Tag: middle class

Special Report: Maximizing Opportunity Urbanism with Robin Hood Planning

This is the first section of a new report authored by Tory Gattis for the Center for Opportunity Urbanism titled Maximizing Opportunity Urbanism with Robin Hood Planning. Download the full report (pdf) here.

Across America and the developed world, we face a well-reported crisis of income stagnation, rising inequality, a declining middle class, and a general lack of broad prosperity. Yet contemporary urban planning seems disconnected from this crisis, focusing instead on pedestrian aesthetics, environmentalism, and appealing to the supposed preferences of the wealthy and the “creative class.” This approach increasingly dominates urban thinking, expressed often as New Urbanism or Smart Growth. In this perspective, dense and usually older cities like New York, Portland, and San Francisco have been held up as models. For the most part, planners see their world through the perspective of an architect – an architect of the physical form of cities. But what if they tried the perspective of an economist – an architect of opportunities for people to have a better life?

Cities matter far more than they used to as engines of opportunity and upward social mobility – the very essence of the American Dream. As the basis of the economy has shifted from industry to services, proximity to others now matters more than ever before. A factory can be anywhere and ship its products anywhere, but, generally speaking, most services need to be in-person. This is pushing more and more of the population to agglomerate around not so much cities, as defined by their political boundaries, but major metros, including numerous suburban rings, where the vast majority of the population resides. In many metros, limited housing supply has driven up home prices and rents to levels where much of the middle and working classes are either unable to buy or must pay a heavy portion of their incomes in mortgages or rents.

This is occurring as economic and technological factors have directed ever more wealth to a relatively small population of elites, whose demand for specialized services – whether personal spending or that of the corporations they control – has become a major part of the economy. Economic opportunity is driven not just by proximity to others in general, but by proximity to the very small but critically influential super-affluent class – what Citigroup research calls the “Plutonomy”. iv In some markets, such as Miami, New York and San Francisco, the locational preferences of this class – who often have several residences and many are foreign buyers – has been yet another driver of major metro agglomeration and higher housing prices, particularly where there are strong land use regulations.

Family sizes have shrunk and reduced fertility rates are leading towards destabilizing demographic implosions in Europe, Japan, and China – and the U.S. trend is moving in the same direction.vi As nations seek to improve fertility rates, one of the greatest challenges is a shortage of family-friendly housing with sufficient space. If that space is not affordable, then people do the next best alternative: shrink their family size. Whereas families used to be comfortable with multiple children per bedroom, the modern standard is one bedroom for every child – not to mention the “home office” for virtual work by the dual-income parents. With the large suburban house both regulatory out-of-favor and unaffordable in some metropolitan areas, families are forced to shrink to live in expensive density, or pay very high prices and rents for what used to be considered standard middle class homes.

The planning community generally has few answers to these dilemmas, but in practice the steps they often advocate may actually be making it worse. A dominant tenet of Smart Growth actually seeks to restrict suburban development and encourage density to contain urban expansion. Draconian regulations – and ever higher costs – are piled on any new developments. On the other side, pressure from NIMBY homeowners often limits development of any kind – including high-density. In some areas, exclusionary zoning – such as tight restrictions on multi-family housing – is used to prevent minority, disadvantaged, or lower-income populations from moving in nearby.

All in all, the net effect is a suffocating restriction on new housing supply even as demand increases, leading to skyrocketing home prices. This has the effect of making affluent NIMBY homeowners, who are disproportionately white and older, quite happy since their homes prices, sans new competition, are almost certain to increase. But the system works like a “Robin Hood in reverse” for younger, middle and working class families that lose out. This is a major driver of inequality – in fact, recent analysis indicates that homeownership completely accounts for the rise in inequality in recent decades. xii Planners have to take a hard look in the mirror and face an uncomfortable truth: whether they have been conscious of it or not, they have been direct accomplices in the rise of inequality and the decline of the middle and working class.

Download the full report (pdf) from the Center for Opportunity Urbanism.

Tory Gattis is a Founding Senior Fellow with the Center for Opportunity Urbanism, and co-authored the original Opportunity Urbanism studies. Tory writes the popular Houston Strategies blog and its twin blog at the Houston Chronicle, Opportunity Urbanist, where he discusses strategies for making Houston a better city. He is the founder of Coached Schooling, a startup to create a high-tech network of affordable private schools ($10/day) combining the best elements of eLearning, home and traditional schooling to reinvent the one-room schoolhouse for the 21st century. Tory is a McKinsey consulting alum, TEDx speaker, and holds both an MBA and BSEE from Rice University.

August 1, 2015
The Cities Leading A U.S. Manufacturing Revival
Manufacturing may no longer drive the U.S. economy, but industrial growth remains a powerful force in many regions of the country. Industrial employment has surged over the past five years, with the sector adding some 855,000 new jobs, a 7.5% expansion.

Several factors are driving this trend, including rising wages in China, the energy boom and a growing need to respond more quickly to local customer demand and the changing marketplace.

To generate our rankings of the best places for manufacturing jobs, we evaluated the 373 metropolitan statistical areas for which the U.S. Bureau of Labor Statistics has complete data over the past decade. Our rankings factor in manufacturing employment growth over the long term (2003-14), medium term (2009-14) and the last two years, as well as momentum.
The Rust Belt Is Back

No part of America suffered more from the de-industrialization of the past 40 years than the Great Lakes states. Yet as manufacturing has come back, particularly the auto industry, many of the region’s economies have begun to resurge. Despite all the fashionable chatter over the question of whether we’ve reached “peak car,” the auto industry has enjoyed six straight years of increased sales, driven by low interest rates, the need to replace older cars and rising consumer confidence.

The epicenter of this trend is exactly where the industrial decline hit hardest: Michigan, which sweeps the top three places on our list of the big cities generating the most new manufacturing jobs. The state has now recovered about 40% of the manufacturing jobs it lost during the recession. The Detroit-Dearborn-Livonia metropolitan area ranks No. 1 among the country’s 70 largest metropolitan areas for manufacturing employment growth over the time period for our study. Since 2009 the Detroit area has seen a remarkable 31.3% rebound to 89,300 industrial jobs, including a 9.8% expansion last year. This growth has helped begin to reverse a long-standing decline in employment overall—still down 12.3% since 2003—with overall employment up 5.9% since 2009.

Detroit’s recovery is not just a matter of inertia, but reflects a unique combination of circumstances. The area is home not only to many skilled workers, but boasts the second largest concentration of engineers among the country’s 85 largest metro areas, behind only Silicon Valley.

In second place is Warren-Troy-Farmington, in the Detroit suburbs, where manufacturing employment is up 38.8% since 2009. In third place is Grand Rapids-Wyoming, a longtime furniture-making hub where an uncommonly high share of jobs is in manufacturing, one in five; the metro area has seen industrial employment rebound 27.9% since 2009.

Another Midwest hotspot has been Toledo, Ohio, only 60 miles from Detroit, which ranks first among the mid-sized cities we evaluated, with a 17.4% jump in industrial employment since 2009.

Southern Cooking

The other big cluster of industrial hotspots is in the Southeast. Manufacturing has been heading to the region for several decades, recently primed by major investments from German and Japanese companies, among others. A prime example is Nashville-Davidson-Murfreesboro, Tenn., No. 4 on our list, where manufacturing employment has jumped 23.9% since 2009. Japan’s Nissan and Bridgestone have establishing manufacturing plants in Central Tennessee, which has also created opportunities for small domestic parts companies in the region. Nissan also relocated its U.S. headquarters to the area in 2006 from Southern California. And domestic auto makers are have become major players in the Southeast—Ford employs some 14,000 in the Louisville, Ky., area, which checks in at No. 7 among our largest MSAs. The South, notes a recent Brookings study, now has the highest number of workers in the country employed in “advanced industries,” which tend to be the higher paying, more technically oriented parts of the factory economy.

Other areas that have become primary places for new industrial investment include such Deep South locations as Savannah, Ga., No. 2 on our mid-sized list, as well as No. 8 Columbia, S.C., a major center for German car companies, and No. 10 Charleston, S.C., which has benefited from the expansion of Boeing and aerospace suppliers there. These areas missed much of the industrial revolution a century ago but are playing an impressive game of catch-up. Each has seen their industrial workforces grow over 20% since 2009. Other southern stars include Cape Coral-Ft Meyers, Fla., No. 4 on our mid-sized city list. Our small cities list also turns up Southern outperformers: No. 2 Naples-Immokalee-Marco Island and No. 3 Sebastian-Vero-Beach, Fla.

The Energy Belt

Falling oil prices may be causing the oil and gas industry to rein in exploration and drilling budgets, but it provides an enormous boon for downstream industries such as refining and petrochemicals. This could keep industrial job growth going in two of our top MSAs that are in the oil patch. Oklahoma City, where manufacturing job growth has soared 23.1% since 2009, ranks sixth, and Houston, where the industrial workforce has expanded 19.8% over the same time span, ranks ninth. Houston now is home to 257,300 manufacturing jobs, the third largest concentration in the country.

As in Detroit, Houston’s industrial rise is powered by more than by brawn. The area ranks sixth among the nation’s major metros in number of engineers per capita. If the Bay Area is master of the digital economy, Houston ranks as the technological leader of the material one; it is the capital for the energy-driven revival of U.S. industry.

Smaller energy-rich areas that have also experienced rapid industrial growth. These include two Louisiana metro areas, No. 3 Baton Rouge and No. 7 Lafayette, third and seventh, respectively on our mid-sized metro area list, as well as Midland, Texas, fifth on our small areas list. Perhaps most surprising, given its location in anti-carbon California, has been the steady growth in Bakersfield, which stands fifth on the mid-sized list and is home to some of the nation’s largest oil fields. With 20.3% industrial growth since 2009, the area, sometimes known as “little Texas,” is the only metro area in the Golden State to make it to the top 10 in either the large or mid-sized list.

A Shift To Smaller Cities

Once American industry was identified predominately with big cities: New York in 1950, according to economic historian Fernand Braudel, had the largest industrial economy in the world, employing a million workers, mostly at small manufacturers. In the 1970s and 1980s, the industrial zeitgeist moved increasingly to Los Angeles, which vied with Chicago as the largest center for factory jobs.

Today this pattern is changing dramatically. Besides the move toward the south and energy hotbeds, industry has been expanding in smaller cities as well as suburban areas beyond the core cities, says University of Washington geographer Richard Morrill. This is not unique to the United States; Germany, which has perhaps the most admired industrial sector in the world, also has dispersed its industrial base, largely to smaller cities.

The reasons for this shift vary, from strict environmental laws in Northern cities, as well as stronger unions, and cheaper land elsewhere.

For example, although the New York state capital Albany ranks fifth on our big metro area list, driven in large part by semiconductor manufacturing, New York City stands at a weak 62nd out of 70. Since 2009, New York has lost 3.3% of its manufacturing jobs; the city’s industrial workforce now stands at a paltry 74,700, a dramatic decline from some 400,000 as recently as the early 1980s.

Yet with its powerful array of media, business service and hospitality businesses, New York appears to be able to withstand deindustrialization more than the two largest industrial MSAs, Chicago and Los Angeles. The one-time “city of big shoulders“ and its environs has also lost industrial jobs since 2009, down to 278,000 from 286,500 in 2011, and a far cry from the 461,600 it had in 2000.

The decline has been, if anything, more rapid in 59th place Los Angeles. This process began with the loss of more than 90,000 aerospace jobs since the end of the Cold War. Los Angeles’ industrial job count stands at 363,900 — still the largest in the nations but down sharply from 900,000 just a decade ago.

Does Industrial Growth Still Matter?

Clearly deindustrialization has a bigger impact in some areas than others. Cities like San Francisco and New York appear better positioned for the post-industrial transition than Chicago or Los Angeles, where manufacturing lingered longer and the elite service or tech industries are not nearly as predominant. Yet the impact of industrial decline — or resurgence — may be more important in the future than many suppose.

This is particularly critical for blue-collar workers, for whom industrial jobs tend to pay more. Welders and other skilled workers are increasingly in short supply, particularly as baby boomers begin to leave the workforce. Many of the cities which did well in our rankings are among the best in building new training partnerships with their industrial employers—these are skills that are decreasingly taught in the modern secondary and college curricula. In some places, vocational skills have recently been commanding higher post-graduation salaries than traditional college degrees.

Industrial growth also provides an opportunity for emerging cities, particularly in the South and the energy belt, to add to their employment base and, in some cases, their connections with international markets. Over-dependence on manufacturing, as the Rust Belt experience showed, can be dangerous, and the need to diversify employmentremains critical. Threats to future growth include the strong dollar, the decline in the energy sector and economic weakness abroad reducing exports.

But factory jobs remain an important asset for many regions. They may not be the central force they once were, but these jobs seem likely to continue making a big difference in the fates of many economies, both big and small.
This piece originally appeared at Forbes.

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

Michael Shires, Ph.D. is a professor at Pepperdine University School of Public Policy.

Auto manufacturing photo by BigStockPhoto.com.
July 24, 2015
LA’s Tale of Two Cities

It’s the best of times and the worst of times in Los Angeles.

Los Angeles is now attracting notice as a so-called “global city,” one of the world’s elite metropolises. It is ranked #6 in the world by AT Kearney and tied for 10th in a report by the Singapore Civil Service College that I contributed to. Yet it also has among the highest big city poverty rates in the nation, and was found to be one of the worst places in America for upward mobility among the poor. Newspaper columns are starting to refer to LA as a “third world city.”

Though the Bay Area gets the headlines, the LA region likes to boast it’s coming on strong in tech. With a diverse set of marquee names including Snapchat, Tinder, Oculus, and SpaceX, LA’s startup scene continues to grow. But tech growth overall has been middling, ranking 28th out of the country’s sixty-six largest region in information job growth, according to a recent Forbes survey.

More disturbing, job growth has also been slow, ranking 35th overall, at a time when it’s long time rivals in the Bay Area occupy the top job and tech rankings. Some of this reflects the loss of a key industry, aerospace, but also the departure of major corporations such as Lockheed, Northrup Grumman, Occidental Petroleum, and Toyota, which has left LA’s once vaunted corporate community but is a shell of its former self.

Yet LA’s glitz factor remains potent. The fashion industry has gained considerable recognition. Tom Ford set up shop and brought his runway show to the city. Locally grown brands like Rodarte have a major following. LA also is increasingly a global center of gravity in the art world.

Yet behind the glitz, in the city of Los Angeles, aging water mains regularly erupt and the streets and sidewalks decay, with the city’s own report estimating it has an $8.1 billion infrastructure repair backlog.

One report chronicles the flight of cash-strapped New York creatives fleeing to sunny, liberating, and less expensive LA. Another how high prices and the Southern California grind are sending those same creatives packing.

What’s going on here?

What we are witnessing is LA changing in the context of the two tier world —divided between rich and poor — that we live in. This has been made worse by a city that has excessively focused on glamour at the expense of broad based opportunity creation.

Los Angeles may be a creative capital and a great place to live as a creative worker, but it was always much more than that. It was also a great place to build the middle class American Dream or run a business that employed people at scale. For example, it was and still today remains the largest manufacturing center in the United States. Yet it has lost half of its manufacturing job base since 1990. That’s over half a million manufacturing jobs lost in the region since then, with over 300,000 of those just since 2000. Unlike Detroit, Houston, Nashville and even Portland, the region has not benefited at all from the resurgence of US manufacturing since 2009.

Manufacturing decline, of course, is hardly unique to LA, but the city’s problems are particularly acute because region is so huge and diverse, being both the second largest metro area in the country, and the most diverse major region in America. LA has a higher share of Hispanic population than any major metro apart from San Antonio – one twice as high as the Bay Area. The LA/Inland Empire’s 8.4 million Hispanics would by themselves be the fourth largest metro area in the country, and are more than the total number of people living in the Bay Area. The area also has over a million black residents.

With their heavily well-educated populations the Bay Area and Boston can perhaps get away with operating as sort of luxury boutiques for upscale whites and Asians, however dubious a decision that may be. Not so LA.

The problem is that LA and California more broadly have adopted the luxury boutique mindset. Policies are made in ways that favor the glamorous industries like Hollywood, high tech, and the arts – industries that don’t employ a lot of aspiring middle class people, particularly Hispanics or blacks.

These policies include strongly anti-growth land use and environmental policies designed to produce the kind pristine playgrounds favored by glamour industries and creative elite. But they have rendered the region increasingly unaffordable to all but the highly affluent or those who were lucky enough to buy in long ago.

Tech firms and entertainment companies can afford to pay their key workers whatever they need to live in LA. That’s tougher for more workaday businesses. Ditto for business regulations, where many industries don’t have the margins to spend on things like a phalanx of compliance attorneys.

Now that high prices are starting to hurt younger hipsters who want to join the creative industries, this is starting to get attention. But if it’s a problem for young, educated Millennials, it’s a disaster for the working class.

LA does deserve credit for potentially opportunity expanding investments in transit. But if transit can be seen as a potential winner, most political leaders seem more concerned with finding ways to simply attempt to politically reallocate some money to those being squeezed by their policies, all at the expense of growth. The $15 minimum wage is Exhibit A. Like rent control, a high minimum wage benefits a few lucky winners while harming others and making it harder to justify business investment that would create more jobs and entry level opportunities onto the ladder of success, while raising consumer prices. The fact that nearly half of LA’s workers might be covered by the new minimum is a damning testament to the erosion of the region’s middle class job base.

The real measure of success for LA is not how many runway shows, startups, and elite rankings it can achieve, but whether it can recover its role as an engine of opportunity for its large and diverse population to achieve their American Dream. Local leaders would be better served looking for policies that will expand opportunity instead of the ones they are following that actually reduce it.

Aaron M. Renn is a Senior Fellow at the Manhattan Institute for Policy Research and a Contributing Editor at its magazine City Journal.

July 20, 2015
Institution of Family Being Eroded

Recent setbacks for social conservative ideals – most particularly on same-sex marriage – have led some to suggest that traditional values are passé. Indeed, some conservatives, in Pat Buchanan’s phrase, are in “a long retreat,” deserted by mainstream corporate America sporting rainbow logos. Some social conservatives are so despondent that they speak about retreating from the public space and into their homes and churches, rediscovering “the monastic temperament” prevalent during the Dark Ages.

This response would be a tragedy for society. For all its limitations, the fundamental values cherished by the religious – notably, family – have never been more important, and more in need of moral assistance. The current progressive cultural wave may itself begin to “overreach” as it moves from the certainty of liberal sentiment to ever more repressive attempts to limit alternative views of the world, including those of the religious.

In the next few years, social conservatives need to engage, but in ways that transcend doctrinal concerns about homosexuality, or even abortion. It has to be made clear that, on its current pace, Western civilization and, increasingly, much of East Asia are headed toward a demographic meltdown as people eschew family formation for the pleasures of singleness or childlessness.

Read the entire piece at The Orange County Register.

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

Baby photo by Bigstock.

July 14, 2015
Countering Progressives’ Assault on Suburbia

The next culture war will not be about issues like gay marriage or abortion, but about something more fundamental: how Americans choose to live. In the crosshairs now will not be just recalcitrant Christians or crazed billionaire racists, but the vast majority of Americans who either live in suburban-style housing or aspire to do so in the future. Roughly four in five home buyers prefer a single-family home, but much of the political class increasingly wants them to live differently.

Theoretically, the suburbs should be the dominant politically force in America. Some 44 million Americans live in the core cities of America’s 51 major metropolitan areas, while nearly 122 million Americans live in the suburbs. In other words, nearly three-quarters of metropolitan Americans live in suburbs.

Yet it has been decided, mostly by self-described progressives, that suburban living is too unecological, not mention too uncool, and even too white for their future America. Density is their new holy grail, for both the world and the U.S. Across the country efforts are now being mounted—through HUD, the EPA, and scores of local agencies—to impede suburban home-building, or to raise its cost. Notably in coastal California, but other places, too, suburban housing is increasingly relegated to the affluent.

The obstacles being erected include incentives for density, urban growth boundaries, attempts to alter the race and class makeup of communities, and mounting environmental efforts to reduce sprawl. The EPA wants to designate even small, seasonal puddles as “wetlands,” creating a barrier to developers of middle-class housing, particularly in fast-growing communities in the Southwest. Denizens of free-market-oriented Texas could soon be experiencing what those in California, Oregon and other progressive bastions have long endured: environmental laws that make suburban development all but impossible, or impossibly expensive. Suburban family favorites like cul-de-sacs are being banned under pressure from planners.

Some conservatives rightly criticize such intrusive moves, but they generally ignore how Wall Street interests and some developers see forced densification as opportunities for greater profits, often sweetened by public subsidies. Overall, suburban interests are poorly organized, particularly compared to well-connected density lobbies such as the developer-funded Urban Land Institute (ULI), which have opposed suburbanization for nearly 80 years.

The New Political Logic

The progressives’ assault on suburbia reflects a profound change in the base of the Democratic Party. As recently as 2008, Democrats were competitive in suburbs, as their program represented no direct threat to residents’ interests. But with the election of Barack Obama, and the continued evolution of urban centers as places with little in the way of middle-class families, the left has become increasingly oriented towards dense cities, almost entirely ruled by liberal Democrats.

Obama’s urban policies are of a piece with those of “smart growth” advocates who want to curb suburban growth and make sure that all future development is as dense as possible. Some advocate radical measures such as siphoning tax revenues from suburbs to keep them from “cannibalizing” jobs and retail sales. Some even fantasize about carving up the suburban carcass, envisioning three-car garages “subdivided into rental units with street front cafés, shops and other local businesses” while abandoned pools would become skateboard parks.

At the end of this particular progressive rainbow, what will we find? Perhaps something more like one sees in European cities, where the rich and elite cluster in the center of town, while the suburbs become the “new slums” that urban elites pass over on the way to their summer cottages.

Political Dangers

The abandonment of the American Dream of suburban housing and ownership represents a repudiation of what Democrats once embraced and for which millions, including many minorities, continue to seek out. “A nation of homeowners,” Franklin D. Roosevelt asserted, “of people who own a real share in their land, is unconquerable.”

This rhetoric was backed up by action. It was FDR, and then Harry Truman, who backed the funding mechanisms—loans for veterans, for example—that sparked suburbia’s growth. Unlike today’s progressives, the old school thought it good politics to favor those things that most people aspire to achieve. Democrats gained ground in the suburbs, which before 1945 had been reliably and overwhelmingly Republican.

Even into the 1980s and beyond, suburbanites functioned less as a core GOP constituency than as the ultimate swing voters. As urban cores became increasingly lock-step liberal, and rural Democrats slowlyfaded towards extinction, the suburbs became the ultimate contested territory. In 2006, for example, Democrats won the majority of suburban voters. In 2012, President Obama did less well than in 2008, but still carried most inner and mature suburbs while Romney trounced him in the farther out exurbs. Overall Romney eked out a small suburban margin.

Yet by 2014, as the Democratic Party shifted further left and more urban in its policy prescriptions, these patterns began to turn. In the 2014 congressional elections, the GOP boosted its suburban edge to 12 percentage points. The result was a thorough shellacking of the Democrats from top to bottom.

Will demographics lead suburbs to the Democrats?

Progressive theory today holds that the 2014 midterm results were a blast from the suburban past, and that the key groups that will shape the metropolitan future—millennials and minorities—will embrace ever-denser, more urbanized environments. Yet in the last decennial accounting, inner cores gained 206,000 people, while communities 10 miles and more from the core gained approximately 15 million people.

Some suggest that the trends of the first decade of this century already are passé, and that more Americans are becoming born-again urbanistas. Yet after a brief period of slightly more rapid urban growth immediately following the recession, U.S. suburban growth rates began to again surpass those of urban cores. An analysis by Jed Kolko, chief economist at the real estate website Trulia, reports that between 2011 and 2012 less-dense-than-average Zip codes grew at double the rate of more-dense-than-average Zip codes in the 50 largest metropolitan areas. Americans, he wrote, “still love the suburbs.”

What is also missed by the Obama administration and its allies is the suburbs’ growing diversity. If HUD wants to start attacking these communities, many of their targets will not be whites, but minorities, particularly successful ones, who have been flocking to suburbs for well over a decade.

This undermines absurd claims that the suburbs need to be changed in order to challenge the much detested reign of “white privilege.” In reality, African-Americans have been deserting core cities for years, largely of their own accord and through their own efforts: Today, only 16 percent of the Detroit area’s blacks live within the city limits.

These trends can also be seen in the largely immigrant ethnic groups. Roughly 60 percent of Hispanics and Asians, notes the Brooking Institution, already live in suburbs. Between the years 2000 and 2012, the Asian population in suburban areas of the nation’s 52 biggest metro areas grew by 66 percent, while that in the core cities expanded by 35 percent. Of the top 20 areas with over 50,000 in Asian population, all but two are suburbs.

Left to market forces and natural demographic trends, suburbs are becoming far more diverse than many cities, meaning that in turning on suburbia, progressives are actually stomping on the aspirations not just of privileged whites but those of many minorities who have worked hard to get there.

Another huge misreading of trends relates to another key Democratic constituency, the millennial generation. Some progressives have embraced the dubious notion that millennials won’t buy cars or houses, and certainly won’t migrate to the suburbs as they marry and have families. But those notions are rapidly dissolving as millennials do all those things. They are even—horror of horrors!—shopping atWal-Mart, and in greater percentages than older cohorts.

Moreover, notes Kolko, millennials are not moving to the denser inner ring suburban areas. They are moving to the “suburbiest” communities, largely on the periphery, where homes are cheaper, and often schools are better. When asked where their “ideal place to live,” according to a survey by Frank Magid and Associates, more millennials identified suburbs than previous generations. Another survey in the same year, this one by the Demand Institute, showed similar proclivities.

Stirrings of Rebellion

So if the American Dream is not dead among the citizens, is trying to kill it good politics? It’s clear that Democratic constituencies, notably millennials, immigrants and minorities, and increasingly gays—particularly gay couples—are flocking to suburbs. This is true even in metropolitan San Francisco, where 40 percent of same-sex couples live outside the city limits.

One has to wonder how enthusiastic these constituents will be when their new communities are “transformed” by federal social engineers. One particularly troubling group may be affluent liberals in strongholds such as Marin County, north of San Francisco, long a reliable bastion of progressive ideology.

Forced densification–the ultimate goal of the “smart growth” movement—also has inspired opposition in Los Angeles, where densification is being opposed in many neighborhoods, as well as traditionally more conservative Orange Country. Similar opposition has arisen in Northern Virginia suburbs, another key Democratic stronghold.

These objections may be dismissed as self-interested NIMBYism, but this misses the very point about why people move to suburbs in the first place. They do so precisely in to avoid living in crowded places. This is not anti-social, as is alleged, but an attempt—natural in any democracy—to achieve a degree of self-determination, notes historian Nicole Stelle Garrett.

Aroused by what they perceive as threats to their preferred way of life, these modern pilgrims can prove politically effective. They’ve shown this muscle while opposing plans not only to increase the density in suburbs, and also balking at the shift of transportation funding from roads, which suburbanites use heavily, to rail transit. This was seen in Atlanta in 2012 when suburban voters rejected a mass transit plan being pushed by downtown elites and their planning allies. Opposition to expanding rail service has also surfaced in the Maryland suburbs of Washington.

Suburbs and 2016 Election

To justify their actions against how Americans prefer to live, progressives will increasingly cite the environment. Climate change has become the “killer app” in the smart growth agenda and you can expect the drumbeat to get ever louder towards the Paris climate change conference this summer.

Yet the connection between suburbs and climate is not as clear as the smart growth crowd suggests. McKinsey and other studies found no need to change housing patterns to reduce greenhouse gases, particularly given improvements in both home and auto efficiency. Yet so great is their animus that many anti-suburban activists seem to prefer stomping on suburban aspirations rather seeking ways to make them more environmental friendly.

As for the drive to undermine suburbs for reasons of class, in many ways the assault on suburbia is, in reality, a direct assault on our most egalitarian geography. An examination of American Community Survey Data for 2012 by the University of Washington’s Richard Morrill indicates that the less dense suburban areas tended to have “generally less inequality” than the denser core cities; Riverside-San Bernardino, for example, is far less unequal than Los Angeles; likewise, inequality is less pronounced in Sacramento than San Francisco. Within the 51 metropolitan areas with more than 1 million people, notes demographer Wendell Cox, suburban areas were less unequal (measured by the GINI Coefficient) than the core cities in 46 cases.

In the coming year, suburbanites should demand more respect from Washington, D.C., from the media, the political class and from the planning community. If people choose to move into the city, or favor density in their community, fine. But the notion that it is the government’s job to require only one form of development contradicts basic democratic principles and, in effect, turns even the most local zoning decision into an exercise in social engineering.

As America’s majority, suburbanites should be able to deliver a counterpunch to those who seem determined to destroy their way of life. Irrespective of race or generation, those who live in the suburbs—or who long to do so—need to understand the mounting threat to their aspirations Once they do, they could spark a political firestorm that could reshape American politics for decades to come.

This piece first appeared at Real Clear Politics.

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

Suburbs photo courtesy of BigStockPhoto.com.

July 10, 2015
Some Kindly Advice From an Old White Guy

Last month I bought an old fixer-upper for $15,000 in Cincinnati. It was originally offered at $17,000, but I got the sellers down a bit. The place is a complete disaster. All the copper pipes and wires have been stripped out of the building. It hasn’t seen paint for decades. Every window and door needs to be replaced. The roof is shot. There’s no insulation of any kind. The yard is a mess. And there are plenty of similar houses in the neighborhood. So why exactly did I buy it? I’ll get to that in a minute.

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But first I want to relate a conversation I had with a contractor this morning. He’s an older man who lives in the distant suburbs and has very definite opinions about the city. He spoke to me in a kindly grandfather voice. “Do you understand where this house is? Do you know what kind of people live there?” He used some colorful language which I won’t repeat. Let’s just say he’s a white guy of a particular generation from the South… He advised me to take the money I’m about to spend renovating the house and use it to buy a nice big new home on a good sized piece of land across the river in Kentucky instead.

If this were 1980, or 1990, or 2000 this man’s recommendation would have been entirely valid from an economic perspective. Inner city neighborhoods all over the country were hemorrhaging population, jobs, and revenue for decades. It would have been a disastrous investment. But times have changed. Not everyone has noticed.

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Here are some before and after photos of buildings in the immediate neighborhood curtesy of Google Street View. Since the Google van has driven by a few times in the last decade it’s possible to see the same buildings from the perspective of different years. People have consistently been buying up cheap run down properties, fixing them up, and incrementally improving the neighborhood. This is no longer a place of permanent decline and disinvestment. The area hit bottom a few years back and it’s already on the way back up. It’s not entirely there yet, but it’s well on its way.

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In addition to recently renovated older buildings, vacant lots are sprouting quality new construction. These two homes are LEED certified for energy efficiency.

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gantrylife.com / bayerbecker.com

csoinc.net / bayerbecker.com

A few blocks away a larger vacant parcel is currently being redeveloped into a market rate multi-million dollar mixed use building by an out-of-state firm. I’ve noticed that local companies don’t always appreciate their own assets, but plenty of well funded ventures from other metro areas are taking advantage of the opportunities on offer in Cincinnati.

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Right next door is the American Can Lofts building which was completely transformed in 2011 after siting empty since 1978. I arrived in Cincinnati for the first time a few years ago just as this building was having its grand reopened. That takes me to how a guy from San Francisco ended up looking at property in Cincinnati in the first place. Which takes me to why I think Cincinnati is such a great investment.

I have long time friends-of-the-family in Los Angeles. Their daughter graduated from university, got married, and promptly left California. She and her husband explored the country looking for a place to live that they both liked and could afford. (That ruled out nearly every inch of California.) They lived in Baltimore, Maryland for a while and then Portland, Oregon for a year before moving to Cincinnati. They could afford Baltimore and appreciated its gritty charm. But they really loved Portland – give or take the ridiculously high rent and real estate values. What they wanted was Portland at a Baltimore price.

And then they moved to Cincinnati. Ahhhhhh. They bought a charming century old four bedroom house in perfectly good condition for $50,000. It was the best thing any young couple could have done, both financially and in terms of their quality of life. If they had stayed in Los Angeles or Portland they would still be renting (with room mates) and just scraping by. In Cincinnati they became comfortably middle class home owners at the tender age of twenty five. Their mortgage is $400 a month. And they’ve had no trouble finding good work or like minded friends. They aren’t the only young people making this kind of move. Which is probably why out-of-state developers are investing in the city.

The odd thing about Cincinnati is that while the existing housing stock is very reasonably priced, good quality space is commanding fairly high rents. Apartments in the America Can building go for $610 for a one bedroom up to $1,480 for a three bedroom – and there’s a waiting lists. My inner capitalist sees a generous spread between affordable property and the potential for solid rent from solvent tenants. If I can provide a high quality building I believe I can find good people to occupy the space at a rent that’s reasonable for them and profitable for me. And I can do it without taking on debt and without being a slumlord. Try that in San Francisco and see how far you get…

I just hired a young local architect to help with the reconstruction. This is going to be a fun little adventure. And I’m really happy that old guy who was trying to give me advice lives in the distant suburbs. He’d be a terrible neighbor.

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

July 4, 2015
Who Should Immigration be Helping?

Recent revelations about the firing of American tech workers and their replacement by temporary visa holders reveal, in the starkest way, why many Americans are wary of the impact of untrammeled immigration. Workers in American companies have been removed from their jobs not because they could not perform them, but because their replacements, largely from India, are simply cheaper and, likely, more malleable.

The H-1B temporary visa program was purportedly designed to help tech firms hire specialized talent to fill needs not adequately addressed by the U.S. labor market. But what it has really become is a way to lay off workers for cheaper ones.

Silicon Valley’s Phony War

A looming shortage of domestic tech talent has long been a siren song played in Silicon Valley by grandees such as Facebook’s Mark Zuckerberg. It is common to hear them claim the visa program must be expanded for them to compete.

Immigrant entrepreneurs and technical staff are hugely important, but the notion about “shortages” of IT workers is dicey at best. A 2013 report from the labor-aligned Economic Policy Institute found that the country is producing 50 percent more IT professionals each year than are being employed. EPI estimates “guest workers” now account for one-third to one-half of all new IT job holders, much of them through contracts with Infosys and Tata Consultancy Services, both based in India. These two firms, according to EPI, have cost over 12,000 U.S. workers their jobs this year alone.

Read the entire piece at The Orange County Register.

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

Photo by telwink

July 3, 2015
The California Dream has Moved Away

Southern California faces a serious middle income housing affordability crisis. I refer to middle income housing, because this nation has become so successful in democratizing property ownership that the overwhelming majority of middle income households own their own homes in most of the country.

Recently I had the privilege of participating in a forum on this subject sponsored by the Urban Land Institute, Los Angeles Housing Chapter in Century City. The forum also included a presentation from USC Professor Dowell Myers and was chaired by Ehud Mouchly, who chairs the Housing Chapter. This article is adapted from my presentation.

I am a native Angeleno, having been born near Temple and Alvarado, less than two miles from City Hall. I was appointed to three terms on the Los Angeles County Transportation Commission (LACTC) by Mayor Tom Bradley, where I played a pivotal role in the establishment of the Los Angeles rail system. LACTC and SCRTD were the two predecessors to the current Los Angeles County Metropolitan Transportation Authority (MTA).

In addition, for 11 years, Hugh Pavletich of Christchurch, New Zealand and I have published the Demographia International Housing Affordability Survey. The latest edition was released in January and included median multiple data for 86 major metropolitan areas and nearly 300 smaller metropolitan areas in nine nations. Finally, I publish the most comprehensive annual review of world urbanization, providing population, land area and density for world urban areas with over 500,000 population (See World’s 1,000 Largest Cities: World Urban Areas 2015 Edition).

All of this makes housing in Southern California and urban development particularly interesting to me.

The Imperative: A Rising Standard of Living and Less Poverty

The title of the forum was "The Changing Demographics of Southern California and Their Impact on Housing," however I think that the reverse is more significant — the impact housing is likely to have on Southern California.

My perspective is neither ideological nor tied to any political party. It is a fundamentally pragmatic view that domestic policy should principally seek to better people’s lives, by facilitating a rising standard of living and reducing poverty. These objectives were also referenced in the G20 nations communiqué in Brisbane and adopted a announcing a dedication to improving standards of living and eradicating poverty.

The issue is particularly ripe in California, where public policies relating to housing are having virtually the opposite effect. Housing costs have already increased poverty and reduced the discretionary income of middle-income households.

This is not an issue of suburbs versus the urban core. I could not be more pleased by the long overdue resurgence of downtown areas as residential locations, something made possible by the huge crime reductions that began with Mayor Rudy Giuliani’s policies in New York City and similar efforts in cities like Los Angeles. It is important to recognize that a vibrant core no more needs dying suburbs then vibrant suburbs need a dying core. Both urban cores and suburbs can prosper, creating a stronger urban area.

The Housing Crisis

Southern California’s biggest crisis relates to housing. Housing is important to the standard of living and alleviating poverty. It is the largest element of household budgets. When housing more expensive, it leaves households with less discretionary income to purchase other goods and services. This will, other things being equal, reduce economic output from levels that would be otherwise attained.

This has been developing for more than four decades as house price to income ratios (such as the median multiple, the median house price divided by the median household income) have doubled and tripled above historical levels and well above those of other metropolitan areas. Attention is often focused on lower income affordable housing, a problem virtually everywhere, but most parts of the country do not suffer so severe a middle-income housing affordability problem. Low-income housing affordability is important and one of the best ways to minimize it is to ensure that there is middle-income housing affordability.

A bit of historical perspective is appropriate. For centuries nations had little or no property-owning middle class. Huge progress has been made in the last century and particularly since World War II. Following the war, housing development innovation, combined with transportation advances, led to the development of owned middle income housing in the suburbs. It started with Levittown on Long Island and spread across the nation. The most fabled Southern California example is Lakewood (see D. J. Waldie’s Holy Land: A Suburban Memoir on this). The result was a massive increase in home ownership, rising from percentages from the low 40s to 65% in the final decades of the 20th century.

Similar progress was made in other countries, especially in Canada, Australia and New Zealand, where middle-income households purchased homes with sufficient space. In each of these nations, the median multiples were around or below 3.0 as late as 1995.

All of this represented progress toward what the late and renown British urbanist Peter Hall called the "ideal of a property owning democracy" (See: The Costs of Smart Growth Revisited: A 40 Year Perspective).

Sadly, affordability has diminished greatly in many metropolitan areas around the world. House prices relative to incomes have doubled or tripled in virtually all of the metropolitan areas of Australia and New Zealand, some metropolitan areas in Canada as well as in some key metropolitan areas in the United States, with the worst in California. In each of these places, this house price escalation occurred after implementation of urban containment policies (also called smart growth or growth management), which seriously reduce the amount of land that can be used for new housing.

The Roots of Urban Containment Policy

Urban containment has its roots in the British 1947 Town and Country Planning Act. This act created green belts around British cities and is a proximate cause of the present housing shortage and crisis. The general philosophy of the 1947 Act is evident throughout urban planning in the United States and has been implemented in Oregon, part of Washington and California. Urban containment policy was also enacted in Florida. There, house prices had escalated at rates — if not the price levels — to near that of California during the housing bubble. However, legislators took the opportunity to repeal Florida’s urban containment policies when housing prices dropped to historical median multiple levels.

A recent California Legislative Analyst’s report indicated that much of the problem is California’s strict land-use laws and regulations (See: How the California Dream Became a Nightmare). A dense mesh of "urban containment" and "smart growth" regulations have severely limited the land available for new housing, especially on the periphery, where cities grow organically. This destroys the competitive market for land, driving up its cost. This makes house prices escalate in relation to incomes.

California: 50% More Poverty Than Mississippi

Today, California house prices are far higher than in the rest of the nation. This is taking a toll on the standard of living and increasing poverty. The Census Bureau’s supplemental poverty measure, which adjusts for housing costs shows California’s poverty rate to be the highest in the nation. It should be of concern that California’s poverty rate is 50% above that of perennial poverty leader Mississippi (Figure).

Because so much poverty is concentrated among minority ethnic populations, California’s urban containment policy is particularly disadvantaging Hispanics and African-Americans. The Thomas Rivera Institute at USC published a detailed examination of California’s land-use regulations and found that "Far from helping, they are making it particularly difficult for Latino and African American households to own a home."

The Need for Reform

The bad news is that things are likely to get much worse. Under the Sustainable Communities Strategies required under Senate Bill 375 (2008), it is likely to become nearly impossible to build traditional suburban single-family housing in California’s metropolitan areas (See: California Declares War on Suburbia). Already, median multiples in San Francisco, San Jose, Los Angeles and San Diego are approaching the highs reached at the peak of the housing bubble. House prices are likely to continue rising relative to incomes, other things being equal.

Allowing Supply to Meet Demand

It is often asserted that diminishing land supply in California reflects not so much regulation, but physical limits. The state is sometimes seen as ‘built out’. Yet, in fact, there is plenty of land available for development. Despite its reputation for urban sprawl, the Los Angeles urban area is the most densely populated in the United States. It covers a bit more than one half the land area of the New York urban area. Like any urban area, the greenfield land that is available for development is on the periphery, which includes areas like the northern Antelope Valley, the Victor Valley, and Southwestern California (Temecula to Hemet) and in some closer areas. Each of these areas is closer to the urban core than some parts of the New York commuter shed.

These areas could easily accommodate the additional population expected in the area by 2060, including the single family housing generally preferred among middle-income households. Households are not likely to raise children on high rise balconies.

Even so, the urban footprint would continue to be much smaller than that of New York. If sufficient land were opened to development, the city would expand geographically, but people would also have better access to middle class standards of living, and there would likely be a lot less poverty. The obvious choice would be to let the city expand, while improving real incomes and reducing poverty.

The California Dream is Now in Denver?

During the discussion period after my talk, perhaps the most prescient comment was made by an unidentified audience member said that the California dream is now in Denver. California’s unjustifiably and artificially high housing prices are the cause. Between 1993 and 2010, there was net out-migration from California to 42 of the 50 states and the District of Columbia. Immigration to Los Angeles and Orange from abroad has also declined, as immigrants too look for more affordable alternatives. People seeking sun, glamour or a good time will continue to flourish in southern California, but it seems likely that more families, and middle class households, will continue to ebb out, seeking somewhere else the dream that was once so closely identified with Southern California.

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.

Photo: Central Los Angeles and the San Fernando Valley (by author)

June 16, 2015
Best Cities for Minorities: Gauging the Economics of Opportunity

This is the overview from a new report, Best Cities for Minorities: Gauging the Economics of Opportunity by Joel Kotkin and Wendell Cox for the Center for Opportunity Urbanism. Read the full report here (pdf viewer).

This study provides an initial analysis of African-American, Latino and Asian economic and social conditions in 52 metropolitan regions currently and over the period that extends from 2000 to 2013. Our analysis includes housing affordability, median household incomes, self-employment rates, and population growth. Overall, the analysis shows that ethnic minorities in metropolitan regions with significant economic growth and affordable housing tend to do better than in other locations irrespective of the dominant political culture.

Understanding the dynamics of minority economic mobility is critical to the future of all Americans. If ethnic minorities may once have been viewed as a cultural afterthought in a primarily anglo society, they are now unquestionably America’s future. According to the U.S. Census Bureau, minority children will outnumber white children by as early as 2020, and by 2050, non-white ethnic groups will equal the total number of White-non Hispanics in the population. These estimates likely understate the rate of ethnic transformation in the U.S. because of the country’s growing number of mixed race households.

For years America has been an anglo-dominated nation and ethnic groups largely peripheral societies all too frequently marginalized by discrimination, segregation and racial strife. If W.E.B. Dubois famously noted that “the problem of the twentieth century is the problem of the color line” at the beginning of the 20th century,” the great historian John Hope Franklin asserted that racial issues will continue to shape our society in the 21st.

Demographic trends suggest this is inevitable. Today, America’s ethnic population has surged to an unprecedented extent Latinos, together with African Americans and Asians, now constitute 43 percent of the population in the country’s 52 largest metropolitan areas with a population of at least one million residents, which also comprise 55 percent of the total U.S. population. This is up from 35 percent in 2000.

African Americans, including new immigrants from the Caribbean and Africa, constitute 15 percent of the population, Hispanics are now 21 percent and Asians 7 percent. These areas. Today Latinos are the nation’s largest ethnic minority and Asians the fastest growing in percentage terms.

Despite the massive new and growing influence of ethnic minorities, there are surprisingly few studies comparing the economic performance of American’s burgeoning communities in different metropolitan areas. Fewer still have attempted to identify specific factors that correlate with the most and least favorable results in different regions. As the ethnic composition of America decisively shifts, it is vitally important to understand what regional factors work best to create and sustain economic and social opportunities for the nation’s emerging majority groups.

Overall we found that metropolitan areas with less burdensome regulations, especially those affecting land use and housing costs, tended to do better, in the survey, but not in every instance. Some areas with more restrictive regulations were also highly ranked if other factors, such as a proximity to a relatively robust government employment base (Washington D.C. and Baltimore regions), or rapid private sector growth (Asians in the San Jose area) were sufficiently strong to overcome adverse regulatory and tax burdens.

The data also show a strong contrast between America’s luxury cities, such as New York, San Francisco or Boston, where high costs have significantly reduced opportunities for middle and working class households, and “opportunity cities,” often located in less costly portions of the country like Texas or the South but that have also sustained more rapid and broadly based economic growth.

Although most, if not all, luxury cities sustain strongly progressive politics African-Americans, Asians and Latino households have done relatively worse in these locations; cities in the states with the more generous welfare provisions aimed to help the minority poor – notably California, New York and Illinois – tended to perform worse than those that were less forthcoming, notably in the sunbelt. Ironically, in many of these places, such as metropolitan New York, Chicago, San Francisco and Los Angeles, the media and public officials may be the most adamant in attacking racial and class inequality, but their outcomes have been generally less than optimal.

Instead, America’s ethnic population growth, has shifted away from these slower growth, higher cost regions, irrespective of the level of public assistance or political ideology, towards opportunity cities where economic, housing and other policies provide greater chances of social advancement for middle and working class Americans of all races.

The implication of these findings is that America’s emerging majorities, like the Anglo communities before them, primarily desire and will populate regions where they can afford decent homes, earn higher incomes relative to the cost of living, and have greater independence and opportunity, as reflected in self-employment rates. These broad strategies do much more to enhance the lives of African-Americans, Asians and Latino households than the redistributive war on poverty-era programs employed in regions with high housing and living costs. These programs are usually not sufficient to improve the prospects of minorities if the business environment is burdened by high costs and regulatory burdens.

Minorities Head to Opportunity Cities

The data overwhelmingly show that minority populations are growing much faster in opportunity cities than in the more expensive, highly regulated luxury cities in the Northeastern corridor or on the west coast.iv In some cases, this has to do with the changing post-industrial nature of these economies. The increasing dependence on industries, such as software and social media, that employ few Latinos or African Americans. In Silicon Valley, African Americans and Hispanics make up roughly one-third of the valley population but barely five percent of employees in the top Silicon Valley firms.

Over the past forty years States such as Texas, Arizona, the Carolinas and Florida have seen their employment base grow far more rapidly and broadly in terms of manufacturing and other blue collar sectors than either California or the Northeast corridor.vi Generally, the leading metropolitan areas in the sunbelt also have overall enjoyed higher growth in population, income and self- employment and considerably higher rates for minority homeownership. “Luxury cities” such as described by former New York Mayor Michael Bloomberg are generally not so good for minorities.

Read the full report (pdf viewer).

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.

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.

May 27, 2015
Who Benefits From Other People’s Transit Use?

In the May 11 issue of Finance and Commerce, Matt Kramer, a local Chamber of Commerce representative lobbying for additional public transit and transportation spending (currently being debated at the Minnesota Legislature) is quoted as saying “Every person who is riding transit is one less person in the car in front of us.”

This is a fascinating quote. First is the use of “us.” So the Chamber of Commerce (probably correctly) identifies riding transit as something someone else does (since “we” are still in the car) and goes on to imply that it benefits us because there will be fewer cars. (Actually he says fewer people per car, but I think he meant fewer cars, not that it would reduce carpooling.) And I suppose he could mean he rides the bus, and the car in front has fewer people (or there were fewer cars in front), but I don’t think that’s what he meant, since the arguments in the legislature are mostly about building and operating new facilities — such as LRT lines or freeway BRT, rather than supporting existing buses driving in traffic.

This evokes the famous Onion article: Report: 98 Percent Of U.S. Commuters Favor Public Transportation For Others.

But it also suggests transit reduces auto travel. The converse is almost equally true, building roads reduces transit crowding. But that is not an argument road-builders make. (It is an argument urbanists make against roads.)

Of course, some transit users would have otherwise driven, but many would have been passengers in cars, walked, ridden bikes, or telecommuted. No one really knows what the alternative untaken mode would be. We have models, but the form of those models dictates the answer. Logit models, which are widely used by travel demand forecasters to predict mode choice (and whose development resulted in a Nobel Prize in Economics for University of Minnesota graduate Daniel McFadden), have the property called “IIA”, which is short for Independence of Irrelevant Alternatives. In short, if you take away a mode, IIA means people choose the other modes in proportion to their current use. So let’s say there are 3 modes: walk 25%, transit 25%, drive 50%, and there is a transit shutdown (like in 2004). IIA implies the 25% of former transit users would split 1/3 (25%/75%) for walk and 2/3 (50%/75%) for driving. We all know that is not true (and there are various techniques to try to fix the models and use more complicated functional forms), but the question of what istrue is not at all clear.

While there are surveys that have answered those questions, they are all context specific. For instance, Googling turns up a Managed Lanes Case Study report:

95 Express bus riders were asked how long they have been traveling by bus and what was their previous mode of travel before using the bus service. 92 percent of respondents (307 out of 334) mentioned they have been traveling the 95 Express bus before the Express Lanes started. Only, 8 percent of respondents (27 out of 334) began using the bus after the Express Lanes opened. Among them, 50 percent (13 out of 27) had their previous mode as drive alone and none of them carpooled previously. Therefore, 95 Express bus ridership consisted primarily of those who have been using the service prior to Express Lanes implementation and the small mode shift from highway to transit was mostly from SOVs. Note that the number of respondents is too small to make any conclusions (Cain, 2009).

Undoubtedly other services would have different numbers, but transit lines are not generally a direct substitute for driving.

The line of reasoning in the opening quote suggests the primary purpose of transit is reducing auto travel, rather than serving people who want to or must use transit. In other words, building transit is good because it reduces traffic congestion (and almost no one argues building roads is good because it reduces transit crowding).

That is at best a secondary benefit, a benefit which could be achieved must more simply and less expensively through the use of prices as we do with almost all other scarce goods in society, even necessities like water.

Transit today is, in almost all US markets, slower than driving. People who depend on transit can reach fewer jobs than those who have automobiles available. Some people use transit by choice, for instance to save money (if they need to pay for parking), and the rest without choice. In my opinion, it is more important to spend scarce public dollars to improve options for those without choices than to improve the choices for those who already have alternatives. Perhaps ideally we could do both, in practice, one comes at the expense of other.

The idea that transit is for the other person is true for the 95.5% of people who don’t use transit regularly. But it warps thinking that the aim of public transit funding is to benefit those non-transit users.

This post was written by David Levinson and originally published on streets.mn. Follow streets.mn on Twitter: @streetsmn.

David Levinson is a Professor in the Department of Civil Engineering at the University of Minnesota and Director of the Networks, Economics, and Urban Systems (NEXUS) research group. He also blogs at The Transportationist and can be found [@trnsprttnst]. Levinson has authored or edited several books, including Planning for Place and Plexus: Metropolitan Land Use and Transport and numerous peer reviewed articles. He is the editor of the Journal of Transport and Land Use.

Photo Metro Transit Stop at Coffman Memorial Union by Runner1928 (Own work) [CC BY-SA 3.0], via Wikimedia Commons

May 24, 2015