New Geography

Tag: Seattle

  • What The Census Tells Us About America’s Future

    With the release of results for over 20 states, the 2010 Census has provided some strong indicators as to the real evolution of the country’s demography. In short, they reveal that Americans are continuing to disperse, becoming more ethnically diverse and leaning toward to what might be called “opportunity” regions.

    Below is a summary of the most significant findings to date, followed by an assessment of what this all might mean for the coming decade.

    Point One: America is becoming more suburban.

    For much of the past decade, there has been a constant media drumbeat about the “return to the cities.” Urban real estate interests, environmentalists and planners have widely promoted this idea, and it has been central to the ideology of the Obama administration, the most big-city dominated in at least a half century. “We’ve reached the limits of suburban development,” Housing Secretary Shaun Donovan opined last February, “People are beginning to vote with their feet and come back to the central cities.”

    Donavan and others cite such things as the energy price spike in the mid-aughts as well as the mortgage crisis as contributing to the “back to the city” trend. Yet in reality the actual numbers suggest that Donavan and his cronies may need a serious reality check. The Census reveals that, contrary to the “back to the city” rhetoric, suburban growth continues to dominate in most regions of the country, constituting between 80% and 100% of all growth in all but three of the 16 metropolitan areas reporting.

    This includes sprawling regions like Houston, “smart growth“ areas like Seattle and Portland  (where suburbs accounted for more than 80% of all growth over the decade) and Midwestern regions like St. Louis, which like Chicago saw a sharp decline in the urban population. The only exceptions have been Oklahoma City, Austin or San Antonio, with vast expanses still allowing for much of new development to take place within the city limits.

    To be sure, no one should pretend that urban fortunes have sunk to their 1970s nadir. Yet overall, central cities, which accounted for a 11% of metropolitan growth in the 1990s, constituted barely 4% of the growth in the last decade.  Some core cities, notably Chicago, have shrunk after making gains in the ’90s. Indeed Chicago — the president’s adopted hometown and the poster child of the urban “comeback” — took what analyst Aaron Renn humorously dubbed “a Census shellacking,” losing some 200,000 people, while the outer suburban ring continued to grow and diversify their populations. The Windy City’s population is now down to the lowest level since the 1910 Census.

    Point Two: America is becoming more diverse, and the diversity is spreading.

    The racial reordering of America is proceeding apace. Nowhere is this more clear than in Texas, where Hispanic and Asian populations have driven much of the state’s demographic growth. Latinos alone now account for roughly 38% of all Texans. Immigration rates in Dallas and Houston  are now higher than for Chicago, Washington, Seattle and Atlanta. Texas, notes long-time observer Candace Evans, is becoming the country’s premier laboratory for promoting a successful diversity.

    There are other major shifts in ethnic demographics. For one thing, minorities continue to head to the suburban rings around most major cities. African-Americans and even Latinos may be fleeing places like Chicago, but they continue to move in large numbers to suburban locales in surrounding Illinois counties. , especially south of the city.  Others appear to  have headed to places like the traditional black-opportunity magnet of Atlanta and or other southern hubs, such as Nashville.

    Another trend appears to be the migration of ethnic minorities to areas that, in the past, have been primarily white. This is clear in the thriving Indianapolis area, where the African-American population grew by 28% and the Hispanic population by 161%, or some 56,000 souls.   Look for more minority growth in such areas which have the advantage of affordable housing, robust economies and better than average job growth.

    3. The Shift to “Opportunity Regions”

    As the economy slid in the last years of the decade, population growth slowed, particularly in some Sun Belt states, such as Florida and Nevada, that thrived during the bubble. In contrast newcomers flocked to places, notably in the Texas cities, that offered better prospects. Austin, San Antonio, Houston and Dallas-Ft. Worth regions all grew by 20% or more over the decade.

    The key here seems to be affordability and jobs. As economist Mark Sharpe has illustrated, Texas private sector job growth last year was 2.7%, compared with 1% nationally. Unfortunately, unemployment remains over 8%, since of this growth was absorbed by newcomers. In contrast, places with the slowest, or negative growth, tend also to be losing jobs. For example, although the residential population of Chicago’s loop tripled in the past decade to 20,000,the famed business district lost almost 65,000 jobs.

    But it’s not just Sun Belt cities that are gaining on places like Chicago.  Indianapolis has emerged as a different kind of “opportunity region.” It lacks the dynamism and diversity of the Texas cities, but it has continued to attract people from all over the country, including the surrounding rural or old Rust Belt parts of the state. Overall the Indianapolis region grew nearly 15% over the decade, roughly 50% higher than the national average, as much as Portland and more than Seattle.

    In contrast, growth seems to be slowing in some formerly hot areas. Population increases for Seattle, Portland and Denver were around 14%,  about half the rate of the previous decade. Part of this may have to do with high unemployment, particularly in Oregon, and high housing prices. Still, these three areas continue to grow much faster than regions such as Chicago, St. Louis or Baltimore where growth struggled in the single digits

    Possible Long-term Implications

    These shifts suggest that the Obama administration might want to rethink its high-density and urban-oriented strategy. Despite all the media focus on an imagined “back to the city” movement, Americans continue to disperse to “opportunity regions” and toward the suburbs. As a result, expect generally conservative-leaning suburbs and exurbs to gain more power after reapportionment and core city influence to decline further.

    Yet the Census numbers also have some unsettling aspects for Republicans. The increasing minority population even in heartland states such as Indiana, not to mention Texas, could undermine GOP gains, particularly if the party listens to its strong nativist wing. Diversification in the suburbs could ultimately turn some of these areas to the center or even left.

    The new American generation arising in the census will be increasingly diverse. A growing portion will consist of the children of immigrants, and they will be predominately English-speaking.  This suggests a more active and engaged minority population, perhaps susceptible to a pro-growth GOP message and the economy of “opportunity regions” but likely hostile to overtly anti-immigrants posturing.

    Whatever your politics or economic interests, the Census suggests that the country is changing in dramatic way– if not always in the ways often predicted by pundits, planners or the media. It usually makes more sense  to study  the actual numbers, than follow the wishful thinking of largely urban-centric, big-city-based and often quite biased analysts.

    This piece originally appeared at Forbes.com

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University, and an adjunct fellow of the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

    Indianapolis Photo by IndySawmill

  • Seattle, Denver & Portland: Slowing Growth Rates & Convergence

    Just released 2010 Census data indicates that the growth rates of the Seattle, Denver and Portland metropolitan areas fell significantly in the 2000s compared to the 1990s.

    Seattle: Seattle metropolitan area population growth fell to 13 percent in the 2000s compared to 19 percent in the 1990s. The metropolitan area population in 2010 was 3,439,000, up from 3,041,000 in 2000. The historical core municipality of Seattle grew eight percent between 2000 and 2010 (from 563,000 to 608,000), while the suburbs grew 14 percent. The suburbs attracted 89 percent of the metropolitan population growth.

    Denver: The Denver metropolitan area experienced a decline in growth rate from 32 percent to 17 percent, while the population increased from 2,179,000 to 2,543,000. The historical core municipality of Denver grew eight percent, from 554,000 to 600,000. The suburbs grew 20 percent and accounted for 83 percent of the metropolitan area population growth.

    Portland: In the Portland Metropolitan area growth declined to 15 percent from 27 percent, with a population rising from 1,928,000 to 2,226,000. The historical core municipality of Portland grew 10 percent (from 529,002 583,000), while the suburbs gained 17 percent. The suburbs attracted 82 percent of the metropolitan population growth.

    Convergence: These slower population growth rates indicate a convergence with the growth rates achieved by middle American metropolitan areas for which data is available. Indianapolis grew 15 percent and Oklahoma City grew 14 percent, more than Seattle and slightly less than Denver and Portland.

  • The Overdue Debate: Smart Growth Versus Housing Affordability

    American households face daunting financial challenges. Even those lucky enough not to have suffered huge savings and retirement fund losses in the Great Recession seem likely to pay more of their incomes in taxes in the years to come, as governments attempt pay bills beyond their reasonable financial ability. Beyond that, America’s declining international competitiveness and the easy money policies of the Federal Reserve Board could well set off inflation that could discount further the wealth of households.

    In this environment, the last thing governments need do is to raise the cost of anything. It is bad enough that taxes may have to rise and that a dollar will probably buy less. America’s standard of living could stagnate or it could even decline.

    The Choice: Smart Growth or Affordability

    The Washington Examiner, however, succinctly put the choices that face the nation, states and localities with respect to the largest element of household expenditure — housing. In an editorial entitled “Take Your Pick: Smart Growth or Affordable Housing,” the Examiner noted:

    “No matter how much local politicians yammer about how much they support affordable housing, they are the principal cause of the problem via their land use restrictions, such as the urban growth boundary in Montgomery County and large-lot zoning in Loudoun County.”

    The editorial was in response to our Demographia Residential Land & Regulation Cost Index, which estimated the extent to which the land to construction ratio had risen in metropolitan regions. The principal finding was that the share of land and regulatory costs to new house prices had risen only with the impostion of more restrictive land use policies. This is principally because strategies such as urban growth boundaries, suburban large lot zoning and geographical growth steering (such as allowing state financial assistance only in areas meeting smart growth criteria) makes land for housing unnecessarily scarce, raising its price just as surely as OPEC’s oil rationing raises the price of gasoline.

    Urban planner and mayor of Ventura, California Bill Fulton objected to our attributing these increases to land and regulation, instead suggesting that smart growth increases homes prices much less than we claimed although, he admits, “at least a little“ . The pro-smart growth study Costs of Sprawl — 2000 concedes that a number of smart growth strategies can increase house prices (See Table 15-4). Thus, the debate is not about whether more restrictive land use policies raise the price of housing, but rather by how much.

    More often, however, proponents of more restrictive land use regulations have avoided and even denied that the inconvenient truth linking their policies with higher housing costs. Rarely, if ever, have proponents of such policies fully disclosed to elected or appointed officials that more restrictive land use policies would lead to higher house prices. It is doubtful that any urban planning department ever sent representatives to an NAACP chapter to explain how fewer African-Americans would be able to own their own homes, despite already having a one-third lower home ownership rate than non-Hispanic whites. Similarly, the planners probably never told La Raza chapters that Hispanic households, also with a one third less home ownership rate, would find home ownership more costly. Nor was the message delivered to the religious organizations concerned with improving the standard of living for lower income households.

    Pervasive Evidence

    Yet the evidence that smart growth boost prices substantially seems incontrovertible. An early 1970s research effort led by renowned urbanologist Peter Hall quantified the impacts of the restrictive Town and Country Planning Act of 1947, which brought smart growth measures to England. The result, The Containment of Urban England revealed how strict regulations on development had driven the price of land for development from five to ten times the value of comparable on which development was not permitted, but might be permitted in the future. More recently, Bank of England Monetary Policy Committee member Kate Barker, was commissioned by the Blair Labour government to review housing affordability and land regulation. She attributed England’s more steeply rising house prices relative to continental Europe to its more restrictive land use regulations.

    The same effect is evident in the United States. Dartmouth’s William Fischel noted that California house prices were similar to those in the rest of the nation as late as 1970. By 1990, however, California house prices had escalated well ahead of the nation. Fischel found that the higher prices could not be explained by higher construction cost increases, demand, the quality of life, amenities, the property tax reform initiative (Proposition 13), land supply or water issues. His conclusion was that the expansion of land use restrictions were the culprit.

    Let Them Eat Cake?

    The disregard at least some smart growth proponents show about house prices may be characterized, for example, in a comment on the Planetizen website:

    “… smart growth can lead to more expensive housing. So what? At least it’s REAL value, generated by a higher quality of life, easier commutes, more transit options, walkability and a more enriched cultural experience…” (emphasis in original)

    Perhaps it never occurred to the proponents of more restrictive land use policies that not all households have the benefit of incomes typical of urban planners or new urbanist architects. One has to question the “REAL values” of smart growth since most housing consumers place their highest emphasis on things like privacy, security and good schools, not always available at a decent price in urban areas.

    In fact, higher priced housing reduces the discretionary income that is crucial to an acceptable standard of living to many households. Millions of households will not be in the market for “a more enriched cultural experience” until they can afford the housing they desire.

    Housing Affordability and the Cost of Living

    It is not accidental that the cost of living is higher (both in nominal terms and relative to incomes) in metropolitan regions where land use regulation is the strongest, such as San Diego, Washington-Baltimore, Seattle or Boston. Nor is it accidental that house prices have escalated to 40 percent above historic norms in Portland, Oregon, where planners have skimped on geographical urban growth boundary expansions, choosing instead to look skyward, seeking higher densities. California’s aspiration under Senate Bill 375 for new housing at 20 units to the acre offers a more than Jakarta level of density (residential densities above 30,000 per square mile) that could escalate the unprecedented exodus of people and businesses.

    Higher Housing Costs: The Poverty Connection

    The acknowledged relationship between more restrictive land use regulation and higher house prices also applies to standards of living, which are sent lower, and poverty rates, which must inevitably be pushed higher. This constitutes a second inconvenient truth: as discretionary income drops, more households fall into poverty. This creates a difficulty for proponents of more restrictive land use regulation, because there is no constituency for increasing poverty. It is no wonder they have generally discounted, ignored or even denied the nexus between smart growth and higher housing costs.

    Considering the financial uncertainty American households face, it is long past time that the choice between smart growth and housing affordability be seriously debated.

    —-

    Photograph: “Low density” smart growth development adjacent to the urban growth boundary (Hillsboro) in suburban Portland (by author)

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

  • Decade of the Telecommute

    The rise in telecommuting is the unmistakable message of the just released 2009 American Community Survey data. The technical term is working at home, however the strong growth in this market is likely driven by telecommuting, as people use information technology and communications technology to perform jobs that used to require being in the office.

    In 2009, 1.7 million more employees worked at home than in 2000. This represents a 31% increases in market share, from 3.3 percent to 4.3 percent of all employment. Transit also rose, from 4.6% to 5.0%, an increase of 9% (Note). Even so, single occupant automobile commuting also rose, from 75.7% to 76.1%, despite the huge increase in gasoline prices. The one means of transport that continued to decline was car pooling, which saw its share decline from 12.1% in 2000 to 10.0% in 2009.

    The increase in working at home was pervasive in scope. The share of employees working at home rose in every major metropolitan area (over 1,000,000 population), with an average increase of 38%. The largest increase was in Charlotte – ironically a metropolitan area with large scale office development in its urban core – with an 88% increase in the work at home market share. In five metropolitan areas, the increase was between 70% and 80% (Richmond, Tampa-St. Petersburg, Raleigh, Jacksonville and Orlando). Only five metropolitan areas experienced market share increases less than 20% (New Orleans, Salt Lake City, Rochester, Buffalo and Oklahoma City). Nonetheless, the rate of increase in the work at home market share exceeded that of transit in 49 of the 52 major metropolitan areas. Transit’s increase was greater only in Washington, Seattle and Nashville (where the transit market share is miniscule).

    The working at home market share increase was also strong outside the major metropolitan areas, rising 23%.

    Working at home is fast closing the gap with transit. In part driven by the surge in energy prices since earlier in the decade, transit experienced its first increase since data was first collected by the Bureau of the Census in 1960. Yet working at home is growing more rapidly, and closing the gap, from 1.7 million fewer workers than transit in 2000 to only 1.0 million fewer in 2009. At the current rate, more people could be working at home than riding transit by 2017. This is already the case in much of the country outside the New York metropolitan area, which represents a remarkable 39 percent of the nation’s transit commuters. Taking New York out of the picture, 31% more people (1.35 million) worked at home than traveled by transit, more than 4 times the 7% difference in 2000 (Table 1, click for additional information).

    Table 1
    Transit & Work at Home Share of Commuting
    Major Metropolitan Areas: 2000 & 2009
      Transit Work at Home
    Metropolitan Area 2000 2009 2000-2009 2000 2009 2000-2009
    New York 27.4% 30.5% 11.4% 2.9% 3.9% 32.6%
    Los Angeles 5.6% 6.2% 11.6% 3.5% 4.8% 35.3%
    Chicago 11.3% 11.5% 2.0% 2.9% 4.0% 37.1%
    Dallas-Fort Worth 1.8% 1.5% -13.3% 3.0% 4.1% 37.0%
    Philadelphia 8.9% 9.3% 3.7% 2.9% 3.9% 35.0%
    Houston 3.2% 2.2% -29.2% 2.5% 3.4% 37.4%
    Miami-West Palm Beach 3.2% 3.5% 9.7% 3.1% 4.5% 48.0%
    Atlanta 3.4% 3.7% 8.7% 3.5% 5.6% 59.9%
    Washington 11.2% 14.1% 26.6% 3.7% 4.5% 22.7%
    Boston 11.2% 12.2% 9.8% 3.3% 4.3% 31.9%
    Detroit 1.7% 1.6% -4.7% 2.2% 3.1% 40.1%
    Phoenix 1.9% 2.3% 17.5% 3.7% 5.3% 44.3%
    San Francisco-Oakland 13.8% 14.6% 6.0% 4.3% 6.0% 40.5%
    Riverside 1.6% 1.8% 9.0% 3.5% 4.6% 32.6%
    Seattle 7.0% 8.7% 25.0% 4.2% 5.1% 23.6%
    Minneapolis-St. Paul 4.4% 4.7% 6.4% 3.8% 4.6% 20.6%
    San Diego 3.3% 3.1% -7.0% 4.4% 6.6% 50.2%
    St. Louis 2.2% 2.5% 14.2% 2.9% 3.5% 22.5%
    Tampa-St. Petersburg 1.3% 1.4% 11.0% 3.1% 5.5% 75.7%
    Baltimore 5.9% 6.2% 5.8% 3.2% 3.9% 23.2%
    Denver 4.4% 4.6% 4.3% 4.6% 6.2% 36.4%
    Pittsburgh 5.9% 5.8% -2.9% 2.5% 3.2% 28.5%
    Portland 6.3% 6.1% -3.0% 4.6% 6.1% 32.9%
    Cincinnati 2.8% 2.4% -13.4% 2.7% 3.8% 40.3%
    Sacramento 2.7% 2.7% 0.8% 4.0% 5.4% 33.1%
    Cleveland 4.1% 3.8% -8.1% 2.7% 3.4% 25.0%
    Orlando 1.6% 1.8% 15.4% 2.9% 4.9% 71.4%
    San Antonio 2.7% 2.3% -12.5% 2.6% 3.4% 29.0%
    Kansas City 1.2% 1.2% 4.6% 3.5% 4.3% 24.7%
    Las Vegas 4.4% 3.2% -26.8% 2.3% 3.3% 45.1%
    San Jose 3.4% 3.1% -9.6% 3.1% 4.5% 44.4%
    Columbus 2.1% 1.4% -35.0% 3.0% 4.1% 36.7%
    Charlotte 1.4% 1.9% 32.2% 2.9% 5.4% 88.1%
    Indianapolis 1.3% 1.0% -22.2% 3.0% 3.7% 24.7%
    Austin 2.5% 2.8% 11.7% 3.6% 5.9% 64.6%
    Norfolk 1.7% 1.4% -17.7% 2.7% 3.4% 27.9%
    Providence 2.4% 2.7% 12.8% 2.2% 3.6% 64.5%
    Nashville 0.8% 1.2% 38.5% 3.2% 4.3% 34.6%
    Milwaukee 4.2% 3.7% -12.5% 2.6% 3.2% 25.3%
    Jacksonville 1.3% 1.2% -9.1% 2.3% 4.0% 73.8%
    Memphis 1.6% 1.5% -8.1% 2.2% 3.1% 41.3%
    Louisville 2.0% 2.4% 20.2% 2.5% 3.1% 22.9%
    Richmond 1.9% 2.0% 6.5% 2.7% 4.7% 76.8%
    Oklahoma City 0.5% 0.4% -13.0% 2.9% 3.1% 4.7%
    Hartford 2.8% 2.8% -1.3% 2.6% 4.0% 53.6%
    New Orleans 5.4% 2.7% -50.3% 2.4% 2.9% 19.2%
    Birmingham 0.7% 0.7% -2.3% 2.1% 2.7% 29.5%
    Salt Lake City 3.3% 3.0% -10.1% 4.0% 4.7% 17.8%
    Raleigh 0.9% 1.0% 10.7% 3.5% 6.0% 74.4%
    Buffalo 3.3% 3.6% 7.9% 2.1% 2.3% 8.3%
    Rochester 2.0% 1.9% -4.3% 2.9% 3.3% 13.7%
    Tucson 2.5% 2.5% 1.8% 3.6% 5.0% 36.3%
    Total 7.5% 8.0% 6.4% 3.2% 4.4% 37.7%
    Other 1.0% 1.2% 12.3% 3.4% 4.2% 23.0%
    National Total 4.6% 5.0% 9.2% 3.3% 4.3% 30.9%
    Major metropolitan areas: Over 1,000,000 population in 2009
    Metropolitan Area definitions as of 2009
    Data from 2000 Census and 2009 American Community Survey

    The rise of working at home is illustrated by the number of major metropolitan areas in which it now leads transit in market share. In 2000, working at home had a larger market share than transit in 28 of the present 52 major metropolitan areas. By 2009, working at home led transit in 38 major metropolitan areas, up 10 from 2000. Between 2000 and 2009, the working at home market share increased nearly 6 times as much as the transit share in the major metropolitan areas (38.4% compared to 6.4%).

    Working at Home Leaps Above Transit In Portland and Elsewhere: Perhaps most surprising is the fact that Portland now has more people working at home than riding transit to work. This is a significant development. Portland is a model “smart growth” having spent at least $5 billion additional on light rail and bus expansions over the last 25 years. Portland was joined by other metropolitan areas Houston, Miami-West Palm Beach, New Orleans and San Jose, all of which have spent heavily on urban rail systems. Working at home also passed transit in Cincinnati, Hartford, Las Vegas, Raleigh and San Antonio (Table 2).

    Table 2
    Work at Home Share Greater than Transit
    Major Metropolitan Areas
    Atlanta Houston Norfolk Sacramento
    Austin Indianapolis Oklahoma City Salt Lake City
    Birmingham Jacksonville Orlando San Antonio
    Charlotte Kansas City Phoenix San Digo
    Cincinnati Las Vegas Portland San Jose
    Columbus Louisville Providence St. Louis
    Dallas-Fort Worth Memphis Raleigh Tampa-St. Petersburg
    Denver Miami-West Palm Beach Richmond Tucson
    Detroit Nashville Riverside
    Hartford New Orleans Rochester
    Indicates working at home passed transit between 2000 and 2009

    Further, the shares are close enough at this point that working at home could surpass n transit in Milwaukee, Cleveland and Minneapolis-St. Paul in the next few years.

    Transit: About New York and Downtown

    As noted above, transit also has gained during this decade. However, the gains have not been pervasive. Out of the 52 major metropolitan areas, transit gained market share in 29 and lost in 23. As usual, transit was a New York story, as the New York metropolitan area saw its transit work trip market share rise from 27.4% to 30.5%. New York accounted for 47% of the increase in transit use, despite representing only 37% in 2000. New York added nearly 500,000 new transit commuters. This is nearly five times the increase in working at home (106,000). Washington also did well, adding 125,000 transit commuters, followed by Los Angeles at 73,000 and Seattle at 41,000.

    Transit’s downtown orientation was evident again. This is illustrated by the fact that more than 90% of the increased use in the major metropolitan areas occurred in those metropolitan areas with the 10 largest downtown areas (New York, Los Angeles, Chicago, Philadelphia, Houston, Atlanta, Washington, Boston, San Francisco and Seattle). Among these, only Houston experienced a decline in transit commuting.

    Implications

    Working at home has been the fastest growing component of commuting for nearly three decades. In 1980, working at home accounted for just 2.3% of commuting, a figure that has nearly doubled to 4.3% in 2009. This has been accomplished with virtually no public investment. Moreover, this seems to have happened without any loss of productivity. Companies like IBM, Jet Blue and many others have switched large numbers of their employees to working at home. These firms, which necessarily seek to provide the best return on their investment for stockholders and owners would not have made these changes if it had interfered with their productivity.

    Over the same period, and despite the recent increases, transit’s market share has fallen from 6.4% of commuting in 1980 to 5.0% in 2009. At the same time, gross spending over the period rose more than $325 billion (inflation and ridership adjusted) from 1980 levels. Inflation adjusted expenditures per passenger mile have more than doubled since that time.

    Given the remarkable rise of telecommuting, its low cost and effectiveness as a means to reduce energy use, perhaps it’s time to apply at least some of our public policy attention to working in cyberspace. It presents a great opportunity, perhaps far greater and far more cost-effective than the current emphasis on new rail transit systems.

    ———-

    Note: Work trip market share reflects transit in its strongest market, trips to and from work. Transit’s overall impact, measured by total roadway and transit travel (passenger miles) is approximately 1%, compared to the national work trip market share of 5%.

    Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

    Photograph: DDFic

  • Despite Transit’s 2008 Peak, Longer Term Market Trend is Down: A 25 Year Report on Transit Ridership

    In 2008, US transit posted its highest ridership since 1950, a development widely noted and celebrated in the media. Ridership had been increasing for about a decade, however, 2008 coincided with the highest gasoline prices in history, which gave transit a boost.

    Less reported was the fact that despite higher ridership, transit’s market share (of transit and motor vehicles) has fallen since the 1950s. In 1955, transit’s market share was over 10%. By 2005, transit’s share had dropped to 1.5%, but recovered only to 1.6% in 2008. Transit’s all time peak ridership was in 1945, driven up by World War II and gas rationing. It is thus not surprising that national transit ridership (boardings) declined 3.8% in 2009 as gasoline prices moderated.

    Market Share by Major Urban Area

    Demographia has released urban area roadway and transit market share estimates for 2008, based upon Federal Transit Administration and Federal Highway Administration data. The table below compares 2008 with 1983 market share data for 56 urban areas with a corresponding metropolitan area population of more than 900,000 (complete data).

    Urban Areas: Roadway & Transit Market Share: 2008
    Ranked by 2008 Transit Market Share
    With 25 Year (1983) Comparison
        2008 1983 Roadway Share % Change
    Rank Urban Area Roadway Share Transit Share:  Roadway Share Transit Share: 
    1 New York 89.0% 11.0% 87.7% 12.3% 1.5%
    2 San Francisco 95.0% 5.0% 93.7% 6.3% 1.4%
    3 Washington 95.5% 4.5% 96.1% 3.9% -0.6%
    4 Chicago 96.1% 3.9% 94.2% 5.8% 2.0%
    5 Honolulu 96.2% 3.8% 93.2% 6.8% 3.2%
    6 Boston 96.7% 3.3% 97.5% 2.5% -0.8%
    7 Seattle 97.2% 2.8% 97.6% 2.4% -0.4%
    8 Philadelphia 97.3% 2.7% 96.0% 4.0% 1.4%
    9 Portland 97.7% 2.3% 97.6% 2.4% 0.1%
    10 Salt Lake City 97.8% 2.2% 99.1% 0.9% -1.3%
    11 Los Angeles 98.1% 1.9% 98.1% 1.9% 0.0%
    12 Denver 98.2% 1.8% 98.5% 1.5% -0.3%
    13 Baltimore 98.3% 1.7% 97.7% 2.3% 0.6%
    14 Pittsburgh 98.6% 1.4% 97.3% 2.7% 1.3%
    15 Miami-West Palm Beach 98.7% 1.3% 98.8% 1.2% -0.1%
    16 Atlanta 98.8% 1.2% 98.0% 2.0% 0.8%
    16 Cleveland 98.8% 1.2% 98.0% 2.0% 0.8%
    16 Las Vegas 98.8% 1.2% 99.6% 0.4% -0.8%
    16 Minneapolis-St. Paul 98.8% 1.2% 98.8% 1.2% 0.0%
    16 San Diego 98.8% 1.2% 99.3% 0.7% -0.5%
    21 San Jose 99.0% 1.0% 99.0% 1.0% 0.0%
    22 Austin 99.1% 0.9% 99.7% 0.3% -0.6%
    22 Houston 99.1% 0.9% 99.0% 1.0% 0.1%
    22 Milwaukee 99.1% 0.9% 98.3% 1.7% 0.8%
    22 Sacramento 99.1% 0.9% 99.0% 1.0% 0.1%
    22 San Antonio 99.1% 0.9% 98.7% 1.3% 0.4%
    27 St. Louis 99.2% 0.8% 99.0% 1.0% 0.2%
    28 Buffalo 99.3% 0.7% 98.5% 1.5% 0.8%
    28 Providence 99.3% 0.7% 98.9% 1.1% 0.4%
    30 Charlotte 99.4% 0.6% 99.3% 0.7% 0.1%
    30 Cincinnati 99.4% 0.6% 98.7% 1.3% 0.7%
    30 Dallas-Fort Worth 99.4% 0.6% 99.4% 0.6% 0.0%
    30 Hartford 99.4% 0.6% 98.7% 1.3% 0.7%
    30 Orlando 99.4% 0.6% 99.7% 0.3% -0.3%
    30 Phoenix 99.4% 0.6% 99.4% 0.6% 0.0%
    30 Rochester 99.4% 0.6% 98.9% 1.1% 0.5%
    30 Tucson 99.4% 0.6% 98.9% 1.1% 0.5%
    38 Detroit 99.5% 0.5% 98.8% 1.2% 0.7%
    38 Fresno 99.5% 0.5% 99.3% 0.7% 0.2%
    38 New Orleans 99.5% 0.5% 97.4% 2.6% 2.2%
    38 Norfolk-Virginia Beach 99.5% 0.5% 99.2% 0.8% 0.3%
    38 Riverside-San Bernardino 99.5% 0.5% 99.6% 0.4% -0.1%
    43 Columbus 99.6% 0.4% 98.6% 1.4% 1.0%
    43 Louisville 99.6% 0.4% 98.9% 1.1% 0.7%
    43 Memphis 99.6% 0.4% 99.4% 0.6% 0.2%
    43 Tampa-St. Petersburg 99.6% 0.4% 99.5% 0.5% 0.1%
    47 Bridgeport 99.7% 0.3% 99.8% 0.2% -0.1%
    47 Jacksonville 99.7% 0.3% 99.4% 0.6% 0.3%
    47 Kansas City 99.7% 0.3% 99.4% 0.6% 0.3%
    47 Nashville 99.7% 0.3% 99.4% 0.6% 0.3%
    47 Raleigh 99.7% 0.3% 99.9% 0.1% -0.2%
    47 Richmond 99.7% 0.3% 99.1% 0.9% 0.6%
    53 Indianapolis 99.8% 0.2% 99.3% 0.7% 0.5%
    54 Birmingham 99.9% 0.1% 99.5% 0.5% 0.4%
    54 Oklahoma City 99.9% 0.1% 99.9% 0.1% 0.0%
    54 Tulsa 99.9% 0.1% 99.6% 0.4% 0.3%
    Unweighted Average 98.7% 1.3% 98.3% 1.7% 0.4%
    All Urban Areas Combined 98.4% 1.6% 97.5% 2.5% 0.9%
    Based upon passenger miles
    Core urban areas in metropolitan areas with more than 900,000 population in 2009.
    Derived from Federal Transit Administration and Federal Highway Administration data
    Los Angeles and Mission Viejo urban areas combined
    San Francisco, Concord and Livermore urban areas combined
    Historic transit market share data at http://www.publicpurpose.com/ut-usptshare45.pdf
    Maryland commuter rail (MARC) assigned to Washington, DC

    In 1983, transit systems started receiving support from federal taxes on gasoline. This was also the first year that the National Transit Database reported on the same annual basis as it does today. One justification for using funds from road users was the hope of attracting people from cars to transit. The national data above and the urban area below show that the overwhelming share of new travel has, nonetheless, continued to be captured by motor vehicles rather than transit. Among the 56 urban areas, 13 experienced gains in transit market share from 1983 to the peak year of 2008, while 37 posted losses and six had no change. Transit was able to capture only 0.9% of new urban travel between 1983 and 2008, while roadways captured 99.1%. (Note 1).

    The Top 10: Still a New York Story

    #1: New York: The nation’s predominant urban area remains New York, with an 11.0% transit market share. In 2008, 41% of the national transit ridership (passenger miles) was in New York, with much of it either in or focused upon New York City. The New York City Transit Authority, and a host of local public and private systems, principally serve New York City destinations and account for a remarkable 38% of the nation’s transit ridership. Even so, transit’s market share dropped from 12.3% in 1983. As a result, the roadway market share in New York increased 1.5% between 1983 and 2008, the fourth largest gain in the nation. Transit attracted 8.7% of the new demand between 1983 and 2008, while roadways attracted 91.3%.

    #2: San Francisco: San Francisco had the nation’s second highest transit market share in 2008, at 5.0%. This is a decline from 6.3% in 1983. Nonetheless, San Francisco moved up from 6th place in 1983. This produced a 1.4% increase in the roadway market share between 1983 and 2008, the fifth largest gain in the nation. Transit accounted for 2.2% of the new demand, while roadways attracted 97.8%.

    #3: Washington: Washington placed third in transit market share in 2008, at 4.5%. This represents a gain from 3.9% in 1983 and an improvement from 6th place. Washington was the only urban area among the top five to experience an increase in transit market share. Much of Washington’s transit increase was on its expanding Metrorail system and the MARC commuter rail system (most of the ridership on this Maryland based system commutes to Washington. Overall, transit in Washington has attracted 5.1% of new travel over the past 25 years, while roadways attracted 94.9% of new demand.

    #4: Chicago: Chicago ranked fourth in transit market share, at 3.9%. In 1983, Chicago had ranked 3rd, with a market share of 5.8. The roadway market share in Chicago increased 2.0% from 1983 to 2008, the third largest road travel gain in the nation. Transit attracted 1.3% of new demand over the period in Chicago, while roadways attracted 98.7%.

    #5: Honolulu: Honolulu ranked fifth in transit market share, at 3.8%. This is a significant drop from 1983, when Honolulu ranked 2nd in the nation, with a transit market share of 6.8%. Honolulu’s roadway market share gain was the largest in the nation between 1983 and 2005, at 3.8%. Transit ridership also dropped in Honolulu from 1983 to 2008, so that roadways accounted for all new travel.

    #6: Boston: Boston ranked sixth in transit market share in 2008, at 3.3%. This is a gain from 2.5% in 1983, when Boston ranked 9th. Much of Boston’s increase is attributable to its commuter rail expansion. Transit captured 4.1% of new demand, while roadways attracted 95.9%.

    #7: Seattle: Seattle’s principally all bus transit system ranked 7th in 2008 with a market share of 2.8%. This is an increase from 2.4% in 1983, when Seattle ranked 10th. Transit captured 3.1% of new travel over the past 25 years, while roadways accounted for 96.9%.

    #8: Philadelphia: Philadelphia slipped from the 5th largest transit market share in 1983 (4.0%) to 8th in 2008, at 2.7%. Philadelphia’s transit system, one of the most comprehensive in the nation, captured just 1.4% of new travel over the last quarter century, while roadways captured 98.6%.

    #9: Portland: Portland ranked 9th in transit market share in 2008, at 2.3%. This is a decline from 2.4% in 1983 and occurred despite opening the most extensive new light rail system in the nation over the period. Transit attracted 2.2% of new travel over the period, while roadways attracted 97.8%.

    #10: Salt Lake City: Salt Lake City, at 10th, is a new entrant to the top 10 transit market share urban areas, with a share of 2.2%. In 1983, Salt Lake City ranked 34th, with a transit market share of 0.9%. Even with this increase, however, roadways captured the bulk of new travel, at 96.2%, while transit attracted 3.8%, due to transit’s small 1983 base.

    Other Urban Areas: There were also notable developments among the urban areas that did not place in the top 10 in 2008 transit market share.

    Las Vegas: Las Vegas improved its ranking more than any other urban area, moving from 49th in 1983 to 16th in 2008 (in a tie with Atlanta, San Diego, Cleveland and Minneapolis-St. Paul). In 1983, Las Vegas had a transit market share of 0.4%, which improved to 1.2% in 2008. This was an especially notable achievement, because Las Vegas experienced substantial population growth over the period. During the period, Las Vegas established a 100% competitively contracted transit system, the only such transit system in the nation and has seen ridership expand by more than 10 times. Nonetheless, as in other gaining urban areas, such as Salt Lake City and Washington, the transit ridership base was so small that roadways captured nearly all the new demand, at 98.6% (transit obtained 1.4%).

    Atlanta: Atlanta both (1) was the fastest growing larger urban area in the developed world between 1983 and 2008 and (2) built the second most new rail capacity in the nation, in its expansion of the MARTA Metro (trailing only Washington’s Metro). Yet, Atlanta’s transit market share fell from 2.0% to 1.2% between 1983 and 2008, with transit attracting only 0.9% of new travel.

    New Rail Urban Areas: Transit market shares generally failed to increase in urban areas opening new light rail or metro systems over the period (excludes urban areas with new rail systems that were not open at the beginning of fiscal year 2008).

    • Six urban areas with new rail systems experienced market share declines, including Portland, Baltimore, Houston, Sacramento, St. Louis and Buffalo.
    • Four urban areas with new rail systems had static transit market shares, including Los Angeles, Minneapolis-St. Paul, San Jose and Dallas-Fort Worth.
    • Three urban areas with new rail systems experienced transit market share increases. The largest increase was in Salt Lake City (and the largest of any urban area). Denver and Miami-West Palm Beach also experienced increases.

    Where from Here? It might have been expected that transit would have attracted far higher ridership numbers when gasoline prices achieved such heights. Yet, nationally, transit market share increase was only from 1.5% to 1.6%, even as roadway demand was declining modestly.

    Transit’s principal marketing problem lies in its problem serving destinations outside downtown. Downtowns typically account for only 10% of urban area employment. Some trips in an urban cannot even be made on transit. For example, Portland’s extensive transit system connects only about two-thirds of the jobs and residences within the (Tri-Met) service area (Note 2). Further Tri-Met’s award deserving internet trip planner shows that some trips to outside downtown destinations can require more than two hours, even when light rail is used.

    Note 1: This data relates only to passenger transportation. Urban roadways, unlike transit, also carry a substantial amount of local and intercity freight, which is not reflected in this data.

    Note 2: According to Metro’s 2004 Regional Transportation Plan, 78% of the residences and 86% of the jobs in the Tri-Met service area were within walking distance (1/4 mile) of a transit stop. This means that approximately 67% of residences and jobs are within 1/4 mile of a transit stop (0.78 * 0.86). Metro’s plans envision this figure dropping to 59% by 2020 (this data does not include Clark County in Washington, part of which is in the urban area).

    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.”

  • Near-New Seattle Residential High-Rise Faces Demolition

    Seattle’s tony Belltown condo neighborhood hardly needs more bad news. Like many other similar areas in central city cores, the supply of new high rise condominiums has far outstripped the demand. Over the past year, the downtown area condominium market has experienced a median price decline of 35%. Units in at least three downtown buildings have been auctioned off at prices from 30% to 50% below the latest, already discounted prices.

    Yet things have gotten even worse. A 25 story apartment building, only 9 years old, will be demolished due to substandard construction. Owners of the McGuire Apartments (photo on web here), Carpenters Union Local 131 and the Multi-Employer Property Trust issued a letter recently announced saying that “Since the necessary repairs are impractical, the decision … is to dismantle the building.” The letter also indicated that tenants would be assisted in finding new housing.

    A local blogger (Hideous Belltown) has provided a more than one-year long chronicle of the building, since scaffolding was erected, and concluding with two “death-watch” entries.

    The Seattle tower may be the newest and tallest building to ever be demolished, especially in the United States.

  • The Downtown Seattle Jobs Rush to the Suburbs

    There are few downtown areas in the nation that are more attractive than Seattle. Downtown Seattle is a dream of spontaneous order and a fascinating place well worth exploring. It is one of the nation’s great walkable downtown areas, with a mixture of older and newer buildings, hills, Ivars Acres of Clams and the Chief Seattle fire boat on Elliot Bay, Pioneer Square, the Pike Place Market (itself the home of the first Starbuck’s coffee) and a hyper-dense 100,000 jobs per square mile.

    Downtown boasts the L. C. Smith Tower, which from 1914 to 1966 was the tallest office tower in the west, at 42 floors and nearly 500 feet. Now Smith Tower ranks no better than 35th tallest downtown. Seattle has built so aggressively that a visitor to the observation deck would see more looking up than down. Smith Tower is dwarfed by a skyline containing some of the nation’s most impressive office architecture, such as Columbia Center and the Washington Mutual Building, which was named for the subprime mortgage lending champion.

    Downtown has many more historic landmarks, such as the Olympic Hotel and the Washington Athletic Club. The art-deco Northern Life Tower was the second tallest until the building boom of the 1960s and would have been the pride of more downtown areas than not. The 1970s Henry M. (Scoop) Jackson federal building is a rare gem of its age, while the Rainier Bank Building is perched on a tapered base that begs the question as to whether it will collapse before the Alaskan Way Viaduct in the great Cascadian subduction zone earthquake (which is due to strike sometime between now and the end of time).

    The Condominium Bust: Downtown Seattle has experienced one of the nation’s strongest central city condominium booms, though its success (and that of others) has long been drowned out by the high pitched chorus of the Portland missionary society. As in Portland, Atlanta, San Diego, Los Angeles and other newly resurgent downtown areas, Seattle’s condominium boom is now a bust as resembling that of a subprime-baby remote desert exurb halfway between San Bernardino and Las Vegas. Even so, the condominium neighborhoods of downtown Seattle are more attractive than what they replaced. Eventually, the large inventory of empty units will be sold or converted into rental units.

    The Office Bust: Downtown’s condominium bust has spread to its office market as well. The vacancy rate is now over 20%.

    The Employment Bust: Data from the Puget Sound Regional Council of Governments (PSRG) indicates the depth of the problem. From 2000 to 2009, employment in the downtown core declined more than 12%, with a loss of 20,000 jobs. But it would be a mistake to conclude that downtown Seattle’s employment decline stems from the Great Recession. The losses occurred before. In 2007, the last year before the recession, employment had fallen nearly 18,000 from 2000.

    Downtown Seattle’s employment decline mirrors trends around the nation and around the world. Now, downtown Seattle accounts for only 8.4% of employment in the four county area, something that would surprise an airline passenger looking at its verticalness from above.

    The balance of the city of Seattle has done somewhat better, having lost 3% of its employment since 2000.

    Suburban Job Ascendancy: All of the employment growth in the Seattle area has been in the suburbs. While the city, including downtown, was losing nearly 30,000 jobs, the suburbs of King, Pierce, Snohomish and Kitsap counties added 90,000 jobs (Table). Suburban Redmond, home of Microsoft, added 19,000 jobs all by itself. Even Tacoma, the old second central city and long since defeated challenger to Seattle added a modest number of jobs between 2000 and 2009.

    EMPLOYMENT IN THE SEATTLE AREA: 2000-2009
    Area 2000 2009 Change % Change
    Downtown         164,255         143,952       (20,303) -12.4%
    Balance: Downtown         338,580         329,182        (9,398) -2.8%
    Balance: King County         646,807         662,470        15,663 2.4%
    Kitsap County           70,854           81,617        10,763 15.2%
    Pierce County         234,619         264,402        29,783 12.7%
    Snohomish County         207,764         241,569        33,805 16.3%
    4-County Area       1,662,879       1,723,192        60,313 3.6%
    Compiled from Puget Sound Regional Council of Governments data.

    If You Built it, They Must be Going: With these trends, it might be expected that local transportation agencies would be rushing to provide sufficient infrastructure to the growing suburbs. Not so. Planners are scurrying about to build one of the nation’s most expensive light rail systems with lines converging on downtown, to feed 20,000 fewer jobs today and perhaps 30,000 or 40,000 fewer in the future. Perhaps this is the train “got a whole city moving again” as the television commercials put it?

    What about growing Redmond? It’s on the map. The line is scheduled to reach Redmond sometime between now and the end of time.

  • The Myth of the Strong Center

    At the height of the foreclosure crisis the problems experienced by some so-called “sprawl” markets, like Phoenix and San-Bernardino-Riverside, led some observers to see the largest price declines as largely confined to outer ring suburbs. Some analysts who had long been predicting (even hoping for) the demise of the suburbs skipped right over analysis to concoct theories not supported by the data. The mythology was further enhanced by the notion – never proved – that high gas prices were forcing home buyers closer to the urban core.

    Yet a summary of the trends over the past 18 months show only minor disparities between geographies within leading urban regions. Overall house prices escalated similarly in virtually all areas within the same metropolitan areas and the price drops appear to have also been similar. This is in contrast to a theory that suggests that huge price drops occurred in the outer suburbs while central city prices held up well.

    Summary of 18 Month Subarea Price Declines: This is indicated by a review of 8 metropolitan areas: Los Angeles, the San Francisco Bay Area, San Diego, Sacramento, Atlanta, Chicago, Portland and Seattle (see end note), for which subarea data is readily available (see table). On average, central area median house prices (all houses, including condominiums), fell 3% in relation to the overall metropolitan area average. Inner suburban areas experienced a 3% gain relative to metropolitan area prices, while outer suburban areas changed at the metropolitan area average. In actual price reduction terms, core areas declined 28.8%, inner suburban areas declined 25.7%, and outer suburban areas declined 27.1%. The overall average metropolitan area decline was 27.2%. There was, however, considerable variation in the figures by metropolitan area (see figure below).

    MEDIAN HOUSE PRICE CHANGES BY GEOGRAPHICAL SECTOR
    8 Metroplitan Areas
    CALIFORNIA MARKETS Central Inner Suburbs Outer Suburbs Overall
    Los Angeles -45.3% -30.0% -41.5% -37.1%
    San Francisco Bay -38.0% -39.1% -38.6% -38.6%
    San Diego -36.5% -37.4% -37.0% -36.9%
    Sacramento -53.6% -36.3% -37.5% -44.0%
    OTHER MARKETS
    Atlanta -11.6% -17.0% -15.8% -15.8%
    Chicago -21.0% -16.3% -17.5% -17.8%
    Portland -10.0% -14.5% -15.7% -13.5%
    Seattle -14.2% -14.7% -13.2% -13.7%
    AVERAGE -28.8% -25.7% -27.1% -27.2%
    Estimated from Data Quick information
    California Markets: July 2008 to January 2010
    Other Markets: 2008-2nd Quarter to 2009-4th Quarter

    Where Central Area Losses were Greatest: Over the past 18 months, central areas posted the largest losses in three of the areas. Further, in each of these areas, the smallest price drops were experienced in the inner suburbs.

    • Sacramento had the steepest central area relative price decline. Central area prices declined 37% relative to inner suburban prices, where the smallest losses occurred. The central area price loss averaged 53.6%, compared to the overall metropolitan area loss of 44.0%. The inner suburbs experienced the smallest loss, at 36.3%.
    • Los Angeles also had a steep central area relative price decline. Central area prices declined 45.3%, compared to the overall metropolitan area loss of 37.1%. The inner suburbs experienced the smallest loss, at 30.0% while outer suburbs lost 41.5%.
    • Chicago’s greatest losses also occurred in the central area, but were of a much smaller magnitude. Central area prices declined 21.0%, compared to the overall metropolitan area loss of 17.8%. The inner suburbs experienced the smallest loss, at 16.3%. The outer suburbs lost 17.5%.

    Where Suburban Losses were the Greatest: In two areas, the central area price losses were the least, Atlanta and Portland. Yet, the magnitude of these losses was modest. It is interesting to note that the metropolitan areas with the smallest relative losses in the central areas pursued radically different policies with respect to development. Portland’s “smart growth” policies favor central development at the expense of suburban development, while Atlanta’s more liberal policies do not attempt to steer development to the core.

    • Atlanta’s greatest price declines occurred in the inner suburbs, which experienced a loss of 17.0%, slightly more than that of the outer suburbs (15.8%). In comparison, the central area price drop was the least, at 11.6%, The metropolitan area loss was 15.8%.
    • Portland’s greatest price declines occurred in the outer suburbs which experienced a 15.7% loss, compared to the inner suburbs, at 14.5. The lowest decline was in the central area at 10.0%. The metropolitan area loss was 13.5%.

    Little Difference in Some Markets: There was little difference in the price declines among geographic sectors in three of the metropolitan areas. In the San Francisco Bay area, San Diego and Seattle, the differences between central, inner suburban and outer suburban price declines were all within a 2% range.

    Core Condominium Market Crisis

    However, core area markets where condominiums predominate indicate substantial difficulties in some of the metropolitan areas. These markets are generally only a small part of central cities, principally around downtown areas or major centers. For example, in the Portland area, the core condominium areas ring the downtown area and include the Pearl District and the South Waterfront District. The central area, which encompasses the entire city of Portland, however, is much larger and has a much larger share of detached housing.

    Demand has been so weak in the core condominium markets that substantial price reductions have occurred and a number of buildings have been forced to sell units at auction. Other buildings have given up altogether on selling and have rented condominiums. Some of the price drops, especially in Atlanta, Portland and Seattle are far greater than occurred overall in the respective metropolitan markets. The condominium implosion has not received nearly the level of attention in the national or local media that was accorded the housing bubble and collapse itself.

    Portland: A local television station video indicates that Portland’s condominium market is in crisis. A report in The Oregonian indicates that the downtown area has a “glut” of condominiums and that February sales prices averaged 30% below list. A luxury new 15-story building in the Pearl District (The Wyatt) is now being leased instead. Units at The Atwater in the South Waterfront district were auctioned, with minimum bid prices more than 50% lower than list. The John Ross, also in the South Waterfront District, is Portland’s largest condominium project and will be auctioning its units. Minimum bid prices average 70% below the previous top list prices. The smallest units have a minimum bid price of $110,000. By comparison, over the past year, the median house price in the Portland metropolitan area has dropped approximately 10%.

    Atlanta: Atlanta has a “vast oversupply” of condominiums. The uptown (including Atlantic Station) and Buckhead markets of Atlanta appear to be experiencing some of the worst market conditions in the nation. The prestigious Mansion on Peachtree, a combination hotel and condominium development, was unable to sell 75% of its residences and was recently sold in foreclosure at approximately $0.30 on the dollar. The winning auction bids at The Aqua condominium in Uptown averaged 50% below the last asking price. In Atlantic Station, units at The Element were auctioned at substantial discounts. Among conventional sales, condominium price reductions of up to 40% have been reported. One building has offered discounts of $100,000 per bedroom. Some new buildings have been converted to rentals, while planned projects have been placed upon hold.

    Seattle: Things are little better in Seattle. The overbuilt downtown area condominium market has experienced a median price decline of 35% over the past year. Units at The Gallery in tony Belltown were auctioned off at minimum prices 50% below the last list prices (which had already been discounted). Units at The Brix, on Capitol Hill, attracted bids at auction averaging 30% below previous list prices. Later this month, unsold units at 5th & Madison will be auctioned, at minimum prices below 50% of previous list. For comparison, median house prices in the Seattle metropolitan area declined 6% over the past year.

    Chicago: The downtown area of Chicago has been among the most vibrant condominium markets for more than a decade. However, in 2009, condominium sales fell to the lowest level since 1997. At current sales rates, the downtown area has a supply of more than five years, with annual sales of less than 600 and more than 3,000 units available or under construction.

    Los Angeles: Few markets have seen as many condominium buildings planned as downtown Los Angeles, and few have seen so many put on hold. A recent issue of the Los Angeles Downtown News lists approximately 50 downtown condominium projects. More than three-quarters of the projects have been scaled back, have had construction slowed or are on “hold.” The market has been so weak that a number of developers have taken losses by auctioning condominium units that they have not been able to sell conventionally.

    San Diego: The downtown San Diego condominium is substantially overbuilt. Developers have leased units that were to have been sold and there is virtually no construction of new units.

    Rental Conversions: Even these grim reports, however, may mask an even bigger problem. It is estimated that more than 20,000 condominiums units are completed or nearly completed, but are not listed for sale in Miami. In what is by far the nation’s strongest condominium market, Manhattan, more than 6,000 condominium units are completed or nearly completed, but not listed for sale.

    In core cities, few issues have been as divisive as the conversion of rental units to condominiums. But, now the opposite is now occurring – condominiums are being converted into apartments for rent: This is trend that undermines markets in a way that cannot be measured by median prices, since it replaces generally high-paying condo owners for generally less flush renters. This puts those who bought at higher prices in these markets at a particular disadvantage.

    Conclusion: Overall, contrary to the mythology developed early in the bubble, suburbs and even exurbs have generally performed about as well as closer in markets. The big imponderable will be the future of the core condominium market, which is experiencing significant financial reverses largely ignored by the national media.

    Note: As used in this article, the Los Angeles metropolitan area is the Los Angeles-Riverside Combined Statistical Area, the San Francisco area is the San Francisco-San Jose Combined Statistical Area and all other metropolitan areas are the corresponding metropolitan statistical areas. http://demographia.com/db-prdistr2010.pdf>Subareas defined.

    Photograph: Condominium construction, Atlanta, weekend of the Lehman Brothers collapse.

    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.”

  • Scenario One: A Pessimistic Forecast for the United States

    This is the first in a two part series exploring a pessimistic and an optimistic future for the United States. Part Two will appear tomorrow.

    I’m an old (76) 1950s type liberal, and have lived to see the election on the nation’s first mixed-race president, as well as some remarkable social change in the general status of women and ethnic minorities. The United States has a remarkable heritage of entrepreneurship and resilience in its democratic institutions. Yet there are cogent reasons to be fearful and pessimistic about our capacity to maintain our preeminence, at least in the medium run (10-15 years). I obviously hope I’m wrong, and look forward to attempts to undermine my thesis – including, tomorrow, my own.

    Consider the numbers 17, 49 and 60. Seventeen is the real unemployment rate, not the “official” ten, when we take into account those dropping out of the labor force, or giving up. Forty-nine is the real percentage of home ownership, in our “ownership” society, not the 68 percent from the census. For mighty Los Angeles, the real number is 44 percent. The difference is the stupendous number of households whose equity in the house is less than they owe on the mortgage. This house of cards has increasingly been the engine of national growth. Sixty is the number of votes in the US Senate needed to stop a filibuster, and together with inept leadership, is responsible for the absurd failure of Congress and the effective collapse of collegial democracy.

    Economists say we are in a recovery. What recovery? The small increase in house sales is due to temporary incentives, but including speculators buying up homes, many foreclosed, for yet greater inequality. The main gains in jobs, not fully offsetting wider losses, are in temporary construction tied to government-funded projects. The growth in jobs and the economy in the last 20 years has been in services, stuff we do for each other, and the main fuel has been the pyramiding of house values. That is over. How can we restore growth through more consumption if the majority of the population no longer has the resources to invest or spend?

    By far the most destructive accomplishment of almost 30 years of restructuring has been the reestablishment of extreme inequality, the emergence and power of the ultra-rich, both “progressive” and conservative in orientation, to levels last seen before the Great Depression.

    But perhaps the greater root of our malaise, and perhaps the downfall of the American Empire, lies in excessive globalization and the loss of our capacity to make stuff, the outsourcing of, first, manufacturing and now even of services. It is instructive that this is the same story of imperial Rome, although long dependent on its empire, by the time of its collapse it imported virtually everything from its tributary states. Its finances could no longer pay the Army which was largely made up of people from outside Italy.

    I’d agree that the main hope in the economic arena is via the small entrepreneur, but they face the immense monopolistic power of ever-larger global capital. I’m proud to live in Seattle, which at least dared to fight back, as in the one and only US general strike, in 1919, and in the WTO protests in 1999. Perhaps this is not so surprising since Seattle still makes things: planes (Boeing), ships (Todd) and trucks (PACCAR).

    The saddest irony is that even as maybe half of us celebrate a Black president, we have utterly failed to follow up on the political civil rights gains on the 1960s to incorporate Black Americans into the mainstream economy. The status of the Black male is, relatively, worse in 2009 than it was in 1969. I would not be surprised to see a reprise of the 1960s race riots. But it is also relevant to reflect on the declining state of the white male, suffering increased drop-out rates from high school, declining enrollments in college, all in the face of reduced job opportunities for the less skilled and educated, plus competition from immigrants, legal and illegal. Is it any wonder that both nativism and populism is rising anew?

    One might dare to believe that large Democratic majorities in Congress would give us hope for effective responses to this national malaise. But I’d say the current Congress rivals the infamous 80th congress that Harry Truman excoriated, for its “do nothingness”. On the surface we can correctly observe that the Republican party, increasingly conservative, is more than willing to wreck the country in order to regain power.

    But part of the problem is that we no longer have a conservative and a liberal party, in an economic sense. We have two bourgeois parties, with the “new” Democratic Party increasingly dependent on the wealthy educated elite as well as well-paid public workers, it long ago abandoned the working class and did nothing to constrain globalization and the rise of the toxic financial practices. Thus we should not be surprised that the populist know-nothing uprising could bring to power large numbers of proudly uneducated folks.

    In the final analysis for this pessimistic scenario, the underlying culprit is the inexcusable failure of the US educational establishment, the astounding incapacity of our public and private schools to teach people to think and reason. And part of the reason for this incapacity is the excessive power of religion, which values belief over reason, in our culture. And this is why decadent Europe – aging and tax-burdened – could come out of this recession and malaise better than the United States. Perhaps we’ll see a reverse migration of surplus underemployed young Americans returning to their aging historic motherlands!

    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).

    Photo: hz536n

  • Welcome to Ecotopia

    In this era of tea-partying revolutionary-era dress-ups, one usually associates secessionism with the far right. But if things turn sour for the present majority in Washington, you should expect a whole new wave of separatism to emerge on the greenish left coast.

    In 1975 Ernest Callenbach, an author based in Berkeley, Calif., published a sci-fi novel about enviro-secessionists called Ecotopia; a prequel, Ecotopia Rising, came out in 1981. These two books, which have acquired something of a cult following, chronicle–largely approvingly–the emergence of a future green nation along the country’s northwest coast.

    Aptly described by Callenbach as “an empire apart,” this region is, in real life, among the world’s most scenic and blessed by nature. Many in this part of America have long been more enthusiastic about their ties to Asia than those with the rest of the country. It is also home to many fervent ecological, cultural and political activists, who often feel at odds with the less enlightened country that lies beyond their soaring mountains.

    Until the election of Barack Obama, the Pacific Northwest certainly was separating from the rest of America–at least in attitude. After George W. Bush’s victory the 2004 presidential election, the Seattle weekly The Stranger published an angry editorial about how coastal urbanites needed to reject “heartland values like xenophobia, sexism, racism and homophobia” and places where “people are fatter and dumber and slower.”

    Such a narrow, cynical view of the rest of the country is in line with Callenbach’s Ecotopia novels, in which the bad guys–representatives of American government and corporations–are almost always male, overweight and clueless about everything from technology to tending to the earth.

    Of course, would-be Ecotopians have much of which to be proud. The three great cities of the region–San Francisco, Portland and Seattle–easily rank among the most attractive on the continent. They all boast higher-than-average levels of education and–at least around San Francisco and Seattle–some of the world’s deepest concentrations of high-tech companies.

    Yet for all their promise, the Ecotopian regions cannot claim to have missed the current recession. Downtown Seattle currently suffers a vacancy rate in excess of 20%, the highest in decades; last year apartment rental rates dropped 13.8%, the steepest decline among American metros. Meanwhile vacancies in the Silicon Valley area south of San Francisco have soared to above 20%. By early this year, there was enough unoccupied office space in the Valley to fill 15 Empire State Buildings.

    This may seem a bit counter-intuitive for a region that boasts the headquarters of Microsoft, Costco, Amazon, Intel and Apple. But while such companies provide lots of high-wage employment, they are no longer enough to spark much growth across the region’s economy. The San Francisco area has actually lost jobs over the past decade and shows little sign of recovering its once prodigious growth rates.

    But easily the weakest of the economies has been Portland, which lacks the presence of major anchor firms like those in greater Seattle or the Bay Area. Portland’s unemployment rate has been well over 10% since late last year.

    A wave of youthful migration has made the city a slacker haven for the past decade and, in turn, exacerbated unemployment figures. Homeless kids now crowd the downtown area, which, although far from destitute, does appear pretty grungy in places.

    Yet, like the Ecotopians in the Callenbach novels, Portland residents and politicians seem nonplussed about their anemic economic performance. After all, the city voted heavily–despite solid opposition from the rest of the state–to raise Oregon’s taxes on wealthy individuals and corporations, a move likely to deter new in-bound investment.

    “You don’t have a big focus here on economic development,” observes Stephen B. Braun, dean of the School of Management at Portland’s Concordia University. “There’s much more emphasis on quality of life than on making a living.”

    The proof: Portland may have high unemployment, but the big idea around city hall is not how to promote jobs but about investing an additional $600 million in bike lanes.

    All these places, of course, avidly endorse green jobs even if there’s little prospect they could replace the jobs being lost in the fading blue-collar sectors. A growing green job sector needs a vibrant economy that produces things and builds new buildings, notions that have little currency across much of the region.

    This anti-growth attitude reflects that of Callenbach’s Ecotopia, which favors a “stable state” economy over job or wealth creation. Ecotopian politics explicitly ban both population increases and the private automobile.

    While the mayors of Portland, San Francisco and Seattle are hardly that extreme, they could propose policies that would make driving more burdensome. And they certainly seem to do wonders in chasing would-be baby-makers out of the city. All three cities have among the lowest percentages of children of any in the U.S.

    Perhaps the toughest issue facing the Ecotopian political economy lies with the issue of class. Callenbach’s Ecotopia adopts something of an anarchic socialism; the cities of the real ecotopia have tended toward ever greater class bifurcation.

    San Francisco, for example, boasts one of the highest per capita incomes in the nation and remains a favorite destination for inherited wealth, whether among individuals or nested in nonprofits. Yet according to the Public Policy Institute of California, if the cost of living is applied, San Francisco ranks high among urban counties in terms of its concentration of poverty.

    It doesn’t help that the city’s economy has been hemorrhaging corporate headquarters and mid-range middle-class jobs for decades. High-end workers commute to Google and other Valley companies, and others work in the financial or media sectors, but many mid-range jobs have been lost, many of them to more affordable business-friendly locales in places like Colorado.

    As middle-class jobs disappear, Ecotopia’s cities increasingly resemble restrictive communities that are anything but diverse. As analyst Aaron Renn has pointed out, Portland and Seattle stand as among the whitest big cities in the nation. And San Francisco’s once vibrant African-American population has been dropping for decades.

    In the coming years this pattern will likely become more pronounced in Seattle and Portland as well. These cities continue to attract many well-educated people, particularly from California, who in turn bring with them both significant accumulated wealth and anti-growth attitudes.

    Strict “green” planning regimes are also accelerating the decline of the local middle class by driving housing prices up, greatly diminishing the once wide affordability for the middle class. Seattle’s regulatory environment, according to one recent study, has bolstered housing prices in the region by $200,000 since 1989. The percentage of families who could afford a median price home in the area has fallen by more than half.

    Many observers see a similar outcome from Portland’s widely ballyhooed planning regime. Despite the massive acceptance by planners as something of a model for the restored city, the vast majority of all job and population growth in the region has occurred at the less pricey fringes, including across the river in Vancouver, Wash., which lies outside the fearsome Portland planning regime.

    So what is the future for the region, and particularly the eco-cities? If the country starts moving toward the center, and even the right, you can expect Ecotopian sentiment to rise again, perhaps not to the point of secession but expressed in attitude.

    But this may not be all bad. As America’s population grows and other regions rise, perhaps it’s helpful for the various parts of the country to experiment with different systems. Short of civil war, there’s something to be said for relentless, even if sometimes daft, experimentation at the local level. The rest of country may not follow all their strictures, but our would-be Ecotopians could produce some interesting and even usable ideas.

    This article originally appeared at Forbes.com.

    Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.