Los Angeles

Observations on Urbanization: 1920-2010

Wendell Cox — Fri, 03 May 2013 09:22:28 -0400

Ninety years have made a world of difference in the United States. Between 1920 and 2010, the nation's population nearly tripled. But that was not the most important development. Two other trends played a huge role in shaping the United States we know today. The first trend was increasing urbanization, a virtually universal trend, but one which occurred earlier in the high income countries, while the other was a rapidly falling average household size.

National Trends

In 1920, the United States had just crossed the same 50 percent urbanization threshold that China recently crossed. By 2000, the United States was 81 percent urban.

The second trend was even more significant. Average household size has fallen from 4.6 in 1920 to 2.6 by 2000, where it remained in the 2010 census. The result is that there are now 7.7 times as many households (Note 1) in urban areas as there were in 1920 (Figure 1).

Urban Area Trends

In the 1960s, the Urban Land Institute sponsored research by Jerome P. Pickard (Note 2) to replicate urban area population and density data going back to 1920, using the generalized criteria that had been developed by the Census Bureau for the 1950 and 1960 censuses.

According to Pickard's work, there were five urban areas in the United States with more than 1 million population in 1920. Unfortunately, the publication did not include Detroit, which undoubtedly had an urban area population of more than 1 million in 1920 (Note 3). In addition, Pickard found nine urban areas with populations between 500,000 and 1 million.

By contrast, today there are 42 urban areas with more than 1 million population and 38 with between 500,000 and 1 million population.

In 1920, the five major urban areas for which there is data had an overall population density of 8,400 per square mile (3,700 per square kilometer). This figure dropped continually, except for between 1940 and 1950 as to its present level (Figure 2) of approximately 3,100 per square mile (1,200 per square kilometer).

However, caution is required, because before 2000, urban areas generally contained only complete municipalities. Two of the nation's major urban areas had substantial rural (greenfield) expenses inside their core cities in 1920. This was most pronounced in the core city of New York, where most of Queens and most of Staten Island were undeveloped. Between 1920 and 2010, these two boroughs added more than 1.8 million population, most of which was on greenfield land, rather than the densification of the existing urban neighborhoods. This was in effect, suburban expansion within the city of New York. The same dynamics occurred, to a lesser degree in core cities such as Philadelphia and Los Angeles.

Pickard finds a population density of 10,600 per square mile (4,100 per square kilometer) for the New York urban area in 1920. It had fallen by half to 5,300 per square mile (2,050 per square kilometer) by 2010.

Core City and Suburban Growth

Over the period, the bulk of the population growth (92 percent) was in the suburbs (Figure 3). Even that figure, however, understates the extent of suburban growth. As was above, the inclusion of rural areas as urban in municipalities appears to have been a major driver of the population increase in the city of New York, which added 2.4 million people between 1920 and 2010. Among the other five major urban areas, which includes an estimate for Detroit (Note 2), the core municipalities lost population in each case over the 90 years, though they all continued to grow at least until 1950.

All of the six major urban areas in 1920 were in the Northeast or the Midwest. The fastest growing urban area from 1920 to 2010 among the six was Detroit, despite the huge losses of its core municipality (Figure 4). No municipality in the world of Detroit's 1950 size (1.85 million) has lost so much of its population (1.1 million) in all of history. Yet, the Detroit urban area is estimated to have added approximately 2.6 million people to its urban area population since 1920, for an approximately 240 percent increase in population. The Detroit urban area peaked in 2000 at 160,000 higher than in 2010. The second fastest growing larger urban area was Chicago, at approximately 175 percent, while Philadelphia gained 146 percent and Boston 142 percent.

Urban Areas with 500,000 to 1,000,000 Population in 1920

The nine urban areas with 500,000 to 1,000,000 population in 1920 had a much lower population density, at 7,200 per square mile (2,800 per square kilometer). This figure, however, is artificially low because of the Los Angeles urban area's extremely small 1920 density (1,700 per square mile or 650 per square kilometer). Just a few years before the 1920 census, Los Angeles had annexed the San Fernando Valley and other largely rural areas. As a result the city quadrupled in land area. Again, the inclusion of rural areas in the core city rendered Pickard's urban area (and that of the Census Bureau to at least in 1950) unreflective of actual urban densities in Los Angeles.

Milwaukee: More Dense than New York

The Milwaukee urban area, with a population of 504,000 had the highest density in the nation, at 10,900 per square mile (4,200 per square kilometer), which was the last time before 1990 that the New York urban area was not the most dense major urban area. In 1990, the Los Angeles area became more dense than the New York urban area. By 2000, both the San Francisco and the all-suburban San Jose urban area had also passed New York,

Falling Densities and Causes

The population density declines were substantial over the period, at from 63 percent to 70 percent. At the same time, falling household sizes created the requirement for more houses and household densities fell at a slower rate, 37 percent in the largest areas and 50 percent in the smaller metropolitan areas. There were other factors as well, such as more efficient manufacturing and commercial operations, that took more space, urban planning requirements in some metropolitan areas (such as Boston and Atlanta) that required larger than market building lots (large lot zoning)and the general preference for more land and space on the part of consumers. The US has not been alone in this. The trend toward lower densities has been virtually universal, from Mumbai and Manila to Moscow and Milan.

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.

----

Note 1: Assumes the same average household size for urban and rural areas.

Note 2: Jerome P. Pickard, Dimensions of Metropolitanism, Urban Land Institute, 1967.

Note 3: In 1920, the municipality of Detroit had a population of 993,000 and a population density of 12,700 per square mile (4,900 per square kilometer). Wayne County, which includes Detroit, had a population of 1,170,000. The land area of the county was approximately nine times that of the municipality, nearly all of it rural. On that basis it is estimated that the urban area would have had no more than 1,100,000 residents.

Photo: New York in the 1920s (Singer Building in foreground, Woolworth Building in the background). Photograph by the U.S. Census Bureau, Public Information Office (PIO).

Disney Stops Thinking About Tomorrow

Zohar Liebermensch — Sun, 03 Mar 2013 02:21:16 -0500

Walt Disney's first version of Tomorrowland came to life in 1955. The attractions were geared towards the space age, and towards the future of transportation that Disney believed scientists of his time were about to create. The imaginary world was intended to “give you an opportunity to participate in adventures that are a living blueprint of our future.” When Tomorrowland opened, its showpiece was the TWA Moonliner exhibit, which contained the Rocket to The Moon; later, its Flight to the Moon gave another perspective. Once Neil Armstrong walked on the moon, these Disney attractions were no longer science fiction.

Accommodating the reality of moon flights, the Flight to the Moon was updated to Mission to Mars. Only 14 years after the park opened, the space age that Walt Disney had imagined was becoming a reality. Before President Eisenhower had signed the Interstate Highway legislation, Autopia allowed riders to experience Disney’s interpretation of what the system would one day be like. Autopia accurately envisioned the future of America's soon to be multilane limited-access highways.

Another addition to Tomorrowland was the Monsanto House of the Future, added in 1957. Items such as picture phones, television remote controls and a microwave oven familiarized many visitors with these ideas for the first time. Tomorrowland continued to prove itself as an innovative predictor of the near future.

Downfall of the Futuristic Tomorrowland - Unlike its predecessor, Mission to Mars wasn't replaced after becoming a reality. Instead, Red Rockett’s Pizza Port, a space themed pizza parlor, took its spot in the 1998 refurbishment. Disney didn’t have enough confidence in a real mission to Mars to update or revamp the ride. Instead of updating it, Disney was essentially saying that a successful human mission to mars was not a fathomable idea.

At the same time, Disneyland was cutting back on refurbishment in the Carousel of Progress. This attraction took viewers on a journey through the eyes of a “typical” American family exploring life through the dawn of electricity and other technological advancements. Periodic updates were necessary to keep up with the times of its audience. The first version lasted three years, the second six years, and then two years, ten years, and nine years respectively. The attraction has been periodically closed, but hasn’t been significantly modified in 18 years. This increased changeless period waves another flag of concern, as it demonstrates Disney's view that there has been no noteworthy progress in almost two decades.

Rather than foreshadowing, like the early Tomorrowland did, current Tomorrowland is opening attractions like Buzz Lightyear Astro Blasters, where passengers shoot targets modeled from Toy Story or a submarine voyage where passengers go “under the sea” to spend time with characters from Finding Nemo. Concentrating on movies expresses that Disneyland has no expectations to focus on the future. The most recent display of this is the sequel of the Star Wars themed motion simulator, Star Tours: The Adventures Continue. Instead of replacing the out of date ride with a new, innovative idea, the same idea from 1987 with newer graphics sufficed. While in the past a bright vision of the future both inspired and guided Disney’s early Tomorrowland, today’s innovative standstill forces the Disney company to draw the focus off the future’s possibilities and gear the theme park towards animations.

Disney Movies - Select movies demonstrate Disney’s continual hope in the space era. The first Zenon movie was set in the year 2049 and took place in the orbiting space station where Zenon’s family resided. Even though this movie was released in 1999, much after Walt Disney’s death, his visions of a space era are directly displayed. Since Zenon, Disney has released another movie with humans residing in an orbiting space station. In 2008’s Wall-E, the humans were forced to evacuate to space in 2105 when the earth became unsafe for human life.

While Disney is keeping their space era predictions, they are continuously projecting them further into the future. Originally, 1955’s Tomorrowland envisioned space development for 30 years in the future. 1999’s Zenon gave the orbiting space home 50 years to become reality, and 2008’s Wall-E gave nearly 100 years until humans began to live in space. This growing gap shows that although the idea of space development stays near to Disney’s heart, the company's pessimism about the technological advancements of society certainly exists.

Justified Pessimism? - Disney’s pessimistic attitude towards the rate of current advancement comes from a place of truth. New, revolutionary ideas were coming out on a consistent basis in the mid 1900s during Walt Disney’s generation, but near the late 1900s progress as a whole slowed down. Rather than innovating new and fresh ideas, the current generation fine-tunes the revolutionary ideas of their predecessors.

A kitchen today won’t differ too grandly from one in 1980. Although most appliances may be higher quality, they were still there in both eras. Comparing kitchens from 1980 and 1940 shows vast differences. Not only did appliances get sleeker, but you will also not find a microwave, a food processor nor Tupperware anywhere. These are only a few of the many kitchen changes that came to life in that time period. The kitchen only represents a small sector of technology and advancement, but the trend it represents stands.

The oldest members of today’s world lived through the invention or development of the airplane, skyscraper, suspension bridge, radio, television, antibiotics, atomic bombs, and interstate highways. The mid-life individuals went through the first moon landing, the popularization of personal computers and invention of search engines, biotechnology, and cellphones. Participants of the younger generation have seen much up- tuning of these devices, but are greatly lacking in brand new revolutionary inventions.

Facebook and the iPhone may be classified as the monumental inventions of the past decade. While they improved the social networking and convenience of society, can they really be compared the monumentality of the first airplane or personal computer? Previous milestones are being expanded and fine-tuned. Rather than thinking of new revolutionary discoveries, the current generation attempts to fix the old ones. Technology seems to be hitting a very worrisome plateau.

Walt Disney was justified in the optimism he displayed with 1955’s version of Tomorrowland. He belonged to the generation of innovation, and naturally expected society to continue flourishing. He didn’t foresee the technological plateau blocking Tomorrowland from becoming reality. Currently, Disneyland is trying to divert notice from the lack of change by adding more animated features to Tomorrowland. The new rides help visitors feel as if Tomorrowland is still continually changing, and that progression hasn’t slowed down.

However, it’s only a matter of time until the whole sector becomes a Disney themed montage. If technological development continues at this rate, Tomorrowland may as well combine with Fantasyland as a childish delusion from the past. As displayed by the modern developments of both Disney movies and Disneyland, the once flourishing future that Disney envisioned for the world is coming to a rapid halt.

Flickr photo by jnocca93:
Entrance to Tomorrowland at Disneyland, California.

Zohar Liebermensch is a sophomore studying business administration emphasizing in economics with minors in computational sciences and the university honors program at Chapman University. Born in Israel, she moved to northern California when she was a toddler and has been enjoying Orange county for the past two years. She is vice president of the Chapman chapter of the National Society of Leadership and Success as well as a member of the university's soccer team.

The Dispersion of Financial Sector Jobs

Wendell Cox — Tue, 08 Jan 2013 00:10:26 -0500

When you think of financial services, one usually looks at iconic downtowns such as New York’s Wall Street, Montgomery Street San Francisco's or Chicago’s LaSalle Street. But since the great financial crisis of 2007-8 the banking business is on the move elsewhere. Over the last five years (2007 to 2012), even as the total number of financial jobs has declined modestly, they have been growing elsewhere.

This is the conclusion of an analysis of data supplied by Moody's Analytics for an article in The Wall Street Journal ("Meet Them in St. Louis: Bankers Move). This analysis adjusts the data provided by Moody's Analytics, combining portions of metropolitan areas (called "metropolitan divisions")into their complete metropolitan areas (See Note 1).

The financial sector tends to be comparatively concentrated. In 2007, approximately one-third of the financial sector jobs reported by Moody's were located in the New York metropolitan area. New York is the home of one of world's largest financial sector hubs, Manhattan.

New York: Financial Sector Employment Losses and Dispersion

However, the New York metropolitan area and the other four largest concentrations of financial sector jobs – New York, Chicago, Boston, Los Angeles and San Francisco – accounted all of the net job losses over the period. Between 2007 and 2012, the five largest financial sector markets, lost 39,000 jobs. Outside these five metropolitan areas, the number of financial sector jobs increased by 12,000 (Figure 1).

The extent of this dispersal away from the five most concentrated markets is illustrated by the decline in their financial sector jobs compared to the other metropolitan areas. In 2007, the five most concentrated markets had 32,000 more financial sector jobs than the other metropolitan areas. By 2012, the other metropolitan areas achieved a total number of 19,000 more financial sector jobs than the five most concentrated markets (Figure 2).

The dispersion of financial sector jobs is evident even within the New York area itself. The central metropolitan division of the New York metropolitan area (New York-White Plains-Wayne), which includes Manhattan, lost 19,000. However, the balance of the New York metropolitan area experienced a 2500 increase in financial sector jobs, resulting in a overall loss of 16,500 jobs in the metropolitan area

Not all of the New York metropolitan area jobs were lost to places like Dallas-Fort Worth and Des Moines. The balance of the New York combined statistical area (formerly called consolidated metropolitan statistical areas) added 2000 jobs, principally in the Bridgeport (Fairfield County, Connecticut) metropolitan area (Figure 3). Thus, while the core of the New York metropolitan area was losing 9 percent of its financial sector jobs, the more suburban balance of the combined area gained 11 percent, even as the total region lost employment.

California: Substantial Financial Sector Employment Losses

However, New York's percentage losses paled by comparison to those in the Los Angeles (Los Angeles and Riverside-San Bernardino) and San Francisco combined (San Francisco and San Jose) statistical areas. The losses in the Los Angeles area were 21 percent, while in the San Francisco area the losses reached 17 percent. The losses in Los Angeles and San Francisco regions exceeded that of the New York combined statistical area, which had three times as many financial sector jobs in 2007. San Diego also experienced a 5percent job loss, while Sacramento's loss was miniscule. Overall, California lost 17 percent of its financial sector jobs between 2007 and 2012.

Texas: Gaining Financial Sector Employment

The large metropolitan areas of Texas and did better. Dallas-Fort Worth, Houston, San Antonio and Austin added 5400 financial sector jobs, an increase of 14 percent (Figure 4).

Metropolitan Area Performance

St. Louis added 5,600 financial sector jobs, the most of any single metropolitan area (Figure 5). The Washington area added 4,400, followed by Phoenix (3,900), Dallas-Fort Worth (2,600) and Bridgeport (2,000). New York, as mentioned above, lost 16,500 financial sector jobs, the most of any individual metropolitan area (Figure 6). Boston had the second largest loss (8,300), followed by Los Angeles (6,800), Miami (4,800) and San Francisco (4,400).

The metropolitan areas with the largest percentage gains include net job leader St. Louis which grew 85 percent (Figure 7). Phoenix gained 36 percent, Washington 28 percent, Tampa-St. Petersburg 18 percent and Dallas-Fort Worth 14 percent. Des Moines, which had only 1,400 financial sector jobs in 2007 had the largest percentage gain, at 96 percent.

Miami had the largest loss, at 27 percent (Figure 8). Charlotte, having risen to prominence with its large banks may have been in the wrong place at the wrong time, losing 24 percent of its financial sector jobs, followed by Boston and Los Angeles (19 percent) and San Francisco (17 percent).

Dispersing to Lower Density Areas

The data is not sufficiently precise to distinguish between central business district, urban core and suburban trends. However, the metropolitan areas with high density historical core municipalities (above 10,000 persons per square mile or 4,000 per square kilometer in 2010), suffered a loss of 35,000 financial sector jobs between 2007 and 2012, more than the total national metropolitan loss of 27,000. The six high density historical core municipalities (Note 2) include New York, Chicago, Philadelphia Boston, San Francisco and Miami all suffered significant losses while the metropolitan areas with less dense cores gained 9,000 financial sector jobs (Figure 9).

Further, the losses were concentrated in the metropolitan areas with the four most dense major urban areas, Los Angeles, San Francisco, San Jose and New York and the losses in these areas exceeded the overall industry loss. This movement away from density reinforces the often misconstrued conclusions of the Santa Fe Institute Urban Scaling research to the effect that metropolitan area size was a principal determinant of productivity, however not urban density (see: Density is Not the Issue: The Urban Scaling Research). Larger, less dense regions did far better --- for example Houston, Dallas and St. Louis --- than their more dense rivals.

Dispersion to Housing Affordability

There is also a strong trend of financial sector job gains where housing is more affordable and job losses where housing is less affordable. This is indicated by the median multiple (median house price divided by gross median household income) data from the 8th Annual Demographia International Housing Affordability Survey (Table below).

Demographia International Housing Affordability Survey Housing Affordability Rating Categories
Rating	Median Multiple
Severely Unaffordable	5.1 & Over
Seriously Unaffordable	4.1 to 5.0
Moderately Unaffordable	3.1 to 4.0
Affordable	3.0 & Under

Metropolitan areas rated as affordable (median multiple 3.0 or lower) gained 9,300 financial sector jobs between 2007 and 2012. Metropolitan areas rated moderately unaffordable (median multiple 3.1 to 4.0) gained 2,600 jobs. The metropolitan areas with the most unaffordable housing suffered a net loss in financial sector jobs. Seriously unaffordable (median multiple 4.1 to 5.0) metropolitan areas lost 3,700 jobs. Metropolitan areas rated seriously unaffordable (median multiple 5.1 or higher) lost 35,000 jobs. This is more than the overall loss reported in the data of 27,000 (Figure 10).

Financial Sector Jobs: Reflecting Urban Dispersion

The dispersion of financial sector jobs away from concentrated areas may come as a surprise, given the close association that the industry has with the largest central business districts. Yet, the trend mirrors the more general, but overwhelming trends of dispersion indicated over the last decade in both population and domestic migration.

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.”

------

Note 1: The data used in this analysis is limited to that provided in The Wall Street Journal article. Data was provided for only is only for a part of the Boston metropolitan area (the Boston-Quincy metropolitan division).

Note 2: In 1940, at least 15 of the historical core municipalities had population densities exceeding 10,000 per square mile (4,000 per square kilometer)

Photo by Flickr user IABoomerFlickr

California's Poor Long-term Prognosis

Joel Kotkin — Mon, 07 Jan 2013 00:38:20 -0500

California's current economic recovery may be uneven at best, but things certainly look better now than the pits-of-hell period in 2008. A cautiously optimistic New York Times piece proclaimed "signs of resurgence," and there was even heady talk in Sacramento of eventually sighting that rarest of birds, a state budget surplus.

Yet such outbreaks of optimism should not blind us to the bigger issue: the long-term secular decline of the state's economy. Whether you believe that the new higher taxes may now slow our growth, as my colleagues at Chapman University now believe, or right the fiscal ship, as is widely hoped in the blue California press, it's more important to look more at the long-term trends, and assess where we stand compared with our domestic competitors.

California, despite its enormous natural and human resources, is losing ground in most basic areas. Its unemployment rate, a still-horrendous 10 percent, stands as the nation's third-highest. This is not a new development or the product of a run of bad luck. The state's unemployment rate has been consistently above the national average for almost all of the past 20 years. Most interior counties, including the Inland Empire and the Central Valley, now suffer unemployment rates well into the double digits, with some approaching 15 percent.

Overall, the state is still down a half-million jobs during the recession. California's losses since its employment peak have been considerably above the national average, some 3 percent, far worse than the 2.3 percent erosion seen nationwide. Despite the modest recent uptick, the California Budget Project projects the state would need to add twice as many jobs per month to fully recover from the recession by the summer of 2015.

Other long-term trends confirm the state's secular decline in competitiveness. Take per capita income – a decent indicator of relative progress. In 1945, journalist John Gunther, writing his famous "Inside USA," gushingly described California "the most spectacular and most diversified American state ... so ripe, golden." At the time, the state boasted the third-highest per capita income in the nation. As late as 1980, the state still ranked fourth. Today, despite Silicon Valley's money machine, California has fallen to 12th and appears headed for further decline.

Despite hopes in Sacramento and in the media, high-tech alone can not bail out the state. The much hoped-for windfall around the time of the Facebook IPO has failed to produce the expected fiscal bonanza for the state treasury. Silicon Valley famously gets nearly half the country's venture capital, but its impact on the rest of the state has diminished. In the 1980s and 1990s, tech booms stretched prosperity throughout its surrounding regions and as far as Sacramento. Now it barely covers half the Bay Area; unemployment in Oakland remains at around 13 percent and one child in three lives in poverty.

Part of this reflects the shift from an industrial high-tech focus to one fixated on software and social media. Given the extraordinary ease with which support and even research operations can be moved, once companies start to grow, they easily head to India, China or over to lower-cost locales like Utah or Texas. "Sure, we are getting half of all the venture capital investment but in the end we have relatively small research and development firms only," observes Jack Stewart, president of the California Technology and Manufacturing Association. "Once they have a product or go to scale, the firms move elsewhere. The other states end up getting most of the middle-class jobs."

This can be seen in the long-term trends in STEM (science, technology, engineering, mathematics-related) jobs. Over the past decade, even with the current bubble, Silicon Valley's STEM employment, according to estimates by Economic Modeling Specialists Inc., has increased by a mere 4 percent over the past decade. In contrast, science-based employment jumped 25 percent in Seattle, 20 percent in Houston and 16.8 percent in Austin, Texas.

The tech scene in the Los Angeles Basin is doing even worse. STEM employment in the Los Angeles-Santa Ana area is still stuck below 2002 levels, partially a residue of the continued decline of the region's once-globally dominant aerospace industry. The region, once arguably the world's largest agglomeration of scientists and engineers, has now dipped below the national average in proportion of STEM jobs.

Far greater problems can be seen further down the economic food chain, where many working-class and middle-class Californians traditionally have been employed. The state's heavy industry – traditionally the source of higher-paid blue-collar employment – has missed out on the nation's broad manufacturing resurgence. Over the past 10 years, according to an analysis by the Praxis Strategy Group, California has ranked 45th among the states in terms of heavy metal job creation, losing 126,000 jobs – more than 27 percent; San Francisco-Oakland ranked last among 51 large metropolitan areas. Both Los Angeles-Orange and San Bernardino ranked in the bottom 10.

Despite hype about "green jobs," the immediate prospect for a big manufacturing turnaround is not bright. Because of its high energy costs and other regulatory costs, industrial investment has dried up in California. According to the California Technology and Manufacturing Association, California in 2011 did not even make the top 10 states in terms of new industrial investment, accounting for a paltry 2 percent. This was about one-third or less the share garnered by rivals such as Texas, North Carolina and rebounding "rust belt" states, like Pennsylvania.

Construction, another pillar of higher-paid blue-collar employment, has recovered a bit but remains in worse shape than elsewhere. Overall, the state has lost almost 300,000 construction jobs from the 2007 peak, an almost 40 percent loss compared with 29 percent for the country as a whole.

Even the trade sector, stalwart performer in producing high-wage jobs, may soon be declining. Recent labor disputes by highly paid, politically powerful California port workers – shutting down operations for eight days in Los Angeles and Long Beach – has reinforced the notion that the state's an increasingly unreliable place to do business. After peaking around 2002, our ports are watching growth shift to the Gulf ports, such as Houston, and to the ports of the south Atlantic. The challenge will become far greater once the Panama Canal is widened in 2014 to accommodate larger ships from Asia.

California is also squandering its chance to participate in a potential fourth source of basic employment, the massive expansion in domestic oil-and-gas production. The Golden State sits on potentially the largest gusher in the nation – the Monterey Formation is now estimated to be four times as rich in oil as North Dakota's Bakken Formation. But our green consciousness dictates we don't exploit our resources too much. In the past decade, Texas created some 200,000 generally high-paying energy jobs, while greener-than-thou California has generated barely one-tenth as many.

As a result, wealthier, older, whiter, generally better-educated coastal areas can recover, but the prospects are dismal the further you head into the increasingly Latino, younger and less-educated inland areas. You have flush times for venture capitalists and celebrities, but growing poverty elsewhere. For at least two decades California's poverty rate has remained higher than the national average. Now, notes a new Census estimate, the Golden State has a poverty rate of more than 23 percent, the highest in the country, something unthinkable a generation ago.

Clearly, progressive policies are having socially regressive effects. Over the past few years the state, as a recent Public Policy Institute of California study demonstrates, has become ever substantially more unequal than the rest of the nation. Typical California middle-income workers have seen their median wage, adjusted for inflation, decline 4.5 percent since 2006, and now is at the lowest level since 2008. Only the highest-paid workers have avoided a decline in earnings.

Fortunately, the elements to regain our former broad-based prosperity are still in place. The critical human assets are there: entrepreneurs, hardworking immigrants, top universities. We boast advantages from legacy industries – entertainment and fashion to technology and agriculture. And, perhaps most importantly, California retains its remarkable natural blessings of massive energy resources, fertile soil and a benign climate.

The imperative now is to take fuller advantage of all these blessings in the coming years. Otherwise California will become poorer, more socially bifurcated and relegated by other places to the proverbial "dustbin of history."

This piece first appeared in the Orange County Register.

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

A Housing Preference Sea Change? Not in California

Wendell Cox — Tue, 13 Nov 2012 09:55:20 -0500

For some time, many in the urban planning community have been proclaiming a "sea-change" in household preferences away from suburban housing in the United States.

Perhaps no one is more identified with the "sea-change" thesis than Arthur C. Nelson, Presidential Professor, City & Metropolitan Planning, University of Utah. Professor Nelson has provided detailed modeled market estimates for California in a paper published by the Urban Land Institute, entitled The New California Dream: How Demographic and Economic Trends May Shape the Housing Market: A Land Use Scenario for 2020 and 2035 (He had made generally similar points in a Journal of the American Planning Association article in 2006).

Professor Nelson says that the supply of detached housing on what he defines as conventional sized lots (more than 1/8 acre) is far greater than the demand in California (Note 1). He further finds that the demand of detached housing on smaller lots is far greater than the supply. Professor Nelson's conclusions are principally modeled from stated preference surveys, which can mislead if people act differently when they make choices in the real world.

The Modeled Demand Estimates

Nelson models the demand for housing types in California's largest four planning regions (Southern California Association of Governments for the Los Angeles area, and the Bay Area Association of Governments for the San Francisco-San Jose area, the San Diego Association of Governments and the Sacramento Area Council of Governments). He estimates 2010 both supply and demand. His demand estimates rely strongly on data from three early 2000s stated preference surveys conducted by the Public Policy Institute of California (PPIC).

Nelson's data indicates a strong preference for multi-family housing, which he places at 62% of demand in 2010, compared to the 2000 supply of 42%. Thus, the demand for multi-family housing is suggested to be one half above the supply.
The most stunning conclusion, however, is an over-supply of detached housing on conventional lots that Nelson estimates. Compared to a 2000 supply of 42% of the market, Nelson estimates the demand to be only 16%. This would indicate the supply of such housing to be more than 2.5 times the demand as is indicated in Figure 1.

Nelson's findings on conventional lot detached housing have obtained the most attention. He surmises that virtually all of the demand over the next 25 years can be met by the existing stock of conventional lot detached housing. This is music to the ears of many urban planners, who have for decades demonized the suburbanization that has been preferred by the overwhelming majority of Californians (and Americans, and people elsewhere in the world where they can afford them).

Actual Demand: Revealed Preferences: 2000-2008

To perform a similar analysis, we used revealed preference data: the actual change in housing by type from the 2000 Census data to the latest American Community Survey (ACS) 2006-2010 data at the census tract level (Note 2).

In contrast to Professor Nelson's estimates, the demand data indicates a strong continuing preference among Californians for detached housing on conventional lots. From 2000 to 2008 (the middle year for the 2006-2010 data), 51 percent of the new occupied housing in the four planning areas is estimated to have been detached on conventional lots (Figure 2). This is more than three times the 16% demand estimate in Professor Nelson's data. In fact, the actual demand was higher than the 2000 supply (42%), indicating that the demand for detached houses on conventional lots has increased.

If there is a sea change, it would appear to be in multi-family housing. In contrast with the 62% share for multi-family dwellings modeled by Nelson, the actual demand indicated in the census tract data was two-thirds less, at 19% (Figure 3), well below the supply of 43 percent in 2000. This suggests a tanking of demand for multi-family housing, even as builders, in California and elsewhere, put more product on the market.

Why Accounts for the Difference

Various factors appear likely to contribute to the difference between the modeled demand and the actual demand.

Smaller Lots and Higher Density Do Not Mean Shorter Commutes: The PPIC survey questions implied a connection between larger lots (lower density) and longer commutes. This is the broadly shared perception, but in reality houses on smaller lots (necessarily in higher density neighborhoods) do not mean shorter commutes. This is illustrated in a chart by Southern California Association of Governments (SCAG) researchers on page 62 of The New California Dream. In the original SCAG document, the authors note that "commuting time is about the same for all density" (Figure 4). This is not surprising, since higher densities are associated with more intense traffic congestion and with greater transit use, both of which lengthen commutes (Note 3).

The "higher density means shorter commute" myth is rooted in the obsolete mono-centric conception of the city. Almost all US urban areas have become poly-centric with job locations highly-dispersed, as jobs have followed people to the suburbs. Gordon and Lee (Note 4) have shown that work trip travel times in the United States are shorter to dispersed employment locations than to central business districts or secondary business centers (such as "Edge Cities").

Invalid Perceptions of Transit Mobility: Professor Nelson also stresses stated preference responses showing that many people would prefer to live near transit service. All things being equal, who wouldn't?

But all things are not equal. Living near transit does not mean practical transit access to most of the urban area. In most cases, only a car can provide that. Transit systems are necessarily focused on downtown areas (central business districts), which contain, on average, only 8% of employment in the four planning regions. , Travel to other destinations is usually inconvenient, because of time-consuming transfers, or not available at all.

A Brookings Institution report indicated that 87 percent of people in California's major metropolitan areas (Los Angeles, San Francisco, Riverside-San Bernardino, San Diego and Sacramento) live within walking distance of transit. Yet, the average employee can reach only 6% of the jobs in their respective metropolitan area in 45 minutes (Figure 5). By contrast, the average work trip travel time ranges from 25 minutes to under 30 minutes in the four planning regions .

Households thinking about a move to higher density could have been, upon more serious examination, deterred by transit's severe mobility limitations.

Data Insufficiently Robust for the Modeling: There is also the potential that the PPIC surveys, with their general questions, were not of sufficient robustness to support Professor Nelson’s assertions. For example, PPIC did not define the size of small lots.

Planning and Reality

If households were so eager to move from detached houses on conventional lots to smaller lots, 2000 to 2008 would have been the ideal time. The mortgage industry was literally falling over itself to fund home purchases. Urban core wannabes could have flooded the market pursuing their smaller lot "stated preferences." The actual, revealed preference data says they did not, which is also indicated by the continuing strength of suburban growth relative to central city growth (Note 5).

Thus, the modeled demand estimates in The New California Dream appear to be at substantial odds with the actual demand.This is much more than an academic issue. The conclusions of The New California Dream have achieved the status of sacred text in the canon of urban planning and are mouthed unquestioningly by organizations like the Urban Land Institute.

Worse, demand estimates from The New California Dream are being relied upon in regional transportation plans being developed by California's metropolitan planning organizations (MPOs). This is particularly risky because these same MPOs have been granted greater power over housing under California's Senate Bill 375, goaded on by a sue-happy state Attorney General's office. The attempt by MPOs to impose their housing plans and regulations on consumers could well backfire, for investors in condominium and multifamily housing. This would not be a first time that developers followed urban planning illusions like lemmings over a cliff, to which huge losses in the last decade attest. The more destructive effects, however, are likely to be paid by households and the economies of California's metropolitan areas.

---------

Note 1: More than 70% of the detached housing stock was on conventional lots in 2000.

Note 2: There is no census tract data on detached house lot size. We scaled the detached housing data from the 2000 census to match Professor Nelson's distribution of detached housing supply by lot size, using population density. Nelson's method and ours were sufficiently similar that the results should have been roughly comparable. As the text indicates, they were not.

Note 3: In each of the three PPIC surveys, respondents are asked to choose between housing alternatives that are high in the questions to commute "lengths." From the description and survey instruments in the PPIC reports, there is no indication that respondents were given any idea what commute "length" means. There are two way to judge commute "length." One is distance or miles, while the other is time. Based upon the PPIC survey instrument, it cannot be known which definition was perceived by the respondents.

Even so, it seems more likely that the term "commute length" was perceived by respondents in time rather than in distance by respondents. Each day, people have only so many hours and minutes available. However, distance is not so constrained, depending upon the speed of the commute. Further, the extensive research on commuting often refers to "travel budgets," which are expressed in time, not distance.

Note 4: Reference: Gordon, P. and B. Lee (2012), "Spatial Structure and Travel: Trends in Commuting and Non-Commuting Travels in US Metropolitan Areas," draft chapter for the International Handbook on Transport and Development edited by Robin Hickman, David Bonilla, Moshe Givoni and David Banister.

Note 5: The most recent year (2010-2011), for which the Census Bureau had issued invalid municipal population estimates, indicated a continued the trend toward suburban rather than urban core growth, as has been shown by Trulia Chief Economist Jed Kolko (see: Even After the Housing Bust, Americans Still Love the Suburbs).

=======

Photograph: Suburban San Diego

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.”

How California Lost its Mojo

Bill Watkins — Tue, 09 Oct 2012 01:38:23 -0400

The preferred story for California's economy runs like this:

In the beginning there was prosperity. It started with gold. Then, agriculture thrived in California's climate. Movies and entertainment came along in the early 20th Century. In the 1930s there was migration from the Dust Bowl. California became an industrial powerhouse in World War II. Defense, aerospace, the world's best higher education system, theme parks, entertainment, and tech combined to drive California's post-war expansion.

Then, in the evening of November 9th, 1989, the Berlin Wall came down. On December 25, 1991, the Soviet Union was dissolved. The Cold War was over. America responded by cutting defense spending and called the savings the Peace Dividend.

California paid that peace dividend. A huge portion of California's military industrial complex was destroyed. The aerospace industry was downsized, never to come back. Hundreds of thousands of well-paying manufacturing and engineering jobs were lost.

The ever-resilient California bounced back though. Tech, driven by an entrepreneurial culture and fed by California's great universities drove California's economy to new heights.

Then, there was the dot.com bust. A mild national recession was much more painful for a California dependent on its tech sector. Eventually California recovered. California's tech sector and climate, aided by a housing boom, restored California's prosperity.

The housing boom was followed by a housing bust. Again, California paid a high price, and unemployment skyrocketed to 30 percent above the national average.

Today, California is recovering. Its tech sector is once again bringing prosperity to the state. Furthermore, California's green legislation is providing the motivation for a brave new future of economic growth and environmental virtue.

The story is true through the Peace Dividend. California did pay a high price for the collapse of the Soviet Union. California's defense sector did begin a decline, and it never recovered. But, defense recovered in other places, as the country expanded defense spending by 21 percent in the 2000s. The United States has constantly been engaged in wars and conflicts for over a decade. On a real-per-person basis, the United States is spending as much on defense as it has at any time since 1960.

But when it comes to the present, the narrative falls down. Defense has rebounded, but not in California. California's defense sector is small and declining, not because of a permanently smaller U.S. defense sector, but because of something about California.

California's tech sector did boom after the collapse of California's defense sector, but that doesn't mean that California recovered. In fact, much of California never recovered. It's the aggregation problem.

The 1990s' recovery was largely a Bay Area recovery. Los Angeles hardly saw any uptick in employment. Here is a chart comparing Los Angeles County's jobs growth rate with the San Jose Metropolitan Statistical Area (MSA):

San Jose probably had California's fastest growing job market in the 1990s. Los Angeles was not the states slowest. Still, the differences are striking.

A few years ago, a couple of my graduate students looked at California data from 1990 through 1999. They divided California into two regions, the Bay Area and everywhere else. The Bay Area was defined as Sonoma, Marin, Napa, Solano, Contra Costa, Alameda, Santa Clara, Santa Cruz, San Mateo, and San Francisco counties. Using seven indicators of economic growth, they performed relatively simple statistical tests to see if the two geographies experienced similar economies. The indicators were employment, wages, home prices, bank deposits, population growth, construction permits, and household income.

By every measure except population growth, the Bay Area outperformed the rest of the state. The exception was probably due to commuters to the Bay Area, given that region’s exceptionally high housing prices.

Some economists will tell you that California saw faster-than-national job growth from the mid 1990s until the great recession. This is another aggregation problem. The claim is technically true, but only in the sense that California had a higher proportion of the nation's jobs in 2007 than it did in 1995. If you look at annual data, you will see that California's share of the nation's jobs only grew from 1995 through 2002. Since then, California's share of United States jobs resumed its decline:

In reality, California never recovered from the dot.com bust. California, perhaps the best place on the planet to live, couldn't keep up in a housing boom. Something was wrong.

California had lost its mojo.

Opportunity is now greater outside California than inside California. For almost 150 years, California was as widely known for its opportunity as it was for its sunshine. The combination was like a drug. George Stoneman, an army officer destined to become California's 15th governor, spoke for millions when he said "I will embrace the first opportunity to get to California and it is altogether probable that when once there I shall never again leave it."

They did come to California, and they made an amazing place. Opportunity-driven migrants are different than other people. They take big risks to leave everything they know for an uncertain future in a new place. They are confident, bold, and brash. California became just as confident, bold, and brash. The Anglo-American novelist Taylor Caldwell spoke the truth when she said "If they can't do it in California, it can't be done anywhere."

That was then. Today, California can't even rebuild an old Hotel.

The Miramar Hotel is a partially-demolished eyesore beside the 101 Freeway in Montecito, just south of Santa Barbara. The Hotel's initial structure was built in 1889. Over the years, it was expanded to a 29 structure luxury hotel and resort. In September 2000 it was closed for renovations which were expected to take 18 months. That was when the fighting started. Community groups, neighbors, and governments all had their own idea of what the Miramar should be. Two owners later, and after millions of dollars, the future to the Miramar is still uncertain.

The Miramar Hotel is a case study of what is wrong with post-industrial California, precisely because it should have been easy, and because it is not unique. Everything is hard to do in California. The state that once moved rivers of water hundreds of miles across deserts and over or through mountain ranges can't rebuild a hotel.

The situation will get worse. California has become the place people are leaving. The following chart shows that for 20 years more people have left California for other states than came to California from other states:

California's population is still increasing because of births and international immigration.

Two decades of negative domestic migration has taken its toll. Millions of risk-taking, confident, bold, and brash people have left California. They took California's mojo with them.

That seems pretty clear when you look at some statistics: California's unemployment is way above the national average. With only about 12 percent of the nation's population, California has over 30 percent of the nation's welfare recipients. San Bernardino has the nation's second highest poverty rate among cities over 200,000.

Sometimes though, aggregated data can hide California's weakness, and some, representing the always-present constituency for the status quo, use these data to deny that California's future is any less golden.

Most recently, those representing the constituency for the status quo have used California's aggregated jobs data to argue that all is well in California. They argue that California's tech sector is leading California to a new golden future.

Year-over-year data confirm that, through August 2012, California gained jobs at a faster pace than the United States. Once again, though, that growth is largely confined to one industry and one geography. California's tech sector is recovering, and amidst a generally weak recovery, it appears strong enough to generate pretty impressive aggregated results. If we disaggregate California's data, we will find that there is not just one California. There is a rich and mostly coastal California, with a few smaller inland counties on the San Francisco-Lake Tahoe corridor. Another California is very poor and mostly inland.

Here's a list of California's poorest counties by poverty rate:

County	Poverty Rate	Child Poverty Rate	Rank
Del Norte	23.5	30.6	3
Fresno	26.8	38.2	1
Imperial	22.3	31.8	6
Kern	21.4	30.3	10
Kings	22.5	29.7	5
Madera	21.7	31.7	8
Merced	23.1	31.4	4
Modoc	21.9	32.5	7
Siskiyou	21.5	30.7	9
Tulare	33.6	33.6	2

Here's a list of California richest counties by poverty rate:

County	Poverty Rate	Child Poverty Rate	Rank
Calaveras	11.1	18.3	10
Contra Costa	9.3	12.7	4
El Dorado	9.4	11.6	5
Marin	9.2	10.9	3
Mono	10.8	15	8
Napa	10.7	14.7	7
Placer	9.1	10.7	2
San Mateo	7	8.5	1
Santa Clara	10.6	13.3	6
Ventura	11	15.3	9

There are some big differences here. The percentage of Fresno's children living in poverty is four and half times the percentage of San Mateo children living in poverty. In fact, the data for California's poorest counties looks like third-world data.

When disaggregated, the job-growth data shows the same story. Through 2012's second quarter, jobs in the San Jose MSA were up 3.6 percent on a year-over-year basis. In Los Angeles, jobs were up only 1.1 percent, while in Sacramento they were up only 0.6 percent. For comparison, U.S. jobs were up about 1.3 percent for the same time period.

You can perform this analysis for all types of data. When the data are disaggregated, the story is always the same. It's telling us that California needs to get its mojo back, and the current tech boom is likely not to be enough for its recovery.

Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org.

Unemployment photo by BigStockPhoto.com.

A Look at Commuting Using the Latest Census Data

Aaron M. Renn — Tue, 25 Sep 2012 01:38:10 -0400

Continuing my exploration of the 2011 data from the American Community Survey, I want to look now at some aspects of commuting.

Public Transit

Public transit commuting remains overwhelmingly dominated by New York City, with a metro commute mode share for transit of 31.1%. There are an estimated 2,686,406 transit commuters in New York City. All other large metro areas (1M+ population) put together add up to 3,530,932 transit commuters. New York City metro accounts for 39% of all transit commuters in the United States.

If one were to guess the #2 city for transit commuting, another older, pre-auto, centralized city on the lines of New York (say Chicago) might be the obvious guess. It would also be wrong. It’s actually Washington, DC that has the second highest transit commute share among large metros at 14.8%. Here’s the complete top ten:

Rank	Metro Area	2011
1	New York-Northern New Jersey-Long Island, NY-NJ-PA	2,686,406 (31.1%)
2	Washington-Arlington-Alexandria, DC-VA-MD-WV	439,194 (14.8%)
3	San Francisco-Oakland-Fremont, CA	299,204 (14.6%)
4	Chicago-Joliet-Naperville, IL-IN-WI	503,535 (11.6%)
5	Boston-Cambridge-Quincy, MA-NH	267,568 (11.6%)
6	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	251,285 (9.3%)
7	Seattle-Tacoma-Bellevue, WA	137,858 (8.1%)
8	Portland-Vancouver-Hillsboro, OR-WA	66,619 (6.3%)
9	Los Angeles-Long Beach-Santa Ana, CA	355,811 (6.2%)
10	Baltimore-Towson, MD	80,472 (6.1%)

Not only are New York and Washington top two cities for public transit commuting, they are also the two cities that have been dominant in increasing transit’s market share. Both cities showed material share gains since 2000, over three and a half percentage points each, for transit. Among large cities, Seattle was the only one that managed to post a share gain of even one percent.

Rank	Metro Area	2000	2011	Change in % of Workers Age 16 and Over
1	New York-Northern New Jersey-Long Island, NY-NJ-PA	2,181,093 (27.4%)	2,686,406 (31.1%)	3.74%
2	Washington-Arlington-Alexandria, DC-VA-MD-WV	278,842 (11.2%)	439,194 (14.8%)	3.61%
3	Seattle-Tacoma-Bellevue, WA	106,784 (7.0%)	137,858 (8.1%)	1.17%
4	Orlando-Kissimmee-Sanford, FL	12,601 (1.6%)	24,901 (2.5%)	0.91%
5	Hartford-West Hartford-East Hartford, CT	15,755 (2.8%)	21,794 (3.7%)	0.91%
6	Charlotte-Gastonia-Rock Hill, NC-SC	9,532 (1.4%)	19,227 (2.3%)	0.91%
7	San Francisco-Oakland-Fremont, CA	278,207 (13.8%)	299,204 (14.6%)	0.81%
8	Los Angeles-Long Beach-Santa Ana, CA	287,392 (5.6%)	355,811 (6.2%)	0.67%
9	Miami-Fort Lauderdale-Pompano Beach, FL	67,685 (3.2%)	95,536 (3.8%)	0.61%
10	Nashville-Davidson–Murfreesboro–Franklin, TN	5,574 (0.8%)	10,705 (1.4%)	0.55%

Vaunted Portland only managed to eke out a share gain of 0.07%, which could be entirely statistical noise. Its performance lagged even auto-centric cities like Charlotte and Nashville.

Bicycling

Every city out there seems to be vying to be the bike friendliest city in the world. Yet bicycling has yet to make much of an impact on commuting. Only 7 out of 51 large metros even post 1% mode share for cycling:

Row	Geography	2011
1	Portland-Vancouver-Hillsboro, OR-WA	23,941 (2.3%)
2	San Francisco-Oakland-Fremont, CA	38,419 (1.9%)
3	San Jose-Sunnyvale-Santa Clara, CA	16,013 (1.9%)
4	Sacramento–Arden-Arcade–Roseville, CA	15,804 (1.8%)
5	Austin-Round Rock-San Marcos, TX	8,847 (1.0%)
6	New Orleans-Metairie-Kenner, LA	5,307 (1.0%)
7	Phoenix-Mesa-Glendale, AZ	18,007 (1.0%)
8	Seattle-Tacoma-Bellevue, WA	15,949 (0.9%)
9	Denver-Aurora-Broomfield, CO	12,052 (0.9%)
10	Los Angeles-Long Beach-Santa Ana, CA	50,080 (0.9%)

Portland grew bicycle mode share by 1.51% Perhaps this explains its poor transit performance. Cycling is canabalizing transit growth.

Walking

The low level of bicycling can perhaps best be illustrated by comparing it to walking. Even in Portland more people walk to work than ride bikes.

Rank	Metro Area	2011
1	New York-Northern New Jersey-Long Island, NY-NJ-PA	540,733 (6.3%)
2	Boston-Cambridge-Quincy, MA-NH	121,537 (5.3%)
3	San Francisco-Oakland-Fremont, CA	87,409 (4.3%)
4	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	101,107 (3.7%)
5	Seattle-Tacoma-Bellevue, WA	62,238 (3.7%)
6	Pittsburgh, PA	36,857 (3.4%)
7	Portland-Vancouver-Hillsboro, OR-WA	35,242 (3.4%)
8	Rochester, NY	15,573 (3.2%)
9	Washington-Arlington-Alexandria, DC-VA-MD-WV	94,698 (3.2%)
10	Chicago-Joliet-Naperville, IL-IN-WI	134,399 (3.1%)

Working from Home

Looking at telecommuting gives a much different list of top cities, this one dominated by “wired” metros like Austin and Raleigh. The share of telecommuters in these cities is bigger than walking or biking, or even transit in many cities. This is an oft-overlooked part of the green transport agenda. The most green commute possible is the one you never have to make.

Rank	Metro Area	2011
1	Austin-Round Rock-San Marcos, TX	62,593 (7.1%)
2	Raleigh-Cary, NC	37,030 (6.6%)
3	Portland-Vancouver-Hillsboro, OR-WA	67,223 (6.4%)
4	San Francisco-Oakland-Fremont, CA	131,029 (6.4%)
5	San Diego-Carlsbad-San Marcos, CA	89,547 (6.3%)
6	Denver-Aurora-Broomfield, CO	76,025 (5.9%)
7	Phoenix-Mesa-Glendale, AZ	105,570 (5.8%)
8	Sacramento–Arden-Arcade–Roseville, CA	52,143 (5.8%)
9	Atlanta-Sandy Springs-Marietta, GA	132,979 (5.5%)
10	Seattle-Tacoma-Bellevue, WA	87,839 (5.2%)

Commute Times

Unsurprisingly, large cities – including New York and Washington again at the top – feature the longest average commute times. Larger cities tend to have worse congestion and feature longer commutes. As transit commutes are generally longer than driving, the high transit mode share helps to drive up commute times in those cities.

Rank	Metro Area	2011
1	New York-Northern New Jersey-Long Island, NY-NJ-PA	34.9
2	Washington-Arlington-Alexandria, DC-VA-MD-WV	34.5
3	Riverside-San Bernardino-Ontario, CA	31.0
4	Chicago-Joliet-Naperville, IL-IN-WI	30.9
5	Atlanta-Sandy Springs-Marietta, GA	30.6
6	Baltimore-Towson, MD	30.3
7	Boston-Cambridge-Quincy, MA-NH	29.2
8	San Francisco-Oakland-Fremont, CA	29.2
9	Los Angeles-Long Beach-Santa Ana, CA	28.6
10	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	28.5

Whether New York might prefer a more auto-oriented layout in order to reduce commute times is a different matter. There’s no precedent for such a huge region having anything less than terrible congestion and commute times. And clearly New York would not be New York with such a radical change. The same forces that drive up commute times in places like New York and Washington are some of the same forces that sustain them as centers of elite economic production.

Note: An early version of this piece contained an incorrect version of "Working from Home" table.

Aaron M. Renn is an independent writer on urban affairs and the creator of Telestrian, a data analysis and mapping tool. He writes at The Urbanophile.

Light trails photo by Bigstock.

The Road Less Understood

Wendell Cox — Mon, 24 Sep 2012 01:38:13 -0400

The Economist confuses ends (objectives) and means in its current number examining the peaking of per capita automobile use in the West in two articles ("The http://www.economist.com/node/21563327" and "Seeing the Back of the Car"). In congratulating metropolitan areas for trying "to change the way people move around," The Economist reminds that Portland (Oregon) has developed light rail and that policy supports transit in Los Angeles. So much for the means, but what about the ends?

In Portland: Transit Loses Ground and a Skeptical Public: Portland, for example, has had anything but stellar performance. Transit has not kept up with growth, having lost 25 percent of its commuting (work trip) share since before the first light rail line was opened in 1986 (Note 1). With five new light rail lines, transit in Portland not only fell short of attracting its previous bus only share of commutes, but also sustained losses greater than the national rate (Figure 1).

The people of the Portland area may not share The Economist's ardor. Just last week, The Oregonian headlined "Clackamas County anti-rail measure passes comfortably; effect could resonate for decades," reporting on a 60-40 vote to require referenda for future rail expenditures. As if that were not enough, a similar measure passed by a similar margin in King City, a municipality in Washington County and Tigard, one of the area's largest municipalities, has placed the matter on the November ballot.

But Portland does have a substantial success missed by The Economist. Working at home is growing rapidly. From 1980 to 2011, working at home (mostly telecommuting) increased by 55,000. This is more than three times the growth in rail transit commuting (17,500). During the last decade, working at home passed transit as a work access mode in Portland, and with virtually no public expenditures (as opposed to the billions for new rail lines). There has been a 375,000 increase in car use by one-way commuters since 1980, and, not surprisingly, a quadrupling of excess travel time in peak period traffic (based upon Texas Transportation Institute data). In the end, Portland built an extensive rail system and the riders have not come. Portland didn't expand its highway system, and they came anyway (National 2010-2011 journey to work data is summarized here.).

In Los Angeles: Long on Rail Lines, Short on Passengers: The Economist rightly points out that Los Angeles has implemented policies to get people out of cars. Indeed, Los Angeles has been the poster child for transit development. In little more than two decades, 11 metro, light rail, and suburban rail lines have been opened. Probably no metropolitan area in the world has opened more miles of new rail service in that period. Matthew Yglesias, writing in Slate was so impressed that he called Los Angeles "America's next great mass transit city."

The results are less convincing. The total daily one-way commutes on the 11 rail lines is only 32,000, smaller than the number of people carried daily on a single lane of the San Diego Freeway (I-405) where it crosses over Wilshire Boulevard. Meanwhile, working at home has risen more than four times that of rail commuting since 1990 (Figure 2). Los Angeles may be better described as “America's next great telecommuting city." However, the auto is still king. From 1990 to 2011, solo automobile commuting increased 340,000, two percentage point gain, three times that of transit.

Younger People: Driving More to Work and Telecommuting More

The Economist also jumps on the "young people forsaking driving" bandwagon, a subject that has attracted the attention of others. But, young people are driving more, at least to work. Since 2000, the increase in driving alone to work by people aged 15 to 24 was nearly 260,000, compared to a 4,000 loss in transit commuting. Working at home was up almost as much as driving, at 200,000. Even so, with the declining size of the younger work force, transit's share was up. From 2000 to 2011, the share of 15-24 year old workers rose from 5.4 percent to 5.8 percent (Figure 3), virtually the same as the overall increase in transit market share of from 4.6 percent to 5.0 percent (Note 2). As with Portland and Los Angeles, the last 11 years saw a much larger increase in working at home, from 3.3 percent to 4.3 percent.

Further, to the extent working at home, social media and online shopping replace the need for driving among younger adults (and everyone), all the better.

The Fantastical Claim: 50,000 Passengers Per Hour

The Economist repeats the specious claim that rail lines can carry 50,000 passengers per hour in each direction. If your world is limited to Paris between Chatelet and Gare de Lyon and the handful of similar places, maybe so. But in most of the rest of the world, it is the stuff of fairy tales.

The 2011 data shows the extent of the illusion. The fantastical rail line carrying 50,000 per hour would carry the equal of all the daily rail commuters in Dallas or Miami in less than 20 minutes. It would take only about five minutes to handle the daily rail transit commuting volume in Minneapolis or Salt Lake City.

Further, some of the new systems have been manifestly unsuccessful in attracting commuters. For example, in Charlotte, there was a strong increase in transit commuting between 2000 and 2011, with transit's market share rising 64 percent. Yet, more than 60 percent of the new commuters were on buses, rather than on light rail, reflecting a long overdue increase in artificially low service levels. In Phoenix, 85 percent of the transit commuting increase was on buses, rather than the light rail line. The fantastical 50,000 per hour line would take only handle this load in about two minutes.

Where Rail Works and Why

None of this is to suggest that rail transit does not have its place. As I pointed out in a Hong Kong Apple Daily commentary, rail transit makes all the sense in the world where appropriate (see: "Hong Kong's Rail Expansion: Avoiding Western Pitfalls"). Appropriate circumstances include huge central business districts with high employment density and radial rail transit service from throughout the metropolitan area. American Community Survey data indicates that just six municipalities (not metropolitan areas) account for 93 percent of the nation's rail commuting destinations. The city of New York, alone is the destination of 65 percent of national rail commuters. Another 28 percent commute to the cities of Chicago, Philadelphia, Washington, Boston and San Francisco. Within these six cities, the overwhelming share of transit commuting is to the downtowns (central business districts), which, combined, cover a land area less than half the size of Orlando's Disney World.

Why Driving Has Peaked

Alan Pisarski told us in 1999 "(Cars, Women and Minorities: The Democratization of Mobility in America") that the demand for driving would soon peak. Women were driving nearly as much as men and cars were becoming the dominant mode of transport for low income people. Cars already carry the overwhelming majority of low-income commuters. A "love affair with the automobile" mentality misled many who should have known better into believing that people would eventually drive 24 hours per day. In fact, the huge increase in driving to the 2000s was more about democratizing mobility and access, and as the Washington Times recently put it, prosperity (see "A world without cars:
The internal-combustion engine has freed mankind"). If home-based access can take up the slack, it would do more for the environment and people’s lives than all the expensive, largely ineffective rail system imagined by the media and the well-financed rail lobby.

------

Note 1: The data in this article is largely taken from the journey to work reports of the US Census (1980, 1990 and 2000) and the American Community Survey (one year data 2011).

Note 2: The overall 5.0 percent transit market share figure may be high. The USDOT National Household Travel Survey (NHTS) indicates that people who commute by transit tend to use other modes (such as automobiles) often. NHTS data indicates that, overall transit accounted for 3.7 percent of commuters and an even lower 2.7% of commuting miles in 2009.

Photo: Harbor Freeway (I-110), Los Angeles (by author)

The Growing Number of Freelancers in Entertainment

Joshua Wright — Thu, 06 Sep 2012 01:38:14 -0400

When people were preparing eulogies for the entertainment sector, Techdirt’s Mike Masnick popped out with his bold piece, “The Sky is Rising,” and poked holes in the gloomy forecast. His scrutiny of the numbers revealed that the entertainment industry is actually growing. Entertainment consumption per household increased from 2000 to 2008. Employment in the entertainment sector jumped 20% from 1998 to 2008. And the number of independent artists rose 43% over the same period.

While the outlook for the sector might not be quite as sunny as Masnick indicates in his report (case in point: the share of household income spent on entertainment has declined every year since 2008), it’s true that entertainment employment is on the rise. Over the last decade-plus, the number of entertainment and sports-related jobs — a group of 10 occupations that includes actors, musicians, and dancers, as well as coaches and referees, etc. — has grown 30%.

But much of this job growth, especially since the recession, is not of the traditional wage-and-salary variety. Instead, EMSI’s new class-of-worker data shows that proprietors account for 242,000-plus, or nearly 80%, of the jobs added since 2001 in the main entertainment and sports-related occupations. This includes workers whose main income comes from self-employment, and even more so those doing side gigs in addition to their day job (what EMSI labels as “extended proprietors” but might better be referred to as freelancers in this case).

Note: EMSI’s employment estimates are a count of jobs, not a count of workers. One person can hold more than one job, and this is particularly the case with the types of worker activity tracked in our extended proprietor dataset.

ENTERTAINMENT-RELATED JOBS (2001-2012)
Source: EMSI 2012.2 Class of Worker
	2001 Jobs	2008 Jobs	2012 Jobs	% Growth Since 2001	% Growth Since 2008	Avg. Hourly Wage
Wage-and-Salary	492,960	549,333	556,765	13%	1%	$19.32
Self-Employed & Extended Proprietors	512,383	685,773	755,137	47%	10%	$17.24
Total	1,005,343	1,235,106	1,311,902	30%	6%	$18.15

Since 2001, employment in entertainment and sports among wage-and-salary workers (those who draw benefits and pay into the unemployment insurance program) has increased 13%. This is a solid gain, but consider that since ’08, the heart of the recession, the job gains have been minimal (1% growth, or 7,432 jobs added).

But look at the self-employed and extended proprietors row in the above table: this part of the entertainment and sports-related workforce has mushroomed 47% since ’01, and 10% since ’08.

The growth in proprietors makes sense when you think about the work being done in these fields — moms and dads coaching their kids (or serving as referees) in soccer, office workers moonlighting in a band that does local gigs, men and women working part-time for the local stage company as an actor or director. These are just a few examples. But it’s clear businesses that hire these types of workers require or prefer freelancers or part-timers; it’s just the nature of the work. And as families’ budgets get tighter or single people need extra (or any) income, these jobs are a welcomed option, at least in the short term.

There are still more than a half million salaried jobs in these fields. But increasingly, freelance workers are becoming the norm in entertainment and sports.

The Workforce Breakdown

Overall, 58% of the “entertainers and performers, sports and related” workforce, as it’s classified by the Bureau of Labor Statistics, is made up of proprietors. That’s up from 51% in 2001 and 56% in 2008.

The largest occupation in this sector, musicians & singers, is predominantly composed of those who do work on the side. Just over 265,000 of 440,000-plus musician jobs in the US fall under EMSI’s extended proprietor category, and there are nearly as many self-employed musicians (73,875) as traditional W-2 musicians (102,628).

Musicians aren’t alone in this trend, of course. Of the 118,000-plus estimated actors in the US, almost half are extended proprietors and another 18,520 are self-employed. Dancers, coaches & scouts, and others have a similar labor force breakdown.

The highest percentage growth since 2001 among these 10 occupations has come in coaches and scouts (51%). Second is actors at 42%; of the 34,706 new actors jobs in the last decade-plus, all but 2,230 have come in the self-employed and extended proprietor categories.

SOC Code	Description	2001 Jobs	2012 Jobs	Change	% Change	Median Hourly Wage	Education Level
Source: EMSI 2012.2 Class of Worker - QCEW Employees, Non-QCEW Employees, Self-Employed, Extended Proprietors
27-2011	Actors	83,451	118,157	34,706	42%	$16.54	Long-term on-the-job training
27-2012	Producers and Directors	126,576	124,670	-1,906	-2%	$28.86	Bachelor's or higher degree, plus work experience
27-2021	Athletes and Sports Competitors	28,335	38,520	10,185	36%	$27.30	Long-term on-the-job training
27-2022	Coaches and Scouts	198,681	299,509	100,828	51%	$13.89	Long-term on-the-job training
27-2023	Umpires, Referees, and Other Sports Officials	25,547	34,447	8,900	35%	$11.31	Long-term on-the-job training
27-2031	Dancers	29,914	37,496	7,582	25%	$14.70	Long-term on-the-job training
27-2032	Choreographers	17,343	22,628	5,285	30%	$18.30	Work experience in a related occupation
27-2041	Music Directors and Composers	65,593	79,927	14,334	22%	$19.31	Bachelor's or higher degree, plus work experience
27-2042	Musicians and Singers	324,934	441,882	116,948	36%	$18.01	Long-term on-the-job training
27-2099	Entertainers and Performers, Sports and Related Workers, All Other	104,970	114,665	9,695	9%	$18.47	Long-term on-the-job training
	Total	1,005,343	1,311,902	306,559	30%	$18.15

Across the board, the job growth numbers look radically different if we take out proprietors. Looking just at EMSI’s QCEW dataset, which corresponds to published Quarterly Census of Employment and Wages data, only four of these occupations have had double-digit growth since ’01: coaches and scouts (39%); choreographers (32%); entertainers and performers, sports and related workers, all other (15%); and music directors and composers (13%).

Top Metros for Entertainment

We all know New York City and Los Angeles are major entertainment hubs. But EMSI’s data is still startling: The nation’s two largest cities account for nearly 1 out of every 5 entertainment and sports-related jobs in America. The New York City metro area has the most jobs in entertainment and sports-related fields of any MSA (with more than 116,000 estimated in 2012), followed by L.A. (112,528). These two have nearly four times the number of jobs as Chicago, which has the third-most in the US at nearly 37,000.

Of the 50 most populous metros in the U.S., Los Angeles is also the most concentrated in entertainment and sports-related workers. With a location quotient of 2.06, L.A. is more than twice as concentrated as the national average of 1.0. Nashville, with an LQ of 2.02, is close behind, followed by San Francisco, New York, Las Vegas, and Austin, Texas.

Since 2008, Austin has blown away every other big metro in terms of its job growth in entertainment and sports jobs (18.4%). Second is Richmond, VA (13.4%).

ENTERTAINMENT-RELATED JOBS IN 50 LARGEST METRO AREAS
Source: EMSI 2012.2
MSA Name	2012 Jobs	2008-2012 Percentage Growth	Median Hourly Earnings	2012 National Location Quotient
Los Angeles-Long Beach-Santa Ana, CA	112,528	1.3%	$26.22	2.06
Nashville-Davidson--Murfreesboro--Franklin, TN	15,442	7.8%	$22.12	2.02
San Francisco-Oakland-Fremont, CA	30,667	5.6%	$23.80	1.51
New York-Northern New Jersey-Long Island, NY-NJ-PA	116,234	7.9%	$23.81	1.43
Las Vegas-Paradise, NV	10,242	5.0%	$21.14	1.29
Austin-Round Rock-San Marcos, TX	10,421	18.4%	$16.51	1.27
Orlando-Kissimmee-Sanford, FL	11,380	5.4%	$17.42	1.22
Portland-Vancouver-Hillsboro, OR-WA	11,953	6.2%	$16.01	1.21
Salt Lake City, UT	7,480	9.1%	$18.46	1.20
Boston-Cambridge-Quincy, MA-NH	26,143	5.1%	$20.53	1.14
New Orleans-Metairie-Kenner, LA	5,906	6.5%	$15.85	1.13
Seattle-Tacoma-Bellevue, WA	18,608	6.1%	$19.06	1.13
Minneapolis-St. Paul-Bloomington, MN-WI	17,912	4.0%	$18.94	1.11
Atlanta-Sandy Springs-Marietta, GA	24,329	12.9%	$19.39	1.06
Washington-Arlington-Alexandria, DC-VA-MD-WV	30,413	7.5%	$19.64	1.06
Milwaukee-Waukesha-West Allis, WI	7,385	-0.2%	$16.21	1.05
Denver-Aurora-Broomfield, CO	12,975	0.4%	$18.08	1.04
Hartford-West Hartford-East Hartford, CT	5,842	8.5%	$19.33	1.02
Indianapolis-Carmel, IN	8,184	11.3%	$16.60	1.02
Kansas City, MO-KS	9,226	10.7%	$16.17	1.01
Providence-New Bedford-Fall River, RI-MA	6,235	3.0%	$16.47	1.00
Raleigh-Cary, NC	4,897	8.7%	$15.55	1.00
Birmingham-Hoover, AL	4,713	5.6%	$14.64	0.99
Dallas-Fort Worth-Arlington, TX	28,900	13.2%	$18.42	0.96
Richmond, VA	5,363	13.4%	$15.50	0.95
Tampa-St. Petersburg-Clearwater, FL	10,409	9.5%	$17.60	0.95
St. Louis, MO-IL	11,182	2.7%	$18.81	0.94
Cleveland-Elyria-Mentor, OH	8,465	4.4%	$14.95	0.93
Sacramento--Arden-Arcade--Roseville, CA	7,844	1.2%	$17.26	0.93
San Diego-Carlsbad-San Marcos, CA	12,478	1.4%	$21.90	0.93
San Jose-Sunnyvale-Santa Clara, CA	7,991	8.2%	$19.51	0.92
Baltimore-Towson, MD	11,283	2.7%	$18.28	0.91
Jacksonville, FL	5,305	12.2%	$17.98	0.91
Charlotte-Gastonia-Rock Hill, NC-SC	7,130	5.4%	$18.80	0.90
Chicago-Joliet-Naperville, IL-IN-WI	35,828	4.8%	$16.91	0.89
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	21,974	7.3%	$18.29	0.89
Cincinnati-Middletown, OH-KY-IN	8,041	5.8%	$17.61	0.88
Columbus, OH	7,586	8.0%	$16.84	0.88
Miami-Fort Lauderdale-Pompano Beach, FL	20,187	5.4%	$22.13	0.86
Pittsburgh, PA	8,991	10.8%	$17.61	0.86
Louisville/Jefferson County, KY-IN	4,743	5.6%	$15.98	0.85
Detroit-Warren-Livonia, MI	13,422	0.0%	$16.29	0.81
Buffalo-Niagara Falls, NY	3,768	-0.2%	$15.66	0.80
Memphis, TN-MS-AR	4,531	7.0%	$16.74	0.80
Oklahoma City, OK	4,534	11.9%	$15.62	0.79
Virginia Beach-Norfolk-Newport News, VA-NC	5,814	4.8%	$14.31	0.79
Phoenix-Mesa-Glendale, AZ	13,194	6.7%	$18.27	0.78
Riverside-San Bernardino-Ontario, CA	9,203	1.6%	$18.51	0.76
San Antonio-New Braunfels, TX	6,732	11.2%	$16.98	0.76
Houston-Sugar Land-Baytown, TX	18,270	11.8%	$18.87	0.69

What About All MSAs?

Among all MSAs in the US with at least 500 jobs in these fields, the highest concentration in the entertainment and sports-related sector belongs to Edwards, Colorado, which is just west of the resort community of Vail (home to the Vail Jazz Festival). The Edwards MSA has just 1,100 estimated entertainment and sports-related jobs. But with a location quotient of 8.42, it is more than eight times as concentrated as the national average in these fields.

Next is an MSA that you’d probably expect to see this high on the list: Santa Fe, New Mexico (with an LQ of 4.01). Sante Fe is known for its art galleries, museums, and other tourist-friendly sites, and it has more than 2,000 entertainment and sports-related jobs.

Joshua Wright is an editor at EMSI, an Idaho-based economics firm that provides data and analysis to workforce boards, economic development agencies, higher education institutions, and the private sector. He manages the EMSI blog and is a freelance journalist. Contact him here.

Film crew photo by Bigstock.

Is California the New Detroit?

Robert J. Cristiano — Fri, 17 Aug 2012 01:38:44 -0400

Most Californians live within miles of its majestic coastline – for good reason. The California coastline is blessed with arguably the most desirable climate on Earth, magnificent beaches, a backdrop of snow-capped mountains, and natural harbors in San Diego and San Francisco. The Golden State was aptly named. Its Gold Rush of 1849 was followed a century later by massive post-war growth.

There is no mystery why California’s population and economy boomed after the Second World War. Education in California became the envy of the world. California’s public school system led the nation in innovation with brand new schools and classrooms. The Community College system that fed its universities was free for its students. A college education at the UC and Cal State systems was inexpensive. UC-Berkeley, with its graduate schools, was arguably the greatest in the world while Stanford developed into the Harvard of the West. An efficient highway system moved California’s automobile driven commerce while fertile soil of the Central Valley became the fruit and vegetable basket of the world.

The next wave hit in the 80s as former orchards south of San Francisco morphed into the Silicon Valley. Intel and other chip manufacturers led the computer and software revolution bringing high tech jobs and immense new wealth to the Golden State. The dot-com revolution of the 90s brought more gold to California. Innovators like Google and Apple cashed in by nurturing the Internet era. The next decade heralded the greatest housing and mortgage boom in the nation’s history. Developers from Orange County, south of Los Angeles, invented creative financing vehicles that drove home sales, and profits, to record heights by 2006.

This success has created a problem: Californians, due to their golden history, live unreflective lives. The Tea Party movement generated a political tsunami that swept more than 60 incumbents from political office in 2010, but the wave petered out at California’s state line as Democrats take every elected office in the state.

The state budget, mandated to balance by law, has been billions in the red for ten straight years. Yet Californians re-elect the same politicians, year after year, who produce budgets with multi-billion dollar deficits. California voters rejected Meg Whitman, the billionaire founder of Ebay, in favor of Jerry Brown. California now has a $16 billion deficit which “assumes” that California voters will pass massive tax increases on themselves. If they do not, the 2013 deficit becomes a mind numbing $20 billion. Yet despite the red ink, Governor Brown signed into law a “high speed rail” bill that will spend $6 billion on a train between Fresno and Bakersfield – not LA and San Francisco as promised. Polls turned against the choo-choo, but there remain no outcry from California voters.

California voters rejected Carly Fiorina, who ran Hewlett Packard, for Barbara Boxer in the 2010 Senate race. To protect the endangered Delta Smelt, a fish known better as bait, water has been diverted from Central Valley farms to the Pacific Ocean. Orchards in the Central Valley were allowed to wither and die resulting in unemployment in the Central Valley as high as 40%. Imagine Californians on food stamps, living in what was the fruit basket of American.

California’s business climate now ranks dead last according to 650 CEOs measured by Chief Executive Magazine. Apple will take 3,600 jobs to its new $280,000,000 facility in Austin Texas – jobs that California would have had in the past. Texas ranked first in the same survey. California’s unemployment rate is consistently higher than 10% of its work force, and there are few jobs for college students who graduate with as much as $100,000 in student loans. Despite overwhelming evidence that bad public policy is chasing away jobs, the same state politicians are sent back to Sacramento every two years.

California’s public education system, once the envy of the world, now ranks 46th in the nation in per pupil spending and faces a $1.4 billion cut in the fall. In the last month, three California cities declared bankruptcy. More will follow. Take Poway for example. Its school board borrowed $100,000,000 (for 33,000 students) through a Capital Appreciation Bond. The politicians told the voters there would be no payments for 20 years. What they did not explain was the residents must pay back $1 billion dollars on their $100 million loan. Beginning in 2021, tiny Poway will be forced to pay $50 million per year in bond payments. Huge property tax assessments will be required if homes do not appreciate 400% by then, which is unlikely under foreseeable circumstances.

Rather than stare at themselves in the mirror, Californians should take a look at Michigan. In the 50s greater Detroit was the fourth-largest city in America with 2 million inhabitants and the world’s most dominant industry: the automobile.

Most people had a good paying job. Its burgeoning middle class was the model of the world with excellent public schools and universities. Detroit in 2012 is a shadow of that once great metropolis. Its population has shrunk to 714,000. The average price of a home has fallen to $5,700. Unemployment stands at 28.9%. It has a $300,000,000 deficit. There are 200,000 abandoned buildings in the derelict city. Its public education system, in receivership, is a disgrace producing more inmates than graduates. In 2006, the teacher’s union forced the politicians to reject a $200,000,000 offer from a Detroit philanthropist to build 15 new charter schools. Jobs long ago abandoned Detroit for places like South Carolina and Alabama, with their “right to work” laws and low taxes.

Now Detroit’s Mayor has proposed razing 40 square miles of the 138 square miles of this once great American city returning 70,000 abandoned homes to farmland. Even such a draconian plan may not be enough to save the city. If a hurricane had hit Detroit, more of us would know of this tragedy in our midst, but this fate was man-made and not wrought by nature. Detroit has had one party rule for more than fifty years. Louis C. Miriani served from September 12, 1957 to January 2, 1962 as Detroit's last Republican mayor. Since that time the Democrats have ruled the Motor City. John Dingell has served region since 1956. His father was the Congressman from 1930 to 1956. Despite the disastrous decline of their city, Detroit voters send him back to Congress twenty-two times.

Like Detroit, California now has one party rule. The Democrats of California did not need a single Republican vote to pass their budget. Governor Brown’s plan is to address the nation’s largest deficit by raising taxes instead of cutting spending. If passed, the deficit would drop from $20 billion to a mere $16 billion. The budget does nothing to cure the systemic problems of a bloated bureaucracy. It does not eliminate one of California’s 519 state agencies.

Caltrans stopped building highways under Brown’s first term, but the people kept coming. Now 37 million Californians are locked in traffic jams each day. Brown was rewarded for such prescience with re-election as Governor. California’s egotistical politicians passed the Global Warming Solutions Act in 2006 (AB32) to “solve” climate change. Dan Sperling, an appointee to the California Air Resources Board (CARB) and a professor of engineering and environmental science at UC Davis, is the lead advocate on the board for a “low carbon fuel standard.” The powerful state agency charged with implementing AB 32 and other climate control measures, claims the low carbon fuel standard will “only” raise gasoline prices $.30 gallon in 2013. The California Political Review reported implementation of these the policies will raise prices by $1.00 per gallon.

Detroit was once the most prosperous manufacturing city in the world, a title later secured by California. Will California follow Detroit down a tragic path to ruin? In 1950, no one could imagine the Detroit of 2010. In 1970, when foreign imports started to make a foothold, the unions and their bought and paid for politicians resisted any change. In the 1990s as manufacturers fled to Alabama and South Carolina, the unions and their political minions held firm, even as good jobs slipped away. No one in Detroit envisioned their future.

Today, California is following Michigan’s path with exploding pension obligations, a declining tax base, and disastrous leadership. Housing prices have fallen 30 to 60% across the state, evaporating trillions of dollars of equity and wealth. Unemployment remains stubbornly high and under-employment is rife. Do our politicians need any more signs?

Governor Brown’s budget will first slash money to schools and raise tuition on its students while leaving all 519 state agencies intact. He apparently will protect political patronage at all costs. Jobs, and job creators, are fleeing the state. Intel, Apple, and Google are expanding out of the state. The best and brightest minds are leaving for Texas and North Carolina. The signs are everywhere. Meanwhile, the voters send the same cast of misfits back to Sacramento each year – just as Detroit did before them.

The beaches are still beautiful. The mountains are still snow capped and the climate is still the envy of the world. Detroit never had that. But will California’s physical attributes be enough? If the people of California want to glimpse their future, they need look no farther than once proud City of Detroit and the once wealthy state of Michigan.

It can happen here.

Robert J Cristiano PhD is the Real Estate Professional in Residence at Chapman University in Orange, CA, a Senior Fellow at the Pacific Research Institute in San Francisco, CA and President of the international investment firm, L88 Companies LLC in Denver – Newport Beach – Washington DC - Prague. He has been a successful real estate developer for more than thirty years.