NewGeography.com blogs

Republicans Sweep from Reston to Roanoke

Republicans dominated the Virginia elections, sweeping all three statewide offices and gaining at least three House of Delegates seats. Former Attorney General Bob McDonnell crushed state Sen. Creigh Deeds by a margin of 59-41% and beat him in 113 of the commonwealth’s 134 counties and cities.

McDonnell dominated every part of the state from the subdivisions of Northern Virginia to the Piedmont to Richmond to the Northern Neck to the Shenandoah Valley to coal country to Southside to Tidewater. It wasn’t even close.

In fact, it was a much bigger and wider sweep than most pundits realize. Attorney General-elect Ken Cuccinelli is “the most conservative statewide official in modern VA history, at least since segregation,” according to a Tweet by Politico’s Jonathan Martin last night.

Democratic House incumbents in Fairfax and Loudoun counties got ousted in moderate, suburban districts. In McLean, Margi Vanderhye, a center-left delegate known for her hard work and commitment to serious issues, lost to the woman who ran Tom DeLay and Scooter Libby’s legal defense funds.

Ultimately it came down to two factors: First, the Democratic base just did not show up and did not care about Deeds, and the GOP base was extremely energized to win back control. Second, McDonnell ran a great campaign with independents and Deeds alienated them.

A few key points:

The Fairfax Streak Lives On: Since 1969, whichever candidate wins vote-rich Fairfax County wins the state. McDonnell kept the streak alive with a 50.8-49.2 win in this suburban county outside Washington.

Deeds Forgot New Independents: As I explained in Politico yesterday, Deeds alienated independents by focusing on cultural issues rather than roads and schools, and consequently lost Loudoun and Prince William counties. It’s the sixth straight election where whoever wins those counties wins the state.

Home Bases: Both candidates performed well in their respective bases. Deeds posted 64% in his native Bath County, where Barack Obama only garnered 48%. McDonnell also put up 64% in his hometown of Virginia Beach, which is actually surprisingly low number considering his statewide tally.

The “Who Cares?” Effect: A lot of the Democratic coalition did not show up. In Charlottesville, Democrats suffered more than a 50% drop-off in turnout from 2008 while Republicans saw only a 36% loss. In Prius-crazy Arlington, Dems suffered a 54% loss rate relative to ’08 while the GOP lost a third.

The Albemarle Effect: If Democrats can’t win liberal Albemarle County surrounding UVA, they might as well give up. This fast-growing, uber-educated, fairly affluent county was trending Democrat as the college enclave of Charlottesville spilled beyond its borders. McDonnell won it with 51%.

Coal County Creigh?: Deeds was supposed to win the F-150 Democrats, but he did even worse than Obama in the hardscrabble southwestern counties that are conservative but UMW-influenced. In ancestrally Democratic Buchanan County, Tim Kaine won 52%, Obama received 47%, and Deeds only got 36%. Mark Warner, a telecom executive from Alexandria, got 66%, almost double Deeds.

Suburban Shutdown for Democrats: One of the major planks of the Obama coalition was suburban and exurban independents. These voters did not show up on Tuesday, dealing significant loses to Democratic House delegates in Oakton, Ashburn, and McLean, and to strong challengers in Sterling and Mt. Vernon.

Black Voter Apathy: Deeds was never popular in the black community. In Brunswick County, a peanut-growing, majority-black county in Southside, Obama received 63% and Deeds pulled together a losing 49.5%. Deeds could barely even hold Newport News, where he got a paltry 50.3%.

What it Means for 2010: Rep. Tom Periello, of the 5th District that stretches from liberal Charlottesville to conservative Southside, must be shaking in his boots after seeing McDonnell dominate in Southside – and ever win Albemarle! – last night. This was always a tenuous seat, but it just got shakier.

Reps. Gerry Connolly of Fairfax County (D-11) and Glenn Nye of Tidewater (D-02) are probably OK since they can take assurance that Deeds was a weak candidate, although hometown boy McDonnell will certainly campaign for Nye’s challenger. Rep. Frank Wolf of Loudoun (R-10) is probably sleeping easy.

Ultimately, trying to analyze the Virginia electoral map from last night is somewhat pointless since it was a well-rounded rout from Ashburn to Abingdon. The interesting points are not in whether or not McDonnell won certain counties, but by how much.

Riding Out the Recession in the Forty Strongest Metropolitan Economies

A few days ago BusinessWeek released a list of the top 40 metropolitan economies based on data compiled at the Brookings Institution's Metromonitor project. But, as many old media sites tend to do, they've locked the list behind a slow-loading slide show in a cheap attempt to drum up page views. Many of the commenters to the original article couldn't even find the list.

So, in the interest of usability, here's the top 40 in boring list format:


1 San Antonio, TX
2 Austin-Round Rock, TX
3 Oklahoma City, OK
4 Little Rock-North Little Rock-Conway, AR
5 Dallas-Fort Worth-Arlington, TX
6 Baton Rouge, LA
7 Tulsa, OK
8 Omaha-Council Bluffs, NE-IA
9 Houston-Sugar Land-Baytown, TX
10 El Paso, TX
11 Jackson, MS
12 McAllen-Edinburg-Mission, TX
13 Washington-Arlington-Alexandria, DC-VA-MD-WV
14 Columbia, SC
15 Pittsburgh, PA
16 Harrisburg-Carlisle, PA
17 Des Moines-West Des Moines, IA
18 Virginia Beach-Norfolk-Newport News, VA-NC
19 Honolulu, HI
20 Rochester, NY
21 Buffalo-Niagara Falls, NY
22 Scranton-Wilkes-Barre, PA
23 Augusta-Richmond County, GA-SC
24 Colorado Springs, CO
25 Madison, WI
26 Albuquerque, NM
27 Syracuse, NY
28 Albany-Schenectady-Troy, NY
29 Kansas City, MO-KS
30 Raleigh-Cary, NC
31 Ogden-Clearfield, UT
32 Boston-Cambridge-Quincy, MA-NH (tied)
32 New Haven-Milford, CT (tied)
33 Bridgeport-Stamford-Norwalk, CT
34 Denver-Aurora-Broomfield, CO (tied)
34 Baltimore-Towson, MD (tied)
35 Poughkeepsie-Newburgh-Middletown, NY
36 Hartford-West Hartford-East Hartford, CT
37 Indianapolis-Carmel, IN
38 Memphis, TN-MS-AR



Trends? Looks like energy economies, state capitals, university-heavy towns, generally affordable regions that avoided the housing boom, and a few old industrial centers that suffered the brunt of decline 25 years ago and now may be positioned for an up-swing.

Here's an explanation of the list methodology:

The Brookings Institution ranked the 100 largest metros by averaging the ranks for four key indicators: employment change, unemployment change, gross metropolitan product, and home price change. Employment was measured by the change from the peak quarter for each metro to the second quarter of 2009. The peak was the quarter in which the metro had the most jobs during the past five years. Unemployment was ranked by measuring the percentage-point change from the first quarter of 2009 to the second quarter of 2009. Gross metropolitan product was measured from the peak quarter to the second quarter of 2009. And the ranking of home prices compared the second quarter of 2009 to the previous quarter. The employment data were provided by Moody's Economy.com, the unemployment data were collected from the U.S. Bureau of Labor Statistics, and the home price index came from the Federal Housing Finance Agency.

Source: The Brookings Institution's MetroMonitor

New York Migration Study, the State Continues to Lose Residents

The Empire Center for New State Policy has released “Empire State Exodus,” which details New York’s continuing loss of people and their incomes to other states. The report was authored by E. J. McMahon, senior fellow with the Manhattan Institute and director of the Empire Center and me.

Since the beginning of the decade, New York has experienced a net domestic migration loss of more than 1,500,000, the largest loss in the nation. The extent of this loss is illustrated by the fact that Katrina/Rita/defective dike ravaged Louisiana lost a smaller share of its population than New York, which also led in relative terms.

The report uses the latest Census Bureau and Internal Revenue Service (IRS) data to examine how many New Yorkers have left the state, where they have gone and how much income they have taken with them. It includes detailed breakdowns of population migration patterns at a regional and county level.

More than 85% of the domestic migration loss was from the New York City region (combined statistical area) of New York State and more than 70% of the loss was from New York City itself. The data shows a continuing exodus from the city, to the suburbs and to elsewhere in the nation.

The annual net loss of New Yorkers to other states has ranged from a high of nearly 250,000 people in 2005 to a low of 126,000 last year, when moves nationwide slowed down sharply along with the economy.

Households moving out of New York State had average incomes 13 percent higher than those moving into New York during the most recent year for which such data are available. In 2006-07 alone, the migration flow out of New York drained $4.3 billion in taxpayer income from the state. New York taxpayers moving to other states had average incomes of $57,144, while those
moving into New York averaged $50,533 as of 2007, according to the report.

“Even with its large domestic migration losses, New York’s total population has grown slightly since 2000, thanks to a large influx of immigrants from foreign countries,” the report says. “But New York’s share of U.S. population is still shrinking. A continuation of the domestic migration trends highlighted here will translate into slower economic growth and diminishing political influence in the future.”

The report is available at EmpireCenter.org.

The Week New Urbanism Died?

It has been a bad media week for New Urbanism.

The day that New Urbanism Died?” was the headline of the St. Louis Urban Workshop blog that detailed the Chapter 11 bankruptcy of Whittaker Builders, developer of the “New Town at St. Charles,” a premier New Urbanist community located in the St. Louis exurbs (beyond the suburbs).

The author notes that “New Town will not disappear, plenty of people are happy to live there, but its promise is gone. It's become just another suburban enclave and will face the same challenges as other suburban developments; lack of retail, long commutes, etc.” The blog’s headline is a play on a characterization by postmodern architect Charles Jenks, who referred to the demolition of the infamous Pruitt-Igoe public housing project as “The Day Modern Architecture Died.”

The Northwest Indiana Times detailed the failure of a new urbanist community (Coffee Creek) in an October 23 article. The article noted that the planned 2,000 home mixed use development, located in the exurbs 45 miles from Chicago’s Loop had attracted only 12 homes and an apartment building. Much of the empty land has been purchased by another developer, who indicated an affection for the new urbanism concept, noting however that it probably would not work here. The article notes that a more modest New Urbanist development is doing better, in nearby Burns Harbor, with 75 homes occupied out of a planned 300.

Perhaps the unkindest cut of all was a survey, reported by the Oregonian, to the effect that residents of Orenco Station travel by car to work nearly as much as people who live in the unremarkably conventional and sprawling suburbs of Portland.

Despite these unhappy stories, the death of New Urbanism is not imminent. True, to the extent that New Urbanism requires subsidies it is likely to prove unsustainable in the longer term, like its Pruitt-Igoe type predecessors. On the other hand, to the extent that New Urbanism represents a genuine response of architects, builders and developers to actual, rather than imagined demand, New Urbanism could be with us for some time to come.

Commercial Real Estate Bust of 2010

Coming soon to a market near you: a bust in commercial real estate that will make the subprime mortgage crisis look like a picnic. The other shoe drops in 2010.

Federal Deposit Insurance Corporation Chairman Sheila Bair told a Senate committee on October 14 that commercial real estate loan losses between now and the end of 2010 pose the most significant risk to U.S. financial institutions. Although you can’t read it online, on October 7, 2009 Wall Street Journal reporters Lingling Wei and Maurice Tamman (Eastern edition, pg. C.1, Fed Frets About Commercial Real Estate) reported on a presentation prepared by an Atlanta Fed real-estate expert who is worried “about the banking industry's commercial real-estate exposure.”

Since July, the Federal Reserve has been pumping billions of dollars into commercial-mortgage-backed securities (CMBS, same things as the residential-MBS I’ve written about before in this space, only for shopping malls instead of houses). To accomplish this, the Fed uses the Term Asset-Backed Securities Loan Facility or TALF program. It is one of several alphabet-soup programs the Fed is using to pass a couple of trillion dollars to the stock market through private corporations (not just regulated banking institutions). For example, between March and July 2009, Harley-Davidson Inc. and other non-banks raised $65 billion in sales of bonds backed by everything from motorcycle loans to credit card debt. The Fed made $35 billion in TALF loans to investors buying those securities, which sparked a market rally. That market rally, however, is not in the commercial real estate market – it’s in the securities market. Since its inception, TALF has put between $2 billion and $11 billion per month into the securities market.

TALF lends money to anyone willing to buy CMBS (or student loans, car loans, etc.). The Fed reasons that, as long as banks can move loans off their books by repackaging and selling them as bonds, they will make more loans. So they justify giving money to non-banks to buy the bonds because the money will go to the banks. Get it?

Unfortunately, as vacancy rates rise, banks are increasingly reluctant to make new commercial real estate loans. This is obviously the case since Office of Thrift Supervision deputy director Timothy Ward told Congress this week that they will be issuing guidelines on doing loan workouts. A loan work out is what industry experts call “extend and pretend” – extend the terms and pretend like they are paying you. CRE loans, furthermore, are shorter in duration than home mortgages – typically 5 years instead of 30 years. That means a lot of loans will be coming due before the economy picks up enough to fill all those offices with rent-paying businesses. The value of commercial mortgages at least 60 days behind on payments jumped sevenfold in September – to $22.4 billion – or almost 4 percent of all commercial mortgages repackaged and sold as bonds. That’s about the same as the 90 day past-due rate seen for all residential mortgages (including those not sold off by the banks) in the first quarter of 2009.

As of October 14, 2009, the TALF balance is $43.2 billion and growing. From what we are hearing now, it may not be enough.

British Taxpayers Pick Up the Tab for the "Worst. Climate. Campaign. Ever."

Climate change threatens popcorn prices, air planes, and outdoor hockey. And, in the latest tax-payer funded advertising from the UK, climate change will tell you bedtime stories of a drowning dog and the coming apocalypse:


From the Register, Britons spent £6 million in public funds for an ad campaign which Nature simply calls the Worst. Climate. Campaign. Ever. The advertisement depicts a father and daughter sharing in a bedtime story describing "a land where the weather was very, very strange." It continues with a sophomoric overview of the causes of climate change, and describes the consequences in a cartoonish overture. The Times reports that "the advertisement attempts to make adults feel guilty about their legacy to their children."

With all their various predictions of the Earth's demise – 100 months? 96 months? Four months? – and tons of carbon spent hauling scientists and politicians to climate change conferences all around the world – climate change campaigners still have the time to make us feel guilty for trying to make a modest living – all at the expense of the already deeply in debt UK taxpayers.

Is this movie about to get played on televisions here in the USA? After all, we have plenty of money to spend on propaganda here as well.

Bifurcated American Politics

Bifurcated means to split or divide something into two parts. It is a term often used to describe trees, but today it can also be applied to our politics in America. It seems that right and left, liberal and conservative, Republican and Democratic have never been more at odds than in our recent history.

Politics has always been blood sport. A quote often attributed to President Harry Truman is, “If you want a friend in Washington, get a dog.” This may have been true about our politics, but our legislative process was much more collegial. Elected leaders worked together, shared power, listened to the other point of view, and knew how and when to compromise. Today, lines in the sand have become chasms, and compromise is viewed as retreat. What happened? .

Robert Bork, by any objective criteria, would be judged to be highly qualified to become Justice of the Supreme Court. He was a renowned legal scholar who had the misfortune of also being a strict constructionist of the constitution. In 1987, he was nominated by then-President Ronald Reagan to fill a vacancy on the court. Within an hour of his nomination, Senator Edward Kennedy stated, “Robert Bork's America is a land in which women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police could break down citizens' doors in midnight raids, schoolchildren could not be taught about evolution, writers and artists could be censored at the whim of the Government…” At that point civility ended. Bork’s nomination was withdrawn and the process has not been the same since. Ted Kennedy defined the fears America harbored about conservatives, and a new word was added to the American lexicon – “borked” – which is defined of a savaging of a candidate because of what they believe.

In 1988, Rush Limbaugh syndicated his talk radio program nationally. He was unabashedly conservative and a ratings sensation. His three hour show usually does not include any guests. To his audience, he is a “lovable little fuzz ball,” but to his enemies he is the personification of mean-spirited Republicanism that is anti-Black, anti-woman, and anti-environment. Limbaugh set the stage for conservatives like Sean Hannity, Glenn Beck and Laura Ingraham to follow and achieve talk radio dominance for the conservative point of view. Limbaugh provides daily talking points to his listeners in the form of arguments against what he deems liberal policies. His “dittoheads” now form a network of followers throughout America who can be quickly mobilized into opposition.

Liberals tried and failed to match Limbaugh by launching “Air America” and other programming, but their programs have all been ratings failures, leaving the right firmly in command of talk radio content. Talk radio has divided America not so much along party lines as along ideological propensity, liberal and conservative.

Trust in our elected leaders has been greatly diminished over the past few decades. Republican trust was shattered when George H.W. Bush broke his “read my lips” promise not to raise taxes. The wound deepened when Newt Gingrich “flamed out” in 1998. Democrats circled the wagons around Bill Clinton during his impeachment. His impeachment was viewed as criminal by Republicans, while his actions were considered minor, personal issues by Democrats. George W. Bush was elected in a disputed ballot election. From that point forward, to Democrats he was “selected not elected.” Our trust in our elected leaders is at an all time low as evidenced at recent town hall meetings on health care and polling data that puts Congressional approval below 30 percent.

The powerful nightly news programs and newspapers at one time were the primary shapers of opinion in America. No longer. New internet based media and content providers simply beat them to the punch on a daily basis. This has caused a divide in how we get news. Fox News is soaring in the ratings with its “fair and balanced” tagline. In response, other mainstream media has moved left. What is troubling is that stories that are broken by Fox, using good journalism, are not even carried in the mainstream media. Two recent examples are reporting on Obama appointee Van Jones, and Fox’s explosive reporting on ACORN. The New York Times missed the Jones story. When he resigned they explained their lack of coverage, writing, “Our Washington bureau was somewhat short-staffed during the height of the pre-Labor Day vacation.” Charles Gibson, anchor at ABC, when asked about the ACORN scandal laughingly stated, “It’s a mystery to me.”

The way our “two media” view tea parties, town hall protesters and the September 12th March on Washington goes far beyond a mere gap in perception or difference of opinion on what constitutes news. It defines the camps in a divided America

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Webinar: The Future of Rural America

New Geography publisher Delore Zimmerman will host a webinar next week discussing the future of rural america. The webinar is part of the Rural Broadband Initiative organized by Northern Minnesota's Blandin Foundation.

From Blandin:

If you are interested in rural community and economic development trends, this webinar is for you. Delore Zimmerman will provide guidance for rural community leaders about development trends and the steps communities must take to increase their investment attractiveness.

The role that technology plays in increasing economic vitality will be presented both in theory and practice, and Delore will include information about successful regional economic development strategies.

Here's more information and registration for this free webinar.

The IOC rejects Chicago in the First Round

The International Olympic Committee has rejected Chicago in the first round. A delegation of President Obama, Michelle Obama, Oprah, Mayor Daley and others failed to convince the IOC. President Obama made an impassioned plea to the IOC:

"Chicago is a city where the practical and the inspirational exist in harmony; where visionaries who made no small plans rebuilt after a great fire and taught the world to reach new heights," Obama told the IOC's members. "I urge you to choose Chicago."

This fell on deaf ears representing a major defeat for President Obama, Mayor Daley, and powerful Alderman Ed Burke (who was the point man to hand out the money).

Veteran Chicago journalist Ben Joravsky summarized the negative concerning Chicago:

the city hasn't completed a major construction project on time or on budget in recent memory. Pick a project, any project: the reconstruction of Soldier Field, the creation of Millennium Park, the redevelopment of the prime downtown land at Block 37, the expansion of O'Hare airport—they were all finished way over budget if they were finished at all. In Chicago, people know that the question isn't whether city projects will go over budget, but by how much.

Even though Chicago’s City Council voted 49-0 in a guarantee to support the 2016, public support has been on the decline all year. A recent Chicago Tribune poll suggested half the public didn’t want the Olympics. The IOC, undoubtedly, had to be concerned the lack of public support in Chicago when making the final decision.

The grass roots organization No Games Chicago deserves much credit for taking on the Chicago Machine with meager funds. Thomas Tesser of No Games ran an effective campaign in the media against the powerful Chicago interests. The Chicago Sun Times ran this Tesser attack which was quite effective:

The City Council voted to give oversight of the City's Olympic commitments to Ald. Ed Burke, chairman of the Finance Committee. This is the final cruel joke played by the Council on the taxpayers. Burke has become a millionaire doing deals with firms that have business with the city and has collected millions in campaign contributions from firms doing business with the city. Pat Ryan, the chairman of the 2016 effort, contributed $3,000 to Burke. Burke didn't mention that he has ten clients who are major donors to the

Will Chicago come back for another try in 2020? Only time will tell.

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One Homeowner, Two Mortgage Holders, No Lien!

I’ve been following this for a while and writing about it on NewGeography.com since March – not all mortgage-backed securities (MBS) are actually backed by mortgages. So when the homeowner goes into bankruptcy, there’s no way for the MBS holder to prove a lien on the house and the judge awards the bondholder bupkus. In April, a bankruptcy judge in California wrote that as many as one-third of all MBS didn’t have mortgages. No “M” in the “BS,” as I like to put it!

Well, this story just gets better and better. It turns out that even when the MBS has an actual mortgage underneath it, the same mortgage is backing more than one security. Last week I talked to Matt Taibbi, who wrote in Rolling Stone magazine (The Great American Bubble Machine) that 58 percent of an MBS issued by Goldman Sachs had nothing but a list of zip codes where the mortgages should have been. He told me about a lawyer in Florida who has a list of cases where two MBS holders showed up at the bankruptcy proceedings, both claiming that they owned the same mortgage. You can expect to read more on that here as the story develops.

Then it gets worse! Gretchen Morgenson reported in the New York Times on Sunday that there are about 60 million mortgages registered with the Mortgage Electronic Registration System (MERS) to keep track of who owns which loans and which MBS. Problem was that MERS, created by Fannie Mae, Freddie Mac and the mortgage industry, thought they were too good to have to register liens against land at the county level – real estate 101 for any sober realtor. The Kansas Supreme Court has now ruled that changes in mortgage ownership registered with MERS – and not registered with the local land authority – have no legal standing.

Don’t forget – MBS are the junk that Treasury Secretary Geithner wants purchase with tax-payer dollars; and Federal Reserve Chairman Ben Bernanke committed $1.25 trillion of freshly-printed dollars to buy up out of the marketplace this year. Here’s the math made easy – the median house costs $177,000, figure an 80% mortgage, times 60 million mortgages: it looks like $8.5 trillion worth of mortgages could have no real estate underneath them! If the repo man comes knocking on your door, remember these four words: Show Me The Paper!