New Geography

Tag: middle class

  • In a Financial Crisis What Happens to the Dog Bakeries?

    What will happen to the dog bakeries? I ask this question, because this line of business (and perhaps many others) escaped my attention for so long. I saw my first one years ago in suburban St. Louis. As one interested in economics, poverty and history, it struck me that dog bakeries represented a perfect symbol for the many “discretionary” business lines that have been established in recent decades in what has been called the consumer economy.

    This discretionary economy consists of businesses for which do not exist in societies with little discretionary income. It includes in its ranks a host of businesses that did not even exist before the last couple of decades, from dog bakeries, to Starbucks, tony cafes, specialized clothing stores and personal fitness centers. While these businesses might have been attractive to the households of the 1940s, 1950s, 1960s, or 1970s, people just didn’t have enough discretionary income to support them.

    Stores specializing in accessories for the bathroom simply did not exist in the immediate post World War II years. There was little, if anything, akin to a Gap store, a Banana Republic or an Abercrombie and Fitch. Few people had either access to or membership in gyms or personal fitness centers. Gyms in those days were often barebones affairs for roughnecks as opposed to the fashionista hangouts of today.

    Even in the 1960s and 1970s, many of the businesses we take for granted today simply did not exist. There were no Starbucks coffee shops. If you wanted espresso, you looked near a college campus or found an Italian neighborhood. Big box stores specializing in pets had not proliferated. Instead there were small stores crowded with everything from hamsters and turtles to birds and bulldogs. I suspect there were no dog bakeries.

    It would be most difficult to reliably estimate the size of the discretionary economy. Much of the discretionary economy lies embedded in the larger service sector. By 2007, the share of private employment in the nation in services had reached 2.5 times the rate of 1947. Within that vast sector are companies which provide goods and services our forebears lived without like gyms, boutique coffee and dog bakeries.

    The years since World War II have seen an unprecedented democratization of prosperity in the United States. Poverty rates have fallen and people live a far better life style than before. This has led critics to complain about the consumer society. For some, this “consumerism” was declared a false god and some even looked forward to a day of reckoning when the nation’s sins of over-consumption would earn it a deserved eternal damnation.

    Generally, these critics lacked a decent understanding of economics. For one thing even the most frivolous types of consumption employ people. When households cancel the gym memberships or have no need of the dog bakery, people lose their jobs. Supporting a nation of 300 million people requires all of the consumption it can afford to provide employment, a decent standard of living, and yes, to reduce poverty.

    So what happens now? If the ‘bubble’ expanded the discretionary economy, what will a prolonged recession do? It could be a mistake to presume that the economic downturn will soon be reversed and that previous consumption rates will be restored. One of the factors different about this downturn is the extent to which it has reduced the wealth of households. The IRAs and investment portfolios that many had relied upon to provide a comfortable retirement have declined steeply in value. This is a particular problem for the millions of baby boomers, who have spearheaded the development of the discretionary economy.

    Now they seem less likely to consume with the abandon they showed before the prospect of running out of money became a realistic one. The coffee at home will be more attractive than the $5.00 latte at Starbucks. Rather than stopping at the canine bakery, people may now choose to buy more prosaic dog biscuits from a supercenter aisle. The recent decision by Starbucks to close 600 stores recently may be a harbinger of things to come.

    But there is more. Boomers and others who have seen their savings devastated could reduce their spending on other items not directly part of the discretionary economy. The wardrobe – you need clothes, but not necessarily new suits every season – may not be renewed quite as frequently. The car may be kept a couple of extra years. This could place the entire auto bailout in jeopardy.

    It would be a mistake to assume that there will be a quick and easy exit from the current economic difficulties. An affluent economy is necessarily a consuming society. Such an economy requires both necessities as well as the frills. It needs gyms, Starbucks, dog bakeries and the rest of the discretionary economy, just as it needs automobile manufacturing, information services and grocery stores. The destruction of the discretionary economy may not be as serious as the loss of homes in Detroit or jobs on Wall Street, but it can not take place without destroying the jobs and lives of people.

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

  • A Bailout For Yuppies

    The recent call by the porn industry – a big employer where I live, in the San Fernando Valley – for a $5 billion bailout elicited outrage in other places. Around here, it sparked something more akin to nervous laughter. Yet lending a helping hand to Pornopolis is far from the most absurd approach being discussed to stimulate the economy.

    Some influentials close to the administration may even find the porn industry a bit too tangible for their tastes. After all, the pornsters make a product that sells internationally, appeals to the masses and employs a lot of people whose skills are, well, more practical than ideational.

    As such, they may not even qualify for what is best described as a yuppie bailout, poised to extend the welfare state to the highly educated professional set. After all, George Bush’s bailout of Wall Street has already set a precedent, using public money to secure the bonuses and nest eggs of some of the nation’s most elite professionals. Call it the Paulson principle: In bad times, steer help to those least in need.

    A yuppie stimulus differs from the more traditional approach, which aims to get the front-line, blue-collar types back to work. Instead, it would channel public funds away from those grouchy construction workers – some 30% of whom may soon be out of work – to better heeled, and, in their minds, more deserving “creative” professionals. After all, what stake do the netroots have in making things better for Joe the Plumber?

    In contrast, the yuppie bailout focuses on a sure-fire Democratic constituency, the well-educated urban professional. One advocate of such an approach, pundit Richard Florida, has urged President-elect Barack Obama to eschew crude investments in traditional production and a renewed housing market in favor of goodies directed to what he calls “the creative industry.”

    Florida sees any focus on restoring manufacturing and housing as a misguided rescue of the “old industrial economy,” in which Americans actually made things and other Americans consumed them. Instead, he suggests, “the first step must be to reduce demand for the core products and lifestyle of the old order.”

    So let’s stop worrying about what happens to Detroit, or the crisis in the housing market. In Florida’s view, cars, of course, are demonized as woefully bad for environmental reasons and not particularly friendly to the preferred dense urbanity so attractive to advocates of “hip cool” cities.

    Florida even recommends shifting away from the single-family home, which is also, all too often, in the ‘burbs. Instead, we should develop what he calls “flexible rental housing,” so people can move every time they get new jobs. I think that is what they used to do in Chairman Mao’s China, too, albeit without the granite countertops and a Starbucks around the corner.

    In a yuppie bailout, what spending takes priority? More jobs for academics and educators. Florida suggests we invest in “individually tailored learning.” We assume this means neither home-schooling nor basic skills training but something more like painting and acting classes for tots and advanced “creative” navel-gazing for tweens and adolescents. And, of course, lots and lots of new jobs for well-paid, unionized teachers.

    These ideas should not be dismissed out of hand as the impractical meanderings of a lone scholar. In fact, Florida’s views are taken very seriously among influential Obama supporters at companies like Google as well as by politicos such as Michigan Gov. Jennifer Granholm, who is widely identified as a key Obama counselor on economic issues.

    Nor is Florida alone in his views. Bigger feet among the purveyors of conventional wisdom, like The New York Times‘ Thomas Friedman, also think the stimulus should steer more resources into the public pedagogy. Friedman even recently suggested teachers be exempted from paying federal taxes.

    And it’s not just teachers who would benefit from a yuppie bailout. The economic stimulus, Friedman says, should also focus more on high-tech companies like Google, Apple, Intel and Microsoft, all of which enjoy extraordinary valuations. This reaffirms the Paulson principle with a politically correct spin.

    Politically, a yuppie bailout would certainly appeal to powerful Democratic constituencies, not just the teachers’ unions. Select high-tech companies and venture capitalists can count on new subsidies and tax breaks. Greens and “smart growth” advocates will celebrate if money is diverted from hard infrastructure – such as improved roads, bridges, ports and transmission lines – which they insist would create enough carbon to heat the planet like a toaster.

    This “yuppie first” approach certainly would appeal to many mayors, some of whom are already adherents to the Floridian ideology. They may be further encouraged by a new report by the Philadelphia Federal Reserve called “City Beautiful,” which suggests cities should not promote growth through traditional infrastructure but instead invest in frilly amenities. As a Boston Globe article on the report summarized cheerfully: “Make it fun.”

    Here’s another hint of what might be coming in a yuppie bailout. Providence, R.I., located in the state with the nation’s second-highest unemployment rate, wants to sink money into a polar bear exhibit at its zoo – perhaps so we can see them before they become extinct or go on Al Gore’s payroll – as well as make improvements to a soccer field. Miami envisions spending on a giant water slide, new BMX and dirt bike trails at a local park and, of great national import, a new Miami Rowing Club building.

    Even the once-booming but now-hurting ultimate “fun city,” Las Vegas, wants in on the act. Mayor Oscar Goodman is asking the feds to kick in big time for its new Museum of Organized Crime and Law Enforcement. That’s right, taxpayers can participate in building a monument to Bugsy Segal. And with Nevada’s own Harry Reid running the Senate, the project seems well-positioned to get the “respect” it deserves.

    If Goodman, who used to defend mobsters as a criminal defense lawyer, has his way, it could spark a feeding frenzy for every under-funded tourist trap from Cleveland to Cucamonga. Pork used to mean roads, bridges and ports that, at least in theory, made the economy more productive while providing well-paid work for blue-collar workers. Soon these dollars may instead go toward yacht clubs, art galleries, museums and “creativity” training for toddlers.

    A yuppie bailout is likely to hold more money for Boston, San Francisco and other havens of the perennially hip – all of them Democratic bastions. There’s also likely to be less funding for the grotty suburban towns, industrial backwaters and Appalachian hamlets, all of which don’t usually appeal to the artistic set.

    To an old-fashioned Democrat, this all seems to miss the point. Shouldn’t we be stimulating the places already suffering the most from high unemployment, foreclosures and spreading impoverishment? Where do Toledo, Cleveland or Modesto fit in to the yuppie bailout? As Pittsburgh-based blogger Jim Russell says: “Most of the population will continue to live in ‘Forgottenville.’ Should we just forget about them?”

    In spite of all this, the mounting pressure for a yuppie bailout sadly reveals how the supposed party of the people is being transformed into just a second party of privilege. We should desperately try to create new productive capacity and better-paying jobs, especially for the denizens of Forgottenville. It certainly makes more sense than pouring taxpayer funds into new clubhouses, water slides or even better-financed pornographic movies – however much the latter may help property values in my neighborhood.

    This article originally appeared at Forbes.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • The Mobility Paradox: Investing in Human Capital Fuels Migration

    China has an interesting urban development strategy. The government bypasses those areas that it considers backward and plagued by poverty and entrenched political corruption. Instead, the investment goes into those areas it presumes to be new boomtowns.

    Now imagine if that Darwinian approach was used here in the United States. A report (“City Beautiful”) authored by two economists at the Federal Reserve Bank of Philadelphia advocates pushing federal infrastructure dollars – which could soon be flowing in the hundreds of billions – not towards our tired, hard-pressed urban areas but those that have experienced the greatest extent of gentrification.

    If you don’t want to slog through the published paper, then you can read about the controversial findings in a recent Boston Globe article. The journalist, not surprisingly, sensationalizes the conclusions and the choice quotes do a great job of provocation: “‘If you have sun and a beautiful beach and 300-year-old buildings, it’s no wonder that you’re going to attract people,’ said [co-author Albert Saiz]. ‘But that’s no use for Detroit or Syracuse.’”

    The author of the Globe piece goes on to question the coming urban bailouts: “Why send another federal dollar to bolster manufacturing in Akron when it could support a golf course in sunny Phoenix?”

    I get the sense that the economists in question aren’t making such a stark distinction. But I can understand why the press would go down that road. I’ve read the research and there are concerns about the wisdom of investing in cities that currently don’t attract tourists or Richard Florida’s elite Creative Class.

    The Federal Reserve Bank of Philadelphia report attempts to reconfigure the understanding of urban geography. People are congregating in urban centers for a new purpose: leisure. The old school of thinking identified the central business district (CBD) as the economic heart of the metropolis. Higher densities were the result of a more efficient way of doing certain types of work (e.g. financial, insurance and real estate).

    The new school sees the city as a special playground and the study tries to capture this effect by looking at tourist Meccas. In short, jobs are following talent to pleasant places to live.

    Gerald A. Carlino and Albert Saiz try to figure out if the geographically mobile are indeed heading to sunnier climes or if the leisure amenities follow the talent. They claim that quality of life comes first. The best and brightest are not chasing top employment opportunities. They are keener on finding a “cool” place to hang out.

    Other research suggests this approach may be limited. For example, although job growth has been very strong in some sun belt cities that are cited, growth rates in other amenity-rich cities – Boston, New York, San Francisco – have been well below par. Although often attractive to twenty-somethings, these areas also suffer a persistently strong net outmigration.

    Perhaps more to the point what use is any of this to those living in the heartland cities? Should Akron start putting more money in skateparks or global warming?

    There are huge problem in spending money in order to attract the geographically fickle. Fads fade and the mobile – largely people under 30 – will move again. And what about the people who can’t move? We’ve yet to address the mobility paradox.

    Moving to a better place might be one of the most distinguishing features of American culture. However, less and less people can manage to do so. There are considerably more “stuck” than there are “mobile.” The nomads of the knowledge economy comprise the global elite. They can live wherever they like and, particularly when young, can move at the drop of a hat.

    Where does that leave the postindustrial cities currently failing to attract the twenty-something demographic? One suggestion is to better educate people tethered to their neighborhood. The rub is that greater investment in your human capital will make your young adults more likely to leave. This is the mobility paradox. Regional workforce development has the unintended effect of increasing out-migration.

    A common response to the mobility paradox is the transformation of a downtown area into a “cool city.” The theory is that the best and brightest won’t leave if there are more fun things to do. Tying up the urban budget with projects aimed at retaining the creative class has its own perils. There is little, if any, evidence indicating that this policy will decrease the geographic mobility of the well-educated. Many cities stuffed with cultural amenities also sport high rates of out-migration. Furthermore, tastes change. ”Best places to live” lists change quite a bit from one year to the next.

    We should learn from the bust of hot destinations such as Florida or even California. Today’s paradise is tomorrow’s backwater. Meanwhile most of the population will continue to live in “Forgottenville.” Should we just forget about them?

    Globalization would seem to reward such an approach. Some cities will cut it, most won’t. Good luck dealing with the political instability. China gets away with ignoring its “old” cities thanks to robust growth and iron-fisted control. Given the current economic slowdown, things may be getting tense there, particularly in the left-behind industrial towns in the interior.

    So should amenities drive President Obama’s economic strategy? These days, the Sunshine States also are in dire need of a bailout. Alabama fights Michigan for federal attention. If the Rust Belt benefits from the Chicago President, let’s hope it’s for its own sake – not just the creative class.

    Read Jim Russell’s Rust Belt writings at Burgh Diaspora.

  • Current Policy Overlooks the New Homeless

    San Francisco: A Chevron employee is forced to move his family of four into their Mitsubishi Gallant after being laid off…

    Atlanta: Jeniece Richards moved from Michigan to Atlanta a year ago, but despite her best efforts, and two college degrees, remains homeless. She is living in temporary housing with her two children and younger brother…

    Denver: As Carrie Hinkle’s hours dwindled, she was forced to choose between paying rent or buying food for her daughter. The two are now working with local agencies towards permanent housing, again…

    These stories, plucked from the headlines of the past months are more than the typical holiday coverage. They show faces of the newly homeless, growing as the economy crumbles and opportunities fade.

    Facing layoffs and deep cuts in working hours, many in fragile circumstances could no longer afford their mortgage. More commonly, they were renting from a landlord who foreclosed on their residence. Healthy, hardworking and addiction-free, the new homeless are closer in demeanor and behavior to our neighbors than the overly-typified street drunk.

    Homeless resource programs across the country have been reporting record requests for assistance. A recent report from the U.S. Conference of Mayors found that, of 21 cities surveyed, 20 reported an increase in requests for food, with 59 percent coming from families. Nationwide, increased food stamps claims – a clear indicator of rising poverty – reached a record 31.6 million in September, up more than four million in a year according to the New York Times.

    California, which has had a homeless problem for decades, has become the epicenter for the newly homeless. The state’s unemployment rate rose to 8.4 percent in November from 5.4 percent in 2007, making it the third highest in the nation. Compounding the homeless problem is the state’s high foreclosure rates (third in the country, according to RealtyTrac data). Homeless programs from San Francisco to San Diego are reporting record numbers, mostly from newly homeless residents impacted by the housing crises or falling economy.

    Sadly this surge in homelessness comes just after a period when the problem was finally getting under control. One study by the Interagency Council on Homelessness found a 12 percent decrease in overall homelessness when comparing 2005 to 2007 data. That same time period also reveals a staggering 30 percent decrease in chronic homelessness (defined as being homeless for either over a year or for multiple stints).

    In 2000, the National Alliance to End Homelessness crafted their landmark Ten Year Plan to End Homelessness. With successful bipartisan funding, 355 Ten Year Plans have been put into action nationwide.

    Such plans, and a strong economy, accelerated the recent gains in the fight against homelessness. But the surge in newly homeless and shrinking budgets now threatens to reverse the progress.

    New York City’s municipal shelter systems have seen record-setting increases over the past three months, according to the City’s Department of Homeless Services, but deep cuts loom ahead. Already, the city’s current budget includes a 3 million dollar decrease in outreach funding.

    Denver plans to slash nearly a fourth of its funding for homeless initiatives at a time when the city reports a 38-percent increase in homelessness over the past year (Denver Post).

    This situation will get much worse. A 20 percent increase of urban homelessness has been projected by the Interagency Council on Homelessness for 2009. Escalating homelessness and looming funding cuts create conditions for a renewed homeless crisis.

    In the past debate has focused on the mentally ill and substance abusers, but the new homeless represent different phenomena. President-elect Obama has the responsibility to increase assistance to the degree that reflects the expanding problem. Washington seems all too willing to prop up the corporate players of the American economy, but let us not forget about the hardest hit by these times. Swift action must be taken to assure that the problem of the new homeless becomes no more than a historical footnote – to assure that we as Americans can look back with pride knowing that even during our hardest hour, all were cared for.

    Ilie Mitaru is the founder and director of WebRoots Campaigns, based in Portland, OR, the company offers web and New Media strategy solutions to non-profits, political campaigns and market-driven clients.

  • Class and the Future of Planning

    Economic segregation may be a foregone conclusion, as studies have long suggested. For one thing, our first tendency is to buy the best place we can afford, intentionally locating to those parts of a region that appeal to others with similar buying power. Secondly, we tend to buy something most suitable to our tastes, which steers us into areas populated by those with similar viewpoints.

    The implications for contemporary planning processes are profound, especially since current best practices revolve so much around form and style and take so little measure of economics, choice, and consequence. It troubles me that my own decisions purchasing houses in the past – made after careful scrutiny of what evidence I could gather about the people living in the neighborhood – showed me that even a planner aware of attempts to integrate could choose segregation.

    But if planning is anything, surely it is the idea that what seemed inevitable can be bypassed with careful consideration, sequencing, and reorganization of inputs. Why plan for a different future if the results are the same as when you started? The idea of inevitable segregation narrows the planning options considerably.

    As a result, planners and community developers have focused not on enlarging the pie, but on figuring out how to appeal to those residents who show up for meetings. Whether these groups are affluent NIMBYs or poor advocates for low-cost housing, the status quo remains completely undisturbed.

    There are two main ways I’ve seen this occur. First is through the comprehensive planning process. The comprehensive planning process attempts to bring together connected but distinct elements – housing, transportation, the environment, the economy – and reassemble them into a cohesive, publicly vetted whole. But what really happens during such efforts?

    Planning staff assembles data. The contours of the process get articulation. Citizens get to describe their vision of their community. Flavor of the day ingredients dominate the discussion – pedestrian malls, node development, open space, wetlands preservation, smart growth, and now green collar jobs, sustainability, and social equity (whatever that is).

    The strong neighborhoods show up in force, working the system to their advantage. They often transform any land use or zoning issue into a referendum on the impacts on property values. The water treatment facility gets sited far away from such neighborhoods. Low-income housing becomes an articulated virtue, so long as its located elsewhere. This occurs in supposedly enlightened and ‘progressive’ neighborhoods like mine – Rosemont in Alexandria, Virginia – and places like Kensington near Berkeley, or in Fairfield County, Connecticut, where addressing homelessness is a rising priority – if it’s handled in Bridgeport and not Danbury or Shelton or Norwalk. Planning nearly always yields good results for neighborhoods like mine.

    In contrast, residents of struggling areas are skeptical of processes that have not benefited them very much in the past. In places like low-income parts of Norfolk, Virginia, “planning” has come to mean either 1950s style urban renewal or 1990s style gentrification. New Urbanism in Norfolk has often meant the very opposite of practical economic inclusion for low-income working households. The very idea that real change could both come and be beneficial to them is laughable. Their issues are not about landscaping with native plants: their concerns are jobs, crime, services, and housing affordability. Astute (cynical) planners soon discover that “respect” is also in play in these neighborhoods; merely listening with sincerity becomes a stand in for actual change. Listening requires no real work, certainly not compared to the heavy lifting of actually improving these areas for their current residents. Planning rarely adds much to these places.

    Middle-class neighborhoods want to preserve what they have. They don’t want their small claim on prosperity threatened by those from the troubled areas in town. They want nothing more than to preserve their safety and the small patch of grass they mow on the weekends. For families in these neighborhoods, the suburbs have for decades been a bastion from a changing urban setting that appears to always grant the rich a pass and provide unearned opportunity to the poor.

    Unable to migrate into the ranks of the upper middle class and penetrate the neighborhoods of lawyers and accountants and physicians, middle neighborhood residents often simply leave and form a place of their own. Plumbers and carpenters dislodged from Del Ray (an old blue collar neighborhood in Alexandria, VA) drive their pick-up trucks to Springfield, where they have a mall and plenty of ranch houses, and where they can safely raise their family while holding a job that does not require a college education.

    Planners generally dismiss these areas since they often come from the upper echelons and maintain a theoretical concern for the poor. But there are consequences when these middle income residents leave. Indeed the migration of these households out of the urban core and inner ring suburbs may be the most pressing social challenge facing planners. Unsexy as the housing concerns of the plumber may be, they are often the critical ones in terms of maintaining strong neighborhoods.

    Take a look at what has happened in the City of Geneva, New York, which is emblematic of so many communities in the middle of a city-county struggle for the middle class. The City’s pre-war manufacturing and agricultural history was sufficient to build a sophisticated infrastructure going into World War II. The arrival of the Depot and Naval Base in nearby Seneca brought overcrowding and congestion and triggered something of a building boom to Geneva. When the base closed, the city’s middle class left for newer housing and retail outside the city.

    As middle income residents have fled, the city itself has become a place of many have-nots and a few haves. Rather than invest to engender pride, safety, and a sense of community in the city’s neighborhoods – the small unstylish work of organizing – the doctrine sought to make downtown attractive, livable and appealing by applying the “edifice complex” or the “Field of Dreams theory”: if you build it they will come. Then the planners and developers get to stand around and wonder why downtown still feels empty.

    Along the way the city opened its doors to a raft of social service providers, inviting them to locate their business and clients downtown. The middle class watched, grew frustrated, and left for the periphery. Despite some of the most glorious – and reasonably priced – architecture in America, the middle class has left, taking with them much of the urban tax base. This creates a hole out from which few cities emerge.

    This is not at all unique to Geneva, as any planner and community developer knows. Its the case in my hometown of Alexandria, Virginia and in neighboring Arlington where programs do an admirable job of enabling some of the working poor to remain, while the middle has found greater comfort in leaving for other counties.

    There may be a way out of this dilemma. The central aim of community development should be to work the system in ways that generate wealth-building probabilities – both for individual households and for neighborhoods. The central aim of our work should be to expand the zone of acceptable and livable neighborhoods: to make more places more worthy of affection, not some extremely worthy and others barely so.

    Planning efforts must concern themselves less with process and more with outcome. Every block in every city can be objectively scored in terms of livability, as defined locally. In this approach, the community development process may be judged a failure if in service of a few individuals concentrated poverty and economic segregation grows. Marin County would no longer be able to balance its affordable housing ledger on the backs of Marin City and a few parts of San Rafael. Montgomery County, Maryland would no longer be able to use Prince George’s County as its de facto affordable housing policy. And genuinely struggling places like Ontario County, NY would not be able to look to the City of Geneva as their repositories of poor families and the hub of the area’s social service network.

    In the last thirty years, planners have reduced our field of vision. We have fostered an exodus of our middle class and focused on creating environments for the rich and poor. If we really want social equity, growing the middle is the best place to start.

    This means we have to change our priorities. We should stop trying to reinforce concentrations of wealth. Poor neighborhoods should not be defined solely as places and people who primarily “need” and never exercise choice. Instead our priority should be to help plan for an expanding middle class – even if it ruffles the feathers of some gatekeepers in both poor and affluent neighborhoods.

    Charles Buki is principal of czb, a Virginia-based neighborhood planning practice.

  • A Housing Boom, but for Whom?

    By Susanne Trimbath and Juan Montoya

    We just passed an era when the “American Dream” of home ownership was diminished as the growth of home prices outpaced income. From 2001 through 2006, home prices grew at an annual average of 6.85%, more than three times the growth rate for income.

    This divergence between income and housing costs has turned out to be a disaster, particularly for buyers at the lower end of the spectrum. In contrast, affluent buyers – those making over $120,000 – the bubble may still have been a boom, even if not quite as large as many had hoped for.

    For middle and working class people, the pressure on affordability was offset by historically low mortgage interest rates which fell from over 11 percent around the time of the 1987 Stock Market Crash to 6 percent in 2002. Yet if stable interest rates were beneficial to overall affordability, the artificially low interest rates promoted by the Federal Reserve may have created instability. By allowing people to increase their purchasing power to an extraordinary level, low mortgage interest rates fueled a rapid escalation in housing prices.

    Now that prices are falling quicker than incomes, there should be a surge in new buyers. Since 1975, whenever the ratio of mortgage payments to income falls, home sales usually rise. The correlation coefficient indicates that for every 1% improvement in affordability there is a 2% increase in home sales. But now, something is wrong. In 2007, for every 1% improvement in affordability, home sales fell by 2%.

    Part of the problem is that prices still are simply too high. Even as recently as August 2008, the median home price was still historically high in comparison to median income – about 4 times. It takes lower rates than in the past for a family with the median income to afford the median priced house. This means that homes are less affordable today than they were 6 years ago.

    The last time that home sales fell as they became more affordable was in the 1990s at a time known as a “credit crunch.” At that time, the ratio of home prices to income was actually lower – 3.8 times in September 1990 compared to 4.3 in September 2008. The difference was that between 1990 and 1992 mortgage interest rates averaged a hefty 9.26%. In the last 3 years, the average was 6.14% and while the words “credit crisis” bled in headlines around the world, the regular mortgage interest rate barely budged.

    What we are clearly witnessing is a fundamental slow-down in the gains towards homeownership. Of course, most of the gains in homeownership in the US were made in the 20 years after World War II: owner-occupied housing went from 43% in 1940 to 62% in 1960. In the 40 years that followed ownership crept up a bit, from 62% to 68%.

    Boom, yes. But for Whom?

    One disturbing aspect of this slow-down has been its effects by class. Overall, ownership has gained only among households making $120,000 or more; for all other groups the ratio of owners to renters is lower today than it was in 1999. (About 80% of American households have income less than $100,000 per year. For Hispanics and African Americans, the number is closer to 90%.)

    There have been some exceptions, particularly among minorities targeted by national policy: expanding home ownership opportunities for minorities was a fundamental aim of President Bush’s housing policy. In the early years of this decade Hispanics enjoyed a net 2.6 percentage point gain in home ownership. In the next four years, while most Americans were seeing a decrease in home ownership, the Hispanic population continued to see gains. Although African Americans initially gained more than Whites in home ownership, they gave back more of those gains in the housing collapse

    The great irony is that exactly those programs aimed at improving affordability may have been responsible for this recent decline. We first wrote about Housing Affordability in 2002. One of our concerns then proved to be true: buyers would focus on “can I afford this home” instead of “what is this home worth.” Although there were some gains in overall home ownership rates in the US during the early part of the boom, about 40 percent of that was given back during the last four years as home prices surged out of reach.

     

    Rate

    Change in Rate

    Location

    2008 Q2

    1999-2004

    2004-2008

    1999 – 2008

    US

    68.1

    2.2

    -0.9

    1.3

    Northeast

    65.3

    1.9

    0.3

    2.2

    Midwest

    71.7

    2.1

    -2.1

    0.0

    South

    70.2

    1.8

    -0.7

    1.1

    West

    63.0

    3.3

    -1.2

    2.1

    City

    53.4

    2.7

    0.3

    3.0

    Suburb

    75.5

    2.1

    -0.2

    1.9

    Non-metro*

    74.9

    0.9

    -1.4

    -0.5

    White

    75.2

    2.8

    -0.8

    2.0

    Black

    48.4

    3.0

    -1.3

    1.7

    Other**

    60.2

    5.5

    0.6

    6.1

    Multi

    56.4

    NA

    -4.0

    NA

    Hispanic

    49.6

    2.6

    1.5

    4.1

    Table based on historical data from US Housing Market Conditions, U.S. Department of Housing and Urban Development, Office of Policy Development and Research,
    *Non-metro includes all areas outside metropolitan statistical areas (non-urban). Note from Census.gov: For Census 2000, the Census Bureau classifies as “urban” all territory, population, and housing units located within an urbanized area (UA) or an urban cluster (UC). It delineates UA and UC boundaries to encompass densely settled territory, which consists of: core census block groups or blocks that have a population density of at least 1,000 people per square mile and surrounding census blocks that have an overall density of at least 500 people per square mile.
    **”Other” includes “Asian”, which reports household incomes about 20% to 30% higher than the Racial/Ethnic category “All” regardless of income level category.

    The areas with the biggest losses in home ownership rates in the 2004-2008 period were outside the cities, particularly in the Midwest which encompasses Missouri, Iowa, Kansas, Nebraska, Minnesota and the Dakotas (west north central) plus Wisconsin, Illinois, Indiana, Michigan and Ohio (east north central). Of the geographic segments, non-metropolitan Americans gained the least in home ownership in the 1999-2004 housing boom; and only the Midwest geographic segment gave back more.

    What about the future? The Obama-Biden Agenda Plan on Urban Policy mentions housing nine times, including a headline on “Housing” with plans for making the mortgage interest tax deduction available to all homeowners (it currently requires itemization) and an increase in the supply of affordable housing throughout Metropolitan Regions. The former should help middle-class households; the latter will help lower-income households. This is not a continuation of the Bush Administration policy which relied on stimulating the demand for housing by providing mechanisms to bring households into the market. The data shows that low income households barely kept even on ownership (versus renting) under this policy, middle-class households suffered tremendous losses and only the wealthy, those making more than $120,000 in income, had a gain in home ownership.

    The last President ignored our advice in 2002: “A more balanced effort to stimulate supply would equilibrate the potential adverse affect on prices” from over stimulating demand. Let’s hope this new President gets the balance right.

    Dr. Trimbath is a former manager of depository trust and clearing corporations in San Francisco and New York. She is co-author of Beyond Junk Bonds: Expanding High Yield Markets (Oxford University Press, 2003), a review of the post-Drexel world of non-investment grade bond markets. Dr. Trimbath is also co-editor of and a contributor to The Savings and Loan Crisis: Lessons from a Regulatory Failure (Kluwer Academic Press, 2004)

    Mr. Montoya obtained his MBA from Babson College (Wellesley, MA) and is a former research analyst at the Milken Institute (Santa Monica, CA) where he coauthored Housing Affordability in Three Dimensions with Dr. Trimbath. He currently works in the foodservice industry.

  • Oregon’s Fringes: A New Rural Alternative

    Once the bastion of a thriving rural middle class, Oregon’s rural communities are now barely scraping by. The state’s timber industry employed 81,400 residents at its peak in 1978. At the time, the industry made up 49% of all manufacturing jobs in the state according to the Oregon Employment Department.

    Since then, the recessions of the early eighties and nineties, increased land-use restriction, decreased timber supply, global competition and automation of the timber industry have devastated rural communities that relied on once-plentiful timber jobs. Total timber industry employment has dropped to barely 11,000. Long term forestry prospects are glum. The benefits of carbon sequestration, endangered species protections, growing green building industry and the desire to protect Oregon’s forests for recreation will continue to hamper extraction and employment opportunities.

    Meanwhile, residents of such places as the southwest town of Oakridge (pop, 4,000) are left with few options. As the last mill went in the early nineties, so did the jobs. Many left for employment in surrounding cities. Those who stay often work multiple minimum-wage retail shifts; a trailer or shared space is many times their only living option.

    Oregon’s rural places were wrecked not just because of the necessary industry shift (away from logging) but because of the lack of long-term planning required to accommodate that shift.

    The obvious decline in timber employment called for a multi-generational plan to re-invent the state’s rural communities. Instead, towns like Oakridge were allowed to sink until the situation became bleak enough to gain state attention. What followed was reactionary policy that mandated mostly welfare and other band-aid solutions.

    The current situation calls for a more drastic plan that will once again restore Oregon’s proud rural tradition. The initial step is recognizing that rural Oregon – if the state is to preserve its natural resources and provide healthy communities for its residents – must transition from a rural layout to denser small town formations. The state lacks the resources, population density and geographic appeal to allow all of rural Oregon to make this change.

    Instead, select areas with the potential for turn-around should be identified across the state and given special attention in making the transition. At best, this should come from the ground up: through the initiative of local communities. These “New Towns” will be allotted state resources and special legislation to reinvent themselves as more compact and sustainable communities with the capacity of attracting skilled workers and business alike.

    Rather than attempt to wrestle with every factor in the discussion of the New Town model, what follows is a broad outline of the more crucial considerations suggested by such an approach . This leaves much open to discussion, to which the reader is invited to contribute.

    First, Oregon’s historically strict land-use regulations need to be re-evaluated. Instead of discouraging development, it should be encouraged within the New Town boundaries by incentive packages to developers who add an element of “community value” to their projects. Projects that are built sustainably, offer employment, scenic access, cultural attractions, restaurants, and/or retail options will qualify for the incentives.

    Of course many oppose almost any further development across rural Oregon. But in reality we really have two options: either accept a future of rural disenfranchisement and resource extraction; or concentrate resources, re-zone, and intelligently build new, economically as well as environmentally sustainable towns across Oregon.

    Alternative energy companies such as SolarWorld, Vestas and Solaicx, Inc. are just a handful of the dozens of renewable energy companies running or planning new facilities in Oregon.

    Initially, these firms have clustered around Portland or its surrounding suburbs. But factors such as dwindling space and access to workers could drive these firms further outwards. The right incentives package, inexpensive land and labor would make the New Towns an attractive option for the green industry in the coming years.

    Green business could provide one foundation for these places. Once the green industry demonstrates confidence in the New Town model, other economic players would likely follow. These include industries – such as food processing, data centers and specialized services – that could also be nurtured successfully, as has occurred in smaller communities elsewhere in the region.

    The New Town proposal also offers a viable solution to Oregon’s expected population growth. Between 1980 and 2006, the Oregon population grew from 2.6 million to 3.7 million, an increase of 40.5 percent. By 2050 population growth for the state is projected at 5.8 million according to the Northwest Rural Development Center using U.S. Census data.

    The state’s population growth – mainly from immigration and domestic migrants – will be attracted to locales with affordable housing and job opportunities. So far this has translated into a largely urban migration. Growth within cities or in their surrounding suburbs increased by as much as 50%, while non-metro growth increased by only 19%.

    As long as jobs remain in or near the handful of cities Oregon has to offer, these trends will continue. Fortunately, the majority of newcomers are not drawn primarily by urban amenities. Inexpensive housing, job opportunities, and scenic attractions could compensate nicely for the increasing cost and congestion that accompanies urban living.

    The development of the suburbs stemmed from the desire to escape the urban core’s problems. The suburbs continue to surround our cities because of the resources and job availability. However, there is little reason that with the digital revolution and the coming green revolution, once-isolated towns cannot become self sustainable and very desirable.

    Many readers will feel uneasy by the suggestion of deliberately spurring growth in particular places while allowing others to wane. It seems to go against free market ideology and even to be unauthentic.

    Yet a change is needed. These places initially thrived because they were located near natural resources. By shifting from extraction industries, the basis of the local economy has shifted. The whole approach to town development needs to be readjusted to meet these new realities.

    Without a complete shift in how planners view and design for the spaces across the entire state, the rural poor will continue to struggle, while population increases will make our metropolitan areas less and less attractive. The New Town model could present a viable option to the contemporary problems Oregonians face and perhaps to other problems now only on the horizon.

    Ilie Mitaru is the founder and director of WebRoots Campaigns, based in Portland, OR, the company offers web and New Media strategy solutions.

  • Auto Bailout: Help Mississippi, Not Michigan

    We should be getting used to the depressing spectacle of once-great corporations begging for assistance from Washington. Yet perhaps nothing is more painful than to see General Motors and other big U.S.-based car companies – once exemplars of both American economic supremacy and middle-class aspirations – fall to such an appalling state.

    Yet if GM represents all that is bad about the American economy, particularly manufacturing, it does not represent the breadth of our industrial landscape. Indeed, even as the dull-witted leviathan sinks, many nimble companies have shown remarkable resiliency.

    These include a series of small and mid-sized firms – in fields as diverse as garments and agricultural machinery, steel and energy equipment – that have managed to thrive in recent years. It also includes a growing contingent of foreign-owned firms, notably in the automobile industry, that have found that “Made in America” is not necessarily uncompetitive, unprofitable or impossible.

    Indeed, until the globalization of the financial crisis, American manufacturing exports were reaching record levels. Overall, U.S. industry has become among the most productive in the world – output has doubled over the past 25 years, and productivity has grown at a rate twice that of the rest of the economy. Far from dead, our manufacturing sector is the world’s largest, with 5% of the world’s population producing five times their share in industrial goods.

    So what is the problem then? If it is not the effort and ingenuity of American workers or our infrastructure, Detroit’s problems must lie somewhere else, largely with almost insanely bad management.

    We have to remember that the Big Three have been losing market share through even the best of times. Their litany of excuses is as tiresome as their product lines. Back in the 1970s it was “cheap” Japanese labor, something that can no longer be cited as an excuse. European car makers, if anything, have even higher wage costs.

    Then there is high gas prices – a good excuse, it appears, back in the 1970s, as well as more recently. But the Detroit auto industry has now had three decades to come up with fuel efficient products that are also fun to drive and reliable. While they have slumbered, the Japanese, Koreans and now the Europeans – with products like the new Volkswagen Jetta – have made enormous strides.

    Now it is the credit crunch, the car makers say. OK. Will increased credit mean that people will suddenly scoop up the same products they have been deserting in droves for decades? Keep in mind that the desertion could get even worse if the congressional greens – led by new Energy and Commerce Committee Chairman Rep. Henry Waxman – impose stiffer taxes on gas, which will hurt the guzzlers that have generated most of Big Three profits.

    So why the push to bail out the Big Three? It’s basically about regional politics. The deindustrializing states of California and New York may not care much, but the big car companies’ operations are overwhelmingly concentrated in the politically volatile Great Lakes region, an area that proved decisive in President-elect Obama’s victory. Another big reason may be that up to 240,000 jobs in Illinois, the nation’s new political epicenter, are tied to the big automakers.

    Sadly, dependence on the Big Three has had long-term tragic results for this entire region. Between 2000 and 2007 – before the onset of the financial crisis – the nation’s largest percentage losses of manufacturing jobs were concentrated in Big Three bastions like Detroit, Warren-Farmington Hills, Saginaw, Flint and Cleveland. In the five years before the onset of the financial crisis, Michigan alone had lost one-third of its auto manufacturing jobs. Now that figure is up to half.

    Worse still has been the psychological dependency that has grown from this troubled relationship. By their very nature, declining businesses – particularly unionized ones – tend to protect their older members and encrusted bureaucracies more than they look to the future. This also creates a political environment where the incentive is not to spur innovation, but to protect the already established.

    Michigan, for example, has met the challenge of its Big Three habit with a combination of farce and failure. Under the clueless leadership of its governor, Jennifer Granholm, the state first hoped its “cool cities” program would keep young, educated workers close to home. After that failed to work, the governor then pushed the highest tax boost in state history, a reliable job-killer.

    So let us be clear. It did not take a world financial crisis to sink Michigan; it was getting there very well on its own. Nearly one in three residents, according to a July 2006 Detroit News poll, believe that Michigan is “a dying state.” Two in five of the state’s residents under 35 said they were seriously considering leaving the state.

    Fortunately, the Big Three do not represent the entire picture of American manufacturing. Even within the Great Lakes region, Wisconsin, which ranks second in per capita employment in manufacturing, has held onto most of its industrial employment due to its large, highly diversified base of smaller-scale specialized manufacturers.

    If Congress and President Obama want to figure out how to restart our industrial economy, they need to travel not to Detroit but to an alternative universe that includes the South and Appalachia, where most of the new foreign-owned auto manufacturers have clustered. States like Alabama, with the second-largest per capita concentration of auto-related jobs, as well as South Carolina, Tennessee, Kentucky, Georgia and Mississippi, have been growing these high-wage jobs for a new generation. In the process, they have brought unprecedented opportunity to some of the nation’s historically poorest regions.

    Nor are these states looking to remain mere assembly centers. For example, they have launched bold new research initiatives, such as the recently formed International Automotive Research Center at Clemson University, which offers the nation’s only Ph.D. in automotive engineering, to make their region a major center of technological innovation for the industry. And the fact that the region will likely be producing the majority of the most low-mileage and low-emission cars certainly cannot hurt their future prospects.

    However, it is also critical to see beyond merely autos. If you look at the period between 2000 and 2007, as we did at the Praxis Strategy Group, much of the fastest growth in manufacturing was taking place in areas tied to energy production like Midland and Longview, Texas, and Morgantown, W.Va., all of which enjoyed 15% or more increases in manufacturing jobs. Already states like Arkansas, Alabama, Iowa and Mississippi boast more per capita industrial jobs than either Michigan or Ohio.

    Another strong performer has been the Great Plains. Places like Dubuque, Iowa, and Fargo and Grand Forks, N.D., experienced substantial growth in industrial jobs during the past decade. The base here, as in Wisconsin, is highly diverse and includes agricultural and construction equipment, electronics as well as a burgeoning sector in the renewable fuels sector, such as LM Glasfibre, a Danish firm with a large operation in Grand Forks. Washington state has been another bright spot, powered by Boeing and other manufacturers attracted to its low-cost, low-emission hydropower.

    If the country is serious about enhancing U.S. industrial might – as it should be – it might want to ask executives and entrepreneurs in these areas, as well as foreign investors, what they need to keep growing and expanding exports. There is clearly a demonstrated global market for Boeing airplanes and Caterpillar construction and agricultural machinery, as well as a host of high-tech and fashion-related products now being churned out in factories scattered across the country.

    The people running these firms should be those at the congressional hearings, not the pathetic losers from companies like General Motors. They might even have some helpful ideas, like streamlining regulations, investing in critical infrastructure and research facilities, expanding support for training a new generation of skilled blue collar workers and using incentives to encourage firms to improve their energy efficiency. These are the steps we can expect our competitors in Europe, Asia and the developing world to take as well.

    Rather than looking for ways to bail out the most egregious serial failures, let us find ways to provide incentives for those successful at creating new jobs and saving existing ones.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a presidential fellow in urban futures at Chapman University. He is author of The City: A Global History and is finishing a book on the American future.

  • Michigration: It’s Not About Out-migration in Michigan

    Pertaining to brain drain hype, Michigan has no equal. So profound is the out-migration that a local broadcasting network coined a term: Michigration. This was in January of 2008. I did a little digging and discovered the fuel for the story was a United Van Lines study about Michigan’s net loss of residents.

    Net population loss is often confused with emigration. Upstate New York, another brain drain case for a future article, is no exception. The Federal Reserve Bank branch in Buffalo issued a report that tried to clear up the confusion, explicitly stating the challenge is attracting more people instead of the assumed issue of retention.

    Michigan is in the same boat. There is nothing remarkable about the rate of out-migration from the state. What is shocking is the lack of newcomers. Most of the Rust Belt has a problem with a distinct lack of in-migration.

    Another oversight of the media is the aging population. Rarely does natural decline make the news. Of course, that “problem” doesn’t lend itself to political gain. That is too bad because making better use of an aging workforce is a missed opportunity. Shouldn’t talent retiring in Michigan be celebrated?

    A third misconception about shrinking cities is that the best and brightest are heading to hip out-of-state destinations. The truth is many graduates go no further than the suburbs, resulting in the donut pattern of urbanization. Those that venture beyond likely end up in the next state over, not halfway across the country. A lot of talent moves from one Rust Belt city to another. Much of the rest – although perhaps not the offspring of the remaining economic and cultural elite – shifts to those areas that have been creating jobs, particularly places like North Carolina, Texas and, before the recent bust, Arizona and Florida.

    In and of themselves, reports of Michigration are harmless. But popular perception is often used to push various initiatives such as Michigan’s Cool Cities:

    Building vibrant, energetic cities that attract jobs, people and opportunity to our state is a key component of Michigan Governor Jennifer M. Granholm’s economic vision for Michigan. Governor Granholm kicked-off the “Cool Cities” initiative in June, 2003 throughout the state, in part as an urban strategy to revitalize communities, build community spirit, and most importantly, retain our “knowledge workers” who are leaving Michigan in alarming numbers.

    The promise is that cooler cities will keep talent from leaving the state. I challenge Governor Granholm to list the top-10 Cool Cities in the United States and their respective out-migration rates. How do Michigan cities compare? How do you quantify “alarming numbers”?

    US cities with the fastest growth rates in population tend to have the highest rates of emigration. Ironically, shrinking cities have relatively weak out-migration. Furthermore, the college educated are much more likely to leave any state or metro than people with just a high school education. Knowledge workers leaving Michigan is normal. The low number of knowledge workers arriving, from out of state, is abnormal. Neither better urban place-making nor more tolerance on its own shows any strong positive correlation with less brain drain. In fact, the opposite may be true. Cool Cities simply hasn’t delivered.

    We do understand that knowledge workers are geographically fickle. But Governor Granholm fails to put the attraction of talent on top of the agenda. She continues to play to fears of Michigration as justification for significant investment in the state’s cities. I’m not anti-urban. On the contrary, I’d like to witness the revitalization of Rust Belt downtowns. But sprucing up an aging downtown in a region with massive job losses will not get the job done.

    The most promising research I’ve read comes from Edward Glaeser, an urban economist at Harvard University. The best investment of public money would seem to be in human capital, education. What would attract well-educated parents would be better schools, something the suburbs have mastered. Inner city Detroit’s main competition for talent is the communities ringing around it.

    Michigration will not be stemmed by being “cool” but by providing some sort of opportunity for a decent middle class life. If Michigan could combine its excellent Universities, skilled workforce and low housing costs with a decent business climate, and significant school reform, perhaps the state would again become a beacon for entrepreneurs and knowledge workers.

    Read Jim’s Rust Belt writings at Burgh Diaspora.

  • Understanding the Geography of the 2008 Election

    Scholars as well as pundits and politicians will study this remarkable election exhaustively. Many, including me, will use county data, because they are convenient and available. From a statistical point of view, counties are lousy units, because of huge variation in size and excess internal variability. But we can’t resist, so here are some at least suggestive findings.

    First, what correlates with the percent voting for Obama? By far the strongest variables are negative – characteristics associated with voting Republican: a county’s share of husband-wife families (-.64), the rate of home ownership (-.55), percent working in craft occupations (-.52), and religious membership (-.51) all work against Obamamania. Other high negative correlations were with percent rural (-.48), with percent white (-.47), other positive were median rent (.45) and percent foreign born (.45). These are not at all surprising, and are what the exit polls told us.

    The highest positive correlations for Obama lay in percentages of non-family households with 2 or more persons (partners, roommates, .50), percent in urbanized areas (.49), or using public transit (.48), and percent with a BA or higher degree (.46). What these figures highlight is the continuing basic polarization between large metropolitan (+ variables) and non-metropolitan (- variables) areas, and simultaneously between the more modern and diverse character of the big city and the more traditional and conservative values of much of non-big city America.

    But, you may protest, we thought race, ethnicity and age played a big role in this election? Indeed, they did, but the correct dependent variable should be the degree of change in the share voting Democratic. In other words, what helps distinguish the 2008 from the 2004 results? The largest effect, of course, is simply the quite large 5-6 percent shift in national sentiment because of economic uncertainty and disillusionment with the Republican regime.

    But beyond that, the pro-Obama variables tend to be the percent of women in the labor force, percent with a BA degree, median household income (yep, time to toss out the traditional wisdom of Republicans being the party of the ‘rich’), non-family households, professional-managerial occupations, and, yes, percent Hispanic, percent Black and percent aged 25-34. In contrast variables leading to a lesser shift, no shift, or even more Republican, were again church membership, percent rural, percent in crafts jobs, and percent 45-64 or over 65, and percent with less than a 9th grade education.

    Overall, education, occupation, age, race and ethnicity help us understand Democratic strength in large metropolitan America and also in rural and small-town American Indian, Black and Hispanic areas, especially in parts of the South and West. But areas and regions with a less educated and professional populace, with higher rates of religious persuasion, with fewer women in the labor force, and with older populations remained loyally Republican. This helps us understand the resistance to Obama and the Democrats in Appalachia and across the border South, from WV, through KY and TN, AR, LA and OK.

    An interesting geographic phenomenon should be noted: the emergence of Chicago and the upper Midwest as part of the new Democratic coalition. Metropolitan Chicago provided Obama with a margin of almost 1.5 million votes, more than New York or Los Angeles. This presaged a gigantic increase in Democratic margins throughout the upper Midwest, including IN, IL, MI, WI, IA, and MN. In this one part of the country more than 150 counties moved from the Republican to the Democratic column. In addition to the big shifts on the coasts, this is where Obama gained the most ground.

    If this pattern continues, the Democrats may well have achieved a critical mass in their core support, adding a powerful upper Midwest base to their almost total control of both coasts. These would leave the GOP with little more than the heart of the Old Confederacy – even that is threatened in places like North Carolina and Virginia by modernization – as well as more socially conservative regions such as Appalachia and parts of the Great Plains. It’s not a pretty picture if you are a Republican.

    Richard Morrill is Professor Emeritus of Geography and Environmental Studies, University of Washington. His research interests include: political geography (voting behavior, redistricting, local governance), population/demography/settlement/migration, urban geography and planning, urban transportation (i.e., old fashioned generalist)