New Geography

Tag: Cleveland

  • “James Drain” Hits Cleveland

    The ten story of mural of LeBron James is coming down in Cleveland. This one hurts. James wasn’t just the latest embodiment of Cleveland’s hopes, he was a local kid who, unlike so many, had stayed home in Northeast Ohio. His joining of the Cleveland exodus at a time of severe economic distress prompted Cavaliers owner Dan Gilbert to pen a now infamous open letter to fans:

    As you now know, our former hero, who grew up in the very region that he deserted this evening, is no longer a Cleveland Cavalier…..The good news is that the ownership team and the rest of the hard-working, loyal, and driven staff over here at your hometown Cavaliers have not betrayed you nor NEVER will betray you….This shocking act of disloyalty from our home grown “chosen one” sends the exact opposite lesson of what we would want our children to learn. And “who” we would want them to grow-up to become….

    Forty years of frustration boiled over in that letter. Gilbert is from Detroit, but perhaps that’s why he too shares these feelings so viscerally.

    Cleveland’s “Big Thing Theory”

    In a sense though, Cleveland’s disappointment was inevitable. LeBron James was never going to turn around the city. No one person or one thing can. Unfortunately, Cleveland has continually pinned its hopes on a never-ending cycle of “next big things” to reverse decline. This will never work. As local economic development guru Ed Morrison put it, “Overwhelmingly, the strategy is now driven by individual projects….This leads to the ‘Big Thing Theory’ of economic development: Prosperity results from building one more big thing.”

    These have all failed, now even “King James”. The trend lines haven’t changed, even where the individual projects have done well. But often even that hasn’t happened. For example, the Flats, a once-thriving entertainment district in an old warehouse district, now resembles, as one local comedian put it, a “Scooby Doo ghost town.”

    Combating “James Drain”

    James’ departure also fits the narrative of generalized anxiety around “brain drain” and cities losing their best and brightest of each generation. As lots of people really have left Cleveland, this is understandable. But the real story is much more complex. A look at IRS tax return data shows that in reality Cleveland doesn’t have especially high out-migration. Its metro out-migration rate* in 2008 was 28.02. Miami’s was 40.34 and for even the boomtown of Atlanta it was 38.95. Not only is Cleveland not losing an especially high number of people, you can actually argue it is losing too few. A big part of the problem in Cleveland’s economy is that too many people are stuck there.

    Conversely, a real migration problem is that too few people are moving in. As local attorney Richard Herman noted, “New York City and Chicago, like most major cities, see significant out-migration of their existing residents each year. What is atypical is that Cleveland does not enjoy the energy of new people moving in.” The Cleveland metro in-migration rate was only 22.19. Miami’s was 30.36 and Atlanta’s a robust 51.91.

    Cities need new blood. Cleveland isn’t getting it. Its circulatory system is shut down. Cleveland needs more natives to leave and more newcomers to arrive. Both sides win. Those Cleveland departees will move on to be part of the new energy other cities so desperately need. James is going to get to live the high life he wants in South Beach, but somebody else will be fired up to get the opportunity to play in Cleveland.

    Selling Cleveland

    But that begs the question, what’s going to get more people to move to Cleveland? The fact is, James wasn’t getting the job done, and never would. Nor will amenities like the Cleveland Orchestra or the Rock and Roll Hall of Fame Museum.

    The mistake Cleveland and other Rust Belt cities make is that they are too worried about the likes of LeBron James moving to Miami. For people with the means and the desire to choose a place like South Beach, Cleveland simply can’t compete. And let’s not forget, James snubbed Chicago, New York, and Los Angeles too.

    Rather than trying to take on the Chicagos, Miamis, and New Yorks of this world at their strongest points, Cleveland would be far better served ceding that market and fighting where it can best compete. Believe it or not, not everyone wants to live in a huge global city. There are plenty of people who might choose to live in Cleveland, if the city focused on the basic blocking and tackling of city services, quality of life, and business climate instead of splashy grands projets. As Anthony Bourdain said this week:

    I think that troubled cities often tragically misinterpret what’s coolest about themselves. They scramble for cure-alls, something that will “attract business”, always one convention center, one pedestrian mall or restaurant district away from revival. They miss their biggest, best and probably most marketable asset: their unique and slightly off-center character….Cleveland is one of my favorite cities. I don’t arrive there with a smile on my face every time because of the Cleveland Philharmonic.

    In short, Cleveland needs less South Beach, less Chicago Loop, and more American Splendor. Ultimately, my bet is Cleveland will end up missing Harvey Pekar a lot more than it will any multi-millionaire sports star.

    Shooting the Messenger

    Who is going to get that message out about Cleveland? After that sendoff, it sure won’t be LeBron James. That’s a shame. As Jim Russell has richly illustrated, people make migration – and investment – decisions based on knowledge, not just information. Nobody picks a city to live in by entering reams to statistics into a sixteen tab spreadsheet. They’re more likely to move to be near family, friends, or places they know. That knowledge comes from first hand experience – and trusted recommendations.

    Until the switch flips on Cleveland’s brand, it needs to be out earning that trust of prospective residents. The people who’ve left aren’t Judases, they’re your field sales force – or at least they should be. James could have been a missionary “Witness” for Cleveland in a foreign land. Instead, Cleveland blew an enormous opportunity, and left itself with little more than soured memories and a partially demolished mural as an ephemeral reminder of yet another failed Next Big Thing.

    * Tax return exemptions migrating per 1000 overall tax return exemptions in the base year.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

    Photo by alexabboud

  • Immigrant Entrepreneurs Can Turbocharge Cleveland’s Flagging Economy

    In seeking to lure a Chinese lightbulb-maker to town, Cleveland leaders revealed both a vision and a blind spot.

    Cleveland Mayor Frank Jackson and his team should be given credit for recognizing the tremendous opportunity in attracting foreign direct investment, or “FDI,” and the new jobs that it provides.

    According to a 2008 report by the U.S. Chamber of Commerce, foreign firms employed more than 5.3 million U.S. workers through their U.S. affiliates and have indirectly created millions of additional jobs. More than 30 percent of direct hires are in manufacturing. In Ohio, 600 foreign-based corporations from 28 countries are operating 1,000 facilities and employing about 180,000 people.

    One exciting new trend is the rise in the annual number of foreign investment projects in the U.S. renewable energy sector, jumping from 4 projects in 2003 to over 40 in 2008.

    In its eagerness to attract a foreign company offering energy-saving light bulbs, however, City Hall fell into traps which may have been avoided if had it tapped the cultural resources at their fingertips.

    When Mayor Jackson’s administration waded into unfamiliar waters to partner with an LED light bulb company in Ningbo, China, no one thought to talk with Chinese-American entrepreneurs and professionals living in Northeast Ohio. These individuals are eager to assist the City in helping identify appropriate partners in China, supporting the due diligence, and generally advising on a culture that dates back to 5,000 B.C. and has only opened-up in recent decades.

    As reported by Crain’s Cleveland Business, local immigrants were not viewed as a resource.

    ‘Why weren’t we informed; we could have helped you?’ asked Hong Kong-born immigration attorney Margaret Wong….

    Ms. Wong made the statement last Thursday evening, May 20, in the Red Room, a conference room attached to Cleveland Mayor Frank Jackson’s office at Cleveland City Hall. She was there with a group of local small business owners, clergy and other civic leaders invited by the mayor to a meeting to enlist their support in his effort to bring Chinese lighting manufacturer Sunpu-Opto Semiconductor Co. to the city.

    Ms. Wong was asking chief of staff Ken Silliman why the Mayor, who was not present, hadn’t sought the assistance of people such as her and the others in the room sooner in his attempt to make Cleveland the U.S. beachhead of Sunpu-Opto, a maker of energy-efficient LED lighting.

    Mr. Silliman didn’t have a ready answer.

    The answer may be that in this region immigrants are often not viewed as a valuable resource to support the region’s business development, or viewed as people with the skills to help Northeast Ohio navigate the language, cultural and market barriers abroad.

    This must change.

    Yes, it is important that the City and the region aggressively pursue FDI, not only with passion, but also with skill, networks, and on-the-ground experience.

    To make these efforts successful, however, leadership should look to leverage the foreign-market experience of our immigrant entrepreneurs and innovators, particularly in relation to China and India, where booming economies, mounting foreign currency reserves, and relationship-based business culture create unique opportunities and challenges.

    Cleveland’s immigrants, some of whom enjoy business and governmental relationships in the homeland that go back generations, are eager to be a partner in revitalizing the city and the region. They are in a unique position to help our region capture our share of the $245 billion of foreign direct investment streaming into the U.S, to ramp-up our exports to global markets where 95% of the world’s consumers live, and to attract the world’s best and brightest innovators, entrepreneurs, and professionals driving a changing economy.

    There is precedent in leveraging ethnic and global networks for local development Northeast Ohio’s Jewish community, which enjoys extensive business, family and social ties in Israel, has helped the region attract tens of Israeli companies in recent years.

    What is needed now is a bold regional plan to take this formula for success to a larger scale, particularly targeting markets such as China where the government is encouraging its businesses to expand into the United States.

    The path to this global journey, however, should begin with a few short steps at home, launching a multi-purpose International Welcome Center which will help the region build a bridge to the world.

    The Welcome Center will not only provide a much-needed platform to coordinate local resources for attracting FDI, but it will also help educate the region on why the development of a global culture is an economic necessity and on what steps we can all take to welcome and partner with international resources, such as the immigrant talent living right now in Northeast Ohio.

    This represents a bit of conundrum. How do we recruit and welcome foreign companies, their executives, and their families, if we do not fully value our existing immigrant entrepreneurs and innovators? How do we attract foreign direct investment when overseas companies are feared as job-takers?

    In responding to the dichotomy of not welcoming immigrants while trying to lure foreign companies to Cleveland, Anne O’Callaghan, founder of the Welcome Center in Philadelphia said in her City Club of Cleveland speech last year:

    Do the region’s leaders think that foreigners should just stay in the homeland but still wire you their money?

    Northeast Ohio’s immigrant community is rich in technology, entrepreneurship, global market knowledge, and new wealth.

    To make a credible push to attract foreign companies which can establish manufacturing, research, and corporate headquarters in Northeast Ohio and in-source thousands of new jobs, the region can take a bold step forward by partnering with immigrants already here and put out the “welcome mat” for those who may arrive tomorrow.

    Richard Herman is a Cleveland lawyer, Co-Chair of TiE Ohio (The International Entrepreneur), and Co-Author of Immigrant, Inc. (Wiley & Sons, 2009).

    Photo by Caveman 92223 — On the 2010 US Tour

  • Drew Carey and John Stossel Tell Cleveland to Learn From Houston

    What started as a humble video segment for Reason TV has mushroomed into a lot of positive PR for Houston (and less than positive for Cleveland).  It started with famous actor and comedian Drew Carey working with the libertarian Reason Foundation on a video series about saving Cleveland, his hometown.  Houston is held up as a “best practice” example for land use regulation.  There are lots of suggestions and positive comparisons to Houston on red tape (minutes 29:20 thru 32), zoning (37:30), and opportunity (47:50). Yours truly has a short cameo at 38:55. (If you want to be able to jump around, the trick is to start playing it, then hit Pause. You’ll see the grey loading indicator continue to download the video. Come back later after it’s fully loaded and you’ll be able to jump to any point you like.)
    After the series was released to the internet and Forbes declared Cleveland the Most Miserable City in America, John Stossel at FOX Business News picked it up.  A friend of mine loaned me a DVD of the 45 minute show (thanks Nolte), but I haven’t been able to find it online.  There are shorter segments about it here and here.  The first one jumps right into talking about Houston 16 seconds in, and the second one jumps into Houston around 40 seconds and 58 seconds in.  The Cleveland newspaper writes about the show here.
    Unfortunately, one of the professors he has on the show to present the other side brings up another one of those Houston myths that just won’t die: that you can build anything next to anything, including a strip club next to a day care center or school.  No, we have narrow nuisance and SOB regulations to prevent that.   We also have private deed restrictions. You don’t have to prescriptively control everything to prevent the worst-case scenarios.
    Then Bill O’Reilly picks up the story in an interview with Stossel (hat tip to Jessie):

    STOSSEL: People go to where the weather is good. We already have…

    O’REILLY: Well, you can’t blame the city for the weather. I mean, look at Chicago. Great city, bad weather. Boston, come on. You can’t blame the city for the weather.
    STOSSEL: You can rank them for that. And you can blame the politicians for saying we’re going to raise taxes to build our wonderful projects, and that’s going to make things better. The cities that prosper like Houston are the cities that have fewer rules and lower taxes.
    O’REILLY: But remember Houston used to be the crime capital? They cleaned that place up pretty well.
    STOSSEL: But Cleveland has 22 zoning categories. Houston has none.
    O’REILLY: Twenty-two zoning categories? Very hard.
    STOSSEL: In Cleveland, to start a business, a politician bragged, “We could get you in there in just 18 months.” In Houston, one day.
    O’REILLY: One day? The problem with no zoning is you can have, you know, the No-Tell Motel right next to you. And…
    STOSSEL: You could. But that rarely happens. And it’s not an ugly city, Houston.
    O’REILLY: No, I didn’t say it was ugly. Who said it was ugly?
    STOSSEL: Lots of people. No zoning. The city planner said it will be ugly. You will have…
    O’REILLY: We have a lot of Houstonians watching “The Factor,” and I love going to Houston. All right. There you are, the Forbes magazine list, and Stossel laying it down.

    We’ve come a long way.  Five or ten years ago, you couldn’t find many people – including libertarians – that were willing to hold Houston up as a land-use model in public because our reputation was so bad.  But now they do, and it’s (slowly) changing our national reputation for the better.

    This post originally appeared at HoustonStrategies.com

  • Will a Dying City Finally Turn to Immigrants?

    Cuyahoga County Treasurer Jim Rokakis, who is based in Cleveland, estimates that new census numbers might show Cleveland’s population to be 325,000, a whopping 153,000 drop in 10 years! That would be an average of 15,000 people leaving Cleveland every year.

    That’s 1,250 people jumping ship every month,

    312 people fleeing the wreckage every week,

    45 people evacuating every day, or

    2 people running out of Cleveland every hour, 24/7, the whole year, for 10 straight years.

    Even conservative estimates have us losing 10 percent of our population this decade, the fastest rate of decline of any major American city (except New Orleans). And still, remarkably, we hear no alarm bells from City Hall, no calls of urgency, just a commitment to stay the course and manage the decline.

    While the extent of the exodus is debateable, it’s obvious that Cleveland, a city that once boasted 1 million residents, is not on the bright path to rebirth.

    Maybe we don’t really understand the problem.

    New York City and Chicago, like most major cities, see significant out-migration of their existing residents each year. What is atypical is that Cleveland does not enjoy the energy of new people moving in.

    Put simply, the city needs the fresh optimism and pluck of new immigrants, the most likely source of New Clevelanders.

    New immigrants are inherently mobile,and can move to Cleveland as part of secondary migration from New York City or other gateway cities. Many would be excited to pursue their American Dream right here on the shores of Lake Erie. In part due to the presence of immigrant language cable television and the internet, they can come to Cleveland and still retain ties to their native culture. Immigrants are moving to far more isolated places, such as Fargo, North Dakota.

    The great shame is that this was once proud city of immigrants (nearly 1/3 foreign-born in the early 20th century). But it now only 5% of its population is foreign-born, well-below the national average of 12%.

    But none of this impresses Mayor Frank Jackson who summarily dismisses immigrant-attraction initiatives like those in Philadelphia and those being discussed now in Detroit. Yet the basic reality is that immigration provides the only way for cities like Cleveland to generate the kind of numbers needed to make up for decades of mass out-migration.

    In numerous cities around the country, economic development professionals and foundations are looking at ways to tap the immigrant market. This will not only counter local depopulation and stabilize local the housing market, but will also attract a new wave of urban entrepreneurs, investors and consumers.

    They also realize that a globally diverse city would act as a magnet for the young, international and minority professionals leading the New Economy. These people could help catalyze a transformation to a more entrepreneurial, globally-connected and innovation-based local economy.

    Philadelphia Mayor Michael Nutter announced his plans to recruit 75,000 newcomers within five years to fill the city’s abandoned homes. And he’s targeting immigrant newcomers who have recently arrived in New York City.

    In Detroit, the New Economy Initiative (a $100 million regional fund for economic development), the Skillman Foundation, and the Greater Detroit Chamber of Commerce are conducting a community-wide discussion about ways to rebuild the city by attracting immigrants and international resources and promoting new intercultural partnerships for the benefit of all its citizens.

    Other cities consider immigrant-attraction strategies, but Cleveland City Hall ignores the very people most likely to move to Cleveland: immigrants looking to own their first homes and to start their new businesses.

    Pittsburgh-based PNC Financial Services Group conducted a study on Northeast Ohio’s economy and concluded that that the region is likely to suffer even after the rest of the country recovers from the recession. PNC’s Senior Economist and author of The Econosphere, Craig Thomas, found that attracting immigrants would help the region’s economy through investments in housing stock and start-ups.

    “As people leave, it really does take international folks to come in, open up stores and fill up neighborhoods,” Mr. Thomas told Crain’s Cleveland Business.

    But Mayor Jackson insists that efforts like those in Philadelphia and supported by economists like Mr. Thomas are not for Cleveland. As he began his second term, he said that he is positioning the City to compete in the global economy by building from within by using what he calls “self-help.”

    But not many are left to help. And by the time the policy is seen as a failure, even more will be gone.

    As people leave, so do businesses, from neighborhoods and many parts of downtown where vacancy rates have skyrocketed.

    As Cleveland’s downward spiral continues, the local leadership appears clueless on how to stop it.

    Richard Herman is the co-author of Immigrant, Inc.: Why Immigrant Entrepreneurs Are Driving the New Economy (and how they will save the American worker) (John Wiley & Sons, 2009). Herman is the founder of an immigration and business law firm in Cleveland, Ohio, which serves a global clientele in over 10 languages. He is the co-founder of a chapter of TiE, a global network of entrepreneurs started in 1992 in Silicon Valley by immigrants from India. For more information on immigrant entrepreneurship and rust belt revival, see www.ImmigrantInc.com ; www.youtube.com/user/Immigrantinc2010 ; www.ohio.tie.org . Contact Richard at richard.t.herman@gmail.com or 216-696-6170.

    Photo by ScallopHolden.com

  • The 10 Percent Solution to Urban Growth

    What if we achieved the urbanist dream, with people deciding en masse to move back to the city? Well, that would create a big problem, since there would be no place to put them. Many cities hit their peak population in 1950, when the US total was 150 million. Today it is over 300 million, with virtually all the growth taking place in the suburbs.

    So where would these new urbanites reside? With the enormous losses in our urban housing stock, our cities lack the residences to hold even their 1950 population. A recent survey found that one third of all the lots in Detroit are now vacant, for example. And even if all the old housing was rebuilt, declines in household sizes, particularly in urban areas, has reduced the effective carrying capacity of the old urban fabric even at historic densities.

    But there’s an even bigger challenge to wholesale urbanization from future population growth. The Census Bureau estimates that the US will add nearly 100 million more new people by 2050. If you look at the few cities in the country that have large inhabited urban cores, they hold a relatively small percentage of the current population. New York City, Los Angeles, Chicago, Philadelphia, San Francisco, Boston, Seattle and Washington, DC combined barely hold 20 million people. Even if all these cities doubled in population by 2050, they would only be able to hold 20% of the net new growth expected over the next four decades.

    And achieving even that level of urban growth is simply not realistic. Most of the existing highly urbanized cities are already largely full of buildings. Even where land is available, zoning restricts what can be built there, and increasing densities is politically difficult. New York City has been the most aggressive on the growth front, rezoning 20% of the city under the Bloomberg administration, although many sections have actually been downzoned.

    But even this effort could accommodate a projected one million new residents by 2030. Chicago is going the other direction. When it introduced new zoning under the Daley administration, permitted densities were actually reduced in most cases, though Chicago remains perhaps the only truly urban city with large amount of vacant or underutilized land for redevelopment. Ed Glaeser calls for building skyscrapers in California, but San Francisco residents are imbued with a strong anti-development mindset and have long railed against the “Manhattanization” of their city.

    America could not be reshaped from a primarily suburban to a city-centric country without a massive shift in local political mind-sets. Rather than attempting that exercise in futility, urban advocates should adopt much more modest goals that, although limited, could be completely transformational for our cities.

    There’s been much made of the return to the city. Indeed, large tracts of the urban cores of many places have been utterly remade. But most of the cities where this has happened have been America’s largest tier one cities – New York, Chicago, Boston, etc. They have achieved the point of self-sustaining urban growth, and are well positioned to attract more residents, particularly the upscale and childless, young singles and students and recent immigrants.

    In contrast, smaller cities have seen a few hundred downtown condos and such, but not a real urban renaissance. There is still a lot of work to do in those places.

    The way to do this is to adopt the “10 percent solution”. That is, for most cities, they should develop a strategy that tries to capture somewhere between 5 and 15 percent of the net new growth in their metro areas. If a city can get more, great. But for any growing region, even 10 percent would create a dynamic of massive change in the urban core.

    Consider Indianapolis, a region with healthy regional growth that is above average but not among the nation’s leaders. The Indianapolis metro area is adding people at a rate of about 200,000 people per decade. Center Township, which is the urban core of the city, peaked in population in 1950 at 337,000 people. Today it is at 167,000, a decline of 50%, on par with America’s greatest urban collapses

    But what if the urban core managed to capture 10% of that new growth? That’s 20,000 new residents, very easy to physically accommodate within a decade. What would 20,000 new residents do to central Indianapolis? What would it do to the entire dynamic of the city? It could be completely transformational.

    Such a modest capture of new population would catapult central Indianapolis into one of the absolute top growth areas in the region. Only one suburb is on track to add that many or more people during the 2000s. Many other suburbs are considered prosperous and fast growing despite adding only a few thousand people. Even that limited influx creates a pattern of growth vs. stagnation and decline. That’s where urban Indianapolis needs to get.

    One of the great advantages of targeting 10% market share in new growth is that it frees the city to pursue a market segmentation strategy. It doesn’t have to try to convince vast numbers of suburbanites – the vast majority of whom are likely to stay in place – to make a radical lifestyle change. Rather, the core can market to specific segments that it is best positioned to attract, and put together the most compelling and differentiated product to attract them.

    One potential market is those who want an urban environment but can’t afford to live in one of the expensive tier one cities. They could market themselves to people who find themselves priced out of the biggest cities, but would settle in a smaller, but still vibrant urban environment.

    Can Indianapolis do it? As with many cities, there is already some evidence that it could. In the 2000s, decades of population decline came to an end in 2006, and Center Township started adding an estimated 400 people per year. The jury is still out on whether the estimates are confirmed by the census count and whether it can be sustained, but it still amounts to 4,000 people per decade, showing that the city is already starting to make progress.

    Cincinnati provides another example. It is a metro growing a bit less than the national average, but still adding people at a rate of about 150,000 per decade. The city of Cincinnati declined from a peak of 503,998 in 1950 to 333,336 today, a loss of 170,000 people. Again, if the city captured 100% of just regional growth, in little more than a decade it would be back to a record high population. That’s not realistic of course, but 10% of that total, or 15,000 people, would still make a tremendous impact on the city. Like Indianapolis, there’s already some sign of an inflection point, as the city population began growing again in the 2000s.

    Can this 10% solution really happen? The answer is a resounding Yes, because it is already happening in Atlanta. Its reputation as a sprawlburg overshadows the fact that it is experiencing one of America’s most impressive urban core booms. The city of Atlanta has added almost 120,000 new residents since 2000, an increase of 28%. This is a mere 10.5% of the metro area’s growth during that time – but it has totally changed the city. Atlanta lost over 100,000 people from its 1970 peak, but is now at an all time high.

    Viewed in this realistic light, there is huge reason for optimism about rebuilding the urban cores of even our Rust Belt cities. Frankly, with the required market share of growth to get there so low, there’s no excuse for not making it happen. If city leaders can’t figure out how to attract even 10% of the market, they deserve to lose. If they can do better, great. And once they’ve captured that 10% base, and restarted a growth pattern, they can figure out how to get more ambitious and expand market share.

    For regions with population decline, like Detroit and Cleveland, there’s a different and much more challenging dynamic. But for cities with even modest regional population growth, there’s all the opportunity in the world to attract new urban residents and completely change the game for their urban cores.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

    Photo: Carl Van Rooy (vanrooy_13)

  • Pittsburgh Renaissance?

    In the third of a three part New Geography series on Pittsburgh for the G-20 summit, Aaron Renn assesses Pittsburgh’s value as a model region for other cities suffering decline.

    As the G-20 leaders prepare to convene in Pittsburgh, expect the recent chorus of praise for that city’s transformation to reach a crescendo. Pittsburgh, once the poster child for industrial decline and devastation, is now the media darling as an exemplar of how to turn it around. The New York Times talks about how “Pittsburgh Thrives After Casting Steel Aside” while the New York Post informs us that “Summer in Pittsburgh Rocks”. The Economist named Pittsburgh America’s most livable city. This emerging reputation for cracking the code on revitalization is prompting struggling burgs like Cleveland and Detroit to ask what lessons the Steel City holds for them.

    But does reality live up to the hype? Has Pittsburgh really turned the corner? For the most part, a look at the data suggests otherwise:

    1. Population Is Shrinking. The city of Pittsburgh has lost over 50% of its population since its peak and it is still declining. Just since the 2000 census Pittsburgh has lost nearly 25,000 people – over 7% of its population. The metro area is shrinking too, making Pittsburgh one of only a handful of large metro areas with the dubious distinction of population decline. Others on that list: Buffalo, Cleveland, Detroit, and New Orleans. Since 2000, metro Pittsburgh has actually lost a greater percentage of its population than metro Detroit.
    2. People Are Leaving. Part of Pittsburgh’s population loss is a result of a rare case of more deaths than births. But the region has net outmigration too. Few other stats are so telling about a city. Is this a place people are voting with their feet to move to or leave from? They may come to school or an internship at a local hospital, but, more often than not, they are not putting down roots. With more people moving out than moving in, Pittsburgh is clearly not a destination city
    3. International Immigrants Are Staying Away. Metro Pittsburgh’s foreign born population percentage was 2.6% in 2000 – very low. The Pittsburgh Technology Council summed it up best when it said, “Our region has negligibly grown its foreign born population.” Contrast Pittsburgh with the national average for foreign born population of 5.7%, and regions like Boston (11.2%), Denver (9.3%), and even Detroit (6.1%).
    4. Poverty Is High. Pittsburgh’s economic area poverty rate is worse than all cities benchmarked against it by Pittsburgh Today at 11.6% versus 9.3% in Milwaukee, 9.9% in Cincinnati, and 10.5% in Cleveland among 14 comparison cities.
    5. The City Is in Debt – Bigtime. Pittsburgh is buried under a mountain of liabilities. Its unfunded pension liability is over $1 billion. Its annual interest on its debt is $352 per capita, far higher than peer cities. Pittsburgh Quarterly is very direct: “Put simply, compared with all the benchmark regions, Pittsburghers have been saddled by their governments with relatively huge amounts of public debt.”

    Still, by other measures Pittsburgh is, if not thriving, certainly outperforming both the Rust Belt and the nation as a whole. Its July metro unemployment rate of 7.8% is well below the national average. In the last 12 months, Pittsburgh lost 2.8% of its jobs, which is a much better performance than regions like Chicago (-4.5%), Atlanta (-4.9%), and Portland (-5.8%). Its housing market, having never boomed to begin with, has not experienced the declines of most of the rest of the country, making it a Rust Belt outpost of the “zone of sanity”.

    Pittsburgh has a large “eds and meds” sector, led by the University of Pittsburgh, whose medical center employs over 25,000 people, and Carnegie-Mellon University. Pittsburgh was early to the game in this approach, with steel fortunes powering the development of these institutions starting in the 1950s. There are now seven universities within a five mile radius of downtown.

    Eds and meds employment is quasi-public sector. It can be a source of stability, but it’s not proved to be the source of dynamism that you see in Silicon Valley, around Boston or even Madison. Sure, there have been some high tech successes in Pittsburgh, but the city is far from a hub of the innovation economy.

    Pittsburgh’s downtown remains an employment center with a density uncommon in a Rust Belt full of cores defined more by parking lots than vital streetscapes. Pittsburgh has long had a rich fabric of dense, urban neighborhoods, and many of those are strengthening. The city’s geography retains its charm, and a lot of former industrial areas along the three rivers have been repurposed for recreational use.

    The truth is that the Pittsburgh story is still being written. It’s still more “green shoots” than a true renaissance so far. Until its migration statistics change course, and it demonstrates sustained and growing economic dynamism, the city cannot claim to have truly turned itself around. Still, the signs of progress are better than in places like Cleveland and Detroit.

    What accounts for this? A few success factors come to mind:

    1. Passion for the City. Older river cities like Cincinnati and New Orleans tend to have strong provincial cultures, with all the good and bad that implies. You see this in Pittsburgh in the unique local “yinzer” dialect, traditions like the cookie table at weddings, and of course the Steeler Nation. There’s a strong attachment to the native soil in Pittsburgh, even for those who left.
    2. Starting Early Into the Cycle. Jane Jacobs pegged Pittsburgh’s economic stagnation to 1910. The steel industry collapsed decades ago. Pittsburgh had troubles before other cities, so it is figuring out how to deal with them before other cities. It takes a long time to recover from a hundred years of status quo thinking.
    3. Shrinkage. There’s no longer a need for a Fort Pitt to project military power. The steel industry is gone and with it the need for thousands of steelworkers. Part of the issue in the Rust Belt is that there is no longer any economic raison d’etre for some of these big cities. Pittsburgh long was too big for its role in today’s economy, so shrinkage was good. This also created the rather unique institution of the Pittsburgh diaspora, best known through the Steeler Nation. Like the Indian and Chinese diasporas, it’s a network of people who went out, made connections in the world, built new skills, etc. that Pittsburgh can now tap into, as tirelessly documented by Jim Russell.
    4. The Totality of the Collapse. On Wall Street they call it “capitulation”, where the markets hit bottom and there is no positive sentiment. You have to hit that bottom to start back up. Pittsburgh went through a civic devastation when the steel industry collapsed the likes of which few American cities have seen. This shock to the system created the conditions necessary for change that a more gradual decline would not have.
    5. Dramatic Educational Improvements. The Chicago Fed reported that Pittsburgh’s national rank for percentage of adults who were high school grads went from 55th to 3rd. And for college grads it went from 69 to 37. These are amazing numbers.

    Is the Pittsburgh model transplantable elsewhere in the Rust Belt? In the short term, no. Pittsburgh’s successes of today are rooted in 30 years of steel industry collapse, shrinkage, and boosting its brain power. The auto industry restructuring eventually might bring a needed jolt to Detroit and other Rust Belt cities, but recovery is a long term game that requires sustained commitment over many years to things like education. Pittsburgh has achieved some of this, perhaps not as spectacularly as the media suggests, but in ways that are still useful for other Rust Belt cities to ponder.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

  • Downtown Central-Cities as Hubs of Civic Connection

    There’s been a torrent of spirited banter lately about the reemergence of downtown central-cities. Much of this raucous debate is between advocates of urban revitalization, who offer an assortment of anti-sprawl messages as justification for this movement, and those who see suburban growth options as essential to quality of life in America. Adding to the fray are environmentalists who see housing density and alternative forms of transportation as the panacea for confronting our carbon-choked world. Downtown central-cities, they say, will incentivize citizens to relinquish their cars in favor of bikes and walking paths.

    These discussions largely ignore a greater significance to the reemergence of central-cities; namely, the recognition of downtowns as the epicenter of civic and cultural activity. This represents a shift away from the traditional concept – barely a century old and now antiquated – of downtown as predominately an economic and job center hub.

    This primary role for downtowns has been declining since the 1950s. According to Robert Fogelson, professor of urban studies and history at MIT and author of Downtown: Its Rise and Fall, 1880-1950, after World War II, downtowns lost their prominence as places where people “work, shop, do business, and amuse themselves.” As he states in the book, “Downtowns were once thought to be as vital to the well-being of a city as a strong heart was to the well-being of a person.”

    Increasingly the word “downtown” has become associated exclusively with large urban centers, fostering images of traffic, crime, homelessness and other forms of unsavoriness. A closer look, however, reveals a wide range of downtown genres – small and large, central-city and suburban, safe and sketchy, chaotic and peaceful, established and emergent. Some downtowns are situated in major urban regions while others are nestled in small-town communities. The senior demographic is prominent in some, college crowd in others.

    This new assessment of downtown as primarily a center for civic opportunities makes sense and revives the ancient role of the plaza “forum” or “agora” concept–places that H.G. Wells affectionately referred to as ideal for “concourse and rendezvous.” This redefinition may bother some who wish to return to the downtown apex of the 1950s, yet the idea is both viable and sustainable.

    With the traditional town-center model serving as the hub of civic activities, residents and visitors alike are frequenting dining establishments, arts and music venues, and coffeehouses in the spirit of civic connection and community. No longer a phenomenon exclusively associated with young artists, bohemians, and intellectuals, the downtown experience is also drawing unprecedented numbers of older folks who appreciate the history, cultural significance, ambiance and architecture of the old core.

    Downtown planning efforts in many locales are responding to this surge of interest by creating a brand identity for their cities – Austin, Texas, has developed a vibrant music scene, with a number of entertainment venues tucked along its 6th street corridor; Indianapolis promotes itself as a spectator-sports mecca, with its downtown activity infused by a robust fan base frequenting college basketball tournaments, pro and minor league baseball games, and the nation’s largest sporting event: the Indianapolis 500; Chicago touts itself as a tourist destination replete with world-class museums, city and architectural tours, and fine dining in its vast downtown core. Smaller downtowns in cities like Davis, California, Evanston, Illinois, and Iowa City, Iowa, tap into a bustling college crowd from area universities.

    Traverse City, Michigan, with a population of over 15,000 (142,075 in the surrounding metro area) offers another model: the quintessential small-city downtown. Quaintly situated along the Grand Traverse Bay on Lake Michigan, the area is primarily known for boating, kayaking, and sailing, except in July, when the city hosts its annual, week-long Cherry Festival that attracts swarms of people to its historic downtown area.

    According to Rob Bacigalupi, Acting Executive Director of the Traverse City Downtown Development Association, downtown traffic is driven by the office population and events. “Downtown Traverse City has somewhere in the neighborhood of 3,500 office workers. Certainly that’s a small number by any measure, but for a town of 15,000, these workers provide a good base for retailers who otherwise have to rely exclusively on seasonal visitor traffic,” he says.

    In terms of a niche identity for downtown Traverse City, tourism seems to be front and center. The calendar is jammed with events, many of which are designed specifically to attract locals downtown. Other cultural activities, such as the Cherry Festival, Traverse City Film Festival and Horses by the Bay, draw visitors by the tens of thousands. Bacigalupi cites a recent convention and visitor’s bureau survey indicating downtown shopping as one of the main regional attractions. “There’s no doubt,” he says, “that regional tourist traffic is perhaps the largest driver of foot traffic downtown. This says a lot for a region that has a number of other attractions and activities to offer.”

    For many city leaders the potential impact of downtown on regional economics and culture is what’s creating the most buzz. Kansas City (Missouri), Roanoke (Virginia), and Asheville (North Carolina) are among a growing number of cities seeking to capitalize on their unique brand of cultural connection to generate badly needed tax revenues for their downtown areas. Some experts say this is a sound move amid tepid economic times as city and local governments look to draw customers from closer to home.

    This message rings true for economically ravaged Rust Belt cities like Cleveland, Ohio. For years, downtown Cleveland has struggled to survive – beginning in 1960 when manufacturing and heavy industries began their decline and the flight to the suburbs gained momentum. In 1978, Cleveland had the dubious distinction of becoming the first American city to enter into default since the Great Depression. Despite small glimmers of promise, downtown Cleveland has been stuck in neutral, unable to build a cohesive identity and direction.

    There are some successes though: Redevelopment efforts have transformed a downtown corridor along E. Fourth Street into a bustling fine dining and nightlife mecca, demonstrating the appeal that well-constituted areas have on the local populaces and tourists. And the area’s rich ethnic and cultural heritage shows promise as a catalyst for change in the central core. While all of this points to some progress for downtown Cleveland, it still must overcome a heavy stigma associated with crime, poverty, and a declining population base to truly achieve civic vibrancy.

    Many of our nation’s suburban communities are setting the pace for downtown civic connection. Naperville, a Chicago suburb and the fifth largest city in Illinois, has established itself as a model for suburban downtowns. This city of 142,000 residents features a cornucopia of sophisticated shops, restaurants and entertainment venues that attract foot traffic to the town center-oriented central district. Open space has been integrated into the cityscape through well-maintained walking paths along the DuPage River, which flows through downtown. Thoughtful planning for the provision of abundant, free parking, train accessibility, and bike lockups enables convenient accessibility to the area both day and night.

    Folsom, California, is indicative of a suburban community that fosters civic ties and activities through its historic downtown district. With a population of 70,000 this city located in the eastern portion of rapidly growing Sacramento County draws an eclectic crowd to its old town boardwalk setting replete with saloons, outdoor restaurants, and antique stores. The downtown core also serves as a gathering post for legions of bicyclists who have helped shape Folsom into one of the top bicycling communities in the nation.

    During summer, downtown Folsom hums with activity generated by two weekly events: Thursday Night Market, featuring live music, food and shopping, and the Sunday Farmers Market, where frequenters can purchase fresh, locally grown food from area farmers. Plans are afoot for a street-scape improvement and a storefront restoration – projects that are designed to preserve historic elements while enhancing the city’s tourism desirability. Also in the works are mixed-use housing units and a restaurant that incorporates a railroad roundabout. All of this comes on the heels of a new parking structure and ice-skating rink, which debuted last year.

    In the end, downtown central-cities seem poised to reclaim some of their prominence as magnets of culture and social connection. We may not be witnessing the rebirth of the great economic centers of the 1950s, but a revival of our central space represents a positive development for communities both large and small.

    Michael Scott is a researcher and writer focusing on the growth and sustainability of downtown central-cities. He can be reached at michael@vdowntownamerica.com.

  • Globalization Leads to Civic Leadership Culture Dominated by Real Estate Interests

    “Cleveland’s leadership has no apparent theory of change. Overwhelmingly, the strategy is now driven by individual projects. These projects, pushed by the real estate interests that dominate the board of the Greater Cleveland Partnership, confuse real estate development with economic development. This leads to the ‘Big Thing Theory’ of economic development: Prosperity results from building one more big thing.“

    Ed Morrison wrote the above about Cleveland, but he could have been describing any number of other cities. Why is it that so many cities have turned to large real estate projects to attempt to restart growth, turning away from strategies that previously made them successful?

    The answer possibly lies in structural economic changes resulting from the nationalization and globalization of industry. Up until the 1990s, many businesses – including retail, utilities, some manufacturing, and especially banking – operated on a regional or local basis. This meant that the civic leadership of a community was heavily dominated by businessmen, again, especially bankers, whose success was dependent on the overall macroeconomic health of the particular city or region they were located in.

    But with banking deregulation, we saw large numbers of hometown banks merged out of existence. Industry after industry was subjected to national or international level roll-ups as changes in the economy and regulatory environment gave increasing returns to scale.

    Why is it that “real estate interests” dominate in a local economy like Cleveland? Because, to a great extent, they are among the only ones left. Consider the local industries that were not as subject to roll-ups. Principal among these are real estate development, construction, and law. This means the local leadership of a community is now made up of executives in those industries, and they bring a very different world view versus the previous generation.

    Consider the difference between a banker and a lawyer. Banks make money on the spread between what they pay for deposits or wholesale funding, and what they charge for loans. This means the CEO of a bank is making money while he plays golf at 3. He’s got a cash register back at the office that never stops ringing.

    By contrast, lawyers get paid by the hour for work on specific matters and transactions. The law partner is only making money on the golf course if he is closing a deal. It’s similar between many other “operational” businesses that were previously prominent in communities, and the “transactional” businesses that are now often dominant.

    Additionally, even where the hometown bank or company did not get bought out, it likely escaped that fate by getting big itself and making large numbers of acquisitions or otherwise expanding. This means those institutions are less dependent on the health of the particular local market they happen to be headquartered in than they are overall macroeconomic conditions. While no doubt they want the headquarters town to be successful, not least of which so they can effectively recruit talent, they can afford to take a portfolio view of local markets.

    Not only has the drying up of local and regional operating businesses led to a business leadership community unbalanced in favor of transactionally oriented firms, the loss of those local and regional operating businesses robbed many of the transactional companies such as law and architecture firms of their principal local client base. Large national businesses employ national firms for advertising, law, architecture, etc. If they use local firms, it is in a subsidiary role. (Or, if a smaller firm is fortunate enough to land a contract, it is servicing a client on a national, not local basis).

    Richard Florida described this in his Atlantic Monthly article on the financial crash. “As the manufacturing industry has shrunk, the local high-end services—finance, law, consulting—that it once supported have diminished as well, absorbed by bigger regional hubs and globally connected cities. In Chicago, for instance, the country’s 50 biggest law firms grew by 2,130 lawyers from 1984 to 2006, according to William Henderson and Arthur Alderson of Indiana University. Throughout the rest of the Midwest, these firms added a total of just 169 attorneys. Jones Day, founded in 1893 and today one of the country’s largest law firms, no longer considers its Cleveland office ‘headquarters’—that’s in Washington, D.C.—but rather its ‘founding office.’”

    Where then is the source of transactions these firms can turn to in order to sustain their business? The public sector, of course.

    I would hypothesize that many local transactionally oriented services companies have seen the public sector take on a greater share of billings than in the past. With the old school bankers and industrialists mostly out of the picture, the leadership in our communities consists increasingly of the political class and a business community dominated by transactional interests.

    When you look at the composition of this group, it should come as no surprise that the publicly subsidized real estate development is the preferred civic strategy. Politicians get to cut ribbons. Cranes always look good on the skyline. Local architects, engineers, developers, and construction companies love it. And there is plenty of legal work to go around.

    This is not to say these people are acting nefariously. And nor were old school bankers and industrialists always acting purely altruistically. Rather, the difference comes from the world view and “theory of change” that people steeped in transactionally oriented businesses bring with them.

    With the current financial crisis, bigness, as a strategy, is out of favor for the moment. Also, the gimmicky financial transactions that underlie much of the crisis are calling the entire transactional model into question. There’s an increasing alarm at the precipitous decline of manufacturing, particularly the auto sector. And people are questioning whether we as a country can survive simply through services, or whether we need to revitalize the concept of the operational business and actually making things. Plus, real estate deals are tougher to get done because of tight credit, and it seems unlikely that the go-go days of recent years are coming back soon.

    We’ll see where this leads. But if we see more local and regional scale operating businesses start to emerge again, then perhaps the urban development pendulum will start swinging the other direction again. In the meantime, large scale real estate development will likely continue to be preferred.

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

  • Shrinking the Rust Belt

    An article in the London Daily Telegraph suggesting that President Obama might back a major program of bulldozing parts of cities in the Rust Belt has put so-called “shrinking cities” back in the spotlight. Many cities around the country, especially in the Rust Belt have experienced major population loss in their urban cores which has sometimes spilled into their entire metro area. They have thousands of abandoned homes, decayed infrastructure, environmental challenges, and no growth to justify a belief that many districts will ever be repopulated.

    Cities in the Rust Belt grew in an era when large scale manufacturing required large amounts of labor. Today, productivity improvements mean that the United States can set new industrial production records with a fraction of the workforce of yesteryear. With much of its traditional labor force no longer as in demand in the modern economy, many Rust Belt cities lack an economic raison d’etre. Some may transform themselves for the modern economy, but many will be forced to accept the reality of a significantly diminished stature in the 21st century.

    In this world, size can prove a liability. One of the biggest problems in turning around Detroit is the sheer size of the region. The metro area has a population of 4.5 million – not including nearby Ann Arbor or Windsor, Canada. Is there really any need in the modern day for a city the size of Detroit in Southeastern Michigan? It seems doubtful. As I’ve argued before, transforming that city’s economy would be much easier if the region were smaller.

    One challenge is that a decline in population, which is already occurring naturally, doesn’t shrink the area of urbanization or the accompanying infrastructure that needs to be maintained. Indeed, although it is losing population and can’t support the infrastructure it has, Detroit still wants to build more, such a new regional rail transit system. And legacy debts such as pension liabilities don’t get smaller just because people leave. As with leverage, scale economics works in declining places as well as on the growing ones. The people who operate new transit systems or police who secure expanded areas must be paid. Roads, sewers, and water lines need to be maintained. In many places that are losing people, jobs, and tax base, such fixed costs could prove ruinous over the long run.

    Under such conditions, Rust Belt cities require both outside help and a program of managed shrinkage. The first challenge will be getting these cities, especially larger ones like Detroit, to admit that they need to do it on a regional basis. Medium sized cities like Flint and Youngstown have been more willing to face up to challenges. In contrast, places like Detroit, Cleveland, and Buffalo still see themselves as important national cities. Pride is blocking the effort to undertake a major managed shrinkage program. Instead of adjusting to reality, these cities continue to pour hundreds of millions into projects that vainly attempt to restart growth. .

    What would a federally assisted managed shrinkage program look like? No one can say for sure since this is a new field in America. Clearly, study of what has happened in Europe, particularly in Germany, where managed shrinkage has long been on the agenda, is warranted. But these ideas can’t just be transplanted via lift and drop. We need to create a distinctly American program informed by the best practices of elsewhere. That program should include the following elements:

    1. Education. Raising educational attainment not only makes people more employable in the new economy, it makes them more mobile.
    2. Relocation Assistance. Many people in the Rust Belt might want to move but be unable to do so because they are upside down on a mortgage or can’t sell their house. As more people leave, that will put downward pressure on the housing market. Hence, some government relocation assistance to help buy out people who want to move might be helpful.
    3. Shrinking the Urban Footprint. The quantity of urbanized land needs to be reduced so that the excess housing and infrastructure can be retired and the cost of servicing it eliminated. This means painfully identifying areas which will not receive reinvestment, and encouraging and assisting the people and businesses that remain to relocate. This will be difficult as these neighborhoods are still the locales for people’s homes and they have a strong emotional sense of ownership. Sensitivity is clearly called for. We need to increase localized density in areas targeted for redevelopment and convert other areas to non-urbanized uses such as nature preserves or agriculture. This will be a long process.
    4. Financial Restructuring. Older cities are often hobbled by mountains of debt, underfunded pensions, overstaffed payrolls, and too many municipal fixed assets. The government needs to be right-sized. Federal assistance may be needed to take over pensions and to give cities some tools to restructure unsustainable debt loads outside of bankruptcy.
    5. Development Restrictions. In return for federal assistance, there ought to be a real insistence that these cities sign up to the shrinkage programs. This might include enforceable restrictions on their ability to adopt policies that are oriented towards servicing growth such as restrictions on the ability to use federal funding for net new infrastructure. For example, if Detroit wants to build a federally funded rail system, it should retire an equivalent amount of other infrastructure elsewhere to offset it.

    Participation would be voluntary, but the federal government should make it clear that it will not finance futile attempts by these cities to try to recapture the glory of their pasts.

    This is of course only a conceptual outline of a program. Significant thought, analysis, and research would be needed to develop a program. Given our lack of experience in the field, experiments should be encouraged, flexibility granted within broad parameters, and real world feedback continuously incorporated back into the program. Clearly, we will not get everything right the first time around. We need to have the courage to learn from our mistakes and not forge headlong into failure simply because it would look like a political retreat.

    This won’t be pleasant or easy. It is not a path anyone wants to take. But given the condition of much of the Rust Belt, the only viable options appear to be painful ones. As local blogger Tom Jones recently said, “Too often, dealing with urban problems in Memphis is like the stages of grief. Just this once, maybe we can move past denial, anger, bargaining and depression, and unabashedly move to acceptance and develop the kinds of bold plans that can truly make a difference in the trajectory of our city.”

    Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

  • Special Report: Infill in US Urban Areas

    One of the favored strategies of current urban planning is “infill” development. This is development that occurs within the existing urban footprint, as opposed that taking place on the fringe of the urban footprint (suburbanization). For the first time, the United States Bureau of the Census is producing data that readily reveals infill, as measured by population growth, in the nation’s urban areas.

    2000 Urban Footprint Populations

    The new 2007 estimates relate to urban areas or urban footprints as defined in 2000 and are produced by the American Community Survey program of the Bureau of the Census. Urban areas are the continuous urbanization that one would observe as the lights of a “city” on a clear night from an airplane. It is the extent of development from one side of the urban form to the other. Further, urban areas are not metropolitan areas, which are always larger and are defined by work trip travel patterns. Metropolitan areas always include adjacent rural areas, while urban areas never do.

    The Process of Infill

    Although embraced with often religious passion within the urban planning community, infill is neither good nor bad in terms of social or environmental impact. Infill always increases population densities and that means more traffic. If road capacity is increased sufficiently, traffic congestion can be kept at previous levels. If on the other hand, nothing is done, traffic congestion is likely to increase along with population. This means slower traffic and more stop and go operations, which inevitably increases the intensity of air pollution with the potential to cancel out any reductions in greenhouse gas emissions (GHG) that might occur if average car trip lengths decline. Similar difficulties can occur with respect to other infrastructure systems, such as sewer and water. Expanding roads, sewer and water systems in already developed areas can be far more expensive than new systems on greenfield sites. Regrettably, boosters of infill routinely ignore these issues.

    But infill has been going on for years, along with suburbanization, both in the United States and in other first world nations. This is indicated by the general densification trend that occurred in US urban areas between 1990 and 2000 and the longer term densification trends that occurred in a number of southwestern urban areas, such as Los Angeles, San Jose, Riverside-San Bernardino, Phoenix, Dallas-Fort Worth and Las Vegas. All these traditionally “sprawling” areas have, in fact, been densifying since 1960 or before. Since 2000, 33 of the nation’s 37 urban areas with a population exceeding 1,000,000 population experienced population infill to their 2000 urban footprints.

    Infill in Traditionally Regulated Markets (More Responsive Markets)

    Infill is a natural consequence of the traditional post-World War II land use regulation, which tends towards accommodating both demographic growth and market forces. This has been replaced by more prescriptive (often called “smart growth”) land use regulation in some urban areas. Under traditional regulation, suburban development followed a “leap frog” process, moving ever further out. This is roundly condemned in today’s planning literature and among leading academics and policy makers.

    Leap frog development occurs where urban development skips over empty land and creates a less continuous urban fabric. Land is developed based upon the interplay between sellers and buyers. Due to fewer planning restrictions, no seller can be sure that their land will be purchased since there is always plenty of land that buyers can otherwise purchase. This keeps land prices down. In the more responsive markets, it is typical for land and site infrastructure costs to be 20 percent of the total price land and house price.

    Infill occurs as land that has been “leaped” over is subsequently purchased for development. Again, because buyers have plenty of choices, prices of the infill land remains low, so that land and infrastructure costs remain relatively affordable in relationship to the overall new house purchase price.

    The result is an urban area that is generally continuous, though with a transitional “ragged edge.” The ragged edge enabled the broad expansion of home ownership that occurred in the decades following World War II by keeping house prices low.

    Infill in More Prescriptive Markets (Smart Growth)

    The infill process is quite dramatically different in more prescriptive markets. Infill might be mandated as a percentage of total development or by severely limiting the development allowed to occur closer to the urban fringe. Sellers of land on which development is permitted have disproportionate power to charge higher prices because the planning regime seriously limits the availability of alternative sites for buyers. This, of course, flows through to house prices. The share of land and site infrastructure can rise to two-thirds of the house and land cost. The urban area may have a “clearer” edge, but at a significant loss in housing affordability.

    Infill Trends in the 2000s

    The new infill estimates indicate that American urban areas continue to densify. Between 2000 and 2007, the 33 of the 37 urban areas of more than 1,000,000 population experienced densification in their 2000 urban footprints. The average population infill increase was 5.6 percent (See Table the following table).

    Population Infill in 2000 Urban Footprints
    2000-2007
      Population Change: 2000 Urban Footprint Population Density of 2000 Urban Footprint in 2007  
    Urban Area 2000 Census 2007 Estimate Change % Rank Rank
    Riverside–San Bernardino, CA       1,506,816      1,800,117     293,301 19.5% 1         4,110 8
    Atlanta, GA       3,499,840      4,118,485     618,645 17.7% 2         2,100 36
    Austin, TX         901,920      1,051,962     150,042 16.6% 3         3,308 17
    Las Vegas, NV       1,314,357      1,518,835     204,478 15.6% 4         5,311 5
    Houston, TX       3,822,509      4,370,475     547,966 14.3% 5         3,377 16
    Portland, OR–WA       1,583,138      1,779,705     196,567 12.4% 6         3,755 12
    Phoenix, AZ       2,907,049      3,254,634     347,585 12.0% 7         4,078 9
    Dallas–Fort Worth, TX       4,145,659      4,549,281     403,622 9.7% 8         3,236 18
    Orlando, FL       1,157,431      1,267,976     110,545 9.6% 9         2,799 24
    San Antonio, TX       1,327,554      1,440,794     113,240 8.5% 10         3,540 14
    Tampa–St. Petersburg, FL       2,062,339      2,209,067     146,728 7.1% 11         2,754 25
    Sacramento, CA       1,393,498      1,488,647       95,149 6.8% 12         4,034 10
    Seattle, WA       2,712,205      2,896,844     184,639 6.8% 13         3,040 21
    Miami, FL       4,919,036      5,243,679     324,643 6.6% 14         4,703 6
    Washington, DC–VA–MD       3,933,920      4,174,187     240,267 6.1% 15         3,611 13
    Denver, CO       1,984,887      2,087,803     102,916 5.2% 16         4,192 7
    Indianapolis, IN       1,218,919      1,278,687       59,768 4.9% 17         2,316 34
    Columbus, OH       1,133,193      1,175,132       41,939 3.7% 18         2,960 22
    Kansas City, MO–KS       1,361,744      1,408,900       47,156 3.5% 19         2,413 31
    Virginia Beach, VA       1,394,439      1,442,494       48,055 3.4% 20         2,742 26
    San Jose, CA       1,538,312      1,588,544       50,232 3.3% 21         6,110 2
    Los Angeles, CA     11,789,487    12,171,625     382,138 3.2% 22         7,302 1
    Cincinnati, OH–KY–IN       1,503,262      1,546,730       43,468 2.9% 23         2,305 35
    Baltimore, MD       2,076,354      2,133,371       57,017 2.7% 24         3,128 19
    San Diego, CA       2,674,436      2,747,620       73,184 2.7% 25         3,514 15
    New York, NY–NJ–CT     17,799,861    18,223,567     423,706 2.4% 26         5,440 4
    Minneapolis–St. Paul, MN       2,388,593      2,438,359       49,766 2.1% 27         2,727 27
    Chicago, IL–IN       8,307,904      8,467,804     159,900 1.9% 28         3,992 11
    St. Louis, MO–IL       2,077,662      2,103,040       25,378 1.2% 29         2,540 30
    Milwaukee, WI       1,308,913      1,324,365       15,452 1.2% 30         2,719 28
    Boston, MA–NH–RI       4,032,484      4,077,659       45,175 1.1% 31         2,350 33
    Providence, RI–MA       1,174,548      1,183,622        9,074 0.8% 32         2,353 32
    Philadelphia, PA–NJ–DE–MD       5,149,079      5,178,918       29,839 0.6% 33         2,880 23
    San Francisco, CA       3,228,605      3,214,137      (14,468) -0.4% 34         6,099 3
    Detroit, MI       3,903,377      3,831,575      (71,802) -1.8% 35         3,041 20
    Pittsburgh, PA       1,753,136      1,687,509      (65,627) -3.7% 36         1,981 37
    Cleveland, OH       1,786,647      1,705,917      (80,730) -4.5% 37         2,641 29
    Total  116,773,113  122,182,066  5,408,953 5.6%
    Data from US Bureau of the Census

    Riverside-San Bernardino, long castigated as a “sprawl” market, had the largest population infill, at 19.5 percent. Atlanta ranked number two, at 17.7 percent. This is a real surprise, since Atlanta was the least dense major urban area in the world in 2000, ranked second in 2000s infill. As a result, it is likely that Pittsburgh- often held up as a model of urban regeneration – is now the world’s least dense major urban area. On the other hand, if Atlanta’s infill rate continues, its 2000 urban footprint will be more dense than that of Boston by 2015.

    Austin ranked third, adding 16.6 percent population to its 2000 urban footprint. Las Vegas ranked fourth, with a 15.6 percent increase in its 2000 urban footprint. The density of Las Vegas is increasing so rapidly that by the 2010 census its 2000 urban footprint will be more dense than the 2000 New York urban footprint, should the current rates continue.

    Perhaps most surprising of all is that Houston ranked fifth, added 14.3 percent to its 2000 urban footprint. This may surprise those who have denounced Houston’s largely deregulated regulatory environment, both in the city and in unincorporated county areas in the suburbs. Yet overall Houston’s infill exceeded that of smart growth model Portland. The Rose City stood at sixth, adding 12.4 percent to its 2000 urban footprint.

    Perhaps equally surprising, Portland remains less dense than average for a western urban area. Its 2000 urban footprint density trailing Los Angeles, San Jose, San Francisco, Las Vegas, Denver, Riverside-San Bernardino, Phoenix and Sacramento, while leading only San Diego and Seattle.

    The top ten were rounded out by Phoenix (7th), Dallas-Fort Worth (8th), Orlando (9th) and San Antonio (10th). It is worth noting that like Houston, the unincorporated suburbs of Austin, Dallas-Fort Worth and San Antonio have largely deregulated land use regulation, yet these urban areas ranked high in infill.

    Interestingly some of the greatest infill growth also took place in the fastest growing, traditionally “sprawling” cities. Atlanta also had the largest numeric increase in the population of its 2000 urban footprint, at more than 600,000. Houston was a close second, at nearly 550,000.

    In contrast, population losses since 2000 in the urban footprints of Cleveland, Pittsburgh, Detroit and San Francisco, means these urban areas experienced no population infill. San Francisco’s loss enabled San Jose to move into second position nationally after Los Angeles in the population density of its 2000 urban footprint.

    How the Core Cities Fared

    The core cities (municipalities) attracted, on average, their population share. Approximately 30 percent of the infill growth occurred inside the core cities. Even this figure may be a bit high, due to the impacts of annexation

    All of the infill in Philadelphia, Baltimore, Chicago, Providence and Minneapolis-St. Paul occurred outside the core cities. The city of Portland attracted barely 10 percent of its urban area infill, despite highly publicized (and subsidized) infill projects such as the Pearl District. Core cities attracted the largest share of infill growth in such diverse cities as San Antonio, San Jose, Columbus, Phoenix and New York.

    Note: Additional information available at http://www.demographia.com/db-uzafoot2007.pdf

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”