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  • Will Obamacare Bail Out Cities?

    When Rahm Emanuel was Barack Obama’s Chief of Staff, little did he know he’d be helping craft a law that would help him as the future Mayor of Chicago. Many American cities failed to put away enough money for current and former government workers.  Rahm Emanuel and powerful Democratic Party interest groups would like the federal government to bailout their pensioners. While the unions are less shy about looting federal taxpayers, Emanuel is working hard getting federal help.

    Emanuel needs to cut costs immediately to prevent more downgrades from the bond rating agencies.  One of Emanuel’s creative financial techniques involves the use of Obamacare as way of pushing some financial costs from the city of Chicago budget onto the federal government.  Many retired workers don’t like or want Obamacare.  The Chicago Sun Times reports :

    Chicago’s 30,000 retired city employees are trying to stop Mayor Rahm Emanuel from saving $108.7 million — by phasing out the city’s 55 percent subsidy for retiree health care and foisting Obamacare on them.

    One week after an unprecedented, triple-drop in Chicago’s bond rating, retirees have filed a class-action lawsuit against the city and its four employee pension funds that threatens to make the financial crisis even worse.

    The suit argues that the Illinois Constitution guarantees that municipal pension membership benefits are an “enforceable contractual relationship which may not be diminished or impaired.”

    Chicago’s retired workers aren’t the only individuals unhappy with Obamacare.  IRS workers don’t want Obamacare but likely will find they can’t keep their current health insurance.  All of this is providing massive strains on the Blue Model coalition of government workers and the Democratic Party.  In Chicago, at least retired government workers can know who to blame for their change in health insurance if they lose their lawsuit. Mayor Rahm Emanuel not only was instrumental in getting Obamacare passed but now he’s dumping Obamacare on thousands of workers as Chicago’s Chief Executive.

  • The Childless City

    What is a city for? Ever since cities first emerged thousands of years ago, they have been places where families could congregate and flourish. The family hearth formed the core of the ancient Greek and Roman city, observed the nineteenth-century French historian Fustel de Coulanges. Family was likewise the foundation of the great ancient cities of China and the Middle East. As for modern European cities, the historian Philippe Ariès argued that the contemporary “concept of the family” itself originated in the urbanizing northern Europe shown in Rembrandt’s paintings of bourgeois life. Another historian, Simon Schama, described the seventeenth-century Dutch city as “the Republic of Children.” European immigrants carried the institution of the family-oriented city across the Atlantic to America. In the American city until the 1950s, urbanist Sam Bass Warner observed, the “basic custom” was “commitment to familialism.”

    But more recently, we have embarked on an experiment to rid our cities of children. In the 1960s, sociologist Herbert Gans identified a growing chasm between family-oriented suburbanites and people who favored city life—“the rich, the poor, the non-white as well as the unmarried and childless middle class.” Families abandoned cities for the suburbs, driven away by policies that failed to keep streets safe, allowed decent schools to decline, and made living spaces unaffordable. Even the partial rebirth of American cities since then hasn’t been enough to lure families back. The much-ballyhooed and self-celebrating “creative class”—a demographic group that includes not only single professionals but also well-heeled childless couples, empty nesters, and college students—occupies much of the urban space once filled by families. Increasingly, our great American cities, from New York and Chicago to Los Angeles and Seattle, are evolving into playgrounds for the rich, traps for the poor, and way stations for the ambitious young en route eventually to less congested places. The middle-class family has been pushed to the margins, breaking dramatically with urban history. The development raises at least two important questions: Are cities without children sustainable? And are they desirable?

    Best-selling urban booster Richard Florida, a pied piper for today’s city developers and planners, barely mentions families in his books, which focus instead on younger, primarily single populations. Eric Klinenberg, a New York University professor and author of the widely touted Going Solo, celebrates the fact that “cities create the conditions that make living alone a more social experience.” But perhaps the most cogent formulation of the post-family city comes from the sociologists Richard Lloyd and Terry Nichols Clark, who see the city, and particularly the urban core, as an “entertainment machine.” In their view, city residents “can experience their own urban location as if tourists, emphasizing aesthetic concerns.” Schools, churches, and neighborhood associations no longer form the city’s foundation. Instead, the city revolves around recreation, arts, culture, and restaurants—a system built for the newly liberated individual.

    Demographic trends seem to bear out this vision.Over the past two decades, the percentage of families that have children has fallen in most of the country, but nowhere more dramatically than in our largest, densest urban areas. In cities with populations greater than 500,000, the population of children aged 14 and younger actually declined between 2000 and 2010, according to U.S. Census data, with New York, Chicago, Los Angeles, and Detroit experiencing the largest numerical drop. Many urban school districts—such as Chicago, which has 145,000 fewer school-age children than it had a decade ago—have seen enrollments plummet and are busily closing schools. The 14-and-younger population increased in only about one-third of all census-designated places, with the greatest rate of growth occurring in smaller urban areas with fewer than 250,000 residents.

    Consider, too, the generation of Americans between the ages of 25 and 34 in 2000. By 2010, the core cities of the country’s 51 most populous metropolitan areas had lost, on average, 15 percent of that cohort, many of whom surely married and started having children during that period. While it’s not possible to determine where they went, note that suburbs saw an average 14 percent gain in that population during the same period.

    Of course, not all sections of our largest cities are equally bereft of children. Of Los Angeles County census tracts where less than 10 percent of the population was 14 and younger in 2010, a significant number were located downtown and along the coast. These are mostly high-density areas where housing is expensive. You’ll find a considerably higher proportion of children under 14 in low-income parts of South and East Los Angeles, and also in middle-class neighborhoods in the heart of the San Gabriel and San Fernando Valleys.

    Opinion polls confirm the impulse behind the child exodus. For example, in a recent survey for the Manhattan Institute by Zogby Analytics, 58 percent of people with children under 17 said that they would consider leaving New York City for better opportunities elsewhere; only 38 percent of those without children agreed. Part of the reason is surely the city’s density and cost, which make family life difficult. In Manhattan, where the average rent approaches $4,000 a month, it’s no surprise that families are waning.

    A more family-friendly city remains possible. The Brooklyn community of Flatbush—like Staten Island, Queens, and eastern portions of Brooklyn—was built in the first half of the twentieth century to appeal to families fleeing the congestion of New York’s core. Just as the suburbs do now, these new settlements revolted many urbanists, such as Lewis Mumford, who complained in 1921 that the “dissolute landscape” was “a no-man’s land which was neither town nor country.” But Flatbush’s tree-lined neighborhoods, such as Kensington and Ditmas Park, may be the city’s best hope for retaining middle-class families. These areas still have many single-family homes and low-rise apartments. And Cortelyou Road, a main drag in Ditmas Park, brims with family-friendly restaurants and shops, though it was fairly desolate just a decade ago. Young families are enthusiastic about the neighborhood. “It’s an amazing place,” says Kari Browne, co-owner of the Lark café on nearby Church Avenue. “But the key concern is: Can you afford to stay?”

    For many young families living in New York’s outer boroughs, the availability of space, particularly backyards, is deeply important. “The cost of space is the biggest issue in Brooklyn,” says resident Michael Milch, whose wife attends dental school at NYU. “The issue becomes: Can you get some personal green space?” Obviously, people who settle here are willing to make do with less space than those who, say, move to a far-flung exurb in Putnam County. But all are seeking space in communities more amenable to family life than are the contemporary city cores. Heightened family demand may be helping send housing prices steadily upward in New York’s boroughs, as young couples move from Manhattan to less dense neighborhoods. Jason Walker, a 45-year-old father of two, left Washington, D.C. (which may have the highest percentage of childless households in the nation), for Ditmas Park to escape “a culture dominated by childless people leery of the existence of kids.” The Walkers live in a two-bedroom apartment but are looking for a house in the area.

    Such opportunities exist elsewhere in America, too, in places where detached single-family homes—the preferred housing of 80 percent of American adults, according to a National Association of Realtors survey in 2011—are often just a short walk or ride from the urban core. With its broad streets and massive shopping centers, the California city of Irvine may lack the inner-ring charms of Flatbush. But families are drawn to Irvine’s amenities—especially its schools. “You really have to worry about the schools in New York,” says Walker, whose children are six and eight. “If you have to go to private schools, this makes it a struggle to stay here.” In Irvine, by contrast, “everything stems from education,” says resident Eveleen Liu. “The city draws people who are impassioned about their kids and their school. Everyone volunteers. It’s the glue that holds this place together.” Schools are particularly crucial in attracting Asians, now the country’s fastest-growing immigrant group. Safety is another big draw: Irvine consistently rates among the safest American cities with more than 100,000 residents.

    Families are also deeply attracted to open space. The great Frederick Law Olmsted–designed New York parks, including Prospect Park in Flatbush, are enormous assets for families without backyards. Irvine may lack stunning urban architecture and glorious cathedrals, but it has a magnificent park system that gives residents ideal settings for recreation, exercise, and family gatherings. “It’s an environment that is clean and nice and open to everyone,” says Veronika Kim, a mother of three and an apartment tenant in Woodbury, an Irvine neighborhood. “You can walk there with the kids and let them play. Even if you rent, you don’t feel like an outsider.” The parks are good not only for kids but for adults—for example, the members of the Woodbury Woodies, who play softball every week against teams from other neighborhoods. “There’s a deep sense of community here,” says Woody regular Julian Forniss. “Softball is part of that.” On the site of a former Marine Corps base, Irvine and Orange County are developing a “Great Park” that will be twice the size of New York’s 840-acre Central Park.

    Other family-friendly cities have embarked on ambitious park and open-space projects as well. In Raleigh, North Carolina, the nearly completed $30 million Neuse River Greenway Trail cuts through 28 miles of forest. Houston’s $480 million Bayou Greenways project will eventually add some 4,000 acres of green space across the city, from the downtown to the outer suburbs, including 300 miles of continuous hiking and bike trails. Houston’s rival, Dallas, is planning a vast 6,000-acre park.

    What families need is more affordable urban neighborhoods with decent schools, safe streets, adequate parks—and more housing space. As New York University’s Shlomo Angel points out, virtually all major cities worldwide are growing outward more than inward—and becoming less dense in the process—because density drives families away from urban cores and toward less dense peripheries. The lesson is clear: if cities want families, they should promote a mixture of density options.

    The solution is not to wage war on suburbia, as urbanists have been doing for years. Following the notions that Jane Jacobs advanced a half-century ago, contemporary urbanists argue that high density creates a stronger sense of community. (Jacobs once opined that raising children in the suburbs had to be difficult, somehow overlooking how families were flocking to those suburbs.) But that contention isn’t self-evident. The University of California’s Jan Breuckner and Ann Largey conducted 15,000 interviews across the country and found that for every 10 percent drop in population density, the likelihood of someone’s talking to his neighbor once a week went up 10 percent, regardless of race, income, education, marital status, or age.

    In California, particularly, state and local officials push policies that favor the development of apartments over single-family houses and town houses. But by trying to cram people into higher-density space, planners inadvertently help push up prices for the existing stock of family-friendly homes. Such policies have already been practiced for decades in the United Kingdom, making even provincial cities increasingly unaffordable, as British social commentator James Heartfield notes. London itself is among the least affordable cities in the world. Even middle-class residents have been known to live in garages, converted bathrooms, and garden sheds.

    A city that continues to be high-density and high-cost hasn’t necessarily signed its own death warrant. Manhattan, parts of Brooklyn, and much of San Francisco, Seattle, Boston, and other amenity-rich cities—what Tulane University geographer Richard Campanella calls “kiddie deserts”—continue to flourish. But other cities, such as Detroit, Cleveland, and Buffalo, can’t attract the same interest from young hipsters and the rich and are consequently less capable of withstanding the effects of family flight to the suburbs. Even in the most affluent cities, the dearth of families reinforces public policies incompatible with children, argues the Austrian demographer Wolfgang Lutz. For example, fewer middle-class families means less political pressure to reform education or support for tougher law enforcement.

    Ultimately, everything boils down to what purpose a city should serve. History has shown that rapid declines in childbearing—whether in ancient Rome, seventeenth-century Venice, or modern-day Tokyo—correlate with an erosion of cultural and economic vitality. The post-family city appeals only to a certain segment of the population, one that, however affluent, cannot ensure a prosperous future on its own. If cities want to nurture the next generation of urbanites and keep more of their younger adults, they will have to find a way to welcome back families, which have sustained cities for millennia and given the urban experience much of its humanity.

    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.

    Ali Modarres is an urban geographer in Los Angeles and co-author of City and Environment.

    This piece originally appeared at The City Journal.

    Crossing the street photo by Bigstock.

  • California’s Blue-on-Blue Battle

    Perhaps nothing more illustrates the evolving inner class conflict within the progressive political movement than the recent embrace of California as a role model for the rest of the country. The Golden State, maintains John Judis of the New Republic, should provide the game plan for the Obama administration as it seeks a path back to relevance.

    As an old-style, and increasingly marginal, Democrat, my response is “say what?” After all, even by the standards of the tepid national recovery, California, for all the celebration, still lags. The state has consistently suffered among the highest unemployment rates in the country – now ranking around sixth at 8.5 percent – and now, according to the U.S. Census, the highest rate of poverty in the country.

    Nor is California, as is often alleged, recovering faster than nation overall. Since January 2007, California has ranked 42nd among the 50 states and the District of Columbia. Even today, it has roughly 3.5 percent – over a half-million – fewer jobs than it had five years ago. In contrast, arch-rival Texas, second after North Dakota in percentage jobs growth, has added close to 1 million positions. The recovery has been particularly slow in Southern California; in a recent analysis of U.S. metropolitan job-growth data since 2007, the Los Angeles-Orange County region ranked 39th, while the San Bernardino-Riverside area rated 37th.

    Growing split

    If anything, what’s really emerging in California is a widening demographic and geographic divide between the hard-hit largely minority inner-city areas, such as Oakland and Los Angeles, as well as much of the entire inland part of the state (with the exception of oil-rich Bakersfield) and the wealthy coastal sliver that is home to the rich, famous, predominately white (and aging). One longtime conservative California observer, Victor Davis Hanson, wryly has dubbed this a form of “liberal apartheid.”

    Whatever one calls it, under the current progressive regime, California is accomplishing the exact opposite of the putative progressive egalitarian agenda. Rather than spread the wealth in the old social democratic model of Roosevelt and Truman, and even Clinton, this recovery, such as it is, has been largely centered among the asset-owning classes. They have benefited from, first, the stock market resurgence and a hypocritically pro-Wall Street regime in Washington and, now, an emerging housing bubble, largely promoted by the Federal Reserve. Meanwhile, vast portions of the middle and working classes have continued to languish.

    This division, notes historian Fred Siegel in his upcoming history “Revolt Against the Masses,” reflects a long-standing elitist tendency within progressivism that extends to at least the beginning of the 20th century. Starting with such luminaries as Herbert Croly and H.G. Wells, there has been a thread of progressive thought that rejects the essential notion of democracy and supports the notion of a guided economic system administered by a disinterested caste of highly educated “supermen.”

    In California, this progressive trend has been given full rein, as political power in the state has flowed increasingly to its most affluent corners – notably, San Francisco and Silicon Valley – where social-media hype and environmental management dominate the political agenda. To date, this agenda has been facilitated by an alliance among the minority political warlord class and the extremely well-organized public sector unions, along with rent-seeking crony capitalists, notably those who have benefited from “green” policies.

    ‘Blue-on-blue conflict’

    Yet, there are some tentative signs that this political alliance could be endangered, as representatives of more working- and middle-class areas begin to recognize the vast chasm between their interests – largely more and better-paying jobs, and more affordable housing – and those of the reigning gentry liberals. This “blue-on-blue conflict,” as the ever-perceptive Walter Russell Mead has dubbed it, may become, given the declining relevance in California of the Republican Party, the most relevant political divide in the state today.

    Caught in the middle is the ever-unpredictable but wily Gov. Jerry Brown. In many ways Brown has epitomized the ruling progressive alliance, particularly on issues such as green energy, which has essentially served to transfer money to rich investors, such as Google, from manufacturers, middle- and working-class consumers. At a time when European model countries, such as Germany and Spain, are rethinking their expensive green-energy programs as wasteful and economically damaging, Brown seems determined to stay his course.

    Also not likely to be altered, at least for the time being, is Brown’s dream of a state high-speed rail network. If ever built, given a funding shortfall of at least $45 billion, it will benefit primarily wealthy travelers and tourists, while the roads, bridges and buses depended on by the masses continue to deteriorate. Recently, a separate proposal for a Victorville-to-Las Vegas “bullet train” failed to win a federal loan, likely dooming it.

    Brown may be basking in the temporary glow of the state’s short-term budget surplus, but he must know that the long-term pension obligations, at both the state and local levels, and the costs of a vast welfare class are, to use the overused phrase, not sustainable. Without some new engine of economic growth beyond social media, capital gains and property bubbles, the state recovery will never spread to the vast majority of Californians and could nudge the interior parts of the state more toward either penury or even the Republican Party.

    Oil and water

    In this respect, Brown has made two tentative, but potentially critical, moves toward addressing the health of an increasingly Hispanic interior. First, he has embraced the possibility of oil production using hydraulic fracking, to the alarm of Bay Area gentry liberals, as a means of sparking desperately needed high-wage blue-collar employment. He has found some allies among largely Latino and African American Democrats from working-class districts who recently blocked coastal gentry efforts to prohibit the practice.

    The second relates to the all-important issue of water. Western lore has it that, in this historically dry part of the world, whiskey may be for drinking but water is for fighting. By embracing the notion of a peripheral canal up north to assure water supplies to the central and southern parts of the state, Brown has taken on the core concerns of the Bay Area green constituencies. (The fact that San Francisco also relies almost entirely on water from the Sierras is not often acknowledged.)

    In the water wars as well, Brown will be able to build a coalition between pro-business Republicans and Democrats who represent the generally more working- and middle-class areas dependent on affordable and reliable water supplies. The imperative to back Brown’s efforts will be even greater in the Central Valley and other agricultural areas.

    Changing attitudes

    Another possible sign of change can be seen in a new effort, supported by business and labor, to begin providing some tax breaks and incentives to firms interested in expanding in the state. In the recent past, budget constraints and a largely anti-business Legislature has limited such incentives, which are used routinely by competitor states such as Texas, Utah and Louisiana. Whether such efforts will make a big difference is questionable, but they are signs of a slowly changing attitude toward enterprise in California.

    Yet, such efforts may not be enough, particularly if the current asset bubble propping up state government begins to falter. At the same time, Brown’s efforts to circumvent the green lobby on water and energy run the risk of endless lawsuits. Being an economic “Nixon in China” may hold great opportunities for Brown, but at the risk of discord with some of the very interests who have been his political bulwarks. It happened in Brown’s original second term – 1979-83 – and could emerge again this time around.

    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.

    This piece originally appeared at The Orange County Register.

    Photo by Randy Bayne; California Governor Jerry Brown

  • Hatemwin – Plagiarism Avenger

  • The Evolving Urban Form: Portland

    Among urban planners, there is probably not a more revered urban area in the world than Portland (Oregon). The Portland metropolitan area and its core urban area , principally located in Oregon, stretches across the Columbia River into the state of Washington (Figure 1). Nearly four decades ago, the state of Oregon adopted strong urban planning requirements, including the requirement of an urban growth boundary. Two principal purposes of the resulting policies (referred to as “smart growth,” “urban containment, “compact cities,” etc.) were densification and transferring travel demand from cars to transit.

    Portland’s progress toward these objectives has been modest, at best. Most growth has continued to be in the suburbs. There has been only modest densification, and employment has continued to disperse from the core. At the metropolitan area level, travel by car remains virtually as dominant as before and traffic congestion has intensified materially. Finally, house prices have been driven up relative to incomes (Note 1).

    Portland: A Dispersing Metropolitan Area

    Like virtually all major metropolitan areas in the world, Portland has experienced substantial dispersion. The core county of Multnomah peaked at more than two thirds of the metropolitan area population in 1930, as defined in 2000 (Note 2). By 2010, Multnomah County had dropped to one third of the metropolitan area population (Figure 2).

    The dispersion has continued in recent years, though there has been core growth (as has been the case in many metropolitan areas). Between 2000 and 2010, the area within two miles (three kilometers) of Portland City Hall grew more than 20 percent. However, this was only five percent of the metropolitan area’s growth. In the inner ring extending to five miles (eight kilometers) from City Hall, the growth was only three percent, well below the metropolitan area’s overall 15 percent growth rate. More than 90 percent of the metropolitan area’s population growth was outside a five mile radius (Figure 3).

    Portland: A Low Density Urban Area

    Despite its international reputation as an exemplar of compactness , Portland is a low density urban area. Among the 875 urban areas in the world with more than 500,000 population, 797 are denser than Portland.

    In the low density United States, Portland ranked 12th among major urban areas (over 1 million population), at approximately 3,500 residents per square mile (1,350 per square kilometer) in 2010. This is approximately 10% higher than the major urban area average density but barely half that of the densest, Los Angeles, with its undeserved reputation for low-density, “sprawling” development (Figures 4 and 5).

    Portland is less dense than all major urban areas in the 13 western states, with the exception of Seattle. Notably, Riverside San Bernardino is denser, despite consisting almost exclusively of post-World War II automobile-oriented development. Even much smaller California urban areas, such as Stockton, Bakersfield, Lodi and Delano are denser than Portland.

    Portland and Houston: Density Cousins

    The Portland metropolitan area’s density profile nearly duplicates that of Houston, which is just as famous for its liberal land use and transportation policies nearly the opposite of Portland’s (Note 3). Both metropolitan areas have nearly the same percentage of their populations living at densities below 7,500 per square mile (2,865 per square kilometer). A 40 percent larger share lives at densities of from 7,500 to 10,000 per square mile (3,860 per square kilometer) in Portland, while Houston’s share of its population living at densities above 10,000 per square mile is three times that of Portland (Figure 6).

    Among the nation’s 51 major metropolitan areas, Portland ranks 25th in the share of population living in zip codes with more than 10,000 people per square mile in 2010 (Figure 7).

    Portland’s Job Dispersion

    As in other metropolitan areas, jobs have dispersed substantially around Portland. Today, fewer than 10% of the jobs are located in downtown Portland (the central business district). The city of Portland itself has approximately 1.41 jobs per resident worker. Suburban Hillsboro, with the third largest employment base in the metropolitan area, has slightly more jobs per resident workers (a higher “jobs-housing balance”) according to American Community Survey data.

    Transit in Portland

    Portland has developed an extensive rail system, intended to attract drivers from their cars. Today, six light rail lines (five light rail) radiate toward the urban periphery, focusing on downtown (the central business district, or CBD).

    Yet the share of commuters using transit has fallen by a quarter since 1980, the last data available before the first light rail line opened. In short, rail has not changed the calculus of travel in Portland. Working at home, which is a less expensive and more environmentally friendly work access mode, has caught up with and now exceeds transit, as has occurred in most US major metropolitan areas. (Figure 8)

    Worse, transit may have already experienced its “best of times.” The future could be grim. Opposition to rail expansion has grown, and longer term transit service cuts of up to 70 percent have been threatened. (See Portland’s Transit Halcyon Days?)

    As elsewhere, transit in Portland is “about downtown.” The Portland Business Alliance estimates that 36% of downtown workers commute by transit. This is nearly one-half of all transit commuting in the Portland metropolitan area. Even in the job rich suburbs of Hillsboro and Beaverton, the share of people using transit for the work trip is less than the 5.0 percent national average.

    Portland: Intensifying Traffic Congestion

    Clinging to the fantasy transit can materially reduce automobile travel, Oregon officials have blocked substantial roadway expansions. Residents have been rewarded with much intensified traffic congestion.

    The Texas A&M Texas Transportation Institute Annual Mobility Report (Note 4) reveals Portland to have the 6th worst traffic congestion in the nation among major metropolitan areas. This compares to a before-rail ranking of 39th in 1982. Now Houston, Atlanta, Dallas-Fort Worth and Phoenix all have lower levels of traffic congestion than Portland (Figure 9). Without decades of urban containment and anti-mobility policies, these metropolitan areas have improved traffic congestion relative to Portland. This is despite far larger increases in travel demand. Since the early 1980s, each of these metropolitan areas has added more residents than live in the entire Portland metropolitan area. Portland also ranks among the worst (5th) in commuter stress (a measure of peak direction traffic congestion), according to the Annual Mobility Report

    Portland: Congestion and Higher Greenhouse Gas Emissions

    Reflecting the reality that greater traffic congestion increases greenhouse gas emissions, Portland’s carbon dioxide (CO2) emissions per automobile commuter have increased substantially and transit has made only the scantest difference. Between 1982 and 2011, Portland’s increase in CO2 emissions was greater than Houston, Atlanta and Phoenix, though less than Dallas- Fort Worth (Figure 10).

    Deteriorating Housing Affordability in Portland

    In Portland, consistent with both economic principle and considerable research, urban containment policy drives house prices up relative to incomes higher by rationing the supply of land and housing. In 2010, values of comparable land on either side of the urban growth boundary varied by more than 10 times in value per acre (a phenomenon also identified in Auckland, New Zealand by Chairman of the Reserve Bank of New Zealand, Arthur Grimes).

    The most recent Demographia International Housing Affordability Survey indicated that Portland’s median multiple (median house price divided by median household income) was 4.3. In normally functioning housing markets, the median multiple is typically 3.0 or less, a ratio last achieved in Portland in 1995. This higher median house price means than approximately 125,000 fewer Portland households —or 15% of households — are able to afford the median priced house. (Note 5).

    Higher housing costs retard the standard of living by reducing discretionary incomes (gross income minus taxes and necessities). This, in turn, leads to less demand for other goods and services (in the “discretionary economy”), less job creation and less economic growth.

    Even so, Portland’s rising house prices have been moderated by the nearby availability of less expensive houses on larger lots in the Vancouver area (Clark County, Washington). There, more liberal land use regulation permits consumer-driven housing choice, rather forcing households to choose from the limited offerings planning authorities prefer.

    In part due to rising prices, Portland is becoming less diverse . Indeed, Aaron Renn has called Portland the penultimate example in his searing critique, The White City. After the results of the 2010 census were announced. The Oregonian quoted then Mayor Sam Adams’ concern about the exodus of African-Americans from the city (municipality), saying that Portlanders should care about the fact that we offer ¬such limited access to equal opportunities. Local policymakers are largely oblivious to the role that urban containment policy may have played in diminishing those opportunities.

    Misplaced Priorities

    Despite all of this, Portland has its advantages.

    As in Houston, Seattle, Atlanta and virtually all other major metropolitan areas regardless of land use regulations, a core renaissance is underway that is making a dense urban lifestyle more practical for the relatively few who both prefer it and can afford it. The suburban lifestyle, dominant virtually everywhere in the United States, remains alive and well in Portland (Note 6). Portland’s physical location remains the envy of most metropolitan areas. There is little better scenery than the nearby Columbia Gorge or majestic Mt. Hood, which crowns the area on clear days.

    However, Portland has been sidetracked by a pre-occupation with urban design, at least partially driven by concerns about reducing greenhouse gas emissions. The good news is that technological advances are poised to do far more to reduce greenhouse gas emissions than could ever be achieved by urban containment policy.

    But scenery aside, cities are primarily economic organisms. Cities have grown by serving the aspirations of people for a better standard of living. The very purpose of cities is to facilitate affluence and minimize poverty among residents (see Toward More Prosperous Cities). Yet policies, such as urban containment, that inherently reduce household discretionary incomes and impose greater congestion costs reduce discretionary incomes. Despite intentions to the contrary, the results show this to be the real Portland story.

    —————————————–

    Note 1: Some other metropolitan areas that have embraced urban containment policy have produced even worse results. For example, traffic congestion is worse in Vancouver, Sydney, Melbourne and far smaller Auckland, according to the “Tom Tom Congestion Index,” a real-time traffic reporting competitor to INRIX. Portland has seriously unaffordable housing, though has not retarded the standard of living nearly so much as in Vancouver, Sydney, Melbourne or Auckland, where housing is severely unaffordable. Attention is drawn to Portland’s negative outcomes because of the extent to which its policies are revered in the urban planning community around the world.

    Note 2: Multnomah County is used in this analysis, instead of the historical core city of Portland, which has grown in large measure by annexation. Since 1950, the city added 108 percent to its land area and little more than half (56 percent) to its population.

    Note 3: Houston is sometimes referred to as having deregulated land use. This is not strictly correct, though Houston is closer to a deregulated model than any other US metropolitan area. The city of Houston does not have zoning, though some municipalities in the suburbs are zoned. Many neighborhoods in the city of Houston have private land use covenants.

    Note 4: The Annual Mobility Report has been the authoritative measure of traffic congestion in US urban areas for three decades. More recently, the report’s traffic congestion measures have been significantly strengthened by the use of actual global positioning data from INRIX, which also produces its own Traffic Scorecard both for US and international urban areas, using satellite based real-time traffic data.

    Note 5: Estimated from income qualifying income requirements as reported by the National Association of Realtors for the third quarter of 2012 and the metropolitan income distribution modeled based on the 2011 American Community Survey.

    Note 6: In 1999, new urbanist architect Andres Duany evaluated Portland in a commentary for The Oregonian: “To my surprise, as soon as I left the prewar urbanism (to which my previous visits had been confined), I found all the new areas on the way to the urban boundary were chock full of the usual sprawl one finds in any U.S. city, no better than in Miami. The outcome wasn’t that different after all.”

    ————————-

    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: Mount Hood (by author)

  • E-Shopping Bubbling While Retail Bums Along

    We recently explored the post-recession tsunami of online retail and discovered that e-shopping’s future is anything if not bright. According to a report by Forrester Research, by 2016, not only are 192 million U.S. consumers projected to be be clicking “checkout” (up 15% since 2012), but those 192 million will also be spending an average of 44% more.

    But does this mean we should expect traditional retail to flatline? Well, no. As we showed here, the flourishing of specific retail subsectors (e.g., warehouses/supercenters) certainly cheers up total gloom-and-doom predictions.

    Nevertheless, traditional retail and e-shopping scream for comparison. Whatever their destiny, they could hardly differ more in size, stability, and growth patterns so far, and so let’s take a look.

    A Comparison

    Here’s how the two industries break down:

    Traditional retail: NAICS 44-45, except for electronic shopping and electronic auctions

    E-shopping: electronic shopping (454111) and electronic auctions (454112)

    A quick comparison between retail and e-shopping shows two very different stories. Traditional retail, of course, has been around forever with its ups and downs, while e-shopping is still technically a teenager — and like a teen, it’s growing wicked fast.

    Chart - Traditional Retail Jobs 2002-2013

     

    • Retail jobs declined 1% from 2002 to 2013. The industry grew 3% from 2002-2007, then tanked 7% from 2007-2010 and has yet to recover even its 2002 status.
    • The industry had 15.7 million jobs in 2002 and now has 15.5 million (loss of 200,000 jobs).
    • The average annual earnings per job is $32,433.
    • Jobs multiplier: 1.32. This means that every job in retail creates a third of another job elsewhere — or, put another way, every three jobs in retail create one job in another industry. (Note: We excluded induced effects in our calculations to avoid the double-counting that comes when looking at spending at the national level.)
    • Department stores have taken a colossal hit, dropping almost without respite from 811,000 jobs to 489,000 (40% loss).
    • In an age when manager positions are stepping on the gas, it’s troubling to see that within the retail industry, general & operations managers have declined 15% the past 10 years (a loss of 35,000 jobs).

    Chart - E-shopping Jobs 2002-2013

    • E-shopping grew 161% from 2002 to 2013 (averaging 15% a year). The industry has spiked 42% just since 2009, coming out of the recession when it still managed to inch up 4%. In fact, e-shopping isn’t far behind the fastest-growing industry sector of the past 10 years — mining, quarrying, and oil & gas extraction (NAICS 21), which has grown 60% since 2002 and 26% since 2009.
    • With 173,737 jobs, e-shopping’s labor force can’t even compare with traditional retail’s.
    • On the other hand, the jobs pay significantly more: $65,000 (annual average).
    • Jobs multiplier: 1.46, slightly higher than traditional retail’s, which is a little surprising. (Again, we left out induced effects.)

    One thing we notice is the huge discrepancy in jobs between these two industries. Traditional retail, for all its loss, is still 90 times the size of e-shopping, whose growth is not quite as jaw-dropping, perhaps, as it might seem at first. Sure, it’s booming, but then, it’s always easier to top 160% growth when you start out so tiny.

    No, the most interesting fact here is not how many jobs e-shopping is adding to the economy, but how many jobs it isn’t. It creates good consumer prices, serves more customers, makes more dough, and has completely changed the way we view products (literally and figuratively). And it does all these things with a smaller workforce.

    This trend of online-based business and a smaller, more tech-based workforce is well illustrated by the Kodak vs. Instagram conversation (read more here and here). At its peak, Kodak employed 140,000 while Instagram, at the time that it was purchased by Facebook in April 2012, employed a mere baker’s dozen. In short, the American economy has always been obsessed with efficiency. If we can do more with less, we will, and the internet is apparently accelerating that process.

    The Story in the States

    Let’s take a closer look at the top states for job growth and decline for both these industries.

    States for Top Job Growth and Decline - Traditional Retail

    Retail jobs have flourished the most in North Dakota (21%), Nevada (15%), Utah (11%), and Arizona (10%). Each of those states, it should be noted, have fast-growing populations and/or economies. The worst decline has taken place in Michigan (15%), Ohio (14%), Rhode Island (13%), and Wisconsin (10%).

    States for Top Job Growth and Decline - E-shopping

    For e-shopping, it’s mostly just a question about where it has grown a lot and where it has grown a ton. Only two states have seen an actual decline in jobs. Idaho leads the way crazy 3,370% growth (from 40 to 1,400 jobs), followed by Utah (800%, from 700 to 6,200 jobs), and Indiana (780%, from 670 to 5,900 jobs). The states that have done the least well are Alaska (20%, from 80 down to 60 jobs), South Dakota (3%, from 92 to 89 jobs), Virginia (mere 5% growth, from 2,000 to 2,140 jobs), and New Mexico (11%, from 127 to 141 jobs).

    Here’s a complete look at the growth/decline of each industry in all 50 states (plus Washington D.C.), as well as how they rank:

    State % Change in Retail Jobs Rank % Change in E-Shopping Rank
    North Dakota 21% 1 85% 37
    Nevada 15% 2 140% 31
    Utah 11% 3 804% 1
    Arizona 10% 4 37% 45
    South Dakota 9% 5 -3% 50
    Texas 8% 6 68% 42
    Idaho 7% 7 3368% 1
    Florida 7% 8 74% 39
    District of Columbia 7% 9 652% 4
    Arkansas 6% 10 134% 33
    New York 6% 11 179% 26
    Alaska 5% 12 -19% 51
    Hawaii 5% 13 125% 35
    North Carolina 4% 14 198% 24
    Washington 4% 15 271% 17
    South Carolina 1% 16 135% 32
    Tennessee 1% 17 114% 36
    Colorado 1% 18 307% 12
    Oklahoma 0% 19 277% 15
    Montana 0% 20 72% 40
    New Mexico 0% 21 11% 48
    Delaware -1% 22 126% 34
    Oregon -1% 23 456% 8
    Virginia -1% 24 5% 49
    West Virginia -1% 25 189% 25
    Vermont -1% 26 298% 14
    Wyoming -2% 27 68% 41
    New Hampshire -2% 28 334% 11
    Louisiana -2% 29 275% 16
    Georgia -2% 30 146% 29
    California -3% 31 156% 28
    Alabama -3% 32 53% 44
    New Jersey -4% 33 218% 23
    Massachusetts -4% 34 220% 22
    Missouri -4% 35 220% 21
    Iowa -4% 36 246% 19
    Kentucky -5% 37 455% 9
    Maryland -5% 38 435% 10
    Nebraska -5% 39 242% 20
    Pennsylvania -6% 40 76% 38
    Maine -6% 41 146% 30
    Minnesota -6% 42 554% 7
    Illinois -6% 43 65% 43
    Mississippi -7% 44 171% 27
    Connecticut -7% 45 13% 47
    Indiana -7% 46 781% 3
    Kansas -8% 47 21% 46
    Wisconsin -10% 48 304% 13
    Rhode Island -13% 49 634% 5
    Ohio -14% 50 572% 6
    Michigan -15% 51 255% 18

    E-Shopping Hot Spots

    E-shopping has also developed quite a few hot spots across the nation, and a handful of MSAs have very high job concentrations. Here are the MSAs where e-shopping’s concentration (measured in terms of location quotient, LQ) is highest:

    MSA 2013 Jobs 2013 Avg. Earnings Per Job 2013 National LQ
    Fernley, NV 710 $55,306 48.05
    Hannibal, MO 590 $13,789 26.83
    Galesburg, IL 426 $27,766 12.17
    Grand Forks, ND-MN 748 $43,981 10.27
    Mexico, MO 114 $22,497 9.27
    Ottawa-Streator, IL 538 $21,666 7.31
    Hood River, OR 111 $26,422 6.46
    Seattle-Tacoma-Bellevue, WA 14,515 $120,560 6.39
    Thomasville-Lexington, NC 328 $36,346 6.02
    Huntington-Ashland, WV-KY-OH 759 $30,910 5.53
    Americus, GA 84 $22,717 5.5
    Salt Lake City, UT 4,277 $64,051 5.17
    Moultrie, GA 98 $31,360 4.9
    Chico, CA 463 $68,168 4.88
    Provo-Orem, UT 1,046 $48,062 4.05
    Indianapolis-Carmel, IN 4,430 $41,354 3.96
    San Jose-Sunnyvale-Santa Clara, CA 4,608 $240,899 3.87
    Bend, OR 312 $32,260 3.72
    Port St. Lucie, FL 604 $22,611 3.72
    Meadville, PA 137 $39,731 3.34
    Mankato-North Mankato, MN 208 $18,374 3.09

    Seattle, home to Amazon.com, stands out for its sheer number of jobs (14,500). So too does San Jose, eBay’s headquarters, with 4,600. These two MSAs are also where most of the earnings are pooled.

    We should also note Indianapolis, where job growth since 2009 approaches 4,000 and tops 500%. In fact, e-shopping is Indianapolis’s fastest-growing industry of the past 10 years, climbing 4,500% since 2002. (Indiana, remember, is third in the nation for e-shopping growth: nearly 800%.)

    The city with the highest concentration of online retail jobs is Fernley, Nev., home to an Amazon distribution center. Currently the town of 53,000 is 48 times the national average for e-shopping. Moreover, about 6% of the town’s workforce (710 out of 12,800 jobs) are in the e-shopping industry.

    However, this isn’t as golden as Fernley was back in 2007, when e-shopping’s concentration was 107 times greater than the national average. During the recession, Fernley lost 30% of its e-shopping jobs, and has yet to recover them.

    Galesburg, Ill., has a similar recession story but bounced back quickly. The town of 32,000, with a concentration 12 times that of the national average, has rapidly regained its jobs — and then some — over the past year.

    E-shopping - Fernley vs. Galesburg

    For towns like Fernley and Galesburg, perhaps the lesson is that e-shopping is much less place-bound than traditional retail. All these small towns with high concentrations run a certain risk with e-shopping if the big companies were to move operations elsewhere.

    The map and table below show the 2009-2013 job performance of online retail in the towns with the highest job concentrations (containing at least 100 e-shopping jobs). We see both huge gains and huge declines (in terms of % growth):

    MSAs - 100+ E-shopping jobs


    MSA 2009 Jobs 2013 Jobs Change % Change 2013 Average Earnings 2009 LQ 2013 LQ
    Akron, OH 150 174 24 16% $34,974 0.60 0.49
    Albany-Schenectady-Troy, NY 79 102 23 29% $29,447 0.23 0.22
    Allentown-Bethlehem-Easton, PA-NJ 177 357 180 102% $32,915 0.67 0.95
    Ann Arbor, MI 50 128 78 156% $32,806 0.32 0.55
    Atlanta-Sandy Springs-Marietta, GA (12060) 1,655 2,454 799 48% $56,564 0.92 0.94
    Austin-Round Rock-San Marcos, TX 737 1,666 929 126% $48,277 1.19 1.75
    Baltimore-Towson, MD 432 478 46 11% $73,551 0.42 0.32
    Baton Rouge, LA 111 125 14 13% $46,293 0.37 0.30
    Bellingham, WA 118 158 40 34% $33,482 1.73 1.64
    Bend, OR 191 300 109 57% $33,132 3.60 4.02
    Birmingham-Hoover, AL 167 218 51 31% $35,155 0.43 0.40
    Boise City-Nampa, ID 377 895 518 137% $56,366 1.77 2.89
    Boston-Cambridge-Quincy, MA-NH 1,709 3,054 1,345 79% $67,988 0.89 1.09
    Boulder, CO (14500) 376 561 185 49% $48,869 2.88 2.89
    Bremerton-Silverdale, WA 53 116 63 119% $46,891 0.69 1.12
    Bridgeport-Stamford-Norwalk, CT 1,017 898 -119.00 -12% $111,274 3.02 1.88
    Brownsville-Harlingen, TX 103 128 25 24% $21,781 0.98 0.83
    Buffalo-Niagara Falls, NY (15380) 185 258 73 39% $26,681 0.45 0.45
    Canton-Massillon, OH 36 128 92 256% $41,449 0.28 0.69
    Cape Coral-Fort Myers, FL 176 194 18 10% $37,279 1.09 0.83
    Charleston-North Charleston-Summerville, SC (16700) 86 137 51 59% $35,397 0.37 0.40
    Charlotte-Gastonia-Rock Hill, NC-SC 277 571 294 106% $50,665 0.42 0.58
    Charlottesville, VA 191 102 -89.00 -47% $29,774 2.41 0.93
    Chattanooga, TN-GA 94 164 70 74% $31,012 0.52 0.63
    Chicago-Joliet-Naperville, IL-IN-WI 2,580 4,557 1,977 77% $59,758 0.77 0.96
    Chico, CA 243 458 215 88% $68,695 3.98 5.42
    Cincinnati-Middletown, OH-KY-IN 1,009 1,625 616 61% $39,261 1.30 1.49
    Cleveland-Elyria-Mentor, OH 770 785 15 2% $54,287 0.98 0.71
    Coeur d’Alene, ID 31 118 87 281% $22,609 0.71 1.94
    Colorado Springs, CO (17820) 233 366 133 57% $27,687 1.01 1.10
    Columbia, MO 93 153 60 65% $36,494 1.33 1.48
    Columbia, SC 59 104 45 76% $35,458 0.21 0.26
    Columbus, OH 3,094 3,324 230 7% $34,355 4.33 3.22
    Dallas-Fort Worth-Arlington, TX 2,950 3,334 384 13% $51,152 1.27 0.96
    Davenport-Moline-Rock Island, IA-IL 107 186 79 74% $50,847 0.75 0.91
    Dayton, OH 111 175 64 58% $26,891 0.38 0.43
    Deltona-Daytona Beach-Ormond Beach, FL 179 157 -22.00 -12% $36,650 1.42 0.88
    Denver-Aurora-Broomfield, CO 1,465 1,936 471 32% $54,863 1.49 1.33
    Des Moines-West Des Moines, IA 143 148 5 3% $35,543 0.56 0.40
    Detroit-Warren-Livonia, MI 712 826 114 16% $47,384 0.53 0.42
    Eau Claire, WI 131 194 63 48% $29,794 2.14 2.16
    El Paso, TX 514 791 277 54% $17,522 2.17 2.28
    Elkhart-Goshen, IN 18 124 106 589% $34,131 0.24 0.99
    Eugene-Springfield, OR 94 177 83 88% $25,883 0.81 1.08
    Fayetteville-Springdale-Rogers, AR-MO 88 162 74 84% $42,470 0.56 0.69
    Fernley, NV (22280) 704 710 6 1% $55,306 72.77 53.93
    Fort Collins-Loveland, CO 147 186 39 27% $39,192 1.35 1.16
    Fort Wayne, IN 54 207 153 283% $48,876 0.34 0.91
    Galesburg, IL 277 424 147 53% $27,835 12.45 13.61
    Grand Forks, ND-MN 268 746 478 178% $44,038 5.99 11.51
    Grand Rapids-Wyoming, MI 693 765 72 10% $85,872 2.47 1.79
    Greensboro-High Point, NC 255 177 -78.00 -31% $36,448 0.95 0.47
    Hannibal, MO (25300) 413 590 177 43% $13,789 31.34 30.11
    Harrisburg-Carlisle, PA 136 209 73 54% $31,602 0.55 0.59
    Hartford-West Hartford-East Hartford, CT 283 486 203 72% $30,435 0.59 0.72
    Honolulu, HI 116 228 112 97% $30,149 0.29 0.40
    Hood River, OR 65 110 45 69% $26,564 6.20 7.16
    Houston-Sugar Land-Baytown, TX 1,442 1,809 367 25% $40,959 0.70 0.58
    Huntington-Ashland, WV-KY-OH 181 759 578 319% $30,904 2.04 6.21
    Indianapolis-Carmel, IN 698 4,367 3,669 526% $41,569 1.03 4.38
    Jacksonville, FL 328 484 156 48% $39,193 0.70 0.72
    Kansas City, MO-KS 671 865 194 29% $38,886 0.86 0.78
    Knoxville, TN 115 226 111 97% $38,606 0.44 0.61
    Lakeland-Winter Haven, FL 97 105 8 8% $39,221 0.62 0.48
    Las Vegas-Paradise, NV 1,128 2,013 885 78% $56,095 1.71 2.15
    Lexington-Fayette, KY 177 280 103 58% $38,517 0.90 0.96
    Lincoln, NE 68 339 271 399% $48,179 0.52 1.80
    Little Rock-North Little Rock-Conway, AR 85 123 38 45% $30,742 0.32 0.33
    Logan, UT-ID 85 135 50 59% $22,246 2.10 2.30
    Los Angeles-Long Beach-Santa Ana, CA 7,839 8,519 680 9% $60,101 1.74 1.32
    Louisville/Jefferson County, KY-IN 126 201 75 60% $38,956 0.27 0.29
    Madison, WI 258 516 258 100% $58,625 0.97 1.36
    Manchester-Nashua, NH 280 353 73 26% $60,692 1.83 1.64
    Mankato-North Mankato, MN 60 206 146 243% $18,459 1.45 3.44
    Medford, OR 107 176 69 64% $39,243 1.63 1.90
    Memphis, TN-MS-AR 284 319 35 12% $34,885 0.59 0.47
    Mexico, MO 12 114 102 850% $22,497 1.54 10.40
    Miami-Fort Lauderdale-Pompano Beach, FL 2,647 3,210 563 21% $54,616 1.47 1.23
    Milwaukee-Waukesha-West Allis, WI (33340) 804 1,162 358 45% $34,887 1.28 1.30
    Minneapolis-St. Paul-Bloomington, MN-WI 611 1,130 519 85% $41,066 0.45 0.57
    Nashville-Davidson–Murfreesboro–Franklin, TN 498 785 287 58% $36,789 0.82 0.85
    New Haven-Milford, CT 110 183 73 66% $68,783 0.38 0.44
    New Orleans-Metairie-Kenner, LA (35380) 160 212 52 33% $35,863 0.38 0.35
    New York-Northern New Jersey-Long Island, NY-NJ-PA 7,402 13,923 6,521 88% $76,745 1.13 1.47
    North Port-Bradenton-Sarasota, FL 177 174 -3.00 -2% $37,516 0.88 0.62
    Ocala, FL 57 104 47 82% $39,066 0.75 0.97
    Ogden-Clearfield, UT 291 557 266 91% $39,442 1.84 2.39
    Oklahoma City, OK 97 163 66 68% $48,017 0.21 0.24
    Omaha-Council Bluffs, NE-IA 654 824 170 26% $53,708 1.80 1.60
    Orlando-Kissimmee-Sanford, FL 544 1,001 457 84% $53,066 0.70 0.88
    Ottawa-Streator, IL 297 535 238 80% $21,722 6.43 8.16
    Oxnard-Thousand Oaks-Ventura, CA 209 272 63 30% $42,119 0.81 0.74
    Palm Bay-Melbourne-Titusville, FL (37340) 143 217 74 52% $42,583 0.92 1.00
    Peoria, IL 58 149 91 157% $36,634 0.42 0.75
    Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 1,335 2,372 1,037 78% $50,131 0.63 0.80
    Phoenix-Mesa-Glendale, AZ 3,332 4,062 730 22% $62,002 2.42 2.03
    Pittsburgh, PA 1,077 1,002 -75.00 -7% $50,314 1.23 0.80
    Port St. Lucie, FL 93 561 468 503% $22,448 0.92 3.87
    Portland-South Portland-Biddeford, ME 188 214 26 14% $44,201 0.88 0.72
    Portland-Vancouver-Hillsboro, OR-WA 1,202 1,944 742 62% $37,203 1.47 1.63
    Poughkeepsie-Newburgh-Middletown, NY 169 136 -33.00 -20% $35,261 0.84 0.49
    Providence-New Bedford-Fall River, RI-MA 279 306 27 10% $23,727 0.52 0.41
    Provo-Orem, UT 556 961 405 73% $49,202 3.72 4.18
    Racine, W 91 110 19 21% $28,197 1.57 1.32
    Raleigh-Cary, NC 378 537 159 42% $49,990 0.94 0.90
    Redding, CA 117 134 17 15% $57,004 2.22 1.88
    Reno-Sparks, NV (39900) 661 386 -275.00 -42% $40,630 4.29 1.81
    Richmond, VA 294 221 -73.00 -25% $36,861 0.61 0.32
    Riverside-San Bernardino-Ontario, CA 649 1,003 354 55% $38,227 0.63 0.69
    Rochester, NY 238 271 33 14% $33,405 0.62 0.50
    Sacramento–Arden-Arcade–Roseville, CA 770 1,016 246 32% $40,959 1.06 1.01
    Salem, OR (41420) 182 225 43 24% $29,941 1.42 1.28
    Salt Lake City, UT 2,006 2,654 648 32% $63,187 4.10 3.60
    San Antonio-New Braunfels, TX 1,594 926 -668.00 -42% $62,759 2.26 0.89
    San Diego-Carlsbad-San Marcos, CA 1,504 2,132 628 42% $62,877 1.34 1.32
    San Francisco-Oakland-Fremont, CA 2,919 4,010 1,091 37% $87,280 1.79 1.67
    San Jose-Sunnyvale-Santa Clara, CA (41940) 810 1,459 649 80% $102,195 1.14 1.37
    San Luis Obispo-Paso Robles, CA 139 205 66 47% $39,356 1.59 1.53
    Santa Barbara-Santa Maria-Goleta, CA 122 132 10 8% $48,521 0.79 0.60
    Santa Rosa-Petaluma, CA (42220) 111 175 64 58% $41,602 0.72 0.80
    Scranton–Wilkes-Barre, PA 247 403 156 63% $31,560 1.25 1.46
    Seattle-Tacoma-Bellevue, WA 7,570 14,226 6,656 88% $120,821 5.45 7.03
    Spokane, WA 408 502 94 23% $60,997 2.38 2.09
    Springfield, MA 88 102 14 16% $41,527 0.37 0.30
    Springfield, MO 165 136 -29.00 -18% $30,943 1.09 0.62
    St. George, UT 143 162 19 13% $30,715 3.74 2.85
    St. Louis, MO-IL 1,102 2,260 1,158 105% $50,619 1.07 1.56
    Tallahassee, FL 95 149 54 57% $40,553 0.72 0.82
    Tampa-St. Petersburg-Clearwater, FL 2,990 1,252 -1738.00 -58% $44,406 3.34 0.98
    Thomasville-Lexington, NC 10 241 231 2310% $40,154 0.30 4.97
    Toledo, OH 88 335 247 281% $29,519 0.38 1.01
    Tucson, AZ 468 373 -95.00 -20% $31,186 1.56 0.89
    Vallejo-Fairfield, CA 42 127 85 202% $18,672 0.40 0.85
    Virginia Beach-Norfolk-Newport News, VA-NC 301 241 -60.00 -20% $43,710 0.47 0.27
    Washington-Arlington-Alexandria, DC-VA-MD-WV 1,250 1,639 389 31% $64,473 0.53 0.48
    Wichita, KS 287 114 -173.00 -60% $28,774 1.22 0.35
    Wilmington, NC 65 188 123 189% $42,190 0.57 1.17
    Worcester, MA 278 653 375 135% $38,345 1.09 1.77

    Conclusion

    There’s no doubt we should keep an eye on the exciting growth in e-shopping. Yet we should also be aware that individual online companies do tend, by their very nature, to be smaller and less sturdy than traditional brick-and-mortar stores. They fluctuate rapidly and often drastically, which could be a little unsettling for towns where e-shopping is heavily concentrated.

    Gwen Burrow 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. Contact her here.

  • America’s Engineering Hubs: The Cities With The Greatest Capacity For Innovation

    America has always been a nation of tinkerers. Our Founding Fathers, notes author Alec Foege, were innovators in areas ranging from agriculture (George Washington, Thomas Jefferson) and electricity (Benjamin Franklin) to the swivel chair (Jefferson).

    Engineering advances drove America’s quest for industrial supremacy in the 19th century, many of them borrowed (sometimes illegally) from the then very resourceful British Isles. By the early 19th century, the U.S. was producing its own major inventions, including the steamboat and cotton gin. By the end of that century, the U.S. was clearly on the way to industrial preeminence. The growth of engineering schools — MIT, the Case Institute, Stevens Institute of Technology, as well as departments at the great land grant universities — generated a steady supply of engineers. For much of the last 70 years, America, has been the world’s leading center of engineering excellence, dominating markets from steel and cars to energy and aerospace.

    Today, as well, where engineers concentrate, we can expect the greatest capacity for innovation. According to research from Houston Partnership economist Patrick Jankowski, there is a wide range of concentrations of engineering talent among the country’s 85 largest metropolitan areas. For the most part, regions with higher concentrations of engineers tend to do better, and seize the leadership of key industries.

    Nowhere is this more true than in America’s top engineering hub, San Jose/Silicon Valley. The Valley’s ratio of 45 engineers per 1,000 employees is twice as high as any other big metro area. This deep reservoir of talent remains the Valley’s key asset, and has made it by most measurements the nation’s most affluent metro area.

    This preeminence dates to the Valley’s early history, particularly in research sponsored by the Defense Department and NASA. This large high-tech workforce was then backed by venture capitalists, many of them also engineers by training, to form by far the most dominant high-tech region in the world. The presence of Stanford, now rated the nation’s second leading engineering school by U.S. News & World Report after MIT, Berkeley, ranked third and Santa Clara, at No. 14, gives the area an unmatched capacity to produce technologists.

    More surprising, perhaps, is the second city on our list: Houston. The world energy capital is home to 59,000 engineers — second most in the U.S. after the much larger Los Angeles metro area — and has a concentration of 22.4 engineers per 1,000 employees. Although it does not match the Bay Area in elite engineering schools, Houston is home to Rice University and the University of Houston, both highly regarded, and, perhaps equally important, a strong sub-structure of trade and technical schools that feed into the engineering pool.

    Key here is the energy industry, which is far more technology-dependent than many might believe. Houston is arguably now the country’s most important emerging city, with the largest job growth of any major metro area. Not only can engineers make money there, unlike in Silicon Valley, they can also afford to buy a house.

    More surprising still is the metro area with the third-highest concentration of engineers: Wichita, Kan., with 21 engineers per thousand employees. In this case, the driver is manufacturing, particularly aerospace. But recent cuts by Boeing threaten the future of the self-proclaimed “air capital of the world.” As a result, Wichita has not done nearly as well economically of late as San Jose or Houston, but its reservoir of engineering talent suggests considerable potential if they stick around.

    These top three engineering cities tell us much about the source of American innovation, and the remarkable diversity that makes this country an engineering powerhouse. It involves three essential industries — information technology, energy and manufacturing. Each has a distinct geographic makeup that reflects differing kinds of engineering talent.

    The High-Tech Centers

    No place comes close to Silicon Valley in terms of concentrations of engineers, but several other traditional tech centers make the top 10, led by San Diego in fifth place, a major center for biotech. Boston, home to No. 1 engineering school MIT, ranks eighth, and Denver, which boasts both a thriving tech and energy sector, is 10th. Other tech regions that rank in the top 20 include Seattle (13th), San Francisco (18th) and Austin (19th). None of these areas can claim even half of Silicon Valley’s per capita engineering base, but have thrived during the current high-tech boom.

    The Energy Cities

    When thinking of energy, we might think of wildcats covered with crude (like James Dean in Giant), but this is becoming an industry very dependent on highly trained geophysicists, petroleum engineers, chemical engineers and other specialists. This explains the ninth-place ranking for Bakersfield, “the oil capital of California,” a city better known for country music and cruising than technology. Over 15,000 people work in this generally high-wage industry in the onetime Okie capital. Energy jobs are also big in No. 14 Baton Rouge, La., home to Louisiana State University, which sends many of its engineering graduates into the Gulf of Mexico energy industry.

    Manufacturing Hubs.

    Detroit’s bankruptcy has shed a bad light on rustbelt centers, but in reality the industrial Midwest has been on something of a roll in recent years, with many states, from Wisconsin and Ohio to Iowa, boasting lower unemployment than the national average. One key element has been the increasingly innovative nature of U.S. manufacturing, notably in the auto industry. Little-recognized Dayton, which ranks fourth, has attracted major investment for advanced manufacturing in autos and aerospace.

    Other manufacturing cities high on our list include No. 6 Greenville-Easley, S.C., home to many European auto-related firms. And despite the city bankruptcy we should not ignore No. 12 Detroit, where most of the metro area’s 30,000 engineers live in the economically healthy suburban regions.

    These numbers, of course, focus on concentration as opposed to absolute numbers of engineers. In terms of raw numbers, by far the largest player is Los Angeles, with some 70,000 engineers. Yet it ranks only 33rd by concentration, a far cry from the region’s aerospace-oriented heyday. But L.A.’s legacy still makes an ideal setting for some tech ventures, notably Elon Musk’s SpaceX.

    In terms of total engineers, L.A. is followed by Houston, with 59,000, Washington-Arlington-Alexandria with 49,000 (11th in terms of concentration), Boston with 43,000 and then San Jose and Dallas (29th), each with 40,000 or so engineers. Each has a critical mass that allows them to tackle big engineering projects, while also staffing potential spin-offs and start-ups. Some of these areas, notably the Valley, know how to make more money with their workforce than others.

    The Have-not Regions

    One surprisingly weak area is greater New York, which ranks 78th, with a miniscule 6.1 engineers per 1,000 workers, and some 20,000 fewer engineers than Los Angeles. The New York media and the city’s chattering classes may like to talk up the Big Apple as a high-tech center, but the relative lack of engineering talent should spark a tad of skepticism over whether the nation’s largest urban area is really up to the task of competing against engineer-rich places like Boston, San Diego, Seattle, Denver or Austin, much less stand up to Silicon Valley, with seven times the concentration of engineers.

    The rest of the bottom of the list is depressingly familiar, in terms of economic also-rans. El Paso, Texas, ranks last among the 85 largest metropolitan areas, followed by Las Vegas, Scranton-Wilkes Barre, Pa., and Fresno. These cities are going to have a very tough time competing for high-tech jobs in the immediate future. To make something, whether digital or tangible, the first step lies in gathering in the talent that can make things happen, but as of yet, they have not made much headway.

    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.

    This piece originally appeared at Forbes.

    Creative Commons photo “Engineers” by Flickr user ensign_beedrill

  • Aspirational Cities: U.S. Cities That Offer Both Jobs and Culture Are Mostly Southern and Modest Sized

    A city at its best, wrote the philosopher René Descartes, provides “an inventory of the possible.” The city Descartes had in mind was 17th-century Amsterdam, which for him epitomized those cities where people go to change their circumstances and improve their lives. But such aspirational cities have existed throughout American history as well, starting with Boston in the 17th century, Philadelphia in the 18th, New York in the 19th, Chicago in the early 20th, Detroit in the 1920s and 1930s, followed by midcentury Los Angeles, and San Jose in the 1980s.

    Yes, the great rule of aspirational cities is that they change over time, becoming sometimes less entrepreneurial, more expensive, and demographically stagnant. In the meantime, other cities, often once obscure, suddenly become the new magnets of opportunity.

    To determine America’s current aspirational hotspots, we focused in large part on economic indicators, such as employment growth, per capita income, and unemployment. But we also took into account demographic factors, such as the growth of domestic migration and the movement of college-educated people and the foreign born.

    Finally, we considered quality-of-life factors such as traffic congestion, housing affordability, and crowding—which are keenly relevant to young families hunting for the places with the best “inventory of the possible.” In a sense, we believe aspirational cities reflect a kind of urban arbitrage, where people look for those places that provide not just economic and cultural opportunity but a cost structure that allows them to enjoy their success to the fullest extent.

    Our top two cities reflect the importance of this arbitrage opportunity. Both No. 1, Austin, Texas, and No. 2, New Orleans, are places where people can enjoy the cultural amenities and attitudes of “progressive” blue states but in a distinctly red-state environment of low costs, less regulation, and lower taxes. These places have lured companies and people from more expensive regions, notably California and the Northeast, by being not only culturally rich but also amenable to building a career, buying a home and, ultimately, raising a family in relative comfort.

    Like the Texas state capital and the legendary Crescent City, most of our top cities are located in the American South and lower Midwest, and they attract businesses and people not only from other sections of the country but also increasingly from abroad as well. These include No. 3, Houston, and the smaller but burgeoning oil town of No. 4, Oklahoma City. These are followed by three fast-growing, low-cost Southern cities: No. 5, Raleigh-Cary, North Carolina; No. 6, Nashville; and No. 7, Richmond, Virginia.

    Not all our top aspirational cities are in Dixie. If there’s enough growth and opportunity, solidly blue-state regions can perform well enough to stay near the top of these rankings. Such cities include No. 8, Washington, D.C., and No. 10, Minneapolis–St. Paul, as well as No. 12, Seattle; No. 16, Denver; and even No. 22, Boston. In these cities, high-tech and professional-service growth has created enough wealth to offset higher costs while offering the next generation the chance to live in a culturally vibrant place where affording a home and raising a family are still possible.

    Perhaps more surprising is the high aspirational ranking of some old Rust Belt and Great Lakes cities. The middle part of the country has been losing people and jobs for half a century, but more recently several urban areas within or bordering the Midwest have established enough of an aspirational culture to reverse the pattern of out-migration and begin luring people from the coasts. These include such diverse places as No. 15, Columbus, Ohio; No. 17 Louisville, Kentucky; No. 21 Pittsburgh; and No. 23, Indianapolis.

    Of course, not everyone will find a perfect match in one of these cities. For those with extraordinary technical skills, for example, it still may make sense to move to the hotbed of the San Francisco Bay Area—notably No. 24, San Francisco, and No. 27, San Jose—where economic opportunity partially offsets extraordinarily high costs, at least for a certain portion of the population.

    This applies as well even to cities toward the bottom of the list, including No. 46, New York, and, in last place, No. 51, Los Angeles. If you want to break into businesses such as finance, media, and entertainment, you have little choice but to concentrate on New York or Southern California. These areas may also prove more attractive to people who have inherited money (critical to affording houses or paying high rents), as well as those whose business is closely tied to these great cities’ ethnic economies.

    People must also make tradeoffs when they decide where to locate. Some value a big house and yard, while others cannot abide a city without a decent opera or good Thai food. And those obsessed with, say, their children’s educations will clearly find a broader variety of schools and cultural institutions in San Francisco or New York than in Oklahoma City.

    But for those who lack these specific demands, and for those whose priority is achieving a middle- or upper-middle-class quality of life, the less expensive, often smaller, and less congested cities seem to have the greatest appeal. This may offend the sensibilities of retro-urbanists, who tend to cluster in the great legacy cities, along with our tribes of cultural tastemakers, but the hard reality shows that, for the most part, people move to places that offer not merely the best lattes or artisanal pizzas but the great opportunity for advancement.

    The Geography of Growth

    We give economic growth roughly half of the weight in these rankings. This consists of three factors: employment growth, unemployment, and per capita income. This is where some of the coastal cities still do well, notably San Jose, whose recent job growth places it first, as well as No. 4, Washington, and No. 7, Seattle. The local economies in these areas have all been driven by the rapid expansion of high-tech and professional services, which explains their particularly high per capita GDP numbers.

    Yet most of the big winners in the economic-aspiration sweepstakes are concentrated elsewhere, notably in Texas. Since the recession, the Lone Star State has created 1 million new jobs, five times as many as New York state. In contrast, Florida and California have lost a half million positions. Not surprising, Texas accounts for four of the top 11 regions for economic opportunity (No. 2, Austin; No. 3, Houston; No. 9, San Antonio; and No. 11, Dallas).

    No big economic region outperforms Houston, a metropolitan area of more than 5 million people that boasts arguably the strongest big-city economy in the nation. Not only the global hub of the energy industry, it also boasts the nation’s largest medical center and has dethroned New York City as the nation’s leading export center. Other strong performers include No. 7, Salt Lake City; No. 8, Oklahoma City; and No. 11, New Orleans, all of which have enjoyed strong job growth over the past five years.

    What Do You Get for the Money?

    Strong economic growth—particularly high per capita incomes—represents half of our ranking, but this is balanced by considerations such as cost of living, housing, and traffic congestion. “Everyday life,” observed the great French historian Fernand Braudel, “consists of the little things one hardly notices in time and space.” This reality is particularly critical for young and prospective families, for whom a higher salary or glamorous environment may mean less than the prospect of owning a decent home, particularly without the necessity of a long, dispiriting commute.

    These factors, we believe, will become more paramount as members of the large millennial or “echo boom” generation enter their late 20s, 30s, and even 40s over the next decade. This demographic—projected by the census to expand by roughly 8 million by 2025—is likely to prove intensely interested in owning their own homes. Indeed, research by generational analysts Morley Winograd and Mike Hais demonstrates that not only do millennials aspire to homeownership, but among the oldest cohorts of this group, now just entering their 30s, interest in buying a house actually surpasses that of their boomer parents.

    This difference in the affordability of housing relative to incomes plays a major role in boosting the rankings of some strong aspirational areas, notably Raleigh; Richmond; Charlotte, North Carolina; Kansas City; and Indianapolis. Along with traffic congestion, it tends to bring down the rankings of most California metropolitan areas, including San Francisco, San Jose, Los Angeles, and San Diego, as well as such hipster hotspots as New York and Miami. We also include “doubling up,” where more than one family lives in a household, as a surrogate for poverty (since metropolitan poverty rates are not adjusted for the cost of living).

    Demographic Destiny

    The last component of our rankings, accounting for roughly a quarter, lies in demographic trends. Like playing defense in basketball, the most important thing here is to watch the feet. The question is movement: where are people going, and where are they not? This tells us much about future trends and how people, as opposed to the media, actually view the best places for them to settle.

    Our methodology concentrates on three metrics: domestic migration, growth of foreign-born population; and growth in the number of college-educated people. These groups reflect what may be thought of as “the canaries in the coal mine”—indicators of where people seeking a better life are choosing to settle. This factor seems to jibe with our overall rankings more than any other component.

    The biggest beneficiaries tend, not surprisingly, to be places that are economically vibrant but not prohibitively expensive, such as Austin, Houston, San Antonio, Dallas, Raleigh, Nashville, Richmond, and Charlotte. Over the past decade these areas have enjoyed by far the fastest growth not only in migration, but in college-educated people and perhaps most surprisingly in number of foreign-born people. Today immigrants are flocking to such unlikely places as Nashville, Richmond, Louisville, and Charlotte. As for the college-educated, they, too, are also migrating to these same aspirational cities, as well as to new hipster hotspots such as New Orleans and Nashville. The increase in B.A.-degree holders in these cities averages in the double digits or higher over the past decade, in some cases more than twice the growth in such traditional “brain gain” cities as Seattle, San Jose, San Francisco, New York, and Boston.

    The Urban Future

    As the younger generation, as well as newly arrived immigrants, begins to look for places to settle, raise families, and start businesses, they will flock increasingly to these affordable and demographically, economically dynamic regions. Yet it is likely that other factors—global economics, shifts in immigration, and technological changes—could influence the aspirational landscape in the years to come.

    In thinking about the future, then, it is important to recall that not long ago some of the cities near the top of today’s aspirational list were facing seemingly irreversible economic decline, demographic stagnation, and even loss and deterioration of basic infrastructure. You only have to recall the dismal ’70s in Seattle, where post-Vietnam budget cuts inspired some to ask that “whoever is last to leave turn out the lights,” or Houston and Dallas–Fort Worth after the oil bust in the ’80s, when those cities were widely known for their “see through” office buildings and abandoned housing complexes.

    It’s always possible that unpredictable and major shifts could topple today’s aspirational cities from the top of the list. However, given current conditions and the most likely accrual of current trends, we can expect that most of the cities at the top of the aspirational rankings will remain there for some time to come.

    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.

    This piece originally appeared at the Daily Beast.

    Creative Commons photo “Austin Skyline” by Flickr user StuSeeger

  • Humiliating Detroit

    As I’ve noted before, Detroit is all too frequently just a blank screen onto which people project their own personal bogeymen. So liberals see in Detroit racism gone wild, America’s comeuppance for its love affair with the automobile, and corporate greed. Conservatives see the ultimate end result of unions and where liberalism will take the US as a whole if it isn’t stopped.

    There’s a bit of truth in all of these. The left would have us believe that having Democrats in charge of the city for so long had nothing to do with where it is today. But they reality is, they’ve got to own their piece of blame. Detroit certainly hasn’t been a bastion of conservative policy, that’s for sure.

    On the other hand, Republicans should be aware that Detroit’s decline has been ongoing for quite a while, and there were definitely some mayors with R’s by their name who were in on the game. And economic forces shaped Detroit far more than they’d like to admit.

    But ultimately what we see today is the left furiously spinning about Detroit (for example, see the book “Detroit: A Biography”) and the right trying to use it as a poster child for everything they hate. Yet on the right I can’t help but observe a particularly mean streak in the commentary, one that’s positively gleeful about Detroit’s demise. It’s as if, not content with letting the results speak for themselves about what happened under Democratic rule, the right seems determined to humiliate Detroit, reveling in its pain. It’s schadenfreude on steroids.

    Let me highlight this. First Kurt Schlichter says that “Conservatives Should Point and Laugh As Detroit Dies.”

    The agonizing death of Detroit is cause for celebration. It’s the first of the liberal-run big cities and states to fall, and we should welcome its collapse with glee.

    Yeah, liberals, eventually you do run out of other people’s money.

    The blue state model is a terminal disease, and Detroit is its poster child. Only this is one telethon where we should pledge that we won’t pay a single dime to keep the progressive party going a single minute longer.

    Detroit represents the epitome of the blue state, Democrat machine liberalism that Barack Obama represents. Well, not one damn cent for Barry’s Kids.

    Don’t hold back, tell us how you really feel. John Fund at the National Review is nowhere near vicious, but he does paint a target on Detroit’s art, basically arguing that the city should be forced to sell off its assets to satisfy creditors:

    What no one wants to do, apparently, is sell the city’s assets. The city has largely unused parks and waterfront property that could be opened to economic development. The Detroit Historical Museum has a collection of 62 vehicles, including an 1870 Phaeton carriage and John Dodge’s 1919 coupe, that is worth millions. But the biggest sacred cow is the Detroit Institute of Art (DIA), one of the nation’s oldest and most valuable art museums. It has pieces by Vincent van Gogh, Henri Matisse, Andy Warhol, and Rembrandt. The Institute also owns William Randolph Hearst’s armor collection and the original puppet from the children’s TV show Howdy Doody.

    The Detroit Free Press asked New York and Michigan art dealers to evaluate just a few of the 60,000 items in the Institute’s collection. The experts said the 38 pieces they looked over would fetch a minimum of $2.5 billion on the market, with each of several pieces worth $100 million or more. That would go a long way toward relieving the city’s long-term debt burden of $17 billion.

    Let me get this straight. Instead of Detroit being $17 billion in debt, let’s sell off everything left that makes Detroit viable and end up still $14.5 billion in debt and still bankrupt. (Though only a few items were evaluated, they were clearly the handful of most valuable ones. Howdy Doody ain’t Van Gogh). Oh, yeah, that will help – if your definition of help is bailing out banks who loaned money to a city everyone has known is a basket case for many, many years. If those banks expected the art to be sold, they should have made the city pledge it as collateral.

    Fund is right that Detroit does need to make tough choices about assets. I’ve made that argument myself. But the goal should be to create at a minimum a sustainably functional government and ensure the bankruptcy of the city of Detroit doesn’t undermine the broader region and state. Selling off secondary assets (and yes, Howdy Doody may be a good candidate) is worth pursuing if there’s cost/benefit. But saying that Detroit should sell off its regional cultural crown jewels is little more than an attempt to inflict counter-productive penance, to force humiliation upon the city. And it would also be completely unlike say a corporate Chapter 11 restructuring, which is designed to produce a viable firm on the other end and thus the most valuable assets are often retained.

    Of course, Detroit’s own residents make it easy to act this way. A group of protestors referred to the bankruptcy filing as a “declaration of war,” saying that outsiders aren’t entitled to any say or even get the money back they loaned the the city, saying instead “the banks owe us.”

    Still, have some compassion. It’s understandable Detroit’s residents are in pain and lashing out. Clearly they have tough medicine they haven’t reconciled themselves to taking. But there are better ways to respond to it. Andrew Biggs at the American Enterprise Institute took a more moderate path, suggesting that while a plain reading of Michigan’s constitution suggests it wouldn’t protect pensions in bankruptcy, there’s still reason to give pensioners some preferential treatment (thought not being made 100% whole, saying:

    Does this mean that retired city workers should take the same haircut as municipal bond holders? I really don’t think so. Anyone loaning money to the city of Detroit was knowingly taking the risk that the city might not repay; that’s why bonds issued by Detroit paid a higher yield than Treasury securities, which are assumed to be riskless. As with any risk investment, sometimes it pays off, sometimes it doesn’t.

    City employees, on the other hand, exchanged services today — along with employee contributions to their pension plan — for benefits to be delivered in the future. Sure, employees should consider the financial stability of their employer in its ability to deliver what is promised, but city employees seem to be a qualitatively different group than municipal bond holders.

    This seems more rational type analysis and isn’t rooted in mean-spiritedness.

    Though eager to point out how Democratic policies and corrupt Democratic politicians helped propel Detroit headlong in bankruptcy (which is certainly a valid political claim to make), having a vengeful streak only shows Republicans behaving in a ways that’s as hard hearted as Democrats say they are.

    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.

  • Portland’s Transit Halcyon Days?

    For more than a quarter century, the leaders in the Oregon portion of the Portland metropolitan area have sought to transfer demand for urban travel from automobiles to transit. Six rail lines have been built, five of which are light rail and bus service has been expanded. If their vision were legitimate, transit’s market share should have risen substantially and automobile travel should have declined. Neither happened.

    The results have been modest, to say the least. Since 1980, before the first rail line was opened, transit’s share of work trip travel in the metropolitan area has declined by one-quarter, from 8.4 percent to 6.3 percent. Overall, the share of travel by car remains about the same as before the first light rail line opened (based upon data from the Texas Transportation Institute and the Federal Transit Administration).

    Transit access to destinations outside downtown Portland remains scant. Despite the huge expenditures on transit, only 8 percent of the jobs in the metropolitan area can be reached by the average employee in 45 minutes, despite the fact that nearly 85 percent of workers are within walking distance of the transit stops or stations. Portland’s transit access is better than the national major metropolitan average of six percent. But Portland trails a number of other metropolitan areas and is well behind the best, Milwaukee, Wisconsin, which has a transit access figure of only 14 percent. This makes a mockery of the “transit access” measure used by many planning agencies. Being close to a transit stop or station is of little help if service to the desired destination is not available or takes too much time.

    According to the latest American Community Survey data, the average work trip by people driving alone in Portland is 23.6 minutes, while the average transit commute trip is 43.8 minutes.

    Further, Portland transit users could face draconian service reductions. Tri-Met, which operates light rail and most Oregon services, has warned that it may be required eventually to cut 70 percent of its service. This results from the failure to control labor costs, particularly pension costs, which is detailed in an Oregonian article. John Charles, president of the Cascade Policy Institute found that $1.63 all the benefits were being paid out for every dollar of wages, a claim confirmed by PolitiFact. The concern extends to the state capital, where the legislature has overwhelmingly approved a bill requiring an audit of Tri-Met by the Secretary of State.

    Tri-Met continues to expand light rail, but with some “pushback.” An under-construction line to Milwaukie evoked such controversy in Clackamas County, that voters elected an anti-light rail majority to the county commission. Voters have banned light rail expenditures without a public vote in the suburban municipalities of Tigard and King City. Clark County (Washington), voters rejected funding for a light rail connection to the Portland system. This opposition was at the heart of defunding a replacement Interstate 5 bridge over the Columbia River. The project recently closed after spending $175 million (see Project Closing Notice).

    With the investment and expansions, these should have been the halcyon days of transit in Portland. The future could be even more challenging.