San Francisco

California's Low-wage Jobs Crisis

Joel Kotkin and Marshall Toplansky — Mon, 23 Dec 2019 21:54:05 -0500

Media, the political class and policy wonks have identified the “housing crisis” as California’s existential challenge.

Yet, in reality, more critical may be a “jobs crisis” that is condemning ever more Californians to permanent low-wage purgatory.

Viewed in aggregate, California employment growth in the past decade has outperformed the rest of the country, although the state lags its prime competitors Utah, Florida, Texas, Colorado, Nevada. In more recent years the state has remained ahead of the national average, although clearly losing momentum.

This is what many boosters see as proof of the “vibrant” economy. But look closer at the quality of jobs being created. Despite the surge of high-wage employment in the Bay Area, the state has created five times the number of low as opposed to high wage jobs.

Rather than a beacon for high wage employment, California has created fewer high-paying positions than the national average, and far fewer than prime competitors like Salt Lake City, Seattle or Austin. The convergence of low wages and ever higher housing prices constitute the real “crisis” facing the state.

Since 2000 home prices across Southern California, including the Inland Empire, have grown at roughly twice the rate of income. The new California dream may be working three jobs and never being able to afford a home of your own.

California’s not so good new economy

The changing nature of the state’s economy does much to explain this disappointing pattern. From the end of the Second World War to the 1990s, California developed a very diverse economy, spanning from entertainment and aerospace to all kinds of manufacturing, agriculture and energy. Except for agriculture, all created many middle-wage jobs.

But with the end of the Cold War, the introduction of ever-stricter environment regulations and among the nation’s highest taxes, many middle-class jobs have disappeared. Such above-average paying jobs have dropped 51 percent in the past decade, among the highest rates in the country.

Many firms that traditionally employed mid-skilled blue- and white-collar workers — Parsons, Bechtel, Occidental Petroleum, Toyota, Mitsubishi, Nissan, Schwab and McKesson, Lockheed Northrup — have either left the state or dramatically lowered their headcounts.

Instead, the state economy has become increasingly dominated by the tech sector, which now accounts for more than half its largest firms. These firms may enjoy enormous profits, but employ relatively few workers, particularly outside the Bay Area. Southern California, with a few exceptions, has not been invited to the party. Although the Los Angeles MSA boasts the second largest number of new engineering graduates, for its size, there should be more STEM jobs here. The L.A. area ranks only 116th on a percentage of tech jobs relative to all jobs in the area. By contrast, Silicon Valley ranks No. 1 and San Francisco No. 3 in the nation on percentage of employment in STEM occupations.

Particularly hard-hit has been the industrial sector, which, notes business relocation expert Joe Vranich, is particularly vulnerable to high energy prices: since 2011 electricity prices have increased five times as fast as the national average. No surprise that the country’s post-recession industrial renaissance has barely touched California. Over the decade California has fallen to the bottom half of states; last year it ranked 44th, with a rate of growth one-third to one quarter that of prime competitors such as Texas, Virginia, Arizona, Nevada and Florida.

Growing regional disparities

The current regulatory regime particularly hits both the poorer parts of urban California and the interior, areas traditionally reliant on basic industries such as agriculture, logistics, and manufacturing. Even as these areas are growing their populations — including millennials — far faster than the unaffordable coast, they must commute elsewhere for middle-class jobs.

Take the Inland Empire. The region created as many jobs per capita as Silicon Valley but mostly in low-wage fields like hospitality, health care and logistics. The result: the Inland Empire suffers the lowest average pay of any of the nation’s 50 largest regions.

The picture may be even worse in the Central Valley, where new groundwater regulations as well as high energy prices threaten its largest industry, agriculture. The Farm Bureau suggests as much as one in three acres could be lost. Particularly in the crosshairs is Kern County, which has one of the nation’s strongest ag industries, and is also as the capital of California’s oil industry, now slated by the governor for extinction. This will cost the area 14,000 generally high-paid jobs even as the state continues to import much of its oil from the Middle East.

Will tech leave too?

As its basic industries struggle, California is becoming an economic colony of the tech oligarchs. Their enormous wealth has served to mask the state’s economic challenges and provided the wherewithal for an ever-increasing welfare and subsidy regime.

Can the party continue? Those parts of the state where the tech headquarters are located — the Bay Area and San Diego — have done well, but Los Angeles, notes a recent Brookings study, has actually lost tech jobs over the decade. Generally, any part of the state that lacks large high-tech headquarters is likely to be ignored. Whether this pattern will persist is uncertain particularly if valuations, as for many recent IPOs and the mega-unicorns continue to drop.

Clearly some new state rules, particularly from Assembly Bill 5, concerning contract labor are a direct threat to tech firms, not only Uber and Lyft but to companies that subcontract services from smaller companies and individuals. Higher-income and other taxes now being proposed will certainly hit the tech workforce. Some firms have already started shifting employment to other states, notably Texas, Tennessee, Nevada, Colorado and Arizona.

In fact, according to estimates by EMSI, several states — Idaho, Tennessee, Washington and Utah — are now growing their tech employment faster than California. The state is also losing its mojo on professional and technical services, the largest high-wage sector, and now stands roughly in the middle of pack, well behind its major competitors like Nevada, Utah, Colorado, Texas, Tennessee and Florida.

If these job opportunities continue to ebb, California will lose its appeal to a new generation of wealth creators. The proverbial land of the future could morph into an island of inertia. California leads the nation in long-term owners who often owe little on their houses, so they may hang around. It’s the next generation that’s most at risk, and if their incomes continue to lag, there is no way they can hope to secure affordable housing.

Needed: a new strategy

California’s economy has always been driven by newcomers. But increasingly people and companies outside the charmed circle of venture capital-funded firms are leaving. Between 2014 and 2018, notes demographer Wendell Cox, net domestic out-migration has grown from 46,000 to 156,000, with an increasing share of younger people, particularly those in family-formation years.

Yet what has been created by misguided policy can be reversed with intelligent alternatives. If we wish to restore middle-class white collar and high-paying blue-collar jobs, we need to consider economic impact as well as the effectiveness of environmental regulations.

The threat from climate change is undeniably here, but essentially returning California to pre-industrial society, dependent on the largesse of a handful of tech companies, seems self-defeating and profoundly feudal. The state needs to apply our legendary innovative skills to address greenhouse gas emissions in ways that don’t also eviscerate middle- and working-class incomes.

There are a host of options including taking another look at nuclear power, renewable/recaptured natural gas, expanding hydro-electric capacity, dispersing work closer to where people can afford to live, encouraging work at home and changing regulations to exempt outlying areas from the most draconian regulations.

If we don’t change course, many California will have to say goodbye to future good jobs and social mobility for our children, unless, of course, they choose to live elsewhere.

Joel Kotkin is the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University in Orange and executive director of the Houston-based Center for Opportunity Urbanism (www.opportunityurbanism.org). Marshall Toplansky is clinical assistant professor of Management Science, research fellow, C. Larry Hoag Center for Real Estate, Argyros School of Business and Economics, Chapman University.

This piece first appeared on The Orange County Register.

Photo credit: USACE via Flickr under CC 2.0 License.

California Preening: Golden State on Path to High-Tech Feudalism

Joel Kotkin — Fri, 20 Dec 2019 21:06:47 -0500

“We are the modern equivalent of the ancient city-states of Athens and Sparta. California has the ideas of Athens and the power of Sparta,” declared then-governor Arnold Schwarzenegger in 2007. “Not only can we lead California into the future . . . we can show the nation and the world how to get there.” When a movie star who once played Hercules says so who’s to disagree? The idea of California as a model, of course, precedes the former governor’s tenure. Now the state’s anti-Trump resistance—in its zeal on matters concerning climate, technology, gender, or race—believes that it knows how to create a just, affluent, and enlightened society. “The future depends on us,” Governor Gavin Newsom said at his inauguration. “And we will seize this moment.”

In truth, the Golden State is becoming a semi-feudal kingdom, with the nation’s widest gap between middle and upper incomes—72 percent, compared with the U.S. average of 57 percent—and its highest poverty rate. Roughly half of America’s homeless live in Los Angeles or San Francisco, which now has the highest property crime rate among major cities. California hasn’t yet become a full-scale dystopia, of course, but it’s heading in a troubling direction.

This didn’t have to happen. No place on earth has more going for it than the Golden State. Unlike the East Coast and Midwest, California benefited from comparatively late industrialization, with an economy based less on auto manufacturing and steel than on science-based fields like aerospace, software, and semiconductors. In the mid-twentieth century, the state also gained from the best aspects of progressive rule, culminating in an elite public university system, a massive water system reminiscent of the Roman Empire, and a vast infrastructure network of highways, ports, and bridges. The state was fortunate, too, in drawing people from around the U.S. and the world. The eighteenth-century French traveler J. Hector St. John de Crèvecœur described the American as “this new man,” and California—innovative, independent, and less bound by tradition or old prejudice—reflected that insight. Though remnants of this California still exist, its population is aging, less mobile, and more pessimistic, and its roads, schools, and universities are in decline.

In the second half of the twentieth century, California’s remarkably diverse economy spread prosperity from the coast into the state’s inland regions. Though pockets of severe poverty existed—urban barrios, south Los Angeles, the rural Central Valley—they were limited in scope. In fact, growth often favored suburban and exurban communities, where middle-class families, including minorities, settled after World War II.

In the last two decades, the state has adopted policies that undermine the basis for middle-class growth. State energy policies, for example, have made California’s gas and electricity prices among the steepest in the country. Since 2011, electricity prices have risen five times faster than the national average. Meantime, strict land-use controls have raised housing costs to the nation’s highest, while taxes—once average, considering California’s urban scale—now exceed those of virtually every state. At the same time, California’s economy has shed industrial diversity in favor of dependence on one industry: Big Tech. Just a decade before, the state’s largest firms included those in the aerospace, finance, energy, and service industries. Today’s 11 largest companies hail from the tech sector, while energy firms—excluding Chevron, which has moved much of its operations to Houston—have disappeared. Not a single top aerospace firm—the iconic industry of twentieth-century California—retains its headquarters here.

Though lionized in the press, this tech-oriented economy hasn’t resulted in that many middle- and high-paying job opportunities for Californians, particularly outside the Bay Area. Since 2008, notes Chapman University’s Marshall Toplansky, the state has created five times the number of low-paying, as opposed to high-wage, jobs. A remarkable 86 percent of new jobs paid below the median income, while almost half paid under $40,000. Moreover, California, including Silicon Valley, created fewer high-paying positions than the national average, and far less than prime competitors like Salt Lake City, Seattle, or Austin. Los Angeles County features the lowest pay of any of the nation’s 50 largest counties.

No state advertises its multicultural bona fides more than California, now a majority-minority state. This is evident at the University of California, where professors are required to prove their service to “people of color,” to the state’s high school curricula, with its new ethnic studies component. Much of California’s anti-Trump resistance has a racial context. State Attorney General Xavier Becerra has sued the administration numerous times over immigration policy while he helps ensure California’s distinction as a sanctuary for illegal immigrants. So far, more than 1 million illegal residents have received driver’s licenses, and they qualify for free health care, too. San Francisco now permits illegal immigrants to vote in local elections.

Such radical policies may make progressives feel better about themselves, though they seem less concerned about how these actions affect everyday people. California’s Latinos and African-Americans have seen good blue-collar jobs in manufacturing and energy vanish. According to one United Way study, over half of Latino households can barely pay their bills. “For Latinos,” notes long-time political consultant Mike Madrid, “the California Dream is becoming an unattainable fantasy.”

In the past, poorer Californians could count on education to help them move up. But today’s educators appear more interested in political indoctrination than results. Among the 50 states, California ranked 49th in the performance of low-income students. In wealthy San Francisco, test scores for black students are the worst of any California county. Many minority residents, especially African-Americans, are fleeing the state. In a recent UC Berkeley poll, 58 percent of black expressed interest in leaving California, a higher percentage than for any racial group, though approximately 45 percent of Asians and Latinos also considered moving out.

Perhaps the biggest demographic disaster is generational. For decades, California incubated youth culture, creating trends like beatniks, hippies, surfers, and Latino and Asian art, music, and cuisine. The state is a fountainhead of youthful wokeness and rebellion, but that may prove short-lived as millennials leave. From 2014 to 2018, notes demographer Wendell Cox, net domestic out-migration grew from 46,000 to 156,000. The exiles are increasingly in their family-formation years. In the 2010s, California suffered higher net declines in virtually every age category under 54, with the biggest rate of loss coming among the 35-to-44 cohort.

As families with children leave, and international migration slows to one-third of Texas’s level, the remaining population is rapidly aging. Since 2010, California’s fertility rate has dropped 60 percent, more than the national average; the state is now aging 50 percent more rapidly than the rest of the country. A growing number of tech firms and millennials have headed to the Intermountain West. Low rates of homeownership among younger people play a big role in this trend, with California millennials forced to rent, with little chance of buying their own home, while many of the state’s biggest metros lead the nation in long-term owners. California is increasingly a greying refuge for those who bought property when housing was affordable.

Read the rest of the piece at City Journal.

Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for the Center for Opportunity Urbanism. His last book was The Human City: Urbanism for the Rest of Us (Agate, 2017). His next book, The Coming of Neo-Feudalism: A Warning to the Global Middle Class, is now available to preorder. You can follow him on Twitter @joelkotkin

Photo credit: Charlie Nguyen via Flickr under CC 2.0 License.

Afterburn

John Sanphillippo — Fri, 20 Dec 2019 20:29:01 -0500

Here in California we’ve just received our first rain since last winter after another brutal round of massive forest fires. Our Mediterranean style climate cycles from a long dry hot period to a few short cool wet winter months. October is our most fire prone time of year. It’s hot, the earth is bone dry, the vegetation is brittle, and windstorms stir up fires like a giant hair dryer. Cyclical burns are part of the ecosystem here and are normal and necessary. It’s been like this for thousands of years. What hasn’t been here until recently are all the structures humans have built as well as a century of fire suppression that transformed small annual fires into enormous pent up conflagrations. We’re only beginning to negotiate how these two forces – nature vs. civilization – might ultimately reach some form of detente. It’s still early days.

I live in San Francisco, but have a modest home in what is now called the rural/urban interface up in Sonoma County fifty miles north of the city. If I walk in one direction from the house I’m in a village. If I walk in another I’m in vineyards and then forest. I was making my way through a long list of autumnal fix-it projects including putting the garden to bed for winter when the larger world pressed in on me. Again.

Source: Sonoma County

The authorities issued rolling alerts as fires spread from town to town. All of Sonoma County was affected by electricity cuts and the natural gas supply was turned off for the entire region. I carried on since my property was just outside the initial fire zone. I have multiple battery bricks to run LED lights and small devices. There’s a generous supply of propane cylinders out in the yard for cooking. The house is super insulated so heat and air conditioning aren’t required. I always have plenty of shelf stable food on hand. And 10,000 gallons of water are kept in tanks which are topped off by the solar well pump and rainwater catchment. I could continue to live comfortably without the usual services for a very long time. On a household level I’m solid.

Source: Sonoma County

But the winds shifted, the fires spread, and the danger increased. The air turned smokey, cell phone service died, sirens roared, and mandatory evacuation orders were declared for my area. It was time to retreat to the safety of the city. No amount of personal preparedness is enough when half the county is on fire.

When I returned a few days later the house and neighborhood were fine, although everything was covered in ash. I was lucky. Again.

I checked the freezer in the garage. Before I evacuated I placed three loose ices cubes in a plastic sandwich bag and left it on an open shelf inside the freezer. When I returned the ice cubes had retained their shape which was evidence that everything in the freezer had remained solidly frozen even without power. I went about my fix-it list pleased that life would go on for another year.

The next evening a crew from the power company arrived to turn the gas back on. They bled the gas lines of air and check that each appliance was relit and functioning properly. They had to do this to most of the homes in the county. Last year the power company declared bankruptcy in the aftermath of the previous set of forest fires in 2017. It was accused of neglecting the maintenance of electrical lines that may have sparked the fires. It’s an ongoing political and public relations drama that will play out for many years. Cutting the electricity and gas supply in an overly cautious manner is now part of the public relations pageantry.

A campaign was launched by the BRITE Coalition, a collective formed by the three dominant utility companies in California. Each video is full of dog whistles about public safety, climate change, renewable energy, and good paying jobs presented by a multi-ethnic cast of earnest people. It’s part of a strategy to shift liability away from power companies in future disasters.

I’ve had direct interactions with my local utility regarding tree trimming along high voltage lines on my property. There’s some truth to the accusation that the company is disinterested in maintenance. Trimming every tree near every wire in California is seriously expensive. Shareholders and ratepayers alike aren’t interested in carrying those costs. I paid $4,000 for this one little patch of tree removal in my front yard. Multiply that effort across the state and you get a very large number. None of my neighbors are willing to spend that kind of money dealing with the trees on their properties and they weren’t too pleased with the resulting barren landscape either. So who’s going to pay? The answer for decades has been… no one. The dominant culture has a strong preference for short term considerations rather than long term structural benefits.

Burying the electrical lines at the required scale is unimaginably expensive. There’s too much attenuated infrastructure spread out across far too much territory with too little revenue from scattered settlements. I honestly can’t say the utility company is wholly responsible for the fires. We’re talking about a population that placed itself squarely in harm’s way by building in locations that naturally want to burn and much of the construction is highly flammable. But “blame the victim” won’t fly even if it’s largely true. That’s not a message a fearful public wants to hear. From a legal perspective it’s really hard to sue a forest for damages. It wouldn’t look right for the governor to lash out at dry trees and wind for inflicting such pain and expense on a population huddled in homes that are effectively big paper boxes.

That takes us to the next piece of this huge puzzle. Firefighter’s keep pushing for more funding. This is a delicate subject so I’ll attempt to tread lightly here. Firefighters are heroes who put their lives on the line to protect the public. I understand that. (Cut to an image of a smoke stained man in a yellow coat carrying a little girl in pigtails from a burning building.) But there are structural problems that have nothing to do with that iconography.

Source: Google

My little semi rural village has a population of 1,700 people. “Downtown” is one block long. The old volunteer fire station that had served the village since 1951 was mothballed a decade ago. The village could have raised some local funds to upgrade the single fire engine and the existing building, but that’s not how these things are done.

The solution involved state and federal funds that covered the cost of a multi-million dollar new high tech facility. The new station is tricked out with a war room and all manner of electronic bells and whistles along with a fleet of shiny engines and boats. The county road adjacent to the station had to be widened in order to accommodate the new equipment. That too was paid for by the higher ups. The station is physically larger in square footage, volume, and land area than the retail strip in the village. I’d be lying if I said I didn’t appreciate the protection this fire station offers me and my property. But this is extreme overkill for a village of this size. As impressive as the station is it still can’t prevent the entire town from burning if a big enough wall of flames comes howling over the hills.

So I do what I can. And the relevant authorities do what they can. At the end of the day this is a saga that will play out for the rest of the century. It’s a battle between insurance companies who will price risks, governments who will absorb long term obligations, and nature that will ultimately win this particular arm wrestling match. So I’ll roll the dice and hope for another lucky year.

This piece originally appeared on Granola Shotgun.

John Sanphillippo lives in San Francisco and blogs about urbanism, adaptation, and resilience at granolashotgun.com. He's a member of the Congress for New Urbanism, films videos for faircompanies.com, and is a regular contributor to Strongtowns.org. He earns his living by buying, renovating, and renting undervalued properties in places that have good long term prospects. He is a graduate of Rutgers University.

Charles Schwab Moving San Francisco HQ to Texas

Joe Vranich — Tue, 26 Nov 2019 23:10:11 -0500

Nov. 25, 2019: The brokerage firm Charles Schwab announced today it would acquire TD Ameritrade in a $26 billion deal and as part of the transaction Schwab will move its headquarters to the Dallas-Forth Worth area.

The integration of the two firms is expected to take between 18 and 36 months, following the transaction’s close. The corporate headquarters of the combined firm will eventually relocate to Schwab’s new campus in Westlake, Texas, which is located in Denton and Tarrant Counties north of the cities of Fort Worth and Dallas.

Both companies have a sizable presence in the area. Any additional real estate decisions will be made over time as part of the integration process.

Schwab was founded in San Francisco and will maintain a presence in the city. However, in my experience, once a company establishes a footprint in a business-friendly location, more jobs gravitate there over time.

The move isn’t surprising considering that Schwab’s founder and chairman, Charles “Chuck” Schwab, has said that “We’re pretty much a national company now. I’m not sure [we’ll stay in San Francisco] … we’ll continue looking at that as a possibility [but] as taxes go … and the costs of doing business here are so much higher than some other place.”

Schwab in Dallas/Fort Worth Area

Even before the TD Ameritrade event, Schwab has been more than doubling its workforce in Westlake. Scheduled to open in 2019 is a $100 million phase of a 70-acre office campus. The initial half-million-square-foot office complex is expected to house 2,600 Schwab workers.

Next will come a second, 617,000-square-foot phase that will add two more offices, resulting in an overall capacity for between 6,000 and 7,000 employees when it opens in 2020 or early 2021. That represents more than one-third of the company’s current workforce of 19,100, signaling where the brokerage expects to concentrate its growth in the years ahead.

It’s growth looks like it will be a bigger benefit for Texas than California. “We have a lot of our growth outside of California – a lot more outside of California than inside California,” Charles “Chuck” Schwab said. In San Francisco, the company employs 1,200 people – down from the dot-com bubble boom peak of 10,000 employees in 2000.

Schwab in Austin

Schwab is sprouting big time elsewhere in Texas, too, by opening its 469,000-square-foot, 50-acre Austin campus in May 2018 to house about 1,900 employees. Construction started later on an additional office building and parking structure – all of which is designed to give room for future growth.

The Austin location encompasses two five-story office buildings and will be home to employees within all 15 lines of Schwab’s business, including its digital accelerator program. The new hires are in I.T., Digital Services, Retirement Services, Compliance and Marketing, among others. Schwab’s capital investment in current Austin projects are estimated to be at least $196.7 million and the company is hiring talent across the state.

Ten other corporate headquarters moves out of San Francisco since the start of 2018 include Aatonomy, Bechtel, Circa of America, Core-Mark Holding Co., GoCheck Kids, Lottery.com, Maxar Technologies, McKesson Corp, PrePaid2Cash Holdings and Xero.

If we were to include moves of companies out of Santa Clara, San Mateo and Alameda counties, the result would show Silicon Valley is the epicenter of companies opting for out-of-California locations in full or in part.

More about out of state moves can be found in this account from Nov. 20, entitled, “Companies Join People in Fleeing California.”

A report issued earlier in 2019, entitled, “Why Companies Leave California” addresses in depth the state’s hostility toward businesses. Examples include regulations requiring steep fines for minor infractions, a ruthless legal climate, escalating taxes and utility rates, high labor costs, and signs that more workers plan to depart California.

None of us should expect California’s business climate to improve any time soon since Gov. Gavin Newsom and his friends in the legislature (and bureaucrats in regulatory agencies) show signs they will continue to treat companies in an unduly harsh manner.

Joseph Vranich relocated his consulting firm, Spectrum Location Solutions, last year from Irvine, Calif., to Cranberry Township, Pa. a suburb of Pittsburgh.

This piece first appeared on Spectrum Business Solutions.

Unsustainable California

Joel Kotkin — Sun, 10 Nov 2019 20:29:01 -0500

The recent rash of fires, like the drought that preceded it, has sparked a new wave of pessimism about the state’s future. But the natural disasters have also obscured the fact the greatest challenge facing the state comes not from burning forests or lack of precipitation but from an increasingly dysfunctional society divided between a small but influential wealthy class and an ever-expanding poverty population.

We are not addressing either the human or natural challenge. Once the ultimate “can do” state, California is morphing into one that is profoundly “can’t do.” Neither right nor left seems to have any program to confront the state’s worsening malaise on issues ranging from housing, education and the economy to the care of the environment.

To be sure, the right is correct to lay some of the blame for fires on green policies that have restricted brush clearance, and have prevented the thinning of the state’s forests, a finding shared by the state’s Little Hoover Commission. But it’s been years since Republicans have been able to present a coherent program — not surprising since vanishingly few in the state listen to, much less follow, the conservative agenda.

For its part, the progressive left controls the debate, the academy, most of the media, but has few answers to the problems plaguing our state. For many, scare-mongering about climate change defines and justifies even the most economically ruinous actions; activists even blame the recent power outages on climate, though the primary cause was lack of investment and maintenance by the state-regulated electrical utility.

Blaming PG&E, President Trump, oil companies, housing developers, car commuters or manufacturers for our problems is no doubt emotionally satisfying to the zealots in Sacramento and their media allies. But despite all this sturm und drang, California’s emissions over the past decade have fallen less than 39 other states and are essentially irrelevant on a global level. Even if the United States adopted the Green New Deal, the impact on climate, notes some recent studies, would be almost infinitesimal. The big emissions increases are almost entirely coming from China and other the less developed countries.

California needs to rediscover its magic

The natural challenges we face are, in fact, not so dissimilar than those in the past. From its inception, California has always been an “unnatural” place for intense urban development. Its lack of water, particularly in the populated parts of the state, long has been an endemic problem; drought and fire a constant theme dating back generations.

The great achievement of the state was to employ innovative engineering solutions that brought massive water supplies from the Sierra range to the water-deficient Bay Area, Southern California and the Central Valley. Elaborate schemes brought electricity and power to the state, sometimes from as far as Utah. Where there was no natural port, one was carved out at San Pedro and Long Beach, now easily the largest entry port in North America.

It’s hard to believe any of this could be done today. Under progressive governors as well as conservative ones, we have done very little to improve our water systems, much less make it more resilient in the face of much feared climate shifts. We talk boldly about going “all electric” but close down emissions-free nuclear plants, shutter efficient gas facilities while refusing to expand hydro-electric systems. No state imports so much of its energy, notably from the enlightened nation of Saudi Arabia, just to keep the lights on — at great cost to both consumers as well as soon to be unemployed California energy workers.

Who loses in the new California?

The future, if Sacramento gets its way, likely will resemble Jerry Brown’s old “era of limits” on steroids. It will become more expensive to get around, even in electric cars that rely on what are already among the country’s highest rates, almost twice as high as competitors like Texas, Arizona, Washington and Oregon, electricity that is rightfully seen as often unreliable as well. Our ability to buy housing, particularly the family-friendly variety, will also be restricted by a planning regime that seeks to cram most into small apartments.

This future appeals to some predictable voices, like The New York Times and The Atlantic, which see the fires on the urban edge as a reason to pack more people into our already congested, unaffordable cities. But these observations fail to distinguish between the heavily wooded areas on the hilly fringes of the metropolis — which are indeed fire-prone — and largely flat expanses of rangeland adjacent to both the Bay Area and the Los Angeles basin. If we don’t find safe places to build the kind of housing most people, notably families, need, our diminished housing choices will accelerate the rising tide of people and companies leaving the state.

These ruinous policies are not necessary. They are based largely on intense “virtue-signaling,” which might also provide the basis for Gavin Newsom’s eventual run for the White House. But he may consider what the rest of the country might think about the kind of bifurcated, dystopic society California now presents; it certainly did not help the failed presidential candidacy of Kamala Harris and was bad enough to keep the disaster that is L.A. Mayor Eric Garcetti out of the presidential sweepstakes.

To be sure, not everyone is suffering from the state’s mismanagement. The oligarchal firms of Silicon Valley, their venture funders and some of their unicorn offspring continue to rack up billions. They plan to house their young employees in glorified dormitories until they decide to leave.

But the path for the rest of Californians is not so clear. Over the past decade, most California metros, notes Chapman University’s Marshall Toplansky, are creating, on a per capita basis, far fewer mid- and high-paid jobs than the rest of the country, particularly places like Dallas, Charlotte, Austin and Salt Lake City. Higher-paid industrial jobs, critical to the working class’s progress, have grown well below the national average over the past decade; last year it was fifth from the bottom among the states.

What lies ahead

This economic disparity in the state, not climate change, as Newsom and his allies insist, remains the biggest challenge facing California. As much or as quickly as it manifests itself, climate will impact every part of the country and the world. The compelling issue should be not how California can heroically address climate issues, but how to do so without engendering a truly unsustainable social transformation.

In terms of fire and drought, there are practical steps to be taken, including allowing more extensive elimination of dead trees and brush as well as building extensive fire breaks, particularly near transmission towers. Potential water shortages can be best addressed with more storage and water-catchment systems as well as conservation and desalinization.

California could choose to reduce emissions in ways that, as longtime environmentalist and author Ted Nordhaus says, eschew “utopian fantasies” and “make its peace with modernity and technology.” There are proven, less economically intrusive ways to reduce emissions without skewering the middle class and turning them into permanent renters, like expanding hydro-electric, nuclear and, most importantly, increasingly abundant natural gas in favor of ruinously expensive renewables.

But efficiency and saving the middle class are not priorities for Sacramento’s empowered bureaucracy. Every time regulators impose more restrictions on home construction and force electricity and water rates up, impacting factories, farms and households, they contribute to the outrage that this richest of states also suffers the country’s highest poverty rate, and hosts many of the country’s poorest metros. A huge percentage of the population — over one third of the population, according to the United Way — are barely making ends meet. California is also home to roughly half of the country’s homeless.

The consequences of staying on this course are far scarier, at least in the short term, than anything that can be ascribed reasonably to climate. Despite the good intentions of some, misplaced environmental policies are building a society — already evident — that will restrict the trajectory, in particular, of the young and minorities, who are faced a declining number of well-paying jobs and ultra-inflated rents and housing prices.

We need is policies whose prime goal is not making the already fabulously rich, like Tom Steyer, or ambitious politicians like Newsom, feel better about themselves. We require an approach that offers hope to middle- and working-class Californians by improving housing choices, expanding industry and jobs, particularly in the poorer areas. New sustainable, and cost-effective, water, power and transport infrastructure constitute a critical part of this solution, as is an education system that teaches skills and practical training for students rather than fashionable “woke” ideology.

If we don’t reverse course, this bifurcated social structure, exacerbated by state policies, threatens something far more unsettling than any natural disaster. A society torn by seemingly unbreachable divisions represents the greatest, and most pressing, sustainability challenge before us.

This piece first appeared on The Orange County Register.

Joel Kotkin is the Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University and executive director of the Houston-based Center for Opportunity Urbanism. He authored The Human City: Urbanism for the rest of us, published in 2016 by Agate. He is also author of The New Class Conflict, The City: A Global History, and The Next Hundred Million: America in 2050. He is executive director of NewGeography.com and lives in Orange County, CA. His next book, “The Coming Of Neo-Feudalism,” will be out this spring.

Photo credit: Scott L via Flickr under CC 2.0 License.

The Expanding and Dispersing San Francisco Bay Area

Wendell Cox — Fri, 01 Nov 2019 19:29:01 -0400

This decade has witnessed an unprecedented expansion of the Greater San Francisco Bay Area (the San Jose-San Francisco combined statistical area or CSA), with the addition of three Central Valley metropolitan areas, Stockton, Modesto and Merced. Over the same period, there has been both a drop in the population growth rate and a shift of growth to the Central Valley exurban metropolitan areas. This expansion was partly justified by the increase in “extreme commutes” – one way work trips of 60 minutes or more.This increased the Bay Area’s already abundant land supply, particularly with the addition of Modesto and Merced. The Central Valley Exurbs added a plain nearly 100 miles north to south and more than 40 miles east to west.

It is notable that the Coast Mountain range did not stop the urban expansion of the Bay Area. Now, nearly 1.6 million Bay Area CSA residents live in the Central Valley exurbs (Figure 1). Much of the growth has to do with the better housing affordability there.

The Bay Area CSA is the broadest definition of the regional labor market, as defined by the White House Office of Management and Budget, using American Community Survey commuting data. It includes the San Francisco metropolitan area (San Francisco, Alameda, San Mateo, Contra Costa, and Marin counties), the San Jose metropolitan area (Santa Clara and San Benito counties), the Santa Rosa metropolitan area (Sonoma County), the Vallejo metropolitan area (Solano County), the Napa metropolitan area (Napa County), the Santa Cruz metropolitan area (Santa Cruz County), the Stockton metropolitan area (San Joaquin County) and the Modesto metropolitan area (Stanislaus) and the Merced metropolitan area (Merced County). The latter shares its southern border with the Fresno CSA.

Population Growth Dropping and Shifting from the Center

Earlier in the decade (2010 – 2015), propelled by the tech boom, the Bay Area CSA experienced strong growth, adding 1.2% annually to its population. This is more than 50% above the national population growth rate of 0.7% (Figure 2). The last three years, however (2015 – 2018) the population growth rate fell to 0.6%, half that of the 2010 – 2015 rate, well below the national rate. Virtually all of the declining growth rate is attributable to the San Francisco and San Jose metropolitan areas, along with the adjacent exurban metropolitan areas (Santa Rosa, Vallejo, Napa and Santa Cruz).

The San Francisco metropolitan area added fewer than 19,000 new residents in 2017 – 2018, a full two thirds below its 60,000 average increase for 2010 – 2015. The San Jose metropolitan area added fewer than 6000 new residents in 2017 – 2018, down approximately 80% from its annual growth of more than 25,000 in 2010 to 2015. The adjacent exurbs, which had added an average of 10,000 residents from 2010 – 2015 saw their growth collapse to a 2000 loss in 2018.This is all the more remarkable in the face of what has been a remarkable economic boom.

Only the Central Valley metropolitan areas sustained their growth, increasing from an annual average of nearly 13,000 in 2010 – 2015 to nearly 18,000 in 2015 – 2018 (Figure 3).

The shift of growth to the Central Valley is illustrated by the tripling of its share of Bay Area CSA growth from 11% in 2010 – 2015 to 35% from 2015 to 2018. The San Francisco metropolitan area fell from 55% of the growth in the first five years to 46% in the last three. The San Jose metropolitan area growth has been nearly halved from 24% to 13%. The adjacent exurbs accounted for 9% of growth in 2010 – 2015, dropping by more than half to 4% between 2015 and 2018 and losing population in 2017 - 2018 (Figure 4).

Even so, the city of San Francisco, which accounts for much of the urban core population, has maintained its growth share, having captured 10.6% of the 2010 – 2015 growth and a slightly larger 11.4% in 2015 – 2018 (Figure 5).

Declining Natural Increase Rate

The Bay Area’s annual natural increase in population has been declining. This measure, measured by births minus deaths, dropped from 57,000 in 2010 – 2011 to 42,000 in 2017 – 2018, an overall decline of 26%. The decline was similar in the San Francisco and San Jose metropolitan areas. The largest decline was in the adjacent exurbs, where the natural increase rate declined by more than one half, from 5600 to 2700. The smallest decline was in the Central Valley exurbs, at 17% (Figure 6). The total natural increase was nearly 410,000.

The natural population increase is declining across the nation, due to falling fertility rates. The recent collapse in the Bay Area CSA in domestic outmigration is also a factor. IRS data shows that California’s net domestic outmigration tends to be strongest among households from 26 to 44 years old, ages that produce most of the children. The lowest outmigration rate is among those aged 65 and over.

Meanwhile, Marin County has the oldest median age in the CSA, at 47.2 years. More than nine years older than the national median (38.4). The youngest ages are in the Central Valley exurbs. Merced County has a median age of 32.1, while San Joaquin and Stanislaus counties are at 34.5.

Domestic Migration Collapses

The Bay Area CSA gained an average of 9000 domestic migrants in 2010 – 2015. However, domestic migration collapsed to an annual net loss of 39,000 in 2015 – 2018, reaching a loss of nearly 50,000 in 2017 – 2018 (Figure 7). Net domestic migration dropped strongly in both the San Francisco and San Jose metropolitan areas. The Bay Area CSA net domestic migration loss in 2010 – 2018 was 71,000.

The decline in net domestic migration was less severe in the adjacent exurbs. The Central Valley exurbs experienced positive domestic migration, reversing the early losses that had been precipitated by the devastating effects of the Great Recession (Figure 7).

The overall 2000 – 2018 net domestic migration by metropolitan area is shown in Figure 8. The overall decline in Bay Area CSA net domestic migration is illustrated in Figure 9.

International Migration

Net international migration has been more steady, ranging from approximately 40,000 to 60,000 per year, with similar fluctuations throughout the CSA. Net international migration was nearly 390,000 from 2010-2018.

Growth Increasing Only in the Central Valley Exurbs

To summarize, the 2010 – 2008 components of population change in the Bay Area CSA are indicated in Figure 10.

The Bay Area CSA has seen a significant reduction in its pattern of growth as the decade has proceeded. The result is that growth has been largely stunted in the San Francisco, San Jose and adjacent metropolitan areas, with growth increasing only in the Central Valley exurbs. The Bay Area may remain the tech capital of the world, people are moving away, despite the continued economic growth.

Photograph: Central Valley Bay Area Exurbs: From the Stockton metropolitan area, looking south toward the Modesto and Merced metropolitan areas (by author).

Wendell Cox is principal of Demographia, an international public policy and demographics firm. He is a Senior Fellow of the Center for Opportunity Urbanism (US), Senior Fellow for Housing Affordability and Municipal Policy for the Frontier Centre for Public Policy (Canada), and a member of the Board of Advisors of the Center for Demographics and Policy at Chapman University (California). He is co-author of the "Demographia International Housing Affordability Survey" and author of "Demographia World Urban Areas" and "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life." He was appointed by Mayor Tom Bradley to three terms on the Los Angeles County Transportation Commission, where he served with the leading city and county leadership as the only non-elected member. Speaker of the House of Representatives appointed him to the Amtrak Reform Council. He served as a visiting professor at the Conservatoire National des Arts et Metiers, a national university in Paris.

California's Man-made Power Outages

Ronald Stein — Tue, 29 Oct 2019 21:29:01 -0400

Californians are mired in a conundrum of conflicting goals to accommodate its growing population, its growing number of registered vehicles, the need for more housing to accommodate its growth, and the unrestricted growth of its forests where much of the housing is encroaching.

The public has strongly supported Obama-era regulations, which were a major rewrite of the country’s forest rules and guidelines. Those rewrites introduced excessive layers of bureaucracy that blocked proper forest management and increased environmentalist litigation and costs—a result of far too many radical environmentalists, bureaucrats, Leftist politicians and judicial activists.

Rather than allow utilities to have right of way control for their grid into the forests, the public has also allowed so-called environmentalists who have a very narrow view of nature, who don’t understand that without proper land management, which means an appreciable amount of logging, they are hurting wildlife and the long-term health of the forest as well as endangering human lives.

Supporters of current environmental regulations would rather see forests burn, than let professional loggers with forest management experience thin out overgrown trees, harvest usable timber left from beetle infestation or selectively cut timber.

Now, with people and electricity moving into the forests, the wide spread support of Obama-era regulations has resulted in the new normal: an endless and devastating fire season. The resulting fires are cauldron-hot conflagrations that exterminate wildlife habitats and roast bald eagle and spotted owl fledglings alive in their nests.

Those infernos are so hot they boil away trout and trout streams, leave surviving animals to starve. They incinerate every living organism in already thin soils that subsequently get washed away during future downpours and snow melts. Areas incinerated by such fires don’t recover their arboreal biodiversity for decades.

So much for a reliable electrical grid surviving in the unrestricted growth of the nation’s forests!

The unintended consequences of restricted forest management, proper maintenance of the current grid, and the unlimited lawsuits that arise from fires tied to the grid, is that corporate America (PG&E) and others are caught between a rock and a hard place. To minimize those lawsuits, it’s better to eliminate the potential causes of those fires from winds by just turning off the power.

Utility companies are granted general authority by the California Public Utilities Commission (CPUC) to periodically de-energize the grid as a preventative measure to protect public safety and maintain the grid’s viability. To do this, PG&E has implemented Public Safety Power Shutoff (PSPS) events, aka rolling blackouts, as a last line of defense against electric service disruption and possible harmful events to communities caused by utility equipment.

For the residents and businesses that are left with no power, they may be going back to pioneer days when you had to fend for yourself, thus a huge self-sufficiency incentive to provide your own electricity via diesel generators or solar panels. Since solar does not work when the sun is not shinning, or if there’s too much smoke in the air, the other drawbacks are greater emissions from ones’ diesel generators, or no power at all if your battery storage is inadequate for the duration of the utility outage.

Understandably, the public perception is that the PG&E policy appears to be nothing more than a very selfish approach to protecting corporate interests at the expense of customers who cannot shop elsewhere for this vital utility – electricity. To compound the problem, the state continues its efforts to sunset the oil and gas industry which would result in less diesel fuel for home generators

PG&E’s decision to protect itself from liability at the expense of hardworking Californians is the tough new norm that may not be tolerated. The utility’s course of action disregards people’s livelihoods as we depend on electricity to maintain a certain standard of living.

Millions without electricity resulting in schools, government offices and businesses simultaneously closing is what a third world country looks like, not a state that is the 5th largest economy in the world.

Employees were sent home as businesses had to shut their doors. Some workers are forced to go without pay. Parents scrambled to find babysitters, raced to buy battery-operated lights, and rushed home to prepare their families in anticipation of days of darkness. This is no way to live in the United States of America. Access to electricity is a necessity we have become accustomed too.

The increasing amount of housing in the wildland-urban interface—by some estimates, almost half of the housing stock built in the last few years in California—is largely being driven by the need to build in lower-cost areas outside of the urban cores.

Environmentalists are hostile to this new construction and resist policy changes that facilitate it. Instead, they’d like to see people driven off their wildland property through a combination of strict land use policies, a fire tax, and the loss of fire insurance.

Unless the public supports a major rewrite to those Obama-era regulations of all the country’s forest rules and guidelines, be prepared to live your lives “off the grid”.

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.

This piece first appeared on CFACT.

Even Before the Blackouts, Most Californians Considered Leaving

Wendell Cox — Thu, 17 Oct 2019 20:56:56 -0400

For virtually all of its history from statehood in 1850 to 2000, California was a magnet drawing households from the rest of the United States for better lives. Indeed, in a nation that had its "American Dream," California had its own "California Dream." There was no Oregon dream, despite its mountains , seashore and proximity to California, nor was there a Maine or South Carolina dream.

And while California remains incomparable with respect to weather and access to beaches and mountains, the allure of the "California Dream" has faded significantly. Probably nothing demonstrates this more convincingly than the fact that since 2000, 2.2 million more residents have moved out to other states than in.

University of California Poll

A new University of California Berkeley IGS Poll indicates that many others are considering leaving the state. The poll was conducted in mid-September from a random sample of about 4500 registered voters. More than half of California's registered voters are giving serious consideration or some consideration to leaving the state. This includes 24% giving serious consideration and 28% giving some consideration.

Areas of the State

The poll divided the state into six areas but the results were fairly consistent. The core of the state's largest urbanization, Los Angeles County just under half (49%) are considering leaving the state. To the south, Orange and San Diego counties were combined in the analysis and their 50% of the households are considering leaving. The rest of Southern California, 56% of the households are considering moving out of the state. This area, dominated by a metropolitan area, Riverside – San Bernardino, is almost as large populous as metropolitan San Francisco and is the fastest growing major metropolitan area in the state.

Residents of the Central Valley exceeded the unhappiness level of the rest of Southern California, with 56% considering a move out of the state. The Central Valley had been growing faster than the rest of the state during the last decade, but considerably less than the previous decade.

Much of the state's economic growth has occurred during this decade in the San Francisco Bay area, which includes the San Francisco and San Jose metropolitan areas. Yet even in this area, indisputably the world's leading tech center, half of the residents (50%) are considering moving out of the state. The rest of Northern California, has the least unhappy households, with only 46% considering an interstate move (Figure 1). Of course, this was before PG&E cut off electricity to much of the area.

Age

There is more variation on intentions to move by age than by area, concentrated among those in the period of family formation and home-buying. Among households in the 40 to 49 category, 61% are considering a move out of the state while households in the 30 to 39 age group are 59% inclined to consider an interstate move. Among those aged 50 to 64, 53% are considering a move out of the state.

The only group where a majority intends to stay is those aged 65 or older, with only 40% considering a move out. This smaller number may be influenced to a great extent by this age group's ability to buy homes at at the much lower prices that prevailed before, The only group where a majority is staying put are those aged 65 or older. The youngest category, 18 to 29 , often an age before home buying and family formation, mirrors the statewide average, with 52% considering a move to another state (Figure 2).

Race and Ethnicity

The Berkeley IGS Poll also categorized responders by race and ethnicity. The most satisfied have been Latinos, 43% of whom indicated an interest in leaving the state. Asian scored similarly, with 44% while 56% of White non—Hispanics were considering an out-of-state move. The greatest dissatisfaction was indicated by African – Americans, 58% of whom are considering moving out. These last two figures are consistent with declining population shares. As late as 1980, white non—Hispanics were the largest ethnic group in the state and rank second now to Hispanics. African-Americans were the second largest ethnic group and now ranked fourth after Hispanics, White non—Hispanics and Asians (Figure 3).

African-Americans and White non-Hispanics both have majorities favoring a move out. The numbers are somewhat smaller with respect to the ethnicities that have increased most substantially in recent decades --- Hispanics and Asians. However, even among these ethnicities there is reason for concern, with more than 40 percent thinking of leaving.

Why Californians Want to Leave

California has long had the least affordable housing costs in the nation, which translate into the highest cost of living. Nearly all of the difference in cost of living between higher cost areas and the national average stems from housing (Figure 4). Not surprisingly, the top reason for wanting to leave was the high cost of housing, which was mentioned by 71% of respondents. High taxes were mentioned by 58% of respondents, and the state's political culture 47% . The poll generally found that more conservative people (as opposed to more liberal people) were more likely to consider moving.

Overcrowding was mentioned by 38% of the respondents. This is likely to become an even greater concern, since California's highest urban density in the nation is likely to be materially increased by state densification policies (Figure 5).

Things Could Get Worse

These reasons for leaving do not bode well for California. There is no indication that things will get better for potential leavers.

Housing costs are severely unaffordable and likely to get no better: Demographia International Housing Affordability Survey.

California's high taxes are not likely to be reduced. More likely they will continue to increase.

It is not surprising that people are concerned about overcrowding. California has the densest urbanization among the 50 states and strong densification mandates from the state likely to increase overcrowding. (see: "America's Most Urban States"). Largely as a result, California has the two most overcrowded metropolitan road systems (Los Angeles and San Francisco) in the nation as public officials pretend (largely innocently) that transit is an alternative to driving more than a few. Even so, the state is committed to even more densification, which promises to exacerbate the overcrowding, and make traffic congestion even worse.

California retains its great weather and beautiful scenery, but its status as America's dreamland has been shattered by the exiting millions.

Photograph: Outer suburbs of Los Angeles (western San Bernardino County), by author.

Of Niche Markets and Broad Markets: Commuting in the US

Wendell Cox — Thu, 03 Oct 2019 21:29:58 -0400

The six transit legacy cities - mostly urban cores that grew largely before the advent of the automobile - increased their concentration of transit work trips to 57.9% of the national transit commuting, according to the 2018 American Community Survey. At the same time, working at home strengthened its position as the nation’s third leading mode of work access, with transit falling to fourth. The transit commuting market share dropped from 5.0% in 2017 to 4.9% in 2018. Carpooling, after at least three decades of decline, has seen an increase in this decade.

Concentration of Transit Commuting Destinations in Legacy Cities

Based on transit work trip destinations (as opposed to residences of commuters) the cities of New York, Chicago, Philadelphia, San Francisco, Boston and Washington increased their share of commuting by 4.8% (2.6% points) in just eight years (from 2010 to 2018). The legacy cities are home to the six largest downtown areas (central business districts) in the United States, the destination for most of their transit commuting.

This increased concentration occurred even as transit commuting has begun to trend downward, from the 2015, the peak ridership post-1960 year (Figure 1). The transit legacy cities accounted for 6.1% of the nation’s employment in 2018. Their 57.9 share of transit commuting is nearly 10 times their equivalent share of jobs. The more favorable performance of the legacy cities in this decade resulted in their garnering 79.7%% of the increased commuting, more than 13 times their share of jobs.

The intensity of the concentration is illustrated in Figure 2, which compares employment, transit commuting and transit commuting increase (2010 to 2018) shares for legacy cities and the balance of the nation. The work trip market share to the legacy cities is 47%. By comparison, in the rest of the nation, transit’s work trip share is a miniscule 2.1%. Only 19 of the nation’s 53 major metropolitan areas has a transit work trip share of 3.0% or more.

However, to get to jobs outside the legacy cities (in the same metropolitan areas), transit commuting is only 8.6% of the national total. Strikingly, in New York, nearly 51% percent of the jobs are outside the city of New York. Transit’s share to these jobs is only 4.4%, a fraction of the 58.0% who use transit to jobs in the city of New York (the urban core)(Figure 3). Large differences between transit commuting to downtown and the suburbs occurs in most major metropolitan areas, not just those with legacy cities.

New York continues to have by far the largest transit commute share, at 30.9% (Figure 4). The lowest transit commute shares are in Birmingham and Oklahoma City, at 0.6%. Transit work trip data is provided in the Table below by mode.

Working at Home: The Big Winner

The American Community Survey data reveals working at home continues to be the big winner among the most popular employment access modes. Between 2017 and 2018, working at home (which includes telecommuting) gained 258,000 workers nationally, rising from 8.00 to 8.25 million in total. This was a considerable accomplishment. Working at home increased disproportionately relative to driving alone. Having only 7% of the driving alone volume in 2017, working at home added more than 20% of the entire commuting increase over the last year.

Working at home strengthened its number three position, following driving alone and vehicle pools, and now exceeding transit by more than 600,000. In 44 of the 53 major metropolitan areas, working at home accounted for more employment access than transit. The nine exceptions, in which transit led working at home included the six metropolitan areas with “legacy cities” plus Seattle, Pittsburgh and Baltimore. Overall, working at home has increased 2.3 million since 2010. It now has a market share of 5.3%, up from 4.3% in 2010.

Raleigh again had the highest work at home market share, at 9.1%, followed by Austin, Denver, Portland and San Francisco. The great advantage of working at home is that it reduces traffic, and does so without public subsidy (Figure 5). The work at home market shares exceeded that of transit in all but one of the ten top metropolitan areas (San Francisco, with its legacy city). Meanwhile, among the other nine strongest work at home metropolitan areas, seven have built expensive rail systems. Each of these has cost from hundreds of millions to billions of tax dollars. Yet, working at home, which is virtually unsubsidized has attracted substantially greater use.

Working at home exhibits little of the concentration observed in transit. All 53 of the major metropolitan areas have work at home shares of 2.5% or more. By contrast, 28 major metropolitan areas have transit commuting shares below 2.5%. Memphis had the lowest work at home share. Second lowest Buffalo, at 3.5% had a work at home market share larger than the transit market shares in 39 major metropolitan areas.

Carpool Resurgence

Carpools increased 300,000 between 2017 and 2018 and more than 600,000 since 2010. This follows decades of decline. This, however, was not enough to keep the mode from falling to 9.0% of the market in 2018 from 9.7% in 2017. There were 19.1 million carpools in 1980, the first year carpool data was collected and only 13.9 million now. The high market share was in Salt Lake City, at 12.0% (Figure 6), while the lowest was in New York, at 6.3%.

Ride Hailing

The data show a huge increase in taxicab use, which is probably due to recently initiated ride hailing services like Uber and Lyft. Taxicab commuting has increased more than 150%, from 150,000 to 360,000. The impact may be even greater. “Other” means of commuting increased almost 300,000, for a 25% increase. This was greater than that of all other modes of employment access, except for work and home and taxicab. It is not hard to imagine some respondents ticking “other” if they did not associate these new services with “taxicab.”

Work Access: Niche Markets and Mass Markets

While transit used to serve the largest share of motorized urban trips (probably about 90 years ago, but I have found no data), it has become a “niche” market among commuters who have a choice (have a car).Transit is about downtown and the urban core, with much of the share of transit commuting being destinations in these areas. Mind you, these are important markets, but they are small in the overall context of employment and transit’s access to metropolitan area jobs is miniscule.

The other three largest modes, cars, car pools and working at home serve broad markets. They can reach virtually any job in the metropolitan area, or in the case of working at home, many jobs around the world. That’s why those three modes hold a near monopoly on commuting, and represent most of its growth. With them, you can get from here to there.

EMPLOYMENT ACCESS BY MEANS OF ACCESS
US Major Metroopolitan Areas: 2018
	Drive Alone	Car Pool	Transit	Taxi	Motor-Cycle	Bicycle	Walk	Other	Home
Atlanta, GA	77.3%	8.9%	3.0%	0.5%	0.1%	0.2%	1.3%	1.2%	7.6%
Austin, TX	76.9%	8.7%	1.9%	0.1%	0.2%	0.8%	1.9%	0.7%	8.7%
Baltimore, MD	77.0%	8.0%	6.0%	0.3%	0.0%	0.3%	2.4%	0.8%	5.3%
Birmingham, AL	84.8%	8.8%	0.6%	0.0%	0.1%	0.0%	0.9%	0.6%	4.2%
Boston, MA-NH	66.1%	7.0%	13.2%	0.3%	0.0%	1.1%	5.6%	1.0%	5.5%
Buffalo, NY	82.1%	6.8%	3.1%	0.2%	0.1%	0.4%	3.0%	0.8%	3.5%
Charlotte, NC-SC	79.2%	9.4%	1.5%	0.2%	0.1%	0.1%	1.4%	0.9%	7.3%
Chicago, IL-IN-WI	69.8%	8.0%	12.1%	0.3%	0.1%	0.7%	2.8%	0.9%	5.4%
Cincinnati, OH-KY-IN	81.6%	8.2%	1.7%	0.1%	0.0%	0.2%	2.2%	0.8%	5.1%
Cleveland, OH	81.6%	7.9%	2.7%	0.1%	0.0%	0.4%	1.9%	0.8%	4.6%
Columbus, OH	81.3%	8.2%	1.7%	0.1%	0.1%	0.3%	2.2%	0.7%	5.5%
Dallas-Fort Worth, TX	80.8%	9.5%	1.3%	0.1%	0.1%	0.1%	1.3%	0.9%	5.8%
Denver, CO	75.0%	8.2%	3.8%	0.2%	0.1%	0.9%	2.4%	0.8%	8.7%
Detroit, MI	83.2%	8.6%	1.3%	0.2%	0.1%	0.2%	1.4%	0.7%	4.3%
Grand Rapids, MI	82.0%	9.1%	1.4%	0.1%	0.1%	0.4%	2.2%	0.5%	4.2%
Hartford, CT	81.2%	7.7%	2.6%	0.1%	0.0%	0.2%	1.8%	0.8%	5.7%
Houston, TX	81.0%	9.4%	2.0%	0.1%	0.1%	0.2%	0.9%	1.3%	4.9%
Indianapolis. IN	83.4%	8.0%	0.9%	0.1%	0.1%	0.2%	1.3%	1.0%	5.0%
Jacksonville, FL	80.3%	8.5%	0.9%	0.1%	0.2%	0.6%	1.6%	1.5%	6.4%
Kansas City, MO-KS	83.8%	7.8%	0.9%	0.2%	0.1%	0.2%	1.2%	0.7%	5.2%
Las Vegas, NV	78.7%	9.8%	3.3%	0.2%	0.3%	0.2%	1.4%	2.1%	4.1%
Los Angeles, CA	75.0%	9.5%	4.8%	0.3%	0.3%	0.6%	2.5%	1.1%	5.9%
Louisville, KY-IN	82.2%	8.5%	1.7%	0.0%	0.0%	0.3%	1.3%	1.0%	4.9%
Memphis, TN-MS-AR	86.1%	9.0%	0.7%	0.1%	0.1%	0.2%	0.9%	0.6%	2.5%
Miami, FL	77.7%	9.2%	3.1%	0.5%	0.2%	0.7%	1.4%	1.4%	5.7%
Milwaukee,WI	81.5%	7.5%	2.6%	0.2%	0.1%	0.5%	2.3%	0.3%	5.0%
Minneapolis-St. Paul, MN-WI	77.4%	8.1%	4.5%	0.2%	0.1%	0.8%	2.4%	0.6%	5.9%
Nashville, TN	80.9%	9.2%	0.8%	0.2%	0.1%	0.1%	1.5%	1.0%	6.2%
New Orleans. LA	78.6%	9.3%	2.6%	0.3%	0.1%	1.2%	2.5%	0.9%	4.5%
New York, NY-NJ-PA	50.3%	6.3%	30.9%	0.8%	0.0%	0.7%	5.5%	0.8%	4.7%
Oklahoma City, OK	82.9%	8.8%	0.6%	0.1%	0.1%	0.2%	2.1%	1.0%	4.2%
Orlando, FL	80.3%	10.4%	1.3%	0.3%	0.3%	0.3%	1.1%	0.9%	5.0%
Philadelphia, PA-NJ-DE-MD	72.3%	7.2%	9.8%	0.3%	0.1%	0.6%	3.4%	0.8%	5.5%
Phoenix, AZ	75.8%	11.2%	1.8%	0.3%	0.3%	0.7%	1.3%	1.2%	7.4%
Pittsburgh, PA	76.6%	8.3%	5.6%	0.1%	0.1%	0.3%	3.4%	0.5%	5.1%
Portland, OR-WA	70.4%	8.8%	6.1%	0.2%	0.2%	2.0%	3.4%	0.7%	8.1%
Providence, RI-MA	81.3%	8.5%	2.4%	0.2%	0.0%	0.2%	3.0%	0.6%	3.8%
Raleigh, NC	79.0%	8.9%	0.9%	0.2%	0.1%	0.1%	1.3%	0.5%	9.1%
Richmond, VA	81.2%	8.7%	1.7%	0.3%	0.1%	0.7%	1.4%	0.9%	5.2%
Riverside-San Bernardino, CA	79.8%	10.9%	1.2%	0.1%	0.3%	0.2%	1.5%	1.0%	5.0%
Rochester, NY	80.9%	7.9%	2.2%	0.2%	0.2%	0.5%	3.0%	0.4%	4.8%
Sacramento, CA	76.6%	9.2%	2.2%	0.2%	0.3%	1.3%	1.7%	0.8%	7.9%
St. Louis,, MO-IL	83.6%	6.9%	2.1%	0.1%	0.1%	0.2%	1.8%	0.6%	4.6%
Salt Lake City, UT	74.5%	12.0%	3.2%	0.1%	0.2%	0.7%	2.2%	0.5%	6.7%
San Antonio, TX	79.2%	11.2%	1.8%	0.1%	0.1%	0.2%	1.8%	1.0%	4.6%
San Diego, CA	76.5%	8.8%	2.6%	0.2%	0.5%	0.4%	3.1%	1.2%	6.6%
San Francisco, CA	57.2%	9.6%	17.3%	0.7%	0.4%	1.9%	4.7%	1.2%	7.0%
San Jose, CA	75.3%	10.3%	4.0%	0.3%	0.3%	1.6%	2.2%	0.9%	5.0%
Seattle, WA	66.1%	10.0%	10.7%	0.3%	0.3%	1.1%	4.1%	0.7%	6.7%
Tampa-St. Petersburg, FL	78.9%	9.0%	1.3%	0.3%	0.2%	0.5%	1.4%	1.1%	7.3%
Tucson, AZ	76.8%	10.0%	2.1%	0.2%	0.4%	1.5%	2.1%	1.3%	5.5%
Virginia Beach-Norfolk, VA-NC	81.2%	8.5%	1.4%	0.1%	0.1%	0.4%	2.8%	1.0%	4.4%
Washington, DC-VA-MD-WV	65.8%	9.2%	13.0%	0.5%	0.1%	0.9%	3.3%	1.0%	6.1%
UNITED STATES	76.3%	9.0%	4.9%	0.2%	0.1%	0.5%	2.6%	0.9%	5.3%
Derived from American Community Survey 2018.

Photograph: Interstate 5 in Orange County California, with elevated express lanes (by author)

Around San Francisco’s New South of Market Transit Center

Wendell Cox — Sat, 31 Aug 2019 01:30:38 -0400

In the 1980s, the city of San Francisco experienced a strong reaction against continued development of its dense financial center skyscraper district north of Market Street. that the term Manhattanization was popularized by the alternative biweekly, San Francisco Bay Guardian, which channeled the interest of many residents to preserve both their neighborhood and the iconic, historic buildings in downtown San Francisco before they were replaced by new, taller structures.

One of the city’s formerly tallest buildings, the Russ Building (completed in 1927), at 435 feet and 31 stories, is a case in point. The Russ Building shared the tallest building honor with the Telephone Building (now 140 New Montgomery), which was the same height but only, 30 stories. The Telephone Building was the tallest building south of Market Street for decades and is visible in Photo 12 taken from the rooftop garden/park (“Salesforce Park”) of the new Salesforce Transit Center.

The Russ Building has long since been surpassed in height by at least 20 new buildings 1986, according to the World Almanac. As late as the early 1960s, only Seattle’s Smith Tower (completed 1909) and the Los Angeles City Hall (completed 1928) exceeded the Russ Building’s height west of Chicago. Photo 1 shows the Russ Building in the background, behind the Pacific Stock Exchange Building and an unimpeded view in Photo 2. A historic streetcar (tram) runs along Market Street in Photo 3.

Concerns about Manhattanization led in 1986 to the voter approved Proposition M, which limited the heights of new buildings and the amount of new floor space that could be built. This meant that the new champion, which opened in 1972, the Transamerica Pyramid, remained the city’s tallest for 35 years, about as long as the Russ Building and Telephone Buildings previously held that crown. This is a building that people either tend to love or hate (I am in the latter camp).

South of Market Street (SOMA)

In more recent years, the city has taken advantage of large tracts of well situated, less intensively developed land south of Market Street. “South of Market” or “SOMA” now hosts two of the city’s three tallest buildings, as well as five of the eight tallest (below).

Before 1986, there was relatively little skyscraper development south of Market Street. Photo 4 is a view today taken east down Post Street, through the pre-2000 financial district, capped in the distance by new Salesforce Tower, in SOMA. It is framed on the left by the One Montgomery Building, built in 1982 as the headquarters of Crocker Bank (which was purchased by Wells Fargo Bank), and on the right, by McKesson Plaza, built in 1969, which housed McKesson’s headquarters until their recent move to Dallas-Fort Worth. The white 595 Market Street Building is at the end of Post Street, at Market Street, in front of the Salesforce Tower.

The centerpiece of SOMA is the Salesforce Tower, which at 1070 feet and 61 floors is the tallest in the city (Photos 5 & 6). Only the Wilshire-Grand Tower in Los Angeles is taller west of Chicago, with a spire reaching 1100 feet. The roof of the Salesforce Tower, however higher is than that of the Wilshire-Grand. The Salesforce Tower also obtained naming rights to the new Salesforce Transit Center (which replaced the Transbay Terminal) and funded amenities in the transit center.

The city’s third tallest building, 181 Fremont is 56 floors and 802 feet. It is a mixed use residential and office tower (Photos 5 & 7).

Just to the east of the Salesforce Tower stands the Millennium Tower, a luxury condominium building. It is the sixth tallest in the city, at 58 floors and 645 feet tall. The building has received considerable unwanted publicity as a result of tilting that could take up to $500 million to correct. Not surprisingly, tenants are not happy. The Millennium Tower developers are suing the public agency owners of the Salesforce Transit Center (the Transbay Joint Powers Authority), claiming, according to Business Insider, that “construction workers pumped too much water out of the ground while the transit center was being built, causing the sand to compress and the tower to sink.” The Millennium Tower is on the right in Photo 6, with the Salesforce Tower on the left.

The 8th tallest Park Tower is a unique design, rising to 600 feet and 43 floors (Photo 9), located to the north of the Avery, which is 575 feet and 56 floors.

Off-ramps from the San Francisco-Oakland Bay Bridge are visible (Photo 10) and the 101 California Street Building can be seen in the distance on Market Street (Photo 11). Photo 12 shows the formerly tallest Telephone Building.

The last next photos were taken while walking to the south of the Transit Center, toward the San Francisco-Oakland Bay Bridge. The two Lumina condominium buildings are shown in Photo 13. The Mira SF condominium tower is a unique angular design (Photo 14). Photo 15 shows San Francisco-Oakland Bay Bridge from Rincon Hill (Harrison Street), as it crosses to Yerba Buena Island.

Salesforce Transit Center

The Salesforce Transit Center is one of the busier locations in downtown San Francisco. It stretches for four blocks as a terminal for San Francisco Municipal Railway buses, suburban buses and is planned to be the terminal for Caltrain commuter rail services from the Peninsula and Santa Clara County. Eventually it may also serve high-speed rail trains, though, given that project’s troubled history, that is uncertain. As is typical for major infrastructure projects, the Salesforce Transit Center experienced nearly 50% cost escalation, with the planned $1.6 billion project escalating to $2.3 billion. The outside and inside of the terminal are shown in Photos 17 and 18. Photo 19 shows a bus bay.

The Salesforce Transit Center, like the Millennium Tower, has experienced structural difficulties, with two cracked beams discovered early after its 2018 opening. This resulted in a closure from September 2018 to July 2019.

Salesforce Park, has places to walk, sit or picnic and a large area used by visitors at lunch, at least on sunny summer days (Photo 20) Photos 5 through 12 were all taken from the roof garden of the Salesforce Transit Center.

SOMA in Context

SOMA has developed into a major addition to downtown, but with considerably less building density and more open space. In a way it reminded me of other, newer downtown additions, such as Chicago’s North Michigan Avenue and River North, with its mix of older buildings and new towers, all considerably more sparsely developed than the Loop. The contrast with the financial district is similar to the old central business district of Buenos Aires and the newer, less intense development in the high-tech district, adjacent to the northeast.

South of Market growth is part of the reason that the city of San Francisco has a larger population than in 1950, one of only three major metropolitan area historical core municipalities achieving that without material annexations (the others being New York and Oakland). Even so , the bulk of the Bay Area’s growth continues to be suburban. From 2010 to 2018, the city accounted for 10.5 percent of the population growth in the San-Jose—San Francisco combined statistical area (CSA), only slightly more than the city’s share of 2010 CSA population Perhaps even more significant is that with all of the employment growth in SOMA, part of the nation’s fourth largest central business district (downtown), 89 percent of the employment is elsewhere in the CSA.

A walking tour South of Market shows high-density neighborhoods that are attractive to their own demographic, as is the case from the core to suburbia to exurbia. Moreover, the park at the top of the transit center is well worth a visit, even if you don’t arrive by bus.

Top photograph: Salesforce Tower
Creative commons: https://commons.wikimedia.org/wiki/File:Salesforce_Tower_SF_2017.jpg