    With its industrial base eroding, Chicago is no longer a strategic hub for any key industry. Outside of trading commodities, it also no longer serves as a major global financial center. Regional population growth has been meager over the past decade, and the city’s own pension issues may be worse than Detroit’s.

    Chicago retains its brilliant skyline, great cultural institutions, powerful political influence, and a strong business community. But its days of America’s number two city are long gone, and, as we enter the mid-2000s, it is falling behind not only Los Angeles and New York but the two rising Texas cities, Houston and Dallas, both expected to pass the “city of big shoulders” in population by mid-century, or earlier.

    Engineering the Future

    In the coming decades, New York will remain the nation’s top global city, due to its remarkable urban legacy, the power of Wall Street, and the entrenched traditional media. But its Achilles heel is a lack of the engineering power necessary to address key challenges such as the digitization of industry, energy efficiency or climate change. New York is profoundly weak in engineering talent (PDF)—ranking 78th out of 85 metropolitan areas in engineers per capita.

    In contrast, the Bay Area represents the epitome of engineering power, with the San Jose area boasting the largest per capita concentration of engineers of any major metropolitan area. The Bay Area’s power to develop new technologies and its almost unfathomable wealth will continue to undermine traditional institutions, from Hollywood and Wall Street to business services, tourism, automotive, and even aerospace industries.

    Far less appreciated, Houston, rather than being a southern city of duller wits, actually ranks second in engineers per capita. If the Bay Area is master of the digital economy, Houston ranks as the technological leader of the material one; it is the capital for the energy-driven revival of U.S. industry, not only in Texas but throughout the old industrial heartland. Revealingly, Houston actually has seen far more rapid growth in both college educated and millennial population since 2000 than the Bay Area, as well as New York, Chicago, and Los Angeles.

    Rival Approaches to Urbanism

    The Bay Area, for all its vaunted progressivism, increasingly resembles a “gated community” whose high prices repel most potential newcomers, particularly families. Already by far the nation’s least affordable city—only 14 percent of current residents can possibly afford to buy a home—it represents a growth model that is by definition exclusive, almost a throwback to medieval forms where the rich clustered inside the city gates.

    High housing prices, notes economist Jed Kolko, account for the fact that, despite the boom, population growth in the Bay Area remains well below national averages. From 2000 to 2013, the region lost approximately 550,000 domestic migrants. Despite sizable immigration, the regional population growth rate has fallen below the national average.

    In contrast, Houston is among the fastest growing regions in the country, with rapid increases both in domestic migrants and newcomers from abroad. This stems from both lower housing prices and a growth model that is far more amenable to higher paid blue collar and middle management positions. Since 2000, Houston’s population has grown by 30 percent compared, three times that of the Bay Area.

    Ironically, Houston’s growth has been more egalitarian than that of the notionally super-progressive San Francisco region. A recent Brookings report found that income inequality has increased most rapidly in what is probably the most left-leaning big city in America, where the wages of the poorest 20 percent of all households have actually declined amid the dot com billions.

    This inequality has a distinct racial element. The Bay Area gap between white residents (who dominate the tech economy) and minorities is among the highest in the nation while, during the boom, income has fallen for Hispanics and African-Americans, according to Joint Venture Silicon Valley.

    This racial divergence is far less pronounced in Houston, while the growth of poverty since 2000 has been slower, increasing at one third the rate of New York and San Francisco, and half that of Los Angeles. The Texas city may lack the great views of San Francisco, but Houston has turned out to be a better city for middle class minorities. Homeownership among African Americans stands at 42 percent and for Latinos at more than 53 percent; this compares to 32 and 37 percent in the Bay Area.

    Perhaps the biggest differences can be seen in families. Of the nation’s 52 largest metropolitan areas, the Bay Area has the lowest percentage, 11.5 percent, of people ages 5 to 14. In Houston, 23 percent of the population fits this age category. In particular San Francisco is notoriously inhospitable to families, with the lowest percentage of kids of any major city.

    The two regions also reflect very different urban forms. The Bay Area’s leadership has opted to favor dense “in fill” growth and sought to restrict suburbandevelopment. Houston has taken a different tack. As its population has expanded, so too has the metropolitan area. This includes the development of many planned communities that appeal to middle class families and many immigrants. In 2013, Houston alone had more housing starts than the entire state of California.

    But it would be wrong to dismiss Houston’s model as merely “sprawl.” Instead it is better seen as simply expansive. In fact, arguably no inner ring in the country has seen more rapid growth, with high-rise, mid-rise and townhouse development in many long neglected districts. The increase in high-density housing tracts (more than 5,000 per square mile) since 2000 has been almost ten times higher than the Bay Area.

    The Political Battle for the Future

    Increasingly America’s future will be determined by these two cities, with the issue of addressing climate change at the fore. Much of the Bay Area’s leadership—led by the likes of Google Chairman Eric Schmidt and investor Tom Steyer—have all but declared war on the oil and gas industry. Several colleges and universities in the region, including Stanford, have shed their energy holdings, and Silicon Valley has nurtured movements such as Bill McKibben’s 350.org that seek to revoke the “social license” of big oil, a tactic used previously against the tobacco companies and firms that did business in apartheid South Africa.

    The elites of Silicon Valley and San Francisco are not just interested in saving the earth; they wish to profit from a change in the nation’s energy economy. Google, Sun Microsystems founder Vinod Khosla, and top venture capitalists such as John Doerr have bolstered their already ultra-thick wallets by capitalizing on “green energy” subsidies and outright grants from various levels of government. Given these investments, it’s easier to understand the Valley’s support for draconian climate change legislation, complete with attempts to demonize “Texas oil.” (One won’t see such populist zeal on , say, increasing capital gains rates.)

    The Valley’s hostility to fossil fuel energy, and its jihad to destroy an entire industry, is only barely recognized in Houston. I also have never heard anyone there suggest that Silicon Valley should be closed down as a danger to the planet (or at least a threat to the attention span of younger Americans). Houstonians, particularly in the energy industry, generally lack media savvy, which is one reason why energy is widely rated as the country’s least popular industry. Also missing, thankfully, is the sense of entitlement and self-congratulation one finds in the Bay Area. But once the intention to devastate the oil and gas industry is better understood, expect the energy capital to square off against the tech center, generating what may be the regional battle royal of our era.

    This piece originally appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Photos courtesy of University of Texas Health Science Center at Houston Office of Communications and Vincent Bloch.

  • Orlando Arts Scene: It’s an Urban Bus Trip

    Artists are bus riders. With day jobs to keep food on the table, they often forego luxuries, using feet and bicycles, as well as buses, instead of cars. They travel alongside many people for whom the bus is an absolute necessity. Too often, the bus is a class marker in America, and a racial marker in the South. Many do not want to cross the threshold of the bus. With artists increasingly passing through this doorway, the Transit Interpretation Project began, first in Orlando, Florida and now in Roanoke, Virginia. It is painting a new picture of the bus, revealing the reality behind the myths, and the humanity behind the faceless term “mass transit” that is so often used as a shorthand for problems and class divisions in our country.

    Taking the bus in the South still has a stigma. Since Rosa Parks’ era, the bus has remained an unfortunate symbol, reinforced by the waves of immigrants that have swelled the region’s population in recent decades. Many who move to the South seek the prosperous life of the American Dream, and the bus is not part of that pursuit.

    For many here in Orlando, Florida, the bus doesn’t register any significance in their lives. Its association with poverty and the working-class South remains visible, if a bit faded.

    I’ve ridden buses in Orlando and cities all over the country, and in a few other countries, too. Here in the South, the stigma still exists. I decided to ride a bus in Orlando during the summer, and learn firsthand what is happening on these lumbering behemoths of metal that steams along our crowded streets.

    My participation began on the #50, a bus route from downtown Orlando to Disney World. I sat alongside Judy, a night worker who left her house at 6:30PM to get to her night shift job starting at 10PM. Petite but hard-edged, Judy and her fellow night workers’ three-and-a-half hour commute each way is not for the leisure class. Coming back late at night, I joined a bus full of uniformed employees, droopy and exhausted from their service to the world travelers who come to play in Orlando.

    My own little blog to report my experiences became part of this project, along with art by photographers, writers, painters and sculptors. For example, Nathan Selikoff, a digital artist, made several animated computer graphics out of his bus ride experiences, including one based on my blog.

    The Transit Interpretation Project, TrIP for short, is an ongoing effort. The project’s work was exhibited at the Gallery at Avalon Island in downtown Orlando in August 2014. The result is an artist’s eye on the shared social space of the city.

    TrIP was the brainchild of Pat Greene, the current Director of the Gallery at Avalon Island. He recently spoke to me about the project. “Initially, when commuter rail was being proposed in Orlando, people parroted a lot of misinformation,” he said, “both for and against it. Train planners were using very analytical arguments, and contrarians were mostly being emotional about their protest. Both sides were very confident, but in many cases, both sides were also very wrong”.

    Orlando’s commuter rail opened this summer to the public with much fanfare, and has generated controversy. Greene, like many others, listened with skepticism to advocates’ claims that it will reduce traffic, because it rides on a nineteenth-century spine through a multipolar, twenty-first century, dispersed urban area. He also listened to opponents who decried it as costly and useless. He decided neither side had all the facts, and wanted to see for himself what buses and trains were really like in Orlando.

    Greene received two bus passes from friend. He invited artists to use them, and then write, paint, photograph, or make anything inspired by the experience, and post it to his website. The site remains open; anyone can participate by emailing their entry to Pat Greene athearsay@gmail.com. Contributors need not have any credentials, they need only to ride the bus and react.

    Greene carried his experiment to a colleague in Roanoke, Virginia. There, Jeremy Holmes, the director of a Ride Solutions Program that helps commuters find bus and carpool routes through the city, began a similar project. The results were displayed at Roanoke’s Marginal Arts Festival this year, illuminating another Southern town’s bus rider population.

    Analysts and talking heads don’t much ride the bus and therefore have little firsthand knowledge of the experience. On one bus ride in Orlando, an African-American man asked artist Jessica Earley to teach him how to pray; you can see her blogpost, labeled Unaffiliated Grace. On another, artist Greg Leibowitz had to convince security guards that taking photographs was not a crime; in spite of this, he captured marvelous portraits of riders. Artist Bethany Mikell sewed a dress from the images she gathered on the #8. Colombian Ivan Riascos mused, “What does this city have to offer me?” as he looked out the window of the #41. Each post, whether in writing or in images, adds a dimension to the individuals of the city.

    While the quality of the Orlando contributions is uneven, the point is not to critique the exhibition as art. It is, rather, to provide an opportunity to join a large-scale investigation into the meaning of twenty-first century public space in an American city of medium size. The space isn’t consistently crowded and hectic, nor is it consistently vacant. TrIP doesn’t consistently represent artists or riders who are black, white, brown, or any specific race or class. Instead, the blog posts build up a narrative of a rainbow rhythm marked by a gentle diversity, much common agreement about the miserable time-cost of the working person’s commute, and a view of a unique collection of humans that make up Central Florida’s specific and localized condition.

    This narrative gains its power from mining an overlooked, shared public space of the city: the inside of buses and trains. Greene eschewed officialdom in activating this project. “If I had approached Lynx [Orlando’s bus system] about doing it, I would have been in endless meetings with lawyers,” he commented. Instead, he just got on the bus and started chronicling what he saw, and encouraged other artists to do so as well.

    In a world where class privilege increasingly isolates people, transit is about the only vestige of the old urban experience where a broad cross-section of society can mix. It is a space that is owned by all of us, just a little bit. Sidewalks, if anyone has noticed, are usually empty in most cities today, making one less place where we can spontaneously encounter strangers. We’ve moved our social time online, building safer and safer little cocoons to prevent rubbing elbows with other classes. Artists seeking human portraits would have wasted their time on street corners in Orlando.

    On the bus, time with strangers revealed a great deal of warmth and emotion. The resulting portraits reveal the dignity of those who ride the bus. It makes me, as a resident of this town, feel a little closer to its soul.

    Richard Reep is an architect with VOA Associates, Inc. who has designed award-winning urban mixed-use and hospitality projects. His work has been featured domestically and internationally for the last thirty years. An Adjunct Professor for the Environmental and Growth Studies Department at Rollins College, he teaches urban design and sustainable development; he is also president of the Orlando Foundation for Architecture. Reep resides in Winter Park, Florida with his family.

    Photo by the author: “Judy”.

  • Seniors Dispersing Away from Urban Cores

    Senior citizens (age 65 and over) are dispersing throughout major metropolitan areas, and specifically away from the urban cores. This is the opposite of the trend suggested by some planners and media sources who claim than seniors are moving to the urban cores. For example, one headline, "Millions of Seniors Moving Back to Big Cities" is at the top of a story with no data and anecdotes ranging that are at least as much suburban (Auburn Hills, in the Detroit area) and college towns (Oxford, Mississippi and Lawrence, Kansas), as they are big city. Another article, "Why Seniors are Moving to the Urban Core and Why It’s Good for Everyone," is also anecdote based, and gave prominence to a solitary housing development in downtown Phoenix (more about Phoenix below).

    Senior Metropolitan Growth Trails National

    Between 2000 and 2010, the nation’s senior population increased approximately 5.4 million, an increase of 15 percent. Major metropolitan areas accounted for approximately 50 percent of the increase (2.7 million) and also saw their senior population increase 15 percent. By contrast, these same metropolitan areas accounted for 60 percent of overall growth between 2000 and 2010, indicating that most senior growth is in smaller metropolitan areas and rural areas.

    Senior Metropolitan Population Dispersing

    The number of senior citizens living in suburbs and exurbs of major metropolitan areas (over 1,000,000 population) increased between 2000 and 2010, according to census data. The senior increases were strongly skewed away from the urban cores. Suburbs and exurbs gained 2.82 million senior residents over the period, while functional urban cores lost 112,000. The later suburbs added 1.64 million seniors. The second largest increase was in exurban areas, with a gain of 0.88 million seniors. The earlier suburbs (generally inner suburbs) added just under 300,000 seniors (Figure 1).

    During that period, the share of senior citizens living in the later suburbs increased 35 percent. The senior citizen population share in the exurbs rose nearly 15 percent. By contrast, the share of seniors living in the functional urban cores declined 17 percent. Their share in the earlier suburbs declined 11 percent.

    This is based on an analysis of small area data for major metropolitan areas using the City Sector Model.
    City Sector Model analysis avoids the exaggeration of urban core data that necessarily occurs from reliance on the municipal boundaries of core cities (which are themselves nearly 60 percent suburban or exurban, ranging from as little as three percent to virtually 100 percent). It also avoids the use of the newer "principal cities" designation of larger employment centers within metropolitan areas, nearly all of which are suburbs, but are inappropriately joined with core municipalities in some analyses. The City Sector Model" small area analysis method is described in greater detail in the Note below.

    Pervasive Suburban and Exurban Senior Gains

    The gains in functional suburban and exurban senior population were pervasive. Among the 52 major metropolitan areas, there were gains in 50. In two areas (New Orleans and Pittsburgh), there were losses. However, in each of these cases there was an even greater senior loss in the functional urban cores. In no case did urban cores gain more or lose fewer seniors than the suburbs and exurbs. Eight of the functional urban cores experienced gains in senior population, while 44 experienced losses (Figure 2)

    Largest Urban Cores

    The major metropolitan areas with the largest urban cores (more than 20 percent of the population in the functional urban cores),  would tend to be the most attractive to seniors seeking an urban core lifestyle. But they  still saw their seniors heading  to the suburbs and exurbs (Figure 3). Senior populations declined in the functional urban cores of all but two of these nine areas, New York and San Francisco. However, in both of these metropolitan areas, the increases in suburban and exurban senior populations overwhelmed the increases in the urban cores. All of these nine major metropolitan areas experienced increases in their suburban and exurban senior populations.

    Moreover, the Phoenix anecdote cited above is at odds with the reality that the later suburbs and exurbs gained 165,000 seniors between 2000 and 2010. The earlier suburbs lost 7,000 seniors (No part of Phoenix has sufficient density or transit market share to be classified as functional urban core).

    Consistency of Seniors Trend with Other Metropolitan Indicators

    As has been indicated in previous articles, there continues to be a trend toward dispersal and decentralization in US major metropolitan areas. There was an overall population dispersion from 1990 to 2000 and 2000 to 2010, which continued trends that have been evident since World War II and even before, as pre-automobile era urban cores have lost their dominance. Jobs continued to follow the suburbanization and exurbanization of the population over the past decade away as cities became less monocentric, less polycentric and more "non-centric." As a result, work trip travel times are generally shorter for residents where population densities are lower. Baby boomers and Millennials have been shown to be dispersing as well, despite anecdotes to the contrary (Figure 4). The same applies to seniors.

    Note: The City Sector Model allows a more representative functional analysis of urban core, suburban and exurban areas, by the use of smaller areas, rather than municipal boundaries. The more than 30,000 zip code tabulation areas (ZCTA) of major metropolitan areas and the rest of the nation are categorized by functional characteristics, including urban form, density and travel behavior. There are four functional classifications, the urban core, earlier suburban areas, later suburban areas and exurban areas. The urban cores have higher densities, older housing and substantially greater reliance on transit, similar to the urban cores that preceded the great automobile oriented suburbanization that followed World War II. Exurban areas are beyond the built up urban areas. The suburban areas constitute the balance of the major metropolitan areas. Earlier suburbs include areas with a median house construction date before 1980. Later suburban areas have later median house construction dates.

    Urban cores are defined as areas (ZCTAs) that have high population densities (7,500 or more per square mile or 2,900 per square kilometer or more) and high transit, walking and cycling work trip market shares (20 percent or more). Urban cores also include non-exurban sectors with median house construction dates of 1945 or before. All of these areas are defined at the zip code tabulation area (ZCTA) level.

    —-

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Photo: Later Suburbs of Cincinnati (where most senior growth occurred from 2000 to 2010). By Author

  • The Death of Nassau Coliseum: A Harbinger of Suburban Decline?

    Nassau Veterans Memorial Coliseum is one of the last remaining old time hockey rinks. But this will be the last year that the New York Islanders play there. The old barn has long been slated for replacement. It is an old building that requires expensive repairs. Many attempts were made to reach an agreement for a new arena with Nassau County. Sadly, the team’s new location will be at the Barclay’s Center in Brooklyn; on Long Island physically, but not a part of the island’s suburban tradition. The team will retain the name, but Long Island effectively is losing its team.

    Suburban Decline, Urban Ascent?

    Some observers, like Mark Byrnes in CityLab, see this shift as further evidence of suburban life and the elevation of the urban core.1 But instead it is another frustrating case of a small, highly visible not in my backyard (NIMBY) movement in suburbia on one hand, and, on the other, an unwanted development foisted upon urban residents without due process through eminent domain.

    Two Arenas

    The New York Islanders haven’t been very newsworthy for the last decade – save for their volatile ownership situation, but their transition from one of the National Hockey League’s oldest buildings in Long Island to a new building in Brooklyn has been a very public ordeal. It’s a story that involves local politicians thwarting construction of a new arena that would have cost taxpayers nothing, a failed referendum to finance an alternative proposal that would have required public funding, and ends with the Islanders moving out of Long Island into the controversial Barclay Centre. Even if the Barclay Centre proves to be a viable and enjoyable venue for the Islanders, it will forever remain one of the most disastrous developments in the history of professional sports.

    The Old Barn

    Nassau Coliseum is the second oldest active building in the National Hockey League. The arena was built on the site of decommissioned Army/Air force base Mitchell Field.2 Nassau County acquired the land in 1960, a year after closure. Nassau Coliseum officially opened on February 11, 1972.3 The cost of the project was $32 million ($179 million, adjusted for inflation).4 The Coliseum sits on 5 acres of a 77-acre plot in Uniondale, the rest of which is mainly surface parking.5

    The site is intersected by two major roadways, and is across the street from Hofstra University and a golf course. It is right down the street from Levittown, the prototypical post-war American suburb. It is the type of place where one might assume that building large scale projects should be relatively simple.

    The Lighthouse Project

    In 2000, software billionaire Charles Wang bought the Islanders for $190 million.6  High end estimates suggest that Wang might have lost as much as $208 million between 2000 and 2009 on the team in large part due to   having one of the least favourable lease agreements in professional sports.7.8 “The need to refurbish the ageing building provided a perfect opportunity to put the team on a solid financial footing.

    Wang proposed a plan to develop the area surrounding the arena. The Lighthouse Project was expected to take 8-10 years to complete at a cost of roughly $3.74 billion.9 The plan included a renovation of the Coliseum, a 60-story tower designed to look like a lighthouse, housing, athletic facilities, a new minor league baseball stadium, restaurants, and a new hotel.10 The transformation of the Coliseum would have entailed lowering the floor of the ice rink to accommodate additional seats, increasing capacity from 16,300 to 17,500 during hockey games, 18,500 for basketball games and 20,000 for concerts, while adding 50 luxury boxes.11

    The proposal would also have brought a 125,000-square-foot athletic complex including two ice rinks (a practice rink for the Islanders, and another for the public), a basketball court, and a fitness club where the Islanders and the Arena Football League’s New York Dragons (also owned by Wang) would have trained.12

    The project would also have included moderately priced housing, which is lacking in Long Island. Long Island County was also exploring enhanced public transportation to the future development, including bus rapid transit.13

    Phase two of the project would have included a conference center, a sports technology building, residences, and the 60-story lighthouse (including a 500 room luxury hotel).14

    Building a new arena on such a large parcel of land surrounded by sparse, low density development should have theoretically faced few obstacles, given that the owner was willing to finance the entire project. Unfortunately, the project drew the ire of some local residents. Robert Zafonte, president of the 3500 member East Meadow Civic and Community Association, had this to say:

    ”The high-rise disturbs me,” he said. ”It seems to be totally out of character with the nature of the suburban area here. It is not consistent with what Long Island is all about – residential, small homes. I don’t think it belongs here.15”

    The Lighthouse Project was approved by the county in 2006, but stalled when Wang was unable to secure zoning approvals from the Town of Hempstead.16 Republican Town of Hempstead Supervisor Kate Murray, lobbied intensely by a small group of local residents, decided that the project would result in too much traffic.

    Not in My Backyard

    In an attempt to salvage the project, Charles Wang and the Lighthouse Development Group partnered with Rexcorp to create a scaled down version of the project. The most notable change was that the Lighthouse would now be 30 stories, rather than 60.17

    But as Pearl M. Kamer, chief economist of the Long Island Association pointed out, “When you cut density on any project, you cut revenue.” He argued that under the proposal, scaled back to meet Murray’s demands, it would be difficult if not impossible to generate enough revenue to finance the project.18 This meant that the new proposal would likely require public funding, in contrast to the original proposal which would have been entirely privately funded.

    Wang eventually reached an agreement with Nassau County to build a scaled down version of the Lighthouse Project, pending an August 2011 referendum. Since the stripped down project would have yielded less revenue than the original proposal, the project would only have been viable with $400 million in public financing.19 The funding would have necessitated a 4 percent property tax increase. Voters rejected the proposal by a 57-43 margin.20

    The End of the Lighthouse Project

    With the end of the Lighthouse Project, Wang entered into a 25 year lease with the Barclay Centre soon after. The Islanders will begin playing at the building in 201521, though they already played their first exhibition game at the arena on September 21st, 2013.

    Losing the Islanders will result in significant economic losses to the county. Nassau County’s comptroller estimated that had last year’s NHL lockout lasted a full season, the county would have lost $62.2 million in economic activity, and the Nassau County treasury would have lost $1.1 million in  of ticket taxes, as well as a share of concessions and parking fees.22  Those are substantial loses for a county of less than 1.4 million residents.

    While Charles Wang has frequently been blamed for the relocation, NHL Commissioner Gary Bettman lays the blame squarely at the feet of local politicians.

    "This is a situation that is not of the Islanders’ making,” he said. “The responsibility for what’s happened really lies with Nassau County and the Town of Hempstead. For the fans in Nassau, not just of the Islanders, but of circuses and rock concerts and the like, it’s a shame.23”

    The Uncertain Future of the Coliseum

    Though this seems like the end of the Nassau Coliseum saga, the future of the arena is still up for debate. Barclay Centre part-owner Bruce Ratner has proposed a $229 redevelopment plan for the arena. The project would include renovating the Coliseum, building restaurants, an ice rink, bowling alley, movie theater and other facilities.24  

    The Ratner proposal faces many hurdles, including luring an American Hockey League (NHL farm team) club to replace the Islanders. The Islanders AHL affiliate, the Bridgeport Sound Tigers (also owned by Wang), could potentially move from Connecticut to fill that void. Additionally, the Islanders are still slated to play 6 home games (out of 41) per year at the Coliseum.25 One columnist at Forbes has speculated that Ratner, who would own both the Nassau Coliseum and part of the Barclay Centre, might well decide to keep the Islanders in Long Island after all if he can secure approval for the new project.26  

    Imposing an Arena on Brooklyn

    The Barclay Centre differs dramatically from the failed Lighthouse Project. The Barclay Centre was part of the $4.9 billion Atlantic Yards project built in run down commercial area of Brooklyn, despite local opposition. Mayor Bloomberg used eminent domain to seize the “blighted” land to allow for construction.

    Brooklyn had been without a sports franchise since 1957, when the Brooklyn Dodgers moved to Los Angeles.  

    The Barclay Centre was initially proposed in 2004 when real estate developer Bruce Ratner purchased the New Jersey Nets for $300 million. Ratner planned to move the franchise out of New Jersey and into the lucrative Brooklyn market. The project was initially projected to open in 2006.

    The attempt to use eminent domain to seize the land was brought before the New York Supreme Court, delaying the process. The court eventually ruled in Ratner’s favour.

    Ratner’s years of frustration with the project lead him to sell a majority share of the Nets to Russian businessman Mikhail Prokhorov for $200 million.

    Due to construction delays, the Nets signed a deal to play in Newark at the Prudential Centre until the Barclay’s Centre was complete.

    Construction of the $1 billion arena began in January of 2010. The Barclay’s Centre was open to the public on September 21, 2012. Just over a month later, the Islanders announced their agreement to play at the Barclay’s Centre.

    The Barclay Compromise

    The Barclay’s Centre wasn’t a bad solution to the stalemate in Nassau County. The arena is new, and Brooklyn is a lucrative sports market. The Long Island Railroad provides direct service to Atlantic Terminal, meaning it will be more convenient for many Long Island residents to access the Barclay’s Centre than Nassau Coliseum. However, the 15,813 seating capacity is far short of most modern NHL arenas, and many seats have partially obstructed views.

    At the same time, the failed Lighthouse Project was a missed opportunity for Nassau County. The community still hasn’t rebounded to its 1970 population, which fell by 100,000 during the 1970s. Estimates suggest that the $4.4 billion of private investment into the Lighthouse project would have created 75,000 construction jobs and 19,000 permanent jobs thereafter.27 Moreover, it would have resulted in expanded public transit options on Long Island. Lawrence Levy, executive director of the National Centre for Suburban Studies at Hofstra University in a 2009 interview described the project as “potentially a game-changer.”

    Even ignoring the direct economic losses, the failure of the Lighthouse Project sent a clear message to businesses that Long Island will only accept investment on its own terms. The fallout is impossible to measure.

    Wither Suburbia?

    There is an ongoing dialogue between observers over whether suburbia is a “market outcome”, or whether it is an artificial creation of government policy. The truth is likely in the middle. Suburban communities are regulated, subsidized, and taxed in many different ways. Zoning restricts the ability to build corner stores and cafes in residential neighbourhoods. Wasteful road projects connect many uneconomic housing developments to cities. Land-use regulations drive up land prices, which are passed on to homebuyers. Suburbia is certainly a market outcome in the sense that decreased transportation costs, dispersed entertainment and communications options, and preferences for larger backyards mean that many people would happily pay the market cost of suburban housing. But its particular shape is not a market outcome. Neither, for that matter, is the shape of any geographical area.  

    There are good reasons for regulating land-use. Separating factories that emit noxious odours from residential communities makes sense. The trouble is that land-use planning has gone from a health and safety measure to an economic tool. In Uniondale it was used to ensure that additional traffic didn’t impose costs on drivers, who would prefer not to bear the costs of congestion. In Brooklyn, it was used to ensure that developers and the municipal government could extract value from property that wasn’t on the market. The market outcome would have been allowing the Lighthouse Project to proceed, and the New Jersey Nets to remain in New Jersey (or perhaps to move to Uniondale). The Barclay’s Centre doesn’t represent a triumph of the city. It is the net result of contrasting political meddling in two different jurisdictions.

    Perhaps There Are No Real Lessons Here

    While we shouldn’t read too much into isolated incidents, there does seem to be an increasing propensity for suburban communities to prevent dense development – from the Bay Area to suburban Toronto –  and for cities to use eminent domain to ram through those same types of developments.  

    This is a story about politics, not economics. And sometimes politics leads to some really bad outcomes. That may well be all there is to it. Either way, the Islanders will be moving to Brooklyn next year. Fans should enjoy the old barn while it lasts. It is the last of a dying breed.

    Steve Lafleur is a public policy analyst with the Frontier Centre for Public Policy, an independent think tank based in Winnipeg, Manitoba. His primary research interests are housing and land use policies, transportation and infrastructure, criminal justice policy, immigration, inter-governmental fiscal relations, and municipal finances. His work has been featured in most Canadian newspapers including the Toronto Star and the National Post.

    1 http://www.citylab.com/politics/2012/11/islanders-move-harbinger-suburban-decline/3826/

    2 http://nysea.bizland.com/nysea/publications/proceed/2012/Proceed_2012_p221.pdf

    3 http://nysea.bizland.com/nysea/publications/proceed/2012/Proceed_2012_p221.pdf

    4 http://nysea.bizland.com/nysea/publications/proceed/2012/Proceed_2012_p221.pdf

    5 http://query.nytimes.com/gst/fullpage.html?res=9D01E5DD1538F930A35753C1A9629C8B63

    6 http://nysea.bizland.com/nysea/publications/proceed/2012/Proceed_2012_p221.pdf

    7 http://nysea.bizland.com/nysea/publications/proceed/2012/Proceed_2012_p221.pdf

    8 http://sports.espn.go.com/nhl/news/story?id=4129484

    9 http://en.wikipedia.org/wiki/The_Lighthouse_Project

    10 http://en.wikipedia.org/wiki/The_Lighthouse_Project

    11 http://query.nytimes.com/gst/fullpage.html?res=9D01E5DD1538F930A35753C1A9629C8B63

    12 http://query.nytimes.com/gst/fullpage.html?res=9D01E5DD1538F930A35753C1A9629C8B63&pagewanted=2

    13 http://query.nytimes.com/gst/fullpage.html?res=9D01E5DD1538F930A35753C1A9629C8B63&pagewanted=2

    14 http://query.nytimes.com/gst/fullpage.html?res=9D01E5DD1538F930A35753C1A9629C8B63&pagewanted=2

    15 http://query.nytimes.com/gst/fullpage.html?res=9D01E5DD1538F930A35753C1A9629C8B63

    16 http://www.newsday.com/long-island/nassau/inside-the-deal-to-remake-nassau-coliseum-1.6115950?utm_medium=twitter&utm_source=twitterfeed

    17 http://en.wikipedia.org/wiki/The_Lighthouse_Project

    18 http://www.nytimes.com/2010/07/25/realestate/25lizo.html?adxnnl=1&adxnnlx=1379883639-wcQ7dfnu7u1PMJZCGW8k9g

    19 http://www.nytimes.com/2011/08/02/nyregion/nassau-voters-reject-proposal-to-overhaul-coliseum.html?_r=0

    20 http://www.nytimes.com/2011/08/02/nyregion/nassau-voters-reject-proposal-to-overhaul-coliseum.html?_r=0

    21 http://www.nydailynews.com/sports/hockey/ice-job-brooklyn-nhl-islanders-leave-15-article-1.1191783

    22 http://nysea.bizland.com/nysea/publications/proceed/2012/Proceed_2012_p221.pdf

    23 http://www.newsday.com/sports/hockey/islanders/gary-bettman-says-he-likes-future-islanders-owners-1.9230790

    24 http://www.newsday.com/long-island/nassau/inside-the-deal-to-remake-nassau-coliseum-1.6115950?utm_medium=twitter&utm_source=twitterfeed

    25 http://www.lighthousehockey.com/2013/5/2/4293850/ratner-brooklyn-islanders-games-nassau-coliseum

    26 http://www.forbes.com/sites/tomvanriper/2013/08/16/brooklyn-islanders-not-so-fast/

    27 http://www.nytimes.com/2009/06/18/nyregion/18towns.html?_r=0