Urban Issues

Rise of Luxury Urbanity as a System: Sydney CBD

John Muscat — Fri, 30 Aug 2024 20:28:58 -0400

In 1971, after a lifetime researching and explaining the Central Business District, American geographer Raymond Murphy gathered his knowledge together in The Central Business District: A Study in Urban Geography. Murphy defined the CBD as a region “draw[ing] its business from the whole urban area and from all ... classes of people.” But that definition would soon be redundant.

Since at least the 1980s, central areas of many world cities like Sydney have evolved from classic industrial era CBDs into more exclusive socio- economic phenomena. The mid-twentieth century brought tensions between a growing suburban periphery driven by mass motorisation and a stagnating, post-industrial inner-city. After an interval at the crossroads, urban centres were refitted as global high-amenity enclaves. These former industrial-mercantile junctions, which distributed goods across whole regions, now radiate little more than inflated land and property prices. Some call this a “shift from the city as a site of production to one of consumption.” Disruptive events like financial crises and the recent Covid- 19 pandemic shaped the course of this evolution.

Sydney’s classic CBD morphology peaked in the 1970s and has been fading ever since. Occasionally, the emerging phenomenon rates a mention in academic literature and popular journalism, but there is still no consensus about its character or economic logic. Many seem reluctant to concede its discontinuity from the classic CBD, fearing to unmask a new stage in the concentration of privilege.

Politicians, property developers and academics tend to downplay the CBD’s loss of functional centrality in Greater Sydney. Since the 1950s, the legacy CBD’s relative share of metropolitan jobs has plummeted from almost a half to around a tenth, and in today’s post-material conditions owes more to a disproportionate allocation of amenities than any unique productivity advantage. The pandemic forced some recognition of reality but notions of natural centrality persist. “The CBD is Dead, Long Live the Central Social District” proclaimed an article by former NSW Cities Minister Rob Stokes. Suggestions that CBD-centric planning is bad for housing affordability, commuting or small business formation are generally disputed.

For a better perspective it is useful to contrast features of today’s ‘post- CBD’ with elements of the classic CBD structure as identified by urban geographers in the literature.

While the spatial order of the old industrial-mercantile CBD was arranged around functions, the contemporary ‘centre’ is laid out for amenities. This new urban logic, called ‘luxurification’ by some scholars, takes form as an upward spiral of amenity enhancements, feeding off soaring peaks in the land value cycle, gentrification on a global scale and ‘sustainable urbanism.’ On very high-priced sites developers will typically maximise returns by substituting capital for land, building larger and taller structures. Scaling up amenities in the structures and on the surrounding ground plane can augment capital. Thus luxurification is sweeping through most features of the CBD landscape, reaching office, retail, leisure-hospitality and residential building stock as well as the streetscapes, transit facilities and public spaces in between. In the office sector, where the CBD vacancy rate is now at a 30-year high, this is commonly referred to as a “flight to quality”.

Read the rest of this piece at The New City Journal (PDF).

John Muscat is a co-editor of The New City Journal. The article above is excerpted from the introduction to his report.

From Settler Colonialism to a New Post-Colonial Settlement

Joel Kotkin and Hugo Kruger — Wed, 28 Aug 2024 20:28:58 -0400

In this era of heightened racial and ethnic tension, few academic concepts have enjoyed as much success as “settler colonialism.” Notably articulated by the Australian anthropologist Patrick Wolfe in his article “Settler Colonialism and the Elimination of the Native,” this approach has been used to explain conflicts taking place in Israel-Palestine, Australia, Russia-Ukraine, Latin America, and the African continent, as well as within the Western world.

Settler colonialism is seen as an ongoing process with enduring impacts on indigenous communities and serves as a framework for explaining the complex dynamics of power, domination, and resistance supposedly inherent in settler-colonial societies. Any perceived settler eruption is said to be governed by what Wolfe labels “the logic of elimination,” meaning that settler colonialism seeks to permanently occupy and transform indigenous lands through violent dispossession, forced assimilation, and cultural erasure. As such, narratives of settler colonialism offer no hope of redemption or reconciliation.

Widely taught and embraced on today’s college campuses, and increasingly featured in the media, the settler-colonial concept has vague connections to the original Marxist-Leninist gospel, but is more directly connected to postcolonial movements headed by figures such as Fidel Castro, Hugo Chávez, Mao, Gamal Abdel Nasser, and Kwame Nkrumah, as well as intellectuals like Frantz Fanon, Steve Biko, Robert Sobukwe, Herbert Marcuse, Efraín Morote Best, and Michel Foucault. Less attention is paid, however, to this ideology’s empirical effects and actual history: the most fervent “anticolonial” regimes have generally done little to improve the lives of the oppressed, and often cause their own societies a great deal of harm.

It’s Not All about Racism

The latest version of the settler-colonialist narrative ties imperialism and slavery to the triumph of “white privilege.” In reality, however, colonialism has a long, and diverse, history. Today’s primary promoters of anti‑Western imperialism—China and Russia—are themselves “settler” states, built over centuries through the displacement of indigenous cultural minorities. Even in North America and Africa, well before the conquest of the New World, there were constant wars and incidents of mass enslavement. The early settlers of southern Africa, the Khoisan, for example, have been reduced to just over 1 percent of South Africa’s population, having been displaced through a series of racially diverse migrations and gold rushes before and after the arrival of Europeans. They have faced notable levels of discrimination in South Africa, Namibia, and Botswana, by both the European and Bantu settlers.

We seem to forget that Africans were quite capable of building their own exploitative empires, such as Great Zimbabwe and the Kingdom of Mapungubwe between the eleventh and fifteenth centuries, which conquered and exploited other people, much like their European settler counterparts. Later, South Africa saw the conquests of the Natal by Shaka Zulu—who notably launched the genocidal Mfecane against the Swazi and Sotho tribes.

Genocides and ethnic cleansings are not unique to any tribe or continent. They have occurred throughout precolonial Africa, in primitive Scandinavia, and pre-Columbian America. As Steven Pinker has noted, in his treatise on the history of violence, several ancient gravesites contain bodies that had their skulls cracked open before they died.

The settler school also often chooses to racialize oppression, forgetting that imperial expansion transcends race and faith. Not all settlers, for example, were demonic tools of capitalism; many came as refugees, such as the persecuted Huguenots following the revocation of the Edict of Nantes in Catholic France, or Jewish refugees fleeing Europe during the Nazi era. Others, like the Afrikaner, also were oppressed; they were herded into concentration camps and their language banned during the height of the British Empire.

Read the rest of this piece at American Affairs.

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 and directs the Center for Demographics and Policy there. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Hügo Krüger is a South African born Structural/Nuclear Engineer, writer and YouTube podcaster, commentating on topics relating to Energy and Geopolitical Matters, Hügo is married to an Iranian born Mathematician and Artist; the couple resides in Paris.

Photo: Landing of Van Riebeeck at the Cape of Good Hope in 1652, painting by Charles Bell, Wikimedia in Public Domain.

The Midwest: Talent, Ambition, and Culture

Pete Saunders — Tue, 13 Aug 2024 20:28:58 -0400

Last weekend there was a debate taking place on a very small corner of the Internet. It was about the Midwest’s culture and its impact on growth and development prospects.

Before I get to the sides of the debate, I’d like to conduct a quick exercise. Pretend you’re invited to a focus group to discuss the Midwest, however you define it. You are to give one word that explains your perception of the region. What comments would you make about how it would be defined?

OK. Have a word? I can probably come up with some that might’ve crossed your mind:

“Rural.”
“Industrial.”
“Cold.”
“Insular.”
“Nice.”
“Flat.”
“Simple.”
“Rusty.”
“Decline.”
“Heartland.”

The ten words above would probably be near the top of anyone’s list. Other words like “middle”, “average”, “ordinary” or “normal” might also enter many people’s lists. Taken together, they could all be described with another single word: “mediocre”.

That’s the crux of the debate. Is the Midwest a mediocre region?

One side says no. There are plenty examples of excellence in the region that can serve as the building blocks for real economic growth in the region. We have top-tier private and public colleges and universities. We have scores of Fortune 500 companies. We’re at the center of the nation’s rail and air network, making us an excellent place for the distribution of people and goods. We’re the nation’s breadbasket, we’re affordable, we offer the best work/life balance of any region in the nation. We already have excellence, and we just need to do a better job of utilizing it to our advantage. And besides, who are you calling mediocre?

The other side of the debate disagrees with this. They say the region is inherently risk-adverse. They see a Midwest that is often unwelcoming to outsiders. They see it as a region that accepts the status quo, even when there are strong arguments for doing otherwise. The world is constantly changing, and the Midwest hasn’t kept pace. Ambitious Midwesterners must leave for the coasts if they want to succeed, they say, and that’s what’s keeping the region from prospering in the 21^st century.

I’ll lay out my position here and describe it in more detail later. Simply put, but sides are right. The Midwest has wonderful assets that would be the envy of any region, or nation. Yet having those assets hasn’t necessarily vaulted the region to greater prosperity over the last 50 years or so. The Midwest is lagging the coasts and the Sun Belt because outsiders view its culture as incompatible with excellence.

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

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: Aerial view of McCordsville, a suburb of Indianapolis, via Library of Congress in Public Domain.

Has Transit Entered the "Death Spiral"?

Charles Prestrud — Mon, 12 Aug 2024 20:28:58 -0400

Transit ridership dropped sharply with the onset of the COVID pandemic in 2020. The slow rebound in the years that followed has prompted discussion, sometimes in hushed tones, as to whether transit had entered a “death spiral.” That ominous description refers to a situation where a decrease in ridership leads to lower farebox revenue, which in turn leads to service cuts, which further reduces ridership, and so on in a vicious downward cycle.

There are historical examples, notably in rust-belt cities that experienced significant loss of population and jobs as their downtowns hollowed out. However, a careful examination of trends in Washington State reveals both similarities and significant differences. Perhaps the biggest difference is the strong growth in transit agency revenue, which increased from $2.15 billion in 2012 to $5.19 billion in 2022. The increase in funding is mostly due to an increase in sales tax revenue and federal grants.

The trend in hourly operating costs is not so encouraging. For example, King County Metro’s operating costs have increased from under $150 dollars per service hour in 2011 to over $235 per hour in 2022, an increase of 20% adjusted for inflation. The statewide averages have also increased steadily, rising from $148 per hour in 2012 to $215 per hour in 2022, an increase of 14% after inflation.

Another worrisome trend has been the decrease in service productivity. In 2012 bus service in Washington State averaged 31.4 passenger boardings per service hour, but by 2022 that had fallen to just 15.96 boardings per hour. For King County Metro productivity was fairly steady until about 2015, after which it began to trend downward, falling off steeply with the COVID pandemic in 2020.

These trends show that transit in Washington State is not in the typical “death spiral” of decreased revenue leading to service cuts leading to lower ridership. Rather, the problem is that costs are spiraling up while productivity has been trending down.

It follows that finding additional sources of subsidy, which has been the most common transit agency response, will not reverse these unfavorable performance trends. Indeed, more revenue may simply move the agencies farther down the slope of diminishing returns.

Read the rest of this piece at Washington Policy.

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. 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.

In Praise of Sprawl

Rob Burgess — Fri, 09 Aug 2024 20:28:58 -0400

Delayed decision-making, bureaucratic dithering, and the stubborn resistance of NIMBYs have all been frequently cited as planning-related barriers to the development of much-needed housing. Seldom, however, does the conversation shift to the impact that containment and densification policies are having upon Australia’s escalating housing crisis.

Against a backdrop of rapid population growth, and in the face of rising social and economic costs, the ‘contain-and-densify’ approach to managing our cities is, simply, no longer fit for purpose. It is increasingly clear that a departure from this entrenched model is crucial. Left unaddressed, the downward spiral that is this nation’s housing crisis will continue, leaving the aspirations of an ever-growing number of Australians in its wake.

The path forward demands a nuanced, evidence-based approach that reconciles the urgent need for affordable housing with practical urban development strategies. Only then can we ensure a future where housing affordability and accessibility are within reach of all Australians, marking a pivotal shift towards a genuinely successful model of urban growth.

Beyond Boundaries

Urban growth boundaries (UGBs) are artificial regional boundaries, enforced by authorities to contain the development of residential and other urban uses of land to mandated areas. They have been a cornerstone of urban planning policy in Australian cities since they were first introduced by the Victorian Government’s Melbourne 2030 policy in 2002. Since its introduction, the contain-and-densify model has been unable to deliver the number of dwellings required, the type of dwellings sought, or housing in the locations intended. The social engineering required to force households into smaller housing is proving to be both politically unworkable and financially unfeasible.

Read the rest (pdf opens in new tab/window)

Rob Burgess is a town planner with over 25 years of experience, having worked in both the public and private sectors. Applying evidence-based insights, Rob’s expertise lies at the intersection of population dynamics, town planning, and property markets. He is regularly engaged to undertake market research, provide strategic advice to clients, and sharing his thoughts on current and future trends. Rob is a Principal with Quantify Strategic Insights.

Photo: from the article cover, courtesy the author

Four Decades of Work Access (Commuting) in Los Angeles

Wendell Cox — Wed, 07 Aug 2024 20:28:58 -0400

This article describes work access in the Los Angeles combined statistical area (Los Angeles, Orange, Riverside, San Bernardino and Ventura counties) from 1980 to 2022, using US Census Bureau data. The combined statistical area (CSA) is comprised by the Los Angeles, Riverside-San Bernardino and Oxnard metropolitan areas. (view Table 1; pdf opens in new tab/window).

Over the period, there has been substantial employment growth, from a daily 5,184,000 workers in 1980 to 8,850,000 in 2022 (an increase of 71% in 42 years). The 2022 figure is down from the pre-pandemic (2019) total of 8,937,000. Both Los Angeles and Orange counties, the two most populous, had lower employment levels in 2022 than in 2019, with Los Angeles down 170,000 and Orange down 26,000. The other three counties had gains, including Riverside up 67,000, San Bernardino up 28,000 and Ventura up 1,000.

This job growth as we can see was overwhelmingly outside the urban core and is a acceleration of existing trends. Driving alone, working from home and car pools now accounted for 93% of work access in 2022 (Figure 1).

Driving Alone: Even in Los Angeles, driving alone is dropping, in response to the work at home revolution. Between 1980 and 2019, driving alone increased as a share of work access in all five counties, with an overall rise from 70.2% to 76.0%. This is despite opening an expansive urban rail system in Los Angeles County and a commuter rail system serving all five counties. In Los Angeles County, driving alone rose from 70.2% to 73.9% (view Table 2; pdf opens in new tab/window).

But the remote work revolution significantly reduced driving alone from 76.0% in 2019 to 67.4% in 2022, The total solo drivers were 5.929 million in 2022, below the 2015 figure of 6.093 million. In Los Angeles County, driving alone in 2022 fell below the 2010 level.

Working from Home: Working from home had an overall work from home market share of 15.7% in 2022, compared to 6.2% in 2019, an increase of 153%. The leaders in working from home were Orange County, both with a 17.8% market share and Los Angeles County with a 17% share. Ventura County was close behind, at 15.4%, while Riverside had an 11.7% share and San Bernardino County had an 11% share.

Overall, working from home has risen more to more than 10 times its 1980s share of 1.5%.

Car Pool: Car Pools suffered losses in the early years, but have attracted similar commuting numbers since 2010, having dropped from 900,000 to 898,000 in 2022.

Transit: Transit commuting fell to a level below that of 1980. In 2022, transit accounted for 218,000 daily work trips, well below the 264,000 in 1980. The peak year among those included in this analysis was 2010, when transit commuting rose to 381,000. Even before the pandemic, transit commuting was declining, and the 2019 market share was the lowest of any analyzed year. Transit commuting fell to 339,000 in 2019, and then fell about another one-third to 2022.

Recovery from the Pandemic: Transit’s pre-Covid 2019 market share was 3.8% overall and 5.7% in Los Angeles County. This compares to 5.0% for the CSA and 7.2% for Los Angeles County in 2010 (Figure 2).

Transit has done the least well in recovering from its pandemic losses, with 2022 commuting 35.8% below the 2019 figure. Driving alone has recovered to a loss of 11.3% of its 2019 commuting share.Meanwhile, among the work access modes that involve travel, car pools have done the best, rising to 5.7% above the 2019 level.Bicycle commuting has fallen 12.0% and walking has fallen by 6.4%.

There have been many significant dates since 1980. For example:

1980: Los Angeles County Transportation Commission adopts Proposition A, which is approved by the voters in the November election. Proposition A provided funding for a three-year flat fare, a program to support local government transit and funding for a proposed urban rail (light rail and subway) system.
1985: Record ridership year for the largest Los Angeles transit operator (SCRTD now Metro) at 497 million.
1990: First modern urban rail service begins on Line A (formerly the Blue Line), between downtown (7th and Flower) and Long Beach. The data shown on the tables is from before the start of service on this line. The rail system now serves more than 120 one-way route miles and significant expansions are being built and planned.
1992: Metrolink commuter rail system begins operation, with service to all five CSA counties as well as a station in San Diego County (Oceanside). Metrolink now serves more than 550 one-way route miles.
1993: Merger between the Los Angeles County Transportation Commission (transportation policy organization) and the Southern California Rapid Transit District (transit operator), forming the Los Angeles County Metropolitan Transportation Authority (MTA).
2024: Largest Los Angeles transit operator (Metro) carried 300 million riders (fiscal year ended June 30), 40% below the peak year (1985).

Overall, the biggest change has to be the extensive rail systems, both urban and commuter, that have been opened. Having been on the Los Angeles County Transportation Commission when the planning for the system began, I have been amazed that transit with rail served considerably fewer riders than transit before rail, when there were only buses. I, and likely most other members, expected material increases in ridership.

There is another large change, which is the shift of workers to residences in more suburban and exurban areas. This is particularly evident between 2010 and 2022, when only 7% of new (incremental) work access demand came from Los Angeles County, despite its having over one-half the population of the CSA. The greatest demand increases were in Riverside County (33% of the total) and San Bernardino County (31%), followed by Orange County (23%). The smallest share of the demand increase was in Ventura County (5%). (Figure 3) This is typical of the continuing spread of development to more distant suburbs and exurbs. None of this bodes well for the future of transit.

Also see:

The Cost of Opportunity Cost Blindness to the Riders and Taxpayers
Transit in Los Angeles: Lost Opportunities
The Work at Home Revolution: Data and Policy Implications

Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is 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.

Photo: Interstate 110 (Harbor Freeway)/Interstate 105 (Century Freeway) in Los Angeles County (which includes general purpose lanes, car pool lanes, toll lanes, an exclusive busway and light rail Line C, via Wikimedia, by Remi Jouan, under CC 3.0 License.

Right-Wing Anti-Semitism Still Haunts the West

Joel Kotkin — Tue, 06 Aug 2024 20:28:58 -0400

In a post-7 October world, many have finally woken up to the reality that the locus of anti-Semitic sentiment now resides on the left. This is the case virtually everywhere in the West, particularly among the educated classes and the left-dominated media. We see it both in Europe, where Jew hatred has a long history, but also in historically more welcoming places like Canada, Australia and the United States.

This doesn’t mean that right-wing anti-Semitism, once the dominant form, has disappeared. As Alan Dershowitz points out, Jew hatred is once again being ‘mainstreamed’. This can be seen in elements of the ‘new right’, or as the media like to call it, the ‘far right’. Within these movements spreading throughout the West, anti-Semitic tropes represent a cancerous cell that is quickly metastasising.

There are two major elements here. Among some US conservatives, there is the rise of ideologies that place Christianity at the centre of national life. This is, of course, something not exactly embraced by most Jews, Muslims, Hindus or agnostics. Equally threatening has been the rise of white nationalism, which lends credence to views that Jews constitute a foreign body in the nation. They are demonised as outsiders who need to be restrained from exercising undue power and influence.

None of this is new. Anti-Semitism has a long history on the right. In the Middle Ages, the Catholic Church allowed some self-government for the small Jewish community. But once the Crusades began, many Christians increasingly viewed Jews as something of an ‘internal enemy’. Many were killed, forcibly converted or expelled, as in England in 1290, when King Edward I expelled the country’s entire Jewish population. Throughout continental Europe, crusaders and local mobs – egged on by some clerics – urged parishioners to ‘avenge the crucified’. This eliminationist approach, notes historian John Weiss, presaged the logic of the Holocaust.

The tone of anti-Semitism only became more intense with the rise of Martin Luther. Though at first he was friendly to Jews, Luther recoiled when they refused to support his new Protestant faith and took on a hostile, even genocidal, view towards them.

Not all Protestants were negative towards the Jewish community, however, with many identifying closely with the Old Testament religion. After all, it was the Roundheads under Oliver Cromwell who invited the Jews back to England after the Civil War. Similarly, it was the mostly Protestant founders of the US – notably George Washington – who initiated America’s historically tolerant approach towards Jews and other ‘non-conformists’.

By the early 20th century, anti-Semitism was less tied to religion and more fixated on race. This new anti-Semitism castigated Jews not as heretics, but as a kind of malicious presence threatening the values and culture of native or long-standing inhabitants. Ideas developed by racist philosophers like Joseph Arthur de Gobineau, Edouard Drumont and Houston Stewart Chamberlain, notes historian Ernst Nolte, helped lay the basis for fascism and its more openly racist Nazi offshoot.

Read the rest of this piece at Spiked.

Photo: Neo-Nazi rally in Washington, D.C., August 2002, by Elvert Barnes Flickr under CC 2.0 License.

Downtowns Don't Matter Anymore

Joel Kotkin — Sun, 04 Aug 2024 20:28:58 -0400

Joseph Lawler’s learned essay on induced demand, looking at the case of highway expansion in Austin, Texas, is fair-minded, but somehow seems more about theory than actual reality. He talks about downtown as if it really mattered all that much. It doesn’t.

Compared to many downtowns, Austin has done well, and a decade ago it was seen as among the most successful in the nation. But more recently, downtown Austin has experienced a rapid increase in office vacancies, up from 14 percent in 2022 to 18 percent in 2023. In contrast, almost all of the growth — in population, employment, and infrastructure — is on the periphery, in suburbs like Cedar Park and Round Rock. Austin’s leaders like to talk about a big new urbanist gain, but the people are headed predominantly in the opposite direction.

This is part of a larger trend. In 1940, thirteen percent of the U.S. population lived in suburbs. In 2010, it was half. An analysis by demographer Wendell Cox of population trends during the 2010s showed that 92 percent of all growth in major metropolitan areas was in the suburbs and exurbs — a trend that well preceded the pandemic. Since 2020, small towns and cities have seen a net gain in domestic migrants, while large metro areas have seen losses.

Simply put, downtowns matter less and less. In Austin and elsewhere, we are witnessing an epochal shift away from the highly concentrated urban center first described by Jean Gottmann in 1983 as the “transactional city.” Gottman spoke of a future dominated by massive high-rise office buildings filled with professionals who commuted largely from the periphery. Yet in reality, jobs have been dispersing throughout metro areas since the 1950s. Bumsoo Lee and Peter Gordon showed that downtowns for cities with the largest populations had dropped to 7 percent of metropolitan employment by 2000, while 78 percent of jobs were located in dispersed areas. Office occupancy and construction of new space have both seen a net decline since the turn of the century. The same goes for businesses, as investment in corporate real estate moves away from dense urban areas.

Remote work, rising before the pandemic but greatly expanded since, allows professionals to work ever further away from their place of employment. According to a 2023 paper at Stanford, work-from-home constituted about 7 percent of workdays before the pandemic and over 60 percent at its peak. The number has since dropped to below 30 percent, but that is still four times the pre-pandemic share.

This trend is particularly critical for high-tech jobs, a key driver in the Austin area. A 2020 study from the University of Chicago suggests that one-third of all jobs could be done remotely and up to half of the jobs generated by Silicon Valley.

Futurists have long argued about how remote work would shape urban geographies. Some predicted a spur to concentration in big cities and high-rises, but others recognized that the ease of telecommunications would allow unprecedented levels of dispersion. Many managers will continue to resist this trend, and surveys of workers suggest that many of them wish a more flexible approach to office occupancy.

This shift favors suburban and exurban areas, particularly those with high concentrations of knowledge workers. Work from home, whether full-time or in a hybrid model, according to a Conference Board survey, also addresses issues especially important to millennials, like work–life balance. The new paradigm also favors suburban and exurban buildings that can accommodate both full-time and hybrid workers, perhaps one reason why they are now outperforming many of their downtown counterparts.

Focusing on freeways to downtown is a bit like buying horse futures around the time of the Model T. Rather than suffering as the result of “job sprawl,” since the 1970s the suburbs and exurbs have continued to garner a growing percentage of the nation’s wealth, according to a paper by Whitney Airgood-Obrycki. Instead, the focus should be on connecting the various suburban areas through both highways and the promotion of remote work.

As we look to develop our transportation policy, our focus should be not on downtown and its dependent suburban workforce, but on connecting whole regions through roads and telecommunications. This is particularly applicable to areas like Austin, Silicon Valley, North San Diego County, Raleigh and Durham, and Boston’s Route 128 tech corridor.

These areas, suggests the historian Margaret Pugh O’Mara, represent the emergence of a new urban form: “cities of knowledge.” Instead of “amorphous ‘regions’” extending out from the core, they achieve “classic definitions of cities in terms of their economic diversity and self-sufficiency.” These cities may have suburban features such as housing tracts, strip malls, and access by car, but they still fulfill many of the traditional functions of the urban core, from recreation and culture to accommodating elite business sectors.

Critics of this growth pattern have often suggested that people would move downtown if they could. And perhaps some might do so, if more spacious and affordable housing were available, and if the schools were better or the streets safer. But that’s not the reality. So for the most part, surveys, such as one in 2019 by political scientist Jessica Trounstine, have found that the preference for lower-density, safe areas with good schools is “ubiquitous.”

This preference is also being adopted by tech firms who are seeking to house their workers. Some of the country’s leading tech moguls have backed pro-density efforts of the YIMBY (“Yes in my backyard”) movement, including executives at Cisco Systems, Palantir Technologies, and Y Combinator. Yet density fever seems to be breaking among the oligarchs. Recently, a group of Silicon Valley investors began pushing to build a new community in Solano County, sixty miles from San Francisco. Similarly, Elon Musk is planning to establish a new city outside Austin.

Educated millennials, the key to past urban growth, are migrating increasingly from the larger coastal metros to the suburb-dominated Sunbelt. Over the past decade, the fastest-growing counties have been outside cities such as Atlanta, Dallas, and Orlando, part of a suburban migration that is most noticeable among people earning over $75,000 and those between the ages of 30 and 44.

As these populations migrate, suburbs will have to change to accommodate their preferences for such things as walking, cultural activities, and recreation. This can be seen in large-scale developments such as Irvine outside Los Angeles, the Woodlands outside Houston, and New Albany near Columbus, Ohio. Developments can accomplish this in part because they have the capital and space, and are far more adept than urban cores at creating environmentally sustainable “garden cities” with their own or nearby offices, recreational facilities, and cultural amenities.

Unlike the largely unplanned, or one-dimensional, housing tracts characteristic of the old suburban form, these areas generally seek to combine housing, retail, and recreation with employment. Rather than the anti-city described by some New Urbanists, these places, writes Ann Forsyth in her book Reforming Suburbia, have fulfilled the goals of the New Urbanists “on a grand scale,” exhibiting “cutting-edge planning and design strategies.”

Perhaps the greatest advantage of well-planned communities, with their ample open space, room for remote work, and considerable outdoor amenities, can be seen in environmental terms. As new developments, they tend to use materials, energy systems, and water systems that are more environmentally sustainable and allow for a richer diversity of plants and animals. The rise of hybrid and full-time work at home could also prove a huge environmental win. The International Energy Agency suggests that “if everybody able to work from home worldwide were to do so for just one day a week, it would save around 1 % of global oil consumption for road passenger transport per year,” a savings “equivalent to the bulk of Greater London’s annual CO₂ emissions.” Some countries, such as Ireland, now support the idea of expanding remote work, in part to cut down on greenhouse emissions.

The rise of suburbs and exurbs, and the particular success of planned towns, is not a rejection of the city but the latest adaptation to contemporary conditions. What planners need is to focus not on transportation issues based on the old model, but on how to fit into the new.

This piece first appeared at The New Atlantis.

Photo: The “Giant Wheel” in a planned development in Irvine, California; by Azusa Tarn via Wikimedia.

The Puzzle of Generational Politics

Joel Kotkin — Thu, 01 Aug 2024 20:28:58 -0400

Age is a big deal. We saw just how big a deal it is from the deterioration of President Biden evident during the recent debate with Donald Trump. There’s a growing sense that the world is being run by a gerontocracy—Biden, Trump, Putin, Xi, Khamenei—worthy of the decrepit and corrupt Emperor Tiberius.

The stage is being set for a global generational conflict. As the old men strut on the world stage, they have left the next generation an almost unfathomable $91 trillion debt load, essentially forcing higher interest rates along with the threat of higher taxes and service cuts. Even in authoritarian countries, the younger generations are getting increasingly restless. And in the West, fewer than 10 percent of Americans under thirty think the country is headed in a good direction.

In most leading countries—the US, China, Japan, the UK, and the EU—a clear and widening divide has opened up between the different age cohorts that will alter our politics, arts, culture, and social norms in the decades ahead. This process is being propelled by demographic shifts unprecedented in modern history. For the better part of a half-century, populations have been expanding and getting richer. Now, we live in an era of flat and even negative population growth, and a shrinking middle class in virtually every middle- and high-income country.

The Long Tail of the Boomers

The younger cohorts inhabit a world in which the Boomer generation hoards wealth and power. This cannot last indefinitely. As usual, the first signs of this conflict come from the arts, in movies like Japan’s Plan 75, which envisions a government programme that urges people over 75 to commit a pleasant suicide for the benefit of future generations.

There are many reasons to want to get rid of the Boomers—my own generation. An aging population requires a working generation that can help foot a nation’s bills and support the elderly. We Boomers were able to do that for our parents, but younger people today may lack the resources. In the United States, fewer than 50 percent of Millennials are doing better than their parents. This is not just an American phenomenon. In almost every high-income country, Pew has found that the vast majority of parents—82 percent in Japan and 72 percent in the US—are pessimistic about the financial future of their offspring.

Compared with their parents, young people today are more likely to have a future with no substantial assets or property. A Deloitte study projects that Millennials (Americans born 1981–96) will hold barely 16 percent of the nation’s wealth in 2030, when they will be the largest adult generation by far. By then, Generation X (born 1965–80) will hold 31 percent, while the Boomers (born 1946–64) will still control 45 percent.

Boomers have greatly benefited from the economic progress made over the past 50 years. Property-led wealth accumulation has made a fifth of Boomers paper millionaires, something not likely to be repeated in the next generation. Overall, Boomers own half of the $32 trillion in US home equity. Despite a mediocre economy and high interest rates, house prices are at record highs across the US and home equity has soared to a record high of $27.8 trillion, while buyers now come largely from households with already strong credit. In Britain, one-in-four Boomers is a millionaire (in pounds sterling), mainly due to inflated housing prices. British retirees have more income than working-age people, notes a recent Resolution Foundation survey.

Read the rest of this piece at Quillette.

Photo: Mark Klotz via Flickr under CC 2.0 License.

The Baby Recession Continues as Births Drop to Lowest Level in Almost Two Decades

Terry Rawnsley — Wed, 31 Jul 2024 20:28:58 -0400

KPMG Australia analysis shows the country is in the midst of a baby recession as births across the country fall by 4.6 per cent year on year. The number of births in 2023 was the lowest since 2006 as cost-of-living pressures impact the feasibility of younger Australians to have children.

During 2023, 289,100 babies were born in Australia, a significant reduction from the 2021 post-lockdown spike which saw 315,200 babies born.

KPMG Urban Economist Terry Rawnsley explains that weak growth in the economy often leads to reduced birth rates, but that current cost-of-living pressures are having a particularly strong impact.

“Birth rates provide insight into long-term population growth as well as the current confidence of Australian families.”

“We haven't seen such a sharp drop in births in Australia since the period of economic stagflation in the 1970s, which coincided with the initial widespread adoption of the contraceptive pill.”

Terry Rawnsley continues: “Following the uncertainty of pandemic lockdowns people who had held off having children decided to start families. The record-low unemployment rate and the stimulus money that flowed into the economy had provided encouragement for people to start having children again.”

“With the current rise in living expenses applying pressure on household finances, many Australians have decided to delay starting or expanding their families. This combination of the pandemic and rapid economic changes explains the spike and subsequent sharp decline in birth rates we have observed over the past four years.”

“This is against the backdrop of a long-term decline in the total fertility rate, which has declined from over 2 children per woman in 2008 to 1.6 in 2023,” said Mr Rawnsley.

Capital cities trending down

The drop in births is more pronounced in the capital cities with:

Sydney births dropping to 60,860 down 8.6 per cent from 2019
Melbourne with 56,270 births down 7.3 per cent
Perth with 25,020 births down 6.0 per cent
Brisbane with 30,250 births down 4.3 per cent

Canberra was the only capital city to see no drop in births since 2019, holding steady at 5,530 in both 2019 and 2023.

Terry Rawnsley explains, “CPI growth in Canberra has been slightly subdued compared to that in other major cities, and the economic outlook has remained strong. This means families have not been hurting as much as those in other capital cities, and in turn, we’ve seen a stabilisation of births in the ACT.”

Sea and tree change boom is over for the regions

Most regional areas have fared better than the cities with only modest declines in births compared to 2019:

Regional NSW declining 0.3 per cent
Regional Victoria declining 0.4 per cent
Regional Queensland declining 2.9 per cent

The declines signal the end of the pandemic sea and tree change boom for the regions.

“Births across most regions have returned to pre-pandemic levels as the baby boom driven by younger Australians shifting to the regions ran out of steam,” said Terry Rawnsley.

Tasmania was the only region to see a noticeable increase in births compared to 2019 with 5,850 up 2.1 per cent.

Total births by region 2019-2023

	2019	2020	2021	2022	2023*	2019-2023 change
Greater Sydney	66,570	64,090	69,270	64,670	60,860	-8.6%
Rest of NSW	31,450	30,970	33,670	33,830	31,340	-0.3%
Greater Melbourne	60,690	57,310	59,440	58,740	56,270	-7.3%
Rest of VIC	16,130	16,170	17,290	17,090	16,060	-0.4%
Greater Brisbane	31,610	30,570	33,130	31,810	30,250	-4.3%
Rest of QLD	29,970	28,950	32,160	30,840	29,100	-2.9%
Greater Adelaide	15,560	14,810	16,130	15,740	15,440	-0.8%
Rest of SA	3,890	3,730	4,000	3,910	3,790	-2.6%
Greater Perth	26,620	25,660	27,580	25,300	25,020	-6.0%
Rest of WA	6,610	6,510	6,880	6,250	6,070	-8.2%
Tasmania	5,730	5,790	6,150	5,560	5,850	+2.1%
Northern Territory	3,650	3,760	3,860	3,650	3,520	-3.6%
Canberra	5,510	5,380	5,650	5,510	5,530	0.4%

^{*KPMG preliminary estimate}

This piece first appeared at KPMG.

Research by Terry Rawnsley, Urban Economist with KPMG.

Photo: Brisbane CBD and metropolitan area by Jorge Láscar via Flickr under CC 2.0 License.