New Geography

Tag: Los Angeles

  • California in 2060?

    The California Department of Finance (DOF) has issued population projections for the state’s counties to 2060.  Forecasts are provided for every decade, from a 2010 base. The DOF projects that the the state will grow from 37.3 million residents in 2010 to 51.7 million in 2060. This is a 0.7 percent annual growth rate over the next 50 years. By contrast, California’s growth rate was 1.7 percent annually over the last 50 years (1960-2010), and a much higher 3.0 percent in the growth heyday of 1940 to 1990. However, even with this slower rate, California is expected to grow slightly more quickly than the nation (0.6 percent annually).

    The current projections are considerably more conservative than those made by DOF less than a decade ago. In 2007, DOF forecast that California would have 60 million residents in 2050. The current population project for 2050 is substantially smaller, at 49.8 million.

    Metropolitan Complexes

    To understand where this growth is projected to take place — and not — we look at CSA’s (consolidated statistical areas).  CSA’s are economically connected, adjacent metropolitan areas. CSA’s require a 15 percent employment interchange between the metropolitan areas. Metropolitan areas themselves are defined by a 25 percent commuting interchange between outlying counties and central counties, each of which must have at least one-half of its population in the core urban area.

    As Michael Barone pointed out in his analysis of the 2014 population estimates, sometimes it is not obvious when one metropolitan area changes into another, as in the cases of San Francisco/San Jose and Los Angeles/Riverside-San Bernardino, which are CSA’s. Another example is New York and the southwestern Connecticut suburbs in Fairfield and New Haven counties. This is because there is no break in the continuous urbanization.

    Metropolitan Complexes in 2060

    If the DOF has it right, in a half century, California will be home to eight major metropolitan complexes. which I am defining as combined statistical areas (CSA’s) or  "stand alone" metropolitan areas with more than 1,000,000 population (Figure 1).

    The Los Angeles metropolitan complex (Los Angeles-Riverside, including Los Angeles, Orange, Riverside, San Bernardino and Ventura counties) would remain by far the largest, growing from 17.9 million to 22.8 million. One-third of the growth would be in Los Angeles County, and two-thirds outside. Riverside and San Bernardino counties would receive most of the growth (53 percent). Riverside County would grow the fastest, adding 68 percent to its population (Figure 2). Overall, the Los Angeles metropolitan complex would grow 27.3 percent, well below the projected state rate of 38.4 percent. This is quite a turnaround for a metropolitan complex that was once among the fastest growing in human history.

    The San Francisco Bay metropolitan complex, including the San Francisco, San Jose, Santa Cruz, Vallejo, Santa Rosa and Stockton metropolitan areas would grow a much faster 45.6 percent, from 8.1 million in 2010 to 11.9 million in 2060. The core city of San Francisco would add nearly 300,000, growing 36.3 percent to 1.1 million, (nearly the state rate). However, only 8 percent of the Bay Area growth would be in San Francisco, and 92 percent outside (Figure 3).  Four counties would add more than 500,000 residents, including Santa Clara (800,000), Alameda (680,000), Contra Costa (519,000), and newly added San Joaquin county, which is defined as the Stockton metropolitan area (620,000). San Joaquin County would also grow the fastest, at 90 percent, reaching 1.3 million. This growth is to be expected, since San Joaquin is one of the more peripheral counties, and where the metropolitan fringe (which includes the commuting shed) has been expanding the most.

    The San Diego metropolitan complex, a "stand alone" metropolitan area, would grow nearly as slowly as Los Angeles. San Diego’s population of 3.1 million in 2010 would rise to 4.1 million in 2060, an increase of 30.8 percent.

    Sacramento’s metropolitan complex includes the Sacramento, Truckee-Grass Valley and Yuba City metropolitan areas. Sacramento is projected to grow 52.8 percent, from 2.4 million in 2010 to 3.7 million in 2060.

    Four additional metropolitan complexes with more than 1 million population are projected, all in the San Joaquin Valley.

    Fresno, which includes Fresno County and Madera County, would grow from 1.1 million to 1.9 million, for a nearly 75 percent growth rate.

    Bakersfield (Kern County) would be the fastest growing among major metropolitan complexes. Bakersfield would grow from 840,000 in 2010 to 1.8 million in 2060, for a growth rate of 111 percent.

    Modesto (Stanislaus and Merced counties) would be the seventh largest metropolitan complex. From a 2010 population of 770,000, Modesto would grow 74 percent to 1,340,000. However, it is possible that by 2060 the commuting shed will reach the San Francisco Bay metropolitan complex, causing it to consume Modesto, as it already has Stockton.

    In 2060, California would get its eighth major metropolitan area, with Visalia-Hanford reaching 1,040,000, up 74 percent from 2010 (Tulare and Kings Counties).

    Outside of these areas, the largest metropolitan complex would be Salinas, which is projected to have 530,000 residents by 2060. However, Salinas is close enough to the San Francisco Bay Area that it could be added to that area’s commuting shed by 2040. The next largest metropolitan area would be El Centro (Imperial County), with a population projected to reach 340,000 by 2060. El Centro, however, could be included in the San Diego commuter shed by that time, making it a part of the San Diego metropolitan complex. The next largest metropolitan complexes would be in the northern Sacramento Valley, Redding and Chico, both approximately 300,000.

    Only 2.4 million Californians lived outside the 8 major metropolitan complexes, or 7 percent of the population. Growth in these areas is expected to be slow, with only a 27 percent increase to 2060.

    The Difficulty of Projections

    Of course, it is virtually impossible to accurately predict demographic trends 50 years into the future. California’s slower than expected growth in recent decades reflected general economic weakness since 1990, and the impact of ultra-high housing prices, particularly on the coast. However, the 2060 California projections provide an interesting view of the future from today’s perspective.

    Photo: Bakersfield: Fastest Growth Projected 2010 to 2060. “Bakersfield CA – sign” by nickchapman – originally posted to Flickr as P1000493. Licensed under CC BY 2.0 via Wikimedia Commons.

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

  • Southern California Housing Figures to Get Tighter, Pricier

    What kind of urban future is in the offing for Southern California? Well, if you look at both what planners want and current market trends, here’s the best forecast: congested, with higher prices and an ever more degraded quality of life. As the acerbic author of the “Dr. Housing Bubble” blog puts it, we are looking at becoming “los sardines” with a future marked by both relentless cramming and out-of-sight prices.

    This can be seen in the recent surge of housing prices, particularly in the areas of the region dominated by single-family homes. You can get a house in San Francisco – a shack, really – for what it costs to buy a mansion outside Houston, or even a nice home in Irvine or Villa Park. Choice single-family locations like Irvine, Manhattan Beach and Santa Monica have also experienced soaring prices.

    Market forces – overseas investment, a strong buyer preference for single-family homes and a limited number of well-performing school districts – are part of, but hardly all, the story. More important may be the increasingly heavy hand of California’s planning regime, which favors ever-denser development at the expense of single-family housing in the state’s interior.

    Read the entire piece at The Orange County Register.

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

    Photo by Downtowngal (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

  • The Big Idea: California Is So Over

    California has met the future, and it really doesn’t work. As the mounting panic surrounding the drought suggests, the Golden State, once renowned for meeting human and geographic challenges, is losing its ability to cope with crises. As a result, the great American land of opportunity is devolving into something that resembles feudalism, a society dominated by rich and poor, with little opportunity for upward mobility for the state’s middle- and working classes. 

    The water situation reflects this breakdown in the starkest way. Everyone who follows California knew it was inevitable we would suffer a long-term drought. Most of the state—including the Bay Area as well as greater Los Angeles—is semi-arid, and could barely support more than a tiny fraction of its current population. California’s response to aridity has always been primarily an engineering one that followed the old Roman model of siphoning water from the high country to service cities and farms.  

    But since the 1970s, California’s water system has become the prisoner of politics and posturing. The great aqueducts connecting the population centers with the great Sierra snowpack are all products of an earlier era—the Los Angeles aqueduct (1913), Hetch-Hetchy (1923), the Central Valley Project (1937), and the California Aqueduct (1974). The primary opposition to expansion has been the green left, which rejects water storage projects as irrelevant. 

    Yet at the same time greens and their allies in academia and the mainstream pressare those most likely to see the current drought as part of a climate change-induced reduction in snowpack. That many scientists disagree with this assessment is almost beside the point. Whether climate change will make things better or worse is certainly an important concern, but California was going to have problems meeting its water needs under any circumstances.  

    Not Meeting the Challenges. 

    It’s not like we haven’t been around this particular block before. In the 1860s, a severe drought all but destroyed LA’s once-flourishing cattle industry. This drought was followed by torrential rains that caused their own havoc. The state has suffered three major droughts since I have lived here—in the mid ’70s, the mid ’80s and again today—but long ago (even before I got there) some real whoppers occurred, including dry periods that lasted upwards of 200 years.  

    This, like the threat of earthquakes, is part of the price we pay to live in this most beautiful and usually temperate of states. The real issue is how to meet this challenge, and here the response has been slow and lacking in vision. Not all of this is to be blamed on the greens, who dominate the state politically. California agriculture, for example, was among the last in the nation to agree to monitoring of groundwater. Farmers have also been slow to adjust their crops toward less water-dependent varieties; they continue to plant alfalfa, cotton, and other crops that may be better grown in more water-rich areas. 

    Many cities, too, have been slow to meet the challenge. Some long resisted metering of water use. Other places have been slow to encourage drought-resistant landscaping, which is already pretty de rigeur in more aridity-conscious desert cities like Tucson. This process may take time, but it is already showing value in places like Los Angeles where water agencies provide incentives. 

    But ultimately the responsibility for California’s future lies with our political leadership, who need to develop the kind of typically bold approaches past generations have embraced. One step would be building new storage capacity, which Governor Jerry Brown, after opposing it for years, has begun to admit is necessary. Desalinization, widely used in the even more arid Middle East, notably Israel, has been blocked by environmental interests but could tap a virtually unlimited supply of the wet stuff, and lies close to the state’s most densely populated areas. Essentially the state could build enough desalinization facilities, and the energy plants to run them, for less money than Brown wants to spend on his high-speed choo-choo to nowhere. This piece of infrastructure is so irrelevant to the state’s needs that even many progressives, such as Mother Jones’ Kevin Drum, consider it a “ridiculous” waste of money. 

    And there needs to be, at least for the short term,an end to dumping water into San Francisco Bay for the purpose of restoring a long-gone salmon run, or to the Delta, in order to save a bait-fish, the Delta smelt, which may already be close to extinct. This dumping of water has continued even as the state has faced a potentially crippling water shortage; nothing is too good for our fish, or to salve the hyper-heated consciousness of the environmental illuminati. 

    The Political Equation 

    The biggest reason California has been so slow, and uncharacteristically feckless, in meeting this existential challenge lies with psychology and ends with political power. The generation that built the sinews of modern California—most notably the late Governor Pat Brown Sr., the current governor’s father—sprang from the old progressive spirit which saw in infrastructure development a chance not only to create new wealth, but also provide opportunity to working- and middle-class Californians. 

    Indeed, if you look at California’s greatest achievements as a society, the Pat Brown legacy stands at the core. The California Aqueduct turned vast stretches of the Central Valley into one of the most productive farming regions in the world. The freeway system, now in often shocking disrepair, allowed for the construction of mass suburbia that offered millions a quality of life never experienced by previous generations. At the same time the development of energy resources—California still boasts the nation’s third-largest oil production—helped create a huge industrial base that included aerospace, semiconductors, and a host of specialized industries, from logistics to garment manufacturing. 

    In contrast, Jerry Brown has waged a kind of Oedipal struggle against his father’s legacy. Like many Californians, he recoiled against the sometimes haphazard and even ugly form of development that plowed through much of the state. Cutting off water is arguably the most effective way to stop all development, and promote Brown’s stated goal of eliminating suburban “sprawl.” It is typical that his first target for cutbacks this year has been the “lawns” of the middle–class suburbanite, a species for which he has shown little interest or tolerance.  

    But it’s not just water that exemplifies the current “era of limits” psychology. Energy development has always been in green crosshairs and their harassment has all but succeeded in helping drive much of the oil and gas industry, including corporate headquarters, out of the state. Not building roads—arguably to be replaced by trains—has not exactly reduced traffic but given California the honor of having eight of the top 20 cities nationally with poor roads; the percentage of Los Angeles-area residents who take transit has, if anything, declined slightlysince train-building began. All we are left with are impossible freeways, crumbling streets, and ever more difficulty doing anything that requires traveling.  

    The Road to Feudalism 

    These policies have had numerous impacts, like weakening California’s industrial sector, which cannot afford energy prices that can be twice as high as in competing states. Some of those who might have worked in the factories, warehouses, and farms of California now help swell the numbers of the welfare recipients, who remarkably make up one-third of the nation’s total. As recently as the 1970s and ’80s, the percentage of people living in poverty in California wasbelow the national average; California today, based on cost of living, has thehighest poverty rate in the country.  

    Of course, the rich and entitled, particularly in Silicon Valley have achieved unprecedented riches, but those middle-class Californians once served by Pat have largely been abandoned by his son. California, long a relative beacon of equality and opportunity, now has the fourth-highest rate of inequality in the country. For those who, like me, bought their first home over 30 years ago, high housing prices, exacerbated by regulation, are a personal piggybank. But it’s doubtful either of my daughters will ever be able to buy a house here. 

    What about “green jobs”? California leads in total number of green jobs, simply by dint of size, but on a per-capita basis, a recent Brookings study notes, California is about average. In wind energy, in fact, California is not even in first place; that honor goes to, of all places, Texas, which boasts twice California’s level of production. Today even  The New York Times has described Governor Jerry Brown’s promise about creating a half-million green jobs as something of a “pipe dream.” Even surviving solar firms, busy in part to meet the state’s strict renewable mandates, acknowledge that they won’t be doing much of the manufacturing here, anyway. 

    The Cost of Narcissism 

    Ultimately this is a story of a state that has gotten tired, having lost its “animal spirits” for the policy equivalent of a vegan diet. Increasingly it’s all about how the elites in the state—who cluster along the expensive coastal areas—feel about themselves. Even Brown knows that his environmental agenda will do little, or nothing, to combat climate change, given the already minimal impact of the state on carbon emissions compared to escalating fossil fuel use in China, India and elsewhere. But the cosmopolitan former Jesuit gives more priority to his spiritual service to Gaia than the needs of his non-affluent constituents.  

    But progressive narcissism is, as some conservatives assert, not the main problem. California greens are, to be sure, active, articulate, well-organized, and well-financed. What they lack is an effective counterpoint from the business class, who would be expected to challenge some of their policies. But the business leadership often seems to be more concerned with how to adjust the status quo to serve privileged large businesses, including some in agriculture, than boosting the overall economy. The greens, and their public-sector allies, can dominate not because they are so effective as that their potential opposition is weak, intimidated, and self-obsessed. 

    What we are witnessing the breakdown of a once-expansive, open society into one dominated by a small group of plutocrats, largely in Silicon Valley, with an “amen” crew among the low-information donors of Hollywood, the public unions, the green lobby, and wealthy real estate developers favored by Brown’s pro-density policies. This coalition backs Brown and helps maintain the state’s essentially one-party system. No one is more adamant about reducing people’s carbon footprint than the jet set of Silicon Valley or the state’s planning elite, even if they choose not to live in a manner that they instruct all others.

    This fundamentally hypocritical regime remains in place because it works—for the powerful and well-placed. Less understandable is why many Hispanic politicians, such as Senate Leader Kevin de Leon, also prioritize “climate change” as his leading issue, without thinking much about how these policies might worsen the massive poverty in his de-industrializing L.A. district—until you realize that de Leon is bankrolled by Tom Steyer and others from the green uberclass.

    So, in the end, we are producing a California that is the polar opposite of Pat Brown’s creation. True, it has some virtues: greener, cleaner, and more “progressive” on social issues. But it’s also becoming increasingly feudal, defined by a super-affluent coastal class and an increasingly impoverished interior. As water prices rise, and farms and lawns are abandoned, there’s little thought about how to create a better future for the bulk of Californians. Like medieval peasants, millions of Californians have been force to submit to the theology of our elected high priest and his acolytes, leaving behind any aspirations that the Golden State can work for them too.

    This piece originally appeared at The Daily Beast.

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

    Los Angeles aqueduct photo by BigStockPhoto.com.

  • Why California’s Salad Days Have Wilted

    “Science,” wrote the University of California’s first President Daniel Coit Gilman, “is the mother of California.” In making this assertion, Gilman was referring mostly to finding ways to overcoming the state’s “peculiar geographical position” so that the state could develop its “undeveloped resources.”

    Nowhere was this more true than in the case of water. Except for the far north and the Sierra, California – and that includes San Francisco as well as greater Los Angeles – is essentially a semiarid desert. The soil and the climate might be ideal, but without water, California is just a lot of sunny potential, but not much economic value.

    Yet, previous generations of Californians, following Gilman’s instructions, used technology to build new waterworks, from the Hetch Hetchy Dam to the L.A. Aqueduct and, finally, the California State Water Project and its federal counterpart, the Central Valley Project. These turned California into the richest farming area on the planet and generated opportunities for the tens of millions who came to live in the state’s cities and suburbs.

    Read the entire piece at The Orange County Register.

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

    Photo of Lake Palmdale California Water Project by Kfasimpaur (Own work) [Public domain], via Wikimedia Commons

  • How the California Dream Became a Nightmare

    Important attention has been drawn to the shameful condition of middle income housing affordability in California. The state that had earlier earned its own "California Dream" label now limits the dream of homeownership principally to people either fortunate enough to have purchased their homes years ago and to the more affluent. Many middle income residents may have to face the choice of renting permanently or moving away.

    However, finally, an important organ of the state has now called attention to the housing affordability problem. The Legislative Analyst’s Office (LAO) has published "California’s High Housing Costs: Causes and Consequences," which provides a compelling overview of how California’s housing costs have risen to be by far the most unaffordable in the nation. It also sets out the serious consequences.

    The LAO says that:

    Today, an average California home costs $440,000, about two-and-a-half times the average national home price ($180,000). Also, California’s average monthly rent is about $1,240, 50 percent higher than the rest of the country ($840 per month).

    LAO describes the evolution:

    Beginning in about 1970, however, the gap between California’s home prices and those in the rest country started to widen. Between 1970 and 1980, California home prices went from 30 percent above U.S. levels to more than 80 percent higher. This trend has continued.

    Much of the LAO focus is on California’s coastal counties, where:

    ….community resistance to housing, environmental policies, lack of fiscal incentives for local governments to approve housing, and limited land constrains new housing construction.

    These causes result from conscious political decisions. While California’s coastal counties do not have the vast stretches of flat, appropriately developable land that existed 50 years ago, building is increasingly  prohibited on that which remains (for example, Ventura County, northern Los Angeles county and the southern San Jose metropolitan area).

    Demonstrating an understanding of economic basics not generally shared by California policymakers or the urban planning community, LAO squarely places the blame on the public policy limits to new housing construction:

    This competition bids up home prices and rents.

    In other words, where the supply of a demanded good is limited, prices can be expected to rise, other things being equal. LAO describes the impact of so-called "growth control" policies, which are also called "urban containment" or "smart growth:"

    Many Coastal Communities Have Growth Controls. Over two-thirds of cities and counties in California’s coastal metros have adopted policies (known as growth controls) explicitly aimed at limiting housing growth. Many policies directly limit growth—for example, by capping the number of new homes that may be built in a given year or limiting building heights and densities. Other policies indirectly limit growth—for example, by requiring a supermajority of local boards to approve housing projects. Research has found that these policies have been effective at limiting growth and consequently increasing housing costs.

    According to LAO, the problem is exacerbated by voter initiatives: "More often than not, voters in California’s coastal communities vote to limit housing development when given the option." It is hard to imagine a more sinister disincentive to aspiration, under which voters can deny equality of opportunity in housing to others by artificially driving up the price.  Because new housing further from coast is also limited, options for a middle income living standard are also diminished.

    These public policies have consequences.

    Notable and widespread trade-offs include (1) spending a greater share of their income on housing, (2) postponing or foregoing homeownership, (3) living in more crowded housing, (4) commuting further to work each day, and (5) in some cases, choosing to work and live elsewhere

    Each of these consequences is described below.

    LAO Consequence #1: Spending a Greater Share of Income on Housing

    LAO models the market situation from 1980 to 2010 to estimate the prices that would have prevailed if the regulatory environment had permitted building sufficient to satisfy customer demand at previous lower price levels. In both years, LAO estimates that the median priced house would have cost 80% more than in the rest of the nation (actual data in 1980, modeled data in 2010). This would have kept California house price increases at the national level. I think it would have been better to have modeled from 1970, before the huge house prices before 1980 described by Dartmouth economist William Fischel.

    I have applied this LAO model estimate to the median multiple for California’s six major metropolitan areas (Los Angeles, San Francisco-Oakland, Riverside-San Bernardino, San Diego, Sacramento, and San Jose) to identify how much better middle income housing affordability would be without California’s excessive regulation. Using the LAO estimates the median multiple (median house price divided by median household income) in 2014 would have been at least 40% lower than the actual level in each of the metropolitan areas (Figure 1).

    Many California households already have been priced out of the market. In the worst case, it is estimated that in the San Francisco metropolitan area, a median income White Non-Hispanic household will have nearly $60,000 annually left over after paying the mortgage on the median priced house. This is less than they would have if house prices had remained reasonable, but it’s enough to live on. The median income Asian household would do almost as well, with about $50,000 left over. The median income Hispanic household would have less than $20,000 left, which is considerably less than is likely to be needed for other essentials. The median income Black household would have less than $3,000 left over (Figure 2). If the price ratios of 1980 were controlling, that amount would rise by $16,000.

    LAO also points out that the Golden State has the highest housing cost adjusted poverty rate in the nation. The latest data shows housing-adjusted poverty rate is far higher even than that in states with a reputation for grinding poverty. California’s housing adjusted poverty rate is more than 50% higher than that of Mississippi and approaches double that of West Virginia (Figure 3, LAO Figure 13)

    LAO Consequence #2:  Postponing or Forgoing Homeownership

    LAO indicates that California ranks 48th in homeownership percentage, behind only New York and Nevada. LAO emphasizes the value of home ownership:

    Homeownership helps households build wealth, requiring them to amass assets over time. Among homeowners, saving is automatic: every month, part of the mortgage payment reduces the total amount owed and thus becomes the homeowner’s equity. For renters, savings requires voluntarily foregoing near-term spending. Due to this and other economic factors, renter median net worth totaled $5,400 in 2013, a small fraction of the $195,400 median homeowner’s net worth.

    Californians are buying their first houses later. LAO indicates that the average first home buyer in California is three years older than the national average.

    LAO Consequence #3:  Living in More Crowded Housing

    The nation’s worst overcrowding is an unfortunate result of California’s housing policies.

    LAO indicates that California’s overcrowding rate is well above that of the rest of the nation’s rate. Among Hispanics, which were expected to exceed the White-Non-Hispanic population in 2014, to become the state’s largest ethnic group, California overcrowding is more than 2.5 times the Hispanic rate elsewhere. Among households with children, overcrowding in California is four times the national households with children rate. Among renters, overcrowding in California is more than three times the national renter rate (Figure 4, LAO Figure 15).

    This has important negative social consequences. According to LAO, research indicates that overcrowding retards well-being and educational achievement:

    Individuals who live in crowded housing generally have worse educational and behavioral health outcomes than people that do not live in crowded housing. Among adults, crowding has been shown to increase stress and aggression, lead to social isolation, and weaken relationships between parents and their children. Crowding also has particularly notable effects on children. Researchers have found that children in crowded housing score lower on standardized math and reading exams. A lack of available and distraction-free studying space appears to affect educational achievement. Crowding may also result in sleep interruptions that affect mood and behavior. As a result, children in crowded housing also displayed more behavioral problems at school.

    Overcrowding is particularly acute in the higher cost coastal metropolitan areas of Los Angeles, San Francisco, San Diego, and San Jose. There, overcrowding among households with children reaches 10%, and among Hispanic households, overcrowding reaches 18%. Among households with children the figure is slightly higher (Figure 5, LAO Figure 16). Overcrowded housing is generally worse, according to LAO, in areas with higher house prices.

    In a state with a political establishment that prides itself in watching out for low income citizens and ethnic minorities, the need to reform the responsible policies could not be clearer.

    LAO Consequence #4: Commuting Farther to Work

    LAO finds that California’s average work trip commuting times are only moderately above the national average. However, LAO suggests that the commute lengthening impact of higher house prices may be reduced by California’s widespread (I call it dispersed) development pattern, its freeway system and the "above-average share of commuters who drive to work. (Driving commutes are generally fast, and therefore metros with higher shares of driving commuters tend to have shorter commute times.)"

    Nonetheless, according to LAO:

    …our analysis suggests that California’s high housing costs cause workers to live further from where they work, likely because reasonably priced housing options are unavailable in locations nearer to where they work.

    LAO Consequence #5:  Choosing to Work and Live Elsewhere

    LAO also indicates that California’s high housing prices are likely to have reduced its population (and economic) growth. LAO sites the strong net outmigration of California households to other states. LAO also finds in its national metropolitan area analysis that counties with higher growth rates tend to have better housing affordability than counties with lower growth rates.

    There has also been strong net outmigration from the coastal counties to inland counties. This is most evident in the growth of the Riverside-San Bernardino metropolitan area (the Inland Empire) between 2000 and 2010. The Inland Empire captured more than two thirds of the population growth of the Los Angeles Combined Statistical Area (Los Angeles, Orange, Riverside, San Bernardino and Ventura counties). LAO notes the impact of the excess of demand in the coastal counties, again recognizing the nexus between overzealous regulation and the loss of housing affordability:

    This competition bids up home prices and rents. Some people who find California’s coast unaffordable turn instead to California’s inland communities, causing prices there to rise as well.

    LAO also refers to the difficulty that employers have in retaining and recruiting staff. LAO cited survey data from the Silicon Valley, which has for years been California’s economic "Golden Goose" in recent years:

    In a 2014 survey of more than 200 business executives conducted by the Silicon Valley Leadership Group, 72 percent of them cited “housing costs for employees” as the most important challenge facing Silicon Valley businesses.

    In addition, there has been a strong movement of California companies to other parts of the nation, where more liberal regulations foster a better business climate.

    Restoring Housing Affordability

    LAO indicates the importance of fundamental reform and calls for putting "all policy options on the table."

    Major changes to local government land use authority, local finance, CEQA (California Environmental Quality Act), and other major polices would be necessary to address California’s high housing costs.

    In addition:

    The greatest need for additional housing is in California’s coastal urban areas. We therefore recommend the Legislature focus on what changes are necessary to promote additional housing construction in these areas.

    Perhaps the only weakness of the report deals with densification, particularly in coastal counties. For example, LAO suggests that without the housing restrictions the city of San Francisco is population would be 1.7 million, rather than the approximately 800,000 who live there today. In fact that would be unprecedented beyond belief. No core city that had become fully developed and reached 500,000 people by 1950 has achieved growth of this magnitude. The greatest growth was less than 10%, in this category of 60 core cities (which includes the city of San Francisco). Even less likely would be public support for such huge population growth in the second densest major municipality in the nation.

    While LAO does not indicate the additional population that its estimates would have placed in the core of Los Angeles, given the scale of the San Francisco increase, this could be a number of up to 3 million. This area, the broadest expanse of over 10,000 population per square mile density in the nation outside New York City is in the middle of the urban area with the nation’s worst traffic congestion, according to the Texas A&M Transportation Institute. It is doubtful that residents would have the "stomach" to expand roadway capacity to keep the traffic moving. Transit could not have made much difference. Even with its now extensive rail network that has opened since the early 1990s, driving alone accounted for 85% of the additional travel to work from 2000 to 2013 in the city of Los Angeles. Yet, the city of Los Angeles has the most extensive transit in the metropolitan area, including service by all rail lines.

    In reality, core densification is likely to be modest. Keeping housing affordability from getting worse requires regulatory liberalization throughout California, including coastal and inland areas
    The reality is that if California had permitted growth, it would naturally occurred mostly on the periphery. Even with the restrictions on building, the preference for suburban living (largely in detached housing) could not be repressed between 2000 and 2010. Less than 10% of the population growth in the Los Angeles and San Francisco Bay areas occurred in the cores.

    The Challenge

    Should the state of California begin to seriously discuss housing affordability, it will be important to ease restrictions throughout the state, not just in the coastal counties. There are serious barriers to placing the appropriate priority on improving the standard of living and minimizing poverty rates among California’s diverse population. Perhaps the biggest impediment is Senate Bill 375, which is being interpreted by the state and its regional planning agencies to require even more stringent land-use regulation.

    In this environment, LAO rightly raises this concern:

    If California continues on its current path, the state’s housing costs will remain high and likely will continue to grow faster than the nation’s. This, in turn, will place substantial burdens on Californians—requiring them to spend more on housing, take on more debt, commute further to work, and live in crowded conditions. Growing housing costs also will place a drag on the state’s economy.

    It is to be hoped that California’s distorted policy priorities will be righted to restore the California Dream.

    Photograph: Dense suburban development: Inland Empire (San Bernardino Freeway with Uplard toward the top and Ontario toward the bottom) – By author

    Wendell Cox is an international public policy consultant and principal of Demographia in St. Louis. He is a native Los Angelino, having been born within two miles of City Hall. He was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. Full biography is here.

  • Go East, Young Southern California Workers

    Do the middle class and working class have a future in the Southland? If they do, that future will be largely determined in the Inland Empire, the one corner of Southern California that seems able to accommodate large-scale growth in population and jobs. If Southern California’s economy is going to grow, it will need a strong Inland Empire.

    The calculation starts with the basics of the labor market. Simply put, Los Angeles and Orange counties mostly have become too expensive for many middle-skilled workers. The Riverside-San Bernardino area has emerged as a key labor supplier to the coastal counties, with upward of 15 percent to 25 percent of workers commuting to the coastal counties.

    In a new report recently released by National Core, a Rancho Cucamonga nonprofit that develops low-income housing, I and my colleagues, demographer Wendell Cox and analyst Mark Schill, explored the challenges facing the region. Although we found many reasons for concern, the region’s overall condition and its long-term prospects may be better than many might suspect.

    Population trends

    The region’s once-explosive growth has slowed considerably. From 1945-2010, the area’s population soared from 265,000 to 4.25 million. Already the nation’s 12th-largest metropolitan area, the I.E. could pass San Francisco and Boston by 2020 (unless faster-growing Phoenix does so first).

    Yet, contrary to expectations (and, perhaps, hope among anti-sprawl campaigners), the area continues to be a beacon for people from the rest of the region. There is a notion, widely expressed in the mainstream media, that Southern California’s growth will now focus more on the urban core around Downtown Los Angeles. Yet, as is often the case, what planners and pundits desire is not widely shared by the vast majority of people.

    People continue to vote for the Inland Empire – and other peripheral areas – with their feet. Census Bureau data indicates that, from 2007-11, nearly 35,000 more residents moved from Los Angeles County to the Inland Empire than moved in the other direction. There was also a net movement of more than 9,000 from Orange County and more than 4,000 net migration from San Diego County.

    Several long-standing demographic trends favor a continued shift to the Inland region, according to Cox and Schill. Immigrants and their offspring may prove the critical factor. Over the past decade, the Inland region dramatically increased its population of foreign-born residents, more than three times the number and at nearly 18 times the rate of the coastal counties.

    The influx of immigrants and their children is largely responsible for the region’s relatively young population, compared with the rest of Southern California. As recently as 2000, the proportion of population ages 5-14 in Los Angeles and Orange counties stood at 16 percent, the sixth-highest level among the nation’s 52 largest metropolitan areas. Thirteen years later, that proportion had dropped to 12.8 percent, 33rd among the 52 largest metropolitan areas. In terms of a dropping share of youngsters, the area experienced a 20 percent reduction, the largest in the nation.

    In contrast, the Inland Empire remains a bastion of familialism, with 15.3 percent of the population aged 5-14, among the highest levels in the nation. This follows a general pattern; according to recent analysis of Census data, high-cost areas tend to repel families. Of the nation’s most expensive areas, such as the Bay Area, New York and Boston, all tend to have well below national norms in terms of families among their populations.

    Perhaps more surprising, younger educated workers also are heading to the region. In fact, from 2011-13, according to American Community Survey data, Riverside-San Bernardino witnessed the 12th-largest increase among the 52 major metro areas in the share of college-educated residents ages 25-34. No major California metro area, including Silicon Valley, could match it. From 2000-13, the Inland region experienced a 91 percent jump in population with bachelor or higher degrees, just less than twice the increase for either Orange or Los Angeles counties.

    Overall, the I.E. has become something of a growth area for millennials – basically, adults ages 20-29. San Bernardino-Riverside ranked second among 52 metro areas, adding 50,000 millennials, an 8.3 percent increase since 2010. Los Angeles and Orange counties – older, settled areas with far lower population growth – together registered 18th.

    Economic Restructuring

    These trends also may reflect improving prospects for the region’s economic recovery. The area remains some 30,000 jobs below its 2007 level, notes California Lutheran University economist Dan Hamilton, but is now growing faster than the rest of the Southland. The region created jobs over the past year at a 2.2 percent rate, well above the 2.0 percent increase in Orange County and almost twice that of L.A.’s 1.3 percent. Foreclosures have diminished to the lowest levels since 2007 and appear back to something resembling normalcy.

    One important source of new employment is grass-roots entrepreneurship. Overall, the Inland Empire accounted for a large proportion of the new businesses created statewide from 2012-13 – despite hosting only 7.4 percent of the total businesses in California. A recent report by Beacon Economics suggested that growth will accelerate over the next five years.

    At the same time, some of the core industries – such as manufacturing and warehousing – have shown signs of recovery. Industrial vacancy rates have fallen from nearly 12 percent in 2009 to roughly half that level today.

    Much of the growth has been for “middle-skilled jobs,” paying $14 to $21 per hour, including positions in medical services, trucking and customer service. Overall, according to one recent survey, the Inland Empire ranked 13th among the nation’s large metropolitan areas in creating such positions. These jobs, notes economist John Husing, are critical to a region where almost half the workforce has a high school education or less.

    Even the housing sector, the driver of the post-crash employment decline, has improved considerably. Today, the Inland Empire is experiencing a far greater increase in construction permits than either Los Angeles or Orange counties. This has also helped boost construction employment, although not to anything like the levels experienced a decade before. Construction employment, although up recently, still totals barely half the people it did in 2006.

    Some, such as University of Redlands economist Johannes Moenius, express concern that important industries, like warehousing and manufacturing, are increasingly using part-time workers. Positions paying $15,000 to $30,000 annually constitute nearly half of all new jobs.

    The ambiguity in the recovery is reflected in a recent survey by Cal State San Bernardino, which found the percentage of those saying the economy was excellent or good had almost doubled since 2010, from 9 percent to 17 percent, but this was considerably below the 40-plus percent seen before the crash.

    The Path Ahead

    The fate of the Inland Empire remains in the balance. The recovery of the region depends largely on continued widespread population growth, largely stimulated by the production of affordable housing. Yet, at the same time, state regulations, spurred on by the environmental lobby, which seeks to slow, or even eliminate, single-family construction, threaten to force up prices and drive young families outside the state.

    Many other core industries of the area – such as warehousing and manufacturing – also face growing regulatory barriers. High taxes and energy costs originating from Sacramento are particularly difficult for industries that require power to operate. Southern California Edison’s rates, for example, are almost twice those found in Salt Lake City, Seattle or Albuquerque.

    Some may celebrate these policies that encourage people to say “good riddance” to a region too sprawling and insufficiently cultured. Yet, it’s hard to see how Southern California can continue to add workers – notably, younger middle-class families – without a vibrant Inland Empire. It remains the one Southern California region with the land, and the housing cost structure, to accommodate much of the hard-pressed middle class. Without growth inland, Southern California will be largely relegated to a torpid economy and rapidly aging demographics, a fate that would compromise the aspirations of future generations.

    This piece originally appeared in The Orange County Register.

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

  • Sources for Our “Southern California Stuck in Drive” Story

    Joel Kotkin and I wrote in the Orange County Register that transit work trip market shares in the Los Angeles area had changed little, from 5.9 percent in 1980 to 5.8 percent in 2013. In a response, the Los Angeles Metropolitan Transportation Authority (LACTMTA) noted that we did not cite sources. Fair enough. Our source was the 1980 US Census and the 2013 American Community Survey, a product of the United States Census Bureau. This data shows Los Angeles to rank 10th in transit market share among the 52 major metropolitan areas (over 1,000,000 population), well below its population rank of 2nd.

    Then LACMTA goes on to note "the percentage of daily transit commuters in the Los Angeles region … has stayed steady over the last several decades." That is exactly our point — that transit is not growing as a percentage of travel in the Los Angeles metropolitan area. This, despite expenditures of $15 billion to build rail over the period in constant 2013 dollars (estimated from data on the Thoreau Institute website).

  • Southern California Stuck in Drive

    Southern California has long been a nurturer of dreams that, while widely anticipated, often are never quite achieved. One particularly strong fantasy involves Los Angeles abandoning what one enthusiast calls its “car habit” and converting into an ever-denser, transit-oriented region.

    An analysis of transit ridership, however, shows that the region is essentially no better off than when the the modern period of transit funding began in 1980, with the passage of Proposition A, which authorized a half-cent sales tax for transit. In 1980, approximately 5.9 percent of workers in the metropolitan area (Los Angeles and Orange counties) used transit for their commute. The latest data, for 2013, indicates the ridership figure has fallen to 5.8 percent.

    Never ones to let facts get in the way of fantasy, some retrourbanists and media types continue to insist our mass-transit transition is well on its way. Liberal blogger Matt Yglesias, writing in Slate, declared that Los Angeles is destined to become America’s “next great transit city.”

    This view is echoed throughout retrourbanist circles. “The City of Angels is noticeably transforming. Our once car-centric town is becoming less car-dependent,” suggests the local LA Streetsblog, “Public transit is having a comeback. Pedestrian and bicycle infrastructures are improving.”

    Instead of rushing to rail, Angelenos continue to rely on their cars to get to work. From 1980-2013, the market share of drive-alone commuters has risen from 70 percent to 74.1 percent. There has been an increase in driving alone of approximately 1.4 million daily commuters. Driving alone accounted for d approximately 85 percent of the region’s increase in commuters.

    Why do people stick to their cars? For one thing, transit takes longer. The average drive-alone, one-way commute in Los Angeles was 27.0 minutes in 2013, compared with an average commute of 48.7 minutes for transit.

    The other big factor is accessibility to jobs. The University of Minnesota Accessibility Observatory produced an estimate for the percentage of jobs that the average L.A. resident could reach within 30 minutes by car. In Los Angeles, the average resident can reach 60 times as many jobs in that time by car as by transit.

    Transit needs downtowns

    Transit plays an important role in America, but mostly in the urban cores of a handful of “legacy” cities. These core metros (excluding their often-sprawling, low-density suburbs) – New York City, Boston, Chicago, Philadelphia, Washington and San Francisco – account for 55 percent of all transit-work trip destinations, just 6 percent of the country’s employment. Overall, the legacy cities’ transit ridership is nearly 10 times their proportionate combined share of jobs.

    To a large extent, this reflects history and urban form. Transit remains largely a matter of downtowns. The cities with transit legacies have an average of 15 percent of their jobs downtown, three times the average for other major metropolitan areas. In contrast, Downtown Los Angeles has 2 percent of the metropolitan area’s jobs. In Orange County, Riverside and San Bernardino counties, homes to much of the regional population, there are really no substantial downtown areas.

    In contrast, the many regions sharing L.A.’s multipolar form and large-scale transit investments – Atlanta, Dallas-Fort Worth, Denver, Minneapolis-St. Paul and Portland, Ore., – have seen their transit market shares stagnate or decline, despite having built expensive rail systems.

    One problem is, like virtually all U.S. metropolitan areas (including the suburbs of legacy cities), the Los Angeles area, which pioneered the multi-polar metropolis, has been becoming more so and is even moving beyond polycentricity. The vast majority of growth in the statistical area encompassing Los Angeles, Orange, Riverside, San Bernardino and Ventura counties has taken place in precisely those areas – the Inland Empire, South Orange County or the Santa Clarita and Antelope valleys in northern Los Angeles County – that also have the lowest transit ridership. In contrast, the core’s growth barely represents a blip. From 2000-10, the functional urban core, which has the strongest concentration of transit destinations, accounted for virtually none of the region’s growth.

    Dreaming of New York?

    For many L.A. planners and urban boosters, more transit – funded from Washington – often seems to constitute an exercise of social engineering on a grand scale. The hope is that, by pushing transit, particularly rail, we will recreate the metropolis with ever-greater density. “We are going to remake what the city looks like,” then-Mayor Antonio Villaraigosa told an approving New York Times two years ago.

    Despite the hoopla and the subsidization of downtown Los Angeles, however, relatively few people work in, or even visit Downtown, ecept for sporting or cultural events, although many pass by it on the freeways.

    For most Angelenos, Downtown is simply not part of their day-to-day experience the way, for example, Manhattan is for many New Yorkers, or the Loop is for many residents of the Chicago region.

    Transit Class Warfare

    Developers and their planning allies tend to focus on transit as something that will get middle-class Angelenos out of their cars. But it’s difficult to see this working as long as such an overwhelming majority of jobs (98 percent) are located outside Downtown. Since 1980, driving alone, which was increasing its market share, added 15 times as many new commuters as transit, with its slipping market share.

    At the same time, there seems to be a profound unawareness of the low incomes of Los Angeles transit commuters. The latest American Community Survey data (2013) indicates that the median earnings of transit commuters at the national level is more than 85 percent higher than in Los Angeles. In the metropolitan areas around transit legacy cities, the median incomes of transit commuters is 150 percent higher than in Los Angeles.

    To some extent, poorer Angelenos, in the government’s expensive shift from buses to trains, are being sacrificed to satisfy the Utopian vision of planners, pad the profits of big urban developers, and to build the campaign war chests of the political class. Indeed, from 2008-12, the bus lines, which carry more than three times as many passengers as trains, were cut 16 percent If L.A. is experiencing a transit revolution, its most dependent riders have been largely left behind.

    So What Should Greater LA do?

    As anyone who drives the freeways knows well, L.A. has a traffic problem. But Los Angeles also has the shortest average commute time of any high-income world megacity for which data is available, despite having the highest automobile usage, the least transit and, except for New York, the lowest urban density.

    The real question is, will more transit, at least in its current form, offer the solution? Certainly, expanding and improving roads – although politically incorrect – has helped make commuting easier for many working in Orange County. Other ways to entice people off the roads, such as telecommuting, should be encouraged. Since 1980, the number of Los Angeles residents working at home has increased by approximately 240,000. This increase – 2.5 times that of transit in total numbers – has come at virtually no cost to taxpayers.

    To be sure, many Angelenos, for one reason or another, need decent transit services. Our approach would be for government to find out who these people are, and look for ways to make transit work better for them. Rather than invest huge dollars in rail megaprojects, perhaps we could reduce bus fares, a strategy attributed to the legendary Los Angeles County Supervisor Kenneth Hahn that increased bus ridership dramatically from 1982-85.

    Unlike today’s “progressives,” Hahn’s prime interest was serving his largely working-class and poor constituents. Besides cutting bus fares and increasingly service, other solutions, such as more competitively contracted service provided by regional agencies, such as Foothill Transit and the Antelope Valley Transit Authority, could provide less-expensive, more efficient and expanded service.

    Los Angeles Mayor Eric Garcetti, has also expressed interest in promoting the use of rideshare services, like Uber or Lyft, and, more importantly, self-driving cars.

    Ultimately, rather than try to recreate New York, or undertake the expensive and virtually impossible task of rebuilding Los Angeles in the image of the latest urban planning fad, we should explore a host of innovative solutions that will help transit riders here and now by developing workable, and effective, ways to help them get to the services and jobs they need.

    This piece first appeared at the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

    Photo: Downtown Los Angeles toward the Hollywood Hills and the San Fernando Valley (by Wendell Cox)

  • California’s Southern Discomfort

    We know this was a harsh recession, followed by, at best, a tepid recovery for the vast majority of Americans. But some people and some regions have surged somewhat ahead, while others have stagnated or worse.

    Greater Los Angeles fails to make the grade. In per capita growth of gross domestic product since 2010, according to analyst Aaron Renn, our region ranks a very mediocre 38th out of 52 metro areas, with a measly 1.5 percent, well below the national average of 3.8 percent. It places behind up-and-comers among the Texas cities, Oklahoma City and some tech-oriented clusters – Silicon Valley ranked second, after Houston. These places have growth rates roughly twice those of the Southland.

    When we wanted to drill down to the more local level, and analyze what is happening by county, we needed to go to the Census Bureau, as opposed to the Bureau of Economic Analysis, where we could glean what is happening in our communities. Our analysis is based on those figures, and neither of us hopes the Southern California region continues to stagnate or decline.

    Poverty

    One of the saddest results of the Great Recession and the weak recovery has been the expansion of poverty across the country. The poverty rate among the country’s 52 largest metropolitan areas, according to the most recent census numbers, grew from 14.9 percent in 1999 to 15.8 percent in 2013, a 7 percent rise. At least one-quarter of that rise has taken place since the recovery began.

    Southland politicians, like those in much of California, often decry income inequality and poverty, but they have not been very effective in combatting it. The region has had higher-than-average poverty for well over a decade, and things have not gotten better recently. Since 2009, the Los Angeles region, which includes Orange County, has seen its poverty rate grow by 1.8 percent, 80 percent higher than the national norm. The area ranked 47th out of 52 in terms of increased poverty. Riverside-San Bernardino saw a similar jump, 1.7 percent, in poverty.

    The scale of the poverty problem in the Southland is much greater than many imagine. When we broke down the figures, Los Angeles County remained the area with the highest concentration of poverty. L.A. saw a slight reduction in poverty from 1999-2010, but has moved in the other direction more recently. From 2010-13, poverty in L.A. County rose from 17.5 percent to 18.9 percent, an 8 percent increase. Poverty now afflicts a considerably larger portion of the population of Los Angeles than it did in 1999.

    But if Los Angeles County endures the largest pocket of poverty, there’s not much for the surrounding counties to shout about. San Bernardino and Riverside counties have each seen rapid 20 percent increases in their poverty rates since 1999; in fact, San Bernardino’s 19.1 percent poverty rate is slightly higher than that of Los Angeles County.

    Orange County fares better, but the curse of poverty is spreading even here. Although its 13.5 percent poverty rate lies below the national average, the ranks of the O.C. poor have jumped 30 percent relative to the entire population since 1999. The expansion of poverty as a share of the population has grown by more than 10 percent since 2010.

    Low Income Growth and High Housing Prices: A Bad Combination

    As befits a region with relatively low GDP growth, incomes in Southern California have stagnated. Median household incomes have dropped in every county in the region, including Ventura and Orange, whose residents boast median household incomes above $70,000, well above the $50,000 range found in Los Angeles, San Bernardino and Riverside. Since 2010, the biggest income drops have happened in the Inland Empire, where real incomes have fallen by nearly 7 percent. Los Angeles also has experienced a drop, with real incomes down 3 percent since 2010.

    For the most part, the more-affluent suburban counties have done better, consistent with the two-speed U.S. economy. Orange and Ventura enjoy median household incomes a full $20,000 above those of Los Angeles County and the Inland Empire. This is after the smaller 2.1 percent reduction (2010-13) in Orange County real incomes. Real incomes have recovered, albeit slightly, only in Ventura. The biggest hit has been concentrated in those parts of Southern California – Los Angeles County and the Inland Empire – historically most dependent on blue-collar professions in manufacturing, logistics and construction. These are, for the most part, also the most heavily Latino and African American areas of the region.

    So, why can’t the Southland replicate the economic boom in the San Francisco Bay Area? Simply put, the Los Angeles region is not the Bay Area, or Seattle. The share of Los Angeles’ jobs that are tied to manufacturing and logistics is twice that of the San Francisco area. Our population is far less well-educated, particularly in the Inland Empire and much of Los Angeles County, and is also far more heavily African American and Latino, groups that have fared particularly poorly. Nationwide, Latino poverty rates, notes a recent Pew study, stand at 28 percent, the highest for any ethnic group.

    Alongside the stagnant economy, growing Latino poverty – which is really the key challenge for Southern California – also reflects a high cost of living. This is most profound in terms of housing costs. Overall, the Southland counties – most notably Los Angeles and Orange – suffer among the highest housing cost burdens, relative to income, than virtually anywhere in the country.

    This can be seen by looking at what parts of the country have the highest percentages of people paying more than 50 percent of pretax income for housing. According to the Center for Housing Policy and National Housing Conference, 39 percent of working households in the Los Angeles metropolitan area spend more than half their incomes on housing, a somewhat higher rate than in the pricier San Francisco and New York areas and much higher than the national rate of 24 percent of households spending more than half of income on housing, itself far from tolerable.

    New Policy Imperatives

    Our current mix of state and local policies are neither reviving the regional economy nor reducing poverty. One key reason is that the current political environment – fostered and perpetuated by greens, urban land interests and organized public workers – places little priority on promoting the growth of the tangible economy that tends to employ blue-collar workers. High energy costs, largely due to the state’s Draconian commitment to renewable fuels, are a direct threat to any kind of industrial growth, while highly restrictive housing policies slow any hope of meeting the needs of renters and prospective homeowners.

    Of course, one could point out that the Bay Area, the one large region in California experiencing above-average income growth, labors under the same progressive policy regime. But the Bay Area, particularly San Francisco, is already largely deindustrialized and its population far more attractive to digitally based companies. It boasts a far larger pool of venture capital, and a unique network to support tech.

    A Google or an Apple can easily move its energy-hungry arrays of computer servers to less-expensive states, along with its device manufacturing. The more grass-roots based, small-business-oriented Southland economy is far less able to adapt to regulatory strictures from Sacramento.

    Southern California leaders clearly need to understand that the region is not winning under the current policy environment in the state. Steps to re-energize our basic industries and restart new housing, particularly single-family housing desired by most young families, need to be taken. Other steps, from reforming the schools and rebuilding basic infrastructure to modernizing higher education, also are imperative. At risk is not just a comfortable way of life, but also the legacy of opportunity that has been so critical to this region from its earliest days, a legacy now at extreme risk.

    This piece first appeared at the Orange County Register.

    Joel Kotkin is executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the “Demographia International Housing Affordability Survey” and author of “Demographia World Urban Areas” and “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.” He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

  • Los Angeles: Rail for Others

    A few years ago, the satirical publication, The Onion ran an article under the headline "98 Percent of US Commuters Favor Public Transit for Others." The spoof cited a mythical press release by the American Public Transit Association (APTA), in which Lance Holland of Anaheim, California said "Expanding mass transit isn’t just a good idea, it’s a necessity," Holland said. "My drive to work is unbelievable. I spend more than two hours stuck in 12 lanes of traffic. It’s about time somebody did something to get some of these other cars off the road." The Onion spoof said that APTA would be kicking off a new promotional campaign using the slogan "Take the Bus… I’ll be Glad You Did." The Onion spoof singled out Los Angeles County Metropolitan Transportation Authority (MTA) officials as saying that public support for mass transit will lead to its expansion and improvement."

    "Transit for Others" characterizes three decades of transit in Los Angeles County. Despite its massive $10 billion plus rail program, MTA bus and rail services carried fewer riders in 2012 (latest Federal Transit Administration data) than were carried by the buses in 1985 (MTA was formed in the early 1990s from a merger between the Los Angeles County Transportation Commission and the Southern California Rapid Transit District).

    The Birth of Modern Rail

    The history of the modern Los Angeles rail revival began with a special meeting of the Los Angeles County Transportation Commission on August 20, 1980. I was to play a principal role.

    I had the honor of being appointed to LACTC by Mayor Tom Bradley to three terms and was the only principal commissioner who was not an elected official. The other members, under state law, were the Mayor of Los Angeles, a Los Angeles City Council Member, the Mayor of Long Beach, two city council members from other cities, the five county supervisors and an additional member appointed by the Mayor of Los Angeles (which was me).

    The special meeting had been requested by legendary county Supervisor Kenneth Hahn, who proposed a 5-year reduction of the bus fare to $0.50 to be financed by a sales tax increase, which would be submitted to the voters at the November election. Any money not needed for the bus fare reduction would be used for unspecified transit  purposes.

    The original motion by Supervisor Hahn was amended by Gardena Mayor Edmund Russ, who proposed a "local return program," which would dedicate 25 percent of the funding to municipalities (and Los Angeles County for unincorporated areas) on a population basis, to be used for transit services. At that time, local operators provided less than 20% of the bus service, with the overwhelming majority of services provided by the Southern California Rapid Transit District (SCRTD). 

    I was concerned that the proposal by Supervisor Hahn failed to provide funding for a rail system. I believed at the time that a rail system would reduce the intractable traffic congestion in Los Angeles. I was also concerned at the rapidly rising unit costs of bus operations and was convinced that unless there was a "firewall," no money would be available for rail.

    As a result, on the spur of the moment, I introduced an amendment to direct 35 percent of the proceeds to rail. This motion was seconded by Supervisor Baxter Ward and was incorporated into the final package Supervisor Hahn accepted a shortening of the reduced fare period to three years. The measure, Proposition A was placed on the ballot and was passed by the voters in November.

    Transit Since Proposition A

    The impacts of the three programs approved in 1980 had varying results on transit in Los Angeles.

    Three Year Fare Reduction (1982-1985): Between 1982 and 1985, there was a flat $0.50 fare for transit services in the county. SCRTD experienced an increase from 354 million to 497 million annual passengers. At 40%, this may be the largest three year relative increase in any large transit agency’s ridership in decades. Ridership fell after subsequent fare increases.

    Further, the fare reduction was cost effective. The cost per new rider was less than $1.00 (2012$), a small fraction of typical projected costs per new riders on proposed rail transit systems around the country. By comparison, the cost per new rider on the east extension of the Gold light rail line was projected at more than $30 (2012$, $24.19 in 2003). This is more than 30 times the cost per new rider of the low fare program.

    The strong ridership increase in response to the low fare program is consistent with the relatively low incomes of Los Angeles transit commuters. In 2013, the median income of Los Angeles County transit commuters was approximately one-half that of the national, 60 percent below that of the six metropolitan areas with transit legacy cities (New York, Chicago, Philadelphia, San Francisco, Boston and Washington) and even lower than the other 45 metropolitan areas over 1,000,000 population (Figure 1)

    Local Return Program: Since 1985, when the bus fare reduction program ended, by far the greatest impact on ridership was from the Local Return program. In 1985, the existing local bus operators carried approximately 55 million annual passengers, a figure that rose to more than 130 million in 2012 (a nearly 140 percent increase). This ridership increase is more passengers that were carried on all the bus and rail systems of Dallas (DART), Salt Lake City and St. Louis in 2012, according to Federal Transit Administration data.

    Urban Rail Program: Many miles of urban rail have been built in Los Angeles County, including two subways and five light rail lines (determined by route termini from downtown). But the hope that others would leave their cars for transit, as expressed in The Onion has not occurred. By 2012, Federal Transit Administration data indicates that MTA (formed by a merger of LACTC and the Southern California Rapid Transit District, which operated the system before) bus and rail system was carrying 475 million annual riders, down from the 497 million carried on buses alone in 1985.

    This is despite constructing billions  in subway lines, light rail lines, and rapid busways and the addition of approximately 2 million residents to Los Angeles County.

    The "Return" on Local Return: The big surprise was the "return" on the local return program. A number of new systems were established, such as Foothill Transit and the Antelope Valley Transportation Authority. Many cities established new bus and paratransit systems. The city of Los Angeles now operates a number of commuter express bus services and local circulation bus services throughout the city. Many of the new systems used competitive tendering, under which services are awarded to competing private companies, with fares, routes, and schedules dictated by the public agencies. One important advantage of competitive tendering is lower costs, which makes it possible to provide more service. This service approach has been used extensively in Denver and San Diego. Further, virtually all of London’s largest public bus system in the high income world is competitively tendered as are  all of the bus, subway, commuter rail and light rail services in Stockholm.

    Overall, the Los Angeles County transit system, including MTA and the local operators experienced a ridership increase of 55 million between 1985 and 2012 (This excludes Metrolink, the five county commuter rail system established in the 1990s). Virtually all of the ridership increase is attributable to the local bus services operated by cities and by new sub-regional agencies (Figure 2).

    Overall Transit Work Trip Share

    Census Bureau data indicates that the employment access share of transit in Los Angeles County has declined modestly, from 7.0 percent in 1980 to 6.9 percent in 2013 (including Metrolink). Driving alone increased from 68.7 percent to 72.7 percent, while car pool commuting dropped from 16.8 percent to 10.0 percent. Outside of driving alone, the largest increase occurred in working at home rising from 1.5 percent to 5.2 percent (Figure 3). Unlike transit, working at home requires virtually no expenditures of public funds. Transit one-way work trips increased 77,000 daily, while driving along increased 947,000 and working at home increased 182,000. Car pools suffered a large loss (Figure 4).     

    Thus, despite rave reviews about its rail system, Los Angeles relies on cars to an even greater extent than before. Los Angeles qualifies as the next great transit city only if the standard is spending and construction, rather than ridership.

    Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. He was appointed to the Amtrak Reform Council to fill the unexpired term of Governor Christine Todd Whitman and has served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

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    Note: Part of the MTA/SCRTD ridership loss was due to the transfer of services to Foothill Transit and the city of Los Angeles in the late 1980s.

    Photo: Los Angeles County Transportation Commission logo from 1980s