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The Shifting Geography of US Deep Tech

Nima Sanandaji — Sun, 08 Jun 2025 20:28:38 -0400

A systematic mapping of where the world’s global leading companies in deep tech are located shows a massive lead for the USA – however the leading edge of particularly Santa Clara Valley shows signs of gradual normalization relative to the rest of the world.

The vast majority of globally leading deep tech companies are found in North America. North America has particularly strong dominance in the areas of artificial intelligence, biotechnology, robotic & communication, quantum & computing and pharmaceuticals. In these five fields of deep tech, around four out of five of the world-leading deep tech companies are found in North America.

In the USA alone, fully 61.6 percent of the globally leading deep tech companies are located. This is the finding of the Deep Tech Index, conducted annually by the European Centre for Entrepreneurship and Policy Reform (ECEPR) with the support of Nordic Capital, which maps and evaluates the global deep tech landscape.

However, while the latest data from the end of 2024 shows that close to two thirds of the world-leading deep tech companies are located in the USA, this is less than the previous year. At the end of 2023 fully 68.4 percent of the world-leading deep tech companies existed in the USA.

Santa Clara Valley, Los Angeles, Austin and Chicago are the leading robotic & communication tech regions. Santa Clara Valley, Boston as well as Vancouver in Canada are centers for quantum and computing development.

The share of global deep tech companies in North America has fallen by 5 percentage points since last year, representing a normalization process. Particularly the USA but also Canada remain dominant, but competition is on the rise.

Besides Santa Clara Valley, the USA also has numerous other world-leading deep tech companies. In Boston fully 6.4 percent of the world-leading deep tech companies are located. Also New York (6.0 percent), Los Angeles (3.8 percent), Chicago and Seattle (2.2 percent each), and Austin (1.8 percent) each host significant share of the world´s deep tech companies. These regions have more deep tech companies in them than most European countries individually, as comparison.

There are also numerous other deep tech companies spread throughout the USA outside the main hubs. Fully 18.8 percent of the world-leading deep tech companies exist in the USA outside of the main urban tech regions.

The share of US-based world-leading deep tech companies that exist in Santa Clara Valley has between the end of 2023 and the end of 2024 fallen from 35 to 33 percent. The share of all world-leading deep tech companies in the USA that are located outside the major urban hubs has also been reduced slightly, from 32 to 31 percent. At the same time the share in the other major urban hubs except Santa Clara Valley (Boston, New York, Los Angeles, Chicago, Seattle and Austin) has grown from 33 to 36 percent.

Two different economic forces are influencing the development. The first is the advantages of specialization. Thomas Edison founded the world’s first industrial innovation laboratory in this valley 150 years ago, and it has since become the most significant region for development of new technologies. The capital, knowledge and entrepreneurship networks needed are in place in Santa Clara Valley, more than any place else in the world. Similarly, the USA is dominant as a nation, compared to the rest of the world.

Yet, the success brings higher costs, for Santa Clara Valley as well as the USA. There are ample talents around the world, at lower prices than the talents of the USA and particularly of the expensive main tech hubs. Current policies relating to trade and international talents is also likely to influence. The trend is that Europe which is second best in deep tech and willing to trade, is catching up somewhat to the USA. Institutional competition will also be significant gradually more from places such as India. Much of globally leading universities in technology and mathematics, as well as global technology firms, are strongly dependent on Indian students and researchers.

The USA retains its dominant leading position, particularly medium-sized regions such as Boston, Los Angeles, Chicago and Seattle. Yet the global competition is growing, hinting at gradual further normalization. Within the coming years, it is likely that we will pass a milestone where less than half of the global deep tech companies are situated in the USA, while no other single country can catch up all the rest of the world combines will do so within coming years. However, the USA can still remain dominant particularly in specific areas. Deep technology is closely linked to prosperity, lower unemployment and national security. Countries around the world need constructive policies to foster deep tech.

The deep tech index demonstrates that countries with a high density of deep tech firms per million adults typically enjoy robust property rights, low capital gains taxes, strong educational outcomes in PISA tests, and prestigious universities specializing in mathematics and engineering disciplines. Boosting universities remains a key challenge now, given the current development in the USA. It is important to remember that Europe and Asia each already have a higher number of the world´s 100 leading universities in mathematics and engineering, the competition is already underway.

Nima Sanandaji, Director, European Centre for Entrepreneurship and Policy Reform (ECEPR)

Photo: cover of Deep Tech Index, 2025 edition.

The West Seattle Link Extension Has Gone Off the Rails

Charles Prestrud — Thu, 14 Nov 2024 20:28:58 -0500

On September 20^th Sound Transit published the Final Environmental Impact Statement (FEIS) for the proposed light rail extension to West Seattle. Ordinarily, publishing the FEIS is one of the final steps in the decision-making process with subsequent Board approval only a formality. However, in this instance information revealed in the FEIS is so unfavorable the Board may realize it is time to reconsider whether it makes sense to proceed as planned.

The news that got the Board’s attention was a cost increase from the 2023 estimate of $4 billion to somewhere between $5.1 and $5.6 billion. The bad news didn’t end there. Sound Transit staff then offered an even higher “opinion of probable cost” of between $6.7 and $7.1 billion, which is “based on a different cost estimating methodology and considers potential savings due to value engineering and other agency changes.” This ought to raise the question of what a realistic “probable cost” would be without the “potential savings.”

The new estimate is about triple the cost estimate provided in 2016 when the ST3 plan was approved, which, at $2.3 billion, was hardly a bargain. The revised cost is over $1.5 billion per mile for a line that is only four miles long and adds just four stations. On a per-mile basis that would make it one of the costliest light rail lines in the world, but nowhere near the most productive.

The Sound Transit Board seemed surprised at the cost increase, but they had every reason to expect the West Seattle extension would be difficult and expensive. The proposed alignment runs through built-up areas, most of the line needs to be elevated or in tunnels, a tall bridge over the Duwamish River will be needed, and considerable right-of-way will need to be purchased from businesses and homeowners. Even if Sound Transit didn’t have a twenty-year history of large cost over-runs on rail projects, the West Seattle extension had obvious challenges and risks likely to drive up the cost.

In the past Sound Transit has been resourceful in handling cost overruns. A combination of strategies including pushing out completion dates, increasing debt, and securing additional federal funding has allowed projects to go forward, even if much more slowly than originally promised. Now, however, Sound Transit is approaching its debt limit. The agency’s financial plan already assumes issuance of $24.7 billion in bonds through 2046, plus another $4.2 billion in federal loans to be repaid. By 2038 Sound Transit expects to pay over a billion dollars per year in debt service. Therefore, piling on more debt would be problematic, and in any case wouldn’t improve performance of the project, only make the ultimate cost even higher.

Faced with this difficult situation, a financially prudent governing board would ask whether it makes sense to proceed with a project that has tripled in cost and busts the budget, but the Sound Transit Board has taken a different approach. In board motion M2024-59 Sound Transit directs staff to “…develop a workplan on the programmatic, financial, and project level measures and opportunities the agency will pursue to improve the agency’s financial situation and move WSLE through design to inform a financially sound project to be baselined…”. What the motion does not do is develop alternatives or ask whether the project still makes sense. And, in case you were wondering, “baselined” is a sort of euphemism for moving the goal posts.

The Board’s motion shows that Sound Transit is approaching the problem as though it is just about the agency budget, but that narrow view ignores the bigger question raised by the FEIS, which is that despite the extravagant cost the project accomplishes very little. The fine print of the FEIS reveals total transit ridership in the region under the No-Build alternative would produce 99.7% of the ridership of the light rail alternative. In other words, the light rail extension would produce less than a one percent increase in total transit ridership for an investment of over $6 billion. That is an exceedingly poor return on such a massive investment. You might be hoping that even if the project doesn’t do much to increase ridership it might reduce congestion or greenhouse gas emissions. Alas, the FEIS also informs us that vehicle hours of delay would change by less than one half of one percent, and total vehicle miles travelled changes even less, just two tenths of one percent. As result, the West Seattle extension will not reduce greenhouse gas emissions, improve transportation system efficiency, or meaningfully improve the mobility of West Seattle residents.

Read the rest of this piece at Washington Policy.

Photo: courtesy Washington Policy

Demographia International Housing Affordability – 2024 Edition Released

Wendell Cox — Sun, 02 Jun 2024 20:28:58 -0400

Demographia International Housing Affordability assesses housing affordability in 94 major markets across eight nations (Australia, Canada, China, Ireland, New Zealand, Singapore, United Kingdom and the, United States). The 2024 edition focuses on data from the third quarter of 2023.

Key Points

Ratings: The report uses a median price-to-income ratio (“median multiple”) to determine affordability.

Affordability Categories: Housing markets are rated from “affordable” to “impossibly unaffordable” based on their median multiple (Table (ES-1).

Geography: Housing markets are labor markets (which are also metropolitan areas or functional urban areas), largely defined by the “commuting shed.” Housing affordability comparisons can be made, (1) between housing markets (such as a comparison between Adelaide and Melbourne) or (2) over time within the same housing market (such as between years in Adelaide).

Variations within Nations: The report emphasizes that affordability often varies significantly between markets within the same country. National averages aren’t always representative.

Housing affordability in 2023 is summarized by nation in Table ES-2.

International Housing Affordability in 2023: In the US, the most affordable market was Pittsburgh (PA), with a median multiple of 3.1, followed closely by Rochester (NY) and St. Louis (MO-IL) at 3.4, with Cleveland (OH) at 3.5. Rounding out the most affordable ten markets also includes one Canadian market, Edmonton, plus Buffalo (NY), Detroit (MI), Oklahoma City (OK) at 3.6, Cincinnati (OH-KY-IN) and Louisville (KY-IN) at 3.7. Singapore at 3.8 was also moderately unaffordable, along with, in the UK, Blackpool and Lancashire, and Glasgow at 3.9.

The Housing Affordability Crisis: Causes and a Path Forward

Middle-income households face rapidly escalating housing costs, which is the primary cause of the present cost-of-living crisis. For decades, home prices generally rose at about the same rate as income, and homeownership became more widespread. But affordability is disappearing in high-income nations as housing costs now far outpace income growth. The crisis stems principally from land use policies that artificially restrict housing supply, driving up land prices and making homeownership unattainable for many.

Urban containment policies (greenbelts urban growth boundaries, densification) are designed to limit sprawl and increase density. While well-intentioned, these policies severely constrict the land available for housing. In constrained markets, higher land values translate to dramatically higher house prices.

Economic Dynamics

Land values naturally increase closer to urban centers. Urban containment policies are associated with abrupt value spikes at established boundaries. Research confirms this, finding land prices inside urban containment boundaries can be 8-20 times higher than outside.

New Zealand's Reforms: A Model

New Zealand provides a hopeful path forward. Recognizing the crisis is rooted in high land values, new policies are proposed to open up sufficient land to accommodate demand.

A Focus on People, Not Places

The housing crisis demands prioritizing the well-being of people over abstract planning ideals. The planning orthodoxy, while aimed at improving cities, has worsened affordability. This undermines the economic opportunity essential for thriving middle- and lower-income households.

Elaboration and sources are in the full report. Click here to read and download the full report.

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a founding senior fellow at the Urban Reform Institute, Houston, a Senior Fellow with the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is co-author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.

Mayor Tom Bradley appointed him to three terms on the Los Angeles County Transportation Commission (1977-1985) and Speaker of the House Newt Gingrich appointed him to the Amtrak Reform Council, to complete the unexpired term of New Jersey Governor Christine Todd Whitman (1999-2002). He is author of War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life and Toward More Prosperous Cities: A Framing Essay on Urban Areas, Transport, Planning and the Dimensions of Sustainability.

Lead image: Demographia International Housing Affordability — 2024 Edition cover photo from New Matilda used under CC 2.0 License.

High-Rise Datacenters: Potential to Assist Downtown Recovery

Wendell Cox — Sun, 05 Nov 2023 19:28:38 -0500

The largest Central business districts (CBDs or downtowns) face a serious crisis as working from home has seriously reduced the demand for five-day on-site employment. The CBDs most at risk are typically those with the strongest transit work trip market shares, at from 30 to 80 percent — New York (Manhattan), Chicago (the Loop and adjacent areas), Boston, Philadelphia, Washington, San Francisco and Seattle. In Canada, this includes Toronto, Montreal, Vancouver and Calgary. Other CBDs, with smaller transit market shares are also experiencing severe difficulties, such as Atlanta, Denver, Houston, Los Angeles, Minneapolis and Portland.

Commutes to these locations are considered anything but rewarding for many. Fully remote workers are employed virtually full-time from home and many of these have moved far away from their on-site employment locations.

Other workers have hybrid schedules, working on-site some days and from home on others. A recent Kastle Systems report of on-site work in 10 large metropolitan areas indicated that Fridays now have an the lowest employee occupancy rate of only 26% to 42%. The top day, generally Tuesday, has an employee occupancy rate of 49% to 71%.

In 2022, 15.2% of US workers worked from home, which marked a decrease from the 17.9% recorded in 2021. However, this percentage remained significantly higher than the 5.7% observed in 2019. The prevalence of remote work surged during the pandemic, with a brief period where it accounted for over 60% of paid work hours. Notably, this increase in working from home had a more adverse impact on public transit compared to driving. According to data from the American Community Survey, between 2019 and 2021, the share of workers using transit dropped by 37.0%, while the percentage of individuals driving alone decreased by 9.6%, and carpooling experienced a 2.4% decline.

The financial fallout for core cities is substantial. The demand for CBD office space is declining. A number of office buildings with Grade A space have been sold for far less than their pre-pandemic values. There have been defaults and hundreds of billions in office building mortgages come due for refinancing in the next five years.

The impacted municipalities are desperate to preserve their CBDs, not least because of the property tax and other tax revenues they produce so crucial to balancing budgets. Further, the last thing the cities need is expanding the all too often hollowing out that has occurred in recent decades.

An obvious solution is to convert disused office buildings into residential buildings. There are already success stories around the country, where empty office buildings have been converted. For examples, the city of Los Angeles, with its adaptive reuse approach has been a model for two decades. One great advantage of the residential conversions would be to moderate the intensively unbalanced jobs to worker ratios. For example, Manhattan in 2019 had 3.1 jobs for every resident worker, according to the American Community Survey (excluding those who work at home).

But not all empty office buildings can be converted to residences at a cost that permits a competitive return on investment for developers. A particular problem is that many of the newer buildings with larger floor plates cannot efficiently be converted to residential, because some apartment rooms would not be able to have windows.

Data centers could provide an opportunity for conversion from office space, where residential conversion is infeasible. According to Bard (Google’s artificial intelligence program), “A data center is a physical facility that houses computer systems and associated components, such as telecommunications and storage systems. Data centers are essential for the operation of the internet and other critical infrastructure. They provide the computing power and storage capacity needed to run websites, applications, and services, and to store and manage data.”

Companies have historically had their own on-premises data centers, but in recent years many have shifted to using third-party (cloud) data centers, where multiple companies can purchase the storage and services they need. There are more than 2,000 datacenters in the United States. Most are low-rise.

High-Rise Data Centers

But there is considerable potential for data centers in the traditional CBDs.

The One Wilshire Building in downtown Los Angeles is a good example of a high-rise data center (Top Photo). One Wilshire opened in 1966 and was the fourth tallest building in downtown Los Angeles, at 30 floors (trailing the Union Bank Plaza. City Hall and the Occidental Center). In its early decades, One Wilshire was a modern, conventional office building. However, the building was converted to a data center in the 1990s. According to Wikipedia, the Los Angeles Times reported that One Wilshire had become one of the three top telecommunications sites in the world, along with 60 Hudson Street (below) in New York and Telehouse in London. Other examples follow.

The Terminal Commerce Building in center city (401 North Broad Street) Philadelphia (below) has been converted to a data center. The 14 floor building was constructed by the Reading Railroad and opened in 1931. It is within a short walk of City Hall.

The 34 story Westin Building (below) in downtown Seattle started out in 1981 as the corporate headquarters of Westin Hotel. It has been converted into a data center.

The Google Building (111 8th Avenue) in Manhattan started out in 1932 as the Port Authority Building (below), built by the Port Authority of New York and New Jersey. It is a 15 story building, which was purchased by Google in 2010 and has been converted into a data center.

A New York Times article singled out the St. Louis downtown area as having substantial potential for office building conversion to data centers.

Rising Demand

The demand for data centers is increasing rapidly, with a doubling expected in power consumption in the United States alone, between 2022 and 2030. Much of this is due to the expansion of artificial intelligence. Meanwhile, the industry faces greater challenges, such as the rising costs of land and community opposition to placement near residential areas. CBD locations could be a godsend, requiring considerably less land and being separated from residential areas.

Conclusion

High-rise data centers will not, in and of themselves, restore downtowns to their former glory. It is always a compelling task to repurpose built environment to accommodate activities for which they were not designed. But high-rise data centers could provide a partial solution to city officials facing a difficult challenge.

Photos: Top photo, One Wilshire Building, downtown Los Angeles via Flickr; 60 Hudson Street, New York via Wikimedia; Terminal Commerce Building via Wikimedia; Westin Building via Wikimedia; Google Building via Wikimedia; under CC 2.0 License.

Top Zip Codes for New Apartments: 2018 - 2022

Wendell Cox — Thu, 26 Oct 2023 20:28:38 -0400

Rentcafe.com has just published a list of the 51 ZIP Codes in the United States that have had the most apartment construction over the last five years (2018-2022). These neighborhoods are located in 20 metropolitan areas (which are housing and labor markets). This article provides data from Rentcafe.com for each of these metropolitan areas, the urban core versus suburban distribution of the new apartment zip codes, as well as recent building permit data for multi-family and single-family housing for the first 8 months of 2023 annualized.

Dallas-Fort Worth, TX a metropolitan area known for its broad expanse of single-family housing, lead the list with 30,557 new apartments. Dallas-Fort Worth had the most zip codes among the top 51, with eight. Two of the zip codes were in or near the urban core, while six were in the suburbs (Farmers Branch, Richardson, McKinney, Frisco, Grand Prairie and The Colony). About 80% of the new apartments are in the suburbs. In 2023 (through August), Dallas-Fort Worth ranked 2nd nationally in multi-family permits and 2nd in single-family permits.

Second place was taken by the Washington, DC-VA-MD-WC metropolitan area with 17,613 new apartments. Washington included the two zip codes with the largest number of new apartments, which are located near the Capitol. A third zip code is in Alexandria, Virginia. In 2023 (through August), Washington ranked 9th nationally in multi-family permits and 15th in single-family permits.

Austin, Texas, the fastest growing metropolitan area in many recent years, added 17,479 new apartments, for third place. Five zip codes are ranked in the top 51. Three are located in or near Austin’s urban core, while two are in the suburbs (San Marcos and Pflugerville). In 2023 (through August), Austin ranked 3rd nationally in multi-family permits and 7th in single-family permits.

New York, NY-NJ-PA, which has by far the largest number of apartments in the nation, ranked fourth with 15,174. This included three zip codes, two in New York City (Brooklyn and Queens) and one in Exchange Place, which has become an across-the-Hudson extension of New York City’s Lower Manhattan and also includes downtown Jersey City. None of the zip codes was in the urban core of Manhattan. In 2023 (through August), New York ranked 1st nationally in multi-family permits and 11th in single-family permits.

Chicago, IL-IN-WI ranked fifth with 13,713 new apartments. This includes four zip codes, which virtually surround the Chicago’s Loop (the central business district), on the south, west and north sides. In 2023 (through August), Chicago ranked 25th nationally in multi-family permits and 22nd in single-family permits.

Seattle ranked sixth, adding 13,016 apartments in three zip codes. One is in suburban Redmond (headquarters of Microsoft), with two more in Belltown and Lake Union-Queen Ann near the urban core. In 2023 (through August), Seattle ranked 13th nationally in multi-family permits and 29th in single-family permits.

Atlanta ranked seventh with 12,174 new apartments in three zip codes in the city of Atlanta. In 2023 (through August), Atlanta ranked 7th nationally in multi-family permits and 4th in single-family permits.

Miami ranked eighth, adding 11,989 apartments, two in Miami zip codes and one in Fort Lauderdale. In 2023 (through August), Miami ranked 5th nationally in multi-family permits and 37th in single-family permits.

Houston ranked ninth and added 11,558 in three urban core zip codes. In 2023 (through August), Houston ranked 4th nationally in multi-family permits and 1st in single-family permits.

Phoenix ranked 10th, adding 9,254 apartments, one in a city of Phoenix zip code and the other in a suburban Tempe zip code. In 2023 (through August), Phoenix ranked 8th nationally in multi-family permits and 3rd in single-family permits.

The San Francisco metropolitan area ranked 11th, adding 8567 apartments, in one San Francisco and one Oakland zip code. In 2023 (through August), San Francisco ranked 36th nationally in multi-family permits and 65th in single-family permits.

Denver ranked 12th, adding 7038 new apartments, two in urban core zip codes. In 2023 (through August), Denver ranked 11th nationally in multi-family permits and 21st in single-family permits.

Nashville ranked 13th, adding 6806 new apartments in a single urban core zip code. In 2023 (through August), Nashville ranked 10th nationally in multi-family permits and 8th in single-family permits.

Columbus ranked 14th, adding 6605 new apartments in one urban core zip code and a zip code on the outskirts of the city of Columbus. In 2023 (through August), Columbus ranked 24th nationally in multi-family permits and 38th in single-family permits.

Charlotte, NC-SC ranked 15th, adding 6363 new apartments, one zip code in the central business district and one in a more distant zip code within the city of Charlotte. In 2023 (through August), Charlotte ranked 16th nationally in multi-family permits and 5th in single-family permits.

San Diego ranked 16th, adding 5346 apartments, all in a central business district zip code. In 2023 (through August), San Diego ranked 22nd nationally in multi-family permits and 77th in single-family permits.

Tampa – St. Petersburg ranked 17th, adding 3379 apartments in a central business district zip code. In 2023 (through August), Tampa-St. Petersburg ranked 14th nationally in multi-family permits and 9th in single-family permits.

Jacksonville ranked 18th and added 3243 new apartments in a zip code on the outskirts of the city of Jacksonville. In 2023 (through August), Jacksonville ranked 18th nationally in multi-family permits and 13th in single-family permits.

Los Angeles ranked 19th, adding 3138 new apartments, in a Hollywood district zip code in the city of Los Angeles. In 2023 (through August), Los Angeles ranked 6th nationally in multi-family permits and 10th in single-family permits.

Orlando ranked 20th, adding 2806 new apartments in the central business district zip code. In 2023 (through August), Orlando ranked 15th nationally in multi-family permits and 6th in single-family permits.

State Analysis

Texas led the nation among the top 51 new apartment zip codes, capturing 3.7 times its share relative to the 2019 (used as the midpoint year, because there was no apartment stock data in 2020) national apartment stock, according to ACS data (Figure). Three other states exceeded a ratio of 2.0 (Washington, Arizona, Georgia and Tennessee) and four other states exceeded a ratio of 1.0 (Colorado, Illinois, North Carolina, Florida and Ohio). Three states had ratios less than 1.00, New York and New Jersey, with all zip codes in the New York metropolitan area and California. California has fallen into population decline in the last few years, though state officials indicate that there is a 3.5 million deficit in housing units.

The District of Columbia, which is a single city as opposed to a metropolitan area, added apartments at a rate equal to more than 15 times its stock of apartments.

Among the 13 states with the top 51 new apartment Zip Codes reported by Rentcafe.com, Colorado had the largest number of apartment building permits as reported by the Census Bureau through in 2023 (through August), annualized, at 3.53 per 1,000 population. Florida was second at 3.27, followed by North Carolina at 2,83, Texas at 2.73, Georgia at 2.68, Tennessee at 2.60, Washington at 2.55 and New Jersey at 2.15. California had 1.39 apartment building permits per 1,000 population, followed by 1.01 in Ohio, 0.89 in New York and 0.55 in Ohio.

Among the three largest states (all with more than 20 million residents), Florida and Texas have had nearly double or more the apartment building permits per 1,000 population than California in 2023, despite the fact that public policy is heavily biased toward multi-family construction and against single-family housing construction, which the overwhelming majority of households prefer.

The District of Columbia had 4.53 apartment permits per 1,000 population through August of 2023.

Photo: Downtown Dallas by Michael Barera via Wikimedia under CC 2.0 License.

Implications of Shifts in Commuting

Charles Prestrud — Fri, 13 Oct 2023 20:28:38 -0400

There has been much speculation about how travel behavior has changed in the wake of the COVID pandemic. The answer to that important question is now coming into view. Data from the American Community Survey allows us to compare pre and post COVID commuting trends. The table below shows the commute mode shares in Washington State for 2019, 2021, and 2022.

Prior to the pandemic commuting by single occupant vehicle (SOV) was far and away the most common mode, constituting 71% of commute trips. During the pandemic lockdowns and business closures of 2021 it dipped to 62%, and only rebounded slightly to 63.2% in 2022. Transit, which accounted for just 7.12% of commute trips in 2019, fell to only 2.13% in 2021, and rebounded only slightly to 3.16% in 2022. Walking and biking also decreased during the pandemic and have not shown a rebound in 2022, remaining in the low single digits.

The only mode to show an increase was teleworking (also known as working from home). Working from home had already been increasing prior to COVID but during the pandemic it more than tripled to over 24% of all commute trips. In 2022 working from home subsided a bit as employers called their employees back to work, but it still accounts for over 20% of commute trips, which is more than transit, carpooling, walking and biking combined. This is a remarkable shift in commuting behavior, and it is an indication of what we can expect in the years ahead. Once people have set up home offices and employers have adopted policies that allow or encourage teleworking it will be easier for people to continue working from home, at least a few days per week.

The significance of this shift in commuting becomes apparent when contrasted with the transportation plans of public agencies, including WSDOT, Regional Planning agencies, cities, and transit agencies. Those plans almost all emphasize transit, biking and walking, and they assume those modes will accommodate much of the increased travel demand that will come with the growth in the State’s population. For example, the PSRC’s 2050 Plan assumed transit ridership would more than double by 2030, but between 2019 and 2022 ridership fell by more than 30%. The large ridership increase assumed by PSRC now looks highly improbable.

The situation with WSDOT is similar. For more than twenty years WSDOT plans have emphasized transit, biking and walking. Those are all good things to encourage and to plan for, but the data shows those modes all decreased significantly during the pandemic, and they weren’t growing much even before the pandemic.

What’s missing is the WSDOT plan to accommodate the increase in vehicular travel. The State Highway System Plan hasn’t been updated since 2007. Nearly all the projects in that plan have since been completed or are well along toward construction. Much as we might wish that transit, biking and walking would reduce the need for highway improvements, the data gives us no reason to believe that will occur.

Now that we have hard data that sheds light on commuting, the public agencies responsible for our transportation system need to update their plans and revise their forecasts. The pre-COVID baselines used in prior plans need to be replaced with more recent trend data. This may prompt some uncomfortable policy discussions, nobody likes to abandon an attractive vision, but wishful thinking isn’t an effective strategy. Updated plans should face up to the change in travel behavior and take advantage of the opportunities that have been created by technology and the increase in working from home.

This piece first appeared at Washington Policy Center.

Charles Prestrud is director of the Coles Transportation Center. Charles brings more than thirty years of transportation experience to the position, including serving as WSDOT’s planning manager for King and Snohomish Counties, and earlier in his career, as planning manager for a transit agency. His professional work has included leading the preparation of a long-range transit plan, analysis of legislative proposals, development of State Highway HOV policy, crafting Federal and regional grant applications, and lots of inter-agency coordination (sometimes successfully). He has served on several Transportation Research Board committees as well as National Cooperative Highway Research Program study panels. Charles graduated from the U.W. where his studies focused on economics and geography.

MAGA Attacks on Cities Are Not Working

Pete Saunders — Tue, 10 Oct 2023 20:28:38 -0400

We’re 13 months away from the 2024 presidential election, and just 3 months away from the primaries. The dominant themes of the election are forming. The Republicans have let it be known that one theme will be the crime, drugs, homelessness, and the general lawlessness of “Democrat-run” cities is a disqualifying factor for Dems, and a point in their favor.

Several cities around the country have been featured prominently on television and social media for frightening criminal acts and intractable social problems. Seattle, Portland, Chicago, and Philadelphia have been noted on many outlets at different times; New York is increasingly being described as a dystopic environment. The message? Republicans can get tough on crime and end this nonsense.

However, for the first time in memory, the strategy is not working.

Origins of the Urban Demon

How did demonizing cities become a political strategy? Well, there’s always been at least a slight anti-city bias in America since its formation. The nation was founded on the principle of self-determination, and the agrarian lifestyle was often viewed as the pinnacle of American living. Cities, however, were viewed as complex, interdependent places that made personal success more complicated.

The rise of the modern industrial economy after the Civil War was centered on cities. Labor was needed to fulfill the mass production needs of large corporations and immigrants from around the world were willing to meet the rapidly expanding need. Cities became the landing spot and training ground for a new group of Americans. However, the rapid economic and social changes of the time caused many people to question whether growth came at the expense of American values, and whether the urban lifestyle was anathema to the self-directed American Dream. In the late 19th and early 20th century, cities were gaining a reputation as disruptive and unmanageable places at best, and disorderly and violent places at their worst.

People who had the desire and ability to escape the chaos of cities did so, fueling the rise of early suburbia. The development of suburbia expanded modestly before World War II and accelerated following it. By the 1960’s there were competing narratives on American living: suburbs on the rise, rural areas in decline, and cities in flux.

And yes, it’s the 1960’s where city demonization goes to the next level. Protests against the Vietnam War, in favor of (and against) the Civil Rights Movement, and the urban riots in several cities in response to poor conditions and treatment in cities became the rule at the time. This all came to a head in 1968. Vietnam War anger forced President Lyndon Johnson to forego seeking reelection. The release of the Kerner Commission Report detailed the inequity in cities that was at the root of the frustration that powered urban riots. The assassinations of Martin Luther King, Jr. and Robert F. Kennedy symbolized an America out of control.

The Impact of 1968

Enter Richard Nixon and George Wallace.

The 1968 U.S. presidential election between Republican Richard Nixon, Democrat Hubert Humphrey and segregationist independent George Wallace led to an American narrative of cities that continues to resonate until today. Nixon ran on a “law-and-order” platform, promising to restore control in tumultuous cities. Humphrey’s campaign sought to continue President Johnson’s Great Society and War on Poverty programs, while maintaining a commitment to the Civil Rights Movement. Wallace was essentially a single-issue candidate, opposing desegregation and the Civil Rights Movement.

The election was close. Nixon won a narrow victory (less than 1%, or about 500,000 votes) over Humphrey. The election was made close by the strong showing of Wallace, who won 13.5% of the national vote, carried five southern states and won 46 electoral votes. It didn’t take long for Nixon to realize that Republicans that they could secure a stronger national majority if they made appeals to Southern voters who voted for Wallace.

After Nixon’s close 1968 win, he focused on a strategy that merged traditional “Middle America” conservative values with the populist and distinctly segregationist Southern voters who supported George Wallace. That merger brought together small town and rural Midwestern voters, an increasing number of suburban voters, and Southerners, who could agree on one thing – their dislike of large cities and the problems they incur.

Nixon’s silent majority and southern strategy plans paved the way for the GOP for the next 40 years. Nixon was able to win in 1972 in a landslide, and Northern Democrats would not win another presidential election until Barack Obama won in 2008.

Cities in the wilderness

What did this mean for cities between 1968 and 2008? Essentially it meant a 40-year period in the wilderness. Federal funding directed at cities during the Great Society era began to wither away by the mid-1970’s. Prominent issues of the Civil Rights Movement, like fair housing, poverty reduction and school desegregation, became issues of the past. Cities were left to their own devices to find a way out of the wilderness.

Cities chose one of two ways to prosper during this avidly anti-city period. One way was to tap into the still-expanding suburban development model. Younger cities largely developed as super-sized versions of suburbs, particularly in the South and West. Older cities tended to double down on their economic strengths as a growth strategy, but with a twist that led to diverging fortunes. Manufacturing centers struggled to keep good-paying manufacturing jobs in the face of international competition. Cities that were already strong in the information and service sectors took advantage of the economic winds that favored things like technology, finance, healthcare and biotechnology, advanced professional services like law, science and engineering, elite higher education, and entertainment.

Things have worked out well for the cities that became super-sized suburbs or relied on information and service sectors that would benefit from a transformative global economy. Things did not work out so well for former manufacturing hubs.

Cities and suburbs today – near-equal footing?

So here we are, in 2023. Republicans are using the same kind of attacks on cities that they used in 1973. Why is the attack that worked then not working now? Five reasons come to mind.

Read the rest of this piece at Corner Side Yard Blog.

Pete Saunders is a writer and researcher whose work focuses on urbanism and public policy. Pete has been the editor/publisher of the Corner Side Yard, an urbanist blog, since 2012. Pete is also an urban affairs contributor to Forbes Magazine's online platform. Pete's writings have been published widely in traditional and internet media outlets, including the feature article in the December 2018 issue of Planning Magazine. Pete has more than twenty years' experience in planning, economic development, and community development, with stops in the public, private and non-profit sectors. He lives in Chicago.

Photo: Former president Donald Trump's infamous photo op in front of St. John's Episcopal Church in Washington, DC, June 1, 2020. The photo op was meant to demonstrate successful "law-and-order" efforts to quell violence in the aftermath of the 2020 George Floyd protests. The photo op was later viewed as a failure after being condemned by military and religious leaders, as well as elected officials from both major political parties. Source: Official White House Photo by Shealah Craighead, in Public Domain.

America's Sanctuary Cities Are Falling Apart

Joel Kotkin — Thu, 21 Sep 2023 20:28:38 -0400

If it were not so tragic, it would be funny. For years the progressive Left — in the US as well as across the West — has boasted about its willingness to accept people even if they have arrived in America illegally. With over one million having crossed the border illegally since Joe Biden took office — and their numbers are rising — the facade of the sanctuary city is falling apart.

Border chaos is now sparking a war among Democrats, with some, like New York Mayor Eric Adams, suggesting the migrant wave may “destroy” the city. His critique has been repeated by much of the border state Arizona Democratic delegation, as well as Independent Senator Kristen Sinema. But if sensible Democrats know the game is up and want to stop the flow, others, like Chicago’s ultra-progressive Mayor Brandon Johnson and Leftist members of the New York City Council, denounce Adams and others as xenophobic acolytes who are mouthing “repugnant Maga garbage”.

Yet the collapse of the sanctuary city is not the product of far-Right manipulation, although it certainly warms the cockles of reactionary hearts. Nor is it primarily caused by shipments of migrants from what some may see as the quasi-fascist republics of Texas and Florida. The vast majority of refugees, as even the New York Times admits, go to New York on their own.

The simple truth is this. If allowed to come and stay, irrespective of legal status, refugees will keep coming. Most of them are seeking a better life, but there is also a non-insignificant presence of criminal elements — notably the Mexican cartels — to flood cities with drugs and human traffickers, too. These often poorly educated, desperate people are also arriving at a time when urban economies around the West are sluggish, and fiscal resources are drying up.

Critically, much of the new opposition to sanctuary cities comes from minority populations that now must compete with migrants for space, medical services, and schools. In New York, Mayor Adams listens to such complaints from his core base of working-class African Americans and Afro-Caribbeans. But in Chicago, Johnson is proving himself a stalwart comrade despite widespread resentment of refugees in many neighbourhoods, including black ones.

Even sensible progressives should acknowledge that it may prove impossible to fund the migrants and still keep up their dreams of a European-style elaborate welfare state. New York City is already contemplating major budget cuts, and it’s hard to believe that hard-hit West Coast cities, such as Los Angeles and San Francisco, can afford more indigents when they already struggle with a large, and seemingly immovable, homeless population on their streets.

California currently suffers from the nation’s highest poverty rate as well as the widest gap between middle- and upper-middle income earners of any state. Its citizens already confront a state with crime, disorder, homelessness and an education system in tatters. Adding hundreds of thousands of poorly educated non-English speakers may not be the salve these school districts need.

Unfortunately, several Democratic leaders do not seem to recognise the scale of the problem. California’s Gavin Newsom is now considering “right to shelter” legislation similar to that which has lured migrants to places like New York. In addition, the state seems determined to provide the undocumented with ever more benefits, offering free healthcare, non-enforcement of immigration and free college for their kids. The high housing prices might keep them away, but instead they get Government-subsidised housing.

Read the rest of this piece at UnHerd.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: screenshot from KTLA news on YouTube.

A New Rideshare Model

Randal OToole — Sun, 14 May 2023 20:28:58 -0400

Alto is a rideshare company that was founded in Dallas and so far is also operating in Houston, Los Angeles, Miami, San Francisco, and Washington. The company differs from traditional rideshare operations like Uber and Lyft in that it owns all of its automobiles and all of its drivers are employees, not contractors. This is supposed to make it more attractive to passengers, especially women, who may be squeamish about riding in a stranger’s car.

Alto claims that its rides are “elevated” above other ridesharers. Its fleet currently seems to consist of Buick Enclaves, a cross-over with three rows of seating. It has replaced the Buick logo on the grill with its own and added its logo to other parts of the vehicles as well. However, it plans to transition soon to all-electric vehicles.

While I’m always intrigued by new business models, I can’t help but feel this one is going in the wrong direction. The intercity bus market went from Greyhound, which owned its own buses, stations, and maintenance facilities, to Megabus, which owned buses and maintenance facilities but no stations, to Flx, which didn’t even own its own buses and maintenance facilities. In other words, the newer models shed costs and spread the risk to more operators.

Uber and Lyft disrupted the taxi market because they replace call centers and human taxi dispatchers with smart phones and automated dispatch. In 2019, some predicted that Uber would never be profitable, but it had its first profitable quarter in 2021 and today both Uber and Lyft claim to be making a profit.

Uber and Lyft have been criticized for treating drivers as contractors and not employees, yet most taxi companies do the same. Uber and Lyft may make less effort than taxi companies to ensure uniformity of service, as not all drivers own the same make and model of vehicles, but it has been my experience, at least, that vehicles are clean, in good condition, and relatively new. The drivers, not Uber or Lyft, take the risk that the vehicles they own won’t earn enough to pay for themselves, but from the customer’s viewpoint that leads to more competition and faster service.

Alto’s model absorbs all of the risk that Uber and Lyft spread among their drivers. That could be quite expensive. Buick Enclaves list for about $45,000, and while I’m sure Alto gets quantity discounts, the $60 million it had raised by mid-2021 is hardly enough to buy 3,000 Enclaves, much less replace them all with electric vehicles by the end of this year, which was Alto’s goal.

Given the limited number of vehicles in its fleet, Alto won’t promise 5-minute wait times like Uber and Lyft can often do. While people can pre-schedule a car, spontaneous Alto customers can expect to wait 10 to 15 minutes. Also, Alto doesn’t operate 24 hours a day; instead, depending on the city, it is shut down for three to five hours each night. Furthermore, while Uber and Lyft are available in hundreds of U.S. cities, Alto is currently limited to just six, which means frequent travelers will keep the Uber and/or Lyft apps even after they’ve tried Alto. Another disadvantage is that all of Alto’s fleet of cars have to be big enough to carry the largest party that might want to use them (i.e., six passengers), while Uber and Lyft can tailor the size of the vehicles they send to the number of people in each party.

Read the rest of this piece at The Antiplanner.

Randal O'Toole, the Antiplanner, is a policy analyst with nearly 50 years of experience reviewing transportation and land-use plans and the author of The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future.

Photo: courtesy Alto.

Washington Governor Jay Inslee Mandates An All-Electric State

Ronald Stein — Wed, 08 Mar 2023 20:28:58 -0500

Washington State Governor Jay Inslee, like California’s Governor Newsom, is mandating his state toward an all-electric state. In doing so, Inslee is demonstrating his visionary limitations, as he cannot see the ugly side of his wind, solar, and EV mandated world.

For the vast acreage required for wind and solar, it’s pathetic destruction of pristine landscapes!

Further, after decades of working around the world, wind turbines and solar panels continue to have a live expectancy of about 20 years. To-date there is yet to be discovered a financially viable means of recycling those renewables. As a result, today’s old wind turbines and solar panels are being dumped into toxic waste dumps.
Today, estimates are that by 2050, with current plans, the quantity of worn-out solar panels, much of its non-recyclable, will constitute double the tonnage of all today’s global plastic waste, along with over 3 million tons per year of unrecyclable materials from worn-out wind turbine blades.

Inslee could enhance his energy literacy by viewing a short 1-minute video produced by Epoch Times TV about renewables that only generate electricity, but manufacture nothing for society. The video has already been viewed by more than 800,000 on social media at youtube.com.

Wind turbine blades are made of a tough but pliable mix of resin and fiberglass—similar to what spaceship parts are made from. Decommissioned blades are difficult and expensive to transport. They can be anywhere from 100 to 300 feet long and must be cut up on-site before getting trucked away on specialized equipment to a landfill that may not have the capacity for the blades. Landfills that do have the capacity may not have equipment large enough to crush them.

Solar panels are mostly made of glass, which has low value as a recycled material, but they also have small amounts of silicon, silver, and copper as well as heavy metals (cadmium, lead, etc.) that some governments classify as hazardous waste. Hazardous waste can only be transported at designated times and via select routes. Because solar panels are delicate and bulky, specialized labor is required to detach and remove them to avoid their shattering and polluting local areas.

Before committing to an all-electric State, Washington has the opportunity to seek decommissioning, restoration, and recycling down to the last dandelion of every wind turbine, solar panel, and EV battery, just like we have for a decommissioned mine, oil, or nuclear sites in America.

Read the rest of this piece at CFACT.

Ron Stein is an engineer who, drawing upon 25 years of project management and business development experience, launched PTS Advance in 1995. He is an author, engineer, and energy expert who writes frequently on issues of energy and economics.

Photo: courtesy CFACT.