Civic Choices: The Quality vs. Quantity Dilemma

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Advocates on opposite sides of urban debates often spend a great deal of time talking past each other. That's because there's a certain Mars-Venus split in how they see the world. In effect, there are two very different and competing visions of what an American city should be in the 21st century, the “high quality” model and the “high quantity” model One side has focused on growing vertically, the other horizontally. One group wants to be Neimans or a trendy boutique and ignores the mass market. The other focuses more on the middle class, like a Costco and Target. It should come as no surprise that there's seldom agreement between the two.

America's “High Quality” cities are the traditional large tier-one metro areas, but also include smaller cities like Seattle and Portland. They stress high wage activities such as finance, high tech, and luxury consumption. In this model, traditional growth in areas like population, jobs, or the size of the urban footprint are less important and even seen as a negative. Understandably so. It's difficult to see, for example, how another million people living in the Bay Area would improve the fortunes of companies like Google or Facebook, or another million Angelenos helping Hollywood.

Indeed many residents would oppose such growth due to increased traffic, infrastructure spending, and other of the challenges associated with it. In effect, the anti-growth agenda that dominates the culture of many of these places is not based simply on environmental concern, but the economic interests of their dominant regional elites. These places have already achieved the size to support their urban amenities.

Another reason not to press the growth button: on measures of urban quality such as economic output and income, most are clearly doing very well. Most of these places generate GDP per capita far above the US metro average of $41,737. With the exception of Chicago, they are also growing at a pace that beats the US average. These cities also boast incomes – although often a cost of living – generally well above average, though have been mixed in performance on that metric over the last decade.









“High Quality” Cities
  Quality Indicators Quantity Indicators
MSA 2008 Real GDP per Capita Percent Change in GDP per Capita, 2001-2008 2008 Per Capita Income as Pct of US Average PCI Change vs. US Average 2009 Pop. Pop. Pct. Change 2000-2009 2009 Jobs Percent Change in Jobs 2000-2009
Boston 57916 11.50% 137 -1 4589 4.20% 2408.1 -5.10%
Chicago 45463 5.50% 113 -4 9581 5.10% 4291 -6.10%
Los Angeles 47214 16.90% 111 6 12875 3.80% 5200.9 -4.80%
Miami 40447 15.60% 107 2 5547 10.40% 2201.9 2.10%
New York 57097 17.60% 137 6 19070 3.90% 8304.5 -1.10%
Portland 47811 22.40% 99 -9 2242 15.80% 972.4 -0.10%
San Francisco 60873 10.50% 156 -8 4318 4.40% 1908.8 -10.20%
San Jose 82880 20.90% 146 -35 1840 5.80% 855.6 -18.10%
Seattle 55982 11.30% 126 -1 3408 11.60% 1668.7 1.30%
Washington 61834 15.20% 141 5 5476 13.60% 2950.2 10.10%




But if these areas are doing well, for those who can afford to live them at least, they tend to do poorly on quantity measures. Many of them have anemic population growth, albeit from a large base. And virtually all of them actually destroyed jobs in the last decade. The ravenous maw of Washington, DC of course, being the great exception.

This mixed performance isn't surprising. High end activities are by definition exclusive. The specialized environments they require, and the high value and wealth they create, create expensive places to do business. Unless you have to be in one of these places, such as to take advantage of industry clusters or specialized labor markets, it doesn't make sense to pay the price to do so. Clearly, mass employers have voted with their feet.

Four data points from Silicon Valley sum it up. Between 2001 and 2008, the San Jose MSA’s: a) real GDP per capita increased by 20.8% b) total real GDP increased by 25.9%, c) real GDP per job increased by 39.6%, BUT d) total employment declined by 9.4%. That's the high quality city dynamic in a nutshell.

America's “High Quantity” cities follow the opposite pattern. They might have their occasional claims to fame, but few feature the high end business or glamorous lifestyles of America's premier metros – even though some have spent big bucks on vanity projects to polish their reputations. Rather, what these cities do well is provide quality workaday environments for the middle class. And create jobs – lots of jobs, the Great Recession notwithstanding.

This is again backed up by the numbers. These cities fare well on quantity measures such as population growth, where they crush the US average of 8.8%, and job growth, where several of them actually managed to post double-digit gains during the generally anemic 2000s.









“High Quantity” Cities
  Quality Indicators Quantity Indicators
MSA 2008 Real GDP per Capita Percent Change in GDP per Capita, 2001-2008 2008 Per Capita Income as Pct of US Average PCI Change vs. US Average 2009 Pop. 2009 Jobs Percent Change in Jobs 2000-2009
Pop. Pct.
  Change
  2000-2009
Atlanta 43020 -6.00% 95 -16 5475 27.90% 2290.3 0.50%
Austin 43819 8.50% 93 -16 1705 34.70% 758.2 12.70%
Charlotte 59191 0.70% 99 -11 1746 30.20% 810.2 5.70%
Dallas 50067 5.10% 104 -9 6448 24.10% 2864.3 3.70%
Houston 49182 3.60% 114 1 5867 23.80% 2539 12.60%
Nashville 43891 9.90% 99 -5 1582 20.10% 723.7 3.30%
Orlando 42353 13.30% 89 -3 2082 25.70% 1009.5 10.60%
Phoenix 38009 2.80% 90 -5 4364 33.10% 1719.6 8.90%
Raleigh 41681 -3.70% 99 -16 1126 40.00% 499.7 14.10%
Salt Lake City 46453 9.30% 95 0 1130 16.20% 610.8 8.00%




But all is not well with these cities just because they are adding jobs and people. Their GDP per capita is generally above average, but is growing slowly. Their per capita income may be lower than some, but their cost of living is rock bottom, enabling a high quality of life. But worryingly, those incomes are often not keeping pace with the US average.

These two dynamics reflect what has happened throughout America, from retail to media, where there has been a great “hour glassing” effect in the marketplace. A small but significant high end is thriving, almost everywhere but particularly in the quality oriented cities. The low end is also doing well, particularly in the quantity oriented cities. Neimans and Wal-Mart, indeed.

In the future, both models face big challenges. The high quality cities continue to become more exclusive. The problem with getting high end on a smaller base is that your market is asymptotically zero. And as high quality talent gets squeezed out – by being not quite elite enough, for lifestyle, affordability or other reasons – the quantity cities start to poach great people and start stealing even more market share. It's always easier to climb up the value chain than go down it. At some point, these cities could run out of room to shimmy up the flag pole.

Some high quantity cities may face even greater risks. America's great elite metropolises have proven they can stand the test of time. New York, Boston, Chicago, San Francisco – all have made it through many economic cycles, fundamental transformations, and even great physical disasters. Few of the high growth cities have proven they've got staying power after exhausting their first great growth phase. Detroit, Cleveland, and other Rust Belt burgs were yesterday's Sun Belt boomtowns. They serve as a cautionary tale about the risks of not having a quality calling card to fall back on when your allure as a growth story fades

Partisans of these two models need to learn how to learn from each other. The high quality cities need to learn again the lessons of their youth about the importance of growth. And the high quantity cities need to create environments that will sustain them after they've lost greenfield advantages. An hourglass America is not one most of us want to live in for the long term. Maintaining a stable commonwealth for the long term means striving again to restore some new 21st century version of our lost middle ground.

Data Sources:
Real GDP per Capita (in 2001 chained dollars) is from the US Bureau of Economic Analysis
Per Capita Personal Income as a percentage of the US average is from the US Bureau of Economic Analysis.
Population is the from the annual mid-year estimates from the US Bureau of the Census.
Total jobs from the US Bureau of Labor Statistics Current Employment Statistics program.
Data changes are calculated.

Aaron M. Renn is an independent writer on urban affairs based in the Midwest. His writings appear at The Urbanophile.

Photo by Werner Kunz (werkunz1)



















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Infrastructure Under Growing Stress

Obviously, problems will arise if a region has already achieved the size to support its urban amenities. For example, we can see pressure bulding up on transport, education, medical & housing in cities where population growth has outpaced infrastructure development.

GSK,
Yuan Ching EC

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Thoughts on Denver?

Interesting and well-positioned comparison Aaron, thanks. I too would consider Austin in the "high-quality" group. Any thoughts on Denver, which has served as one of America's most intriguing urban canvases, especially from a redevelopment perspective, for the last 15 years or more? Like the high-quality cities, the city itself seems not to have suffered too much through the recent economic downturn, but I'm not sure if that can be said for all of the metro area (the wider suburbs, I mean); and Colorado Springs down the road a bit has suffered considerably.

Thanks,
Simmons

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This article hints at but

This article hints at but fails to address a few critiques:

- In "quantity" cities, quality of life for the middle class may not be good. Hours spent commuting, stress from traffic, etc. Houston is held up as a poster child for the pro-sprawl camp, but the reality is that a) many households spend large amounts of money on trasnportation, even if they pay less for housing; and b) although the "median" housing price is low, many parts of Houston look like the third world as far as housing, schools, etc. are concerned, and are in need of help. Even the middle class and poor benefit from quality of life!

Indeed, many cities from Kansas City to Omaha are seeking to improve quality of life, revitalize downtowns and riverfronts, build trails, etc., creating attractive second-tier metros. Other metros afflicted with crime, poor education and income, and consequently greater suburban sprawl (both black and white middle classes are fleeing some cities) are at a distinct disadvantage.

- Many "quality" cities are indeed pushing out the middle class (exceptions perhaps being Portland, Minneapolis, Pittsburgh ...). Growth is not 'needed' simply to grow the economy, as the author implies, but rather because the U.S. is growing at 1 million people a year from births and immigration, plus people are moving from less desirable or economically depressed places in the U.S. to more successful places. It becomes a social issue that cities with high quality of life should not seek to become high-income "boutiques." Articially stopping all growth will squeeze people out of housing. These cities are having vigorous debates between NIMBY's (who oppose not only horizontal growth, but also infill and vertical growth) and those who recognize the need for smart growth. State legislation in Oregon seems to do a good balance by requiring a 20-year supply of land, while letting metro regions (rather than individual cities) decide how compactly they will grow.

"They stress high wage

"They stress high wage activities such as finance, high tech, and luxury consumption. In this model, traditional growth in areas like population, jobs, or the size of the urban footprint are less important and even seen as a negative."

That describes Austin to a T, at least compared to its background.

Philadelphia

Interesting way to mash up two different growth strategies. Though I know my beleaguered but beautiful Philadelphia is not high on anyone's list, did any trends appear in your data? I'm thinking we are high quantity since our GDP growth trends don't seem to support high quality.

Any thoughts?

Tables question

I'm really confused by the tables.

For example, assuming that "PCI Change vs. US Average" indicates how the growth of per-capita income in the given metro relates to the growth of per-capital income in the US as a whole, then how can San Francisco have the second-highest increase in per-capita income, yet have the worst in comparison to the US as a whole? Either the descriptions on the columns are wrong, or the data is wrong, or they mean something entirely different than they seem to.

Can you clarify (or fix, if that's the case) that?

The Bureau of Economic

The Bureau of Economic Analysis publishes various tables of personal income. One is per capita personal income. Another is per capita personal income as a percent of the US average. You can have a very high per capita personal income, and yet lose ground as a percentage of the US over time.

For San Francisco, here are the numbers:

Per Capita Income
2000: $49,652
2008: $62,593
Percent Change (26.1%)

Per Capita Income as a Percent of the US Average
2000: 164%
2008: 156%
Total Change: 8 percentage points

One potentially confusing matter. The PCI change is a percent, the PCI change as a percent of the US is in percentage points (subtraction)

To group Austin with Atlanta

To group Austin with Atlanta on the quantity side shows you know very little about Austin. Austin is as close to quality as you get in Texas; for quantity you want Houston, Dallas, or San Antonio.

On what metrics would you

On what metrics would you judge Austin as "high quality"? I measured it on GDP per capita, personal income per capita, and the change in those values.

I don't understand

how Washington, DC can be anything other than zero for GDP per capita.
They produce nothing.

Dave Barnes
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D.C. metro area

The numbers are for MSAs/metro areas, not exclusively for the cities proper. So D.C. includes the surrounding MD, VA counties that do produce.

excellent piece

I really like this piece, Aaron, because you are so even-handed. It gets frustrating to read Kotkin, or even worse, Wendell Cox, because they are so unabashadley "pro-quantity," and pass negative judgement against "pro-quality" cities. You point out the virtues and drawbacks of both.

In short, this is an excellent and concise primer on the state of urban America today.

Thanks, Jay

Thanks, Jay