What Message Is Your City Telling You?

Most Houstonians are familiar with Houston's most famous piece of graffiti, the "Be Someone" message in giant letters on the Union Pacific bridge over I45 north of downtown. It's gone through a lot of iterations and defacement over the years, including recently, but the fact that it keeps coming back is a testament to its popularity. Long ago I did a post here titled "What message is your city telling you?" discussing an essay by Paul Graham (of Y Combinator fame). His basic theme is that each city has its own subtle message it's sending you about what's important and how you should direct your ambition.

Here are some of his examples:

New York: "You should make more money."

Boston/Cambridge: "You should be smarter." (or at least better read)

Silicon Valley: "You should be more powerful." (i.e. change the world)

"Cambridge as a result feels like a town whose main industry is ideas, while New York's is finance and Silicon Valley's is startups."

SF/Berkeley: "You should live better." (more conscientious, more civilized, better 'quality of life')

LA: "You should be more beautiful and famous."

DC: "You should know more important people."

Paris: "You should do things with more style."

London: "You should be more aristocratic." (higher class - although he says this signal is weaker than it used to be)

Here's the summary list of messages he came up with:

"So far the complete list of messages I've picked up from cities is: wealth, style, hipness, physical attractiveness, fame, political power, economic power, intelligence, social class, and quality of life."

And here's what I came up with at the time for Houston:

"So what about our little town of hard working engineers and entrepreneurs? The city of Canion, Cooley, DeBakey, and a gaggle of energy and real estate mavericks? Well, I think we can rule out style, hipness, physical attractiveness, fame, political power, intelligence, social class, and quality of life. Wealth, maybe a bit, but I think the primary one is economic power - "You should be a bigger player in business."(even the business of medicine) We don't seem to care too much whether you're an entrepreneur, developer, or top executive - just so long as you're a big shot. And if you're not a big shot, the message is to become one by whatever path necessary - whether on your own or through a large organization.

Maybe not the ideal message I'd choose (although not bad), but I think it's an accurate reflection of the culture of the city."

Later my friend Anne suggested maybe "industriousness" is a better ambition message for Houston rather than "economic power", because it's more inclusive of people working hard in all sorts of endeavors, including nonprofits. Both of those certainly fit well with a "Be Someone" motto encouraging people to go out and make a difference in the world.

I think it would great for the city to embrace "Be Someone" as our official motto and start baking it into our identity as a city (cue the T-shirts). It's a great message we could put just about everywhere. A similar example of an inspiring motto is "Live a Great Story". On a practical note, that probably means cleaning up the sign and protecting it from future defacement, maybe with a protective spray-paint-repelling clear coat and/or some sort of physical protective shield added to the bridge. But the real value is beyond the sign itself, but in the collective sense of identity it can unify Houstonians around.

Would love to hear your thoughts in the comments...

AEI Rates Bay Area STEM Among the Worst

A new report by Edward Pinto of the American Enterprise Institute (AEI), which rates the “Ten Best and Worst Metro Areas to Live in for Science, Technology, Engineering, and Math (STEM) Jobs,” comes to some apparently surprising conclusions (full report). Pinto, Co-director of the AEI Center on Housing Markets and Finance considers the 30 metropolitan areas with the most STEM jobs, and considers three factors, (1) the number of STEM jobs, (2) job growth since 1990 and (3) relative housing affordability for first time home buyers. Job growth is included as a measure of economic vibrancy. Pinto explains the inclusion of housing affordability.

On one hand, some metro areas with relatively high home prices are desirable places to live in terms of jobs and local amenities. On the other hand, house prices may be higher than they really need to be due to local policies that needlessly drive up the price of land and thereby constrain the amount of new housing. Households should be aware of these tradeoffs.

All of the top four metropolitan areas are in the South, Dallas-Fort Worth, Houston, Atlanta and Austin. Chicago, with superior housing affordability, ranks unusually high at number five. Four of the bottom five are in California, Los Angeles, Sacramento, San Diego and fifth worst San Jose, the historic world leader in technology. Baltimore ranks fourth worst. Just outside the bottom five is tech leader San Francisco, at sixth worst.

The map below summarizes the rankings (see map below, used by permission).

Please continue reading the AEI findings here (full report).

Demographia International Housing Affordability Survey Executive Summary

The 15th Annual Demographia International Housing Affordability Survey covers 309 metropolitan housing markets (metropolitan areas) in eight countries (Australia, Canada, China [Hong Kong Only], Ireland, New Zealand, Singapore, the United Kingdom and the United States) for the third quarter of 2018. A total of 91 major metropolitan markets (housing markets) --- with 1,000,000+ population --- are included, including three megacities, with more than 10,000,000 residents (New York, London and Los Angeles).

Middle-Income Housing Affordability

The Demographia International Housing Affordability Survey rates middle-income housing affordability using the “Median Multiple,” which is the median house price divided by the median household income. The Median Multiple is widely used for evaluating housing markets. It has been recommended by the World Bank and the United Nations and has been used by the Joint Center for Housing Studies at Harvard University. The Median Multiple and other price-to-income multiples (housing affordability multiples) are used to compare housing affordability between markets by the Organization for Economic Cooperation and Development, the International Monetary Fund, The Economist, and other organizations.

Historically, liberally regulated markets have exhibited median house prices that are three times or less that of median household incomes (a Median Multiple of 3.0 or less). Demographia uses the housing affordability ratings in Table ES-1.

Housing Affordability in 2018

Over the past year, there has been moderation of house prices in some of the most unaffordable markets. In some markets, prices have stabilized, while in others actual declines have occurred. However, none of the price declines have been sufficient to materially improve housing affordability. These developments could, in the long run, simply be further indication of the price volatility exhibited associated with stronger land use regulation.

There are 9 affordable major housing markets, all in the United States. There are 29 severely unaffordable major housing markets, including all in Australia (5), New Zealand (1) and China (1). Thirteen of the major markets in the United States are severely unaffordable (out of 55), seven in the United Kingdom (out of 21 major markets) and two out of Canada’s six.

The most affordable major housing markets are in the United States, with a moderately unaffordable Median Multiple of 3.9, followed by Canada (4.3) and Singapore (4.6). Ireland and the United Kingdom both have Median Multiples of 4.8. The major markets of Australia (6.9), New Zealand (9.0) and China (20.9) are severely unaffordable (Table ES-2).

There are 9 affordable major housing markets, all in the United States. Pittsburgh and Rochester are the most affordable, with a Median Multiple of 2.6. Oklahoma City has a Median Multiple of 2.7, while Buffalo, Cincinnati, Cleveland and St. Louis each has a 2.8 Median Multiple. Indianapolis (2.9) and Detroit (3.0) are also affordable.

There are 26 severely unaffordable major housing markets in 2018. Again, Hong Kong is the least affordable, with a Median Multiple of 20.9 up from 19.4 last year. Vancouver has replaced Sydney as the second least affordable, with a Median Multiple of 12.6. With slightly declining house prices, Sydney’s Median Multiple dropped to 11.7. Melbourne (9.7), San Jose (9.4), Los Angeles (9.2) and Auckland (9.0) were also among the least affordable. San Francisco (8.8), Honolulu (8.6), as well as London (Greater London Authority) and Toronto (both 8.3) were also among the 10 least affordable major markets. Schedule 1 includes Median Multiples for all major markets.

Table ES-3 summarizes housing affordability in all markets.

Well-Functioning Cities

There has been significant progress in the reduction of poverty around the world, first in the high income world and now in other nations. Paradoxically, threats are emerging in some urban areas of the high-income world, as middle-income households face intensifying economic challenges.. Much of the cause can be traced to much higher house prices.

Former World Bank principal urban planner Alain Bertaud’s new book (see Introduction: Avoiding Dubious Urban Policies) expresses concern that urban policy in cities is being driven by planning that ignores fundamental economics. This, he warns, can lead to a “costly utopia.” According to Bertaud, “The objective of the book is not to propose new urban forms but to apply already consensual basic economic principles to the practice of urban planning.”

In the environment of current urban policy, principally urban containment policy, middle-income housing has become too expensive for many middle-income households and poverty has increased. Significant national economic losses have been associated with more restrictive land use regulation.

Economists Paul C. Cheshire, Max Nathan and Henry G. Overman of the London School of Economics state the obvious priority: “… the ultimate objective of urban policy is to improve outcomes for people.” Economists Edward Glaeser of Harvard University and Joseph Gyourko of the University of Pennsylvania, have that “well functioning” housing markets are crucial to housing affordability. Housing affordability requires well functioning land markets.

Bertaud adds: “The main objective of the planner should be to maintain mobility and housing affordability” This would produce substantial opportunities, permitting residents the widest access to employment and shopping and other pursuits--- in short, well functioning cities (labor markets).

15th Annual Demographia International Housing Affordability Survey

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

Rich Keep Getting Richer in Tech as Apple Picks Austin for $1 Billion Campus

Apple has picked Austin as the site of its new $1 billion campus, one that will ultimately have 15,000 employees. The Verge has the initial details:

Along with the 6,200 employees that Apple already has in the city, its new 133-acre development is expected to make it the largest private employer in Austin. Apple expects the new campus to accommodate 5,000 employees at first, though it will ultimately have a total capacity of 15,000. The new Austin campus will handle tasks ranging from engineering to customer support for the company. Like all Apple’s other facilities worldwide, the facility will run on 100 percent renewable energy.

Along with its new Austin campus, Apple has also announced expansions across a number of other US cities. Seattle, San Diego, and Culver City will each grow to have over 1,000 employees apiece, and Apple also plans to expand its operations in Pittsburgh, New York, and Boulder, Colorado, over the next three years. In total, Apple employs 90,000 people across the US, and has over 1,000 employees per state across 16 states.

Once again we see a major tech company going with the “usual suspects.” Austin is not a superstar city, but is a booming Sunbelt city with a longstanding tech cluster. Apple picking Austin may help explain how Amazon ended up in Nashville over Austin.

The other places Amazon is going to are all already on the list so to speak. This map from Verge says it all about how things are playing out in American tech:

Click through to read the full piece over at the Verge.

This piece originally appeared on Urbanophile.


McKesson Moves to DFW from San Francisco

The Dallas-Fort Worth metropolitan area (DFW) will be the new headquarters of McKesson, the nation’s largest pharmaceutical distributor, the company announced this week. DFW will now have three of the top 10 companies in the Fortune 500 (ranked by total revenue). No other metropolitan area has more than one of the top 10. Dallas-Fort Worth is also home to Exxon-Mobil, the second largest company and AT&T, ranked ninth.

This continues the high-profile exodus of companies from California, with its high cost of living and Chief Executive Magazine ranking as the worst state for business. Not surprisingly, McKesson chose the state ranked as best for business, Texas.

A Look at Lordstown

With news that GM is closing its Lordstown assembly plant near Youngstown, I thought back to a short film I saw in grade school that made such an impression on me at the time that I never forgot it. In the wake of a strike at the plant in 1972, film makers interviewed workers at the plant and created a short documentary from it. Note at the scenes inside the plant are not from Lordstown. In fact, I think they are from a Ford plant. GM refused to cooperate with the film crew in any way, so they used other footage to give a look at life inside the plant in that era. If the video player doesn’t display for you, click over to watch on YouTube.

Another GM plant that’s closing is the one in Detroit’s former Poletown neighborhood. Steve Malanga at City Journal takes a look back at the senseless destruction of a city neighborhood carried out to build this plant that will now just become another hulking ruin in Detroit.

Maine Governor Moving to Florida for Lower Taxes

Maine governor Paul LePage has announced that he will move to Florida after his term expires in 2019. According to The Hill, taxes are driving the Governor away. He said: “I will pay no income tax and the house in Florida’s property taxes are $2,000 less than we were paying in Boothbay,” LePage said. “At my age, why wouldn’t you conserve your resources and spend it on family [rather] than spend it on taxes?”

Young People Leaving Buffalo, Despite Cuomo Claims

According to the Wall Street Journal, New York Governor Andrew Cuomo said that young people are returning "to upstate cities such as Buffalo." The Governor continued, “This is reality, these are numbers.” Cuomo was quoted in a 27 September article on the population and economic stagnation in New York. Actually, the latest American Community Survey domestic migration data for the Buffalo metropolitan area, there was net outmigration in 2011-2015. The rate of net loss was nearly double the metropolitan area loss rate among those aged 20 to 24, and more than triple the metropolitan rate among those aged 25 to 34. That is the reality, at least according to data developed by the US Census Bureau.

Transit Commuting Falls Behind Working at Home in 2017… New US Census ACS data

After years of substantially increasing numbers, working at home has now exceeded transit as an employment access mode. In 2017, 8 million people worked at home, compared to 7.6 million riding transit in the U.S. Since 2010, the share of workers at home has risen 21 percent, compared to transit’s 1 percent rise. More details will follow on shortly.

Korea Abolishes Seoul-Incheon Airport High-Speed Rail Line

The Nikkei Asian Review reports that: “A high-speed rail line connecting Seoul to Incheon International Airport will be abolished after just four years of service, as the expensive, politically motivated project loses the ridership race to buses.” Incheon is the principal international airport for the world’s fourth largest urban area, Seoul, which has 24 million residents. The Review reported that “Average daily ridership last year totaled only 3,433 passengers, which left 77% of seats unoccupied. Carriages were especially empty during weekday hours.”

The Review contrasted this with the airport volume: “Yet 42.23 million passengers boarded international flights during the first half of 2018, up 14% on the year, transport ministry data shows. … These numbers indicate that air passengers simply did not choose KTX to reach the Seoul-area airport.”

The line had fallen 97 percent short of its projected ridership, according to The Korea Times, which reported that daily ridership was to have reached 490,000 by 2010, yet was only 16,000 last year. This may have been the highest projection error in the history of an industry plagued by such inaccuracies (see: High-Speed Rail: Toward Least-Worst Projections).