New Geography

Category: Urban Issues

  • High Tech Leaves NYC Behind

    Is New York City ready to contest in high-tech against Silicon Valley? Fuggedaboutit.

    Gotham is so far behind in every conceivable measurement — from engineering prowess to employment and venture funding — that even the idea is somewhat ludicrous.

    While Madison Alley has marketed the city’s tech prowess before, going back to when owners of lower Manhattan real estate promoted “Silicon Alley,” the action has been elsewhere.

    And while some urban boosters such as Richard Florida and Bruce Katz predict that new tech centers will not be the traditional suburban nerdistans, but instead the dense places where “smart” people cluster, there’s reason to be skeptical.

    To some extent, their ideas do apply in San Francisco, though mostly because of its proximity to the people and, more importantly, the venture capital in nearby Silicon Valley. It may even apply to Seattle, where large tech companies like Microsoft and Amazon are based.

    But most tech employment has continued to be concentrated in suburban locations. Even as the social media boomlet has created a few high-profile urban firms, core counties nationwide actually lost about 1.1% of their tech jobs over the last decade, while more peripheral areas gained 3.5%.

    Despite a few modest successes, New York has not produced any business that approaches the top five firms of social media. Facebook, Twitter, Pinterest, Google and LinkedIn are all based in the Valley or its urban satellite city, San Francisco.

    Crucially, New York remains a laggard in Science Technology Engineering and Mathematics (or STEM) employment, with slightly fewer tech jobs per capita than the national average, or a third as many as Silicon Valley.

    And it’s not only the Bay that New York is behind — it also trails less hyped locales such as San Diego, Raleigh, Portland, Seattle, Houston and Dallas.

    New York’s most glaring weakness is a lack of engineering talent. Behind venture capital, the greatest asset of Silicon Valley is its huge proportion of engineers, roughly 45 out of every 1,000 workers. Other high concentrations can be found in such varied burgs as San Diego, Boston, Houston and Denver.

    While the coming Cornell Technion may start to change that dynamic, Gotham has a long way to climb. Right now its concentration is 78th out of 85 metros — just behind Omaha.

    And it’s been headed in the wrong direction. Between 2001 and 2011, the New York area ranked a dismal 44th out of 52 metropolitan areas in tech growth, losing a net 84,000 jobs.

    Even as things picked up after 2009 with the social-media boom, tech employment here expanded about one-tenth as quickly as in Silicon Valley, as well as Columbus, Salt Lake City and Raleigh. Growth in Seattle was eight times faster.

    Without deep engineering talent, regions have a difficult time adjusting to technological changes that periodically reshape the high-tech industry. Silicon Valley is already beginning to move beyond social media; Google and Apple are focused increasingly on building their own pipes to move their content, and expanding into other promising tech fields from household appliances, electric cars and robotics to space exploration. New York simply does not have the engineering heft to make this transition.

    Inevitably, the social media boomlet, like the previous dotcom version, will slow, as companies merge and start moving operations to less expensive areas such as Salt Lake City, Denver, Austin and even Columbus, Ohio. Urban tech firms, particularly in media-drenched places like New York, nearly collapsed when the last bubble burst, with Silicon Alley hemorrhaging 15,000 of its 50,000 information jobs between 2000 and 2005.

    What’s more, the new tech oligarchs are gaining at the expense of New York’s traditional media industries and their elites. Since 2001, the book publishing industry, dominated by New York, has contracted nationally by 17,000 jobs. Newspapers lost 190,000 positions and magazines 50,000 in that same span. But internet publishing, dominated by the Bay Area, expanded by 77,000 jobs.

    Given the cultural tepidness of Silicon Valley, the oligarchs may still exploit talent in places like New York or LA, where artists concentrate. But while New Yorkers talk a good game, money, power and control are shifting away, perhaps permanently, to the left coast.

    This story originally appeared at the New York Daily News.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. 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 Mike Lee

  • Urban Planning 101

    Former World Bank principal planner Alain Bertaud has performed an important service that should provide a much needed midcourse correction to urban planning around the world. Bertaud returns to the fundamentals in his "Cities as Labor Markets."

    Bertaud begins by reminding us that without well functioning labor markets, cities will not be successful. This requires mobility, which he defines as "the ability to move quickly and easily between locations within a metropolitan area" and "the ability to locate one’s house or one’s firm in any location within a metropolitan area." This mobility, he maintains, is indispensable in facilitating growth of the city.

    There is just one exception, according to Bertaud. These are retiree cities, which do not principally rely on mobility for their growth. Yet, Bertaud notes that these are themselves products of the much more numerous conventional cities, where mobility has facilitated growth and in which future retirees accumulate the resources that permit migration to the retirement cities.

    There are also the planned cities for government, such as Brasilia and Washington. Bertaud contends that they have become successful because "more diversified labor market "was grafted " onto the government activities."Before that, however: "The ‘cost is no object’ concept presided over their construction and insured their initial survival as they were financed by taxes paid by the rest of the country." This should give pause to nations, especially in the developing world proposing to build and thereby divert resources from improving the lives of people (see;  Unmanageable Jakarta Soon to Lose National Capital?).

    Imaginary "Urban Villages"

    Bertaud insists on the importance of cities as unified labor markets. Metropolitan areas will be hampered in their development and innovation to the extent that they are fragmented.

    He is particularly critical of planning attempts to create "urban villages" within the unified labor markets (metropolitan areas). He contends that: "The urban village model” implies a systematic fragmentation of labor markets within a large metropolis and does not make economic sense in the real world."

    Bertaud does not accept the notion that:

    "… everybody could walk or bicycle to work, even in a very large metropolis. To allow a city to grow, it would only be necessary to add more clusters. The assumption behind this model is either that urban planners would be able to perfectly match work places and residences, or that workers and employers would spontaneously organize themselves into the appropriate clusters."

    He is concerned at the "prevalence of this conceit in many urban master plans," which he characterizes as "utopian trip patterns."

    According to Bertaud, the urban village "model does not exist in the real world because it contradicts the economic justification of large cities: the efficiency of large labor markets." The cold water of reality is that "… the urban village model exists only in the mind of urban planners."

    Uncontained Self-Contained Satellite Towns

    He supports his claim. Seoul’s satellite communities were intended to be self contained towns (urban villages), in which most residents both lived and worked. Yet, most of the workers employed in the satellite towns live in other parts of the metropolitan area. At the same time, most of the residents of the satellite  work in other parts of the Seoul metropolitan area. He cites Stockholm regulations requiring neighborhood jobs – housing balances as having no impact on shortening commute distances even when such a balance is achieved.

    My own research using 2001 census data indicated that the London area new towns, also intended to be populated principally by people who work in them, had average work trip travel distances more than their diameter (See: Jobs-Housing Balance and Urban Villages in Southeast England). This means that large numbers of people were traveling to work outside the towns. In London as in Seoul, the planners can conceptualize the self-contained satellite towns, but it is beyond them to force the behaviors to make them work.

    Similarly misguided efforts elsewhere, from the San Francisco Bay Area and other California metropolitan areas to Montréal and beyond are destined for similar failures.

    Commuting and the City

    Bertaud cites research by Remy Prud’homme and ChoonWong Lee at the University of Paris showing that the efficiency of cities tends to increase up so long as a large share of the commutes are less than 60 minutes, though optimal efficiency occurs at shorter commute distances. Lest there be any misunderstanding, American cities have average commute times of approximately 25 minutes, according the Census Bureau’s American Community Survey, not the hour or two hour journeys of urban legends.

    Defining the City

    This large commuting radius makes it clear that Bertaud does not accept the distorted urban definition that would, for example, define the urban form to not extend beyond the borders of New York City, or worse beyond the Hudson, East and Harlem Rivers – the boundaries of the island of Manhattan. If the city is limited to dense cores, then the "half urban" world recently announced won’t be here for many decades. The city is the metropolitan area – the labor market, which extends to the far reaches of the commuting shed.

    The Bottom Line

    According to Bertaud, 

    "Increasing mobility and affordability are the two main objectives of urban planning. These two objectives are directly related to the overall goal of maximizing the size of a city’s labor market, and therefore, its economic prosperity." 

    That brings us back to first principles. Cities are about people. Planning is justified to the extent that it facilitates the aspirations of people. The city requires prosperity, which Bertaud shows in a much needed first installment of Urban Planning 101.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.

    —–

    Note: Alain Bertaud’s "Cities as Labor Markets," was published by the Marron Institute on Cities and the Urban Environment at New York University and is intended to be a chapter in his forthcoming book, tentatively titled Order without Design.

  • The Evolution of Red and Blue America 1988-2012

    David Jarman of Daily Kos Elections provides an excellent analysis of the absolute change in the Democratic and Republican vote for president from the 1988 through the 2012 elections, together with valuable tables and maps. The maps, tables, and narrative clearly demonstrate that, while the map looks mostly red as if Republicans were the big winners, the reality is that the Democrats were the beneficiaries of vastly more added votes, because of Democrats’ stupendous domination of the denser, bigger, metropolitan territory. For example, Los Angeles County by itself provided a Democratic gain of 1.2 MILLION, while the largest Republican gain was Utah county, Utah (Provo) with a paltry 90,000 gain. Republicans dominate the vast non-metropolitan expanses, Democrats the urban cores.

    But the title of the piece, “Democrats are from cities, Republicans from exurbs”, is not quite right. Density is only one factor in elections; Democrats did quite well in much of exurbia as well as much of suburbia, relegating Republicans to rural, small city, non-metropolitan America. But the story is as much one of social change as of city versus country. Not only the big central cities, but their suburbs and even exurbs have evolved to house the more socially liberal population, with issues of race, women’s rights, and sexuality converting many middle and upper class to the Democratic side, even while rural small town America and much of the South remain socially conservative and supportive of Republicans.

    This analysis extends Jarman’s findings by disaggregating the net change in the D and R vote by first looking at the degree of change in the Democratic share of the presidential vote from 1988 to 2012 and second by classifying by the change by such categories as:

    • increased R vote shares, 1,
    • declining R votes, 2,
    • shift to Democratic to Republican,3,
    • increased D vote shares, 4,
    • decreased D vote shares, 5,  and
    • 6, a shift from Republican to a Democratic majority

    This permits a more subtle geographic evaluation of the evolution of Red and Blue America. I want to thank the Daily Kos Elections which generously provided the necessary data files. This analysis considers only the vote for president, as the story of votes for congress is complicated by gerrymandering and other issues.

    Change in the Democratic vote by type of change (see Table 1)

    Table 1: Net Change by Type of Change
    Number of Counties 2012 %D 1988 %D Change in D% 88-12 net change County Type (Code)
    1411 30.8 39.8 -9 -4,605,125 1 Total
    448 40.3 55.1 -14.5 -1,517,300 3 Total
    108 55.8 57.2 -1.4 -62,214 5 Total
    -6,184,639 R gain
    274 71.1 58 12.8 8,835,866 4 Total
    313 59.7 42.9 16.4 8,917,699 6 Total
    572 42.4 35.3 7.1 463,743 2 Total
    18,217,308 D gain
    12,032,669 Net D Gain

    Almost half of all counties, 1411, experienced Democratic declines and net Republican gains, totaling  a  net change of 4,605,000, with the Democratic share dropping nine points from 39.8% to 30.8%.  Next in importance for Republicans was the gain of 1,517,000 votes in 448 counties taken from the Democratic column in 1988, with a decline in the Democratic share from 55.1% to 40.3%, a big drop of 14.8 points.  Finally a smaller number of counties, 108, remained Democratic but with a declining share (type 5), giving Republicans a small net gain of 62,000. These Republican gains totaled 6,184,000 and look impressive on a US map.

    But what the Democrats lose in vast America, they make up in the crowded parts. Although their increased shares took place in only 274 counties, the gains were populous enough to provide the Democrats with a massive gain of 8,836,000 total votes. The D share rose an impressive 12.5 points from 58.8% to 71.1%. (This exceeds even the R share in the R gaining counties). But even this big number was exceeded by the gain of 8,918,000 in the again fairly small number of counties which switched from Republican to Democratic, with a change in share up 16.4 points from 46.1% D to 59.3%. Finally the Democrats gained a net 464,000 votes in 572 counties carried by Republicans but by a lesser margin than in 1988, with the D share rising from 35.3% to 42.4%.  Overall the net Republican gains of 6,184,000 were surpassed by Democratic gains of 18,717,000 for a net D growth of 12,032,000, a rise in the D share of 5.9 points from 46.1% in 1988 to 52.6% in 2012.

    Change By State

    A short look at the state level is interesting (Table 2).  Sixteen states became even more Republican, with a net gain of 2,681,000.  Most important in total numbers is the southwestern set of  TX, OK, LA, and AR (1,143,000), then the northern mountain states of UT,ID, WY, and MT (477,000), followed by the Great Plains states of ND,SD, NE, KS, and MO (376,000), and the Appalachian set of TN  and KY (488,000). To the latter should be added West Virginia, 210,000, the only state which switched from Democratic to Republican and an apt example of the non-big-metropolitan and ideological shift in the US electorate.  Only one state, Iowa, experienced a small Democratic decline.

    Nine states became even more Democratic, but sixteen switched from Republican to Democratic, and thus spurring the major numeric and geographic manifestation of the 1988-2012 realignment, a total of 15,342,000.  Combining the Democratic states into subregions reveals the overwhelming importance of greater northeastern Megalopolis, yielding a net vote gain of 5,660,000 and of the “Left Coast” with 4,115,000, both dwarfing the total Republican gains. And the gains in the Great Lakes of 2,740,000, northern New England of 443,000, and the southern Mountain states of 431,000 were significant. Finally the major change in the South Atlantic region is notable, with a gain of 1,383,000 in SC, NC, GA, and FL, even though all but Florida remained Republican. At the individual state level California is dominant, 3,367,000, followed by NY-NJ. For Republicans Texas dominated with 578,000 followed by much smaller Utah with 268,000.

    County level

    The first two maps are the traditional red and blue (sort  of) choropleth maps, showing in Map 1 change in the share voting Democratic and in Map 2, the type of change. Map 3 depicts via graduated circles the absolute net change by counties, like the similar map in the Jarman article.

    Percent change in the Democratic and Republican shares, 1988-2012, Map 1

    Somewhat over half the territory of the US experienced Republican gains, in red shadings, but on average, the populations of the counties are smaller than for the Democratic counties in the blue shades. The dominant swath of red in the center third of the country from TX and LA north through the Dakotas and MN is impressive, but also prominent is the extension across the border south from MO and southern IL to KY, WV and into western PA, and then the northwestern extension to the mountain west, as far as the Cascade range. The most extreme Republican gains were in the two cores of southern Appalachia and eastern TX and OK into LA, plus UT. Most are non-metropolitan. A few most extreme R gains were in Knott, KY, 50%, Cameron, LA, 45, Mingo and Logan, WV, 44 and 43, and Kent, TX, 43%.

    Democratic gains were far more concentrated: in the northeast, in the urban Great Lakes, in much of FL, in the Black Belt of the south, in the metropolitan Left Coast, and in the southern mountain states. The highest gains were in central and suburban-exurban counties in the northeast, the west coast, and Great Lakes, and also in non-metropolitan northern New England. Lower Democratic gains were common beyond the big metropolitan cores or on the edges of the Black Belt in the south.  A few of the more extreme Democratic increases were in Clayton, GA, 51%, Rockdale, GA, 33, both suburban Atlanta, Osceola, FL, 31, Prince George, MD, 30, and Hinds, MS (Jackson), 28%. 

    Kind of change, 1988-2012, Map 2

    The 1411 counties becoming even more Republican (type 1) certainly dominate the interior Plains from Canada to the Gulf and the interior, mainly non-metropolitan far northwest. There are a few counties (typically university counties) in this heartland with counties still red, but less so in 2012. The dominant areas for Republican decline (type 2) are found in the Great Lakes states, in the non-metropolitan, often exurban edges of Megalopolis (NY, PA, NJ, MD, VA). Other areas of Republican decline include rural areas in the interior west, especially areas with environmental attractions and/or increasing Latino populations, and even in parts of the traditional south, such as MS, FL, SC,NC, and VA.

    Most notable are such long term Republican strongholds as Orange, CA, Duval (Jacksonville), FL, and Maricopa, (Phoenix).  Counties which switched from Democratic to Republican (type 3) are first and most impressively in Appalachia from western PA, then including most of WV, and into western VA, central TN into northern AL, second in the TX-OK-AR-LA zone, almost totally non-metropolitan.

    Areas of Democratic gains, type 4, darkest blue, require a close look at the map, as they are mainly the metropolitan cores, most notably Los Angeles, Cook, King (Seattle), much of the New York SMSA, San Francisco-Oakland, Detroit, and Philadelphia. However there are also many majority-minority counties: in the Black Belt across the south, in a few Hispanic areas along the Rio Grande, and Native American areas across the west. Highest Democratic share gains were in metropolitan CA,  FL, in exurban New York, Philadelphia, Washington, DC, and Chicago, northern New England and select amenity areas, popular with metropolitan migrants, even in WY and ID!

    Democratic voter share declined (type 5) in  some urban cores, like Allegheny (Pittsburgh), but the most prominent areas are in farming and forestry  areas in the upper Midwest (IA, WI, MN, often adjacent to counties which switched from D to R), and traditionally D forest industry counties in OR and WA. Especially interesting are the counties switching from Republican to Democratic, type 6, most critical to understanding the connection to social liberalism. The most prominent area is northern New England and NY, and extending through Megalopolis snatching a large number of very populous suburban and EXURBAN counties (MA, CT, NY, NJ, MD, VA, PA).

    A second large swath in territory and population is in CA, switching major metropolitan-suburban counties, and also increasingly Hispanic counties to the D column. This switching of suburban and exurban counties was also prevalent in CO, OR, WA, IL, and MI, as well as in parts of the south, e.g., FL and NC. Less visible is the shift of many university counties in most parts of the country. Last and increasingly important is the shift of rural environmentally attractive areas, mostly across the west, but also in the south Atlantic, upper New England and the upper Great Lakes, in part due to retirement of urban professionals. Some of the most important switches were Riverside, San Bernardino, San Diego, Sacramento in CA; Miami and Orlando, FL; Oakland, MI; Suffolk, Bergen and Westchester (all exurban New York); Mecklenburg (Charlotte); and Marion, IN (Indianapolis).

    Absolute change in the D and R vote, 1988-2012, Map 3

    Map 3 plots the absolute size variation in the Democratic versus Republican change, via a simple blue versus red, to assist the reader in properly interpreting Maps 1 and 2. The map highlights the tremendous concentration of Democratic gains in the northeastern Megalopolis, metropolitan California, the big cities of the Great Lakes, and Florida, versus the much more widespread pattern  of Republican gains, extensive in area but small in voter magnitude across the Plains, Mountain states, and most notably, Appalachia .

    Overall, what emerges is a picture far more subtle than simply cities versus exurbs. The bad news for Republicans is that most of their gains occur in rural areas with little population while the Democrats have consolidated their increases in more populous urban, suburban, and in some places exurban areas. Whether these trends spell the death knell for the GOP in the post-Obama period may turn on how they learn to appeal to the next generation of suburban and exurban voters – many of them Hispanic or Asian – as they enter their 30s, buy houses and start businesses. Economic issues could help here, but an emphasis on social issues, or simple anti-tax dogmatism could spell the GOP’s descent into permanent minority status.

    Table 2: Greatest Changes by State
    State 2012% 1988% % Change Code Net change (000)
    TX 42 43.7 -1.7 1 -578
    UT 25.4 32.6 -7.2 1 -268
    KY 36 44.7 -8.7 1 -254
    OK 33.3 41.6 -8.3 1 -253
    TN 39.5 41.8 -2.3 1 -234
    WV 36.3 52.4 -16.1 3 -210
    WY 28.6 39.5 -10.9 1 -62
    DE 59.6 43.5 16.1 4 114
    VT 68.2 48.3 19.9 6 115
    NV 53.3 39.2 14.1 6 141
    NH 52.9 37.7 15.2 6 157
    ME 57.8 44.3 13.5 6 171
    WA 58.2 50.8 7.4 4 435
    MA 61.7 54 7.7 4 516
    VA 51.9 39.7 12.2 6 598
    OH 51.5 43.9 7.6 6 643
    MI 54.8 46 8.8 6 739
    MD 62.6 48.5 14.1 6 756
    IL 58.6 49 9.6 6 979
    FL 50.4 38.8 11.6 6 1,036
    NJ 59 43.1 15.9 6 1,068
    NY 66.2 52.1 14.1 4 1,720
    CA 61.9 45.2 16.7 4 3,367

    Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist).

  • Forget What the Pundits Tell You, Coastal Cities are Old News – it’s the Sunbelt that’s Booming

    Ever since the Great Recession ripped through the economies of the Sunbelt, America’s coastal pundit class has been giddily predicting its demise. Strangled by high-energy prices, cooked by global warming, rejected by a new generation of urban-centric millennials, this vast southern region was doomed to become, in the words of the Atlantic, where the “American dream” has gone to die. If the doomsayers are right, Americans must be the ultimate masochists. After a brief hiatus, people seem to, once again, be streaming towards the expanse of warm-weather states extending from the southeastern seaboard to Phoenix.

    Since 2010, according to an American Community Survey by demographer Wendell Cox, over one million people have moved to the Sunbelt, mostly from the Northeast and Midwest.

    Any guesses for the states that have gained the most domestic migrants since 2010? The Sunbelt dominates the top three: Texas, Florida and Arizona. And who’s losing the most people? Generally the states dearest to the current ruling class: New York, Illinois, California and New Jersey.  Some assert this reflects the loss of poorer, working class folks to these areas while the “smart” types continue to move to the big cities of Northeast and California. Yet, according to American Community Survey Data for 2007 to 2011, the biggest gainers of college graduates, according to Cox, have been Texas, Arizona and Floria; the biggest losers are in the Northeast  (New York), the Midwest (Illinois and Michigan).

    For the most part, notes demographer Cox, this is not a movement to Tombstone or Mayberry, although many small towns in the south are doing well, this is a movement to Sunbelt cities. Indeed, of the ten fastest growing big metros areas in America in 2012, nine were in the Sunbelt. These included not only the big four Texas cities—Austin, Houston, Dallas-Ft. Worth, San Antonio—but also Orlando, Raleigh, Phoenix, and Charlotte.

    Perhaps the biggest sign of a Sunbelt turnaround is the resurgence of Phoenix, a region devastated by the housing bust and widely regarded by contemporary urbanists as the “least sustainable” of American cities. The recovery of Phoenix, appropriately named the Valley of the Sun, is strong evidence that even the most impacted Sunbelt regions are on the way back. 

    A look at the numbers on domestic migration undermines the claim that most Americans prefer, like the pundit class, to live in and near the dense Northeastern urban cores. People simply continue to vote with their feet. Since 2000, more than 300,000 people have moved to Atlanta, Dallas, Houston, and Charlotte; in contrast a net over two million left New York and 1.4 million have deserted the LA area while over 600,000 net departed Chicago and almost as many left the San Francisco Bay region. These trends were slowed, but not reversed, by the Great Recession.

    The Sunbelt’s recovery seems likely to continue in the future. Immigrants, who account for a rising proportion of our population growth, are increasingly heading there. New York remains the immigrant leader, with the foreign-born population increasing by 600,000 since 2000 but second place Houston, a relative newcomer for immigrants, gained 400,000, more than Chicago and the Bay Area combined. The regions experiencing the highest rate of newcomers were largely in the south; Charlotte and Nashville saw their foreign-born populations double as immigrants increasingly beat a path to the Sunbelt cities.

    The final demographic coup for the Sunbelt lies in its attraction for families. Eight of the eleven top fastest growing populations under 14, notes Cox, are found in the Sunbelt with New Orleans leading the pack. Generally speaking, roughly twenty percent or more of the population of Sunbelt metros are under 14, far above the levels seen in the rustbelt, the Left Coast, or in the Northeast.

    This all suggests that the Sunbelt is cementing, not losing, its grip on America’s demographic future. By 2012 and 2017, according to a survey by the manufacturing company Pitney Bowes nine of the ten leading regions in terms of household growth will be in the Sunbelt.

    If the population growth rates predicted by the US Conference of Mayors continue, Dallas-Ft. Worth will push Chicago out of third place among American metropolitan areas in 2043, with Houston passing the Windy City eight years later. Now seventh place Atlanta would move up to sixth place and Phoenix to 8th. Of America’s largest cities then, five would be located in the Sunbelt, and all are expected to grow much faster than New York, Los Angeles or the San Francisco area. Overall, the South would account for over half the growth in our major metropolitan areas in 2042, compared to barely 3.6 percent for the Northeast and 8.7 percent in the Midwest.

    What drives the change? Not just the sun, but the economy, stupidos!

    From the beginning of the Sunbelt ascendency, sunshine and warm weather have been important lures and this may even be more true in the near future. But the key forces driving people to the Sunbelt are largely economic—notably job creation, lower housing prices and lower costs relative to incomes.

    Until the housing bust, states like Arizona, Nevada and Florida were typically among the leaders in creating new jobs but their performance fell off with the decline of construction. But other Sunbelt locales, notably Texas, Louisiana and Oklahoma have picked up much of the slack. This resurgence has been centered in Texas, which created nearly a million new jobs between 2007 and 2013. In contrast, arch-rival California has lost a half a million.

    Many other Sunbelt states have yet to recover jobs lost from the recession, but most of their big metros have shown strong signs of recovery. Since 2007 five of the seven fastest growing jobs markets among the twenty largest cities were in Sunbelt states. Looking forward, recent estimates of job growth between 2013 and 2017, according to Forbes and Moody’s project employment to grow fastest in Arizona, followed by Texas. Also among the top ten are several states hit hard by the Recession, notably Florida, Georgia and Nevada. No Northeastern state appeared anywhere on the list; nor did California.

    For all its shortcomings, including what some may consider the overuse of tax breaks and incentives, the much-dissed Sunbelt development model continues to reap some significant gains. The area’s history of lagging economically has long spurred Sunbelt economic developers to utilize a policy of light regulation, low taxes and lack of unions to lure businesses to their area. Sunbelt states—Texas, Florida, the Carolinas, Tennessee, Arizona—dominate the ranks of the most business friendly states in the union, notes Chief Executive magazine, findings they often cite when courting footloose businesses.

    The clear economic capital of the Sunbelt is now Houston, with some stiff competition from Dallas-Ft. Worth. Houston, the energy capital, now ranks second only to New York in new office construction and is the overall number one for corporate expansions. There are fifty new office buildings going up in the city, including Exxon Mobil’s campus, the country’s second largest office complex under construction (after New York’s Freedom Tower). Chevron, once Standard Oil of California, has announced plans to construct a second tower for its downtown Houston campus while Occidental Petroleum, founded more than fifty years ago in Los Angeles, is moving its headquarters to Houston.

    Houston’s ascendance epitomizes the shift in the geographic and economic center of the Sunbelt. The “original in the Xerox machine” for Sunbelt style growth, Los Angeles’ rise was powered by new industries like entertainment and aerospace and oil, ever expanding sprawl and a strong, tightly knit business elite. Pleasant weather and Hollywood glitz still inform the image of Los Angeles, but under a regime dominated by government employee unions, greens and developers of dense housing, it suffers unemployment almost four points higher than Houston . Nine million square feet of space is currently being built in Houston, compared to just over one million in Los Angeles-Orange which has more than twice the population. It is not in the rising Sunbelt but in places like Southern California, where jobs lag amidst high costs, that the American dream now seems most likely to die.

    Movin’ on Up

    In Houston particularly but throughout the Sunbelt, job growth critically is not tied to cheap labor, but to  industries like energy which pay roughly $20,000 more than those in the information sector. According to EMSI, a company that models labor market data, energy has  generated some 200,000 new jobs in Texas alone over the past decade. Although Houston is the primary beneficiary, the American energy boom is also sparking strong growth in other cities, notably Dallas-Ft. Worth, San Antonio, and Oklahoma City.

    Once dependent on low-wage industries such as textiles and furniture, the energy boom is pacing a  Sunbelt move towards generally better paying heavy manufacturing. Texas and Louisiana already lead the nation in large new projects, many of them in petrochemicals and other oil-related production. Of the biggest non-energy investments, three of the top four, according to the Ernst and Young Investment Monitor, are in Tennessee, Alabama and South Carolina, which are becoming the new heartland of American heavy manufacturing, notably in automobiles and steel. Since 2010, Birmingham, Houston, Nashville and Oklahoma city all have enjoyed double digit growth in high paying industrial jobs that used to be the near exclusive province of the Great Lakes, California and the Northeast.

    The Sunbelt resurgence is important in part because it offers some hope to millions of Americans who may not have gone to Harvard or Stanford, but have work skills and ambition. The region’s growth in what might be called “middle skilled jobs” that pay $60,000 or above has been impressive.

    It may come as a surprise to some, but the Sunbelt is also pulling ahead in high tech jobs. In a recent analysis of STEM (science, technology, engineering and mathematics) job growth for Forbes we found that out of out of the 52 largest regions, the four most rapid growers over the past decade were Austin, Raleigh, Houston and Nashville, with Jacksonville, Phoenix and Dallas also in the top fifteen. In contrast New York ranked #36th out of 52 and Los Angeles, a long-time tech superpower, now a mediocre #38.

    In another example of how much things are changing, when college students in the South now graduate, noted a recent University of Alabama study, they do go to the “big city” but their top four choices outside the state are in the Sunbelt—Atlanta, Houston,  Nashville, Tenn., and Dallas—and followed then by New York. The biggest net gains in people with BAs and higher are primarily in the sunbelt, led by Phoenix,   Houston, Dallas-Ft. Worth, Austin, Houston and San Antonio; the biggest losers, according to Cox’s calculations, have been New York, Los Angeles, Chicago and, surprisingly given its reputation, Boston.

    These trends may become more pronounced as the current millennial generation starts settling down into family life. Housing costs could prove a decisive factor. In terms of the median multiple, median housing cost as share of median household income, Sunbelt cities tend to be about half as expensive as New York, Boston or Los Angeles, and one third of the Bay Area.  

    To be sure, many of the “best and brightest” will continue to flock to New York, the Bay Area or Los Angeles, but many more—particularly those without Ivy degrees or wealthy parents—may migrate to those places where their paycheck stretches the furthest. The Sunbelt, with its job growth, strong middle class wages and lows housing costs, is a good bet for the future.  

    What will the future bring?

    Prosperity, Herodotus reminded us, “never abides long in one place.” Certainly the Sunbelt economy could lose its current momentum but fortunately, having been schooled by the housing bust, many Sunbelt communities are increasingly focused on improving their basic economy—jobs, income growth, and skills-based education. Tennessee and Louisiana, for example, have led the way on expanding working training, and some of most ambitious education reform is taking place in New Orleans and Houston.

    Yet, there are many threats to continued growth, both internal and external. Given his penchant for executive orders and his close ties to wealthy green donors, President Obama could take steps—for example clamping down on fossil fuel development—that could reverse the steady growth along the Gulf Coast. Any draconian shift on climate change policies would be most detrimental to the energy sector Sunbelt states.

    But President Obama will not be in office forever. In the long run, the biggest threat to the Sunbelt ascendency is internal. Some fear that as more easterners and Californians flock to the area, they will bring with them a taste for the very regulatory and tax policies that have stifled growth in the states they left behind . Most worryingly, so called “smart growth” regulations could drive housing costs up, as occurred in Florida and several other states in the last decade, and erode some of the Sunbelt’s competitive advantage.

    Perhaps the most immediate threat comes from the angry, reactionary elements on the right, who tend to be more powerful in the sunbelt than elsewhere. These groups, sometimes including the Tea Party, have taken   positions on issues like immigration and gay rights that local business leaders fear could deprive their regions of energetic and often entrepreneurial newcomers. Equally important, the right’s anti-tax orthodoxy, although perhaps not as devastating as the huge burdens placed on middle class individuals in the North and California, could delay critical outlays in transportation, parks and other essential infrastructure in regions that are growing rapidly. This is particularly true of education, a field in which most Sunbelt cities, while gaining ground, remain below the national average.

    Whatever one thinks of the motivations of the green clerisy, there are clearly environmental measures, particularly in the Sunbelt’s western regions, that these cities need to enact to protect future growth. This includes reducing the amount of concrete that creates “heat islands,” expanding parks, and shifting to more drought resistant plants.

    Fortunately, many leaders throughout the Sunbelt, particularly in its cities, are aware of these challenges, and are looking for ways to tackle them. This is driven not by the doomsday environmentalism common in California and Northeast, but grows instead out of a practical concern with stewarding critical resources and creating the right amenities to foster continued growth.

    Combined with basics like lower housing costs and taxes, it’s a common optimism about the future that really underlies the resurgence now occurring from Phoenix to Tampa. The long-term shifts in American power and influence that have been underway since the 1950s have not been halted by the housing bust. Disdained by urban aesthetes, hated by much of the punditry, and largely ignored except for their failings in the media, the Sunbelt seems likely to enjoy the last laugh when it comes to shaping the American future.

    This story originally appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. 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.

    Houston skyline photo by Bigstock.

  • ‘Lone Eagle’ Cities: Where The Most People Work From Home

    In an era of high unemployment and limited opportunity, more Americans are taking matters into their own hands and going to work for themselves out of their homes.

    Normally small businesses have led the way during economic recoveries, but this time around they’re not creating many jobs. Instead much of the growth we are now seeing is in “lone eagle” businesses, to borrow a phrase from Phil Burgess, often operating out of the worker’s residence. This reverses the trend from 1960 to 1980, when there were steady reductions in the number of people who worked at home. Indeed, despite all the talk of increased mass transit usage, the percentage of Americans working at home has grown 1.5 times faster over the past decade; there are now more telecommuters than people who take mass transit to work in 38 out of the 52 U.S. metropolitan areas with more than 1,000,000 residents.

    One clear driver of this trend is technology, particularly the growing ubiquity of high-speed Internet. A consultant in New York can now serve customers in Fargo, and vice versa, greatly expanding the range of places where people can live. This is particularly true for aging boomers, as well as younger workers having problems finding a full-time job in this tough economy.

    Not surprisingly, of America’s 52 largest metro areas, the ones with the highest proportions of home-based workers are generally those with high-tech, information-based economies. Tops is San Diego, a major center for digital and biomedical businesses, where 6.6% of workers are based at home.

    The next five metro areas, which have home worker concentrations ranging from 6.1% to 6.4%, all boast a high number of STEM workers and tech firms: Austin, Portland, Denver, Raleigh and San Francisco-Oakland. They all also have another thing in common: They tend to be popular destinations for millennials, who seem far more comfortable with unconventional work arrangements than older generations.

    High real estate costs may be accelerating the trend in San Francisco, San Diego and Portland —  if office space isn’t affordable, why not stay at home? All are also plagued by traffic congestion, most notably the Bay Area, which has among the longest commute times in the country. Rather than drive down snarled freeways, or take slow mass transit, individuals may do better working from home and heading into the traffic maelstrom only when absolutely necessary.

    College Towns, Suburbs And Exurbs

    Many metro areas, of course, are huge, and have many different kinds of geographies. But when we looked at the percentage of home-based workers in all municipalities with populations above 25,000, two types dominated the top of the table: college towns and tech-oriented exurbs. Boulder, Colo., for example, has the third highest proportion of people who work at home, at 11.6%, almost three times the national average. Other college towns with large proportions of telecommuters and one-person businesses include Berkeley, Calf. (tied for fifth, 10.6%), and Columbia, S.C. (12th, 9.9%), home to the University of South Carolina.

    But the bulk of our leading work-at-home locales are tech-oriented suburbs or exurbs. These include several communities around the often traffic-clogged greater Atlanta area, including No. 2 John’s Creek (13.1%) and No. 6 Alpharetta (10.6%).

    There are even more in the sprawl of Southern California. As many  longtime Southland residents can attest, the best workday is one that does not involve either driving or taking transit. The top municipalities on our list in the region tend to be more affluent communities, including two suburbs of our top-ranked metro area, San Diego: Carlsbad (16th, 9.4%) and Encinitas (fourth, 10.7%).

    The Codger Economy

    Yet it would be a mistake to think cities with large home-based workforces are necessarily youthful ones. Nor are they all in large metropolitan areas. Although still slightly below the average for metropolitan areas, the pace of new telecommuter growth is now much faster outside the major metro areas.

    More than 5 million Americans aged 55 or older run their own businesses or are otherwise self-employed, according to the Small Business Administration, and their numbers soared 52% from 2000 to 2007. As research from the Kauffmann Foundation suggests, many of these aging workers are not ready to hang up their workboots.

    This entrepreneurial push could correlate with  the movement of aging boomers to more rural communities, and sleepier outer suburbs. Contrary to the much-hyped notion of a “back to the city” movement among boomers, Census research suggests that if they move at all, most head further to the periphery. At the top of our list of communities over 25,000 is the coastal North Carolina city of Jacksonville, home to the Marine Corps’ Camp Lejeune and a good number of military retirees. A remarkable 13.8% of the people in this highly affordable, scenic community of 70,000 work out of their homes, roughly three times the national average. The median home price in Jacksonville: $141,000.

    Other retirement hot spots with high telecommuter shares include Boca Raton, Fla. (9.8%), Scottsdale, Ariz. (9.8%), and Bend, Ore. (9.0%). These communities tend to attract well-educated boomers, many of whom have kept their business connections and work as consultants. In many cases, telecommuting allows people to continue their careers, but in an atmosphere of comfort, without the burden of commuting and, in many cases, sans the high income taxes of places like California and New York.

    We can expect the wired economy to expand to other smaller communities. Already numerous smaller towns in the Midwest, such as Albert Lea, an hour and a half from Minneapolis, Brainerd, Minn., and Hastings Neb., all have home worker shares well above the national average. Many of the areas with the fastest growth in the number of self-employed people, notes EMSI is in small, somewhat isolated communities.

    Many analysts who follow these trends expect stay-at-home workers to become more common in the future. According to research by Kate Lister and Tom Harnish of the Telework Research Network, the typical teleworker is a 49-year-old, college-educated, salaried, non-union employee in a management or professional role, earning $58,000 a year at a company with more than 100 employees.

    This suggests that, as more workers enter their 50s, the telework population will expand further.  These numbers will continue to be buttressed by both economic and social factors. The shift towards outsourcing by companies seems unlikely to slow in the years ahead, with more work going to subcontractors who can often work at home. At the same time more boomers, particularly those with skills and connections, will continue to move to places that offer more attractive lifestyles — a process that Joel Garreau has labeled “the Santa Fe-ization of the world,” which he links to people with enough money to have choices.

    In the future, however, less well-heeled workers can also be expected to increasingly shift to affordable locales that appeal to them. This can be almost anywhere — a beach community, a rural hamlet, an exurb or even a dense urban location, as we can see by the geographic diversity in these rankings. As USC grad student Jeff Khau writes, this should encourage the development of wired coffee shops and casual restaurants in smaller communities and exurbs.

    Finally, there are both familial and environmental reasons for this trend to expand. With more two-worker households, it has become more attractive to have at least one person working from home, part-time or full-time. And then there is the environmental desire to reduce carbon admissions. Compared to being forced to live in dense cities, or taking mass transit, the best way by far to reduce energy use – not to mention stress – is to not leave home at all.

    Top Places Where Residents Work at Home

    No. 1: Jacksonville, NC – 13.8%

    No. 2. Johns Creek, GA – 13.1%

    No. 3: Boulder, CO – 11.6%

    No. 4: Encinitas, CA – 10.7%

    No. 5 (tie): Berkeley, CA – 10.6%

    No. 5 (tie): Alpharetta, GA -10.6%

    No. 5 (tie): Santa Monica, CA -10.6%

    No. 8: Frisco, TX – 10.2%

    No. 9 (tie): San Clemente, CA – 10.1%

    No. 9 (tie): Columbus, GA – 10.1%

    No. 11: Bethesda CDP, MD – 10.0%

    No. 12: Columbia, SC – 9.9%

    No. 13 (tie): Boca Raton, FL – 9.8%

    No. 13 (tie): Scottsdale, AZ – 9.8%

    No. 15: Newport Beach, CA – 9.5%

    Journey to Work Market Share by Mode (2012 ACS.1 & Year)
      Total Drive Alone Car Pool Transit Cycle Walk Other  @ Home
    United States 100% 76.3% 9.7% 5.0% 0.6% 2.8% 1.2% 4.4%
    Outside Major Metropolitan Areas 100% 79.9% 10.2% 1.2% 0.6% 2.8% 1.2% 4.1%
    Major Metropolitan Areas (52) 100% 73.5% 9.3% 7.9% 0.7% 2.8% 1.2% 4.6%
                     
    Atlanta, GA 100% 78.0% 10.5% 2.9% 0.1% 1.4% 1.1% 5.9%
    Austin, TX 100% 76.0% 11.0% 2.3% 0.9% 2.0% 1.4% 6.4%
    Baltimore, MD 100% 76.5% 8.9% 6.5% 0.3% 2.7% 1.0% 4.1%
    Birmingham, AL 100% 85.7% 9.1% 0.6% 0.1% 1.0% 0.5% 2.9%
    Boston, MA-NH 100% 68.6% 7.5% 12.2% 1.0% 5.4% 1.0% 4.4%
    Buffalo, NY 100% 82.9% 7.5% 3.0% 0.5% 2.9% 0.8% 2.3%
    Charlotte, NC-SC 100% 78.8% 10.3% 2.1% 0.2% 1.6% 1.2% 5.9%
    Chicago, IL-IN-WI 100% 70.9% 8.8% 11.1% 0.7% 3.2% 1.1% 4.2%
    Cincinnati, OH-KY-IN 100% 83.5% 8.3% 1.8% 0.1% 2.0% 0.7% 3.5%
    Cleveland, OH 100% 82.3% 7.4% 3.2% 0.3% 2.3% 0.9% 3.6%
    Columbus, OH 100% 82.1% 8.4% 1.6% 0.5% 2.0% 1.1% 4.3%
    Dallas-Fort Worth, TX 100% 80.9% 10.2% 1.5% 0.2% 1.2% 1.5% 4.6%
    Denver, CO 100% 75.6% 9.1% 4.4% 1.1% 2.4% 1.1% 6.3%
    Detroit,  MI 100% 83.7% 8.9% 1.6% 0.3% 1.3% 0.8% 3.4%
    Grand Rapids, MI 100% 82.7% 9.2% 1.2% 0.5% 1.8% 0.6% 4.0%
    Hartford, CT 100% 81.4% 7.6% 3.4% 0.2% 2.7% 0.9% 3.7%
    Houston, TX 100% 79.6% 11.1% 2.6% 0.3% 1.4% 1.5% 3.5%
    Indianapolis. IN 100% 82.6% 9.4% 1.2% 0.3% 1.6% 0.9% 4.0%
    Jacksonville, FL 100% 80.7% 9.9% 1.3% 0.7% 1.3% 1.3% 4.7%
    Kansas City, MO-KS 100% 83.2% 8.9% 1.1% 0.2% 1.3% 1.1% 4.2%
    Las Vegas, NV 100% 78.5% 10.7% 3.8% 0.3% 2.0% 1.6% 2.9%
    Los Angeles, CA 100% 74.1% 10.1% 6.0% 0.9% 2.6% 1.2% 5.1%
    Louisville, KY-IN 100% 82.9% 9.3% 1.8% 0.2% 1.8% 0.8% 3.2%
    Memphis, TN-MS-AR 100% 83.0% 10.5% 1.2% 0.1% 1.2% 0.9% 3.0%
    Miami, FL 100% 77.6% 9.5% 4.2% 0.6% 1.8% 1.3% 5.0%
    Milwaukee,WI 100% 80.2% 8.6% 3.7% 0.6% 2.9% 0.7% 3.2%
    Minneapolis-St. Paul, MN-WI 100% 78.2% 8.6% 4.3% 1.0% 2.2% 0.7% 5.0%
    Nashville, TN 100% 82.4% 9.6% 1.1% 0.1% 1.2% 1.0% 4.7%
    New Orleans. LA 100% 79.2% 10.4% 2.7% 1.0% 2.5% 1.6% 2.6%
    New York, NY-NJ-PA 100% 49.8% 6.7% 31.0% 0.6% 6.1% 1.6% 4.1%
    Oklahoma City, OK 100% 82.9% 10.2% 0.4% 0.3% 1.7% 1.2% 3.3%
    Orlando, FL 100% 80.8% 9.2% 2.0% 0.6% 1.2% 1.7% 4.6%
    Philadelphia, PA-NJ-DE-MD 100% 73.3% 7.9% 9.4% 0.7% 3.8% 0.7% 4.2%
    Phoenix, AZ 100% 77.3% 11.0% 2.1% 0.8% 1.4% 1.8% 5.6%
    Pittsburgh, PA 100% 77.3% 9.0% 5.5% 0.3% 3.4% 0.9% 3.6%
    Portland, OR-WA 100% 70.8% 9.7% 6.0% 2.3% 3.8% 1.0% 6.4%
    Providence, RI-MA 100% 80.4% 8.8% 2.9% 0.3% 3.2% 1.1% 3.2%
    Raleigh, NC 100% 80.3% 9.8% 1.0% 0.4% 1.1% 1.2% 6.2%
    Richmond, VA 100% 81.5% 9.3% 1.6% 0.5% 1.5% 0.9% 4.7%
    Riverside-San Bernardino, CA 100% 77.7% 13.4% 1.5% 0.4% 1.6% 1.0% 4.4%
    Rochester, NY 100% 82.4% 7.9% 1.9% 0.3% 3.6% 0.7% 3.2%
    Sacramento, CA 100% 75.5% 11.2% 2.3% 1.9% 2.2% 0.9% 6.0%
    Salt Lake City, UT 100% 75.0% 12.1% 3.9% 0.9% 2.0% 1.3% 4.7%
    San Antonio, TX 100% 79.7% 11.1% 2.3% 0.1% 1.7% 1.0% 4.1%
    San Diego, CA 100% 76.2% 9.9% 2.8% 0.7% 2.7% 1.2% 6.6%
    San Francisco-Oakland, CA 100% 60.4% 10.1% 15.6% 1.8% 4.3% 1.6% 6.1%
    San Jose, CA 100% 76.5% 10.6% 3.4% 1.9% 1.6% 1.4% 4.6%
    Seattle, WA 100% 69.6% 10.5% 8.5% 1.2% 3.6% 1.1% 5.5%
    St. Louis,, MO-IL 100% 82.4% 8.1% 2.3% 0.3% 1.7% 0.9% 4.2%
    Tampa-St. Petersburg, FL 100% 80.0% 9.6% 1.2% 0.8% 1.7% 1.3% 5.4%
    Virginia Beach-Norfolk, VA-NC 100% 80.9% 8.9% 1.9% 0.4% 2.7% 0.9% 4.3%
    Washington, DC-VA-MD-WV 100% 65.8% 10.2% 14.1% 0.8% 3.2% 0.9% 5.0%

    This story originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. 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.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.

    Photo by By Rae Allen, “My portable home office on the back deck”

  • What America’s Fastest-Growing Economies Have in Common

    Midland and Odessa in West Texas. Pascagoula, a port town on the Mississippi Gulf Coast. Fargo and Bismarck, the two largest cities in North Dakota. These were among the USA’s 10 fastest-growing metro economies in 2013, as ranked by growth in real gross metropolitan product (GMP), and they have a few things in common.

    For one thing, none are huge population magnets. They’re also either at the center of the energy boom or indirectly benefiting from the advances in fracking technology. And they share another common trait, too: along with Columbus, Ind., also in the top 10, most of these metro areas depend on one major, export-oriented industry sector to bring in outside income and drive growth.

    In Columbus’ case, it’s manufacturing. In Odessa and Midland’s, it’s oil and gas extraction. Fargo and Bismarck have diversified economies, but they’ve a seen surge in economic activity because of North Dakota’s oil and gas boom. And in Pascagoula, it’s shipbuilding (and shipments of liquefied natural gas through the Port of Pascagoula).

    USA TODAY had a good rundown from 24/7 Wall St. of the top 10 (and bottom 10) economies, which were based on a Conference of Mayors report released in January. The authors of the piece touched on the reliance most of these metros have on one industry, and the ups and downs that can come with that. In the case of Columbus, they pointed to EMSI’s recent analysis:

    The area is highly dependent on manufacturing, and according to a 2012 report from Economic Modeling Specialists Intl., it highly “exemplifies the intriguing potential, and inherent risks, that come with relying on the manufacturing sector.” Engine and motor vehicle parts makers are a huge part of the area’s economy, where manufacturing jobs accounted for nearly 20,000 of the 53,000 total jobs as of November.

    Columbus, Ind., which was No. 9 on the fastest-growing economy list, is home to engine-maker Cummins. The central Indiana metro has a remarkable concentration of manufacturing jobs — more than a third of jobs in Columbus are manufacturing-based, and it has the highest share of mechanical engineers in the U.S. (just ahead of Peoria and Bloomington-Normal, Ill.). In recent years, employment growth in Columbus has sizzled, while Cummins continues to prosper.

    When a regional economy relies on a single basic industry like manufacturing or energy for much of its employment and exports, it can mean lots of prosperity — and a big jump in gross metro product, as USA TODAY’s list indicates. But it’s also a risky proposition. For every spike in manufacturing production, there are pullbacks and plant shutdowns. Energy booms don’t (usually) last for decades.

    “If you’re a small metro area depending on a vulnerable export sector, once that industry goes, you’re in big trouble,” Alec Friedhoff of the Brookings Institution told 24/7 Wall St.

    For metros like Midland and Odessa, the natural multiplier effects that come with energy booms will lead to more jobs in business services, retail, and especially transportation. Public-sector infrastructure jobs also usually follow. But the end goal is to spur innovation and sustainable job creation elsewhere in the economy.

    With that in mind, which of these 10 fastest-growing metros based on GMP growth is the most diversified already? The following table shows the largest contributor to gross regional product (as shown EMSI’s Analyst), as well as the sector with the largest share of jobs in each metro. The table is ranked by how the 10 metros fared in 2010-2013 job growth.

    Fastest-Growing MSAs (Based on 2013 GMP Growth) 2013 Jobs 2010-2013 % Job Growth Largest Sector Largest Contributor to 2012 GRP (Private)
    Source: QCEW Employees, Non-QCEW Employees & Self-Employed – EMSI 2013.4 Class of Worker; EMSI Social Accounting Matrix model (2012)
    Midland, TX 92,857 23% Mining/Oil & Gas Extraction (22% of jobs) Mining/Oil & Gas Extraction (55% of total)
    Odessa, TX 80,360 23% Mining/Oil & Gas Extraction (15% of jobs) Mining/Oil & Gas Extraction (28% of total)
    Columbus, IN 52,014 18% Manufacturing (36% of jobs) Manufacturing (50% of total)
    Bismarck, ND 75,090 10% Government (19% of jobs) Health Care (13% of total)
    Fargo, ND-MN 143,563 9% Health Care (13% of jobs) Manufacturing, Wholesale Trade, Finance/Insurance, and Health Care (each 10% of total)
    Sioux Falls, SD 153,358 6% Health Care (17% of jobs) Finance/Insurance (18% of total)
    Cheyenne, WY 53,917 6% Government (32% of jobs) Manufacturing and Real Estate (each 10% of total)
    Trenton-Ewing, NJ 253,751 4% Government (27% of jobs) Professional, Scientific, and Technical Services (13% of total)
    St. Joseph, MO-KS 60,643 2% Manufacturing (17% of jobs) Manufacturing (25% of total)
    Pascagoula, MS 60,214 -3% Manufacturing (22% of jobs) Manufacturing (46% of total)

    Manufacturing in Columbus makes up the highest percentage of jobs (36%), and mining and oil and gas extraction in Midland is the most dominant GRP force (55% of the total in 2012). Fargo and Bismarck, despite getting lumped in with other North Dakota oil hubs, are fairly spread out in both employment and contributors to GRP. And Pascagoula, where manufacturing accounted for 46% of GRP in 2012, is the only one of the fastest-growing metros to see an employment decline (-3% since 2010).

    Sioux Falls, however, stands out in terms of industry mix and GRP — finance and health care are strong industries, and the metro has seen seen steady job growth.

    SiouxFalls_2003-2013

    Employment has increased 17% since 2003, and the gains have been broad-based. Nine major sectors, including health care, retail trade, finance, government, and professional, scientific, and technical services, have added at least 1,000 jobs in the last decade.

    That’s a diversified economy, all right. But most of the other less-diversified economies on this list are doing just fine, too.

    Joshua Wright is an editor at EMSI, an Idaho-based economics firm that provides data and analysis to workforce boards, economic development agencies, higher education institutions, and the private sector. He manages the EMSI blog and is a freelance journalist. Contact him here.

  • We Had To Destroy the City In Order to Save It

    As housing prices and rents soar out of control in tightly regulated cities like San Francisco and New York, many people have called for a significant loosening of zoning rules to permit greater densification. Many policies contribute to unaffordable housing, including rent control, historic districts, eminent domain abuse, and building codes, but zoning puts an absolute cap on dwelling units per acre thus is generally part of any solution to the supply problem. What’s more, as recent commentators have started to notice, even many of America’s most dense cities are predominantly zoned for single family homes, calling into question the need to dedicate so much space to a single housing typology.

    For example, a web site called Better Institutions posted this map of Seattle, in which all of the yellow districts are zoned exclusively for single family homes:

    The poster lets his feelings be known by using scare quotes to denote single family “character” and blaming the zoning for Seattle’s high rents.

    And Daniel Hertz posted a similar map of Chicago in which the red is single family homes only and yellow is industrial space unavailable for any residential use:

    Some go beyond affordability, saying that we also need to significantly increase densities in central cities in order to reduce greenhouse gas emissions.  Harvard professor Ed Glaeser wrote an article advocating this subtitled, “To save the planet, build more skyscrapers—especially in California.”  He says, “A better path would be to ease restrictions in the urban cores of San Francisco, San Jose, Los Angeles, and San Diego. More building there would reduce average commute lengths and improve per-capita emissions” and “Similarly, limiting the height or growth of New York City skyscrapers incurs environmental costs. Building more apartments in Gotham will not only make the city more affordable; it will also reduce global warming.” He claims that, “The best thing that we can do for the planet is build more skyscrapers.”

    These complaints and the proposed solution of more dense multi-family development may be true in a technical sense, but what would carrying that out mean for people who actually live in our cities?

    Some critics may disdain the character of single family districts but few of these pundits ask the question of what eliminating lower-density housing actually means to the survival of the urban middle class.  Districts, like the Portage Park example Daniel Hertz gave in Chicago, are some of the last bastions of middle class family life in the city.  It’s clear that some densification can be implemented without radically changing the appearance or functioning of the built environment. Allowing 2-flats and coach houses, or even the corner apartment building or townhouse development, wouldn’t ruin Portage Park. There’s no reason such things should not be allowed. But nor would they make a major dent in affordability in places where a tidal wave of global demand is washing over the city such as in San Francisco.

    To materially boost the number of units in an era in a manner that moderates prices in a highly desirable place like San Francisco would require massive changes in the built environment of its neighborhoods.  This would radically transform the character and nature of the city in question.  If San Francisco were really covered in skyscrapers, it would cease to be San Francisco— a city of low-rise buildings framed by hills that would be obscured by high rises. There may well be the same geography on the map labeled as such, but it would be a completely different place. We would have to destroy the city in order to save it.

    One person who gets that is Alex Steffan. He’s angry about prices, saying that the “criminal lack of housing is a global scandal.”  He’s also honest enough to forthrightly acknowledge that a sufficient scale of new homes to bend the cost curve would fundamentally change many of our cities:

    We can build some housing incrementally, without changing the skyline or cityscape, but not anything like enough. To produce enough homes to matter, fast enough, we’re going to have to fundamentally alter parts of our cities. That, of course, demands a local government willing and able to plan and permit such widespread change. It also takes an array of homebuilders doing the actual work, often in more innovative and low-cost ways, like more collaborative housing, manufactured buildings and flexible living spaces. Most of all, it takes broader public insight into how large-scale development can improve our cities.

    In other words, it’s a major change in communities that requires selling the public on the idea. He believes that young people will be the agents of change here. This shows perhaps one of the signature affects such changes would have. They would displace families by eliminating their preferred housing typologies in favor of forms more amenable to predominantly younger singles or the childless for  whom living in an apartment with no backyard is more likely a relief than an imposition. But it’s hard to imagine cities as places for solving the problem of climate change if they are, like San Francisco, increasingly places devoid of families with children.

    Steffan also says affordable housing is a social justice issue. Yet is it really social justice to require everyone to have equal access to San Francisco, population 825,000?  I think not. Especially not when America is replete with urban centers whose biggest problems are depopulation and worthless houses that you can’t give away. There are plenty of options of places for people to live; we should look at making our now failing cities more attractive to people who may like the housing and neighborhood, if not for issues such as crime and poor schools. There’s no guarantee in America that you can afford to live in the place you might most want to choose. That’s long been true of suburbanites and city dwellers alike.

    Also, the willingness to fundamentally reshape cities is odd in light of the fact that such previous attempts are uniformly viewed in the urbanist community as disasters. The idea of Manhattanizing San Francisco brings to mind nothing so much as Le Corbusier’s Plan Voisin for Paris, in which the historical cityscape is replaced with towers in the park.

    Of course no one is actually saying to take it this far, although Glaeser’s vision gets close it. But once we enshrine the rule that a certain threshold of unaffordability means more density and building regardless of neighborhood character, it’s hard to see what the limiting principle would be. Also, high rises or even buildings above 4-5 stories in height usually require expensive construction techniques, and thus are inherently costly.

    It’s true, however, that cities are not static entities. Every downtown skyscraper in America is built on a site that was once used for something else. Yet we see this densification overall as a good thing. Had Manhattan been preserved as of its pre-skyscraper era, it’s not clear the city would have benefitted.

    Clearly the zoning and building regulations in our cities are often too strict. Yet the disasters of previous generations’ radical change suggests that incrementalism is a better course.  By all means allow two-unit houses, corner stores with upper story apartments, etc. into currently all-single family zones. Add areas where high rises are allowed the peripheries of districts currently zoned for such; warehouse districts as well as office buildings that are not well occupied.  But don’t bring out the bulldozer wholesale.  Additionally, a healthy city should make sure to embrace the entire palette of housing types – including single family homes. There’s more to making cities attractive to middle class families than just cost, and things like the prospect of a backyard for the kids to play in are among them.

    And given the relatively few intact and attractive urban cores in America, prices are going to continue to go up. That’s true even with radical new building. As mentioned, San Francisco only has a bit over 800,000 people. Boston and DC have only about 600,000 each. How many people can you plausibly put into these places? Realistically, not all of us who would like to live in San Francisco or lower Manhattan are going to be able to do so.  That’s true no matter how many skyscrapers we build.

    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.

    Lead Photo: More density in Los Angeles

  • Where New Yorkers are Moving

    The American Community Survey has released domestic migration data that was collected over a five year period (2007 to 2011).  There is newer domestic migration data available, such as is annually provided by the Census Bureau’s population estimates program, but not in the detail that the latest data provides.

    The new release is significant because domestic migration data is provided between each of the nation’s more than 3,100 counties. Because the survey was taken over a five-year period, the data represents, in effect, a one-fifth snapshot of domestic migration for each of the years from 2007 to 2011. Each year respondents are asked where they lived a year ago. It is thus a rolling annual figure, rather than a picture of a single year.

    The Uniqueness of New York City

    The city of New York provides an interesting case for many reasons. The city is by far the largest municipality in the United States and the only municipality composed of at least two complete counties. New York is coterminous with five counties. New York also has by far the greatest extent of high density in the United States, comprising more than 85 percent population of zip codes with greater than 25,000 per square mile density (10,000 per square kilometer).

    Finally, New York is at the center of the largest metropolitan area in the United States, which in its expanded, combined form (combined statistical area) has a population of 23.1 million, most of which (20.7 million) is in a built-up urban area that covers the largest land area in the world (has the largest urban footprint). This is more than a third larger than Tokyo, the world’s largest urban area by population, with an 80 percent higher population. It is surprising to many that New York’s urban area covers nearly twice the land area of Los Angeles and is nearly one-quarter less dense.

    Domestic Migration and New York City

    New York’s broad suburban expanse generally resembles the suburbs of Dallas-Fort Worth, Seattle or Toronto and much of its Staten Island borough (county of Richmond) looks more like suburban New Jersey than New York, most of its urban core – the city of New York – is unique.

    And the city continues to export large numbers of people – 90,000 more than arrived in the rolling year represented by the latest ACS data. This is a big number, representing 1.1 percent of the city’s 2010 population. This is a larger loss than Philadelphia (0.5 percent), but smaller than Washington (1.4 percent).

    This has been evident in the large numbers net domestic migrants reported each year in the Census Bureau estimates. The data shows that people are leaving not only the city of New York not only for the suburbs, but moving in even greater numbers to beyond the metropolitan area. Approximately 27,000 more New Yorkers moved to the suburbs than to the city of New York over the period. However, an even larger 63,000 net domestic migrants left the city of New York for areas outside the metropolitan area.

    Approximately 30,000 of these inter-regional migrants moved to other major metropolitan areas (those with more than 1 million population). By far the largest share – 74 percent – of the city’s net domestic migrants to other major metropolitan areas moved to the South. Four of the five largest major metropolitan gainers at the city’s expense were Miami (net 5,600) and Atlanta (net 4,300), followed by Tampa-St. Petersburg, and Dallas-Fort Worth.

    Another 13 percent of the city’s net domestic migrants moved to other major metropolitan areas in the Northeast. Rochester was the largest gainer with nearly 1000 net domestic migrants from the city of New York, followed by Philadelphia. The city gained more than 250 residents from Boston.

    Approximately 9 percent of the city’s net domestic migrants moved to major metropolitan areas in the West. Los Angeles led in the West, gaining 1,800 net migrants from the city. The outlier was the Midwest, which sent more than 300 net migrants to the city (Figure 1).

    City residents tended to move to the suburbs of the major metropolitan areas, which attracted 60 percent, while the core cities received 40 percent of the net migrants.

    Dispersing Beyond the Larger Metropolitan Areas

    However, the most striking trend is that most of the net domestic migrants who left the city of New York to move outside the New York metropolitan area moved to areas outside the major metropolitan areas. In this regard, New Yorkers who move seem to be more inclined toward the greater dispersion of the nation’s smaller metropolitan areas and micropolitan areas.

    Over the period, approximately 32,500 net domestic migrants left the city for areas outside major metropolitan areas. This is more than moved to the other major metropolitan areas or to the New York metropolitan area suburbs (Figure 2).

    The most surprising finding is that the majority (65 percent) of net domestic migrants from the city who moved to outside the major metropolitan areas settled in the Northeast. Most of these 23,000 residents moved to smaller areas in Upstate New York and Pennsylvania. Virtually all of the other migrants not moving to major metropolitan areas moved to states in the South (41 percent). In contrast, there was a small amount of migration to New York from the West and Midwest totaling less than 2,000 (Figure 3).

    Outside New York and New Jersey, which contain nearly all of the New York metropolitan area, Florida received the largest number of net migrants from the city (11,000), followed by Pennsylvania (8,000). Only 100 of the Pennsylvania migrants were to Pike County, which is in the New York metropolitan area. Georgia, Texas and North Carolina all received approximately 5,000 net migrants from the city. The top ten destinations were rounded out by Virginia, Connecticut and South Carolina. A total of 37 states received net domestic migrants from the city. Only Alaska and the District of Columbia sent more than 1,000 net domestic migrants to New York City.

    Conclusion

    The New York City migration data indicates continuing dispersion of the population. People are moving from the core to the periphery in New York, and many going beyond to less urban areas in the Northeast. More are moving to other major metropolitan and other smaller areas, located for the most part in the South. This year’s brutal winter could make the South look even better to New Yorkers.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.

    Photo: Leaving New York City via the Holland Tunnel (by author)

  • Post-Nagin, New Orleans Is On Way To Becoming A Model City

    Last week’s conviction of former New Orleans Mayor Ray Nagin on 20 charges of bribery and fraud marks the end of a tumultuous era in the city’s history, and perhaps also the beginning of a new era in American urban politics. Perhaps most remarkable was the almost total lack of protest in New Orleans over the downfall of Nagin, who had relied heavily on polarizing racial politics in his last five years in office.

    This is among the many hopeful signs in the Crescent City and its environs. Over the past year as I’ve put together a report on the future of New Orleans, I have seen a city once described by Joel Garreau in his Nine Nations of North America (1981)as a “marvelous collection of sleaziness and peeling paint,” clean up its politics, restart and diversify its economy, and begin the slow process of reducing its deep-seated crime problem.

    In the past, the “pay to play” politics and corruption epitomized by Nagin and former congressman William Jefferson were widely winked at in New Orleans as if it were just local color. “We like our politics like our rice — dirty,” a Katrina evacuee in Houston once told me with a knowing smile.

    Katrina changed that. The natural disaster was made far worse by the corruption and incompetence of virtually every key institution, starting with police and the levee boards. With the city largely underwater and much of its population forced to flee, some urban experts, such as Harvard’s Ed Glaeser, wondered if we would be better off to encourage people to leave the area permanently, perhaps with vouchers, to seek a better life elsewhere.

    Yet it is here that the real turnaround began. Business leaders, who had seen Nagin as an ally during his first term, realized he was not up to the extraordinary challenges posed by the disaster. The man who some called “Ray Reagan” for his business-friendly policies was morphing into the worst kind of racial demagogue, a kind of bayou version of Coleman Young or Sharpe James. His appeal to keep New Orleans a “chocolate city” and his now well-documented graft frustrated those who wanted to revive the city and its surrounding region.

    “When Nagin came in, he was seen as a reformer,” recalls Greg Rusovich, former chairman of the New Orleans Business Council, which includes 70 of the Crescent City’s largest businesses. “But after Katrina he really turned into a racial politician and surrounded himself with incompetents.”

    This incompetence, Rusovich suggests, slowed New Orleans’ recovery as Nagin proved unable to help direct the massive federal aid, and the many private donations, that came into the city. Eventually, voters tired of poor public services and began to demand a more competent regime.

    The current mayor, Mitch Landrieu, first elected in 2010 and easily re-electedwith strong black support this month, has brought a climate of technocratic competence to the city. With the active backing of business leaders, the city has attracted large-scale corporate investment, including a 300-person General Electric software development center, as well as a surge of videogame and entertainment companies.

    This growth was in large part sparked by a steady movement of young, educated people into the city. For decades, New Orleans’ “best and brightest” tended to move elsewhere; now the flows for the Crescent City have turned positive, including from the West Coast and the Northeast. By last year, theAtlantic Cities, the leading mouthpiece for “hip” urbanism, proclaimed New Orleans potentially the nation’s “next great innovation hub.”

    Yet for all the hoopla surrounding the growth in the information sector, it is unlikely to be enough to sustain the New Orleans region’s recovery. Not only are the total numbers of such jobs still small, in the realm of 2,600 for entertainment, STEM employment is lower than a decade ago due to cutbacks at the NASA facilities at Michoud as well as in aerospace. More important, the growth of tech and entertainment jobs will likely be insufficient to address the fundamental issues of race and poverty that have bedeviled the city throughout much of its history.

    Today, in part due to the return of evacuees, the poverty rate for the metro area stands at 19%, close to the pre-Katrina level and well above the national average of 15%. The differential between white and black incomes is some $6,000 per household above the national average and some observers, including many African-Americans, fear that the gentrification of parts of the city is reinforcing the class and racial divides that existed before the flood.

    Many African-Americans, notes city employee Lydia Cutrer, have “trust issues after many broken promises, and feel like outsiders are taking over.” Or, as Sherby Guillory, a health care worker who now lives in Houston, described the recovery efforts: “They want to build a shining city on a hill, but without the people.”

    Ultimately, to deal with these concerns, New Orleans needs to focus on the industries that drove its economy for much of its history: energy and trade. These are the primary providers of high-wage jobs, many of which are blue collar. The New Orleans area lost energy jobs from 2007-12, in part due to the Gulf drilling moratorium in the wake of the BP disaster, but activity is rising again and low natural gas prices have prompted a surge in chemical and refinery investment in south Louisiana.

    A recent report by the Greater New Orleans Community Data Center concluded that over 10,000 energy, petrochemical and related advanced manufacturing jobs could be added in the region by 2020; in contrast the digital media sector was projected to expand by roughly 2,200 positions. Finding ways to accelerate this development, while using new revenues to shore up the fragile ecosystem, needs to become the primary focus of new development efforts.

    This vision for post-Katrina New Orleans will no doubt meet opposition from those who would like the city to evolve into a humid, southern version of San Francisco. Yet this makes little sense for a place whose history, location and ethnic heritage suggest a more economically diverse future. Having survived Katrina and Ray Nagin, the next task should be to see how to make sure that the recovery reaches into those neighborhoods that have historically been left behind. Rather than stand only as a charming artifact of its past, New Orleans can become a role model in showing how cities can not only survive, but create a prosperous future.

    This piece originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. 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.

    New Orleans photo courtesy of Jon Sullivan.

  • Sustaining Prosperity: A Long Term Vision for the New Orleans Region

    This is the executive summary from a new report Sustaining Prosperity: A Long Term Vision for the New Orleans Region, authored by Joel Kotkin for Greater New Orleans, Inc. Download the full report from GNO, Inc. here: gnoinc.org/sustainingprosperity

    The recovery of greater New Orleans represents one of the great urban achievements of our era. After decades of slow economic, political and social decline, hurricane Katrina seemed a kind of coup de grâce, smothering the last embers of the region’s vitality. In the fall of 2005 it was entirely logical to see New Orleans as just a potential exemplar of failed urbanization, much as we might see in Detroit1, Cleveland, and a host of other once great cities – for example Naples, Lisbon, Antwerp and Osaka – that have tumbled from their once great importance.2

    Yet in New Orleans’ case, disaster engendered not continued decline, but the revival of the en­tire region, its economy, and social and political institutions. Like Chicago after the great fire of 1871, San Francisco in the wake of the 1906 earthquake and fire, or New York following 9-ll, New Orleans has rebounded in ways that have defied expectations.

    Critical to making New Orleans a resilient city has been the transformation of the civic culture. This has much to do with the commitment of New Orleanians to their city – like Chicagoans, New Yorkers and San Franciscans in the past. “A city,” notes urban historian Kevin Lynch,” is hard to kill if it possesses unique cultural appeal, geographic assets and people who are determined to save the city they love.”3

    New Orleans resiliency since Katrina constitutes much more than improved levees or better evacuation procedures; more than new brick and mortar applied to what had been an aging, deterio­rating region. New Orleans has made enormous progress in cleaning up its famously corrupt political system, and also made huge strides in improving its educational infrastructure. Once considered one of the worst places to do business, the region, and the state of Louisiana, has undergone a marked improvement to its reputation. It has emerged as a good place for commerce – something of a “Cin­derella” in economic development terms.4 Allison Plyer of the Greater New Orleans Community Data Center put it, “Greater New Orleans is in some ways rebuilding better than before”.5

    Our analysis shows this progress in a host of indicators. Once a below-average job producer, the region has expanded its employment since the 2007 recession far faster than the national average. It recovered all the jobs lost in the recession by 2012 – and then some – while the nation remained three percent below its pre-recession level. Entrepreneurial activity also has grown faster than the national average by a wide margin.6

    More important still, the region finally began to reverse a demographic decline that, for a gen­eration or more, saw young, educated people and families depart for other locales to seek out a better life. The concentration of 25 to 35 year olds has increased far more quickly in the region than it has in the nation as a whole. Indeed since 2007, New Orleans region has experienced the fastest growth in educated population in the nation.7

    Many economic trends favor the region’s continued ascendency. These include the still nascent US energy boom, which represents arguably the greatest shift in global economic power since the end of the Cold War and the rise of China; the massive flow of investment, domestic and foreign, into lower-cost locales and most particularly into the Third Coast, the burgeoning region around the Gulf of Mexico; and finally the expansion of US trade with Latin America and the Caribbean basin.

    To these powerful forces we can also add demographic and social factors that work to the region’s advantage. One key is a relatively low cost of living, which, in effect, gives area residents and businesses a leg up on their East and West coast rivals. This is critical in attracting net migration from those regions, with their storehouse of educated residents and skilled workers.8 Another force is the breadth of skills that can be easily found in the region, including higher paid skilled professionals ex­perienced in transportation and material moving, installation, maintenance and repair, construction, manufacturing and energy.

    A future scenario can be constructed where greater New Orleans emerges as one of the bright­est spots in the North American economy. Not only does the region have natural advantages in terms of energy resources and transportation, it can claim primary sources of higher-wage employment. It also possesses a cultural cachet that attracts educated workers, but in a cost and regulatory environ­ment that appeals to business investors.

    This is most notable in the growth of the region’s rapidly evolving information industry, in­cluding software, videogames and an expanding film/television industry. Over the past five years, New Orleans has come to enjoy a locational concentration equal to that of New York, and has emerged as a major player in this sector.

    Challenges Ahead: Economic, Social and Environmental

    As the region moves further from the immediate post-Katrina crisis, the great momentum of the last five years is clearly slowing down. Job creation remains positive, but has gradually fallen towards national norms. Indeed, since 2010, after years of running ahead, the region’s job growth rate actually trailed the national average. This could be simply a sign that, after recovering more slowly, the rest of the country is now catching up. But the slowdown relative to other cities should be taken seriously, as it could represent a loss of critical momentum.

    “Concert Of Economic Forces” That Can Make Recovery Permanent

    To overcome its legacy of poverty and inequality, the New Orleans region needs to focus not on just one sector but on five critical ones. In a highly competitive national and global economy, re­gions need to work on their unique strengths, establishing advantages that can lead to more, and bet­ter, job creation. Most particularly, the region needs to develop a broad, but still highly selective, base of industries that can create the higher-wage jobs necessary for the uplift not of a few New Orleani­ans, but for the many.

    1. The first, and most evident, is the region’s cultural legacy, which serves as a major source of jobs for local people as well as a lure for talented people from elsewhere. This, of course, includes the still very important tourism industry, but also encompasses generally higher-wage professions in film, television, video game software and even medical research.

    The growth in information sector employment, something relatively new to the region, rep­resents a clear breakthrough. It allows the region to take advantage of its essential cultural assets, by attracting companies and highly skilled workers. Although it is unlikely that the New Orleans region will ever become as tech-dependent as, say, Silicon Valley — which may prove a good thing, given that industry’s volatility — New Orleans can look forward to a sustained increase in high-paying, and high-visibility, employment. Perhaps most critically, it has an excellent opportunity to make itself the cultural capital of the Third Coast, the burgeoning region around the Gulf, something the region desperately needs and a role that New Orleans is uniquely positioned to fulfill.

    Yet although these industries are important, they alone cannot sustain a long-term, broad recovery. Wages in the tourism industry and the arts tend to be low – one reason for the city’s per­sistently poor income distribution in the past – and higher-wage jobs, except in engineering services and entertainment, remain below national norms in total jobs and will take many years to reach true critical mass. Perhaps most critically, these industries alone cannot produce enough high-wage skilled jobs for the region’s working class population.9

    2. The river system. Its location at the shipping terminus of the Mississippi River, across the regions the region’s ports – New Orleans, South Louisiana, St. Bernard, Manchac, Plaquemines and Grand Isle Port – is the historic reason for the region’s existence and one of the key factors in its future success. The region needs to work to compete successfully with its Third Coast rivals, notably Houston, as well as Mobile and Tampa. Growing trade with the Caribbean and the completion of the Panama Canal expansion project increase the opportunities for expanded logistics and cargo han­dling. In addition, the river provides an ideal spur to new industrial production, such as the Nucor Steel plant in St. James Parish, which some see as the precursor of a new zone, akin to Germany’s Ruhr Valley, that could emerge between New Orleans and Baton Rouge.

    Given the devastation of the region’s unique ecological environment, the river presents unique challenges to be addressed. At the same time, the river offers the region new opportunities to develop yet another nascent sector: environmental remediation. The RESTORE Act funds will bring billions to the Gulf help alleviate the region’s own environmental issues, but could also support the unique expertise and skills related to the profound challenges of maintaining coastal regions. This can be seen already in the over $210 million that has flowed to expert Louisiana companies as a result of Hurricane Sandy.10

    3. The energy revolution. Perhaps no sector has more potential to generate higher wage jobs across the region, particularly for working class residents, than the current energy revolution. This is rapidly shifting economic power to North America, and it’s a shift for which the region has a front row seat. Louisiana and the greater New Orleans area boast enormous oil and gas reserves, but the region has not kept up with Houston or even smaller cities in terms of energy-related jobs. Yet there has been continued growth in many upstream services, such as petro-industrial development and exploration, even if headquarters employment has dropped. With the resolution of the BP disaster, it is hoped that the region will recover more employment in this high-wage sector.

    4. Environmental remediation. This is both a major challenge and an opportunity for economic development. Simply put, there is no long-term future for the region if the environment that sup­ports it collapses. Katrina, after all, was not the first ecological disaster to hit the region, and it won’t be the last. Finding ways to restore coastal wetlands and manage the river and other water resources in a sustainable manner not only preserves the environment that New Orleanians cherish, but could also create significant business opportunities down the road; More than 4% of Dutch GDP is related to water management, and more than 50% of that is related to international projects and the export of water expertise and services.11

    The region has already received $1.3 billion from various BP criminal settlements that will be applied to river diversion and barrier island restoration projects. Over $600 million is already budget­ed for projects being let in 2014 alone, signifying great potential to expand the region’s expertise and capacity in this sector.12

    5. The construction of infrastructure. New industries require new or improved roads, better freight and harbor access, reliable, inexpensive electricity, and improved air service. The region is moving ahead on many of these fronts, from the expansion of the airport to major port improvements and the development of a new biomedical district along the Canal Street corridor. A region that has historically lagged in forward-looking improvements is showing clear signs of determination to catch up with competitors in the country and around the world.13

    Yet all these efforts must be done in conjunction with a long-term commitment to preserve the very environment that New Orleanians treasure. This is the ultimate challenge to sustaining and expanding regional prosperity in the era ahead.

    This concert of economic forces is critical to driving down poverty rates and raising incomes across class and racial lines. This can only be realized if there is a conscious effort to promote broad-based, sustainable growth in a diversity of industries. This requires placing a greater emphasis, among other things, on higher education, particularly on engineering and the biosciences, and, per­haps even more, on community colleges, technical schools and certificate training. The area may now be attracting more college-educated workers, but it still lags behind the national average, reflecting a legacy of out-migration of skilled workers over the past few decades.14

    This is the executive summary from a new report Sustaining Prosperity: A Long Term Vision for the New Orleans Region, authored by Joel Kotkin for Greater New Orleans, Inc. Download the full report from GNO, Inc. here: gnoinc.org/sustainingprosperity

    Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. 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.

    Endnotes
    1 http://www.newgeography.com/content/003897-root-causes-detroit-s-decline-should-not-go-ignored
    2 http://www.theatlantic.com/business/archive/2012/01/the-10-fastest-growing-and-fastest-declining-cities-in-the-world/251602/#slide16
    3 Lawrence J. Vale and Thomas J. Campanella, “Conclusion: Axioms of Resilience”, in The Resilient City, editors, Lawrence J. Vale and Thomas J. Campanella, Oxford University Press, (New York: 2005), pp.335-353
    4 http://chiefexecutive.net/best-worst-states-for-business-2012
    5 The New Orleans Index, by Allison Player, 2013
    6 Allison Plyer, Elaine Ortiz, Ben Horwitz and George Hobor, The New Orleans Index at Eight: Measuring Greater New Orleans Progress Towards Prosperity, Greater New Orleans Community Data Center August 13, 2013, p.6-7
    7 newgeography.com/content/002044-americas-biggest-brain-magnets
    8 http://www.newgeography.com/content/002950-the-cities-where-a-paycheck-stretches-the-furthest
    9 Author’s analysis of data from EMSI, Inc.
    10 http://www.bp.com/en/global/corporate/sustainability/environment/managing-our-impact-on-the-environ­ment/complying-with-regulations/clean-water-act-provision.html; http://www.restorethegulf.gov/council/about-gulf-coast-ecosystem-restoration-council
    11 Dale Morris, Senior Economist, Royal Netherlands Embassy
    12 http://www.nfwf.org/gulf/Pages/home.aspx;
    13 http://biodistrictneworleans.org/
    14 Plyer, etal, op. cit., p.12