NewGeography.com blogs

Commuter tax on Suburbanites Working in Indianapolis?

According to the Indianapolis Star, Mayor Greg Ballard of Indianapolis is poised to improve the slowing growing city's competitive position relative to the suburbs.  The Star  noted:

"Indianapolis may be a bigger draw than surrounding areas in attracting young residents, but it’s got a problem."

"Right as they begin raising families, many in their 30s split for the suburbs — taking their growing incomes, and the local taxes they pay, to bedroom communities in Hamilton, Johnson, Hendricks and other counties."

Mayoral Chief of Staff Ryan Vaughn told The Star that initiatives would include a focus on improving schools, and public safety, both of which had much to do with the decades long declines of US central cities. Vaughn told the newspaper that "Ballard wants to focus on strategies to compete more fiercely with suburban counties that draw — and keep — middle- and higher-income residents."

Certainly, the fact that central cities are far safer today than they were when New York's Mayor Rudolph Giuliani implemented his much copied policy of intolerance toward crime in the early 1990s. Even so, Mayor Ballard has it right. Long term, sustainable recovery of cities as livable environments within the metropolitan economy requires both good public schools and an environment in which parents feel that they and their children are safe.

There is a cautionary note however. While the Mayor's office is on the right track in wanting to solve the endemic problems that have so weakened core cities such as Indianapolis, he has yet to take a position on a proposed commuter tax that would be levied against employees who live in suburban counties and work in the city. This would make the suburbs more attractive for employers who are presently located in the city. Further, it would make the suburbs more competitive to businesses that choose the Indianapolis area for relocation. Trying to attract and keep middle income households, while repelling business makes little sense.

North Dakota Leads Population Growth Again

New US Census Bureau state level estimates have just been released. Repeating the pattern similar to that developing since 2010, North Dakota, the District of Columbia, Texas, Utah and Colorado have posted the strongest percentage gains.  North Dakota added 3.1 percent to its population between 2012 and 2013 and 7.6 percent since the 2010 Census. Close behind was the District of Columbia, which added 7.4 percent since 2010, though its growth over the past year has been at a lower 2.1 percent rate.

Texas added the most residents of any other state over the last three years (1.3 million), a fifth more than 22nd ranked California, which is nearly 50 percent larger. Texas has added 5.2 percent to its population since 2010, while California has added 2.9 percent.

Utah grew 5.0 percent, followed closely by Colorado, at 4.8 percent.

Former perennial growth leader Florida continues to recover, placing 6th, with a three year growth rate of 4.0 percent. At its present growth rate, Florida should pass New York by 2014, to become the fourth largest state. South Dakota, Washington, Arizona and Alaska rounded out the top ten.

The slowest growing states were Rhode Island (the only state to lose population since 2010), Maine, West Virginia, Michigan and Vermont. A table is attached with the data.







States Ranked by 2010-2013 Population Change
Rank   2010 Census 2012 2013 Pop. Change 2010-2013 % Change 2012-2013 % Change 2010-2013
1  North Dakota           672,591        701,345        723,393         50,802 3.1% 7.6%
2  District of Columbia           601,723        633,427        646,449         44,726 2.1% 7.4%
3  Texas      25,145,561   26,060,796   26,448,193    1,302,632 1.5% 5.2%
4  Utah        2,763,885     2,854,871     2,900,872       136,987 1.6% 5.0%
5  Colorado        5,029,196     5,189,458     5,268,367       239,171 1.5% 4.8%
6  Florida      18,801,310   19,320,749   19,552,860       751,550 1.2% 4.0%
7  South Dakota           814,180        834,047        844,877         30,697 1.3% 3.8%
8  Washington        6,724,540     6,895,318     6,971,406       246,866 1.1% 3.7%
9  Arizona        6,392,017     6,551,149     6,626,624       234,607 1.2% 3.7%
10  Alaska           710,231        730,307        735,132         24,901 0.7% 3.5%
11  Wyoming           563,626        576,626        582,658         19,032 1.0% 3.4%
12  Nevada        2,700,551     2,754,354     2,790,136         89,585 1.3% 3.3%
13  North Carolina        9,535,483     9,748,364     9,848,060       312,577 1.0% 3.3%
14  Virginia        8,001,024     8,186,628     8,260,405       259,381 0.9% 3.2%
15  South Carolina        4,625,364     4,723,417     4,774,839       149,475 1.1% 3.2%
16  Hawaii        1,360,301     1,390,090     1,404,054         43,753 1.0% 3.2%
17  Georgia        9,687,653     9,915,646     9,992,167       304,514 0.8% 3.1%
18  Delaware           897,934        917,053        925,749         27,815 0.9% 3.1%
19  California      37,253,956   37,999,878   38,332,521    1,078,565 0.9% 2.9%
20  Idaho        1,567,582     1,595,590     1,612,136         44,554 1.0% 2.8%
21  Maryland        5,773,552     5,884,868     5,928,814       155,262 0.7% 2.7%
22  Oklahoma        3,751,351     3,815,780     3,850,568         99,217 0.9% 2.6%
23  Montana           989,415     1,005,494     1,015,165         25,750 1.0% 2.6%
24  Oregon        3,831,074     3,899,801     3,930,065         98,991 0.8% 2.6%
25  Tennessee        6,346,105     6,454,914     6,495,978       149,873 0.6% 2.4%
26  Nebraska        1,826,341     1,855,350     1,868,516         42,175 0.7% 2.3%
27  Massachusetts        6,547,629     6,645,303     6,692,824       145,195 0.7% 2.2%
28  Minnesota        5,303,925     5,379,646     5,420,380       116,455 0.8% 2.2%
29  Louisiana        4,533,372     4,602,134     4,625,470         92,098 0.5% 2.0%
30  Arkansas        2,915,918     2,949,828     2,959,373         43,455 0.3% 1.5%
31  Iowa        3,046,355     3,075,039     3,090,416         44,061 0.5% 1.4%
32  Kansas        2,853,118     2,885,398     2,893,957         40,839 0.3% 1.4%
33  New York      19,378,102   19,576,125   19,651,127       273,025 0.4% 1.4%
34  Indiana        6,483,802     6,537,782     6,570,902         87,100 0.5% 1.3%
35  Kentucky        4,339,367     4,379,730     4,395,295         55,928 0.4% 1.3%
36  New Mexico        2,059,179     2,083,540     2,085,287         26,108 0.1% 1.3%
37  New Jersey        8,791,894     8,867,749     8,899,339       107,445 0.4% 1.2%
38  Alabama        4,779,736     4,817,528     4,833,722         53,986 0.3% 1.1%
39  Wisconsin        5,686,986     5,724,554     5,742,713         55,727 0.3% 1.0%
40  Missouri        5,988,927     6,024,522     6,044,171         55,244 0.3% 0.9%
41  Mississippi        2,967,297     2,986,450     2,991,207         23,910 0.2% 0.8%
42  Connecticut        3,574,097     3,591,765     3,596,080         21,983 0.1% 0.6%
43  Pennsylvania      12,702,379   12,764,475   12,773,801         71,422 0.1% 0.6%
44  New Hampshire        1,316,470     1,321,617     1,323,459           6,989 0.1% 0.5%
45  Illinois      12,830,632   12,868,192   12,882,135         51,503 0.1% 0.4%
46  Ohio      11,536,504   11,553,031   11,570,808         34,304 0.2% 0.3%
47  Vermont           625,741        625,953        626,630              889 0.1% 0.1%
48  Michigan        9,883,640     9,882,519     9,895,622         11,982 0.1% 0.1%
49  West Virginia        1,852,994     1,856,680     1,854,304           1,310 -0.1% 0.1%
50  Maine        1,328,361     1,328,501     1,328,302              (59) 0.0% 0.0%
51  Rhode Island        1,052,567     1,050,304     1,051,511         (1,056) 0.1% -0.1%
 United States  308,745,538 313,873,685 316,128,839    7,383,301 0.7% 2.4%

 

Srirachagate Gives a Window Into California’s Business Climate Problem

I love Huy Fong Foods’ Sriracha sauce as much as the next guy, which is to say a lot. The red hot sauce with the rooster on the bottle has a cult following across the nation. So unsurprisingly it made national news when the city of Irwindale, CA sued to shut down production at the company’s processing plant there. The processing of the hot peppers, done during only a limited time of year because Huy Fong only uses fresh peppers, was alleged to be causing a noxious odor in the town.

This looks like a pretty garden variety dispute between neighbors and an industrial business. Clearly industrial odors can be a problem. I don’t know how long they’ve been in Irwindale, but Sriracha has been around a long time so I’m a bit skeptical something changed just this year. Regardless, I don’t think odor complaints are necessarily evidence of a bad business climate as there could be a legitimate problem.

Then came the state order to stop shipping the product for 30 days. The state of California decided that to reduce the risk of food borne illnesses, the sauce had to sit for 30 days before it can be shipped. Keep in mind, this is for a product that has never had a complaint against it for making someone sick.

How many businesses can afford to halt shipments for a month and survive? Sriracha has a cult following and so they’ll likely overcome it. But many businesses wouldn’t have this luxury. When their customers can’t get product, they lose the business. Indeed, I wouldn’t be surprised if restaurants do turn to alternative suppliers. At a minimum, Huy Fong is going to lose a lot of sales.

Who in their right mind would want to do business in a state like this? And this is far from the worst case. It just so happens that because this is such a popular consumer product, it’s visible. If even these types of companies get shut down, how much more so a firm where this wouldn’t create an avalanche of bad publicity?

Urbanists put way too little thought into business climate, which can sound like such a shady way of saying cut services and taxes. But taxes are often the least part of it. It’s the regulatory apparatus that makes doing business in many places too painful to contemplate. This even affects city-suburb investment patterns. I’ve observed that in many places, the urban core is a flat out terrible place to do business, unless you’re very politically wired up.

This doesn’t usually bother urbanists all that much until a trendy business they like gets affected. For example, an urban farming supply shop in Providence called Cluck got sued when they tried to open. The beautiful and the bearded were outraged and the shop was ultimately approved. But there’s no similar visibility or outrage when a Latino immigrant runs into the red-tape buzzsaw when he tries to open a muffler shop.

If we want to promote investments in our cities and states, we need to be focused on basics like an objective, predictable regulatory framework that operates in the timely fashion and in which arbitrary denials, rule changes, and such are minimized. This is way more important to attracting capital investment than sexier items like streetcar lines.

This piece first appeared at The Urbanophile.

Court Rules Against California High Speed Rail

California Superior Court Judge Michael Kenny ruled against the California High Speed Rail Authority in two decisions announced on November 25. In the first, Judge Kenny ruled that the Business Plan failed to meet the requirements of the voter approved referendum under California Assembly Bill 3034 (2008), in not identifying sufficient capital funding for the first segment. As a result, the Business Plan needs to be redrafted. In the second decision, Judge Kenny declined to issue a conformity ruling that would have paved the way for $8 billion in bonds that had been approved by voters, which were also subject to same Assembly Bill 3034.

Judge Kenny declined to stop construction of the project, which is scheduled to start in the Spring. However, the Authority only has federal funds for that segment, and which would require, in the longer run, matching state funds (which were to have been from the bonds).

According to the San Francisco Chronicle , Kenny's found that the California High Speed Rail Authority "abused its discretion by approving a funding plan that did not comply with the requirements of law."

The Undead Suburban Office Market

The restoration of central city living and working environments has been one of the more important developments in the nation’s metropolitan areas over the past two decades. Regrettably, a good story has been exaggerated out of all proportion in the print, electronic and online media.  

Exaggerating Core Population Increases: The rise of population in urban cores has been important, but it has too often been used to suggest the apparent, but fallacious opposite, suburban decline. In fact, the suburbs are hardly in decline, with 93.5 percent of major metropolitan area growth outside a 10 mile radius from city hall between the 2000 and 2010 censuses (See: Flocking Elsewhere: The Downtown Growth Story).

Exaggerating CBD Office Space Gains: Similar misinformation had been circulating about office space outside the nation’s CBDs (central business districts, or “downtowns”). Commercial real estate information company Costar’s Randyl Drummer recently described suburbia’s improving fortunes (See: Once Left for Dead, Suburban Office Making a Comeback).

“Some analysts wrote the obituary of the suburban office campus as downsizing companies shed millions of square feet, in many cases consolidating into buildings closer to public transit in urban centers.” 

It’s just not happening, according to Costar research:

“Overall, the suburbs have garnered more than their usual share of leasing demand over the past two years, according to an analysis by CoStar real estate economists. Since the beginning of 2012, suburban markets have accounted for a whopping 87% of office demand -- which is 13% more than their 'fair share' based on the total market size compared with CBD office markets, according to data presented at CoStar’s recent third-quarter office review and forecast.” 

Indeed, CBD leasing, at 13 percent of the total, is a full 50 percent below their current share of inventory (Figure 1). As of mid-2013, the suburbs accounted for nearly three quarters of the nation’s office inventory (Figure 2).

Costar cites strong suburban development in Raleigh’s Research Triangle, and further notes that:

A diverse set of markets that include Sacramento, San Jose, Austin, Kansas City and Charlotte have posted some of the strongest net office absorption among suburban markets.

This is despite the glowing publicity being given to core area development, especially in places like Charlotte and Austin.

The reality is that the monumental CBD towers dominating metropolitan skylines do not indicate downtown dominance. In fact, throughout the high income world, most metropolitan employment is outside CBDs. In the United States, typically 90 percent of employment is outside the CBDs. The suburban employment (outside the CBD) share is a bit smaller in Western Europe, Canada and Australia, but still averages approximately 80 percent or more.

The good news is that neither suburbia nor downtown is dead.