New Geography

Category: Urban Issues

  • Will Driverless Cars Help us Drive Less?

    The war on automobiles is real. Backed by a legion of city officials, environmentalists, and new urbanists, the argument to mitigate vehicle usage has so far been an easy sell – at least in planning circles. Their assumptions echo concerns about the trajectory American cities – the downfall of rural life and open space to name a few.  The problem is the trifecta of pollution, congestion, and urban sprawl. Out with cars, they propose – people could ride high-speed transit instead of sitting in traffic.

    But technical innovation could make this proposal more like a plea. Google, along with GM, Ford, and Daimler are now designing cars that drive themselves, making private vehicles more efficient, flexible, and thereby more irreplaceable. The US is not alone. Manufacturers in Japan and Germany are coordinating with their national government to launch their autonomous cars within the next decade. IEEE, a group of technology professionals, says that self-driving vehicles would comprise 75 percent of the global traffic stream by 2040. 

    “Currently, a car spends 96% of its time idle,” says Koushik Dutta of ClockworkMod. He says there’s an unforgiving economic incentive to make sure an airplane is always in use, since they spend almost their entire lifetime in operation. To leave a plane idle is inefficient and unprofitable; similar logic applies to parked car. Some predict the autonomous vehicle technology will decrease this idle time as households begin to link their commutes in one car, rather than one car per person. Sergey Brin, Google’s cofounder, believes the technology, now tangible, will be on the market in five years.

    But what precisely is this new technology? As it turns out, much of it is not new; a number of automated features can be found in today’s cars: timed braking during collisions, motion sensors that detect distance between the vehicle and what’s in front of it, and adaptive cruise control. Many of the latest features have applications that use advanced sensors to self-park and prevent drifting to adjacent lanes and self-park.

    Unprecedented is the use of a network for vehicles to communicate with one another. A study finds that if vehicles use sensors alone, highway capacity can increase by 43 percent, and if all of the vehicles use both sensors and vehicle-to-vehicle (V2V) communication, the increase swells to 273 percent. Additionally, networks can facilitate information exchange between vehicles and road infrastructure (V2I). With live data streams, cars will be able to inform one another about oncoming traffic, and perhaps even instinctively reroute the car onto less congested roads.

    The move to driverless cars will make the private vehicle much more attractive compared to other modes of travel. This is particularly important for older drivers whose ability to drive has diminished; the coming of driverless cars brings them back onto the road. Less reliant on their friends and family as chauffeurs, boomers may happily embrace the ability to travel further and more frequently.

    This appeal will extend to all generations. The driverless car offers the current conveniences of the private auto – such as door-to-door travel, safety, and status – while reducing its level of risk and mental stress. Also, the stigmas of driving are eased; self-driving cars are expected to be more eco-friendly, time-efficient, and user-friendly. Once on the market, driverless technology will change lives by saving lives. Advocates of self-driving cars believe that with less human operation and more automated maneuvering on the road, fewer accidents will occur.

    But before autonomous cars can save lives, it must squirm through some political barriers. For one, city officials in large metropolitans are glued to the idea that the best communities exemplify mixed used, high-density, transit-oriented development. Hoping to reverse the still far from over exodus to the suburbs, cities like Los Angeles are banking on public transit to revitalize its inner-urban areas. Though public transit ridership has increased in the last two decades, its market share of ridership has being declining. Metropolitan officials hope that millennials, who tend to be more cognizant of mankind’s carbon footprint, will reverse the trend. It is, however, difficult to imagine why any future generation would enjoy the conveniences of taking transit if a car ride can be just as untroubled. Driverless will make vehicle ownership much more attractive. Public transit will lose its status as an amenity. One of the chief advantages of public transit is the fact that one can ride it stress free without worrying about maneuvering to the destination. With driverless cars, this advantage is superseded.

    Congestion may increase because more vehicles will find the frustrations of wading in traffic mitigated. Time in congestion can be replaced with a book, movie, perhaps even a nap. But there’s also the possibility that more households will link their trips using one shared vehicle, decreasing the number of vehicles on the road. Some suggest this may help Americans come to terms with letting go of the private vehicle and, instead, embrace the idea of having one household vehicle, a prevailing trend across the rest of the world.

    Transportation planners often promote tolls as revenue sources because building high-occupancy and toll (HOT) lanes. The concept is deemed equitable since it links the payers with the users, begetting a sustainable funding model. Much of the funding for these projects is based on the congestion premium – what people will pay to avoid a crammed highway. This is useful in determining how much to price a toll or high-occupancy lane. But since driverless technology will likely lower this premium, the revenue of these lanes may be overvalued.

    With the pieces in place, the journey to driverless cars is vastly feasible. In September 2012, California Governor Jerry Brown enacted a state measure to legalize driverless technology in cars running on public roads; at any given moment, a dozen driverless cars are operating somewhere in California. Currently, each vehicle is manned by two testers and marked by a distinguishable license plate. In the future, the vehicle will only be required to have a one driver. And not too far is the idea of a completely unmanned vehicle, what some call the robocar, which will revolutionize not just our mode of travel but our relationship with time and distance.

    Jeff Khau graduated from Chapman University with a degree in business entrepreneurship. Currently, he resides in Los Angeles where he is pursing his dual-masters in urban planning and public policy at the University of Southern California.

    Retrofitted driverless Lexus photo by WikiCommons user Steve Jurvetson via Mariordo.

  • Rust Belt Cities: Invest in Odysseus, Not Barney Fife

    Given its legacy of shrinking, the Rust Belt has issues. The issues arose naturally, and relate to the fact things leave, or that so much has left. Particularly, when things leave, the mind—both the individual and the collective city mind—can get protective and restrictive. Neediness arises. The smell of desperation ensues like a pall that can tend to hang over cities, influencing decision making on all levels.

    Enter “brain drain”, or that term coined to refer to the outmigration of an area’s educated citizens, particularly it’s young. You know the drill: Johnny goes to State college, comes back home for a spell, but then leaves Cleveland, Ohio for Chicago or New York. That is brain drain. And city leaders hate it, spending billions of dollars to stop it—often at the cost of coming off ridiculous, lame.

    For instance, in Pittsburgh, there was a civic booster campaign thought up to keep educated folks from going. It was called “Boarder Guard Bob”. According to researcher Chris Briem, “Bob” was a Smokey-the-Bear-type of public service announcement made into a Barney Fife character, with the billboard-size messaging of “Bob” intended to “stop young people at Western Pennsylvania’s borders before they had a chance to leave for other cities”. And while this particular retention strategy (luckily) never went to print, various “plug the brain drain” strategies persist in one form or another at exorbitant cost to taxpayers.

    But beyond the near-pitiful messaging, there are major problems with the brain drain approach, especially from an economic development perspective. For example, when, as a community, you are intentionally telling your citizen’s not to go, you are asking them to sacrifice personal development for the benefit of a place. To this point, my colleague, Jim Russell—a leading thinker in brain drain boondoggles and blogger at Burgh Diaspora—says it best, stating: “Discouraging geographic mobility is the same as restricting access to higher education”. In other words, it’s like telling Johnny to stick with his high school diploma so as to forego leaving the community for a 4-year degree.

    What’s more, getting people to stay put does little to grow a local economy. In fact it hurts it. Because leaving home is often a rite of passage. It develops a person. I mean, can you imagine if there was no odyssey in the epic Odyssey? If so, Odysseus wouldn’t be the changed man with perspective and experience as he was when he returned back to his homeland, and so there’d be no “there” there. In this sense, the Rust Belt needs to engage their young to embark on their own “Hero Journey” if only to gain skills and broaden geographic connections. This is international economics 101 (see China, India, Brazil, etc.). It should be a domestic economic priority for the Rust Belt, and it would be if only the Cleveland’s of the world could let go of the protectionism that defines their longstanding existential fears of shrinking into one big pile of ruin porn.

    Of course confidently encouraging outmigration is part and parcel with an understanding that many expats will “boomerang” back. But many are, and at a faster rate. To wit: as the alpha cities of the America like NYC get too expensive or creatively-class cute, many Rust Belt refugees are pivoting back from a certain left-wanting lifestyle if only for the opportunity, tradition, and honest-to-god reality that is “Rust Belt Chic”. And when they do, they often become “economic ass kickers”, which is term Russell uses to exemplify the fruits of the Hero Journey that is not only individually experienced, but felt in the local economy as well.

    Take Sean Watterson, the co-proprietor of the wildly successful restaurant the Happy Dog on Cleveland’s Near West Side. He moved back from D.C. because, according to a recent Plain Dealer article, “Cleveland-ness is like Polish-ness or Irish-ness. It’s an ethnicity”. Here, Watterson not only runs a great hot dog business, but uses his establishment to advance a circulation of ideas by hosting a variety of events like “Life, the Universe, and Hot Dogs”, which is a series hosted by researchers from the Institute for the Society of Origins. Another big hit is the live performances by members of the Cleveland Orchestra called Classical Revolutions.

    Cool sounding events, sure. But there is more to it than that, as such happenings spark cross-fertilization between parts of Cleveland—the blue collar West Side and the intelligentsia of the East Side—that have long been divided, often at the cost of Cleveland as a place of cultural and economic innovation. And how exactly does Watterson’s own “Hero Journey” come into play in his self-stated goal to break down barriers “between east and west and between high culture and low culture”? It likely relates to the fact he experienced experience outside of a legacy city bubble that enabled him to see and cross bridges that others have difficulty envisioning.

    Now, does this mean that cities simply need to let people leave to prosper? Obviously not. If the place expats are boomeranging back to is stagnant and disparate, with openness and connection disabled by a collective insular mentality that: “that’s just the way things are done around here”, well, the boomeranging effect won’t hold. And the economic ass-kickers won’t ass-kick.

    The goal, then, of cities should be on fostering return migrant connections, or to know who they are, why they are there, and to help get them together so that their collective unchained perspective can pop bubbles of inert status quo. This need is real. For instance, take this first-hand return migrant account published in Rust Belt Chic by Dana Marie Textoris:

    Funny how your location-based identity, your physical and mental place in the world, can flip like a switch: Before I was a Clevelander managing to make it in San Francisco….right now I feel a lot like a San Franciscan stuck in Cleveland. In either place, I felt just a little bit Other. A bit of a novelty. Just a tad on the outside looking in. Where does that leave me? Where is home? As I type this, I realize, with sort of an internal groan, that the place I’m left in, the guide to what I’m searching for, is probably just right here, inside me, where my two lives — West Coast and Midwest — are now combined. I’m not really a true Clevelander anymore…I’ve picked up way too much San Francisco for that. The balance I’ve become, a little of this and that, is just what I’m hoping I’ll find, one day.

    So, to all Rust Belt cities—this is where your attention must be turned: not on the ones who are leaving for good reason, but on those returning who have not left for good. They have brought the path of their self-discovery back to your doorstep.

    Don’t close the door by screaming at the backs of others.

    Richey Piiparinen is a writer and policy researcher based in Cleveland. He is co-editor of Rust Belt Chic: The Cleveland Anthology. Read more from him at his blog and at Rust Belt Chic.

  • How Polarization Plays Out in Washington state: Voting for President and the Same-sex Marriage

    Washington may be a left coast “blue” state, but the geography of the voting well illustrates the national phenomena of intensifying polarization.  The division may be among individual people,   but also expressed in geographies down to precincts and census tracts. 

    The Washington 2012 elections provided ample data to assess this political and geographic divide. I review here the two most polarized races, for president (Obama vs. Romney) and for R74, to reaffirm the right to same sex marriage.  

    Here are a series of 6 maps, 3 for the presidential race, for the state as a whole, and for the greater Seattle area, and one showing just the extreme tracts for Obama in the Seattle area, and 3 for the R74 contest, for the state, for greater Seattle and again of just the extreme tracts, all in the city of Seattle.  These maps illustrate the extreme dimensions of polarization impacting the regions.         

    The results suggest three overlapping dimensions. The dominant one is itself ecological – that is the urban-rural, or better large dense metropolitan territory versus rural, small towns, with smaller cities and metropolitan suburbs in between, and less polarized geographically. The strongest correlations in demographic variables are transit use vs. SOV use, density, single persons, and multi-family versus mobile homes.  

    These factors apply to both the Obama race and for R74, but more strongly for Obama. The second dimension is of social liberalism, and is characterized by variables on household relationships, unmarried partners, gay and lesbian, education, e.g., share  with BA vs. with high school only, occupation, e.g., percent managerial professional vs. percent in laboring and construction occupations. The social divide also shows difference by age, those 20-34 more liberal, areas with high shares under 18, that is families, more conservative. This dimension too applies to both contests, but more strongly to R74. The third dimension is race, minority racial areas vs. more white areas, and positively correlated with support for Obama, although the Asian share is much more related to support for R74.  In Washington we will see that the racial dimension really is somewhat distinct from the urban-rural, as Obama did well, but R 74 did poorly in rural small town areas that are now heavily minority (Hispanic and Native American).

    In a few cases with a large difference should be noted. Areas dominantly white are non-supportive of Obama, but not opposed to R74.  Similarly, areas high in managerial-professional occupations and higher education generally are more correlated with support for R74, than for Obama.

    Obama carried Washington state by 464,000 votes, 56 to 44 percent, and R74 won by some 229000 votes, 54 to 46 percent.  Consider first the maps for Washington State as a whole, realizing that like the US as a whole, rural territory dominates most of the physical space.  I use the same intervals for mapping, so comparison is easier.  The main difference between the Obama and R74 maps is race and ethnicity – many of the lighter blue rural small town areas are  Native American Indian reservations, or strongly Latino areas, which voted for Obama, but also cast ballots overwhelmingly against R74, likely reflecting the role of local churches. Obama also did better than R74 in traditional logging areas of western Washington, a continuation of a long history of their identification with Democratic voting, but more conservative on the social issues like same sex marriage. 

    Rural to smaller city areas voting for both Obama and R74 include university towns, notably Pullman (Washington State in eastern Washington,  Bellingham  (Western Washington U), Olympia, the state capitol, and many areas of “spillover” of more educated and professionals, out of the Seattle core to desirable water and mountain environments, for retirement and second homes,    At the other extreme are two areas in western Washington which are extremely “red” , the Centralia area in southwestern Washington,  and the city of Lynden, up at the border with Canada, and still dominated by its Dutch Reformed church adherents.

    Turning to the equivalent maps for Obama and R 74 for the greater Seattle area, with two-thirds of the state population, the picture is broadly the opposite of that for the state. Here blue dominates, with “red” areas pushed to the rural edge.  But the differences in the maps are interesting, illustrating the dimensions of polarization.  The Obama map exhibits a simpler belted pattern, the dense urban core, the city of Seattle with spillover north and south, with an inner suburban belt of moderate Obama domination (60 to 75 percent) and an outer suburban and exurban ring. This pattern was repeated for the city of Tacoma to the south. To the west, however, are two islands of very high Obama support, Vashon and Bainbridge, with very high proportions of professionals commuting to the Seattle core. Areas of support for Romney include a few fairly close in affluent areas and more rural areas, including actual farming areas to the southeast.

    The map for R74 is subtly different. The area of strongest support is reduced to the city of Seattle, plus the commuter islands, but support for R74 is quite a bit weaker in less affluent and educated black and latino areas. Likewise the majority of inner suburban areas are still supportive for Obama but far less than the core. These are mainly family areas, while the areas of highest support in the city are dominated by singles and childless couples, including unmarried partners.

    Conversely, moderately higher support for Obama and R74 extends somewhat farther east to affluent educated suburbs, e.g, the Microsoft workshed, which is also high in Asian population.  The final two maps are of the tracts with the highest support for Obama and for R74, most of which are confined to the city of Seattle. The areas of over 90 % support are two: the historic CD or Central District, which defined the Seattle Black population as of 1970-1980, not much gentrified at the north end, but also including the core of Seattle’s GLBT community (the westward extension over 90 %. The second area is in near north Seattle, extending from west of the University of Washington westward  in areas dominated by young singles and unmarried couples, including many students. The map for R74 is quite different, with no areas of extreme support to the south of the core GLBT area, but with stronger support than for Obama in the highly affluent and professional areas, just north of the GLBT core.

    Clearly the 3 dimensions of polarization, by settlement type, by social values-education, and by race, all are exemplified by the map results. The geographic concentration of the vote, especially for R74 can be seen in these amazing numbers:

    Vote Results in Washington State
    State State Outside King Co. King Co Seattle King Co. Outside Seattle
    Obama 1,755 1,087 668 279 389
    Romney 1,291 1,015 276 46 230
    Difference 464 72 392 233 159
       
    R74 yes 1,660 1,021 639 274 365
    R74 no 1,431 1,107 315 57 258
    Difference 229 -86 324 217 107

     

         
    Obama carried the state by 464,000. Half of this was accounted for by just the city of Seattle. The
    Pro vote for R74 was even more concentrated in the metropolitan core, as the margin just in the central  city of Seattle , 217,000, was essentially the margin for the state!  King County outside Seattle provided an additional margin of 107,000, offsetting a net loss of 86,000 in the entire rest of the state, where the vote was 1,107,000 to 1,021,000 against. 

    It is similarly amazing to note the relative location of areas with very high or very low vote shares for Obama and for R74.  Eighty-nine census tracts were carried by Obama with over 85% of the vote and 83 tracts voted more than 83 percent for R74. The distributions were:

    Number of Census Tracts Voting 85% for Obama or 83% for Measure R74
    Obama R74
    North Seattle 37 33
    Central Seattle 19 26
    South Seattle 26 1
    Pierce (Tacoma, reservation) 1  
    Whatcom (WWU) 2 2
    Whitman (WSU) 2 1
    Yakima (Reservations) 3  
    Thurston (Olympia) 1  

    Eighty-two of 89 of tracts with high Obama shares were in the city of Seattle, dominating the city and well distributed across it. The other 7 were in Tacoma, Olympia, Whatcom and Whitman, both university communities, and in Yakima county Indian reservations.  All these tracts were urban core tracts, except for those on the Yakama reservation.   Sixty of 63 tracts with the highest shares for R74 were in the city of Seattle,  concentrated in the north (University of Washington dominated) or highly professional, and in the center, home of the large GLBT community, with few in the south of the city, which is less affluent and higher in minorities.  The remaining 3 are in Whatcom (WWU) and Whitman (WSU). All these tracts are urban.

    The distribution of tracts with very low shares for Obama and for R74 shows the other side of the   polarization.  Of the 71 tracts where Obama received less than a third of the vote, 34 were in south central Washington, the region of the Tri Cities of Richland, Kennewick and Pasco, Yakima, county and Grant county, home of the Columbia basin irrigation project, all areas high in Mormon and Latino populations. Another 19 were in north central and northeastern Washington, including much of Okanogan and Lincoln counties, and even some exurban counties around Spokane. Another 8 were in southeastern Washington (wheat country), leaving 9 in western Washington.  Three each were in rural parts of Clark County and Lewis County in the southwest, and 3 were in the very conservative small city of Lynden, on the Canadian border, and home of a large Dutch reformed community. All these tracts are rural except for the city of Lynden and 3 suburban tracts in the Tri-Cities.

    Similarly, of 81 tracts with shares below one third for R74, 32 were again in south central Washington, 21 in north central and northeastern Washington, 4 in the southeast, and now a larger 15 in western Washington. The Lynden area of Whatcom county accounts for 4, but now 6 in socially conservative Lewis County, 4 in rural parts of Clark County, and 2 in family dominated military parts of Pierce County.  All these tracts are rural, small town, except for those in Lynden, again in suburban Tri-cities and 2 in suburban Tacoma.

    Differences between Obama and R74 Shares

    The last discussion compares the vote for Obama and for R74, identifying areas with the greatest difference, recalling that the overall correlation was a very high .87.  Please also see Map 7.

    The Obama vote exceeded the share for R74 by more than 20 percent in 56 census tracts.
    In rural areas Obama did well with the large Latino vote, which also voted against R74. This was true as well in Indian reservation tracts.  In Seattle and Tacoma the tracts are mainly lower to middle class, worker areas, Black or Latino or both.  All of the King county tracts were in south Seattle, extending southward into lower and middle class industrial suburbs.

    The R74 vote exceeded the Obama vote by 5% or more in 51 tracts.

    Overall, R74 fared better than Obama in affluent professional areas, socially more liberal but economically more conservative.  But the pattern surprisingly occurs in several military base areas, as in Island and Kitsap counties. In 15 tracts R74 won but Obama lost, all affluent suburb or military areas in several parts of the state.  In King the 4 tracts are the 2 richest tracts in the state plus 2 near the Microsoft Redmond campus.  In 12 tracts both Obama and R74 won, but R74 polled higher. These tracts were spread across the state, in mainly exurban economically conservative areas. In 24 tracts Obama and R74 won. All but one were in King, most in the professional suburbs east of Seattle and a few in the wealthiest tracts inside the city of Seattle.

    Conclusion

    The electorate of Washington, like that of the country, is ideologically divided, and which is manifest geographically in the familiar red and blue mosaics. Washington overall is on the economically and socially liberal side, although statewide maps would not recognize the degree of this, simply because of the extreme concentration of these sub-populations in the urban cores, and especially in and around the   city of Seattle.

    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).

  • California’s Demographic Dilemma

    It’s been nearly 20 years since California Gov. Pete Wilson won re-election by tying his campaign to the anti-illegal immigrant measure Proposition 187. Ads featuring grainy images of presumably young Hispanic males crossing the border energized a largely white electorate terrified of being overwhelmed, financially and socially, by the incoming foreign hordes.

    The demographic dilemma facing California today might be better illustrated by pictures of aging hippies with gray ponytails, of legions in wheel-chairs, seeking out the best rest home and unemployed young people on the street corner, watching while middle-age families drive away, seeking to fulfill mundane middle-class dreams in other states.

    The vital, youthful California I encountered when moving here more than 40 years ago soon could be a thing of the past – if we don’t address the root causes of an impending demographic decline. The days of fast population growth have certainly passed; the state’s population growth barely equaled the national average in the past decade. In the urban strips along the coasts, particularly in the Los Angeles Basin, growth has been as little or half that level.

    To be sure, particularly in this region, few would want to see a return to breakneck population growth. But there’s little denying that California has shifted from a vibrant magnet for the young and ambitious to a state increasingly bifurcated between an aging, predominately white coastal population and a largely impoverished, heavily Hispanic interior. This evolution, as suggested in last week’s essay, has much to do with what passes for "progressive" policies – high taxation, regulation and an Ecotopian delusion that threatens to crush the hopes of many blue-collar and middle-class Californians.

    California’s consistent net outmigration over the past two decades continues, albeit at a slower rate. Over that period, California, notes a recent Manhattan Institute report, has lost a net 3.4 million people. This outflow has slowed with the recession and housing bust, but could swell again, as in the past, when the housing market recovers, and people can sell their homes.

    This long-term outmigration likely stems from a combination of persistently weak job growth, relatively higher unemployment rates amid generally far higher housing prices. Until 1970, notes demographer Wendell Cox housing prices in California, including Los Angeles and Orange County, were generally in line with national averages, adjusted for income.

    But over the past four decades, California’s housing prices relative to income have mushroomed to more than twice the national average. This is particularly true in places such as Orange County, where housing prices, particularly near the coast, are so high that younger even solidly middle-class families have little chance to enter the market.

    These high prices are the result not merely of market forces, but also the perverse impact of Proposition 13, which allows people to stay longer in their homes, as well as regulatory restraints on new housing construction. The regulatory vise, if anything, is almost certain to get worse as the state’s "climate change"-inspired regulations seek to all but ban new single-family house construction, all but guaranteeing higher prices.

    Until recently, the impact of net outmigration has been ameliorated by immigration, not just the kind memorialized in Wilson’s grainy ads but of the legal variety, as well. Over the past decade, however, immigration enforcement data indicates that California has suffered a gradual erosion in its appeal to immigrants; this is particularly true for the L.A. Basin. In 2000, for example, Los Angeles-Orange County received 120,000 new immigrants; a decade later the annual intake had dropped by 87,000.

    Essentially, immigration into the L.A. Basin fell 27.5 percent while immigration nationwide remained essentially stable; the numbers of Houston, Dallas, Seattle, Washington and New York, in contrast, remained level or grew.

    Particularly troubling has been the relative decline in Asian immigrants, whose numbers now surpass Hispanics, and who also tend to be better educated than other newcomers. An analysis of migration of Asians conducted by demographer Wendell Cox, shows Asians heading increasingly to places like Houston, Dallas-Fort Worth, Raleigh, N.C., and Nashville, Tenn. Still home to the largest concentration of Asian-Americans, the L.A. Basin’s growth rate is now among the lowest in the nation, 24 percent in the past decade, compared with 39 percent in New York, and more than 70 percent in Dallas-Fort Worth and Houston.

    Some, like USC’s Dowell Myers, suggest slowing migration and population growth may actually be a positive, and claims "the demographic picture is brighter than it is has been in decades." He suggests that, rather than depend on the energy of newcomers, we now ride on "the skills of homegrown Californians."

    Certainly, slower growth may help with our traffic problems and even provide a break on housing inflation, but the contours of our demographics appear less than favorable. Over the past decade, for example, virtually all the largest metropolitan areas – including Silicon Valley – have seen slower percentage growth in college graduates than the national average. The big exception has been Riverside-San Bernardino, which started from a low base but has appeared to attract some college-educated people from the more expensive coastal regions.

    In contrast, largest rate of growth in educated people has taken place in regions such as Raleigh, N.C.; Austin, Texas, Phoenix and Houston; all these cities have increased the number of bachelor’s degrees at least one-third more quickly than the major California cities. Although California retains a strong educational edge, this is gradually eroding, particularly among our younger cohorts. In the population over age 65, California ranks an impressive fourth in terms of people with bachelor’s or higher degrees; but in the population under 35 our ranking falls to a mediocre 28th. If we are becoming more reliant on our native sons than in the past, we may be facing some serious trouble.

    This pattern can also be seen in those with graduate educations, where we are also losing our edge, ranking 19th among the younger cohort. More worrying still is the dismal situation at our grade schools, where California now ranks an abysmal 50th in high school attainment. Our students now rank among the worst-performing in the nation in such critical areas as science and math.

    If these issues are not addressed forcefully, what then is our demographic trajectory? One element seems to be a decline in the numbers of children, particularly in the expensive coastal areas. Over the past decade, according to the Census, the Los Angeles-Orange County region has suffered among the most precipitous drops in its population under age 15 – more than 12 percent – than any large U.S. metropolitan area.

    The numbers are staggering: in 2010 the region had 363,000 fewer people under age 15 than a decade earlier, while competitors such as Dallas-Fort Worth and Houston increased their youngsters by over 250,000 each. Orange County alone suffered an 8 percent decline in its under-15 population, a net loss of 54,000.

    If current trends continue, we may not be able to rely on immigrants to make up for an nascent demographic or vitality deficit. In fact, demographer Ali Modarres notes that L.A.’s foreign born-population is now older than the native-born, as their offspring head off for opportunities in lower-cost, faster-growing regions.

    Ultimately the state’s political and economic leadership needs to confront these demographic shifts, and the potential threat they pose to our prosperity. We can’t just delude ourselves that we attract the "best and brightest" from other states without creating improving the basics critical to families, from other states and abroad, such as education, reasonable housing costs and business climate. California ‘s beauty, great weather and a bounteous legacy remain great assets, but the state can no longer rest on its laurels if it hope to attract, and retain, a productive population capable of rebuilding our state’s now-faded promise.

    Joel Kotkin is executive editor of NewGeography.com and a 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.

    This piece originally appeared in the Orange County Register.

    Photo illustration by krazydad/jbum

  • The Evolving Urban Form: Kuala Lumpur

    The Kuala Lumpur region of Malaysia is generally defined by the state of Selangor and two geographical enclaves (the federal territories of Kuala Lumpur and Putrajaya), carved from the state. These enclaves are the two seats of the federal government. Kuala Lumpur houses the national parliament and Putrajaya the executive and judicial branches.

    Population Growth in the Kuala Lumpur Region

    The Kuala Lumpur region had a population of approximately 7.1 million, according to the 2010 census. This includes 1.6 million in the federal territory (core city) of Kuala Lumpur and 5.5 million in the suburbs (which include Putrajaya). The region has experienced strong growth since modern Malaysia evolved between 1957 and 1963. In 1950, the region had only 900,000 residents. By 1980, the population had more than doubled to nearly 2.4 million and by 2010, the population had tripled from its 1980 level.

    Unlike many urban cores, the city of Kuala Lumpur continues to experience strong population growth. Since 1980 (the first census after the creation of the new territory), the city has experienced a population increase of 77 percent.

    Yet, the suburbs and exurbs (Note 1) have grown far more rapidly. The suburbs and exurbs have grown 280 percent and have added nearly six times the population increase of the city (Figure 1).  This general distribution of growth continued over the past decade, with the suburbs attracting 83 percent of the new population, while the city of Kuala Lumpur received 17 percent of the growth (Figure 2).


    The region continues to grow faster than the nation and at the current growth rate, the Kuala Lumpur region could approach a population of 10 million by 2025.

    The Urban Area

    The Kuala Lumpur urban area (area of continuous urban development) has an estimated population of 6.6 million (2013). Kuala Lumpur ranks as the 49th largest urban area in the world (Note 2). The urban area covers an estimated 750 square miles (1,940 square kilometers), ranking it 42nd largest in the world. The population density is 8,800 per square mile (3,400 per square kilometer). Among the 70 world urban areas with more than 5,000,000 population, Kuala Lumpur ranks 56th in population density, with approximately the same density as Western European urban areas in the same size classification (Figure 3).

    The highest population densities are in the city of Kuala Lumpur, at 17,300 per square mile (6,700 per square kilometer), approximately the density of the city of San Francisco. The suburban areas have a population density of 6,800 per square mile (2,600 per square kilometer), approximately five percent higher than the suburbs of Los Angeles (Figure 4).

    The Economy

    Kuala Lumpur is a prosperous region by developing world standards. Only high-income Singapore is more prosperous in Southeast Asia. According to the most recent Brookings Global Metro Monitor, Kuala Lumpur has gross domestic product per capita of $23,900 annually (based on purchasing power). This is higher than all metropolitan economies in Latin America other than Brasilia, Monterrey and Buenos Aires. If Kuala Lumpur were in China, it would rank in the top quarter of the richest per capita metropolitan economies (Note 3).

    The Setting

    The urban area stretches from the core of Kuala Lumpur more than 20 miles (32 kilometers) westward to Port Klang on the Strait of Malacca, with similar expanses to the north and south. The urban area stretches less than 10 miles into the Titiwangsa Mountains, which forms the central cordillera of the Malay Peninsula.

    Physical Description

    The Kuala Lumpur urban area is located in a densely forested tropical region. The urban areas somewhat low density has permitted retention of substantial greenery. As a result, Kuala Lumpur appears to be among the "greenest" urban environments in East Asia, and for that matter, in the world. The greenery is especially evident in residential areas, where most housing is either detached or row house (Photos).


    Detached housing

    Row Houses

    However, the greenery also extends to the central business district (Photo: Kuala Lumpur’s Green Central Business District), where the largest buildings are much less densely packed than in most large world cities. Kuala Lumpur’s central business district is home to the Petronas Towers (Photograph above), twin towers that became the tallest buildings in the world upon completion in 1998, displacing Chicago’s Sear’s Tower (now Willis Tower). The title was lost to Taipei’s Tower 101 in 2004.


    Photo: Kuala Lumpur’s Green Central Business District

    Kuala Lumpur is not monocentric. The central business district accounts for only 12 percent of regional employment, a figure that is projected to decline (Figure 5). The central business district share is slightly more than the United States average (10 percent) and less than the Western European average (18 percent).

    Transport

    The Kuala Lumpur region principally relies on personal mobility (cars and motorcycles) for its transportation. As late as 1985, 35 percent of travel in the Kuala Lumpur was by mass transit. By 2010, this had fallen to between 10 and 12 percent. This is after opening three metro lines, a monorail and three commuter rail lines, with the metro and monorail lines having opened since 1995. Kuala Lumpur’s mass transit market share is more reflective of a high-income nation region than a middle income nation, comparable to Sydney, Toronto or New York and one-third below that of Western Europe. However, Kuala Lumpur is much more transit dependent than most US metropolitan areas, at five to 10 times that of Los Angeles, Portland, Seattle, Dallas-Fort Worth and Phoenix.

    The Kuala Lumpur region is served by an extensive network of expressways. One segment includes the "SMART" tunnel, which is a 6 mile (10 kilometer) long tunnel that serves both vehicles and storm water. While the tunnel has levels dedicated to both vehicles and storm water, the entire tunnel can be converted to storm water usage when there is serious flooding.

    Prospects

    Kuala Lumpur seems well positioned for the future. As the urban area has expanded in population and land area, its populace has achieved a level of affluence toward which much of the world strives.

    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 1: See "Definition of Terms used in The Evolving Urban Form"

    Note 2: The comprehensive Demographia World Urban Areas is published at least annually, with the next (9th) annual edition due in the Spring of 2013.

    Note 3: The ranking for Chinese metropolitan areas is adjusted, using the population figures from the 2010 census (which included the urban migrant population). The issue is described in Endnote 19 in the Brookings Global Metro Monitor.

    ——————-

    Photograph: Petronas Towers (all photos by author)

  • The New Places Where America’s Tech Future Is Taking Shape

    Technology is reshaping our economic geography, but there’s disagreement as to how. Much of the media and pundits like Richard Florida assert that the tech revolution is bound to be centralized in the dense, often “hip” places where  “smart” people cluster. Some, like Slate’s David Talbot, even fear the new tech wave may erode whatever soul is left to increasingly family free, neo-gilded age San Francisco.

    Such claims have been bolstered by the tech boom of the past few years — especially the explosion of social media firms in places like Manhattan and San Francisco. Yet longer-term trends in tech employment suggest such favored media memes will ultimately prove well off the mark. Indeed, according to an analysis by the Praxis Strategy Group, the fastest growth over the past decade in STEM (science, technology, engineering and mathematics-related) employment has taken place not in the most fashionable cities but smaller, less dense metropolitan areas.

    From 2001 to 2012, STEM employment actually was essentially flat in the San Francisco and Boston regions and  declined 12.6% in San Jose. The country’s three largest mega regions — Chicago, New York and Los Angeles — all lost tech jobs over the past decade. In contrast, double-digit rate expansions of tech employment have occurred in lower-density metro areas such as Austin, Texas; Raleigh, N.C.; Columbus, Ohio; Houston and Salt Lake City. Indeed, among the larger established tech regions, the only real winners have been Seattle, with its diversified and heavily suburbanized economy, and greater Washington, D.C., the parasitical beneficiary of an ever-expanding federal power, where the number of STEM jobs grew 21% from 2001 to 2012, better than any other of the 51 largest U.S. metropolitan statistical areas over that period.

    The question is whether the last two to three years, during which places like San Francisco, New York and Boston have enjoyed stronger STEM growth than their peripheries, represents a paradigm shift or is just a cyclical phenomenon. As with tech in general, the long-term trends are not so city-centric; over the past decade,  the core counties nationwide overall have lost about 1.1% of their tech jobs while more peripheral areas have experienced a gain of 3.5%.

    Today’s urban tech boom looks a lot like a rerun of the dot-com boom of the late 1990s. In that period media-savvy dot-com startups proliferated in such places as South of Market in San Francisco and the Silicon Alley in lower Manhattan. At their height, these firms and their founders were as likely to be covered in the fashion and lifestyle sections as on the business pages.

    Yet by the early 2000s, many of these dot-com darlings had merged, been acquired or simply gone out of business. Anchored largely on hype, they fell victim to flawed business models, and rapid industry consolidation.  In San Francisco, for example, tech employment crashed from a high of 34,000 in 2000 to barely 18,000 four years later. Silicon Alley suffered a similar downward trajectory, losing 15,000 of its 50,000 information jobs in the first five years of the decade.

    The peaking social media boom, marked by the weak performance of Facebook’s IPO last year, suggest another bust at the end of the “hype cycle.” Urban darlings such as  San Francisco’s Zynga and Chicago’s Groupon have floundered in spectacular fashion. More are likely to join them.

    These firms may have generated buzz, but they have done not so well at the mundane task of making money. One problem may be that  the most avid users of social media are largely young people from the “screwed” generation who lack much in the way of spending power — a clear turnoff to advertisers. Now , with venture capital flows declining overall,  cooler heads in the Valley are shifting bets to more business-oriented engineering and research-intensive fields more grounded in marketplace realities.

    And what about the future of the Valley — still home to virtually all the Bay Area’s top tech firms? Its glory days as a job generator and economic exemplar seem to have passed. Between 1970 and 1990 the number of people employed in tech in the Valley more than doubled to 268,000, and then burgeoned to over 540,000 in the 1990s. At the peak of the last tech boom in 2001, the unemployment rate in Santa Clara County was a tiny 3%; the Silicon Valley Manufacturing Group confidently predicted there would be another 200,000 jobs by 2010.

    However, at what may be the peak of the current boom, the number of tech jobs in the Valley remains down from a decade ago and unemployment is over 7.7%, just around the national average. In reality, social media was never going to reverse the downward trajectory in the rate of job growth. Old-line companies like  Hewlett-Packard or Intel, with over 50,000 employees in the U.S. alone, were capable of creating a broad range of opportunities for workers; in contrast, the social media big three of Facebook, LinkedIn and Twitter together have less than 6,500 employees.

    As the social media industry matures and consolidates,   employment is likely to continue shifting to less expensive, business-friendly areas. The Bay Area, where the overall cost of living is 68% higher than the national average and housing is the most expensive in the nation, may continue to attract and retain only the highest-end, best-paid workers. But for the most part they will follow the path of established tech firms such as  Apple, Intel, Adobe, eBay and IBM  to lower-cost places like Austin, Columbus and Salt Lake City. A similar phenomena also can be seen in other urban-centered industries, such as entertainment and finance where  virtually all employment growth is in places like St. Louis, Des Moines and Phoenix, even as the largest centers, New York, Chicago, Boston, Los Angeles and San Francisco have suffered significant job losses.

    Demographic forces may further accelerate these trends. The critical fuel for tech growth, educated labor, is now expanding faster in places like Columbus, Austin, Raleigh, Dallas and Houston than in Boston, San Jose and San Francisco. The old centers may still enjoy a lead in brains, but other places are catching up rapidly.

    Companies may also discover that with many millennials starting to hit their 30s, some may seek to leave their apartments to buy houses and start families. In California new local regulations essentially ban the construction of new single-family homes in some of the state’s biggest metro areas, pricing this option out of reach for all but a few, and forcing a key demographic group to seek residence elsewhere.

    Under these conditions, Silicon Valley will be forced to rely increasingly on inertia and mustering of financial resources than innovation. As a result, the nation’s tech map will continue to expand from the Bay Area, Boston, Seattle and Southern California to emerging metropolitan areas in North Carolina, Texas, Utah, Colorado and the Pacific Northwest. In the future parts of Florida, Phoenix, and even Great Plains cities like Sioux Falls and Fargo could also achieve some critical mass.

    Ultimately, one of the main dynamics of the information age — that even sophisticated tasks  can be done from anywhere — works against the dominion of single hegemonic industry centers like Wall Street, Hollywood and Silicon Valley. The tech sector is particularly vulnerable to declustering, due in large part thanks to the freedom from geography created by technologies of its own making.   Silicon Valley may continue to reap riches from the periodic technology  gold rush , but in the longer term, tech growth will continue its long-term dispersion to ever more parts of the country.

    STEM Occupations in the Nation’s 51 Largest Metropolitan Areas
    MSA Name 2001 – 2012 Growth 2005 – 2012 Growth 2010 – 2012 Growth 2012 Location Quotient LQ Change, 2001 – 2012
    Washington-Arlington-Alexandria, DC-VA-MD-WV 21.1% 12.7% 3.7% 2.19 10.6%
    Riverside-San Bernardino-Ontario, CA 18.6% -1.4% 2.2% 0.57 1.8%
    San Antonio-New Braunfels, TX 18.3% 17.2% 4.5% 0.83 1.2%
    Baltimore-Towson, MD 17.9% 11.4% 3.9% 1.37 15.1%
    Raleigh-Cary, NC 17.9% 14.6% 6.2% 1.53 0.0%
    Las Vegas-Paradise, NV 17.2% -2.6% 0.8% 0.52 4.0%
    Salt Lake City, UT 16.3% 18.1% 7.4% 1.16 4.5%
    Houston-Sugar Land-Baytown, TX 15.7% 17.2% 6.6% 1.20 -2.4%
    Seattle-Tacoma-Bellevue, WA 15.4% 22.2% 6.7% 1.86 8.1%
    Jacksonville, FL 13.0% 6.5% 2.4% 0.87 8.7%
    Austin-Round Rock-San Marcos, TX 12.2% 17.2% 9.1% 1.82 -8.5%
    San Diego-Carlsbad-San Marcos, CA 11.3% 8.0% 2.1% 1.38 6.2%
    Columbus, OH 10.4% 12.8% 4.7% 1.27 7.6%
    Orlando-Kissimmee-Sanford, FL 9.4% -1.1% 0.8% 0.84 -3.4%
    Indianapolis-Carmel, IN 6.9% 6.5% 2.7% 1.04 2.0%
    Nashville-Davidson–Murfreesboro–Franklin, TN 6.7% 3.5% 2.4% 0.77 -1.3%
    Sacramento–Arden-Arcade–Roseville, CA 6.4% 3.5% 0.4% 1.33 2.3%
    Oklahoma City, OK 5.5% 9.6% 6.4% 0.89 -1.1%
    Pittsburgh, PA 5.3% 10.3% 4.9% 1.07 5.9%
    Virginia Beach-Norfolk-Newport News, VA-NC 4.8% 2.3% 0.5% 1.10 3.8%
    Charlotte-Gastonia-Rock Hill, NC-SC 4.3% 8.2% 5.7% 0.99 -3.9%
    Kansas City, MO-KS 4.0% 5.8% 4.6% 1.12 4.7%
    Richmond, VA 3.8% 4.4% 3.4% 0.99 0.0%
    Cincinnati-Middletown, OH-KY-IN 3.7% 5.5% 6.8% 1.02 4.1%
    Buffalo-Niagara Falls, NY 3.2% 6.4% 3.6% 0.90 4.7%
    Dallas-Fort Worth-Arlington, TX 3.1% 11.4% 5.5% 1.19 -5.6%
    San Francisco-Oakland-Fremont, CA 2.5% 15.0% 9.9% 1.63 5.8%
    Phoenix-Mesa-Glendale, AZ 2.3% 3.5% 3.9% 1.05 -6.3%
    Minneapolis-St. Paul-Bloomington, MN-WI 2.2% 6.7% 5.9% 1.31 1.6%
    Portland-Vancouver-Hillsboro, OR-WA 1.6% 6.4% 5.4% 1.19 -3.3%
    Louisville/Jefferson County, KY-IN 0.9% 9.6% 6.9% 0.76 0.0%
    Denver-Aurora-Broomfield, CO 0.5% 10.8% 3.7% 1.43 -2.1%
    Atlanta-Sandy Springs-Marietta, GA -1.0% 5.5% 6.5% 1.07 -2.7%
    Boston-Cambridge-Quincy, MA-NH -1.3% 11.2% 6.0% 1.64 -1.2%
    Providence-New Bedford-Fall River, RI-MA -1.5% -1.6% 1.9% 0.88 2.3%
    Philadelphia-Camden-Wilmington, PA-NJ-DE-MD -2.8% -1.4% 1.4% 1.06 -1.9%
    Hartford-West Hartford-East Hartford, CT -4.5% 1.5% 0.3% 1.10 -3.5%
    New York-Northern New Jersey-Long Island, NY-NJ-PA -4.6% 2.8% 3.2% 0.90 -6.2%
    St. Louis, MO-IL -4.8% -1.7% 1.4% 1.05 -0.9%
    Milwaukee-Waukesha-West Allis, WI -6.1% -0.8% 4.0% 1.00 0.0%
    Tampa-St. Petersburg-Clearwater, FL -6.3% -4.3% 2.5% 0.89 -3.3%
    Miami-Fort Lauderdale-Pompano Beach, FL -6.4% -8.3% 0.6% 0.67 -8.2%
    Los Angeles-Long Beach-Santa Ana, CA -7.1% -3.5% 3.1% 0.98 -5.8%
    Memphis, TN-MS-AR -7.3% -4.0% 0.7% 0.62 -4.6%
    Cleveland-Elyria-Mentor, OH -8.8% -2.1% 4.3% 0.89 1.1%
    Chicago-Joliet-Naperville, IL-IN-WI -10.8% -1.4% 3.5% 0.87 -7.4%
    Birmingham-Hoover, AL -11.4% -8.0% -2.0% 0.76 -8.4%
    Rochester, NY -12.0% -2.1% 4.1% 1.14 -10.2%
    San Jose-Sunnyvale-Santa Clara, CA -12.6% 12.4% 8.3% 3.18 -4.8%
    New Orleans-Metairie-Kenner, LA -16.0% -7.4% -2.4% 0.74 0.0%
    Detroit-Warren-Livonia, MI -17.7% -10.3% 10.5% 1.42 -3.4%
    Analysis by Mark Schill, Praxis Strategy Group
    Data Source: EMSI 2012.4 Class of Worker – QCEW Employees, Non-QCEW Employees & Self-Employed 

    The LQ (location quotient) figure in the table above is the local share of jobs that are STEM occupations divided by the national share of jobs that are STEM occupations. A concentration of 1.0 indicates that a region has the same concentration of STEM occupations as the nation. The analysis covers 80 STEM occupations in all industries.

    Joel Kotkin is executive editor of NewGeography.com and a 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.

    This piece originally appeared at Forbes.com.

    Computer engineer photo by BigStockPhoto.com.

  • The Dispersion of Financial Sector Jobs

    When you think of financial services, one usually looks at iconic downtowns such as New York’s Wall Street, Montgomery Street San Francisco’s or Chicago’s LaSalle Street. But since the great financial crisis of 2007-8 the banking business is on the move elsewhere. Over the last five years (2007 to 2012), even as the total number of financial jobs has declined modestly, they have been growing elsewhere.

    This is the conclusion of an analysis of data supplied by Moody’s Analytics for an article in The Wall Street Journal ("Meet Them in St. Louis: Bankers Move). This analysis adjusts the data provided by Moody’s Analytics, combining portions of metropolitan areas (called "metropolitan divisions")into their complete metropolitan areas (See Note 1).

    The financial sector tends to be comparatively concentrated. In 2007, approximately one-third of the financial sector jobs reported by Moody’s were located in the New York metropolitan area. New York is the home of one of world’s largest financial sector hubs, Manhattan.

    New York: Financial Sector Employment Losses and Dispersion

    However, the New York metropolitan area and the other four largest concentrations of financial sector jobs – New York, Chicago, Boston, Los Angeles and San Francisco – accounted all of the net job losses over the period. Between 2007 and 2012, the five largest financial sector markets, lost 39,000 jobs. Outside these five metropolitan areas, the number of financial sector jobs increased by 12,000 (Figure 1).

    The extent of this dispersal away from the five most concentrated markets is illustrated by the decline in their financial sector jobs compared to the other metropolitan areas. In 2007, the five most concentrated markets had 32,000 more financial sector jobs than the other metropolitan areas. By 2012, the other metropolitan areas achieved a total number of 19,000 more financial sector jobs than the five most concentrated markets (Figure 2).

    The dispersion of financial sector jobs is evident even within the New York area itself. The central metropolitan division of the New York metropolitan area (New York-White Plains-Wayne), which includes Manhattan, lost 19,000. However, the balance of the New York metropolitan area experienced a 2500 increase in financial sector jobs, resulting in a overall loss of 16,500 jobs in the metropolitan area

    Not all of the New York metropolitan area jobs were lost to places like Dallas-Fort Worth and Des Moines. The balance of the New York combined statistical area (formerly called consolidated metropolitan statistical areas) added 2000 jobs, principally in the Bridgeport (Fairfield County, Connecticut) metropolitan area (Figure 3). Thus, while the core of the New York metropolitan area was losing 9 percent of its financial sector jobs, the more suburban balance of the combined area gained 11 percent, even as the total region lost employment.

    California: Substantial Financial Sector Employment Losses

    However, New York’s percentage losses paled by comparison to those in the Los Angeles (Los Angeles and Riverside-San Bernardino) and San Francisco combined (San Francisco and San Jose) statistical areas. The losses in the Los Angeles area were 21 percent, while in the San Francisco area the losses reached 17 percent. The losses in Los Angeles and San Francisco regions exceeded that of the New York combined statistical area, which had three times as many financial sector jobs in 2007. San Diego also experienced a 5percent job loss, while Sacramento’s loss was miniscule. Overall, California lost 17 percent of its financial sector jobs between 2007 and 2012.

    Texas: Gaining Financial Sector Employment

    The large metropolitan areas of Texas and did better. Dallas-Fort Worth, Houston, San Antonio and Austin added 5400 financial sector jobs, an increase of 14 percent (Figure 4).

    Metropolitan Area Performance

    St. Louis added 5,600 financial sector jobs, the most of any single metropolitan area (Figure 5). The Washington area added 4,400, followed by Phoenix (3,900), Dallas-Fort Worth (2,600) and Bridgeport (2,000). New York, as mentioned above, lost 16,500 financial sector jobs, the most of any individual metropolitan area (Figure 6). Boston had the second largest loss (8,300), followed by Los Angeles (6,800), Miami (4,800) and San Francisco (4,400).

    The metropolitan areas with the largest percentage gains include net job leader St. Louis which grew 85 percent (Figure 7). Phoenix gained 36 percent, Washington 28 percent, Tampa-St. Petersburg 18 percent and Dallas-Fort Worth 14 percent. Des Moines, which had only 1,400 financial sector jobs in 2007 had the largest percentage gain, at 96 percent.

    Miami had the largest loss, at 27 percent (Figure 8). Charlotte, having risen to prominence with its large banks may have been in the wrong place at the wrong time, losing 24 percent of its financial sector jobs, followed by Boston and Los Angeles (19 percent) and San Francisco (17 percent).

    Dispersing to Lower Density Areas

    The data is not sufficiently precise to distinguish between central business district, urban core and suburban trends. However, the metropolitan areas with high density historical core municipalities (above 10,000 persons per square mile or 4,000 per square kilometer in 2010), suffered a loss of 35,000 financial sector jobs between 2007 and 2012, more than the total national metropolitan loss of 27,000. The six high density historical core municipalities (Note 2) include New York, Chicago, Philadelphia Boston, San Francisco and Miami all suffered significant losses while the metropolitan areas with less dense cores gained 9,000 financial sector jobs (Figure 9).

    Further, the losses were concentrated in the metropolitan areas with the four most dense major urban areas, Los Angeles, San Francisco, San Jose and New York and the losses in these areas exceeded the overall industry loss. This movement away from density reinforces the often misconstrued conclusions of the Santa Fe Institute Urban Scaling research to the effect that metropolitan area size was a principal determinant of productivity, however not urban density (see: Density is Not the Issue: The Urban Scaling Research). Larger, less dense regions did far better — for example Houston, Dallas and St. Louis — than their more dense rivals.

    Dispersion to Housing Affordability

    There is also a strong trend of financial sector job gains where housing is more affordable and job losses where housing is less affordable. This is indicated by the median multiple (median house price divided by gross median household income) data from the 8th Annual Demographia International Housing Affordability Survey (Table below).

     

    Demographia International Housing Affordability Survey

    Housing Affordability Rating Categories

    Rating

    Median Multiple

    Severely Unaffordable

    5.1 & Over

    Seriously Unaffordable

    4.1 to 5.0

    Moderately Unaffordable

    3.1 to 4.0

    Affordable

    3.0 & Under

     

    Metropolitan areas rated as affordable (median multiple 3.0 or lower) gained 9,300 financial sector jobs between 2007 and 2012. Metropolitan areas rated moderately unaffordable (median multiple 3.1 to 4.0) gained 2,600 jobs. The metropolitan areas with the most unaffordable housing suffered a net loss in financial sector jobs. Seriously unaffordable (median multiple 4.1 to 5.0) metropolitan areas lost 3,700 jobs. Metropolitan areas rated seriously unaffordable (median multiple 5.1 or higher) lost 35,000 jobs. This is more than the overall loss reported in the data of 27,000 (Figure 10).

    Financial Sector Jobs: Reflecting Urban Dispersion

    The dispersion of financial sector jobs away from concentrated areas may come as a surprise, given the close association that the industry has with the largest central business districts. Yet, the trend mirrors the more general, but overwhelming trends of dispersion indicated over the last decade in both population and domestic migration.

    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 1: The data used in this analysis is limited to that provided in The Wall Street Journal article. Data was provided for only is only for a part of the Boston metropolitan area (the Boston-Quincy metropolitan division).

    Note 2: In 1940, at least 15 of the historical core municipalities had population densities exceeding 10,000 per square mile (4,000 per square kilometer)

    Photo by Flickr user IABoomerFlickr

  • California’s Poor Long-term Prognosis

    California’s current economic recovery may be uneven at best, but things certainly look better now than the pits-of-hell period in 2008. A cautiously optimistic New York Times piece proclaimed "signs of resurgence," and there was even heady talk in Sacramento of eventually sighting that rarest of birds, a state budget surplus.

    Yet such outbreaks of optimism should not blind us to the bigger issue: the long-term secular decline of the state’s economy. Whether you believe that the new higher taxes may now slow our growth, as my colleagues at Chapman University now believe, or right the fiscal ship, as is widely hoped in the blue California press, it’s more important to look more at the long-term trends, and assess where we stand compared with our domestic competitors.

    California, despite its enormous natural and human resources, is losing ground in most basic areas. Its unemployment rate, a still-horrendous 10 percent, stands as the nation’s third-highest. This is not a new development or the product of a run of bad luck. The state’s unemployment rate has been consistently above the national average for almost all of the past 20 years. Most interior counties, including the Inland Empire and the Central Valley, now suffer unemployment rates well into the double digits, with some approaching 15 percent.

    Overall, the state is still down a half-million jobs during the recession. California’s losses since its employment peak have been considerably above the national average, some 3 percent, far worse than the 2.3 percent erosion seen nationwide. Despite the modest recent uptick, the California Budget Project projects the state would need to add twice as many jobs per month to fully recover from the recession by the summer of 2015.

    Other long-term trends confirm the state’s secular decline in competitiveness. Take per capita income – a decent indicator of relative progress. In 1945, journalist John Gunther, writing his famous "Inside USA," gushingly described California "the most spectacular and most diversified American state … so ripe, golden." At the time, the state boasted the third-highest per capita income in the nation. As late as 1980, the state still ranked fourth. Today, despite Silicon Valley’s money machine, California has fallen to 12th and appears headed for further decline.

    Despite hopes in Sacramento and in the media, high-tech alone can not bail out the state. The much hoped-for windfall around the time of the Facebook IPO has failed to produce the expected fiscal bonanza for the state treasury. Silicon Valley famously gets nearly half the country’s venture capital, but its impact on the rest of the state has diminished. In the 1980s and 1990s, tech booms stretched prosperity throughout its surrounding regions and as far as Sacramento. Now it barely covers half the Bay Area; unemployment in Oakland remains at around 13 percent and one child in three lives in poverty.

    Part of this reflects the shift from an industrial high-tech focus to one fixated on software and social media. Given the extraordinary ease with which support and even research operations can be moved, once companies start to grow, they easily head to India, China or over to lower-cost locales like Utah or Texas. "Sure, we are getting half of all the venture capital investment but in the end we have relatively small research and development firms only," observes Jack Stewart, president of the California Technology and Manufacturing Association. "Once they have a product or go to scale, the firms move elsewhere. The other states end up getting most of the middle-class jobs."

    This can be seen in the long-term trends in STEM (science, technology, engineering, mathematics-related) jobs. Over the past decade, even with the current bubble, Silicon Valley’s STEM employment, according to estimates by Economic Modeling Specialists Inc., has increased by a mere 4 percent over the past decade. In contrast, science-based employment jumped 25 percent in Seattle, 20 percent in Houston and 16.8 percent in Austin, Texas.

    The tech scene in the Los Angeles Basin is doing even worse. STEM employment in the Los Angeles-Santa Ana area is still stuck below 2002 levels, partially a residue of the continued decline of the region’s once-globally dominant aerospace industry. The region, once arguably the world’s largest agglomeration of scientists and engineers, has now dipped below the national average in proportion of STEM jobs.

    Far greater problems can be seen further down the economic food chain, where many working-class and middle-class Californians traditionally have been employed. The state’s heavy industry – traditionally the source of higher-paid blue-collar employment – has missed out on the nation’s broad manufacturing resurgence. Over the past 10 years, according to an analysis by the Praxis Strategy Group, California has ranked 45th among the states in terms of heavy metal job creation, losing 126,000 jobs – more than 27 percent; San Francisco-Oakland ranked last among 51 large metropolitan areas. Both Los Angeles-Orange and San Bernardino ranked in the bottom 10.

    Despite hype about "green jobs," the immediate prospect for a big manufacturing turnaround is not bright. Because of its high energy costs and other regulatory costs, industrial investment has dried up in California. According to the California Technology and Manufacturing Association, California in 2011 did not even make the top 10 states in terms of new industrial investment, accounting for a paltry 2 percent. This was about one-third or less the share garnered by rivals such as Texas, North Carolina and rebounding "rust belt" states, like Pennsylvania.

    Construction, another pillar of higher-paid blue-collar employment, has recovered a bit but remains in worse shape than elsewhere. Overall, the state has lost almost 300,000 construction jobs from the 2007 peak, an almost 40 percent loss compared with 29 percent for the country as a whole.

    Even the trade sector, stalwart performer in producing high-wage jobs, may soon be declining. Recent labor disputes by highly paid, politically powerful California port workers – shutting down operations for eight days in Los Angeles and Long Beach – has reinforced the notion that the state’s an increasingly unreliable place to do business. After peaking around 2002, our ports are watching growth shift to the Gulf ports, such as Houston, and to the ports of the south Atlantic. The challenge will become far greater once the Panama Canal is widened in 2014 to accommodate larger ships from Asia.

    California is also squandering its chance to participate in a potential fourth source of basic employment, the massive expansion in domestic oil-and-gas production. The Golden State sits on potentially the largest gusher in the nation – the Monterey Formation is now estimated to be four times as rich in oil as North Dakota’s Bakken Formation. But our green consciousness dictates we don’t exploit our resources too much. In the past decade, Texas created some 200,000 generally high-paying energy jobs, while greener-than-thou California has generated barely one-tenth as many.

    As a result, wealthier, older, whiter, generally better-educated coastal areas can recover, but the prospects are dismal the further you head into the increasingly Latino, younger and less-educated inland areas. You have flush times for venture capitalists and celebrities, but growing poverty elsewhere. For at least two decades California’s poverty rate has remained higher than the national average. Now, notes a new Census estimate, the Golden State has a poverty rate of more than 23 percent, the highest in the country, something unthinkable a generation ago.

    Clearly, progressive policies are having socially regressive effects. Over the past few years the state, as a recent Public Policy Institute of California study demonstrates, has become ever substantially more unequal than the rest of the nation. Typical California middle-income workers have seen their median wage, adjusted for inflation, decline 4.5 percent since 2006, and now is at the lowest level since 2008. Only the highest-paid workers have avoided a decline in earnings.

    Fortunately, the elements to regain our former broad-based prosperity are still in place. The critical human assets are there: entrepreneurs, hardworking immigrants, top universities. We boast advantages from legacy industries – entertainment and fashion to technology and agriculture. And, perhaps most importantly, California retains its remarkable natural blessings of massive energy resources, fertile soil and a benign climate.

    The imperative now is to take fuller advantage of all these blessings in the coming years. Otherwise California will become poorer, more socially bifurcated and relegated by other places to the proverbial "dustbin of history."

    This piece first appeared in the Orange County Register.

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

  • California’s Blue Utopia

    The Progressive wing of the Democrat Party sits at the left end of their spectrum. JFK’s liberal positions would be regarded as moderate today. Progressives have a unique vision of what a blue state utopia would look like that begins with clean air, clean water, and green energy. Over the last twenty years, with the backing of the public employee unions that control the political process in California, the Progressives have managed to neuter the Republican Party and turn California Blue, owning every elective office in the state. They did not need much help according to Dan Walters, who stated, “Even the most anti-immigrant, anti-gay marriage, anti-tax, anti-abortion Republican activist must now recognize that with the party’s wipeout in last month’s elections, continuing down its recent path is a plunge into complete irrelevance”.

    In 2012, the progressive Democrats captured a super majority in both houses so that with their Progressive governor, they no longer require a single Republican vote to pass any form of legislation, leaving conservatives an “irrelevant” minority.  As an independent businessman, I have created many jobs and opportunities. But despite my contributions to society, and the taxes I have paid over the last thirty plus years, the Progressives believe I need to pay more so that I pay “my fair share.” Only when I pay my fair share can their blue vision of utopia be fulfilled.

    What is my fair share? Under existing Federal and State income tax rates, I will pay 50% of my income in taxes. In California alone, my “fair share” on a million dollars of income is $133,000 each year. In exchange for my taxes, I receive little from the state. In addition, I pay gasoline taxes that pay for the upkeep of the highways. I pay airline taxes that maintain the airports I use. I pay among the highest in the nation sales tax on what I consume. I pay property taxes for the schools my grown children no longer use (they have already left California). I pay utility taxes for the upgrade of infrastructure. I pay higher health insurance rates. I already pay more than my own way.

    I used to develop new homes in California and paid development fees, school fees, park fees, bridge & thoroughfare fees, endangered species fees, utility hook up fees, and processing fees to employ the city workers who reviewed my plans. Such fees totaled $40,000 to $75,000 for each new home built in California. I more than paid my own way. Such new homes are no longer feasible in California considering that home prices have fallen between 20-40% since 2008. And with the new regulations to be imposed in 2013 with the passage of the Global Warming Solutions Act of 2006, housing and energy will cost even more making new houses even less attractive than they are now.

    A problem in Blue Utopia

    The number 1 topic of conversation amongst the despised 1% in California today is when you are leaving California or whether you can leave. Property owners who cannot move their apartment building or office complexes can move their homes and change their residency. On a flight from Austin, Texas to Orange County last week, I sat next to the owner of a substantial manufacturing business whose plant is in the inland southern California community of Ontario. He lives in Austin, flies in on Monday and home on Thursday. He spends less than 180 days a year in California. His savings in state income taxes more than pays for his airfare, hotel and rental car expenses. His home and gas and energy all cost less in Texas. More significantly, he will not expand his plant in California and intends to move his plant and people to Texas over the next five years.

    What do the progressives have to say about a successful businessman wanting to move out of the state? Some like Paul McCloskey who recently attempted to pass a ballot measure for a Wealth Tax imposed on those leaving the state, would like to follow the French. France imposed a 75% tax rate on anyone making more than one million Euros per year. France’s Prime Minister Jean-Marc Ayrault said about people leaving France for lower rates, “We cannot fight poverty if those with the most, and sometimes with a lot, do not show solidarity and a bit of generosity," McCloskey’s proposal would impose an additional 17.5% tax on those with incomes exceeding $150,000 ($250,000 joint) and 35% on incomes exceeding $350,000/year. He would use the extra income to purchase shares of California public companies to “influence their environmental policies and practices”. While his ballot measure did not succeed, it is sobering to think the Democrats do not need a single Republican vote to pass legislation such as this.

    So many of the 1% are quietly leaving. The exodus has already begun. Spectrum Location Solutions reported that 254 companies left California in 2011. Despite claims of an upturn, a press release by the State Controller’s office last week revealed tax revenues from both personal income taxes and corporate taxes fell during the month of this November. Revenue from personal income dropped 19 percent below projections while corporate tax revenue was down a whopping 213.4 percent. Such declines will continue unabated for years to come as the California brain drain proceeds.

    When a government becomes a one-party state, nothing can stop the utopians and zealots of either party. In California, there’s no brake on progressives imposing its vision of Blue Utopia on its people.   California may have clean water, clean air and green energy but at the expense of its people, prosperity and fiscal health.

    The problems in Blue Utopian society will be similar to the unintended consequence of protecting the Delta Smelt in the Central Valley. The Blues labeled this tiny fish, previously known as “bait,” as an endangered species. The Endangered Species Act was created to protect the American Bald Eagle but now extends protection for the Delta Smelt, forcing water to be diverted from the farms of the Central Valley to the Pacific Ocean. The Delta Stewardship Council shows the water cutoffs had no effect on the smelt population. But it did a devastating effect on another endangered species: the California family. When 300,000 acres went fallow, 37,000 jobs were lost. Unemployment has reached 40% in some areas of the Central Valley. Food lines have appeared in the world’s most fertile agricultural valley. Farmworkers were forced to accept bags of carrots grown in China. Orchards that existed for decades died without water. The Central Valley now needs food stamps to feed its residents.  

    The Blues are excited to impose their vision of Utopia on California. I, for one, will not be here to see it. My home goes on the market next month. My company has already re-located to another state. My children have already moved away seeking a future more promising than anticipated here in California. It is ironic because that is why I left my parents in Cleveland, Ohio to come to California four decades ago. I will be sad to leave my home and friendships acquired over decades. But I realize our leaders will neither notice, and if they did, they would not care. 

    As the tax revenues continue to fall (as they always do when rates increase), the Blues will rail against the remaining 1%, claiming that if only “they” would pay their fair share, things would be perfect. They will raise rates, fees, costs, and penalties again on the business class, and will do so as long as they hold power.

    But there is a problem in Blue Utopia. Short term, the state may be supported by the occasional Internet or Housing Bubble, but the money will finally run out.  When it does, maybe they will ask us to come back to the Golden State. They will promise to lower rates and turn the water back on. But it is already too late for the dead orchards of the Central Valley. And it will soon be too late for all but a handful of entrepreneurs of California.

    ¨¨¨¨¨¨¨¨¨¨¨¨¨¨¨

    Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, a Senior Fellow at the Pacific Research Institute in San Francisco, CA and President of the international investment firm, L88 Companies LLC in Washington DC – Newport Beach – Denver – Prague. He has been a successful real estate developer in California for more than thirty years and now makes his home in Austin, Texas.

    California coast photo by BigStockPhoto.com.

  • New Geography’s Most Popular Pieces of 2012

    Here’s a list of the most popular pieces from 2012 here at NewGeography, our fourth full calendar year. Thanks for reading and happy 2013.

    10. The Cities Where a Paycheck Stretches the Furthest In this piece from July, Joel Kotkin looks at average pay in U.S. metropolitan areas adjusted for regional cost of living based on my analysis of data from EMSI and C2ER. Since it ran, the table at the end of the piece has been updated with 2012 data. This piece also ran in Forbes.

    9. The Export Business of California (People and Jobs) Wendell Cox quantifies the outmigration from California and outlines a few reasons why residents might be leavings.

    8. America’s Future is Taking Shape in the Suburbs The evidence suggests that it’s not time to write off the suburbs just yet, according to this July Joel Kotkin piece. This piece also appeared at Forbes.

    7. The New Geography of Success in the U.S. and the Trap of the “New Normal” Joel Kotkin suggests that all of the public discussion about a “new normal” of U.S. mediocrity may not be the case due to a few of America’s inherent competitive advantages. “The stories of the successful states tell us the key to success lies  in promoting basic industries like energy, agriculture and manufacturing — which then create business service and high-skilled jobs — combined with a broad agenda favorable to entrepreneurs of all kinds.” This piece also appeared in Forbes.

    6. Sex (or Not) and the Japanese Single Edward Morgan explores the issue of sex and fertility and how it may affect the future of Japan.

    5. The Unseen Class War that Could Decide the Presidential Election In August Joel Kotkin pointed out that the issue of class is one of the most important facing American policymakers. He points out that the “clerisy” of both parties has ignored upward mobility and the needs of the “yeomanry.” This piece also appeared in Forbes.

    4. After the November election, Joel Kotkin argued that the nation may be in for a future similar to the current state of California in the piece, “For a Preview of Obama’s America in 2016, Look at the Crack-up of California.” This piece also appeared in Forbes.

    3. World Urban Areas Population and Density Wendell Cox’s summary of population data on the world’s urban areas has become a popular resource for readers looking for population data in search engines.

    2. Is California the New Detroit? In August Robert Cristiano called out California political leaders about the state of the state: “The beaches are still beautiful. The mountains are still snow capped and the climate is still the envy of the world. Detroit never had that. But will California’s physical attributes be enough?”

    1. Best Cities for Jobs 2012 Articles Our Best Cities Rankings measure short-, medium-, and long-term employment growth in the nation’s metropolitan areas and metropolitan divisions. We keep the measure simple on purpose: to offer an indicator of which regions are changing the fastest.

    Mark Schill is a community strategist and analyst with Praxis Strategy Group and New Geography’s Managing Editor.