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  • A Guide to China’s Rising Urban Areas

    From a Rural to Urban Dispersion in the Middle Kingdom

    China’s rise to economic prominence over the past 30 years has rested in large part to its rapid    urbanization. Prior to ‘reform and opening up’ that started in earnest during the 1970s, cities in China were viewed as pariahs by the party leadership. Millions of young urban dwellers were forced into the countryside to labor on farming communes during the Cultural Revolution. In stark contrast, today millions of rural migrants make their way to the city.

    The scale at which this is happening is unprecedented. Currently, there are 85 metropolitan areas in China with more than 1 million people, compared to 51 in the US. By 2015, urban regions will account for half of China’s population and by 2025, the urban population’s share should reach about 75%.

    To date, international attention has remained fixated on China’s largest cities of Beijing and Shanghai (and to a lesser extent, Guangzhou and Shenzhen). This is not without good reason, as Beijing and Shanghai are not only the respective government and financial centers of mainland China, but both were host to two of the most visible world events of the past decade: the 2008 Summer Olympics and the recently concluded World Expo.

    Second and Third-Tier Cities Enter Onto the World Stage

    Increasingly, however, the real trajectory of urban growth is shifting to China’s so-called ‘second-tier’ and ‘third-tier’ cities. To the outside observer, China’s lesser-known cities might seem all too similar to one another given the monotonous aesthetic of their newly constructed cityscapes. Indeed, the newfound appearance of Chinese cities is a point of contention among local urban development scholars who are concerned about the converging ‘identical faces’ of these urban areas.

    Yet to Chinese locals and foreigners who have spent some time living here, it Chinese cities are defined more by their local cuisine, dialect, history, geography, culture and climate rather than their architectural character. These often-overlooked nuances of local culture are much more essential to the identity of these cities than buildings. In the future, these distinctions may prove more effective in attracting investment and talent than flashy new construction projects.

    Here’s a short guide to these rising urban areas by region and their current identities and prospects.

    TOP 20 URBAN AREAS IN CHINA: 2010 ESTIMATES
    Rank
    Urban Area
    2010
    Area: SqMi
    Density
    Area: SqKM
    Density
    Base Year
    Base Year Pop.
    1 Shanghai, SHG 18,400,000 1,125 16,400 2,914 6,300 2010 18,400,000
    2 Shenzhen, GD 14,470,000 550 25,900 1,425 10,000 2008 14,000,000
    3 Beijing, BJ 13,955,000 1,275 10,800 3,302 4,200 2008 13,545,000
    4 Guangzhou-Foshan, GD 13,245,000 760 17,000 1,968 6,600 2007 12,600,000
    5 Dongguan, GD 10,525,000 535 19,200 1,386 7,400 2007 10,000,000
    6 Tianjin, TJ 6,675,000 500 13,100 1,295 5,000 2007 6,400,000
    7 Chongqing, CQ 5,460,000 280 19,100 725 7,400 2007 5,240,000
    8 Hangzhou, ZJ 5,305,000 250 20,600 648 8,000 2007 5,015,000
    9 Wuhan, HUB 5,260,000 275 18,700 712 7,200 2007 5,040,000
    10 Shenyang, LN 5,160,000 280 18,100 725 7,000 2007 4,950,000
    11 Chengdu, SC 4,785,000 220 21,300 570 8,200 2007 4,585,000
    12 Xi’an, SAA 3,955,000 205 18,900 531 7,300 2007 3,785,000
    13 Harbin, HL 3,615,000 235 15,100 609 5,800 2007 3,460,000
    14 Suzhou, JS 3,605,000 245 14,300 635 5,500 2007 3,400,000
    15 Nanjing, JS 3,550,000 330 10,500 855 4,100 2007 3,400,000
    16 Dalian, LN 3,255,000 270 11,800 699 4,500 2007 3,105,000
    17 Changchun, JL 3,170,000 145 21,300 376 8,200 2007 3,010,000
    18 Kunming, YN 3,070,000 130 23,100 337 8,900 2007 2,925,000
    19 Wuxi, JS 2,925,000 150 19,000 389 7,300 2007 2,760,000
    20 Taiyuan, SAX 2,900,000 120 23,600 311 9,100 2007 2,755,000
    Source: Demographia World Urban Areas: Population & Projections: 6th Edition. http://demographia.com/db-worldua.pdf

     

    The Interior Rises

    Chengdu (成都): It was the devastating 2008 Wenchuan Earthquake that first out Chengdu onto the international radar, but it’s the rapid expansion of its massive high tech sector that may define its long term prospects.  The aerospace industry also plays an important role in the capital city of Sichuan Province as it is the site of the development of China’s first stealth fighter, the Chengdu J-20. Despite all the new development, Chengdu remains a pleasant city, known for pandas and spicy food as well as its generally relaxed and agreeable disposition. The local government has done a good job of promoting ‘quality of life’ and relatively low cost of living to attract both investment dollars and skilled labor away from the prohibitively expensive eastern metropolises.

    Chongqing (重庆): Also known for spicy food, this municipality, which falls under direct control of the central government, is bisected by the Yangtze River. Its urban vista is unique, with deep gorges. It long has been known as a rough and tumble place, long plagued by organized crime. This has abated under the leadership of Communist Party Secretary Bo Xilai who has waged a war against organized crime in Chongqing since assuming office there in 2007. Though a controversial leader with a penchant for strong “red” leanings, the ambitious Bo has been applauded for cleaning up the city and implementing a large-scale public housing program.

    Kunming (昆明): The city of Eternal Spring and the capital of China’s ethnically diverse southern Yunnan Province, Kunming claims the best weather in the country. As such, Kunming’s residents would rather enjoy the sunshine then spend their days indoors working in factories. The lack of industrial production doesn’t mean this city isn’t important- as Kunming has China’s 6th busiest airport and is the country’s gateway to Southeast Asia. If China goes forward with its ambitious plans to link itself with Southeast Asia via high-speed rail, Kunming could enhance its status an international transportation node.

    Wuhan (武汉): Wuhan, capital of Hubei Province, is an important rail and river transport hub at China’s central crossroads. Known for its unbearably hot summers, Wuhan sits on the Yangtze River a few hundred kilometers downstream from the infamous Three Gorges Dam. The city is China’s center for the optical-electronic industry, with a focus on the production of fiber-optics. It was also recently announced that Wuhan will get China’s third tallest building, the 606 meter Greenland Center.

    Xi’an (西安): Once known as Chang’an (‘eternal peace’), Xi’an was the capital of multiple Chinese dynasties throughout history. It remains as one of the most popular international tourist destinations in China thanks to its world-renowned Terracotta Warriors. But today this ancient city and present day capital of Shaanxi Province is also positioning itself as a hub for the development of the software and aerospace industries. The city is also host to several reputable universities, which could help supply a strong local talent pool.

     

    Yangtze River Delta (Greater Shanghai)

    Hangzhou (杭州): Arguably China’s most naturally beautiful large city, Hangzhou is famous for its scenic Xihu or ‘West Lake’, which just became a UNESCO Heritage Site. The capital of Zhejiang Province not only attracts tourists, but investment as well, especially in the light manufacturing and textile industries. Already somewhat of a ‘bedroom community’ for Shanghai’s wealthy, The recently inaugurated Shanghai-Hangzhou high-speed rail line, which has cut travel time down to 45 minutes between the two cities, means that Hangzhou stands to further benefit from this connection.

    Nanjing (南京): One of the ‘Four Great Ancient Capitals of China’, the capital of prosperous Jiangsu province is today a bustling modern metropolis. Located on the Yangtze River, Nanjing has greatly benefitted its location within the greater Yangtze River Delta Region. The city’s close proximity to Shanghai means that is has absorbed some spillover from investors looking for a lower-cost alternative. Nanjing is also home to one of China’s tallest towers, the newly opened Nanjing Greenland Tower and Asia’s largest railway station.

    Suzhou (苏州): Situated in Jiangsu Province en route from Shanghai and Nanjing, Suzhou is strategically located in the center of a booming region. Often referred to as the ‘Venice of the East’, the city is famous for its historic canals and classic Chinese gardens. In addition to being a popular tourist destination Suzhou is an emerging hi-tech center. The China-Singapore Suzhou Industrial Park, the largest strategic partnership between the two governments, has been established in the city.

    Wuxi (无锡): Only 50 km from Suzhou, Wuxi straddles the north shores of Lake Taihu. With 3,000 years of history, Wuxi is today one of China’s most business friendly cities. Wuxi is particularly attractive to Japanese businesses, with companies like Sony, Nikon, and Konica Minolta owning manufacturing and assembling facilities in the city’s New District. The city’s relatively new airport, which opened in 2004, serves the city as well as neighboring Suzhou.

     

    The Industrial North: China’s Rustbelt

    Changchun (长春): Changchun was the last capital of Manchuria and the seat of Japan’s ‘Puppet Government’ during their occupation of the region during WWII. Today the capital of China’s northern Jilin Province stands as “China’s Detroit” as the country’s largest automobile producer.The Changchun Automotive Economic Trade and Development Zone is home to the country’s biggest wholesaler of used cars, automotive spare parts and tires.

    Dalian (大连): Consistently ranked as one of the ‘most livable’ of China’s big cities, Dalian sits strategically on the Liaodong Peninsula making it the principle seaport for the country’s northeast (‘DongBei’) region. Banking and IT is big here, with semiconductor giant Intel just having recently opened a $2.5 billion manufacturing facility in the city. The Dalian Commodity Exchange, highlighted by the trading of soybean contracts, is China’s largest futures exchange. Bo Xilai also left his mark on the city when he was Mayor before heading to Chongqing by initiating a campaign to add significant green space to the city.

    Harbin (哈尔滨): The capital of Heilongjiang province, Harbin is the country’s northernmost big city. Famous for its local beer and annual winter ice sculpture festival, Harbin is China’s gateway to neighboring and resource-rich Russia. Russian culture has also left its mark on the city, influencing everything from the local cuisine to the architecture. Today Harbin’s economy is focused on textiles and power equipment manufacturing.

    Shenyang (沈阳): Shenyang, the capital of Liaoning province, is the largest city in China’s northeast. Once the capital of the Manchurian Empire during the 17th Century, Shenyang is today an industrial powerhouse producing industrial equipment,  construction vehicles, power tools, and biomedical equipment. Shenyang is also a hub for agriculture and the production of foodstuffs.

    Taiyuan (太原): The capital of coal producing Shanxi province, Taiyuan is moving up on China’s urban radar. The city serves as the administrative center for both Chinese state-owned and foreign enterprises involved in the coal mining business. The city is also home to the Taiyuan Steel and Iron Company, China’s largest producer of stainless steel. Unfortunately, due to the heavy industrial activity in the region, Taiyuan is also one of the country’s most polluted cities.

    Tianjin (天津): Long ridiculed by Beijingers, Tianjin is ambitiously positioning itself as a financial and sea logistics center for northern China. One of China’s four direct-controlled municipalities, Tianjin is less than 30 minutes from nation’s capital by high-speed train yet still has a distinct dialect and culture. The city is divided into two distinct parts: the charming historic city center, which retains colonial buildings from 19th Century foreign concessions, and the Binhai New Area, an up-and-coming Special Economic Zone next to the Bohai Sea. Tianjin is also aiming to become the center of China’s burgeoning biotech industry.

     

    The Outlier

    Dongguan (东莞): As the fifth largest city in China by population, Dongguan should register more prominently on the international radar. Unfortunately the most defining characteristic about this urban amalgam is its lack of character. A sprawling unplanned mass of factories in the Pearl River Delta situated between Shenzhen and Guangzhou, Dongguan is the largest city in the world without an airport. As the Pearl River Delta de-industrializes as more factories move into the lower-cost inland regions of China, Dongguan will need to reinvent itself.

    Adam Nathaniel Mayer is an American architectural design professional currently living in China. In addition to his job designing buildings he writes the China Urban Development Blog.

    Photos: Chengdu and Chongqing photos by author. All other photos by Wendell Cox.

  • Infographic: State Property Tax Data

    Credit Sesame has created an interactive map showing property tax rates for all 50 states. Based on data from the Tax Foundation, the graphic also shows property tax rates as a share of home value and as a share of median income of homeowners. It’s important to note that property taxes can vary regionally within states, and property taxes are only one part of overall state and local tax burden.


    Mortgages – CreditSesame.com

    Here’s the Tax Foundation’s numbers on overall state and local tax burden. For more on overall state business climates, check out our Enterprising States report.

  • The Costs of Smart Growth Revisited: A 40 Year Perspective

    “Soaring” land and house prices “certainly represent the biggest single failure” of smart growth, which has contributed to an increase in prices that is unprecedented in history. This  finding could well have been from our new The Housing Crash and Smart Growth, but this observation was made by one of the world’s leading urbanologists, Sir Peter Hall, in a classic work 40 years ago. Hall led an evaluation of the effects of the British Town and Country Planning Act of 1947 (The Containment of Urban England) between 1966 and 1971. The principal purpose of the Act had been urban containment, using the land rationing strategies of today’s smart growth, such as urban growth boundaries and comprehensive plans that forbid development on large swaths of land that would otherwise be developable.

    The Economics of Urban Containment (Smart Growth): The findings of Hall and his colleagues were echoed later by a Labour Government report in the mid-2000s which showed housing affordability had suffered under this planning regime. Author Kate Barker was a member of the Monetary Policy Committee of the Bank of England, which like America’s Federal Reserve Board, is in charge of monetary policy. Among other things, the Barker Reports on housing and land use found that urban containment had driven the price of land with "planning permission" to many multiples (per acre) above that of comparable land where planning was prohibited. Under normal circumstances comparable land would have similar value.

    Whether coming from the left or right, economists have demonstrated that prices tend to rise when supply is restricted, all things being equal.  Certainly there can be no other reason for the price differentials virtually across the street that occur in smart growth areas. Dr. Arthur Grimes, Chairman of the Board of New Zealand’s central bank (the Reserve Bank of New Zealand), found the differential on either side of Auckland’s urban growth boundary at 10 times, while we found an 11 times difference in Portland across the urban growth boundary. 

    House Prices in America: The Historical Norm: Since World War II, median house prices in US metropolitan areas have generally been between 2.0 and 3.0 times median household incomes (a measure called the Median Multiple). This included California until 1970 (Figure 1). After that, housing became unaffordable in California, averaging nearly 1.5 times that of the rest of the nation during the 1980s and 1990s (adjusted for incomes). Even after the huge price declines from the peak of the bubble, house prices remain artificially high in Los Angeles, San Francisco, San Diego and San Jose, with median multiples of six or higher.

    William Fischel of Dartmouth University examined a variety of justifications for the disproportionate rise of California housing prices and dismissed all but more restrictive land use regulation. He noted that "growth controls (restrictive land use regulations) have the undesirable effect of raising housing prices." Throughout the rest of the nation, more restrictive land use regulations have been present in every market where house prices rose substantially above the historic Median Multiple norm, even during the housing bubble. No market without smart growth has ever reached these heights.

    Setting Up for the Fall: Excessive Cost Increases in Smart Growth Markets: The Housing Crash and Smart Growth, published by the National Center for Policy Analysis, examined the causes of house price increase during the housing bubble. The analysis included all metropolitan areas with more than 1,000,000 population. It focused on 11 metropolitan areas in which the greatest cost increases occurred (the "ground zero" markets), comparing them to cost increases in the 22 metropolitan areas with less restrictive land use regulation (Note 1).

    • Less Restrictively Regulated Markets: In the less restrictively regulated markets, the value of the housing stock rose approximately $560 billion, or 28 percent from 2000 to the peak of the bubble (Note 2). In nearly all of these markets, the Median Multiple remained within the historical range of 2.0 to 3.0 and none approached the high Median Multiples that occurred in the "ground zero" markets.
    • Ground Zero Markets The value of the housing stock rose $2.9 trillion from 2000 to the peak of the bubble in the "ground zero" markets, all of which have significant land use restrictions (Note 3). The 112 percent increase in the "ground zero" markets was four times that of the less restrictively regulated markets. The Median Multiple rose to unprecedented levels in each of the "ground zero" markets, peaking at from 5.0 to more than 11.0, four times the historic norm.

    The 28 percent increase in relative house value that occurred in the less restrictively regulated markets (those without smart growth) is attributed to the influence of loosened lending standards. The excess above 28 percent, which amounts to $2.2 in the "ground zero" markets is attributed to to the supply restricting strategies of smart growth (Figure 2).

    The Fall: Smart Growth Losses

    The largest house price drops occurred in the markets that had experienced the greatest cost escalation, both because prices were artificially higher but also because prices in smart growth markets are more volatile.  The "ground zero" markets, with only 28 percent of the owner occupied housing stock, accounted for 73 percent of the pre-crash losses ($1.8 trillion). Thus, much of the cause of the housing crash, which most analysts date from the Lehman Brothers bankruptcy (September 15, 2008), can be attributed to these 11 metropolitan areas.

    By contrast, the 22 less restrictively regulated markets accounted for only six percent ($0.16 trillion) of the pre-crash losses. These 22 markets represented 35 percent of the owned housing stock (Figure 3).

    If the losses in the ground zero markets had been limited to the rate in the less restrictively regulated markets (the estimated impact of cheap credit), losses would have been $1.6 trillion less (Note 4). The Great Recession might not have been so "Great."

    Economic Denial and Acknowledgement: In his writing forty years ago, Dr. Hall noted that English planners denied the connection between the unprecedented house price increases and urban containment. This same denial also informs smart growth advocates today. This is perhaps to be expected, because, as Hall noted 40 years ago, an understanding of the longer term consequences would have undermined support for these policies.

    To their credit, some advocates recognize that smart growth raises house prices. The Costs of Sprawl – 2000¸ a volume largely sympathetic to smart growth, also indicates that urban containment strategies can raise housing prices. The only question is how much smart growth raises house prices. The presence of urban containment policy is the distinguishing characteristic of metropolitan markets where prices have escalated well beyond the historic norm.

    The Social Costs of Smart Growth: Moreover, the social impacts of smart growth are by no means equitable. Peter Hall says that the "less affluent house-owner … has paid the greatest price for (urban) containment" (Note 5). He continues: "there can be little doubt about the identity of the group that has got the poorest bargain. It is the really depressed class in the housing market: the poorer members of the privately-rented housing sector." Finally, Hall laments as well the impact of these policies on the "ideal of a property owning democracy."

    Hall’s four decades old concern strikes a chord on this side of the Atlantic. Just last week, a New York Times/CBS News poll found that nine out of ten respondents associated home property ownership with the American Dream. Planning needs to facilitate people’s preferences, not get in their way.

    ——–

    Note 1: The housing stock value uses a 2000 base, which adjusts house prices based upon the change in household incomes to the peak.

    Note 2: The underlying demand for housing was substantial in some of the less restrictively markets, which is illustrated by the strong net domestic migration to metropolitan areas such as Atlanta, Austin, Dallas – Fort Worth, Houston, Raleigh and San Antonio. At the same time, some more restrictive markets (smart growth) that hit historically experienced strong demand were experiencing huge domestic outmigration, indicating little in underlying demand. This includes Los Angeles, San Francisco, San Diego and San Jose. Demand, however is driven upward in more restrictively metropolitan areas by speculation which, according to the Federal Reserve Bank of Dallas is attracted by supply constraints.

    Note 3: The 11 "ground zero" metropolitan markets were Los Angeles, San Francisco, San Diego, San Jose, Sacramento, Riverside-San Bernardino, Las Vegas, Phoenix, Tampa-St. Petersburg, Miami and the Washington, DC area.

    Note 4: The pre-crash losses in the 18 other restrictively regulated markets were $0.5 trillion. These markets accounted for 37 percent of owner occupied housing in the metropolitan areas of more than 1,000,000 population, compared to 35 percent in the less restrictively regulated markets, yet had losses three times as high.

    Note 5: The Containment of Urban England also indicates that new house sizes have been forced downward by the planning regulations (see photo at the top of the article).

    Photograph: New, smaller exurban housing in the London area (by author)

    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

  • The Next Boom Towns In The U.S.

    What cities are best positioned to grow and prosper in the coming decade?

    To determine the next boom towns in the U.S., with the help of Mark Schill at the Praxis Strategy Group, we took the 52 largest metro areas in the country (those with populations exceeding 1 million) and ranked them based on various data indicating past, present and future vitality.

    We started with job growth, not only looking at performance over the past decade but also focusing on growth in the past two years, to account for the possible long-term effects of the Great Recession. That accounted for roughly one-third of the score.  The other two-thirds were made up of a a broad range of demographic factors, all weighted equally. These included rates of family formation (percentage growth in children 5-17), growth in educated migration, population growth and, finally, a broad measurement of attractiveness to immigrants — as places to settle, make money and start businesses.

    We focused on these demographic factors because college-educated migrants (who also tend to be under 30), new families and immigrants will be critical in shaping the future.  Areas that are rapidly losing young families and low rates of migration among educated migrants are the American equivalents of rapidly aging countries like Japan; those with more sprightly demographics are akin to up and coming countries such as Vietnam.

    Many of our top performers are not surprising. No. 1 Austin, Texas, and No. 2 Raleigh, N.C., have it all demographically: high rates of immigration and migration of educated workers and healthy increases in population and number of children. They are also economic superstars, with job-creation records among the best in the nation.

    Perhaps less expected is the No. 3 ranking for Nashville, Tenn. The country music capital, with its low housing prices and pro-business environment, has experienced rapid growth in educated migrants, where it ranks an impressive fourth in terms of percentage growth. New ethnic groups, such as Latinos and Asians, have doubled in size over the past decade.

    Two advantages Nashville and other rising Southern cities like No. 8 Charlotte, N.C., possess are a mild climate and smaller scale. Even with population growth, they do not suffer the persistent transportation bottlenecks that strangle the older growth hubs. At the same time, these cities are building the infrastructure — roads, cultural institutions and airports — critical to future growth. Charlotte’s bustling airport may never be as big as Atlanta’s Hartsfield, but it serves both major national and international routes.

    Of course, Texas metropolitan areas feature prominently on our list of future boom towns, including No. 4 San Antonio, No. 5 Houston and No. 7 Dallas, which over the past years boasted the biggest jump in new jobs, over 83,000. Aided by relatively low housing prices and buoyant economies, these Lone Star cities have become major hubs for jobs and families.

    And there’s more growth to come. With its strategically located airport, Dallas is emerging as the ideal place for corporate relocations. And Houston, with its burgeoning port and dominance of the world energy business, seems destined to become ever more influential in the coming decade. Both cities have emerged as major immigrant hubs, attracting on newcomers at a rate far higher than old immigrant hubs like Chicago, Boston and Seattle.

    The three other regions in our top 10 represent radically different kinds of places. The Washington, D.C., area (No. 6) sprawls from the District of Columbia through parts of Virginia, Maryland and West Virginia. Its great competitive advantage lies in proximity to the federal government, which has helped it enjoy an almost shockingly   ”good recession,” with continuing job growth, including in high-wage science- and technology-related fields, and an improving real estate market.

    Our other two top ten, No. 9 Phoenix, Ariz., and No. 10 Orlando, Fla., have not done well in the recession, but both still have more jobs now than in 2000. Their demographics remain surprisingly robust. Despite some anti-immigrant agitation by local politicians, immigrants still seem to be flocking to both of these states. Known better s as retirement havens, their ranks of children and families have surged over the past decade. Warm weather, pro-business environments and, most critically, a large supply of affordable housing should allow these regions to grow, if not in the overheated fashion of the past, at rates both steadier and more sustainable.

    Sadly, several of the nation’s premier economic regions sit toward the bottom of the list, notably former boom town Los Angeles (No. 47). Los Angeles’ once huge and vibrant industrial sector has shrunk rapidly, in large part the consequence of ever-tightening regulatory burdens. Its once magnetic appeal to educated migrants faded and families are fleeing from persistently high housing prices, poor educational choices and weak employment opportunities. Los Angeles lost over 180,000 children 5 to 17, the largest such drop in the nation.

    Many of L.A.’s traditional rivals — such as Chicago (with which is tied at No. 47), New York City (No. 35) and San Francisco (No. 42) — also did poorly on our prospective list.  To be sure,  they will continue to reap the benefits of existing resources — financial institutions, universities and the presence of leading companies — but their future prospects will be limited by their generally sluggish job creation and aging demographics.

    Of course, even the most exhaustive research cannot fully predict the future. A significant downsizing of the federal government, for example, would slow the D.C. region’s growth. A big fall in energy prices, or tough restrictions of carbon emissions, could hit the Texas cities, particularly Houston, hard. If housing prices stabilize in the Northeast or West Coast, less people will flock to places like Phoenix, Orlando or even Indianapolis (No.11) , Salt Lake City (No. 12) and Columbus (No. 13). One or more of our now lower ranked locales, like Los Angeles, San Francisco and New York, might also decide to reform in order to become more attractive to small businesses and middle class families.

    What is clear is that well-established patterns of job creation and vital demographics will drive future regional growth, not only in the next year, but over the coming decade.  People create economies and they tend to vote with their feet when they choose to locate their families as well as their businesses.  This will prove   more decisive in shaping future growth   than the hip imagery and big city-oriented PR flackery that dominate media coverage of America’s changing regions.

    Cities of the Future Rankings
    Rank Metropolitan Area
    1 Austin, TX
    2 Raleigh, NC
    3 Nashville, TN
    4 San Antonio, TX
    5 Houston, TX
    6 Washington, DC-VA-MD-WV
    7 Dallas-Fort Worth, TX
    8 Charlotte, NC-SC
    8 Phoenix, AZ
    10 Orlando, FL
    11 Indianapolis, IN
    12 Salt Lake City, UT
    13 Columbus, OH
    14 Jacksonville, FL
    15 Atlanta, GA
    16 Las Vegas, NV
    16 Riverside, CA
    18 Portland, OR-WA
    19 Denver, CO
    20 Oklahoma City, OK
    21 Baltimore, MD
    22 Louisville, KY-IN
    22 Richmond, VA
    24 Seattle, WA
    25 Kansas City, MO-KS
    26 San Diego, CA
    27 Miami, FL
    28 Tampa, FL
    29 Sacramento, CA
    30 Birmingham, AL
    31 New Orleans, LA
    32 Philadelphia, PA-NJ-DE-MD
    33 Minneapolis, MN-WI
    34 St. Louis, MO-IL
    35 Cincinnati, OH-KY-IN
    35 New York, NY-NJ-PA
    37 Boston, MA-NH
    38 Memphis, TN-MS-AR
    39 Pittsburgh, PA
    40 Virginia Beach, VA-NC
    41 Rochester, NY
    42 Buffalo, NY
    42 San Francisco, CA
    44 Hartford, CT
    45 Milwaukee, WI
    45 San Jose, CA
    47 Chicago, IL-IN-WI
    47 Los Angeles, CA
    49 Providence, RI-MA
    50 Detroit, MI
    51 Cleveland, OH

    This piece originally appeared at Forbes.com.

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

    Photo by Exothermic Photography