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  • Deindustrialization, Depopulation, and the Refugee Crisis

    The refugee crisis facing Western nations has begun to peak both demographically and politically.  The United Nations has reported that more than 6.5 million Syrians have fled to neighboring countries and Europe, and even nations that until recently welcomed refugees are frantically trying to change immigration policy or protect borders. In contrast, as migration has swelled the population in some places, in others, like the Rust Belt of the United States, depopulation undermines future economic development.  Some have begun to ask whether population trends can or should determine policy. The answer is yes.

    To understand the significance of depopulation in the Rust Belt, imagine that a plague hit the Midwest and four million people had vanished. What would be the economic consequences for the region, its institutions and for individuals?  Deindustrialization has operated much like a plague, and just as with a plague, the long term social and economic costs are substantial. The region can’t “just get over it.”  Deindustrialization, and the depopulation associated with it, continues to be a drag on the region both economically and socially.

    For example, in Youngstown, Ohio, steel mills began closing almost 40 years ago.  The city’s population is now around 62,000, a decline of more than 50 percent since the 1970s.  A community once known at the “City of Homes” now has more than 4000 vacant properties. Youngstown’s economic redevelopment program has largely failed. Attempts at economic redevelopment around prisons, fracking, 3-D printing and casinos have had only limited success, at best. They seem more like examples of the economics of desperation than serious efforts to revitalize the local economy. Appeals by business and government leaders to redefine this as a  “shrinking city” and exhortations for the community to exhibit “adaptive resilience” have proven shallow.  With little economic growth, such approaches feel too much like cruel optimism.

    Youngstown mayor John McNally has said that his most important task is to stop the depopulation.  A city like Youngstown needs to stop the hemorrhaging and get an infusion of energy.  Would the city gain by encouraging refugees to move to Youngstown? Other communities have tried this approach, encouraging immigrants to move to depopulated areas and gaining new economic activity in the process. Weather-challenged Winnipeg, the capital of Manitoba, has taken advantage of the Manitoba Provincial Nominee Program, which “selects applicants who demonstrate they have the potential and the desire to immigrate and settle themselves and their families in the Canadian province of Manitoba.” Immigrants may apply through different categories such as General, Family Support, International Student, Employer, Strategic Initiative, or Business Immigration. An Economic Development study reports that Winnipeg’s metropolitan population has grown to 780,000, 100,000 higher than earlier projections. The population increase includes about 85,000 immigrants. Between 2009-2014, the local economy stabilized with unemployment below the national average and higher labor force participation and wage growth. In 2014, the city was touted by KPMG as the No. 1 low cost manufacturing location in aerospace, chemical, electronics assembly, pharmaceuticals and telecommunications equipment in North America.

    On a smaller scale, some locations have also stemmed depopulation through the employment of existing ethnic enclaves as portal communities. Even in places like deindustrialized metro Detroit, depopulation was offset by an influx of Mexican and Middle Eastern immigrants into existing enclaves, transforming areas that were thought of as ghost towns. While traditional immigrant/refugee communities, like those in the Detroit Metro region were quite large, much of the new resettlement has been more geographically diverse and dispersed than it once was. For example, over 70,000 Bosnian refugees have resettled in St. Louis within the region over the last 20 years.

    The New York Times reported in 2014 that new immigrants are more often to be found in midsize cities, like Dayton, Ohio than in New York, Chicago, and other large cities.   Like Youngstown, Dayton had lost over 40% of its population.  But city officials embraced immigration by establishing a “Welcoming Dayton” plan in 2011. The plan encouraged new immigrants and refugees to relocate in this Southwestern Ohio community and developed support groups to help newcomers adjust to their new community.  Most of the new growth in Dayton has been the result of the relocations and the city is in the process of accelerating the plan.

    Another example is Utica, New York. In 2002, this deindustrialized city established the Mohawk Valley Resource Center for Refugees (MVRCR). Over 10,000 immigrants, largely from Bosnia and Vietnam, relocated to the Utica Area.  The 2012 U.S. census reports that 17.6 percent of Utica’s population was foreign born and 26.6 could speak a language other than English. NPR reported that the resettlement succeeded in part because Utica had low housing costs and many low-skilled jobs that were unfilled as result of depopulation. Refugees found jobs as meat cutters, greenhouse workers, and nursing home attendants. Some saved enough money to go into business themselves. They bought low-priced homes and rehabbed them, began to pay taxes, and purchased goods and services. No doubt, the refugees initially generated costs to taxpayers in terms of housing subsidies, Medicaid, Welfare, and education, but over time, repopulation stemmed depopulation and provided a glimmer of hope for economic revitalization.

    Winnipeg, Dayton, and Utica are examples of small-scale attempts at repopulation using relatively small-scale government initiatives and ethnic portal communities. But the scale of today’s refugee crisis suggests the need for larger scale efforts, including, perhaps, a national program.  For example, the German government has developed an administrative formula that distributes refugees and asylum seekers among the 16 German states.  According to Thomas Greven, a political scientist at the Free University of Berlin, the distribution plan is based primarily on population and economic data, with the most refugees assigned to the depopulated parts of East Germany. The hope is that these new arrivals will develop their own micro-economies that will contribute to the revitalization of the region.

    No doubt, the surge in refugees in Germany has caused resentment toward the policy and government in the short term.  Yet the German government has announced its willingness to accept 800,000 new refugees largely from the Syrian war, promised greater economic aid to state and local communities, and enlisted German companies to cope with the influx of refugees. While the German efforts reflect ethical and moral commitment, there is more to the story. The German population has been dropping for some time. Its population has become older and new birth rates are among the lowest in the world.  The German government and business leaders understand that “demographics are destiny,” and if it is to be a leader in economic growth it needs not only more people but also younger people – like the refugees.

    Will any large immigration/refugee repopulation policy be considered in the US? It does not appear so given some recent attempts – by localities, states, and even the U.S. Congress — to discourage immigration and refugees. But the Federal government has final authority over immigration policy matters. If the US were to follow Germany’s approach and offer relocation incentives, Rust Belt communities have the infrastructure and housing to accommodate many refugees. In turn, the new immigrants could establish microeconomic communities, compliment established markets, invest earnings and consume in the local economy and become a source for new tax revenue.

    No doubt, this will be a political challenge given the current zeitgeist. But such a policy would be moral and ethical and in the best traditions of America. It could also help boost the economies of cities that are still struggling to recover from deindustrialization.  One thing that is for certain, if St. Louis can resettle 70,000 Bosnians in a15 year period, the US can certainly accommodate more than the 10,000 Syrian refugees currently slated for resettlement, especially in the deindustrialized and depopulated in the Rust Belt.

    John Russo is a visiting fellow at Kalmanovitz Initiative for Labor and Working Poor at Georgetown University and at the Metropolitan Institute at Virginia Tech. He is the co-author with Sherry Linkon of Steeltown U.S.A.: Work and Memory in Youngstown (8th printing).

  • Fostering a Climate of Intolerance

    The Paris Climate Conference, convening this week, takes place in the very place where, arguably, the most dangerous exemplar of hysteria, the Islamic jihadi movement, has left its bloody mark. Yet the think tank mavens, academics, corporate shills and endless processions of bureaucrats gather in the City of Light not to confront the immediate deadly threat, but to ramp up their own grisly scenarios and Draconian solutions.

    Welcome to the age of hysteria, where friends and foes, and even those who blissfully talk past each other, whip themselves into an emotional frenzy that bears no discussion, debate or nuance. Rather than entering a technological age of reason, we seem to lurching towards a high-tech middle ages, where warring bands – greens, jihadis, libertarians, social conservatives, nationalists – immerse themselves not in intellectual competition but, inflating their own individual outrage. In this environment, exaggeration and hysteria are weapons of recruitment, while opposition is met with demeaning attacks, potential imprisonment and, at the worst, vicious acts of violence.

    Establishment’s hysteria

    Amid the recent carnage in Paris – not to mention bloodshed in the Sinai, Beirut and Mali – one would expect the world’s economic and political leadership to focus on that clear and present danger presented by Islamic extremism. But for years, much of the world’s power structure, particularly on the Left, has convinced itself that climate change represents the greatest challenge to mankind, rather than more immediate threats such as terrorism, poverty, deforestation and stagnating global economies.

    For some, climate change has become the default cause of virtually everything, even the Syrian civil war. However much dry conditions may have contributed to the crisis, this assertion ignores the fact that people have been killing each other in the Middle East from time immemorial and that droughts have been a constant threat in that region, as here in California, since before biblical times.

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo: Entrance to Le Bourget UN climate Conference COP21 by Flickr user Takver

  • White House Economist Links Land Use Regulations: Housing Affordability and Inequality

    There is a growing body of research on the consequences of excessive land use regulation. The connection between excessive land use regulation and losses in housing affordability, has been linked to  the doubling or tripling of house prices relative to incomes in places as diverse as Hong Kong, the United States, Canada, Australia, New Zealand and the United Kingdom.

    More recently, research has identified serious consequences to national economies, beyond the fact that many households cannot afford to live, much less buy a home in the metropolitan areas with excessive land use regulation. Because residents such area have less income to spend due to the higher house costs, job creation and economic growth are hobbled. Rising inequality is also being cited as a consequence of excessive land use regulation.

    The White House Economic Chairman’s Address

    The issue has caught the attention of the White House (See: “Why White House Economists Worry about Land Use Regulations”). The Chairman of the White House Council of Economic Advisers, Jason Furman delivered an address on the subject to a conference hosted by the Urban Institute and Core Logic in Washington on November 20 (See: Barriers to Shared Growth: The Case of Land Use Regulation and Economic Rents).

    Furman starts with the fundamentals: “Basic economic theory predicts—and many empirical studies confirm—that housing markets in which supply cannot keep up with demand will see housing prices rise.”

    Furman cites research by Christopher Mayer of the University of Pennsylvania and C. Tsuriel Somerville of the University of British Columbia who “conclude that land use regulation and levels of new housing construction are inversely correlated, with the ability of housing supply to expand to meet greater demand being much lower in the most heavily regulated metro areas.” (see Note 1.)

    The Association with Deteriorating Housing Affordability

    Furman told the conference that: “While land use regulations sometimes serve reasonable and legitimate purposes, they can also give extranormal returns to entrenched interests at the expense of everyone else.” He suggested that: “There can be compelling environmental reasons in some localities to limit high-density or multi-use development. Similarly, health and safety concerns—such as an area’s air traffic patterns, viability of its water supply, or its geologic stability—may merit height and lot size restrictions.”

    But, according to Furman, excessive land use regulation can severely impact the housing market:

    "…zoning regulations and other local barriers to housing development allow a small number of individuals to capture the economic benefits of living in a community, thus limiting diversity and mobility. The artificial upward pressure that zoning places on house prices—primarily by functioning as a supply constraint—also may undermine the market forces that would otherwise determine how much housing to build, where to build, and what type to build, leading to a mismatch between the types of housing that households want, what they can afford, and what is available to buy or rent."

    In effect, excessive land use restrictions feed upon themselves to exacerbate the losses in housing affordability (Note 2):

    "… some individuals are priced out of the market entirely, and homes in highly zoned areas also become even more attractive to wealthy buyers. Thus, in addition to constraining supply, zoning shifts demand outward, exerting further upward pressure on prices…"

    Broader Consequences: Rising Inequality and Labor Mobility Stagnation

    But the impacts go well beyond housing affordability losses. Furman expresses concern that the housing affordability losses in some cities make it difficult for households to move from elsewhere to take advantage of higher paying positions. He notes the impact of artificial constraints on housing supply as hindering mobility and suggesting that:

    "Zoning and other land use regulations, by restricting the supply of housing and so increasing its cost, may make it difficult for individuals to move to areas with better-paying jobs and higher-quality schools. Barriers to geographic mobility reduce the productive use of our resources and entrench economic inequality."

    He elaborated on this point:

    "Reduced labor mobility may be a contributing factor to both increased inequality and lower productivity growth in the United States. This reduction in mobility has manifested itself in a wide variety of ways, including the fact that individuals are less likely to change jobs, to switch occupations or industries, or to move within States or across State lines. Businesses are creating and destroying jobs at a lower rate and fewer new businesses are being formed, both of which could be causes or consequences of a decline in labor mobility."

    Part of the key to improving economic growth is greater job mobility.

    "…increasing mobility ‘is going to be an important part of the solution of increasing incomes and increasing incomes across generations,’"

    The greater restrictions imposed on mobility by excessive land use regulation particularly injures middle income and lower income households.

    "But when zoning restricts the supply of housing and renders housing more expensive—even relative to the higher wages in the high productivity cities—then workers are less able to move, particularly those who are low income to begin with and who would benefit most from moving. As a result, existing income inequality across cities remains entrenched and may even be exacerbated, while productivity does not grow as fast it normally would."

    Economic Growth and Distributional Consequences of Excessive Regulation

    Mr. Furman cited ground-breaking research on the economic and distributional effects of excessive land use regulation. This includes:

    Research by Raven Saks of the Federal Reserve Board, which “shows that an increase in labor demand in high regulation cities leads to a smaller increase in the housing stock, greater house price appreciation, and lower employment growth than in low regulation cities.”

    Research by Peter Ganong and Daniel Shoag of Harvard University finding that the historic convergence of incomes between higher and lower income areas of the US has declined substantially. Furman said “One story for this lack of any convergence is that only high-income workers can afford to relocate to the high-productivity cities that have tight land use regulations, which reinforces existing inequality.”

    Research by Chang-Tai Hseih of the University of Illinois, Chicago and Enrico Moretti of the University of California, Berkeley estimating a nearly 10 percent loss in national output from the reduced job mobility (Furman characterizes this modeled estimate as “tentative.”) Furman reported that the researchers attributed most of this loss to restrictions on housing supply.

    Furman also expresses concern about intergenerational equity losses and the fact that over the past four decades land use regulations, along with larger income gains for the more affluent: “have worked toward pricing middle- and lower-income families out of the communities with the best schools.” In fact, in the major metropolitan areas, excessive land use regulations started four decades ago in California and Oregon, but with effects generally similar to what Furman suggests.

    Toward Relief for Future Generations

    The answer, according to Furman is better policies:

    "Thus, within the broader context of declining migration rates, divergence across labor markets, and worsening housing affordability, pursuing more prudent zoning policies could also reduce inequality that is entrenched across generations."

    Furman also notes the importance of studying restrictions, such as excessive land regulation because such an effort can: “…make the economy more competitive by artificial barriers, thus improving both the distribution of income and the productive capacity of the economy.”

    Such improvements are genuine concerns. A year ago, the G-20 group of nations, meeting in Brisbane, adopted a communiqué declaring “better living standards” as their highest priority. They also committed to eradicating poverty. However, since last year, economic growth has been disappointing, as the post-Great Recession recovery appears stalled in second gear, at best. Yet despite the weak economy, housing affordability has deteriorated even more sharply in G-20 member states Australia, Canada, China and the United Kingdom.

    As the US research indicates, real household income growth can be severely hobbled if much or all of the modestly rising incomes is consumed by extraordinarily rising housing costs. This also does nothing to reduce, much less eradicate poverty. Governments from Sacramento and Olympia to Sydney and London should strive to improve the situation by reforming counterproductive and economically destructive land use regulations.

    Note 1: The academic references in this article are detailed in longer discussions in our new reports, A Question of Values: Middle-Income Housing Affordability and Urban Containment Policy, and Putting People First: An Alternative Perspective with an Evaluation of the NCE Cities “Trillion Dollar” Report.

    Note 2: In a footnote to the speech transcript, Furman notes that housing housing affordability requires comparison to incomes rather than simple house price comparisons: “Yet, affordability measures are relative to wages in an area not levels of house prices across cities.” This required nexus to income is not always evident in research on housing affordability.

    Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and principal of Demographia, an international public policy and demographics firm.He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Photo: Entering Oregon sign

  • Jerry Brown’s Insufferable Green Piety

    At the site of real and immediate tragedy, an old man comes, wielding not a sword to protect civilization from ghastly present threats but to preach the sanctity of California’s green religion. The Paris Climate Change Conference offers a moment of triumph for the 77-year-old Jerry Brown, the apogee of his odd public odyssey.

    Jerry Brown has always been essentially two people—one the calculating, Machiavellian politician, the other the dour former Jesuit who publically dismisses worldly pleasures for austere dogma. Like a modern-day Torquemada, he is warning the masses that if they fail to adhere in all ways of the new faith or face, as he suggested recently humanity’s “extinction.”

    Brown is important because many other green cheerleaders like Al Gore grate on the public, in part because of rampant greed and a penchant for unsupportablepredictions. In contrast, Brown presents, with some justification, the very model of enlightened leadership and smart management, certainly in comparison with the ideologues and public employee pawns who dominate his party, and the blatant wealthy hypocrites who rule the green universe.

    Increasingly, Brown has become the patron saint of climate change, while at the same time exposing the effort’s flaws and contradictions most clearly. Railing against the satanic greenhouse gases, Brown, one supposes unwittingly, seems unconcerned he is waging what amounts to a war against the state’s own middle and working classes. His intolerance of dissent—albeit less extreme than some—reflects the current trajectory of environmentalism, which increasingly seeks to silence and even criminalize those who dispute their analyses and prescriptions.

    Like the Spanish father of the Inquisition, Brown has it in for anyone who dissents from his “God is not mocked,” as he suggested recently, attacking critics of his policies as “falsifying the scientific record,” something climate change advocates have also been caught doing on more than one occasion. Brown dismisses allclimate skeptics, even those who admit some carbon-caused warming,  as “a well funded cult.”

    Like a religious adept, Brown shows his need to link everything to one sin—greenhouse gas emissions—to explain virtually everything from wildfires to the current drought on climate change, although with little support from scientists who study such things. As was common in the worst aspects of the medieval Catholic Church, one increasingly cannot dissent in any way from revealed doctrine without being essentially evil.

    Between Image and Reality

    In Paris, Brown hopes to present himself as the great green success story, leader of an economy that has thrived despite some of the world’s most draconian climate change measures. And he has something of a case since California, after suffering greatly in the recession, has finally recovered its lost jobs and has bolstered its critical role as the dominant technology power on the planet.

    For many progressives, California represents “a beacon of hope.” Its “comeback” has been dutifully noted and applauded by left-wing economist Paul Krugman, and Michael Kinsley and the Washington Post’s Chris Cilizza have even suggested that Brown should run for president—at the ripe age of 77.

    These fans miss a big part of the reality. Outsiders think of California as a prosperous place that mints billionaires, but overall the state’s economic recovery has done little for many, if not most, state residents. Even with the boom in Silicon Valley, roughly one in three Californians live check to check, the state hashigher rate of poverty than Mississippi, as well as one-third of the nation’s welfare recipients. Among the emerging Latino majority, a prime Brown constituency, the state’s cost-adjusted poverty rate is more than 33 percent, compared to just 22.7 percent in Texas, a state often derided as unenlightened and cruel.

    During this “boom,” most California blue-collar workers in farming, fishing, and forestry have experienced actual average wage decreases. Employment in fields such as construction and manufacturing remain well below their 2007 levels. Much of this has to do with environmental regulation, which has raised energy costs almost twice those of nearby competitors and also helped raise housing prices to an unsustainable level.

    Once the beacon of opportunity, California is becoming a graveyard of middle-class aspiration, particularly for the young. In a recent survey of states where “the middle class is dying,” based on earning trajectories for middle-income cohorts, Business Insider ranked California first, with shrinking middle-class earnings and the third-highest proportion of wealth concentrated in the top 20 percent.

    Most hurt, though, are the poor. California is home to a remarkable 77 of the country’s  297 most “economically challenged,” cities based on levels of poverty and employment, according to a recent USC study; altogether these cities have a population of more than 12 million. Some stressed cities exist cheek-to-jowl with the state’s uber-rich—Oakland, Los Angeles, as well as Coachella, near Palm Springs. Most others are in the poorer, more heavily Latino interior, places like Riverside, Stockton, and Vallejo. Journalists who come to California to praise the governor may think it’s still “California Dreamin’” but for all too many, particularly away from the coast (PDF), it’s more like The Grapes of Wrath.

    The Making of a Modern Medievalist

    Of course, there’s a long history of such bifurcated society, where people tend to stay in their class and the poor depend largely on handouts from their spiritual “betters.” It’s called feudalism.

    In many ways, Jerry Brown is a perfect medievalist—the son of a self-made man, a person who largely inherited his position. Without the legacy of his father, Edmund G. “Pat” Brown, a natural politician and arguably the greatest governor in the state’s history, it’s unlikely the shy, awkward, although unquestionably bright kid would have been elected the first time in his mid-thirties.

    Brown came to politics bathed not in the practicum of politics but in theology. As a seminarian, he imbibed the Jesuitical approach—highly intellectualized, hierarchical, and accepting of class distinctions. Although he occasionally dabbled in populist politics, particularly in his presidential runs, Brown’s achievement has been to undermine not just the Reaganite regime but also the pro-growth progressive structure left behind by his father and earlier California governors.

    Brown’s acuity has often been on target, as, for example, when he took on the encrusted bureaucracy at the University of California and inside state government. But Brown’s maverick approach also revealed a streak that reflected a harshness toward those who were weaker, including the poor. In his first term, Brown’s callous treatment of the mentally ill left 30,000 mental patients in worsening conditions in inadequate nursing facilities. As the Los Angeles director of mental health told me at the time, under Reagan there was “genuine concern for people,” while under Brown he didn’t “see much concern for people at all.”

    He came into office, recalled top aide Tom Quinn, “questioning the values of the Democratic Party” and rejecting the “build, build, build thing” of his father. Like the 15th century Florentine Catholic monk Girolamo Savonarola, he came to Sacramento, in part, to rid it of suberbia and luxuria. Most important, he did not restart the infrastructure building, most portentously for water storage, that marked his father’s regime; the severity of the drought and the awful condition of the state’s roads are, to some extent, his legacy.

    Brown’s initial politics were built around three principles—“serve the people, save the earth, and explore the universe.” Some, such as farmworkers, owe him much. But the biggest winners under Brown were the well-financed green lobby and public employee unions have become so powerful that that replaced the coalition of developers, farmers, and industrialists who had accepted, and often bankrolled, his father.

    In recent years, Brown, after being praised for his moderation in his first four years as second time governor, has become more “crotchety,” according to the Los Angeles Times’ George Skelton. He has insisted on funding his favorite project, the much maligned “bullet train,” even though many on the left, including Mother Jones, have identified it not as an environmental benefit but a colossal waste of time and money.

    In contrast, on most everything else, Brown leans toward austerity—he even reveals a fondness for the ration cards used during World War II. Yet surprisingly, Brown, the supposed ascetic, appears increasingly comfortable with his own wealth. He has speculated freely in Bay Area real estate and stocks, essentially creating a multimillion-dollar estate that, as the San Jose Mercury put it kindly, “belie [the] monastic image.” Recently he shocked his own green supporters by having a state agency perform a detailed analysis of the oil, gas, and mineralresources on his family’s 2,700-acre Northern California ranch, a service not readily available to other mere mortals.

    As for the poor left behind in California’s recovery, this, Brown insists, is not due to policy failure but because the state is an irresistible “magnet” for the masses.

    The High Priest of the Oligarchy

    Early on Brown cleverly cultivated the emerging tech oligarchy in Silicon Valley. This has created a new class of major donors who, along with the unions and Hollywood, have financed his political re-ascendency.

    The oligarchs seem kindred souls for Brown, with little patience for less advanced beings. He also knew that their success has allowed him to show economic gains without having to concede to the regulatory concerns of more traditional industries. In the new Silicon Valley, most of the “dirty work” is shoved off to other more benighted states, or abroad; regulatory overreach poses only limited problems. For his part, Brown sees the oligarchs as the state’s economic foundation. “We’ve got a few problems, we have lots of little burdens and regulations and taxes,” he said recently, “but smart people figure out how to make it.”

    Brown’s Bay Area connection is helped by the fact that the venture and tech firm oligarchy often share his climate concerns. He has further tightened this alliance by lavishing enormous subsidies for often dodgy, expensive renewable energy schemes backed by companies such as Google and by many among the venture capitalist elite.

    Ironically, none of Brown’s moves will, by themselves, have any demonstrable impact on climate. California is too small, too temperate, and, at this stage, too de-industrialized to make a difference. Indeed, as one recent study found, California could literally disappear tomorrow with virtually no effect on the climate. Perhaps less recognized, its efforts to reduce emissions have accounted for naught, since so much industry and so many people—some 2 million in the last decade—have taken their carbon footprint elsewhere, usually to places where climate and less stringent regulation allow for greater emissions. Some states, rather than embrace Brown’s formula and seeing an opportunity to score, have detached themselves from renewable mandates entirely.

    And now the world

    So why the dogged insistence on draconian policies? It’s very much for the same reason people take priestly vows, or why penitents whip themselves: moral posturing before the rest of the world and, for politicians, the prospect of attracting the adoring masses (or at least the media). President Obama looks to California policies for his future climate policies. On this issue Brown is the rock star, and will be in Paris, cool again after all these years.

    Brown’s green religion now has a most powerful ally, the leading Jesuit on the planet, Pope Francis. This alliance offers something of a religious redemption for Brown, a former seminarian who has rejected most traditional Catholic teachings on such things as gay marriage, abortion, population control, and, most recently,euthanasia.

    In Paris, Brown’s claims of economic infallibility should be questioned particularly among leaders of developing countries. Some 3 billion people suffer from pollution created by burning wood, coal, or dung. Some 4.3 million die annually from the resultant indoor pollution compared to 250,000 deaths that might be assigned to climate change by 2050. For many, fossil fuels represent a lifesaver today. To offer these people expensive and inefficient solar panels instead of basic necessities, as economist Bjorn Lonborg has suggested, represents nothing more than “inexcusable self-indulgence.”

    Some developing countries are making their intentions clear. Indian Prime Minister Narendra Modi has thrown out Greenpeace for agitating against coal mines in his energy-starved country. China, whose world-leading emissions are now almost twice those of the U.S., recently admitted to burning 17 percent more coal than previously estimated. No doubt they will happily wink and nod their assent to a vague green agreement while Western countries, following Brown, Obama, and the Pope, adopt ever stricter regulations. By the time we get to 2030, when China might begin reducing emissions, the West itself may be so weakenedeconomically that it won’t be able to question anything Beijing wants to do anyway.

    Russia and virtually the entire Middle East also are not likely to give up on fossil fuels, which is the only thing that makes the world pay attention to them. Rather than use our energy boom to create leverage against these autocracies, Brown and his confederates are pushing policies that consequently make them more influential, also allowing them to finance and arm terrorists, whether ISIS, al Qaeda, or theocratic Iran and their satraps.

    A decade from now, the futility and wasted economic potential of this posturing will be clear. What could have been accomplished, at least initially, by replacing coal with natural gas and the careful expansion of nuclear power, will instead lead to a lower quality of life for all but the rich in the West, with perhaps worse ill-effects elsewhere. But by then Brown will likely have faded from the scene, although he may manage to get his wife, former Gap attorney Ann Gust Brown, elected to succeed him.

    What will be Brown’s main legacy? A more environmentally pure but severely bifurcated California and, if he and his compatriots have their way, an accelerating decline of the Western world and arguably the stagnation of the entire world economy. But Brown and his crony capitalist and priestly friends will be happy. They may have messed up the world, but they will always have Paris.

    This piece first appeared at The Daily Beast.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Facebook photo by BigStockPhoto.com.

    Photo: Troy Holden

  • How Portland Is a Lot Like Texas

    One theme I always hammer is that you have to look at proposed policy solutions in the context of the area where you want to apply them.

    A great example of this is Portland’s Urban Growth Boundary (UGB). The UGB, a policy that limits suburban development outside of a line drawn around the Portland region, is widely admired and perhaps even seen a type of holy grail policy in terms of preventing sprawl.

    Obviously restricting development outside the UGB raised demand for land inside of it and thus housing prices. Portland’s median home price multiple – that is, the median home price divided by the median household income – is 4.8. The average household in Portland would need to spend 4.8 times its annual income to buy a house there.  This compares with 2.9 in Kansas City, 3.0 in Columbus, and 3.9 in Austin.

    So Portland is less affordable than many similar sized housing markets around the US.

    But despite this, Portland remains the most affordable major West Coast metro area.  That’s because housing prices in other major coastal cities are even higher, including Seattle (5.2), Los Angeles (8.0), San Diego (8.3), the Bay Area (9.2), and Vancouver (10.6).

    So even while its home prices have risen, Portland remains the cheapest major city to live apart from Sacramento (4.7).  That is, even with the UGB Portland has a big cost advantage over its regional competition. In short, it’s cheap.

    In this way, the attraction of Portland is a lot like Texas. Its draw is more a cost arbitrage play for people leaving San Francisco than an upgrade to superior urbanism from the interior. As it happens, California refugees make up the bulk of the net migrants into Portland.

    The Texas comparison is relevant on the tax front too. Portland is one of the rare places you have the potential for double border tax arbitrage. Washington state has no income tax and Oregon has no sales tax. While only a limited number of people can take advantage of both (you have to both live and work in Washington to avoid the income tax), being able to zero out one or more major tax categories is a win.

    This is not to say that Portland is a lousy place to live. It’s fantastic as near as I can tell. The point is that Portland was able to put in place policies to create good enough urbanism to lure a certain number of San Franciscans without compromising its competitive position because it was in a high cost neighborhood.

    The story would be very different for a place like Oklahoma City or Columbus. These cities are in low cost regions, and if they undertook policies that raised their housing prices, they’d rapidly find themselves the most expensive market in their area.

    Cloning Portland’s UGB is simply not a viable policy for most interior cities, even if they had the political alignment to make it happen.

    There are many policies that can be broadly implemented across cities. The general principle is to first understand why a policy worked in the original context, then ask whether it is applicable to the target context, and if so how to implement it most successfully.

    Aaron M. Renn is a senior fellow at the Manhattan Institute and a Contributing Editor at City Journal. He writes at The Urbanophile, where this piece originally appeared.

  • The Detached iHome of the Future

    Will new American housing growth continue to reflect old methods, or will the land development, home building, and consulting industry retool, re-educate, and collaborate to create a new era of more attractive, livable, efficient, and environmentally responsible growth at attainable prices?

    Here is why it would be so significant to make a change: The US Department of Housing has determined that 620,000 new single family homes were completed in 2014, averaging 2,453 square feet on an 8,689 square foot average lot. The average price was $345,800, with a national total of $214.4 billion.

    Those post-recession 620,000 homes have used up much of the existing empty suburban lots from the recession. Assume that 30 percent of a development is consumed by infrastructure, and that typical 8,689 square foot lot represents about 12,400 square foot of growth. That means we have newly-developed — or recently consumed — about 275 square miles of construction, using lot stock. In other words, now that the existing lots are consumed, future growth will annually consume more than 275 square miles of land.

    That development, at $214 billion dollars in home value, is the equivalent of a $650 iPhone 6s for every US resident. Unlike the iPhone that is assembled in a minute, though, a single family home is built by craftsmen over many months in a development that takes years to go through the approval and construction process.
    An iPhone is a marvel of technology, representing billions in research and development, and requiring close communication and collaboration between professionals in engineering, materials, software, and manufacturing.

    The design for the $345,800 home and its neighborhood progress at a snail’s pace. Both floor plans and site plans are rooted in the 1960s, with civil engineering standards from the 1950s handbook. The professionals involved in land development design and construction — surveyors, planners, civil engineers, and architects — are a most un-collaborative group, fostering this stagnation.

    Yet today, innovations in both technology and methods can empower the consulting industry to create neighborhoods and housing that matches the progress of other industries, like those that are creating mobile phones, cars, and medicines. Savvy developers and home builders are beginning to break free, setting new trends by merging planning, architecture, and engineering.

    Of those 620,000 homes, it’s likely that only a few custom built ones had a tight coordination between the room function, the wall and window locations, and the connection to the surrounding viewsheds.

    When land is ‘subdivided,’ the streets, and afterwards the lot lines, are all set to regulatory minimums. This method ‘stretches’ the public street to create the greatest volume of street and the smallest area available for lots. The compression of space forces cookie-cutter, mundane growth. Architectural design was traditionally an afterthought to the subdividing process.

    To develop alternative approaches, we used the ‘down-time’ during the recession to research and develop new geometric relationships between lot and home, as well as to develop better spatial analysis and design software to accomplish ‘Architectural Blending’ for the mass market single family home.

    We saw how advancements in land planning have been made possible by merging engineering and surveying geometry with organic site layout methods. This combination has proven to significantly reduce infrastructure (street-utility length), while increasing average lot area. Redistributed space allows for more flexible designs.

    The merging of interior and exterior spaces, ‘Architectural Blending,’ was first implemented in a design idea coined as ‘BayHomes.’ The term came from the bay-like shape of common open spaces that undulated between home fronts. In 1999, Professional Builder Magazine called BayHomes “New Urbanism with a View.”

    BayHomes are single family detached homes set within townhome zoning, thus, they are in association-maintained environments. They were first implemented in 1998 on The Greens of Hutchinson, Minnesota, offering production housing that coordinated living spaces within the home with adjacent spaces and views, and for the first time merged planning and architecture at attainable prices. Since The Greens, there have been thousands of BayHome designs that have refined the method.

    BayHomes are positioned to provide a panoramic view from the focal point, usually the kitchen, to common spaces adjacent to the home front. BayHomes hide the garages, which makes them ideal along arterial streets to create a ‘village-like’ appearance. By eliminating most of the public street right-of-ways, compared to traditional single family homes the BayHome can achieve duplex density with plenty of landscaped open space providing a lower density feel.

    BayHomes serve a specific consumer who would have otherwise bought a duplex or townhome. The large scale housing market has been and will remain single family homes.

    The next problem became: How to duplicate advantages of a BayHome in a single family home which must front a lot on a public street? The challenge to increase available space was solved through a design technique called coving. A rectangular lot is simple: You have few options — no side views and limited front and rear yards space — whereas ‘coving’ produces a larger, non-rectangular lot, yet still maintains the density of the rectangle.

    When we looked at some traditional designs that would fit on higher density narrow lots, we saw typical floor layouts where — for example — 8.1 percent of the home was consumed by the hallway. If the home cost $200,000, then $16,000 was the cost of the hall. By merging planning and architecture, new models are more efficient within higher density single family-home neighborhoods, reducing or eliminating these common forms of waste within and around the home.

    With a new era of design we can solve problems like these, as well as critical issues. The problem with increased density is the compaction of space, sacrificing livability, efficiency, curb appeal, views, and environment. Some may argue that the environment is not harmed by increased density, ignoring that while the lot and home size is reduced, streets, walks, garages, and other infrastructure elements remain the same size as larger lots. Thus, the ratio of housing footprint to paved areas serving the home increases, and ‘organic’ (landscaped) space is sacrificed.

    As the home buying public becomes aware that it’s possible to have a home of significantly higher value than the typical monotonous design rooted in the 1960s, and that it can be located in a neighborhood of greater character, they will demand change with their pocketbooks. They will be able to look at the streetscapes of nearby cookie cutter subdivisions, and see that neighborhoods of the same density can have a dramatic increase in function, curb appeal, views, safety, efficiency, connectivity, and perception of space. The differences will be as dramatic as comparing a dial phone of the 1960s to the iPhone of today.

    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.

    Aerial view of Transoma, a community planned on the principles of coving, from the author.

  • Tech Titans Want to be Masters of All Media We Survey

    The rising tech oligarchy, having disrupted everything from hotels and taxis to banking, music and travel, is also taking over the content side of the media business. In the process, we might see the future decline of traditional media, including both news and entertainment, and a huge shift in media power away from both Hollywood and New York and toward the Bay Area and Seattle.

    This shift is driven by several forces: the power of Internet-based communications, the massive amounts of money that have accumulated among the oligarchs and, perhaps most important, their growing interest in steering American politics in their preferred direction. In some cases, this is being accomplished by direct acquisition of existing media platforms, alliances with traditional firms and the subsidization of favored news outlets. But the real power of the emerging tech oligarchy lies in its control of the Internet itself, which is rapidly gaining preeminence in the flow of information.

    This transition is being driven by the enormous concentration of wealth in a few hands, based mostly in metropolitan Seattle and Silicon Valley. In 2014, the media-tech sector accounted for five of the 10 wealthiest Americans. More important still, virtually all self-made billionaires under age 40 are techies. They are in a unique position to dominate discourse in America for decades to come.

    In recent years, like Skynet in the “Terminator” series, the oligarchs have become increasingly aware of their latent power to shape both the news media and the political future. A prospectus for a lobbying group headed up by Mark Zuckerberg’s former Harvard roommate, suggests tech will become “one of the most powerful political forces.” The new group’s “tactical assets” include not only popularity and great wealth but the fact that “we control massive distribution channels, both as companies and individuals.”

    Read the entire piece at The Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Facebook photo by BigStockPhoto.com.

  • 2014 Journey to Work Data: More of the Same

    The major metropolitan area journey to work data is out, reported in the American Community Survey ‘s 2014 one year edition. The news is that there is not much news. Little has changed since 2010 despite all the talk about “peak car” and a supposed massive shift towards transit. Single occupant driving remains by far the largest mode of transport to work in the 53 major metropolitan areas (with over 1,000,000 population), having moved from 73.5 percent of commutes to 73.6 percent. Little upward change in single occupant commuting can be expected, since it is probably already a virtual saturation rate.

    The only significant change is the most important trend that is occurred for decades in US commuting: the reduction in carpooling. Between 2010 and 2014, carpooling dropped from 9.8 percent to 8.8 percent in the major metropolitan areas.

    Transit continued to hold on to third place, with an increase from 7.9 percent to 8.1 percent in the major metropolitan areas. Working at home, including telecommuting, continued its more dramatic rise, from 4.4 percent in 2010 to 4.7 percent in 2014. Walking remained constant at 2.8 percent, while cycling continued its increase but from a small 0.5 percent to 0.7 percent. Other modes of transport, such as taxis and motorcycles remained constant at 1.2 percent (Figure 1).

    In the major metropolitan areas, transit continued to lead over working at home (8.1 percent compared to 4.7 percent), though at the national level the margin was much smaller (5.2 percent compared to 4.5 percent). Transit strength was far more concentrated principally in a few metropolitan areas with “legacy” cities and, as a result, working at home exceeded transit’s market share in 39 of the 53 markets.

    Should carpooling continue its downward trend, it would fall below transit before the end of the decade among the major metropolitan areas (now at 8.8 percent compared to transit 8.1 percent), though the carpooling lead is sufficient to retain second-place far longer at the national level (9.2 percent compared to 5.2 percent). As in working at home, however, transit’s strength is highly concentrated relative to carpooling. Transit leads carpooling only in the six metropolitan areas with transit legacy cities (New York, Chicago, Philadelphia, San Francisco, Boston, and Washington), while carpooling leads in 47 metropolitan areas.

    Commuting market share data for the major metropolitan areas is shown in Tables 1 and 2.

    Transit Gains and Losses

    With by far the most attractive urban environment for transit use in the United States and far and away the largest system, New York dominated the transit share of the  journey to work data, adding 240,000 daily transit commuters between 2010 and 2014 (out of a national total of 576,000). Six other metropolitan areas with the strongest transit gains were San Francisco at 66,000, Chicago with 41,000, Boston with 38,000, Seattle with 34,000 and Washington with 32,000. All of these were above the next highest, Philadelphia, with 16,000. Each of these metropolitan areas, with the exception of Seattle, has a transit legacy city at its core. Overall the other 45 metropolitan areas, with nearly 70 percent of the population, accounted for less than 20 percent of the transit increase.

    Los Angeles, which has been hailed as the becoming "next transit city," seems long on intentions and construction, but wanting in results.  The laggard transit performance of Los Angeles, despite one of the world’s most aggressive rail construction programs has been described in a recent Orange County Register commentary. In 2014-2015, ridership on the legacy MTA (former SCRTD) bus and rail system was almost 10 percent below the bus only system of 1985, despite an increase in the Los Angeles County population of approximately one-quarter (see: Los Angeles; Rail for Others).

    Thirteen metropolitan areas experienced modest transit commuting losses (less than 3,000). In addition to Los Angeles, these included rail metropolitan areas Virginia Beach-Norfolk, San Diego, Buffalo, Cleveland, and Pittsburgh.

    Working at Home Gains and Losses

    The largest working at home gain was also in New York, at 40,000 (out of 499,000 in the major metropolitan areas). The second largest gain was in Los Angeles at 32,000. San Diego added 27,000 people accessing work from home. Four metropolitan areas lost commuters who work at home, though the losses were modest (less than 1,000) in all but Virginia Beach-Norfolk, where the decline was more than 11,000.

    Driving Alone Gains, No Losses

    New York also led in the number of additional commuters driving alone to work, adding more than 420,000. The other largest gainers were in Los Angeles at 325,000 and Houston at 309,000. All of the 53 major metropolitan areas added single occupant commuters and in each single occupant commuting added more than any other mode, including transit. Rochester had the smallest increase, at 7,000.

    Carpool Gains and Losses

    Despite its continuing overall losses, carpooling made gains in some metropolitan areas. Detroit led with nearly 14,000 new carpoolers, followed closely by Orlando, Portland, and Dallas-Fort Worth both added more than 10,000 new carpoolers, adding more commuters than their rail oriented transit systems.

    However, the car pool losses were generally more severe. Chicago lost nearly 36,000 carpooling commuters. Los Angeles lost 30,000, New York lost 29,000 and Tampa-St. Petersburg lost 19,000. Losses of more than 10,000 were also sustained in Washington, St. Louis, San Diego, Pittsburgh, Phoenix, Memphis, Baltimore, and Boston.

    Cycling Gains and Losses

    New York also gained the most cycling commuters, at nearly 14,000, followed by San Francisco at 13,000, Los Angeles at 10,000. Eight metropolitan areas lost cycling commuters, but only two exceeded 250, Grand Rapids (800 loss) and Riverside-San Bernardino (700 loss).

    More of the Same

    U.S. commuters continue to travel to work using the modes that have dominated for decades, with the exceptions of substantial increases in working at home and big losses in car pooling. Though even in these modes, the changes are slight in view of the dominance of single-occupant commuting, as Figure 1 indicates. This is not surprising, commuters who drive alone reach virtually anywhere in the metropolitan area and nearly always at a faster speed than any other method of commuting, save working at home.

    Table 1
    Transit Work Trip Market Share: 2014
    Major Metropolitan Areas (53 over 1,000,000 Population)
    MARKET SHARE              
    MSA Drive Alone Car Pool Transit Bicycle Walk Other Work at Home
    Atlanta, GA 77.6% 10.3% 3.1% 0.2% 1.4% 1.4% 6.2%
    Austin, TX 76.6% 10.1% 2.5% 0.7% 1.7% 1.5% 6.9%
    Baltimore, MD 77.2% 8.2% 6.6% 0.3% 2.6% 1.1% 4.0%
    Birmingham, AL 85.2% 9.1% 0.5% 0.2% 1.1% 1.1% 2.9%
    Boston, MA-NH 67.6% 6.8% 12.9% 1.0% 5.3% 1.2% 5.1%
    Buffalo, NY 82.3% 7.7% 3.0% 0.4% 2.9% 0.9% 2.9%
    Charlotte, NC-SC 81.0% 9.4% 1.9% 0.2% 1.4% 1.1% 5.1%
    Chicago, IL-IN-WI 70.9% 7.7% 11.9% 0.7% 3.2% 1.2% 4.5%
    Cincinnati, OH-KY-IN 82.8% 7.9% 2.1% 0.3% 2.0% 0.8% 4.1%
    Cleveland, OH 82.3% 6.8% 3.2% 0.3% 2.6% 0.9% 3.9%
    Columbus, OH 83.0% 7.7% 1.8% 0.5% 2.1% 0.7% 4.4%
    Dallas-Fort Worth, TX 80.8% 9.9% 1.6% 0.2% 1.2% 1.7% 4.6%
    Denver, CO 76.3% 8.8% 4.5% 0.9% 2.0% 0.8% 6.6%
    Detroit,  MI 84.0% 9.0% 1.6% 0.3% 1.3% 0.8% 3.1%
    Grand Rapids, MI 81.6% 8.9% 1.7% 0.3% 2.2% 1.4% 4.0%
    Hartford, CT 81.4% 7.8% 2.7% 0.2% 2.6% 1.1% 4.2%
    Houston, TX 80.3% 10.7% 2.4% 0.3% 1.3% 1.6% 3.4%
    Indianapolis. IN 84.2% 8.5% 1.2% 0.3% 1.3% 0.7% 3.8%
    Jacksonville, FL 80.4% 9.7% 1.2% 0.6% 1.2% 1.7% 5.2%
    Kansas City, MO-KS 83.4% 8.5% 1.0% 0.2% 1.2% 1.0% 4.7%
    Las Vegas, NV 77.6% 10.2% 4.8% 0.5% 1.6% 2.3% 3.1%
    Los Angeles, CA 74.6% 9.7% 5.8% 1.0% 2.5% 1.3% 5.1%
    Louisville, KY-IN 81.8% 9.5% 2.0% 0.3% 1.7% 1.0% 3.7%
    Memphis, TN-MS-AR 84.9% 8.6% 1.0% 0.1% 1.1% 1.7% 2.6%
    Miami, FL 78.7% 8.9% 3.7% 0.6% 1.7% 1.4% 5.0%
    Milwaukee,WI 80.6% 8.4% 3.5% 0.5% 2.6% 0.8% 3.6%
    Minneapolis-St. Paul, MN-WI 77.3% 8.6% 4.8% 1.0% 2.4% 0.9% 4.9%
    Nashville, TN 81.7% 9.8% 1.3% 0.2% 1.6% 0.8% 4.6%
    New Orleans. LA 79.2% 9.7% 3.1% 1.3% 2.3% 1.5% 2.9%
    New York, NY-NJ-PA 50.2% 6.4% 31.1% 0.6% 6.0% 1.5% 4.2%
    Oklahoma City, OK 82.8% 10.1% 0.4% 0.4% 1.5% 1.1% 3.7%
    Orlando, FL 79.8% 9.9% 2.0% 0.6% 0.9% 1.2% 5.6%
    Philadelphia, PA-NJ-DE-MD 73.0% 7.8% 9.7% 0.6% 3.7% 0.8% 4.3%
    Phoenix, AZ 77.0% 10.5% 2.1% 0.9% 1.5% 1.9% 6.1%
    Pittsburgh, PA 77.5% 8.1% 5.6% 0.4% 3.4% 0.8% 4.1%
    Portland, OR-WA 70.0% 10.2% 6.5% 2.6% 3.3% 1.0% 6.4%
    Providence, RI-MA 81.1% 7.9% 2.8% 0.5% 3.4% 0.9% 3.5%
    Raleigh, NC 80.0% 9.0% 1.0% 0.2% 1.3% 1.1% 7.3%
    Richmond, VA 81.8% 9.1% 1.7% 0.4% 1.6% 1.2% 4.2%
    Riverside-San Bernardino, CA 77.4% 13.3% 1.6% 0.3% 1.7% 1.0% 4.7%
    Rochester, NY 82.5% 6.9% 2.5% 0.7% 3.1% 0.7% 3.7%
    Sacramento, CA 76.4% 10.2% 2.7% 1.8% 2.0% 1.3% 5.5%
    Salt Lake City, UT 74.9% 12.2% 3.8% 0.8% 2.1% 0.8% 5.3%
    San Antonio, TX 80.0% 10.8% 2.1% 0.2% 1.7% 0.9% 4.3%
    San Diego, CA 76.0% 8.6% 2.7% 0.8% 2.9% 1.4% 7.5%
    San Francisco-Oakland, CA 59.2% 9.4% 16.7% 2.2% 4.7% 1.6% 6.2%
    San Jose, CA 76.2% 10.4% 4.0% 1.6% 1.7% 1.2% 4.8%
    Seattle, WA 69.0% 9.8% 9.6% 1.2% 3.6% 1.1% 5.7%
    St. Louis,, MO-IL 82.7% 7.3% 2.9% 0.3% 1.8% 0.8% 4.1%
    Tampa-St. Petersburg, FL 81.1% 7.4% 1.5% 0.9% 1.5% 1.7% 5.9%
    Virginia Beach-Norfolk, VA-NC 82.4% 8.2% 1.6% 0.5% 3.0% 1.2% 3.1%
    Tucson, AZ 77.0% 9.1% 2.9% 2.1% 2.5% 2.0% 4.5%
    Washington, DC-VA-MD-WV 66.1% 9.7% 14.3% 0.8% 3.1% 1.0% 5.1%
    Major Metropolitan Areas 73.6% 8.8% 8.1% 0.7% 2.8% 1.2% 4.7%
    Outside Major Metropolitan Areas 80.4% 9.8% 1.2% 0.5% 2.7% 1.2% 4.1%
    United States 76.5% 9.2% 5.2% 0.6% 2.7% 1.2% 4.5%
    From American Community Survey: 2014 (1 Year)

     

    Table 2
    Transit Work Trip Market Share: 2010 (2008-2012 ACS)
    Major Metropolitan Areas (53 over 1,000,000 Population)
    MARKET SHARE              
    MSA Drive Alone Car Pool Transit Bicycle Walk Other Work at Home
    Atlanta, GA 77.6% 10.7% 3.2% 0.2% 1.3% 1.4% 5.6%
    Austin, TX 75.0% 11.3% 2.6% 0.8% 1.8% 1.9% 6.6%
    Baltimore, MD 76.3% 9.7% 6.3% 0.3% 2.7% 0.9% 3.9%
    Birmingham, AL 84.0% 10.6% 0.7% 0.1% 1.1% 0.6% 3.0%
    Boston, MA-NH 68.8% 7.9% 11.9% 0.9% 5.3% 0.9% 4.4%
    Buffalo, NY 81.8% 8.1% 3.5% 0.4% 3.0% 0.9% 2.4%
    Charlotte, NC-SC 80.5% 10.4% 1.8% 0.1% 1.4% 0.9% 4.9%
    Chicago, IL-IN-WI 70.9% 8.8% 11.3% 0.6% 3.1% 1.1% 4.2%
    Cincinnati, OH-KY-IN 82.6% 8.7% 2.2% 0.2% 2.1% 0.7% 3.6%
    Cleveland, OH 82.1% 7.8% 3.5% 0.3% 2.1% 0.8% 3.4%
    Columbus, OH 82.6% 8.2% 1.6% 0.4% 2.1% 0.8% 4.2%
    Dallas-Fort Worth, TX 80.9% 10.5% 1.5% 0.2% 1.2% 1.3% 4.5%
    Denver, CO 75.7% 9.5% 4.5% 0.9% 2.1% 1.2% 6.0%
    Detroit,  MI 84.2% 8.7% 1.6% 0.2% 1.4% 0.8% 3.1%
    Grand Rapids, MI 82.8% 8.9% 1.2% 0.5% 1.9% 0.7% 3.9%
    Hartford, CT 81.0% 8.2% 3.1% 0.2% 2.7% 1.0% 3.8%
    Houston, TX 79.2% 11.7% 2.4% 0.3% 1.4% 1.6% 3.4%
    Indianapolis. IN 83.6% 9.0% 1.1% 0.3% 1.7% 0.8% 3.6%
    Jacksonville, FL 81.1% 9.9% 1.3% 0.6% 1.4% 1.3% 4.4%
    Kansas City, MO-KS 82.9% 9.2% 1.2% 0.2% 1.3% 1.0% 4.1%
    Las Vegas, NV 78.5% 11.1% 3.7% 0.4% 1.8% 1.5% 3.0%
    Los Angeles, CA 73.6% 10.8% 6.1% 0.9% 2.7% 1.2% 4.9%
    Louisville, KY-IN 82.9% 9.3% 2.1% 0.3% 1.7% 0.8% 2.9%
    Memphis, TN-MS-AR 82.8% 10.7% 1.3% 0.1% 1.3% 1.0% 2.8%
    Miami, FL 78.2% 9.8% 3.7% 0.6% 1.8% 1.4% 4.5%
    Milwaukee,WI 79.9% 9.2% 3.6% 0.5% 2.8% 0.7% 3.2%
    Minneapolis-St. Paul, MN-WI 78.1% 8.6% 4.6% 0.9% 2.3% 0.8% 4.7%
    Nashville, TN 81.5% 10.4% 1.1% 0.2% 1.2% 0.9% 4.6%
    New Orleans. LA 79.0% 10.9% 2.6% 0.8% 2.4% 1.6% 2.6%
    New York, NY-NJ-PA 51.0% 7.1% 29.9% 0.5% 6.1% 1.6% 3.9%
    Oklahoma City, OK 82.9% 10.4% 0.5% 0.3% 1.6% 1.1% 3.3%
    Orlando, FL 81.1% 9.3% 1.9% 0.5% 1.1% 1.7% 4.5%
    Philadelphia, PA-NJ-DE-MD 73.4% 8.2% 9.4% 0.6% 3.7% 0.8% 3.8%
    Phoenix, AZ 76.4% 11.9% 2.1% 0.8% 1.6% 1.6% 5.6%
    Pittsburgh, PA 76.9% 9.3% 5.7% 0.2% 3.6% 0.9% 3.5%
    Portland, OR-WA 71.2% 9.7% 6.1% 2.2% 3.5% 1.0% 6.3%
    Providence, RI-MA 80.8% 8.8% 2.7% 0.3% 3.2% 0.9% 3.3%
    Raleigh, NC 80.6% 9.6% 1.0% 0.3% 1.4% 1.2% 5.9%
    Richmond, VA 81.3% 9.6% 2.0% 0.4% 1.4% 0.8% 4.5%
    Riverside-San Bernardino, CA 76.2% 14.4% 1.6% 0.4% 1.8% 1.1% 4.4%
    Rochester, NY 81.4% 8.4% 1.9% 0.5% 3.6% 0.7% 3.5%
    Sacramento, CA 75.1% 11.6% 2.7% 1.8% 2.0% 1.2% 5.6%
    Salt Lake City, UT 75.9% 12.0% 3.5% 0.8% 2.3% 1.2% 4.3%
    San Antonio, TX 79.1% 11.5% 2.2% 0.1% 1.9% 1.2% 3.9%
    San Diego, CA 75.9% 10.2% 3.1% 0.7% 2.7% 1.1% 6.3%
    San Francisco-Oakland, CA 61.5% 10.3% 14.7% 1.7% 4.3% 1.4% 6.0%
    San Jose, CA 76.5% 10.4% 3.2% 1.7% 2.1% 1.4% 4.7%
    Seattle, WA 69.7% 11.0% 8.3% 1.0% 3.6% 1.1% 5.3%
    St. Louis,, MO-IL 82.6% 8.4% 2.5% 0.3% 1.7% 0.8% 3.7%
    Tampa-St. Petersburg, FL 80.3% 9.5% 1.4% 0.7% 1.6% 1.4% 5.2%
    Virginia Beach-Norfolk, VA-NC 80.6% 9.0% 1.8% 0.4% 2.6% 1.1% 4.4%
    Tucson, AZ 76.5% 10.3% 2.4% 1.5% 2.5% 2.0% 4.8%
    Washington, DC-VA-MD-WV 66.0% 10.6% 14.0% 0.6% 3.2% 0.9% 4.7%
    Major Metropolitan Areas 73.5% 9.6% 7.9% 0.6% 2.8% 1.2% 4.4%
    Outside Major Metropolitan Areas 80.8% 9.8% 0.9% 0.5% 2.7% 1.2% 4.2%
    United States 76.6% 9.7% 4.9% 0.5% 2.8% 1.2% 4.3%
    From American Community Survey:2008-2012

     

    Wendell Cox is Chair, Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), is a Senior Fellow of the Center for Opportunity Urbanism (US), a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California) and principal of Demographia, an international public policy and demographics firm.He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Photo: Harbor Freeway (I-110), Los Angeles (by author)

  • Cherry Hill: The Winners

    This is Cherry Hill. It is by far the most desirable suburb in this part of southern New Jersey as measured by all the usual metrics. Property values are high. Public schools are great. The municipal government is lean and responsive. This is as good as the American Dream gets.


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    The families who live here are overwhelmingly well educated professionals, often first and second generation immigrants who have discovered the high quality of life on offer. What was once a nearly 100% white enclave is now a diverse multi-cultural community. You’re just as likely to live next door to Hindus, Jews, Greek Orthodox, or Muslims, as the main line Protestants that dominated the area in previous decades. When proponents of suburban living talk about the success of the suburban development pattern this is the kind of place they often refer to.

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    If you’re raising children you really can’t ask for a better environment. It’s safe, clean, and (most importantly) your kids will rub shoulders with the kids of equally successful families – which is what exclusive suburbs and premium school districts are really all about. Cherry Hill has successfully filtered out the riffraff.

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    Cherry Hill has a middle-of-the-road population when it comes to social issues, but it’s decidedly conservative when it comes to money. It has embraced all the usual cost savings techniques to keep the budget tight and taxes as low as possible. Traditional in-house departments have been dissolved in favor of contract services with low cost private firms for things like waste management, school buses, and landscaping. Sales tax revenue has been boosted by cultivating the most successful regional shopping mall in the area. Class A suburban office parks deliver commercial property taxes to help subsidize the shortfall from residential taxes.

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    And yet… there are problems. The average homeowner in Cherry Hill pays about $8,000 a year in property tax. Some of the larger homes pictured above pay on the order of $23,000 a year. You can blame teachers and cops and their “extravagant” salaries and pensions, but schools and public safety are the primary attractions to living in Cherry Hill. Outsourcing to low wage alternatives for these public services may not really work over the long term – although Cherry Hill keeps pushing that envelope. And the cost of maintaining a huge amount of very expensive attenuated public infrastructure like roads, sewers, and water pipes is rapidly getting out of control.

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    Here’s another problem with Cherry Hill. This is what passes for the public realm. All the emphasis has been placed on private space. The homes, the tree lined subdivisions, the quality retail establishments, and the hermetically sealed professional centers are pristine. But in between there’s nothing that even comes close to a pleasant commons. Route 70 is “Main Street.” That’s all you get. Of course, the people who self select in to Cherry Hill don’t care. They’re inside their homes, shops, offices, and cars 100% of the time. There’s simply no need for a public realm. It’s a fully private pay-per-view environment.

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    Unless you’re one of these poor bastards standing on the side of the highway waiting for a bus that may or may not arrive sometime within the next hour. These people can’t afford to live in Cherry Hill or own private vehicles so they commute on crappy inadequate public transit to and from neighboring low income suburbs.

    Cherry Hill is a giant wealth sponge. It soaks up the segment of the population that can afford to live the best version of a suburban life. That means there are many other suburbs – the vast majority – that become the also-ran towns of fair-to-middling suburbs with just-okay schools and mediocre shops. And then there are the lower income suburbs farther out that can’t quite manage to bootstrap themselves up above the poverty line.

    The dominant conversation in America today centers on the bleakness of inner city ghettos and the extravagance of newly gentrified urban elite neighborhoods. The reality is that most Americans live in the suburbs. A small number of people live in a few great places like Cherry Hill. The overwhelming bulk of the population, including the poor and large downwardly mobile middle class, now live in failing cheap anonymous declining suburbs that no one talks about – until they erupt Ferguson style.

    I’m just sayin.

    John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He’s a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.

  • The Cities Where Your Salary Will Stretch The Furthest 2015

    Average pay varies widely among U.S. cities, but those chasing work opportunities would do well to keep an eye on costs as well. Salaries may be higher on the East and West coasts, but for the most part, equally high prices there mean that the fatter paychecks aren’t necessarily getting the locals ahead.

    To determine which cities actually offer the highest real incomes, Mark Schill, research director at Praxis Strategy Group, conducted an analysis for Forbes of the 53 largest metropolitan statistical areas, adjusting annual earnings by a cost factor that combines median home values from the U.S. Census (20%) with a measure of regional price differences from the U.S. Bureau of Economic Analysis (80%).

    The takeaway: When cost of living is factored in, most of the metro areas that offer the highest effective pay turn out to be in the less glitzy middle part of the country. 

    Ranking first is the Houston-the Woodlands-Sugar Land metro area, followed by one high-cost outlier: San Jose-Sunnyvale-Santa Clara, Calif., aka Silicon Valley. Although average wages in the San Jose area are $38,000 higher than Houston’s $60,096, the much lower cost of living in Houston means residents there are effectively slightly better off. Adjusted for costs, Houston’s average real income is $62,136. A big contributing factor is Houston’s low home prices: the ratio of the median home price there ($215,000 in the third quarter) to median annual household income is 3.1, compared to 7.5 in the San Jose area (median 3Q home price: $795,000).

    San Jose’s high ranking is somewhat of an anomaly: the very high salaries paid by the tech industry in a metro area made up of largely affluent suburban communities go a long way to make up for the high prices. San Jose’s prices were the third highest among major U.S. metro areas in 2013, the most recent year for which the BEA has data — 21.3% above the national average — while the average annual wage of $98,247 as of this year ranks first.

    Another example of a higher-cost success story is the Hartford, Conn., metro area, which ranks fourth on our list with adjusted annual real earnings of $54,590. One of the lowest-density regions in the country, it boasts many small, prosperous communities with high housing prices surrounding a largely impoverished but small core city (population: 125,000 ). In 2011, the Harford metro area was ranked by Brookings as the most productive metropolitan region in the world.

    But for the most part, it’s the low-cost heartland that dominates the top 15 of our ranking of Cities Where Your Salary Stretches The Furthest. Manufacturing powerhouse Detroit-Warren-Dearborn ranks third with cost-adjusted annual earnings of $55,950. The metro area is comfortably affordable, including an average home price value of $136,400, but also boasts strong wages given the area’s high concentration of factory and engineering jobs, which tend to pay better than other industries, particularly for blue-collar workers.

    Low costs are an advantage that unites a number of the top-ranked heartland metro areas, including Cleveland-Elyria (seventh), where prices of goods and services are 10.5% below the national average, and Cincinnati (ninth), where prices are 9.5% below the national average. In all these areas, the cost of a house is about 20% of what passes for normal in Silicon Valley.

    Hip, But Increasingly Not Worth It

    Perhaps the biggest surprise in our survey is the low rankings of the “cool” cities that are widely discussed as the places that offer the best economic opportunities.

    Take for instance San Francisco, a city that has become the epicenter of “disruptive” tech companies Uber, Lyft, Airbnb, Salesforce.com that are changing our service economy, as well as Twitter. With an average annual salary of $74,794, you would think people would be fat and happy in Baghdad by the Bay. But soaring home prices — median value, $657,300 — have raised costs so high that the area ranks a poor 41st on our list.

    The tech boom has also raised prices in Austin, which ranked fifth when we last did this ranking in 2012, but falls to 19th this year. Over the past year, the average home value in the Texas capital has risen by $24,000, twice the increase experienced in the rest of the country. Median prices now average $217,9000, well above the national median of $188,000 for all large metropolitan regions. This is still not ridiculous, but costs do seems to be eroding some of Austin’s still powerful advantage.

    Similarly, greater New York City also fared poorly, ranking 33rd, in large part due to high housing prices and the overall cost of living: prices there are 22.3% above the national average, according to BEA data, making it the second-costliest metro area in the nation.

    Some of the biggest gaps between cost of living and salary are in Southern California, which has experienced significant house price gains without the income growth that makes San Jose more competitive. Already high, prices in San Diego-Carlsbad (51st), Los Angeles-Long Beach-Anaheim (52nd) and Riverside-San Bernardino (last among the 53 largest metro areas) have all risen considerably above the national average.

    Long-Term Implications

    Our paycheck analysis does not impact everyone equally. Given the central role of housing, for example, long-term residents who bought their homes before prices began to rise dramatically can keep a bigger portion of their take-home pay, and if they decide to sell, they’ll benefit greatly from inflated values. More directly impacted may be young adults and immigrants, most of whom do not own their own homes, and often lack the resources to buy in the more expensive markets.

    Over time this could influence where young families and singles chose to migrate. Since 2010, according to an upcoming study by Cleveland State’s Center for Population Dynamics, there has been a marked shift of college educated workers aged 25 to 34. While between 2008 and 2010, metro areas like San Francisco, New York, Los Angeles, San Jose and Chicago enjoyed the biggest upticks in this coveted population, over the most recently studied period, 2010-13, the leaders were generally less expensive places like Nashville, Pittsburgh, Orlando, Cleveland, San Antonio, Houston and Dallas-Ft. Worth.

    This suggests that areas that have both high-wage jobs and low costs are likely to gain momentum in coming years, particularly if the economy expands. This is not to say that people do not like the excitement and culture associated with San Francisco, Los Angeles or New York, but many may be finding that the price of admission to these fabled places may be too high.

    This could be a great opportunity for less-heralded communities, from Arizona and Texas to Ohio, to gain more educated workers and the companies that require them.

    Metropolitan Average Annual Earnings Adjusted for Cost of Living and Home Values
    Rank MSA Name Adjusted Ave Annual Earnings
    1 Houston-The Woodlands-Sugar Land, TX $62,136
    2 San Jose-Sunnyvale-Santa Clara, CA $56,147
    3 Detroit-Warren-Dearborn, MI $55,950
    4 Hartford-West Hartford-East Hartford, CT $54,590
    5 Dallas-Fort Worth-Arlington, TX $54,497
    6 Atlanta-Sandy Springs-Roswell, GA $53,922
    7 Cleveland-Elyria, OH $53,841
    8 Pittsburgh, PA $53,726
    9 Cincinnati, OH-KY-IN $53,405
    10 St. Louis, MO-IL $53,115
    11 Charlotte-Concord-Gastonia, NC-SC $52,508
    12 Birmingham-Hoover, AL $51,710
    13 Kansas City, MO-KS $51,460
    14 Memphis, TN-MS-AR $51,339
    15 Boston-Cambridge-Newton, MA-NH $50,373
    16 Columbus, OH $50,369
    17 Chicago-Naperville-Elgin, IL-IN-WI $50,351
    18 Nashville-Davidson–Murfreesboro–Franklin, TN $50,168
    19 Austin-Round Rock, TX $50,154
    20 Minneapolis-St. Paul-Bloomington, MN-WI $50,117
    21 Indianapolis-Carmel-Anderson, IN $49,790
    22 Oklahoma City, OK $49,771
    23 Seattle-Tacoma-Bellevue, WA $49,514
    24 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD $48,976
    25 Louisville/Jefferson County, KY-IN $48,807
    26 Milwaukee-Waukesha-West Allis, WI $48,341
    27 Denver-Aurora-Lakewood, CO $48,287
    28 Washington-Arlington-Alexandria, DC-VA-MD-WV $48,102
    29 Buffalo-Cheektowaga-Niagara Falls, NY $48,071
    30 New Orleans-Metairie, LA $47,956
    31 San Antonio-New Braunfels, TX $47,837
    32 Rochester, NY $47,660
    33 New York-Newark-Jersey City, NY-NJ-PA $47,649
    34 Jacksonville, FL $47,230
    35 Raleigh, NC $47,164
    36 Richmond, VA $47,002
    37 Grand Rapids-Wyoming, MI $46,480
    38 Phoenix-Mesa-Scottsdale, AZ $46,281
    39 Tampa-St. Petersburg-Clearwater, FL $45,826
    40 Baltimore-Columbia-Towson, MD $45,184
    41 San Francisco-Oakland-Hayward, CA $45,082
    42 Portland-Vancouver-Hillsboro, OR-WA $44,451
    43 Salt Lake City, UT $43,857
    44 Sacramento–Roseville–Arden-Arcade, CA $43,254
    45 Miami-Fort Lauderdale-West Palm Beach, FL $42,976
    46 Las Vegas-Henderson-Paradise, NV $42,960
    47 Providence-Warwick, RI-MA $42,827
    48 Orlando-Kissimmee-Sanford, FL $42,463
    49 Tucson, AZ $42,264
    50 Virginia Beach-Norfolk-Newport News, VA-NC $42,226
    51 San Diego-Carlsbad, CA $37,395
    52 Los Angeles-Long Beach-Anaheim, CA $35,691
    53 Riverside-San Bernardino-Ontario, CA $34,040
    Figure is the average annual wages, salaries and proprietor earnings adjusted for cost of living usine BEA Regional Price Parities (80%) and variation in Census median home value among the 53 regions (20%). Data Sources: EMSI 2015.2 Employment Data, U.S. Bureau of Economic Analysis Regional Price Parities, U.S. Census American Community Survey
    Analysis by Mark Schill, mark@praxissg.com

     

    This piece first appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. He is also executive director of the Houston-based Center for Opportunity Urbanism. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is also author of The City: A Global History and The Next Hundred Million: America in 2050. He lives in Orange County, CA.

    Photo by w:Flickr user Bill Jacobus [CC-BY-2.0], via Wikimedia Commons