New Geography

Tag: California

  • California’s Global Warming High-Speed Train

    The California High-Speed Rail Authority promises to “achieve net zero greenhouse gas (GHG) emissions in construction” and is committed to operate the system on “100% renewable energy” by contracting for “400 to 600 megawatts of renewable power”. These promises may please environmentalists, but they cannot be kept.

    Construction Emissions

    The Authority has provided only limited information regarding GHG construction emissions. Its 2013 Emissions Report estimated 30,107 metric tons in GHG “direct emissions” for the first 29 miles of construction. “Indirect emissions” associated with the manufacture and transport of materials, primarily concrete, steel, and ballast were not reported because, according to the Authority, precise quantities, sources, and suppliers were not known. A more plausible reason is the their desire to hide from the public more than 90% of GHG emissions associated with their project. Regardless, recent testimony by the Authority’s CEO clearly indicates that indirect emissions can now be tallied.

    Speaking before the Assembly High-Speed Rail Oversight Committee on January 27, 2016, CEO Jeff Morales, spoke at length on how costs were estimated. He described the assemblage of 200,000 individual line items including concrete, steel, dirt, electrical, etc. and said each includes a unit cost which is multiplied by the units required to build the system.

    Total GHG construction emissions would still be unknown today were it not for the work of professors Mikhail V. Chester and Arpad Horvath working in UC Berkeley’s Department of Civil and Environmental Engineering. They studied this issue, published their findings in 2010, and estimated that 9.7 million metric tons of GHG would be emitted during the construction of the statewide system; primarily because of the production of massive amounts of concrete and steel. Using mid-level occupancy for the three competing modes of travel (high-speed train, auto, and airplane) the authors estimated it would take 71 years of train operation to mitigate the project’s construction emissions. California’s Legislative Analyst Office came to a similar conclusion in a 2012 report critical of using GHG reduction funds to pay for Phase 1 (Los Angeles to San Francisco) of the statewide system because “if the high-speed rail system met its ridership targets and renewable electricity commitments, construction and operation of the system would emit more GHG emissions than it would reduce for approximately the first 30 years”. Here, the LAO appears to be citing an updated Chester and Horvath study, published in July 2012, which focused on only Phase 1 of the high-speed rail project, as outlined in the Authority’s Revised 2012 Business Plan. They took into account additional highway infrastructure that could be avoided as well as claims that “a future CAHSR system will likely see improved train performance and an opportunity for increased renewable electricity usage”.

    However, the Authority promised “zero net greenhouse gas emissions in construction”. A reduction in California’s GHG emissions due to the trains’ operations was to help reduce the state’s future GHG emissions, not merely mitigate construction releases. The Authority’s zero construction emissions promise relies heavily on a tree planting program. More than 5 million trees, each more than 50 feet tall, would need to be grown and perpetually maintained to recapture the 9.7 million tons of GHG construction emission. However, one year into construction, the Authority’s CEO admitted that not a single tree had been planted. Worse, as part of their project, the Authority plans to cut down thousands of trees south of San Francisco to electrify Caltrain trackage.

    Emissions from Operation

    Chester and Horvath generously assumed the trains would run on a power mix relatively high in renewable sources. However, high-speed electric trains would replace fossil fueled propelled automobiles and airplanes. When Phase 1 is completed, the trains will place a new demand on the electric grid that must be met immediately by starting up an idle generator capacity. It may be a peaking unit in California powered by natural gas or a coal burning plant in Utah. The exact source is unknowable, but it will not be a wind or solar powered electric plant. These sources will already be generating all the power they can produce when the first trains require additional power.

    The Authority’s business plans are constantly changing as are their assumptions on energy consumption and energy cost. The 2012 Business Plan is cited, a plan that referred to paying 15.2 cents/kWh for electrical energy, inclusive of a 3 cent premium for renewable energy. Energy consumption was established at 63 kWh/mile. Train miles traveled between 2022 and 2030 was projected to be 99 million, resulting in an energy use of 6,300 million kWh. In order to make good on their claim that they will power the trains with 100% renewable energy the Authority needs to fund the construction of the necessary renewable power plants.

    California Valley Solar Ranch, a 250MW facility producing 650 million kWh/year recently built at a cost of a $1.6 billion ($1.2 billion financed at a 3.5% interest rate using a federal loan guarantee coupled with a check from the U.S. Treasury for $430 million), serves as a proxy for the needed capital. The Authority’s trains would consume 1,200 million kWh in 2030 and need the output of 1.85 Solar Ranches; 460MW of capacity costing $3.0 billion. A premium of 42 cent/kWh, fourteen times the Authority’s offer, would be needed to raise the necessary capital by 2030. More than 20% of this capacity, costing half a billion dollars, must be constructed before the first trains run. Otherwise, those trains will be totally powered by fossil fuels, meaning the GHG emissions per passenger mile will be no better than for two passengers traveling in an automobile which meets the federal fuel efficiency standards scheduled to be in place in 2022.

    The issue of global warming needs to be addressed. However, the planting of millions of trees and the spending of billions of dollars on a fossil fuel propelled train is not a practical or cost effective way to address the problem. From the climate point of view, the Authority’s project is detrimental because of its massive construction GHG emissions and because it diverts funds from other actions, such as providing financial incentives for ride-sharing and for the purchase of zero emission or low emission vehicles that could really help address the serious problem of global warming.

    Michael J. Brady has been a litigator and appellate lawyer for 50 years; he has worked on opposing California’s high speed rail for 10 years.

    Mark Powell has been assisting Mike Brady for seven years; he is a retired chemist for Union Oil Co.

    Photo by California High-Speed Rail Authority [Public domain], via Wikimedia Commons

  • Is America Now Second-Rate?

    President Donald Trump’s recent renunciation of the Paris climate change accords has spurred “the international community” to pronounce America’s sudden exit from global leadership. Now you read in the media aspirations to look instead to Europe, Canada, or even China, to dominate the world. Some American intellectuals, viewing Trump, even wish we had lost our struggle for independence.

    Yet, perhaps it’s time to unpack these claims, which turn out to be based largely on inaccurate assumptions or simply wishful thinking. In reality, these countries are hardly exemplars, as suggested by the American intellectual and pundit class, but rather are flawed places unlikely to displace America’s global leadership, even under the artless Trump.

    We’ll always have Paris, or is it Beijing?

    California Gov. Jerry Brown’s recent trip to China reflects the massive disconnect inherent in the progressive establishment worldview. The notion that the country that is the world’s largest emitter of carbon dioxide, emitting nearly twice as much as the United States, and is generating coal energy at record levels, should lead the climate jihad is so laughable as to make its critics, including Trump, seem reasonable. All this, despite the fact that the U.S., largely due to the shift from coal to natural gas, is clearly leading the world in greenhouse gas reductions.

    Paris is good for China in that it gets it off the hook for reducing its emissions until 2030, while the gullible West allows its economies to be buried by ever-cascading regulations. The accords could have cost U.S. manufacturers as many as 6.5 million industrial jobs, while China gets a basically free pass. President Xi Jinping also appeals to the increasingly popular notion among progressives that an autocracy like China is better suited to address climate change than our sometimes chaotic democratic system.

    Xi has played the gullible West with a skill that would have delighted his fellow autocrat, Joseph Stalin, who did much the same in the 1930s. (“Purges? What purges?”) Of course, Xi does not have to worry much about criticism from the media — or anywhere else. Trump may tweet insanely and seek needless fights with the media, but critics of the Chinese Communist Party end up in prison — or worse. To accuse Trump of loving dictators and then embrace Xi seems a trifle dishonest.

    Ultimately, the Paris accords are much ado about nothing. The goals will have such little impact, according to both rational skeptics like Bjorn Lomborg and true believers like NASA’s James Hanson, as to make no discernible difference in the climate catastrophe predicted by many greens. In reality, Paris is all about positioning and posturing, a game at which both Brown and Xi are far more adept than the ham-handed Trump.

    Read the entire piece at The Orange County Register.

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

    Photo by Michael Temer via Flickr, using CC License.

  • California’s Descent to Socialism

    California is widely celebrated as the fount of technical, cultural and political innovation. Now we seem primed to outdo even ourselves, creating a new kind of socialism that, in the end, more resembles feudalism than social democracy.

    The new consensus is being pushed by, among others, hedge-fund-billionaire-turned-green-patriarch Tom Steyer. The financier now insists that, to reverse our worsening inequality, we must double down on environmental and land-use regulation, and make up for it by boosting subsidies for the struggling poor and middle class. This new progressive synthesis promises not upward mobility and independence, but rather the prospect of turning most Californians into either tax slaves or dependent serfs.

    California’s progressive regime of severe land-use controls has helped to make the state among the most unaffordable in the nation, driving homeownership rates to the lowest levels since the 1940s. It has also spurred a steady hegira of middle-aged, middle-class families — the kind of tax-burdened people Gov. Jerry Brown now denounces as “freeloaders” — from the state. They may have access to smartphones and virtual reality, but the increasingly propertyless masses seem destined to live in the kind of cramped conditions that their parents and grandparents had escaped decades earlier.

    A green people’s republic?

    There is some irony in a new kind of socialism blessed by some of the world’s richest people. The new policy framework is driven, in large part, by a desire to assume world leadership on climate-related issues. The biggest losers will be manufacturing, energy and homebuilding workers, who will see their jobs headed to other states and countries.

    Under the new socialism, expect more controls over the agribusiness sector, notably the cattle industry, California’s original boom industry, which will be punished for its cows’ flatulence. Limits on building in the periphery of cities also threaten future growth in construction employment, once the new regulations are fully in place.

    Sadly, these steps don’t actually do anything for the climate, given the state’s already low carbon footprint and the fact that the people and firms driven out of the state tend to simply expand their carbon footprints elsewhere in their new homes. But effectiveness is not the motivation here. Instead, “combating climate change” has become an opportunity for Brown, Steyer and the Sacramento bureaucracy to perform a passion play, where they preen as saviors of the planet, with the unlikable President Donald Trump playing his role as the devil incarnate. In following with this line of reasoning, Bay Area officials and environmental activists are even proposing a campaign to promote meatless meals. It’s Gaia meets Lent.

    Read the entire piece at The Orange County Register.

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

    Photo by Fortune Live Media, via Flickr, using CC License.

  • Is California About to Clobber Local Control?

    The gradual decimation of local voice in planning has become accepted policy in Sacramento. The State Senate is now considering two dangerous bills, SB 35 and SB 167, that together severely curtail democratic control of housing.

    SB 35: Housing Accountability and Affordability Act (Wiener)

    SB 35, the brainchild of San Francisco State Senator Scott Wiener, would force cities that haven’t met all their state-mandated Regional Housing Need Allocations to give by-right approval to infill market-rate housing projects with as little as 10% officially affordable housing. 

    SB 35 is anti-free speech and civic engagement. No public hearings, no environmental review, no negotiation over community benefits. Just “ministerial,” i.e., over-the-counter- approval.

    SB 35 is pro-gentrification. As a statewide coalition of affordable housing advocacy organizations has written:

    Since almost no local jurisdiction in the State of California meets 100% of its market rate RHNA goal on a sustained basis, this bill essentially ensures by-right approval for market-rate projects simply by complying with a local inclusionary requirement [for affordable housing] or by building 10% affordable units.

    The practical result is that all market rate infill development in most every city in California will be eligible for by-right approval per this SB 35-proposed State law pre-emption.

    Berkeley Housing Commissioner Thomas Lord also has pointed out, the RHNA program itself is a pro-gentrification policy. It follows that passage of SB 35 would further inflate real estate values and worsen the displacement of economically vulnerable California residents.

    SB 35 is pro-traffic congestion. It would prohibit cities from requiring parking in a “streamlined development approved pursuant” to SB  35, located within a half-mile of public transit, in an architecturally and historically significant historic district, when on-street parking permits are required but not offered to the occupants of the project, and when there is a car share vehicle located within one block of the development. Other projects approved under the measure would be limited to one space per unit.

    Absent the provision of ample new public transit, the prohibition of parking in new development will worsen neighborhood traffic problems. SB 35 says nothing about new transit.

    The construction of on-site parking is expensive, up to $50,000 a space. A measure that exempts new development, as designated above, from including parking without requiring developers to transfer the savings to affordable housing is a giveaway to the real estate industry.

    Nor does SB 35 say anything about funding the amount of infrastructure and local services—fire and police, schools, parks—that would be required by the massive amount of development it mandates. Are local jurisdictions expected to foot the bill?

    The lineup of SB’s supporters and opponents reveals serious splits in the state’s environmental and affordable housing advocates. SB 35 has revealed serious splits among advocates for both environmental protection and affordable housing.

    Supporters include Bay Area Council, the lobby shop of the Bay Area’s biggest employers; BAC’s Silicon Valley counterpart, the Silicon Valley Leadership Group; the San Francisco and LA Chambers of Commerce; the Council of Infill Builders; several nonprofit housing organizations, including the Non-Profit Housing Association of Northern California and BRIDGE Housing; the Natural Resources Defense Council; the California League of Conservation Voters; and a panoply of YIMBY groups, including East Bay Forward and YIMBY Action.

    Opponents include the Sierra Club; the League of California Cities; the Council of Community Housing Organizations; the California Fire Chiefs Association; the Fire Districts Association of California; a handful of cities, including Hayward, Pasadena, and Santa Rosa; the Marin County Council of Mayors and Councilmembers; and many building trades organizations, including IBEW Locals 1245, 18, 465 and 551, and the Western States Council of Sheet Metal Workers.

    SB 167: Housing Accountability Act (Skinner)

    This bill, introduced by State Senator Nancy Skinner, who represents Berkeley and other East Bay cities, and sponsored by the Bay Area Renters Federation (BARF), is a companion to SB 35. It would prohibit cities from disapproving a housing project containing units affordable to very low-, low- or moderate-income renters, or conditioning the approval in a manner that renders the project financially infeasible, unless, among other things, the city has met or exceeded its share of regional housing needs for the relevant income category. (As of November 2016, HUD defined a moderate-income household of four people in Alameda County as one earning under $112,300 a year.)

    The bill defines a “feasible” project as one that is “capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic environmental, social, and technological factors.” It does not define “successful” or “reasonable.”

    If a city does disapprove such a project, it is liable to a minimum fine of $1,000 per unit of the housing development project, plus punitive damages, if a court finds that the local jurisdiction acted in bad faith.

    SB 167 authorizes the project applicant, a person who would be eligible to apply for residency in the development or emergency shelter, or a housing organization, to sue the jurisdiction to enforce SB 167’s provisions. The bill defines a housing organization as

    a trade or industry group whose local members are primarily engaged in the construction or management of housing units or a nonprofit organization whose mission includes providing or advocating for increased access to housing for low-income households and have filed written or oral comments with the local agency prior to action on the housing development project [emphasis added].

    The highlighted passage was added to the existing Housing Accountability Act to encompass BARF’s legal arm, the California Renters Legal Advocacy and Education Fund (CaRLA), whose lawsuit of Lafayette recently failed. Last week CaRLA re-instituted its lawsuit of Berkeley over the city’s rejection of a project at 1310 Haskell.

    SB 167 further amends the existing Housing Accountability Act to entitle successful plaintiffs to “reasonable attorney’s fees and costs.”

    Predictably, the bill is supported by the Bay Area Council, the lobby shop for the region’s largest employers; the California Building Industry Association; the Terner Center at UC Berkeley; the San Francisco Housing Action Coalition; and YIMBY groups, including East Bay Forward, Abundant Housing LA, and of course CaRLA.

    Opponents include the California Association of Counties and the American Planning Association.

    If these bills—especially SB 35—become law, Californians will have lost a good deal of their right to a say the life and governance of the communities in which they live.

    This piece was first published in Berkeley Daily Planet and Marin Post.

    Zelda Bronstein, a journalist and a former chair of the Berkeley Planning Commission, writes about politics and culture in the Bay Area and beyond.

  • The California economy’s surface strength hides looming weakness

    If you listen to California’s many boosters, things have never been so good. And, to be sure, since 2011, the state appears to have gained its economic footing, and outperformed many of its rivals.

    Some, such as Los Angeles Magazine and Bloomberg, claim that it is California — not the bumbling Trump regime — that is “making America great again.” California, with 2 percent job growth in 2016, gained jobs more rapidly than most states. The growth rate was about equal to Texas and Colorado, but behind such growth centers as Florida, Nevada, Oregon, Washington, Utah and the District of Columbia.

    Bay Area: Still the tower of power

    Over the past few years, the Bay Area has grown faster in terms of jobs than anywhere in the nation. But this year, according to the annual survey of the nation’s 70 largest job markets that I do with Pepperdine University public policy professor Michael Shires for Forbes, there is a discernible slowing in the region. For the first time this decade, San Francisco lost its No. 1 slot to Dallas, which, like most other fastest-growing metros, boasts lower costs and taxes, and has created more middle-class jobs than its California rivals.

    The San Francisco area, which includes suburban San Mateo, remains vibrant. More troubling may be the weakening of the adjacent San Jose/Silicon Valley economy, which dropped six places to eighth — respectable, but not the kind of superstar performance we have seen over the past several years.

    This partly reflects an inevitable slowdown in information job growth. As the startup economy has stalled, and the big players have consolidated their dominance, sector growth has dropped from near double digits to well under half that. Perhaps more telling has been a shift in domestic migration, which was positive in San Francisco earlier in the decade, but has now turned sharply negative. These are clear signs of a boom that is cooling off.

    Read the entire piece at The Orange County Register.

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

    Photo by Todd Jones (Flickr) [CC BY 2.0], via Wikimedia Commons

  • MaX Lanes: A Next Generation Strategy for Affordable Proximity

    This is the introduction to a new report written by Tory Gattis of the Center for Opportunity Urbanism. Download the full report here.

    The core urban challenge of our time is ‘affordable proximity’: how can ever larger numbers of people live and interact economically with each other while keeping the cost of living – especially housing – affordable? In decentralized, post-WW2 Sunbelt cities built around the car, commuter rail solutions don’t work and an alternative is needed, especially as we see autonomous vehicles on the horizon.

    This briefing explores a next-generation mobility strategy for affordable proximity: MaX Lanes (Managed eXpress Lanes) moving the maximum number of people at maximum speed and allowing direct point-to-point single-seat high-speed trips by transit buses and other shared-ride vehicles today, and autonomous vehicles in the future. It includes a case study of Houston with a proposed network as well as profiles of similar lanes around the country.

    Download the full report here.

  • Move Over, San Francisco: Dallas Tops Our List Of The Best Cities For Jobs 2017

    Dallas is called the Big D for a reason. Bigger, better, best: that’s the Dallas mindset. From the gigantic Cowboys stadium in Arlington to the burgeoning northern suburbs to the posh arts district downtown, Dallasites are reinventing their metropolis almost daily. The proposed urban park along the Trinity River, my Dallas friends remind me, will be 11 times bigger than New York’s Central Park.

    Here’s something else for them to boast about: the Dallas-Plano-Irving metropolitan area ranks first this year on our list of the Best Cities For Jobs.

    2017 Best Cities Rankings Lists

    It’s a region that in many ways is the polar opposite of the San Francisco and San Jose metropolitan areas, which have dominated our ranking for the last few years. (They still place second and eighth this year, respectively, among the largest 70 metropolitan areas, though San Jose is down sharply from second place last year.)

    Unlike the tech-driven Bay Area, Dallas’ economy has multiple points of strength, including aerospace and defense, insurance, financial services, life sciences, data processing and transportation. Employment in the metro area has expanded 20.3% over the past five years and 4.2% last year, with robust job creation in professional and business services, as well as in a host of lower-paid sectors like retail, wholesale trade and hospitality.

    According to Southern Methodist University’s Klaus Desmet and Collin Clark, Dallas’s success stems in part from the fact that it isn’t looking to appeal to the elite “creative class,” but to middle-class workers and the companies and executives who employ them. Dallas attracts both foreign and domestic migrants, particularly from places like California, where housing is, on an income-adjusted basis, often three times as expensive. This has had much to do with the relocation to the area of such companies as Jacobs Engineering, Toyota, Liberty Mutual and State Farm.

    Methodology

    Our rankings are based on short-, medium- and long-term job creation, going back to 2005, and factor in momentum — whether growth is slowing or accelerating. We have compiled separate rankings for America’s 70 largest metropolitan statistical areas (those with nonfarm employment over 450,000), which are our focus this week, as well as medium-size metro areas (between 150,000 and 450,000 nonfarm jobs) and small ones (less than 150,000 nonfarm jobs) in order to make the comparisons more relevant to each category. (For a detailed description of our methodology, click here.)

    The Rise of Low-Cost Meccas

    Dallas is far bigger (particularly if you add the neighboring 28th-ranked Ft. Worth-Arlington area to the mix) than any of the other metro areas that have prospered by offering cheaper alternatives to coastal cities, with lower taxes and generally more friendly business climates. Among them is No. 3 Nashville-Davidson-Murfreesboro-Franklin, Tenn.

    The metro area has seen rapid job growth, nearly 20.6% since 2011. Last year job growth was across the board, including a 4.1% expansion in manufacturing employment, 5.2% in business professional services, and 2.9% in the information sector.

    Like Dallas, Nashville has become a mecca for companies looking to relocate operations. Some, like UBS, are fleeing the high cost of places like New York or London. Others, like Lyft, are escaping high costs in coastal California. CKE Restaurants, owner of Carl’s Junior and Hardees, is moving operations from coastal California and St. Louis to set up shop in Nashville. All are bringing a diverse new range of jobs to the Music City.

    Other low-cost migration meccas include fourth-place Charlotte-Concord, Gastonia, No. 5 Orlando-Kissimmee-Sanford, and No. 6 Salt Lake City. All boast growing tech centers with rapidly expanding STEM employment, as well as business and professional service growth.

    Boom Towns Get Pricier

    Some thriving metro areas on our list are becoming increasingly expensive, but they still don’t pack the tax and housing punch associated with blue state economies. No. 7 Austin-Round Rock, No. 9 Seattle-Bellevue-Everett and No. 11 Denver-Aurora-Lakewood have been big beneficiaries of the tech boom, and continue to attract migrants from areas like the Bay Area, where housing prices are still twice as high.

    It’s possible for older large cities with strongholds in key industries to generate strong job growth. New York’s population growth in 2016 may be half of what was in 2010, but financial sector job growth and associated professional service firms enable the Big Apple to rank a respectable 25th. Another high-cost area, Boston-Cambridge-Quincy, with its unparalleled concentration of elite colleges, ranks 30th.

    The picture is not so pretty in Los Angeles-Long Beach-Glendale, a region whose housing costs are almost as high as the Bay Area, with the same onerous state regulatory and tax burdens. It ranks 40th this year, with anemic 1.2% job growth in professional and business services over the past three years and 4% in financial services. The L.A. area continues to bleed manufacturing jobs, down 2.1% in the last year and 4.6% since 2013. Even retail and wholesale trade showed weakness in 2016, growing at a lowly 0.7% and 1.7% rate, respectively. The Information sector, highlighted by Snapchat’s splashy IPO, made the best showing for Tinseltown, with employment rising 4.2% in the last year. The sector, which includes entertainment, has seen employment expand an impressive 20.9% since the bottom of the recession in 2011.

    As has been the case almost every year in this millennium, the super-sized metro area doing worst is Chicago. It ranks 51st this year, down four places. Since the Great Recession, Chicago has managed modest job growth of 8.3%, and only a weak 0.7% expansion in 2016. Despite an uptick in financial services jobs over the past two years, and some ballyhooed relocations of corporate headquarters, the metro area has been losing jobs in information, manufacturing, and wholesale trade. Business services was up a scant 0.5% in the last year.

    Demographic Change and Changing Momentum

    The resurgence of expensive areas — notably New York and the San Francisco area — has been propelled largely by demographic trends, notably the movement of highly educated millennials to these areas. Yet as millennials begin to enter their 30s, and seek to buy homes and raise families, the momentum may be turning decisively to regions that are both less expensive but still have considerable appeal to educated workers. Most of the big gainers this year – Dallas, Orlando, Salt Lake, Raleigh, and No. 24 Indianapolis – have developed better inner-city amenities in recent years while keeping housing costs low.

    This shift is being driven in large part by unsustainable housing costs. In the Bay Area, techies are increasingly looking for jobs outside the tech hub, and some companies are even offering cash bonuses for those willing to leave. A recent poll indicated that 46% of Millennials want to leave the San Francisco Bay Area.

    It seems that some areas located in pro-business, low-tax states are increasingly attracting the educated millennials that we usually associate with places like San Francisco, Brooklyn or West L.A. Since 2010, among educated millennials, the fastest growth in migration has been to such lower-cost regions as Atlanta, Orlando, New Orleans, Houston, Dallas-Fort Worth.

    Over time, this migration could restructure the geography of job growth. As the middle class, particularly those of child-bearing age, continue moving out of states like California and into states like Texas. Utah or The Carolinas, the geography of skills changes. New families, a critical engine of job growth, are far more likely to form in Salt Lake City, the four large Texas metropolitan areas, or Atlanta, than in the bluest metropolitan areas like New York, Seattle, Los Angeles or San Francisco, where the number of school-age children trend well below the national average.

    Ultimately, we may be on the cusp of a new economic era in which the cost of housing and living becomes once again a key determinant in regional growth. This trend has been developing for years, but both demographics, notably the aging of millennials, and out of control costs could accelerate it. Many areas may wish to somehow emerge as “the new Silicon Valley,” just as they wished once to be the next “Wall Street” or “Hollywood.” Yet these iconic economies are difficult, to impossible, to duplicate. It might make more sense instead to look the success of places like Dallas — where lower costs are luring companies and talent at a level unrivaled in the nation.

    This piece originally appeared on Forbes.

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

    Dr. Michael Shires primary areas of teaching and research include state, regional and local policy; technology and democracy; higher education policy; strategic, political and organizational issues in public policy; and quantitative analysis. He often serves as a consultant to local and state government on issues related to finance, education policy and governance. Dr. Shires has been quoted as an expert in various publications including USA Today, Newsweek, The Economist, The Sacramento Bee, San Francisco Chronicle, and LA Times. He has also appeared as a guest commentator on CNN, KTLA and KCAL to name a few.

    Photo by Diann Bayes, obtained via Flickr using a CC License.

  • California’s War on the Emerging Generation

    It should be the obligation of older citizens to try to improve the prospects for their successors. But, here in California, as seen in a new report issued by the Chapman Center for Demographics and Policy, we seem to have adopted an agenda designed to make things tougher for them.

    Millennials everywhere face many challenges. The U.S. Census Bureau estimates that, even when working full-time, they earn $2,000 less than the same age group made in 1980. Nationwide, a millennial with a college degree and college debt, according to a recent analysis of Federal Reserve data, earns about the same as someone of the baby boomer generation did at the same age without a degree.

    Generational crisis

    But California millennials face an even greater challenge than most. Despite the anecdotes of youthful fortunes emanating from Silicon Valley, California’s millennials, on average, do not earn more than their counterparts elsewhere. Yet, they confront the highest housing prices in the nation, now 230 percent of the national average.

    These prices hit the newest and youngest buyers hardest. California boomers have rates of homeownership close to the national average, but people aged 25 to 34 suffered the third-worst homeownership rate (25.3 percent) among the 50 states. In San Francisco, Los Angeles and San Diego, the 25-34 homeownership rates range from 19.6 percent to 22.6 percent — approximately 40 percent or more below the national average. That is no surprise here, given that in Los Angeles and the Bay Area a monthly mortgage takes, on average, are close to 40 percent of income, compared to 15 percent nationally.

    California’s young people are also staying with their parents more than their counterparts elsewhere. Overall, approximately 47 percent of 18-34s lived with parents or other relatives in 2015, according to the American Community Survey. In California, the figure was 54 percent.

    Long-term implications

    These soaring prices could have severe demographic consequences. For every two homebuyers who have come to the state, five homeowners left, the research firm Core Logic has found. If millennials continue their current rate of savings, notes one study, it would take them 28 years to qualify for a median-priced house in the San Francisco area, but only five years in Charlotte, N.C., or three years in Atlanta. A recent ULI report found that 74 percent of all Bay Area millennials are considering a move out of the region in the next five years.

    This exodus could accelerate over the next decade, as most millennials reach their 30s, marry, settle down, start families and consider a home purchase. We have already passed, in the words of USC demographer Dowell Myers, “peak urban millennial.”

    The future market demand for affordable single-family homes seems likely to continue expanding. Nationally, among home purchases made by those under 35, four-fifths choose single-family detached houses, a form that is increasingly out of reach. This is not due to preference. Indeed, according to a California Association of Realtors survey, 82 percent of millennial renters in the state believe that purchasing a home is a clever idea and a safe investment.

    Some assume that building more high-density housing will solve California’s severe housing affordability crisis. Unfortunately, construction costs for higher-density housing range up to 7.5 times the cost of building detached housing. Equally important, the clear majority of new households generally prefer single-family residences by a wide margin.

    Read the entire piece at The Orange County Register.

    Click here to see the video on millennial prospects in California.

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

    Photo by American Advisors Group, obtained via flickr using a CC License

  • California’s Fading Promise: Millennial Prospects in the Golden State

    Homeownership continues to be the most important part of the American dream for millennials, but California’s rising house prices continue to force them out of the state.

    This video is part of the larger report “California’s Fading Promise: Millennial Prospects in the Golden State”, conducted by Joel Kotkin and Chapman University researchers, in partnership with the California Association of Realtors.

  • Fading Promise: Millennial Prospects in the Golden State

    This is the introduction to a new report published by the Chapman University Center for Demographics and Policy titled, “Fading Promise: Millennial Prospects in the Golden State.” Read the full report (pdf) here.

    Along with the report, a new video from Chapman University and the California Association of Realtors talks about the housing crisis in California. Watch it here.

    Throughout much of American history there was a common assumption that each generation would do better than the previous one. That assumption is now being undermined. The emerging millennial generation faces unprecedented economic challenges and, according to many predictions, diminished prospects.

    These problems are magnified for California’s millennials. Their incomes are not higher than those in key competitive states, but the costs they must absorb, particularly for housing, are the highest in the country. Their prospects for homeownership are increasingly remote, given that the state’s housing prices have risen to 230 percent of the national average.

    The long-term implications for California are profound. The lack of housing that can be afforded by middle-income households—particularly to buy—has driven substantial out-migration from the state. California has experienced a net loss in migrants for at least the last 15 years. This includes younger families—those in their late 30s and early 40s—which is the group most likely to leave the state. For every two home buyers who came to the state, five homeowners left, notes the research firm Core Logic.

    Over the next decade, as the majority of millennials reach these ages, the long-term implications for employers and communities are profound. Rising house prices and rents are already impacting employers, including in Silicon Valley. High prices can also mean a rapidly aging population, something that is likely to sap the economic potential and innovation in our communities.

    Many of California’s problems are self-inflicted, the result of misguided policies that have tended to inflate land prices and drive up the cost of all kinds of housing. Since housing is the largest household expenditure, this pushes up the cost of living.

    California still has the landmass and the appeal to power opportunity for the next generation. It is up to us to reverse the course, and restore The California Dream for the next generation.

    Read the full report here.