Blog

  • University of California Report Calls Cambridge Systematics High-Speed Rail Ridership Forecast Unreliable

    A just-released report by the Institute of Transportation Studies at the University of California-Berkeley finds that the ridership projections prepared by Cambridge Systematics (CS) for the California high speed rail system are “not reliable.”

    Authors Samer Madanat (director of ITS-Berkeley and a professor of civil and environmental engineering), Mark Hanson (UC-Berkeley professor of civil and environmental engineering) and David Brownstown (chair of the Economics Department at UC-Irvine) essentially reported that the projections had such large error margins that the system could either lose a lot of money or make a lot of money:

    … the combination of problems in the development phase and subsequent changes made to model parameters in the validation phase implies that the forecasts of high speed rail demand-and hence of the profitability of the proposed high speed rail system-have very large error bounds. These bounds, which were not quantified by CS, may be large enough to include the possibility that the California HSR may achieve healthy profits and the possibility that it may incur significant revenue shortfalls.

    Biased High Speed Rail Projections: Given the overwhelming history of upwardly biased ridership and revenue projections in major transport projects, it seems far more likely that reducing the margins of error would produce projections with much smaller ridership numbers and major financial losses. Major research by Oxford University professor Bent Flyvbjerg, Nils Bruzelius (a Swedish transport consultant) and Werner Rottenberg (University of Karlsruhe and former president of the World Conference on Transport Research) covering 80 years of infrastructure projects found routine over-estimation of ridership and revenue (Megaprojects and Risk: An Anatomy of Ambition). The evidence is so condemning that Dr. Flyvbjerg has referred to the planning processes for such projects as consisting of “strategic misrepresentation” and “lying” (his words) to advance projects that might not otherwise be implemented.

    Broad Concern about the Reliability of California High Speed Rail Projections: The University of California report joins other reports that have questioning the veracity of the Cambridge Systematics projections. During the run-up to the 2008 statewide bond issue, the California Senate Transportation and Housing Committee, chaired by Senator Alan Lowenthal (D-Long Beach) indicated concerns. Illustrating continuing concerns, the committee commissioned the University of California study.

    Doubts have been expressed by the California Legislative Analyst and the California State Auditor. The Reason Foundation Due Diligence Report, authored by Joseph Vranich and me in 2008 estimated the ridership projections to be at least 100% high (see High Speed Rail: Untimely Extravagance presented at the Heritage Foundation last week in Washington).

    Investment Grade Projections Far Lower: The Cambridge Systematics ridership projections publicized that were used in the statewide bond election were more than 150% above the “investment grade” projections that had been produced by Charles Rivers Associates for the California High Speed Rail Authority a decade ago. Even “investment grade” projections can be high, as the recent bond default and bankruptcy of the Las Vegas Monorail indicates. In that case the “investment grade” ridership projections were 150% above the actual achieved average, nonetheless bond holders lost their investments. (Our 2000 report accurately projected the Monorail ridership).

    Undermining GHG Emissions Reduction Claims: Meanwhile, the California high speed rail proposal has come under criticism with respect to its environmental claims. The high speed rail line has been promoted as a means for reducing greenhouse gas (GHG) emissions in the state. Yet another recently released University of California report indicates that it could take as long as 71 years to save enough GHG emissions by attracting airline passengers and drivers to cancel out the emissions produced in constructing the project. More defensible ridership projections could lengthen this period considerably.

    Response to Criticism: The body of the University of California high speed rail study is 10 pages, followed by approximately 40 pages of comments and response by Cambridge Systematics and a letter from the California High Speed Rail Authority requesting that the University of California authors to consider the comments. This review is performed by the University of California authors, as they reject virtually all Cambridge Systematics criticisms in the final four pages of the report.

    Photograph: Cover of Megaprojects and Risk: An Anatomy of Ambition

  • Follow The Money On Development Deals

    “Follow the money” became a household phrase after the 1976 movie that told the story of Watergate, All the Presidents Men. Personal experiences over four decades in the consulting industry, working to create sustainable developments, often bring the phrase to mind.

    In a meeting a few weeks ago concerning a potential collaboration between our planning company and large engineering consulting firm, I was coached to tone down the fact that the design methods we invented and utilize reduce infrastructure. You might ask, why would reduced infrastructure (one key to a more sustainable world) be a negative condition for an engineering firm whose main purpose is to design the infrastructure that society must rely upon?

    Follow the money… Large engineering projects, as well as many architectural structures, are often quoted as a percentage of construction costs. The incentive is to increase, not decrease construction costs. We have the ability today to reduce the world’s infrastructure possibly up to 30%, which would be a major step towards reducing initial costs of commercial building and residential housing. It would have massive environmental benefits, and reduce the continual maintenance costs to the governmental authorities (forever) up to 30%.

    Follow the money… If the income of consulting firms is based upon construction costs, the consultants’ gross dollar billings would also be reduced by 30%. Firms that supply concrete, steel, pipes, etc would also have their gross income slashed by 30%. Does our world have a chance of becoming sustainable? Dream on!

    Follow the money… A decade ago I met with the president of one of the largest engineering firms in Minnesota. He wanted to know how our firm can produce so much work with so few people (I personally design all of the developments and had a drafting staff of two people). In ten minutes I designed a development of about 15 lots that showed homes, driveways, and all the final geometry, using the commercially available technology we had developed. “Oh my,” he said, and paused. I thought he would say, “We could reduce our staff by half,” but instead said , “You must put the plans on the shelf a few weeks, to justify the billing hours”. Then the enlightenment came to me. I had developed a software technology used in my own consulting business to produce engineering-accurate layouts in a fraction of the time of a CAD (Computer Aided Drafting)-based technology, but started to understand that this might be a hard sell.

    Follow the money… Large consultants often look at the floor of employees as a multiplier, meaning that each workstation will bring some multiple of profit. Suppose a technician costs $50,000 a year, and the multiplier is 3.5. After overhead, that technician represents $100,000 in potential profit. At a 150 person company, replacing one third of the staff by using more efficient technology and methods in the above example reduces the potential consulting income by five million dollars!

    Follow the money… Liability is another roadblock to sustainability. Why try something new when the old tried and true has worked for decades or centuries? In the consulting industry, licensed professionals risk their careers if a new concept causes a major failure, so they’re more likely to discourage anything without a proven history. The loss of a license to certify plans would have a devastating effect on a consultant’s personal finances. It is far safer to claim that the new method cannot work and talk the developer or municipality out of the idea.

    Follow the money… Today, few consultants are making any. Most are either hanging on (barely) or have shut their doors. The unemployment rate among architects, engineers, draftsmen, technicians, planners, and related occupations is very high. The exceptions are those lucky few that have won lucrative government contracts and are holding their own, or even thriving.

    Follow the money… The market reacts to design, innovation and value. The first Toyota Prius was an ugly miniscule car based upon the Echo, but it was highly efficient. Gas was cheap when it was first introduced, and sales were dismal. The first generation Prius had innovation, but lacked design. The next generation Prius came out as gas prices soared. When an attractive interior and exterior design was combined with innovation, it quickly became a symbol for a new era of green thinkers. Rising fuel prices turned the hybrid technology into an increasing value which fueled — so to speak — its success. Before the I-Pod there were many digital music players that were innovative. When players were combined with an attractive package design and the ability to download from the same vendor, the overall value created its success. Like the Prius and the I-Pod, land development itself is a “product”.

    Follow the money… The housing market crashed and many believe the commercial real estate crash to come will also be devastating. Funding for infrastructure keeps many consultants employed when the private development and building industry flounder.

    Those of us in the consulting industry must make some significant foundational changes if we are going to have a sustainable future, and claiming “Sustainability!” on the corporate web site is not enough. Unlike building construction, where being “green” typically increases costs, in land development, environmentally sound design and construction can cost significantly less if done right. That said, it does require more design effort with a greater attention to detail. It is possible to decrease both construction costs and environmental impacts say, 30%, but it could mean the consultant doubling his or her design efforts to do so. Not only does the firm lose 30% of its gross income if billing is based upon a percentage of construction costs, it must make a huge increase in effort to do so.

    Follow the money… In this new age of engineering and designing sustainable development, it is no longer possible to get the best result by simply using an off-the-shelf software to calculate the hydrology of the site (the drainage) within sewer pipes. Using surface flow along with natural materials that can filter pollutants from the run-off before drainage leaves the site requires a botanical engineering solution that blends knowledge of natural and manmade engineering. This requires a specialist, and the complexity that’s required to successfully design these systems with fail-safe methods goes far beyond pressing a software button. Small errors could have devastating results, and the consultant will be liable.

    For example, I installed a no-mow – low watering – fescue lawn, instead of sod, when my home was built last year. This landscaping worked great during the first year, giving us the look of a lawn look without having to mow it. We were told to water twice daily to get it established by the landscaping firm that claimed to be experts on this exciting new low impact landscaping. Well, watering fescue twice daily, it turns out, is the worst thing you can do, according to the prairie restoration consultants. We inadvertently turned our lawn into a fast growing prairie that needs more mowing than sod! But this is just one example of what can go wrong in this new era of sustainability. I was willing to invest, and I believe mistakes can be corrected and documented to reduce future errors. My landscape contractor installed something quite new in the industry, and took on a risk compared to suggesting safe sod. After the bugs are worked out the company will have a market edge and an example to show (but maybe not this year).

    So how can we force an industry to change?

    Lead with Money… Cities and developers hire firms assuming that they are going to use the latest techniques available to get the most efficient design possible. If the bidding process changed from seeking the lowest bidder to looking for the most advanced and efficient bidder, the industry would be rewarding innovation, competition, great design, and risk. Give priority to solutions that exceed the specifications. Contractors and consultants could be rewarded for coming up with revolutionary solutions.

    Lead with Money… The reward could be in the form of a bonus for innovation: For example if a plan saves 100 million in right-of-way purchasing, give half of the savings to the winning contractor and consultant. If the consultant is being paid a percentage of the construction costs (lets use 5% as an example) on a 100 million dollar project, then he or she would gross five million dollars. If they could win the consulting (engineering) contract by demonstrating the most efficient design instead of being the lowest bidder (or the most politically connected), and be paid a percentage of the demonstrated benefit, they would be making more for providing a higher degree of effort and perhaps taking on more risk. In the above example, if 30 million dollars is demonstrated to be a savings or increase in functionality, and 20% of the savings is rewarded back to the consultant, then the consultant would make 5% on the 70 million dollars (3.5 million dollars) and 20% on the 30 million in savings (6 million dollars). The gross revenue to the consultant would almost double.

    Lead with Money… Our military often awards bids for those projects that exceed the specifications. Vendors should compete not just on price, but to demonstrate how they exceeded the specifications. Governments as well as private developers could pick and choose based upon innovation, design, and value. Those taking the extra effort would flourish, and eventually the new higher standards would become the norm.

    How about forcing change through regulations? Regulations can only control minimum standards, pretty much guaranteeing monotony and stagnation. Instead, follow the money: To create a sustainable world, we need to exceed minimums, and foster innovation by rewarding risk, effort, and investment.

    Flickr photo, “George Is Keeping An Eye On You,” by We Love Costa Rica

    Rick Harrison is President of Rick Harrison Site Design Studio and Neighborhood Innovations, LLC. He is author of Prefurbia: Reinventing The Suburbs From Disdainable To Sustainable and creator of Performance Planning System. His websites are rhsdplanning.com and performanceplanningsystem.com.

  • Surprise, Frisco and Beaumont Among Fastest Growing

    The Bureau of the Census has updated its city (municipality or local government area) population estimates for 2009. Predictably, anti-suburban interests saw more indication of the elusive (read non-existent) exodus from the suburbs to the central cities. One analyst even suggested that a “high quality” of life in one central city (Washington, DC) might have kept people from moving to the suburbs. In fact, since 2000, nearly 40,000 people (domestic migrants) have moved out of the city of Washington and in the last year, the city gained 4,500 residents while the suburbs gained 13,700.

    In contrast, Buffalo News reporter Jack Ray looked at the data and noted that some cities in that metropolitan area were growing rather quickly, while others were losing population. Generally, he found that outer suburban communities were growing more quickly. Ray’s analysis was reflective of trends around the nation.

    There are nearly 20,000 incorporated cities, towns and villages in the United States. Population trends in these cities show that urban areas are growing most strongly on their suburban fringes or even in their exurbs. For example, two-thirds of the fastest growing 100 municipalities in the nation were suburbs or exurbs in the nation’s major metropolitan areas (those with more than 1,000,000 population). The other third were all municipalities in smaller metropolitan areas or outside metropolitan areas.

    The extent of this growth on the edge is illustrated by an examination of the nation’s municipalities of 25,000 or greater population that grew more than 25% between 2000 and 2009.

    • Among the 89 municipalities that grew 50% or more, 59 were in major metropolitan areas and all were suburbs (nearly all near the urban fringe) or exurbs. The total population growth among these suburbs and exurbs was 2.2 million from 2000 to 2009, for an average growth rate of 91%. These major metropolitan suburbs and exurbs grew 1.8 million, while the municipalities outside the major metropolitan areas added 400,000.
    • Among the 119 municipalities that grew between 25% and 50%, 69 were in major metropolitan areas. This included 67 suburbs and exurbs. It also included 2 central cities, Raleigh (39%) and Atlanta (28%). These major metropolitan area suburbs and exurbs gained 1.7 million residents, while the two central cities gained a total of 200,000. The municipalities outside the major metropolitan areas grew 1,000,000.

    Combined, the fastest growing suburbs and exurbs with more than 25,000 population grew more than 3.5 million, while the municipalities outside the major metropolitan areas grew 1.5 million, for a combined growth of more than 5.0 million. The smaller high growth municipalities (under 25,000), nearly 1,200 of them, both major metropolitan and outside, grew another 2.5 million.

    The fastest growing municipalities, excluding the two central cities of Raleigh and Atlanta, accounted for nearly one-third of the nation’s growth between 2000 and 20009.

    Most of the fast growing suburbs and exurbs have names that are simply not recognizable. Yet, a half-dozen added nearly as many or more new residents than all of the 20-plus central cities combined in the major metropolitan areas that do not have large swaths of suburbanization inside their borders. These include such places as Phoenix suburb, Surprise, Dallas-Fort Worth suburb Frisco and Riverside-San Bernardino suburb Beaumont.

    In Crabgrass Frontier: The Suburbanization of the United States, Kenneth Jackson noted that central Philadelphia began losing population in the early 19th century. The dispersion of America continues.

    Photograph: Exurbs of New York: Pike County, Pennsylvania

  • Salt Lake City’s Sacred Space

    Amid a devastating condo crash and high office vacancies across the U.S., one of the country’s largest downtown development projects is taking shape in Salt Lake City. The city’s center displays a landscape of cranes, cement-mixers and hard-hats–something all too rare in these tough times.

    Over the next few years, with an investment estimated locally at $2 billion, developers hope to transform a 20-acre swath of the city’s now-uninspired central core. By 2012 they hope to create a model downtown district with a whole new array of retail shops and residential towers accommodating some 700 units.

    On the surface, Salt Lake City , America’s 38th largest central business district , would seem an unlikely place for such an ambitious development. The city’s population growth–it is home to fewer than 200,000 of the region’s 1.2 million people–has been meager, particularly compared with the surrounding suburbs. The central business district represents less than ten percent of the region’s total employment.

    The driving force here is not economics, but the desire of Salt Lake’s most powerful institution, the Church of Jesus Christ of Latter Day Saints, to salvage its immediate neighborhoods. “The church’s primary notion is to protect the Temple Square and the headquarters of the Church,” explains Mark Gibbons, president of City Creek Reserve, the church’s development arm. “That’s first and foremost. This development would not have been done just on a financial basis, I can tell you that.”

    This motivation deviates from what we see now in most cities. For one thing, this does not reflect rent-seeking by real estate interests–there are no public subsidies, for example. Instead the City Creek project represents the ultimate in back-to-the-future city planning, a reversion to the ancient ideal of building a city around its essential “sacred space.”

    It’s all the more remarkable at a time when churches being converted into yuppie housing, discos or carpet stores is celebrated by the decidedly secular caste of urbanists. Of course, not everyone loves this approach. One former Salt Lake City planning official, a non-Mormon, has expressed fears about the “Vaticanization” of the area.

    Yet to date the traditional urban approach–museums, light rail development, downtown malls–has been far from a shining success. Salt Lake’s greatest remaining asset remains the Church, its great central Temple and the surrounding infrastructure of office, museums and genealogical agencies .

    Mormonism, in a sense, has to be thought of as a growth industry for downtown. Since 1960, church membership has surged from 2 million worldwide to nearly 14 million. Although Utah remains the church’s central base–over 70% of the state population is Mormon–the biggest increase has been outside the U.S., predominately in Latin America and parts of east Asia. This reality is reflected in Salt Lake itself; once overwhelmingly white, its population is now some 30% minority, much of it Latino.

    As an anchor tenant, the Church provides the ultimate raison d’etre for the surrounding area. The Temple Square remains the state’s largest tourist attraction. Church members from around the world come to the city for conferences and to consult with church records and officials.

    Of course, the fundamentally ecclesiastical logic diverges wildly from urbanist conventional wisdom. In most cities, planners embrace the idea of building the city core around singles, or “empty nesters.” The nurturing of a “bohemian” culture–hopefully of the free-spending bourgeois variety–is seen as providing a spur to art galleries, bars, clubs and high-end restaurants.

    Salt Lake’s developers wish to improve the amenity structure too, but in ways that would appeal to the middle-class families who dominate the region. Mormons, who make up half of the city population and the vast majority of those in the surrounding suburbs, average three to four children per family. Overall, the area has one of the youngest populations of any metropolitan region in the country.

    “The idea of having a sacred center is to create a space–like a campus–that’s decent, clean and upscale in a design sense, but accessible to families, ” observes Joe Cannon, editor of the church-owned local paper, The Deseret News. Without drawing in people from the predominately family-oriented suburbs, he says, the downtown would lack the base to rebound from a generation of neglect and decline.

    The church focus also makes sense, Cannon notes, when you take into account the unique history of the place. Unlike most American cities, Salt Lake was born primarily through the religious vision of the Mormon Church and in particular its great visionary leader, Brigham Young.

    The Mormons came to Salt Lake as part of their search for a sacred space. Such ideas led some to regard the Mormon as cult-like sect, dangerous to the nation. They came to Salt Lake only after attempting to settle down in Ohio, Illinois and Missouri–an action that often led. They often were booted out courtesy of bloodshed inflicted on them by more-traditional Christians.

    Although successful in a capitalist sense, Salt Lake’s urban culture reflected what Mormon historian Leonard Arrington describes as “Jacksonian communalism.” For many years, the Church controlled Zion’s Bank, the largest in the region, and promoted commercial development. Critically, Mormon charities and organizations brought in new settlers, mostly from England and Scandinavia.

    By the 1960s the downtown began to decay as Mormons, as well as non-Mormon “Gentiles,” moved en masse to the suburbs. The area around the Temple became increasingly seedy and rundown. This has led to the current effort to revive the city through the efforts of the Church–the institution with the greatest stake in the central core.

    Over the next decade, the Church’s effort could represent something unique in an urban America increasingly obsessed with the ephemeral. “We are not trying to build a ‘faux city,’” notes Mark Gibbons. “We are trying to build something that will last a hundred years or more.”

    In following that strategy, Salt Lake is trying to recover some of the very things that have sustained cities over time. It will be fascinating to see how their approach–based on the most ancient of city-building strategies–fares compared with those applied by their more decidedly secular rivals.

    This article originally appeared in Forbes.com.

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

    Photo by Edgar Zuniga Jr.

  • G20: The Siege of Toronto

    Excerpts from Steve Lafleur’s personal “View From The Wreckage” diary and photo log from this month’s G20 conference in Toronto:

    June 25th
    10:51 PM:
    I arrive in Toronto to a surprisingly vacant parking lot on the Esplanade, in the heart of Toronto’s bustling financial district. Quietest Friday night I’ve ever seen in Toronto. Barely a soul out in the usually packed financial district.

    2:12 AM: On the way back to my lodgings, I pass by the French delegation’s bus. The hotel workers had been on strike for the previous few days. The hotel is owned by a French company, so the workers decided to go on strike while the French delegation was there.

    2:14 AM: The Esplanade is conspicuously devoid of returning bar goers.

    June 26th
    10:39 AM:
    I arrive a few minutes after a scheduled keynote speaker at Allen Gardens that I heard about on Twitter. The tent town built by protesters has already been broken up, and its occupants have dispersed. The speaker goes on anyways, with a small crowd.

    10:56 AM: I head to Bay Street, the heart of Canada’s financial district. I figure if there are pre-rally disruptions, they would be here.

    11:11 AM: The Art Gallery of Ontario was one of the many high profile venues that closed for the conference. (Many shows, including the high profile musical, Rock of Ages, were canceled. The Blue Jays were also forced to move three home games to Philadelphia).

    11:29 AM: Arrival at the Security barrier. A few officers hanging around, but surprisingly quiet. The police decided to use tightly meshed chain link fences to make climbing the barriers extremely difficult.

    11:55 AM: The University of Toronto, which was also closed for the conference.

    12:10 PM: Queen’s Park begins to fill up with all of the usual suspects. Union activists, environmentalists, and anti-war protesters seem to be the bulk of the crowd.

    12:34 PM: When I see Greepeace approaching, I know it won’t be quiet much longer… and then I see people in their midst who appear to be Black Bloc anarchists, notorious for their role in the Seattle WTO protests of 1999, where they caused major property destruction.

    12:43 PM: Things get pretty busy at Queen’s Park. Despite the rain, the crowd is estimated to be 5000.

    12:48 PM: A crowd protesting the Ethiopian genocide fills the streets of Queen’s Park. I tell my photographer not to worry about them; that they have nothing to gain from being violent. Spoiler: I am right.

    1:41 PM: The demonstrators have now officially shut down University Avenue. The Queen’s Park subway station, and some other stops, are also closed. Frustrated motorists and streetcar passengers are stuck.

    2:26 PM: Rather than contain the crowds (which would lead to immediate confrontation), the police form a human funnel to shunt the protesters west on Queen Street.

    2:55 PM: As I reach University, the police are once again blockading. Riot police one street south are putting on gas masks. There appear to be police officers fighting with protesters. Police tell us to head north immediately or risk becoming collateral damage. Rioters breaking every window in sight.

    3:48 PM: Smoke is coming from a burning car in the middle of the road. We later find out it was a police car set on fire by protesters with Molotov cocktails (one of at least 3).

    11:46 PM: Stop for a quick drink at Duggan’s, a local microbrewery. Downtown is once again eerily quiet. Some business owners had the foresight to board up in anticipation of the riots.

    11:52 PM: We are greeted by hundreds of riot police outside of our lodgings and escorted across the street. There doesn’t appear to be anything amiss. From the roof, we are able to discover what the police are up to: resting.

    June 27th
    2:09 PM:
    Both the Bank of Montréal and The CIBC across the street from it are smashed in. It is surprising how quickly the vandalized establishments were boarded up. No remaining shattered glass visible from the road.

    2:11 PM: The Gap is one of the predictable targets for protesters, but dozens of less prominent shops are also vandalized. Starbucks, of course, the absolute favorite target of anti-corporate vandals; also the CTV news building, as well as several media vehicles.

    2:15 PM: As I continue along Queen Street, I hear a loud rumble. Yet another protest march coming. I quickly pull a U-turn, and exit the city.

    There are plenty of lessons that one might learn from this experience. This was my second G20; my first was last year’s meeting in Pittsburgh. The lesson that I want to impart is simple: Major political meetings should never be held in large cities. They are a magnet for violent protesters, and endanger local residents. The destruction, along with the billion dollar security tab, will hopefully make politicians think twice about foisting these events upon major cities. As I said before the meeting, it should have stayed in Huntsville, a small tourist town outside of the city, where it was initially supposed to take place.

    Photos by Andrew Lafleur.

    Steve Lafleur is a public policy analyst and political consultant based out of Calgary, Alberta. For more detail, see his blog.

  • The Urbanist’s Guide to Kevin Rudd’s Downfall

    The political execution of Prime Minister Kevin Rudd by his own Australian Labor Party colleagues was extraordinary, the first time a prime minister has been denied a second chance to face the voters.

    According to the consensus in Australia’s mostly progressive media establishment, Rudd fell victim to his “poor communication skills”, a somewhat Orwellian take since until recently he was hailed as a brilliant communicator. What went wrong?

    Certainly, Rudd’s style of communication was a factor. Yet the media’s disjointed interpretations avoid what, for them, is an inconvenient truth. As much as any defects in the man himself, Rudd’s linguistic meltdown can be traced to deep socio-economic divisions wracking today’s Australian Labor Party.

    Australia has its own version of the American red and blue state dichotomy. But with a much smaller, highly urbanised population, and only six states, the social fault line runs through major metropolitan regions rather than state boundaries. Left with a fractured support base, federal Labor often struggles to hold onto majority support. Rudd clearly underestimated the persisting social divide, and his obsession with a media driven solution was disastrous.

    In Australia, post-war suburbanisation and gentrification played out differently than in the US. Since in the 1970s, Australian cities have experienced a broad geographic sorting along class lines. On the one hand, rising land values and car ownership dispersed the old industrial core, and its working class population, to the middle and outer suburbs. On the other, a booming generation of university graduates, many immersed in the counter-culture, and employed in expanding government agencies, flooded into inner-city tenements.

    Lacking the racial frictions of some American cities, and typically adjacent to attractive harbour foreshores (Australia’s major cities are all coastal), these nineteenth century streetscapes were ripe for gentrification. Before long, all remnants of the old working class gave way to restaurants, upscale bars, coffee shops, cinemas, bookshops, art galleries and other favourite amenities of a new upper middle class.

    Over time, urban polarisation has far-reaching political consequences. While the new professional class voted Labor, and transformed the Labor Party in their own image, they dominated only a handful of electorates (electoral districts). Most of these are in the inner precincts of Sydney and Melbourne. The overwhelming majority of electorates are suburban or regional, populated by blue-collar, routine white-collar and self-employed private sector workers. Whether former inner-city residents, or newly arrived migrants, they embraced the suburban ideal of reward for work, free-standing homes on a quarter acre block and the prospect of upward mobility, particularly for their children. Later, social commentators labelled them “aspirationals”.

    Increasingly, inner-city elites and suburban aspirationals inhabited different worlds. By 1996, many aspirationals felt Labor had lost touch with their priorities. Apart from his poor record on inflation and interest rates, sensitive issues in the mortgage-belt, then Prime Minister Paul Keating became a champion of the elite’s obsession with race and gender. Having infiltrated Labor’s apparatus, progressives now seized control of the party’s policy agenda.

    Ultimately, Labor’s historic bond with working people was severed at the 1996 election, when masses of aspirational voters defected to the conservative John Howard. Howard retained their support over four terms in office. During this time they acquired another label – “Howard Battlers” (an antipodean variant of Reagan Democrats).

    Labor spent these years wavering between elite and aspirational programs, failing to reconcile their deep-seated differences. Successive leadership changes were a flop. Not until 2006, when Howard showed signs of running out of steam, was victory finally in sight. Leaving nothing to chance, the popular Rudd was installed as leader, and handed the task of herding both progressive and aspirational voters into Labor’s camp. Rudd’s strategy may have won him the election, but it bore the seeds of his destruction.

    On sensitive issues, Rudd resorted to an elaborate form of doublespeak: headline rhetoric crafted for aspirationals with policy small print pitched at progressives. He was confident enough in his mastery over the media cycle to pull this off. And he assumed aspirationals were too unsophisticated to catch on. He was proved wrong on both counts, but only after winning office.

    Take his handling of housing, transport and urban development. Housing affordability and traffic congestion loomed as hot topics in the 2007 election. Before the late 1990s, Australian cities had generally liberal approaches to land release and suburbanisation, and the motor vehicle was supreme. Urban planning was the province of state governments, which had long considered motorways the wave of the future, given the country’s increasingly dispersed patterns of residential, commercial and industrial development.

    As the century drew to a close, however, sentiment in the planning profession, including state officials, many now religiously green, shifted from growth to consolidation (“smart growth“) and the revival of rail transport. More recently, the climate panic accelerated this trend. On the whole, state governments, mostly Labor in the decade to 2007, proved compliant. Considering that Australian cities were experiencing high rates of population growth, in part due to very high levels of immigration, land values and house prices soared and roads, particularly in the middle to outer suburbs, couldn’t cope with traffic volumes. These problems were especially bad in Sydney. For the first time, many Australians feared that their children would never achieve the dream of home ownership.

    Leading up to the election, Rudd took to calling housing affordability “the ultimate barbeque stopper”, a subject on everyone’s lips. He convened a Housing Affordability Summit, and released a strategy paper. His campaign launch speech, weeks out from polling day, reminded voters that Labor had “put forward a national housing affordability strategy – so that we can keep alive the great Australian dream of one day owning your own home”. Rudd’s rhetoric on “infrastructure bottlenecks” was just as high-blown. “For 11 years”, he said repeatedly, “Mr Howard’s government has failed to provide leadership in developing our nation’s infrastructure”. References to traffic congestion were made in this context.

    But the policies didn’t match the rhetoric. Since elite sentiment was, by this stage, in the grip of climate alarmism, there was little way Rudd would address the root causes of these problems. Restricted land supply and urban growth boundaries, to contain Australia’s “ecological footprint”, combined with population growth, were driving up land values and inducing developers to bank their land holdings rather than release them. Rudd’s plan just tinkered around the edges. There were to be tax breaks on capped home saver bank accounts, subsidised rental accommodation for low income earners, and a massive boost in social housing stock. Conceived by activists who saw housing as a welfare issue, these measures did little for the mass of aspirationals or their children. A later boost to the existing “first home buyer grant” probably inflated prices further. Far from saving the great Australian dream, Rudd cast it into the dustbin.

    After the election, the small number of infrastructure projects selected for funding had limited potential to ease traffic congestion. In his landmark October 2009 speech on urban policy, Rudd had more to say on shifting motorists out of cars and onto trains than upgrading roads to improve traffic flows. For Sydney’s long-suffering commuters, there was no sign that “missing links” in the Orbital Motorway Network ring road would be completed.

    Well into 2010, house prices had been escalating for over a year, and mortgage interest rates began to creep up again, having been slashed during the financial crisis. More and more Australians thought Rudd’s performance, on a broad range of policy fronts, was falling short of his elevated rhetoric. He was “all talk and no action”. When his opinion poll ratings plummeted, with no revival in sight, Labor Party power-brokers feared their government would be thrown out after just one term, a first since 1932. Either Rudd or the Labor government had to go. They chose Rudd.

    John Muscat is a Sydney lawyer and co-editor of The New City (www.thenewcityjournal.net), a web journal of urban and political affairs.

    Photo by London Summit

  • Aspiring to The Russian Dream

    Bloomberg Business Week reports that the Russian government wants to move urban residents from their “cramped” high rise apartments to new suburban developments. Single family houses would be built in joint ventures with private developers. Present plans are to develop 2.5 million acres of suburban homes. This is a very large program. At Los Angeles densities, this amount of land would be sufficient to house about 28,000,000 people, roughly double the present population of the Moscow urban area.

    As occurred before in the United States, expanding suburban home ownership could generate a democratization of prosperity that brings far better living conditions to middle income households. Already, more affluent households have built European and American style detached houses outside Moscow’s 8-lane ring road (see photograph).

    Photograph: New detached housing, northern Moscow suburbs (Veshki).

  • The Changing Demographics of America

    Estimates of the United states population at the middle of the 21st century vary, from the U.N.’s 404 million to the U.S. Census Bureau’s 422 to 458 million. To develop a snapshot of the nation at 2050, particularly its astonishing diversity and youthfulness, I use the nice round number of 400 million people, or roughly 100 million more than we have today.

    The United States is also expected to grow somewhat older. The portion of the population that is currently at least 65 years old—13 percent—is expected to reach about 20 percent by 2050. This “graying of America” has helped convince some commentators of the nation’s declining eminence. For example, an essay by international relations expert Parag Khanna envisions a “shrunken America” lucky to eke out a meager existence between a “triumphant China” and a “retooled Europe.” Morris Berman, a cultural historian, says America “is running on empty.”

    But even as the baby boomers age, the population of working and young people is also expected to keep rising, in contrast to most other advanced nations. America’s relatively high fertility rate—the number of children a woman is expected to have in her lifetime—hit 2.1 in 2006, with 4.3 million total births, the highest levels in 45 years, thanks largely to recent immigrants, who tend to have more children than residents whose families have been in the United States for several generations. Moreover, the nation is on the verge of a baby boomlet, when the children of the original boomers have children of their own.

    Between 2000 and 2050, census data suggest, the U.S. 15-to-64 age group is expected to grow 42 percent. In contrast, because of falling fertility rates, the number of young and working-age people is expected to decline elsewhere: by 10 percent in China, 25 percent in Europe, 30 percent in South Korea and more than 40 percent in Japan.

    Within the next four decades most of the developed countries in Europe and East Asia will become veritable old-age homes: a third or more of their populations will be over 65. By then, the United States is likely to have more than 350 million people under 65.

    The prospect of an additional 100 million Americans by 2050 worries some environmentalists. A few have joined traditionally conservative xenophobes and anti-immigration activists in calling for a national policy to slow population growth by severely limiting immigration. The U.S. fertility rate—50 percent higher than that of Russia, Germany and Japan and well above that of China, Italy, Singapore, South Korea and virtually all the rest of Europe—has also prompted criticism.

    Colleen Heenan, a feminist author and environmental activist, says Americans who favor larger families are not taking responsibility for “their detrimental contribution” to population growth and “resource shortages.” Similarly, Peter Kareiva, the chief scientist at the Nature Conservancy, compared different conservation measures and concluded that not having a child is the most effective way of reducing carbon emissions and becoming an “eco hero.”

    Such critiques don’t seem to take into account that a falling population and a dearth of young people may pose a greater threat to the nation’s well-being than population growth. A rapidly declining population could create a society that doesn’t have the work force to support the elderly and, overall, is less concerned with the nation’s long-term future.

    The next surge in growth may be delayed if tough economic times continue, but over time the rise in births, producing a generation slightly larger than the boomers, will add to the work force, boost consumer spending and generate new entrepreneurial businesses. And even with 100 million more people, the United States will be only one-sixth as crowded as Germany is today.

    Immigration will continue to be a major force in U.S. life. The United Nations estimates that two million people a year will move from poorer to developed nations over the next 40 years, and more than half of those will come to the United States, the world’s preferred destination for educated, skilled migrants. In 2000, according to the Organisation for Economic Co-operation and Development, an association of 30 democratic, free-market countries, the United States was home to 12.5 million skilled immigrants, equaling the combined total for Germany, France, the United Kingdom, Australia, Canada and Japan.

    If recent trends continue, immigrants will play a leading role in our future economy. Between 1990 and 2005, immigrants started one out of four venture-backed public companies. Large American firms are also increasingly led by people with roots in foreign countries, including 15 of the Fortune 100 CEOs in 2007.

    For all these reasons, the United States of 2050 will look different from that of today: whites will no longer be in the majority. The U.S. minority population, currently 30 percent, is expected to exceed 50 percent before 2050. No other advanced, populous country will see such diversity.

    In fact, most of America’s net population growth will be among its minorities, as well as in a growing mixed-race population. Latino and Asian populations are expected to nearly triple, and the children of immigrants will become more prominent. Today in the United States, 25 percent of children under age 5 are Hispanic; by 2050, that percentage will be almost 40 percent.

    Growth places the United States in a radically different position from that of Russia, Japan and Europe. Russia’s low birth and high mortality rates suggest its overall population will drop by 30 percent by 2050, to less than a third of the United States’. No wonder Prime Minister Vladimir Putin has spoken of “the serious threat of turning into a decaying nation.” While China’s population will continue to grow for a while, it may begin to experience decline as early as 2035, first in work force and then in actual population, mostly because of the government’s one-child mandate, instituted in 1979 and still in effect. By 2050, 31 percent of China’s population will be older than 60. More than 41 percent of Japanese will be that old.

    Political prognosticators say China and India pose the greatest challenges to American predominance. But China, like Russia, lacks the basic environmental protections, reliable legal structures, favorable demographics and social resilience of the United States. India, for its part, still has an overwhelmingly impoverished population and suffers from ethnic, religious and regional divisions. The vast majority of the Indian population remains semiliterate and lives in poor rural villages. The United States still produces far more engineers per capita than India or China.

    Suburbia will continue to be a mainstay of American life. Despite criticisms that suburbs are culturally barren and energy-inefficient, most U.S. metropolitan population growth has taken place in suburbia, confounding oft-repeated predictions of its decline.

    Some aspects of suburban life—notably long-distance commuting and heavy reliance on fossil fuels—will have to change. The new suburbia will be far more environmentally friendly—what I call “greenurbia.” The Internet, wireless phones, video conferencing and other communication technologies will allow more people to work from home: at least one in four or five will do so full time or part time, up from roughly one in six or seven today. Also, the greater use of trees for cooling, more sustainable architecture and less wasteful appliances will make the suburban home of the future far less of a danger to ecological health than in the past. Houses may be smaller—lot sizes are already shrinking as a result of land prices—but they will remain, for the most part, single-family dwellings.

    A new landscape may emerge, one that resembles the network of smaller towns characteristic of 19th-century America. The nation’s landmass is large enough—about 3 percent is currently urbanized—to accommodate this growth, while still husbanding critical farmland and open space.

    In other advanced nations where housing has become both expensive and dense—Japan, Germany, South Korea and Singapore—birthrates have fallen, partly because of the high cost of living, particularly for homes large enough to comfortably raise children. Preserving suburbs may therefore be critical for U.S. demographic vitality.

    A 2009 study by the Brookings Institution found that between 1998 and 2006, jobs shifted away from the center and to the periphery in 95 out of 98 leading metropolitan regions—from Dallas and Los Angeles to Chicago and Seattle. Walter Siembab, a planning consultant, calls the process of creating sustainable work environments on the urban periphery “smart sprawl.” Super-fuel-efficient cars of the future are likely to spur smart sprawl. They may be a more reasonable way to meet environmental needs than shifting back to the mass-transit-based models of the industrial age; just 5 percent of the U.S. population uses mass transit on a daily basis.

    One of the urban legends of the 20th century—espoused by city planners and pundits (and a staple of Hollywood)—is that suburbanites are alienated, autonomous individuals, while city dwellers have a deep connection to their neighborhoods. As the 2001 book Suburban Nation puts it, once suburbanites leave the “refuge” of their homes they are reduced to “motorist[s] competing for asphalt.”

    But suburban residents express a stronger sense of identity and civic involvement than city dwellers. A recent study by Jan Brueckner, a University of California at Irvine economist, found that density does not, as is often assumed, increase social contact between neighbors or raise overall social involvement; compared with residents of high-density urban cores, people in low-density suburbs were 7 percent more likely to talk to their neighbors and 24 percent more likely to belong to a local club.

    Suburbs epitomize much of what constitutes the American dream for many people. Minorities, once largely associated with cities, tend to live in the suburbs; in 2008 they were a majority of residents in Texas, New Mexico, California and Hawaii. Nationwide, about 25 percent of suburbanites are minorities; by 2050 immigrants, their children and native-born minorities will become an even more dominant force in shaping suburbia.

    The baby boom generation is poised for a large-scale “back to the city” movement, according to many news reports. But Sandra Rosenbloom, a University of Arizona gerontology professor, says roughly three-quarters of retirees in the first bloc of boomers appear to be sticking close to the suburbs, where the vast majority reside. “Everybody in this business wants to talk about the odd person who moves downtown,” Rosenbloom observes. “[But] most people retire in place. When they move, they don’t move downtown, they move to the fringes.”

    To be sure, there will be 15 million to 20 million new urban dwellers by 2050. Many will live in what Wharton business professor Joseph Gyourko calls “superstar cities,” such as San Francisco, Boston, Manhattan and western Los Angeles—places adapted to business and recreation for the elite and those who work for them. By 2050, Seattle, Portland and Austin could join their ranks.

    But because these elite cities are becoming too expensive for the middle class, the focus of urban life will shift to cities that are more spread out and, by some standards, less attractive. They’re what I call “cities of aspiration,” such as Phoenix, Houston, Dallas, Atlanta and Charlotte. They’ll facilitate upward mobility, as New York and other great industrial cities once did, and begin to compete with the superstar cities for finance, culture and media industries, and the amenities that typically go along with them. The Wall Street Journal noted that commercial success has already turned Houston, once considered a backwater, into “an art mecca.”

    One of the least anticipated developments in the nation’s 21st-century geography will be the resurgence of the region often dismissed by coastal dwellers as “flyover country.” For the better part of the 20th century, rural and small-town communities declined in percentage of population and in economic importance. In 1940, 43 percent of Americans lived in rural areas; today it’s less than 20 percent. But population and cost pressures are destined to resurrect the hinterlands. The Internet has broken the traditional isolation of rural communities, and as mass communication improves, the migration of technology companies, business services and manufacturing firms to the heartland is likely to accelerate.

    Small Midwestern cities such as Fargo, North Dakota, have experienced higher than average population and job growth over the past decade. These communities, once depopulating, now boast complex economies based on energy, technology and agriculture. (You can even find good restaurants, boutique hotels and coffeehouses in some towns.) Gary Warren heads Hamilton Telecommunications, a call center and telecommunications-services firm that employs 250 people in Aurora, Nebraska. “There is no sense of dying here,” Warren says. “Aurora is all about the future.”

    Concerns about energy sources and hydrocarbon emissions will also bolster America’s interior. The region will be pivotal to the century’s most important environmental challenge: the shift to renewable fuels. Recent estimates suggest the United States has the capacity to produce annually more than 1.3 billion dry tons of biomass, or fuels derived from plant materials—enough to displace 30 percent of the current national demand for petroleum fuels. That amount could be produced with only modest changes in land use, agricultural and forest-management practices.

    Not since the 19th century, when the heartland was a major source of America’s economic, social and cultural supremacy, has the vast continental expanse been set to play so powerful a role in shaping the nation’s future.

    What the United States does with its demographic dividend—its relatively young working-age population—is critical. Simply to keep pace with the growing U.S. population, the nation needs to add 125,000 jobs a month, the New America Foundation estimates. Without robust economic growth but with an expanding population, the country will face a massive decline in living standards.

    Entrepreneurs, small businesses and self-employed workers will become more common. Between 1980 and 2000 the number of self-employed individuals expanded, to about 15 percent of the work force. More workers will live in an economic environment like that of Hollywood or Silicon Valley, with constant job hopping and changes in alliances among companies.

    For much of American history, race has been the greatest barrier to a common vision of community. Race still remains all too synonymous with poverty: considerably higher poverty rates for blacks and Hispanics persist. But the future will most likely see a dimming of economic distinctions based on ethnic origins.

    Since 1960, the proportion of African-American households at or below the poverty line ($22,000 annually for a family of four in 2008 dollars) has dropped from 55 to 25 percent, while the black middle class has grown from 15 to 39 percent. From 1980 to 2008, the proportion who are considered prosperous—households making more than $100,000 a year in 2008 dollars—grew by half, to 10.3 percent. Roughly 50 percent more African-Americans live in suburbs now than in 1980; most of those households are middle class, and some are affluent.

    The most pressing social problem facing mid-21st-century America will be fulfilling the historic promise of upward mobility. In recent decades certain high-end occupation incomes grew rapidly, while wages for lower-income and middle-class workers stagnated. Even after the 2008 economic downturn, largely brought on by Wall Street, it was primarily middle-class homeowners and jobholders who bore the brunt, sometimes losing their residences. Most disturbingly, the rate of upward mobility has stagnated overall, as wages have largely failed to keep up with the cost of living. It is no easier for poor and working-class people to move up the socio-economic ladder today than it was in the 1970s; in some ways, it’s more difficult. The income of college-educated younger people, adjusted for inflation, has been in decline since 2000.

    To reverse these trends, I think Americans will need to attend to the nation’s basic investments and industries, including manufacturing, energy and agriculture. This runs counter to the fashionable assertion that the American future can be built around a handful of high-end creative jobs and will not require reviving the old industrial economy.

    A more competitive and environmentally sustainable America will rely on technology. Fortunately, no nation has been more prodigious in its ability to apply new methods and techniques to solve fundamental problems; the term “technology” was invented in America in 1829. New energy finds, unconventional fuel sources and advanced technology are likely to ameliorate the long-prophesied energy catastrophe. And technology can ease or even reverse the environmental costs of growth. With a population of 300 million, the United States has cleaner air and water now than 40 years ago, when the population was 200 million.

    The America of 2050 will most likely remain the one truly transcendent superpower in terms of society, technology and culture. It will rely on what has been called America’s “civil religion”—its ability to forge a unique common national culture amid great diversity of people and place. We have no reason to lose faith in the possibilities of the future.

    This article originally appeared in Smithsonian Magazine

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

    Photo by clevercupcakes