Houston

Rethinking Urban Dynamics: Lessons from the Census

Aaron M. Renn — Thu, 28 Apr 2011 05:39:30 -0400

Much has been made of the vaunted “back to the city” movement by “the young and restless,” young professionals, the creative class, empty nesters and others were voting with their feet in favor of cities over suburbs. Although there were bright spots, the Census 2010 results show that the trend was very overblown, affecting mostly downtown and near downtown areas, while outlying ones bled population. One culprit for this discrepancy seems to be that the intra-census estimates supplied by the Census Bureau were inflated – in some cases very inflated.

Looking at selected core cities for major US metropolitan areas, many of them were materially over-estimated:

One particularly egregious case relates to Atlanta. Its huge projected population increase in the 2000s led me to describe it as “one of America's top urban success stories.” The reality proved to be quite different. Rather than strong population growth in the city, the population growth turned out to be basically flat, quite a different story. Other declines might be more predictable, such as Detroit, or those who had previously challenged estimates like Cincinnati and St. Louis. Still, even urban cores in rapidly growing regions like Dallas and Houston were not immune from this trend.

There were some exceptions. Cities like Indianapolis, Columbus, and Oklahoma City came in slightly ahead of expectations, but the number of cities with misses and the sizes of the positive and negative misses tilted towards the down direction.

It seems clear now that the justification for much of the “back to the city” story reflected bad estimates. People can't be faulted for relying on the official government numbers – I did. But the reality of the 2010 Census, as demonstrated by Wendell Cox and others, is that the 1990s were actually better for urban population growth in America than the 2000s in many respects.

One legitimate bright spot for cities lay in the growth of downtown and near downtown areas. Though often starting from low bases, these areas often showed impressive increases. For example, St. Louis showed good growth downtown despite a very disappointing decline in total city population:

The poster child for this phenomenon was Chicago, where a fairly expansive area in the greater core showed large population growth. Areas that were formerly almost all commercial, such as the Loop, added significant residential population, while areas that were nearly derelict like the near South Side have blossomed into thriving upscale neighborhoods.

The problem, from places ranging from Chicago to Cleveland, is that the gains in the “core of the core” have been more than offset by losses elsewhere, especially the flight of blacks and other minorities – many of them immigrants – to the increasingly diverse suburbs.

Cities across America have invested enormous sums into downtown redevelopment and major projects in selected districts. The good news: these investments have shown some ability to move the needle in terms of attracting young professionals downtown. The bad news lies with the fact that these developments have been extremely costly, and have not transformed the overall demographic or economic climates of the cities that tried them. This demonstrates the limits of the policies. Those who aren't in the young professional, empty nester, or creative class demographic have rightly figured out that they are no longer the target market of city leadership. No surprise then that many of them have decided to vote with their feet.

Given the resulting overall negative swings, cities may want to revisit their strategy of putting all their chips in the downtown redevelopment basket in favor of less glamorous improvements in basic neighborhood safety, services, schools and other critical elements. A handful of elite enclaves and talent hubs may be able to thrive on a “favored demographic quarter” strategy, but for most places there just aren't enough young professionals and artists to go around.

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

* Actual population minus projected population as of 4/1/2010 using a run rate projection based on the 2008-2009 estimated population growth.
** Base is the projected 4/1/2010 population above.

Photo by Ian Freimuth

China, Detroit, and Houston: How Ghost Properties Compare

Rick Harrison — Sat, 09 Apr 2011 13:59:29 -0400

Learning about China's property boom and its "ghost" cities has given me a whole new perspective on my four decades in the building, land development and consulting fields. During these periods our economy has had various ups and downs. In ‘up’ times, the rise in construction of new housing and growth in commercial developments has been quite obvious. What I have always had a problem understanding is why there seemed to be new housing projects and commercial projects that sprouted up during the bad times.

Unlike this current recession — and I do believe that it is still current, despite the rhetoric that it's over — past economic downturns were localized. As an example, I lived in Detroit in 1973 during the first gas crunch, when there were long lines to fill up. Unemployment in Detroit was a huge problem, and there was no work for a young ‘planner’ for new suburban developments, nor the prospect of anything turning around soon.

I eventually decided to move to the south, where it was thought to be better. As I crossed into Texas, there weren't any more gas lines. It seemed the entire State was booming. I drove through to Houston, picked up a phone book, and made a phone call to Paul Lederer Land Surveying and Engineering, which had a display ad that stuck out. Paul answered, and when I explained that I wanted to work as an apprentice to expand my knowledge into his field he hired me over the phone. I settled down, and after a year was ready to buy a home of my own.

Detroit was still in economic hardship, with housing requiring a 20% down payment for a mortgage. At the same time, in Houston, homes were so much in demand that we had only minutes to make an offer once a home we wanted came on the market. Financing required only a 5% down payment.

When a wealthy Detroit businessman heard that I could buy homes with only 5% down in a market that was escalating in sales and pricing I was offered a business proposition. I was asked to buy 50 homes at 5% down, and then resell them to a shell company for at least 10% more than our original purchase price. The homes would then be re-financed elsewhere with 5% down. The shell company would then default on the loans, and we would split the profits.

In other words, if we paid an average of $30,000 each for 50 homes, we would have $1,500,000 in real estate, for which we had put $75,000 down. In theory, if I sold the homes to a shell company for $2,000,0000 with a $100,000 down payment, we would each walk away with $200,000 profit (roughly $790,000 in today’s dollars after inflation) if we defaulted on the loans. I was not interested in something that I considered fraud for a quick dollar, but it would not have been difficult to do this in real estate at that time.

A few years later, Detroit was still in an economic downturn, and another person I knew was building large residential and commercial projects. These were new developments with hundreds of units and high-rise office towers.

I mentioned to someone close to this developer that I was unimpressed with a venture to build at a time when there was not a market for either condominium buyers or office tenants, and curious as to why it was being pursued. A 20 story office tower would impress me if it were leased out; one sitting empty would not be so impressive.

The answer was a lesson in economics. It was explained to me that the office tower was built for $10 million, but financed for $20 million, made possible by some inventive appraisals. Yet the bank needed only $1 million down. In other words, if the developments failed spectacularly there were still millions to be made, even if the properties went back to the banks. Ironically, Detroit in the late 1970’s and early 1980’s recovered somewhat, and the developments in question became financially viable and successful.

I have no doubt that every industry, not just the development of land, has stories of financial shenanigans, but these are two examples of only a few that I have been exposed to during my 43 years in the development business.

So today, whenever I see areas with aggressive construction that exceeds market potential, it makes me wonder…

In light of this history, see what you think about development in China. Check out this 15 minute video from a major Australian broadcaster on China's ghost cities.

Rick Harrison is President of Rick Harrison Site Design Studio and Neighborhood Innovations, LLC. He is author of Prefurbia: Reinventing The Suburbs From Disdainable To Sustainable and creator of Performance Planning System. His websites are rhsdplanning.com and performanceplanningsystem.com.

Photo: Expensive waterside apartments in Shekou Shenzhen by DC Master.

The Best Cities For Minority Entrepreneurs

Joel Kotkin — Thu, 31 Mar 2011 11:07:17 -0400

As the American economy struggles to recover, its greatest advantage lies with its diverse population. The U.S.’ major European competitors — Germany, Scandinavia, France, Italy, the Netherlands and Italy — have admittedly failed at integrating racial outsiders. Its primary Asian rivals, with the exception of Singapore, are almost genetically resistant to permanent migration from those outside the dominant ethnic strain.

In contrast, America’s destiny is tied to minorities, who already constitute a third of the nation’s population and who will account for roughly half of the population by 2050. Younger and more heavily represented in the labor force, minorities are poised to become the primary source of entrepreneurial growth.

The clear advantage with minorities, particularly immigrant minorities, lies in their own self-selection. Risk-takers by the very act of emigration, they are more likely to start small firms than other Americans. In fact, a recent Kauffman Foundation study found that immigrants were unique in boosting their entrepreneurial activities since the onset of the recession. Overall the share of immigrants among new entrepreneurs has expanded from 13.4% in 1996 to nearly 30% this year.

Forbes asked demographer Wendell Cox (www.demographia.com), researcher Erika Ozuna and me to examine the immigrant entrepreneurial phenomena among the nation’s 52 largest metropolitan areas. The results (below) turned out to be in many ways surprising, and almost counter-intuitive.

Usually we think of immigrant entrepreneurs as clustering in crowded city communities or high-tech places like Silicon Valley. But based on rates of self-employment, housing affordability, income growth and migration, immigrant entrepreneurs tend to prefer sprawling, heavily suburbanized regions, many of them clustered in the South and Southwest.

The best U.S. city for minority entrepreneurs on our list, Atlanta, has long been a haven for black entrepreneurs. But, recently, its Latino and Asian populations have exploded, with exceptionally high rates of self-employment. In the past decade, the Atlanta region’s Asian population surged 74%, while its Latino population grew by 101%. The overall foreign-born population rose by roughly 300,000.

Similar surges took place in almost all the top cities on list. They include Baltimore (No. 2), Nashville (No. 3), Houston, Miami, Oklahoma City, Riverside San Bernardino, Calif., the Washington D.C. metro area, Orlando, Fla.. and Phoenix, Ariz.

Latino shopping center developer Jose Legaspi traces much of the entrepreneurial success in these areas to this rise in population. This is particularly true in places like Miami, which has the nation’s highest rate of foreign immigration, and has long boasted of its role as “the capital of the Americas.” Less renowned are cities like Houston, which now enjoys a higher per capita rate of immigration than Boston, Seattle or Chicago. All these cities have engendered dense pockets of diverse and often dispersed ethnic populations; in some locales, ethnic groups share neighborhoods and economic space. It’s increasingly common to see stores owned by ethnic groups serving both their own tribe as well as others.

“The entrepreneurial class will follow the immigrant population,” notes the Montebello, Calif.-based entrepreneur, who has developed retail centers in such diverse locations as Los Angeles, Las Vegas, Atlanta, Phoenix and Fort Worth, Texas. “You get small retailers following their needs as well as a growing professional class.”

Legaspi notes that an increasingly critical factor for the growth of many of these fastest-growing minority areas is cost of living. With the exception of Baltimore and Washington — whose growth is tied to the expansion of the federal government — the cities on our list enjoy relatively low housing costs. Minorities “American dream” generally does not revolve around an apartment in dense, expensive urban areas, Legaspi n says, but want an affordable single-family house.

This also applies to middle- and working-class African-Americans, whose shift away from cities to suburbs has been among the most remarked upon phenomena identified by the Census. In Atlanta, for example, the ratio of median income to median house value is 4.6 for African-Americans, 3.1 for Asians and 5.2 for Hispanics. In 35th-ranked San Francisco it’s 14.3 for African Americans, 7.1 for Asians and 10.6 for Hispanics. No surprise that per-capita minority growth is far more rapid in Atlanta than in the avowedly “multi-cultural” Bay Area.

Land use and other regulations also play a role here, not only for housing prices but for entrepreneur opportunities. Again, with exception of the Washington and Baltimore areas, the fast-growing minority regions, and rapidly growing self-employed populations, are regions with diffuse, multi-polar and heavily suburbanized land patterns.

The strip mall, much detested among urban aesthetes and planners often serves as “the immigrants’ friend,” says Houston architect Tim Cisneros. In places like Houston, Cisneros points out, Columbians, Nigerians, Mexicans , Indian and Vietnamese businesses usually cluster not in downtown centers or fancy high-end malls, but in makeshift auto-oriented strip centers, where prices are low, parking ample and the location within easy driving distance of various ethnic populations. You want a good Indian meal in Houston, you don’t need to head downtown, but to the outer suburbs of Fort Bend County.

In contrast, many of the more expensive, denser regions — many with storied high-tech sectors — did poorly in our survey. Besides San Francisco, Minneapolis ranked No. 49, San Diego No. 48, San Jose No. 46 and Boston No. 45. Chicago clocked in at a dismal No. 50.New York, the legendary home of minority entrepreneurship, ranked a meager No. 39.

Jonathan Bowles, president of the New York-based Center for an Urban Future, traced this poor performance to a myriad of factors, including sky-high business rents, which stymie would-be entrepreneurs in minority communities. “[Entrepreneurs] face incredible burdens here when they start and try to grow a business,” Bowles suggested. “Many go out of business quickly due to the cost of real estate and things like high electricity costs. It’s an expensive city to do business without a lot of cash.”

Yet not every region at the bottom of our list came from the array of high-end “luxury” cities. The bottom of the list also included a host of rustbelt cities, including Detroit (No. 47), Cleveland (No. 51) and Milwaukee (last place at No. 52). Clearly cheap rents and affordable space are not enough when weighed against slow job growth, weak immigration and general economic stagnation.

And often, notes Richard Herman, an immigrant attorney in Cleveland, a cultural pre-disposition against immigrants plays a destructive role in many of these cities. “The rust belt cities don’t tend to welcome newcomers,” Herman says. “The infrastructure, the sentiment is not there. But you can’t get around it. We have to change our culture if want to change our situation.”

Here is the full ranking of the top 52 metros for minority entrepreneurs, compiled by researchers Wendell Cox and Erika Ozuna:

Atlanta-Sandy Springs-Marietta, GA
Baltimore-Towson, MD
Nashville-Davidson-Murfreesboro-Franklin, TN
Houston-Sugar Land-Baytown, TX
Miami-Fort Lauderdale-Pompano Beach, FL
Oklahoma City, OK
Riverside-San Bernardino-Ontario, CA
Washington-Arlington-Alexandria, DC-VA-MD-WV
Orlando-Kissimmee, FL
Phoenix-Mesa-Scottsdale, AZ
Memphis, TN-MS-AR
Dallas-Fort Worth-Arlington, TX
San Antonio, TX
Tampa-St. Petersburg-Clearwater, FL
Austin-Round Rock, TX
Charlotte-Gastonia-Concord, NC-SC
Indianapolis-Carmel, IN
Los Angeles-Long Beach-Santa Ana, CA
Richmond, VA
New Orleans-Metairie-Kenner, LA
Jacksonville, FL
Tucson, AZ
Portland-Vancouver-Beaverton, OR-WA
Raleigh-Cary, NC
Louisville-Jefferson County, KY-IN
Birmingham-Hoover, AL
Seattle-Tacoma-Bellevue, WA
Cincinnati-Middletown, OH-KY-IN
Sacramento-Arden-Arcade-Roseville, CA
Pittsburgh, PA
Kansas City, MO-KS
Columbus, OH
Las Vegas-Paradise, NV
Virginia Beach-Norfolk-Newport News, VA-NC
San Francisco-Oakland-Fremont, CA
Denver-Aurora-Broomfield, CO
St. Louis, MO-IL
Buffalo-Niagara Falls, NY
New York-Northern New Jersey-Long Island, NY-NJ-PA
Rochester, NY
Hartford-West Hartford-East Hartford, CT
Salt Lake City, UT
Providence-New Bedford-Fall River, RI-MA
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Boston-Cambridge-Quincy, MA-NH
San Jose-Sunnyvale-Santa Clara, CA
Detroit-Warren-Livonia, MI
San Diego-Carlsbad-San Marcos, CA
Minneapolis-St. Paul-Bloomington, MS-WI
Chicago-Naperville, Joliet-IL-IN-WI
Cleveland-Elyria-Mentor, OH
Milwaukee-Waukesha-West Allis, WI

This piece originally appeared in Forbes.com

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

Photo by LHOON

Census 2010: A Texas Perspective

Candy Evans — Fri, 25 Feb 2011 05:38:06 -0500

If you want to get a glimpse of the future of the U.S., check out Fort Worth, TX. Never mind the cowboy boots, but you might want to practice your Spanish.

Texas is growing explosively and much of that growth is among Latinos. The latest Census Bureau figures show the Lone Star State grew by 20%, to over 25 million people, recording about a quarter of the nation’s overall growth. The rate of growth was twice the national average. The implications are huge politically, as Texas stands to gain 4 new Congressional seats from this expansion, and Hispanic leaders want in.

A majority of the Hispanic growth came from births to families already living here. While migration from other states and countries contributed about 45%.

The Texas story stands in contrast to the Rust Belt states and the Northeast, where overall growth is minimal. Texas’s Hispanic-fueled growth spurt out-paced the entire countries, helped brace our housing market and our economy.

A close look at Texas growth reveals much about American’s home-buying habits. Rural areas got smaller – few want to live in the boonies of far west Texas while it appears suburban areas won over the most transplants.

But arguably the biggest winner was Ft. Worth, or Cow Town as we call it. Fort Worth grew by a whopping 38.6%, the largest increase in the state, followed by Laredo’s 33%, Austin at 20.4%, and San Antonio at 16%. In contrast the city of Dallas, my home, grew by a scant .8% – a bit deflating to a city all puffed up about a $354 million arts center, a downtown park and greenway, and the $185 million Perot Museum of Nature & Science underway.

Houston remains the state’s largest metropolitan area but sustained growth of only 7.5%, though Harris County – mostly due to growth in the suburbs – grew by 20%. As in Ft. Worth and elsewhere, Hispanics have been the driver, and now comprise 41% of the Harris County population. The biggest growth took place in formerly rural towns just outside the big cities, one-shop stop farmer’s crossings or granaries.

Curtis Tally shakes his head at how fast little Justin, north of Fort Worth, has grown. Subdivisions sprouted up on what was once farmland around his Justin Feed Co. in southern Denton County. From 1891 residents in 2000, Justin has 3,246 today.

"We were selling seed for pastures; now we're selling seeds for lawns," Tally, 74, who has been in business in Justin since 1958, told the Fort Worth Star Telegram.

If you think that’s amazing, wait ‘till you get to Fate, Texas, 25 minutes east of Dallas on Interstate 30. Ten years ago you would have missed Fate, a town of 500 so small the utility invoicing was done on postcards if you blinked while driving. Today, Fate is the fastest-growing town in the state, with 6,357 residents – an increase of 1,179%! Residents who live there say it’s far enough away from Dallas to be in the country, but still close to the big city. Fate draws many first time homebuyers who are starting families (home prices range from $50,000 to $300,000) Here’s what Fate resident Tina Nelson told The Dallas Morning News:

“My kids can go ride bikes all day long and I don’t have to worry too much about where they are,” said Tina. “It’s like the 1950s (here) the sun goes down and everyone’s porch light comes on.”

On the western side of Lake Ray Hubbard, a few minutes from Fate and slightly closer to Dallas is Sunnyvale, another fast-growing little hick town where professionals are building $2 million dollar homes on a 124 acre family ranch turned into home sites called St James Park. They send their children to a two-year old, $50 million public school with the highest ratings in the state.

The young man building homes on the 49 two acre estate sites is Jojy Koshy of Atrium Fine Homes. At 31, Jojy holds a masters in business from the University of Texas and tells me, with pride, how his parents immigrated to the Dallas suburb of Plano in 1986 from India.

“My parents instilled a strong work ethic in us,” he says. “I know this market is challenging, but I believe that if I work longer, harder, and keep our clients completely satisfied, we will have a great business.”

It’s the same story across the state. The Interstate 35 corridor between Austin and San Antonio filled in with development as the cities merged closer to becoming one big schizophrenic metropolis. The string of counties along the Rio Grande, anchored by Brownsville and McAllen have been growing, and may be beneficiaries of the crime wave south of the border. A sharp Dallas Realtor took out an ad in the Monterrey newspaper advertising homes for sale in Dallas and snagged several buyers. Even the wife of the Monterrey mayor moved to a Dallas suburb, escaping the cartel and seeking to be closer to her family here.

Aside from escaping death in Mexico, what is driving people to Texas? Start with our rising star, Fort Worth. The city has both a cowboy pizzazz personality and a lower crime rate than Dallas. Fort Worth’s arts district has overshadowed Dallas’s for years, and the neighborhoods offer true community – places where the kids can still walk, not be bussed, to school. Rose Bowl winner Texas Christian University is on the upswing, downtown is charmingly vibrant, and an urban renaissance is taking hold on the city’s western edge called West 7th.

What are people seeking in Texas? I’d call it quality of life with room for upward mobility: affordable homes with mortgage payments that leave some money for recreation, good public schools for their kids and generally less onerous tax regime.

Yet with our many gains, Texas faces great challenges. The state has the third-highest teenage pregnancy rate in the nation, which is actually an improvement from last year, when we were number two. There are a rising number of children are living in poverty in Texas. Many of these children may be anchor babies born to illegal immigrants who cross the border to ensure their children and ultimately, themselves, citizenship. In 2006, 70% of the women who gave birth at Dallas County’s Parkland Memorial Hospital were illegal immigrants.

Increasingly, Latinos, illegal or not, take those babies home to the suburbs. Texas suburbs are no longer lily-white. This is true in working class places like Bedford, Texas, outside Fort Worth, where the black population has almost doubled. In affluent Southlake, the population this decade shifted from 95 percent Anglo down to 88 percent. Looking for a great selection of Asian food? You’ll starve (or go broke) in downtown Dallas. Go north to Carrollton, Texas where you’ll find a 78,000 square foot Super H Mart in what was once a Mervyns department store. Inside you’ll find seven types of gray, fuzzy, Chinese long, acorn, spaghetti, butternut, and kombucha squash eight food stalls said to rival any of those found in Seoul and Singapore, two cities known for their gourmet street food. Manduguk, anyone?

The new Texans are coming here not just to live, but to dig in economically.

In the end, we are seeing the birth of a Texas that is neither the white bread, big hair idyll of the cultural conservatives or the free market dystopia imagined by liberals. It is becoming more diverse, without losing its capitalist energy. With all its blemishes, the emerging Texas may well become the model for how America evolves in the coming decades.

Candy Evans is an independent journalist based in Dallas, Texas, She covers Texas for AOL's HousingWatch and blogs at secondshelters.com.

Photo by Rick

The Still Elusive "Return to the City"

Wendell Cox — Tue, 22 Feb 2011 05:38:12 -0500

Metropolitan area results are beginning to trickle in from the 2010 census. They reveal that, at least for the major metropolitan areas so far, there is little evidence to support the often repeated claim by think tanks and the media that people are moving from suburbs to the historical core municipalities. This was effectively brought to light in a detailed analysis of Chicago metropolitan area results by New Geography’s Aaron Renn. This article analyzes data available for the eight metropolitan areas with more than 1 million population for which data had been released by February 20.

Summary: Summarized, the results are as follows. A detailed analysis of the individual metropolitan areas follows (Table 1).

In each of the eight metropolitan areas, the preponderance of growth between 2000 and 2010 was in the suburbs, as has been the case for decades. This has occurred even though two events – the energy price spike in mid-decade and the mortgage meltdown – were widely held to have changed this trajectory. On average, 4 percent of the growth was in the historical core municipalities, and 96 percent of the growth was in the suburbs (Figure 1).
In each of the eight metropolitan areas, the suburbs grew at a rate substantially greater than that of the core municipality. The core municipalities had an average growth from 2000 to 2010 of 3.2 percent. Suburban growth was 21.7 percent, nearly 7 times as great. Overall, the number of people added to the suburbs was 14 times that added to the core municipalities.

Table 1:
Metropolitan Area Population: 2000-2010

	2000 Population
	Historical Core Municipality	Suburbs	Metropolitan Area
Austin	656,562	593,201	1,249,763
Baltimore	651,154	1,901,840	2,552,994
Chicago	2,895,671	6,053,068	8,948,739
Dallas-Fort Worth	1,188,580	3,972,964	5,161,544
Houston	1,953,631	2,761,776	4,715,407
Indianapolis	860,454	664,650	1,525,104
San Antonio	1,144,646	567,057	1,711,703
Washington	572,059	4,181,934	4,753,993
Total	9,922,757	20,696,490	30,619,247

	2010 Population
Austin	790,390	925,899	1,716,289
Baltimore	620,961	2,089,528	2,710,489
Chicago	2,695,598	6,599,081	9,294,679
Dallas-Fort Worth	1,197,816	5,173,957	6,371,773
Houston	2,099,451	3,846,449	5,945,900
Indianapolis	903,393	852,848	1,756,241
San Antonio	1,327,407	815,101	2,142,508
Washington	601,723	4,883,034	5,484,757
Total	10,236,739	25,185,897	35,422,636

	Change: 2000-2010
Austin	133,828	332,698	466,526
Baltimore	(30,193)	187,688	157,495
Chicago	(200,073)	546,013	345,940
Dallas-Fort Worth	9,236	1,200,993	1,210,229
Houston	145,820	1,084,673	1,230,493
Indianapolis	42,939	188,198	231,137
San Antonio	182,761	248,044	430,805
Washington	29,664	701,100	730,764
Total	313,982	4,489,407	4,803,389


	Percentage Change: 2000-2010
Austin	20.4%	56.1%	37.3%
Baltimore	-4.6%	9.9%	6.2%
Chicago	-6.9%	9.0%	3.9%
Dallas-Fort Worth	0.8%	30.2%	23.4%
Houston	7.5%	39.3%	26.1%
Indianapolis	5.0%	28.3%	15.2%
San Antonio	16.0%	43.7%	25.2%
Washington	5.2%	16.8%	15.4%
Total	3.2%	21.7%	15.7%

Chicago excludes Kenosha County, WI
Washington excludes Jefferson County, WV
Indianapolis core municipality: Indianapolis & Marion County

Analysis of Individual Metropolitan Areas: The major metropolitan areas for which data is available are described below in order of their population size (Figure 2 and Table 1).

Chicago:The core municipality of Chicago lost 200,000 residents between 2000 and 2010. Suburban growth was 546,000, adding up to total metropolitan area growth of 346,000 people. The suburbs accounted for 158 percent of the metropolitan area growth. The core municipality decline was stunning in the face of the much ballyhooed urban renaissance in that great city. Yet this renaissance was limited enough as to not lead to an expanding population.

The decline in the core municipality population represents a major departure from the 2009 Bureau of the Census estimates, which would have implied a 2010 population at least 170,000 higher (assumes the growth rate of 2008 two 2009).

Instead all of the growth was in the outer suburbs, beyond the inner suburbs of Cook County.

Dallas-Fort Worth: The historical core municipality of Dallas had a modest population increase of 9000, or less than 1 percent between 2000 and 2010. In contrast, the suburbs experienced an increase of 1.2 million, or 30 percent. Thus, approximately 1 percent of the metropolitan area growth was in the core municipality, while 99 percent was in the suburbs, most of it in the outer suburbs. The inner suburbs added 14 percent to their 2000 population, while the outer suburbs added 36 percent.

The population figure for the core municipality of Dallas – consistently among the strong core areas – was surprisingly low, at 9 percent below (117,000) the expected level. The suburban population was 1 percent (71,000) below expectations.

Houston: The historical core municipality of Houston had comparatively strong population growth, adding 146,000 and 8 percent to its 2000 population. However this figure was 8 percent, or 174,000 below the expected figure. By contrast, the suburban growth was 39 percent, more than five times that of the central jurisdiction. The suburban population growth was 1,085,000, more than six times that of the core jurisdiction. The suburban population was 4 percent or 144,000 higher than expected.

The core jurisdiction of Houston accounted for 12 percent of the metropolitan area growth while the suburbs s accounted for 88 percent. This was evenly distributed between the inner suburbs of Harris County and the outer suburbs. The inner suburbs added 38 percent to their population while the outer suburbs added 41 percent.

Washington:Reversing a decade's long trend, the historical core jurisdiction of Washington (DC) had a small population gain between 2000 and 2010. But the Washington, DC gain of 30,000 pales by comparison to the suburban gain, which was more than 20 times greater, at 700,000. The core jurisdiction accounted for 4 percent of the population gain, while the suburbs accounted for 96 percent.

More than 60 percent of the growth in the metropolitan area was outside the inner suburban jurisdictions that border Washington, DC (Arlington County and Alexandria in Virginia, together with Montgomery County and Prince George's County in Maryland), while the inner suburbs accounted for 36 percent of the growth. The population increase in the inner suburbs was 9 percent, compared to 37 percent in the outer suburbs.

Jefferson County in West Virginia was not included in the analysis because data is not yet available.

Baltimore: The historical core municipality of Baltimore, the site of another ballyhooed urban comeback, lost 30,000 people, or 5 percent of its 2000 population. Baltimore's 2010 population was 4 percent or 16,000 below the expected level. The suburbs experienced a 10 percent or 188,000 person increase. The region’s population increase was roughly equal in numbers between the inner suburbs and the outer suburbs, although the exurban percentage increase was nearly twice as large.

San Antonio:The historical core municipality of San Antonio experienced the largest population increase among the eight metropolitan areas, at 183,000, a roughly 16 percent population jump. The city of San Antonio accounted 43 percent of the growth while suburbs in Bexar County and further out accounted for a larger 57 percent. However, the suburban population increase was 248,000 or 44 percent. This is something of a turnaround in trends that favored the city of San Antonio in the past because of its vast sprawl and predominant share of the metropolitan population.

The city of San Antonio population was 5 percent or 65,000 people short of the expected 2010 level. The suburban population was 15 percent more or 104,000 more than the expected level.

Indianapolis:The historical core area of Indianapolis and Marion County (including enclaves within Indianapolis) grew 5 percent and accounted for 19 percent of the metropolitan area growth. In contrast, the surrounding suburbs grew 28 percent, representing r 81 percent of the metropolitan area growth. Overall, the core municipality added 44,000 people, while the suburbs added more than four times as many, at 188,000.

Austin:The historical core municipality of Austin experienced the greatest growth of any core jurisdiction in the eight metropolitan areas, at 20 percent. Even so, growth in the suburban areas was nearly 3 times as high at 56 percent. The city of Austin accounted for 29 percent of the metropolitan area population growth, while the suburbs accounted for 71 percent. Overall, the central municipality grew 134,000, while the suburbs grew 2.5 times as much, at 333,000.

Generally it is fair to say that, so far, suburban areas are growing far faster than urban cores. In addition, most of the fastest growing core municipalities are those areas that are themselves largely suburban, particularly in relatively young cities like San Antonio, Houston and Austin.

Among the eight metropolitan areas analyzed, the older core jurisdictions (with median house construction dates preceding 1960) tended to either lose population or grow modestly. This is illustrated by the city of Chicago, with a median house construction date of 1945, Baltimore with a median house construction date of 1946 and Washington with a median house construction date of 1949 (Table 2). Generally, the central jurisdictions with greater suburbanization (with median house construction dates of 1960 or later) grew more quickly. For example, highly suburban central jurisdictions like Austin with a median house construction date of 1983 and San Antonio, with a median house construction date of 1970, grew fastest. So much for the long forecast, and apparently still elusive, “return to the city”.

Table 2:
Historical Core Municipalities: Growth & Median House Age

	Historical Core Municipality
	Growth: 2000-2010	Share of Metropolitan Growth	Median House Construction Year
Austin	20.4%	28.7%	1983
Baltimore	-4.6%	-19.2%	1946
Chicago	-6.9%	-57.8%	1945
Dallas-Fort Worth	0.8%	0.8%	1974
Houston	7.5%	11.9%	1975
Indianapolis	5.0%	18.6%	1967
San Antonio	16.0%	42.4%	1979
Washington	5.2%	4.1%	1949
Average	3.2%	3.7%

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

Why Affordable Housing Matters

Joel Kotkin — Mon, 24 Jan 2011 13:12:34 -0500

Economists, planners and the media often focus on the extremes of real estate — the high-end properties or the foreclosed deserts, particularly in the suburban fringe. Yet to a large extent, they ignore what is arguably the most critical issue: affordability.

This problem is the focus of an important new study by Demographia. The study, which focuses largely on English-speaking countries, looks at the price of housing relative to household income. It essentially benchmarks the number of years of a region’s household income required to purchase a median-priced house.

Overall, the results are rather dismal in terms of affordability, particularly in what Wharton’s Joe Gyourko dubs “superstar cities.” These places — such as London, New York, Sydney, Toronto and Los Angeles — generally tend to be more expensive than second-tier regions commonly found in the American South and heartland.

Even with their usually higher incomes, these regions, for the most part, still have a ratio of five years median income to median house price; this is far higher than the historical ratio of three. In some areas the ratios are even more stratospheric. Sydney and Melbourne, for example, have ratios over nine; London, New York, San Jose and Los Angeles approach six or more.

Urbanists often assume that these high prices — unprecedented in a tepid economy — reflect the greater attractiveness of these regions. This is somewhat true, particularly for parts of London and New York, which can survive high ratios because their markets are less national and middle-income and more tied to the global upper classes.

In places like Mayfair or New York’s Upper East Side, the buying “public” extends beyond the local market to high-income markets in places like the United Arab Emirates, Moscow, Shanghai, Singapore or Tokyo. Many owners are not full-time residents and consider a home in such places as just another expression of their wealth and privilege.

Yet such markets are exceptional. In most regions, the vast preponderance of homebuyers are either natives or long-term migrants. Their less glamorous tastes — notably access to affordable single-family dwellings — drives migration from one region to another. Over the past decade, and even since the crash, this has meant a general trend of migration from high-end, unaffordable markets to less expensive regions. In the U.S., for example, people have been flocking to the South, particularly the large metropolitan areas of Texas.

One factor driving this migration, the Demographia study reveals, is differing levels of regulation of land use between regions. In many markets advocacy for “smart growth,” with tight restrictions on development on the urban fringe, has tended to drive up prices even in places like Australia, despite the relatively plentiful supply of land near its major cities.

More recently, “smart growth” has been bolstered by claims, not always well founded, that high-density development is better for the environment, particularly in terms of limiting greenhouse gases. Fighting climate change (aka global warming) has given planning advocates, politicians and their developer allies a new rationale for “cramming” people into more dense housing, even though most surveys show an overwhelming preference for less dense, single-family houses in most major markets across the English-speaking world.

Limits on the kind of residential living most people prefer inevitably raises prices. As the Demographia study shows, the highest rise in prices relative to incomes generally has taken place in wherever strong growth controls have been imposed by local authorities.

Perhaps the poster child for “smart growth” has been the U.K. Long before the climate change debate, both of England’s major parties embraced the notion of strict constraints on suburban development — not only in London, but across the country. As a result, even places with weak economies are not as affordable as they should be. Liverpool, Newcastle and the Midlands have affordability rates higher than Toronto, Boston, Miami and Portland — and not much lower than those of New York or Los Angeles.

But the most remarkable impact of “smart growth” policies has been in Australia, which once had among the most affordable housing prices in the English-speaking world. Houses in Sydney and Melbourne, for example, are now less affordable than in London or San Francisco. Even secondary markets like Adelaide and Perth are more expensive than Toronto, New York, Los Angeles or Chicago. Most recently these policies have even caught the attention of the OECD, which linked overly regulated housing markets not only to the Great Recession, but to a continued slow economic recovery.

Compared with the U.K. and Australia, the U.S. housing market is more hopeful, with a host of regions — notably Houston, Dallas, Austin, San Antonio, Phoenix and Kansas City — with affordability rates around three and under. Low prices by themselves, of course, are no guarantor of success; in economically challenged places like Detroit and Cleveland, out-migration and high unemployment have driven prices down.

But in many, if not most, cases affordability has promoted economic and demographic growth. Generally speaking, affordable markets tend to draw migrants from overpriced ones, for example to Houston or Austin from Los Angeles or New York.

Nor is this necessarily a case of “smart” people heading to dense, expensive cities while the less cognitively gifted head to the low-cost regions — as news outlets like The Atlantic have claimed. In fact, the American Community Survey reveals that between 2007 and 2009 college graduates generally gravitated toward lower-cost, less dense markets — such as Austin, Houston and Nashville — than to the highly constrained, denser ones. Overall growth in affordable markets — with a ratio of three or four — among college graduates was roughly 5%; in the more expensive places , it was barely 3%.

How could this be, if everyone with an above-a-room-temperature IQ supposedly favors hip, cool, dense cities? Perhaps it’s because of factors often too small or mundane for urban pundits to acknowledge. Most people, particularly as they enter their 30s, aspire to a middle-class lifestyle — and being able to afford a house constitutes a large part of that.

So what does this tell us about future growth? Clearly affordability matters. Areas that combine strong income and job growth, along with affordable housing, are poised to do best. This will be particularly true once the economy recovers and a new generation of millennial buyers, entering their 30s in huge numbers over the next decade, start their search for a place where they can settle down and start raising families.

This piece originally appeared in Forbes.

Photo by Je Kemp

Personal Income in the 2000s: Top and Bottom Ten Metropolitan Areas

Wendell Cox — Sun, 23 Jan 2011 23:34:13 -0500

The first decade of the new millennium was particularly hard on the US economy. First, there was the recession that followed the attacks of 9/11. That was followed by the housing bust and the resulting Great Financial Crisis, which was the most severe economic decline since the Great Depression.

Per capita personal incomes in America's major metropolitan areas vary widely. Moreover, the changes in per capita incomes from 2000 to 2009 have also varied. The differences are particularly obvious when average incomes are adjusted for metropolitan area Consumer Price Indexes. The US Bureau of Labor statistics produces a Consumer Price Index for nearly 30 metropolitan areas. Among these, 28 metropolitan areas are covered by these local Consumer Price Indexes.

While overall national inflation was approximately 25 percent between 2000 and 2009, the metropolitan area inflation indexes ranged from 16 percent in Phoenix to more than 32 percent in San Diego. Five additional metropolitan areas had 2000 to 2009 inflation of more than 30 percent, including Los Angeles, Riverside-San Bernardino, Miami, Tampa-St. Petersburg and San Diego. Four metropolitan areas experienced inflation of less than 20 percent, including Atlanta, Detroit and Cleveland and Phoenix.

Overall, the 28 metropolitan areas covered by metropolitan inflation indexes averaged a per capita income decrease of 0.1 percent, after adjustment for inflation. Increases were achieved in 18 metropolitan areas, while decreases occurred in 10. The overall average declines occurred because the steepest loss (19 percent in San Jose), was far outside the plus 10 percent to minus 8 percent range of the other 27 metropolitan areas (Table).

Metropolitan Area: Per Capita Income
Metropolitan Areas Covered by Metropolitan Consumer Price Indexes
Inflation Adjusted

Rank	Metropolitan Area	2000 in 2009$	2009	Change
1	Baltimore	$ 43,729	$ 47,962	9.7%
2	Pittsburgh	$ 39,024	$ 42,216	8.2%
3	Washington	$ 53,753	$ 56,442	5.0%
4	Philadelphia	$ 43,572	$ 45,565	4.6%
5	St. Louis	$ 38,636	$ 40,342	4.4%
6	Milwaukee	$ 40,028	$ 41,696	4.2%
7	Los Angeles	$ 41,382	$ 42,818	3.5%
8	Houston	$ 42,232	$ 43,568	3.2%
9	Cleveland	$ 38,396	$ 39,348	2.5%
10	Chicago	$ 42,761	$ 43,727	2.3%
11	Phoenix	$ 33,594	$ 34,282	2.0%
12	San Diego	$ 44,812	$ 45,630	1.8%
13	Kansas City	$ 39,020	$ 39,619	1.5%
14	New York	$ 51,638	$ 52,375	1.4%
15	Cincinnati	$ 37,852	$ 38,168	0.8%
16	Seattle	$ 48,651	$ 48,976	0.7%
17	Boston	$ 53,396	$ 53,713	0.6%
18	Minneapolis-St. Paul	$ 45,690	$ 45,750	0.1%
19	Denver	$ 46,205	$ 45,982	-0.5%
20	Miami-West Pallm Beach	$ 41,937	$ 41,352	-1.4%
21	Riverside-San Bernardino	$ 30,600	$ 29,930	-2.2%
22	Portland	$ 39,703	$ 38,728	-2.5%
23	Tampa-St. Petersburg	$ 38,048	$ 36,780	-3.3%
24	San Francico	$ 61,831	$ 59,696	-3.5%
25	Dallas-Fort Worth	$ 41,575	$ 39,514	-5.0%
26	Detroit	$ 40,412	$ 37,541	-7.1%
27	Atlanta	$ 39,775	$ 36,482	-8.3%
28	San Jose	$ 68,185	$ 55,404	-18.7%
	Unweighted Average	$ 43,801	$ 43,700	-0.2%

The Top Ten: The strongest per capita personal income growth between 2000 and 2009 was in Baltimore, which had an inflation adjusted increase of 9.7 percent. This strong performance is not surprising due to Baltimore’s proximity to Washington and the federal government's high paying jobs. It also receives spillover lucrative employment from federal contracts to health, defense and security companies. In fact, Baltimore did better than Washington. Washington, which extends from the District of Columbia and into Maryland, Virginia and West Virginia. Not that DC did badly; it boasted the third highest income growth, and 5.0 percent.

However, perhaps the biggest surprise is the metropolitan area that slipped into the number two position between Baltimore and Washington. The Pittsburgh metropolitan area, which may have faced the most severe economic challenges of any major metropolitan area over the past 40 years, achieved per capita personal income growth of 8.2 percent. The Pittsburgh gain is all the more significant in view of the local financing difficulties which placed the city of Pittsburgh in the near equivalent of bankruptcy under Pennsylvania's Act 47. However, as is the case in on number of metropolitan areas, the central city has become much less dominant and no longer seals the fate of the larger metropolitan area. Today, the city of Pittsburgh accounts for only 15 percent of the metropolitan area population.

Philadelphia, the other long troubled region across the state, constitutes another surprise. Philadelphia placed fourth in per capita income growth at 4.6 percent only slightly behind Washington. The Philadelphia metropolitan area borders on that of Baltimore, stretching from Pennsylvania into New Jersey, Delaware and Maryland. Together with Washington and Baltimore, Philadelphia anchors the northern end of a corridor of comparative prosperity.

Four of the next six positions are occupied by Midwest metropolitan areas. This may be unexpected because of the significant job losses sustained in this area since 2000. St. Louis, which stretches from Missouri into Illinois, ranked fifth in per capita income growth, at 4.4 percent. Milwaukee ranked sixth in its per capita income growth at 4.2 percent. Cleveland ranked ninth with per capita income growth of 2.5 percent, while Chicago placed 10th, with a gain of 2.3 percent in per capita personal income.

Los Angeles was the only metropolitan area in the West to place in the top 10 in per capita income growth. Los Angeles ranked seventh growth of 3.5 percent. Houston replaced eighth with personal income growth of 3.2 percent.

Overall, the East and Midwest captured six of the top ten income positions, while the South and West occupied four of the top ten positions.

The Bottom 10: If the top 10 contained surprises, the bottom 10 could be even more surprising. Last place (28th) was occupied by San Jose, which experienced a stunning 18.7 percent decline in per capita inflation adjusted income between 2000 and 2009. This income loss is more than double that of the second-worst performing metropolitan area and more than triples that of all but two other metropolitan areas.

The second worst position (27th) also contained a surprise, in Atlanta, which has enjoyed decades of unbridled growth. Yet, Atlanta experienced a per capita income loss of 8.3 percent. There was no surprise in the third to the last ranking (26th) of Detroit, with its automobile industry employment losses and the physical deterioration of its central city, which may be unprecedented in modern peace-time. Per capita incomes declined 7.1 percent in Detroit.

Dallas-Fort Worth, which has also experienced strong growth in the past, posted a surprising fourth worst, with a per capita income decline of 5.0 percent. San Francisco, which has now replaced San Jose as the metropolitan area with the highest per capita income, ranked fifth worst and experienced a decline of 3.5 percent.

All of the remaining bottom 10 positions were occupied by metropolitan areas that have developed a reputation for strong growth. Tampa St. Petersburg ranked 6th worst, with a per capita income loss of 3.3 percent. Portland (Oregon) ranked 7th worst with a personal income loss of 2.5 percent. Riverside San Bernardino, with the lowest per capita income ranking out of the 28 metropolitan areas, ranked 8th worst with a per capita income drop of 2.2 percent.

The Miami (to West Palm Beach) metropolitan area ranked 9th in personal income growth with a loss of 1.4 percent from 2000 to 2009, while Denver topped out the bottom 10, ranking, with a per capita income loss of 0.5 percent

Overall, the South and the West captured nine of the bottom ten positions, while only one Midwestern metropolitan area, Detroit, broke into the bottom ten.

Of course, the 2000s certainly were an unusual time. But it does suggest that the dogma about the geography of regional prosperity needs to be challenged and perhaps thoroughly revised.

Photo: Pittsburgh: Second Fastest Growing Income per Capita 2000-2009 (photo by author)

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

Greetings From Recoveryland: Ten Places to Watch Coming Out of the Recession

Joel Kotkin — Mon, 08 Nov 2010 19:01:16 -0500

Like a massive tornado, the Great Recession up-ended the topography of America. But even as vast parts of the country were laid low, some cities withstood the storm and could emerge even stronger and shinier than before. So, where exactly are these Oz-like destinations along the road to recovery? If you said Kansas, you’re not far off. Try Oklahoma. Or Texas. Or Iowa. Not only did the economic twister of the last two years largely spare Tornado Alley, it actually may have helped improve the landscape.

We have compiled a list of the 10 American cities best situated for the recovery. These are places where the jobs are plentiful, and the pay, given the lower cost of living, buys more than in bigger cities. In other words, places unlike much of the rest of the country. The cities, most of which lie in the red-state territory of America’s heartland, fall into three basic groups. There’s the Texaplex—Austin, Dallas, San Antonio, and Houston—which has become the No. 1 destination for job-seeking Americans, thanks to a hearty energy sector and a strong spirit of entrepreneurism. There are the New Silicon Valleys—Raleigh-Durham, N.C.; Salt Lake City; and urban northern Virginia—which offer high-paying high-tech jobs and housing prices well below those in coastal California. And then there are the Heartland Honeys—Oklahoma City, Indianapolis, and Des Moines, Iowa—which are enjoying a revival thanks to rising agricultural prices and a shift toward high-end industrial jobs.

Unlike the Sun Belt states and cities along the East and West coasts, these locales not only grew during the boom of the mid-2000s, they suffered least in the Great Recession. The fact that they are mostly in red states should give the newly ascendant GOP comfort as it tries to deliver on its election-year promise to right the economy. That isn’t to say all the blue states will remain weather-beaten. Wall Street, heady with cheap money, has sparked a return to opulence. And the strong demand for high-tech products and services will likely keep places like Boston, San Francisco, and San Diego from devolving into fancy versions of Detroit. Yet given the results of last week’s election and the increasing odds against another bailout of state governments, the near-broke and highly regulated blue states will be hard-pressed to generate much new employment.

Of course, not everyone living in our Top 10 cities has avoided the heartache. And the continued slow pace of the economic recovery could hamper expansion even in the most-favored cities. If energy tanks as a result of a renewed global slowdown, it could hurt Texas and Oklahoma; dropping agricultural prices would hit some of the Heartland Honeys hard. But relatively—and that is the operative word in this tough economy—our 10 cities should fare better than most anywhere in America. And they could offer us a road map for what the nation’s economy will look like once the dust settles.

THE TEXAPLEX

For sheer economic promise, no place beats Texas. Though the Lone Star State’s growth slowed during the recession, it didn’t suffer nearly as dramatically as the rest of the country. Businesses have been flocking to Texas for a generation, and that trend is unlikely to slow soon. Texas now has more Fortune 500 companies—58—than any other state, including longtime corporate powerhouse New York.

Austin boasted the strongest job growth in our Top 10, both last year and over the decade. Home to the state capital and the ever-expanding University of Texas, the city is arguably the best-positioned of the nation’s emerging tech centers. It enjoys good private-sector growth, both from an expanding roster of homegrown firms and outside companies, including an increasing array of multinationals such as Samsung, Nokia, Siemens, and Fujitsu.

Yet Austin’s newfound prosperity isn’t simply a product of its university culture or its synergetic collection of technology firms. Its success owes a great deal to simply being in Texas—a state itching to eclipse its historic archrival, the increasingly troubled California. Indeed, Texas is becoming to the Golden State what Arizona, Nevada, and Oregon were in the last decade: a refuge for workers and companies fed up with California’s high unemployment, cost of living, and dysfunctional state government.

The Texas economy has benefited from widening diversification. Houston has a robust energy business and medical-services industry, and thriving international trade—all long-term growth areas. Dallas enjoys an expanding tech sector and well-developed business-service industries tied to a powerful corporate base. San Antonio has a strong military connection and an expanding manufacturing capacity, and it is a key locale for the growing Latino marketplace. What’s more, Texas offers pro-business policies and relatively low taxes, and the physical infrastructure in the cities is generally as good or better than in many East and West coast metropolitan areas.

People are voting with their feet. All four Texas cities are enjoying strong immigration from the rest of the country and abroad. Houston and Dallas have higher rates of immigration than Chicago, and if the job picture stays the same, those cities could someday rival New York and Los Angeles in terms of ethnic diversity.

THE NEW SILICON VALLEYS

Although Massachusetts and California are lauded as the places “where the brains are,” neither ranked high in the growth of tech jobs over the past decade. More important is where the brains are headed.

A lot of them are going to North Carolina, Virginia, and Utah. The population of Raleigh-Durham grew faster than any major U.S. metropolitan area during the recession, and the city ranked third on our list in terms of job growth over the last decade. To the north, in Virginia, lies another Silicon Valley wannabe, stretching across Alexandria, Arlington, and Fairfax counties. And then there’s Salt Lake City and its environs, buoyed by the arrival of such big names as Adobe, Twitter, and Electronic Arts. The Greater Salt Lake region, which follows the Wasatch Mountains from Provo to Ogden, has much to attract tech companies: short commutes, decent public schools, spectacular nearby recreation, and, perhaps most important, affordable housing. Roughly 75 percent of households in Salt Lake can afford a median-priced house, as compared with 45 percent in Silicon Valley and roughly half that in New York City and San Francisco. The cost advantages of cities like Salt Lake and the other high-tech hubs are expected to prove especially attractive to millennials—the generation born after 1982—as they begin forming families and buying homes en masse.

None of these Silicon Valleys may ever reach the critical mass of the real thing in California, but they will become increasingly more effective competitors and take an expanding market share of the nation’s technology business.

THE HEARTLAND HONEYS

The oft-ignored center of the country boasts a thriving economy that seems poised for further expansion. The region is well positioned to take advantage of growing markets for agricultural commodities and farm machinery in fast-growing countries such as India and China. The Great Plains and parts of the southern Midwest have also attracted new investments in manufacturing, both from domestic and foreign firms.

Having largely missed out on the housing bubble, the region also avoided the hangover. As a result, after watching generation after generation move away, several heartland cities are enjoying a noticeable uptick in domestic migration as well as immigration. During the Great Depression, it was Oklahomans who moved to California to escape the Dust Bowl. Now there are considerably more people moving from California to Oklahoma than the other way around.

Indianapolis, once written off as “Indiana no-place,” is one emerging hotspot. The area’s housing affordability now stands at a remarkable 90-plus percent. Although the recession has hit some of Indiana’s manufacturing-oriented northwest corner, over the past decade Indianapolis’s population grew at a rate 50 percent greater than the national average, notes urban analyst Aaron Renn. Much of this success is due to an aggressively pro-business attitude that promotes growing clusters such as life sciences, motor sports, and Internet marketing.

Oklahoma City and Des Moines have also enjoyed steady growth in both jobs and net migrants over the past decade. Des Moines was recently rated the No. 1 spot in the country for business and careers by Forbes magazine, thanks to a surging agricultural sector and strength in the business-services segment. And Oklahoma City—which enjoys low unemployment as a result of its steadily growing energy and aerospace sectors—has been ranked among the best job markets for young people, ahead of Dallas, Seattle, and even New York (having Kevin Durant lead the NBA’s Oklahoma City Thunder for the foreseeable future can only improve the buzz).

Of course, none of the cities in our list competes right now with New York, Chicago, or L.A. in terms of art, culture, and urban amenities, which tend to get noticed by journalists and casual travelers. But once upon a time, all those great cities were also seen as cultural backwaters. And in the coming decades, as more people move in and open restaurants, museums, and sports arenas, who’s to say Oklahoma City can’t be Oz?

	Job Growth				Net Domestic Migration				Total 2010	2009
	10yr	7yr	2yr	1yr	9yr	6yr	2yr	1yr	Emplymt	Population
Northern Virginia	13.8%	11.5%	-1.0%	1.2%	12.3	3.2	10.1	8.3	1,309,675	2,558,256
Raleigh	13.5%	13.7%	-4.9%	-0.4%	236.7	186.6	47.2	18.4	496,900	1,125,827
Salt Lake City, Ogden, Provo	7.7%	8.5%	-6.7%	-1.4%	9.2	15.9	7.4	2.4	961,900	2,227,413
Austin	14.1%	17.8%	-0.9%	1.7%	177.2	136.5	37.3	15.5	768,500	1,705,075
Dallas-Fort Worth	3.7%	8.1%	-3.6%	0.8%	59.3	44.8	14.3	7.2	2,876,925	6,447,615
Houston	11.7%	10.9%	-3.6%	-0.5%	51.2	42.9	15.5	8.7	2,518,675	5,867,489
San Antonio	11.4%	10.8%	-2.7%	-0.2%	102.1	86.4	21.3	9.3	833,325	2,072,128
Oklahoma City	4.9%	6.7%	-2.2%	1.0%	37.8	32.7	11.6	7.3	561,125	1,227,278
Des Moines	7.8%	7.4%	-3.5%	-0.9%	63.6	56.2	14.0	6.1	316,975	562,906
Indianapolis	1.6%	0.3%	-5.5%	-0.3%	45.9	34.6	8.0	4.1	870,850	1,743,658
New York	-1.5%	0.3%	-4.1%	-0.5%	-104.7	-82.6	-13.8	-5.8	8,288,300	19,069,796
Los Angeles	-6.2%	-5.2%	-8.0%	-1.0%	-107.9	-89.0	-15.7	-6.3	5,118,950	12,874,797
San Francisco	-13.1%	-6.0%	-8.9%	-2.6%	-83.1	-57.6	3.4	1.9	1,853,350	4,317,853
Chicago	-8.0%	-4.8%	-7.4%	-1.7%	-60.0	-45.8	-8.8	-4.2	4,235,175	9,580,567
Nation	-1.2%	0.4%	-4.9%	-0.1%					130,690,750

Areas are Metroplitan Statistical Areas
Northern Virginia, Va. includes Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford, and Warren Counties and Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park Cities in Virginia.
Salt Lake City region includes Ogden and Provo Metroplitan Statistical Areas
Job growth uses May-August average for each year.
Job data: U.S. Bureau of Labor Statistics, Current Employment Survey
Migration data: U.S. Census Population Estimates. Migration is cumulative over 10, 7, 2, or 1 yr period. Number is rate per 1,000 residents in base year.

----------------

This article originally appeared in Newsweek.

Praxis Strategy Group and Zina Klapper provided research for this article.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University and an adjunct fellow with the Legatum Institute in London. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in February, 2010.

Photo: Jeanette Runyon

Decade of the Telecommute

Wendell Cox — Tue, 05 Oct 2010 20:38:21 -0400

The rise in telecommuting is the unmistakable message of the just released 2009 American Community Survey data. The technical term is working at home, however the strong growth in this market is likely driven by telecommuting, as people use information technology and communications technology to perform jobs that used to require being in the office.

In 2009, 1.7 million more employees worked at home than in 2000. This represents a 31% increases in market share, from 3.3 percent to 4.3 percent of all employment. Transit also rose, from 4.6% to 5.0%, an increase of 9% (Note). Even so, single occupant automobile commuting also rose, from 75.7% to 76.1%, despite the huge increase in gasoline prices. The one means of transport that continued to decline was car pooling, which saw its share decline from 12.1% in 2000 to 10.0% in 2009.

The increase in working at home was pervasive in scope. The share of employees working at home rose in every major metropolitan area (over 1,000,000 population), with an average increase of 38%. The largest increase was in Charlotte – ironically a metropolitan area with large scale office development in its urban core – with an 88% increase in the work at home market share. In five metropolitan areas, the increase was between 70% and 80% (Richmond, Tampa-St. Petersburg, Raleigh, Jacksonville and Orlando). Only five metropolitan areas experienced market share increases less than 20% (New Orleans, Salt Lake City, Rochester, Buffalo and Oklahoma City). Nonetheless, the rate of increase in the work at home market share exceeded that of transit in 49 of the 52 major metropolitan areas. Transit's increase was greater only in Washington, Seattle and Nashville (where the transit market share is miniscule).

The working at home market share increase was also strong outside the major metropolitan areas, rising 23%.

Working at home is fast closing the gap with transit. In part driven by the surge in energy prices since earlier in the decade, transit experienced its first increase since data was first collected by the Bureau of the Census in 1960. Yet working at home is growing more rapidly, and closing the gap, from 1.7 million fewer workers than transit in 2000 to only 1.0 million fewer in 2009. At the current rate, more people could be working at home than riding transit by 2017. This is already the case in much of the country outside the New York metropolitan area, which represents a remarkable 39 percent of the nation’s transit commuters. Taking New York out of the picture, 31% more people (1.35 million) worked at home than traveled by transit, more than 4 times the 7% difference in 2000 (Table 1, click for additional information).

Table 1
Transit & Work at Home Share of Commuting
Major Metropolitan Areas: 2000 & 2009

	Transit			Work at Home
Metropolitan Area	2000	2009	2000-2009	2000	2009	2000-2009
New York	27.4%	30.5%	11.4%	2.9%	3.9%	32.6%
Los Angeles	5.6%	6.2%	11.6%	3.5%	4.8%	35.3%
Chicago	11.3%	11.5%	2.0%	2.9%	4.0%	37.1%
Dallas-Fort Worth	1.8%	1.5%	-13.3%	3.0%	4.1%	37.0%
Philadelphia	8.9%	9.3%	3.7%	2.9%	3.9%	35.0%
Houston	3.2%	2.2%	-29.2%	2.5%	3.4%	37.4%
Miami-West Palm Beach	3.2%	3.5%	9.7%	3.1%	4.5%	48.0%
Atlanta	3.4%	3.7%	8.7%	3.5%	5.6%	59.9%
Washington	11.2%	14.1%	26.6%	3.7%	4.5%	22.7%
Boston	11.2%	12.2%	9.8%	3.3%	4.3%	31.9%
Detroit	1.7%	1.6%	-4.7%	2.2%	3.1%	40.1%
Phoenix	1.9%	2.3%	17.5%	3.7%	5.3%	44.3%
San Francisco-Oakland	13.8%	14.6%	6.0%	4.3%	6.0%	40.5%
Riverside	1.6%	1.8%	9.0%	3.5%	4.6%	32.6%
Seattle	7.0%	8.7%	25.0%	4.2%	5.1%	23.6%
Minneapolis-St. Paul	4.4%	4.7%	6.4%	3.8%	4.6%	20.6%
San Diego	3.3%	3.1%	-7.0%	4.4%	6.6%	50.2%
St. Louis	2.2%	2.5%	14.2%	2.9%	3.5%	22.5%
Tampa-St. Petersburg	1.3%	1.4%	11.0%	3.1%	5.5%	75.7%
Baltimore	5.9%	6.2%	5.8%	3.2%	3.9%	23.2%
Denver	4.4%	4.6%	4.3%	4.6%	6.2%	36.4%
Pittsburgh	5.9%	5.8%	-2.9%	2.5%	3.2%	28.5%
Portland	6.3%	6.1%	-3.0%	4.6%	6.1%	32.9%
Cincinnati	2.8%	2.4%	-13.4%	2.7%	3.8%	40.3%
Sacramento	2.7%	2.7%	0.8%	4.0%	5.4%	33.1%
Cleveland	4.1%	3.8%	-8.1%	2.7%	3.4%	25.0%
Orlando	1.6%	1.8%	15.4%	2.9%	4.9%	71.4%
San Antonio	2.7%	2.3%	-12.5%	2.6%	3.4%	29.0%
Kansas City	1.2%	1.2%	4.6%	3.5%	4.3%	24.7%
Las Vegas	4.4%	3.2%	-26.8%	2.3%	3.3%	45.1%
San Jose	3.4%	3.1%	-9.6%	3.1%	4.5%	44.4%
Columbus	2.1%	1.4%	-35.0%	3.0%	4.1%	36.7%
Charlotte	1.4%	1.9%	32.2%	2.9%	5.4%	88.1%
Indianapolis	1.3%	1.0%	-22.2%	3.0%	3.7%	24.7%
Austin	2.5%	2.8%	11.7%	3.6%	5.9%	64.6%
Norfolk	1.7%	1.4%	-17.7%	2.7%	3.4%	27.9%
Providence	2.4%	2.7%	12.8%	2.2%	3.6%	64.5%
Nashville	0.8%	1.2%	38.5%	3.2%	4.3%	34.6%
Milwaukee	4.2%	3.7%	-12.5%	2.6%	3.2%	25.3%
Jacksonville	1.3%	1.2%	-9.1%	2.3%	4.0%	73.8%
Memphis	1.6%	1.5%	-8.1%	2.2%	3.1%	41.3%
Louisville	2.0%	2.4%	20.2%	2.5%	3.1%	22.9%
Richmond	1.9%	2.0%	6.5%	2.7%	4.7%	76.8%
Oklahoma City	0.5%	0.4%	-13.0%	2.9%	3.1%	4.7%
Hartford	2.8%	2.8%	-1.3%	2.6%	4.0%	53.6%
New Orleans	5.4%	2.7%	-50.3%	2.4%	2.9%	19.2%
Birmingham	0.7%	0.7%	-2.3%	2.1%	2.7%	29.5%
Salt Lake City	3.3%	3.0%	-10.1%	4.0%	4.7%	17.8%
Raleigh	0.9%	1.0%	10.7%	3.5%	6.0%	74.4%
Buffalo	3.3%	3.6%	7.9%	2.1%	2.3%	8.3%
Rochester	2.0%	1.9%	-4.3%	2.9%	3.3%	13.7%
Tucson	2.5%	2.5%	1.8%	3.6%	5.0%	36.3%
Total	7.5%	8.0%	6.4%	3.2%	4.4%	37.7%

Other	1.0%	1.2%	12.3%	3.4%	4.2%	23.0%

National Total	4.6%	5.0%	9.2%	3.3%	4.3%	30.9%

Major metropolitan areas: Over 1,000,000 population in 2009
Metropolitan Area definitions as of 2009
Data from 2000 Census and 2009 American Community Survey

The rise of working at home is illustrated by the number of major metropolitan areas in which it now leads transit in market share. In 2000, working at home had a larger market share than transit in 28 of the present 52 major metropolitan areas. By 2009, working at home led transit in 38 major metropolitan areas, up 10 from 2000. Between 2000 and 2009, the working at home market share increased nearly 6 times as much as the transit share in the major metropolitan areas (38.4% compared to 6.4%).

Working at Home Leaps Above Transit In Portland and Elsewhere: Perhaps most surprising is the fact that Portland now has more people working at home than riding transit to work. This is a significant development. Portland is a model "smart growth" having spent at least $5 billion additional on light rail and bus expansions over the last 25 years. Portland was joined by other metropolitan areas Houston, Miami-West Palm Beach, New Orleans and San Jose, all of which have spent heavily on urban rail systems. Working at home also passed transit in Cincinnati, Hartford, Las Vegas, Raleigh and San Antonio (Table 2).

Table 2
Work at Home Share Greater than Transit
Major Metropolitan Areas

Atlanta	Houston	Norfolk	Sacramento
Austin	Indianapolis	Oklahoma City	Salt Lake City
Birmingham	Jacksonville	Orlando	San Antonio
Charlotte	Kansas City	Phoenix	San Digo
Cincinnati	Las Vegas	Portland	San Jose
Columbus	Louisville	Providence	St. Louis
Dallas-Fort Worth	Memphis	Raleigh	Tampa-St. Petersburg
Denver	Miami-West Palm Beach	Richmond	Tucson
Detroit	Nashville	Riverside
Hartford	New Orleans	Rochester

Indicates working at home passed transit between 2000 and 2009

Further, the shares are close enough at this point that working at home could surpass n transit in Milwaukee, Cleveland and Minneapolis-St. Paul in the next few years.

Transit: About New York and Downtown

As noted above, transit also has gained during this decade. However, the gains have not been pervasive. Out of the 52 major metropolitan areas, transit gained market share in 29 and lost in 23. As usual, transit was a New York story, as the New York metropolitan area saw its transit work trip market share rise from 27.4% to 30.5%. New York accounted for 47% of the increase in transit use, despite representing only 37% in 2000. New York added nearly 500,000 new transit commuters. This is nearly five times the increase in working at home (106,000). Washington also did well, adding 125,000 transit commuters, followed by Los Angeles at 73,000 and Seattle at 41,000.

Transit's downtown orientation was evident again. This is illustrated by the fact that more than 90% of the increased use in the major metropolitan areas occurred in those metropolitan areas with the 10 largest downtown areas (New York, Los Angeles, Chicago, Philadelphia, Houston, Atlanta, Washington, Boston, San Francisco and Seattle). Among these, only Houston experienced a decline in transit commuting.

Implications

Working at home has been the fastest growing component of commuting for nearly three decades. In 1980, working at home accounted for just 2.3% of commuting, a figure that has nearly doubled to 4.3% in 2009. This has been accomplished with virtually no public investment. Moreover, this seems to have happened without any loss of productivity. Companies like IBM, Jet Blue and many others have switched large numbers of their employees to working at home. These firms, which necessarily seek to provide the best return on their investment for stockholders and owners would not have made these changes if it had interfered with their productivity.

Over the same period, and despite the recent increases, transit's market share has fallen from 6.4% of commuting in 1980 to 5.0% in 2009. At the same time, gross spending over the period rose more than $325 billion (inflation and ridership adjusted) from 1980 levels. Inflation adjusted expenditures per passenger mile have more than doubled since that time.

Given the remarkable rise of telecommuting, its low cost and effectiveness as a means to reduce energy use, perhaps it’s time to apply at least some of our public policy attention to working in cyberspace. It presents a great opportunity, perhaps far greater and far more cost-effective than the current emphasis on new rail transit systems.

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Note: Work trip market share reflects transit in its strongest market, trips to and from work. Transit's overall impact, measured by total roadway and transit travel (passenger miles) is approximately 1%, compared to the national work trip market share of 5%.

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris and the author of “War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life”

Photograph: DDFic

How Texas Avoided the Great Recession

Wendell Cox — Tue, 20 Jul 2010 01:38:39 -0400

Lately, Texas has been noted frequently for its superior economic performance. The most recent example is the CNBC ratings, which designated the Lone Star state as the top state for business in the nation. Moreover, Texas performed far better than its principal competitor states during the Great Recession as is indicated in our How Texas Averted the Great Recession report, authored for Houstonians for Responsible Growth.

Introduction: How Texas averted the Great Recession:

One reason that Texas did so well is that it fully escaped the “housing bubble” that did so much damage in California, Florida, Arizona, Nevada and other states. One key factor was the state’s liberal, market oriented land use policies. This served to help keep the price of land low while profligate lending increased demand. More importantly, still sufficient new housing was built, and affordably. By contrast, places with highly restrictive land use policies (California, Florida and other places, saw prices rise to unprecedented heights), making it impossible for builders to supply sufficient new housing at affordable prices (overall, median house prices have been 3.0 times or less median household incomes where there are liberal land use policies).

The Great Recession: The world-wide Great Recession was the deepest economic decline since the Great Depression: This downturn hit average households very hard. According to Federal Reserve Board "flow of funds" data, gross housing values declined 9 quarters in a row through the first quarter of 2009. The previous modern record is a single quarter. From the peak to the trough, household net worth was reduced a quarter, which is more than 1.5 times the previous record decline.

Texas Largely Avoided the Great Recession. Texas has largely escaped the economic distress experienced around the nation, and especially that of its principal competitors, California and Florida. By virtually all measures, Texas has performed better in growth of gross domestic product, employment, unemployment, personal income, state tax collections, and consumer spending This is in part due to much less mortgage distress in Texas. At the bottom of the economic trough, the Brookings Institution Metropolitan Monitor ranked the performance of the 6 largest Texas metropolitan areas among the top 10 in the nation. The latest Metropolitan Monitor ranked each of the 6 metropolitan areas in the highest performance category.

Throughout the past decade, Texas has experienced far smaller house price increases than in California, Florida and many other states. During the bubble, California house prices increased at a rate 16 times those of Texas, while Florida house prices increased 7 times those of Texas. As a result, after the bubble burst, subsequent house price declines were far less severe or even non-existent in Texas. Texas had experienced its own housing bubble in the 1980s, however even then overall prices did not exceed the Median Multiple of 3.0 (The Median Multiple is the median house price divided by the median household income).

Unlike Texas, all of the markets with steep house price escalation had more restrictive land use regulations. This association between more restrictive use regulation and higher house prices has been noted by a wide range economists, from left-leaning Nobel Laureate Paul Krugman to the conservative Hoover Institution’s Thomas Sowell. It is even conceded in The Costs of Sprawl ---2000, the leading academic advocacy piece on more restrictive land use controls, which indicates the potential for higher house or land prices in 7 of its 10 recommended strategies.

Comparing Texas and California: Unlike California, housing remained affordable in Texas. California’s housing affordability - in relation to income – largely tracked that of Texas (and the nation) until the early 1970s (Figure). After more restrictive land use regulations were adopted prices started to escalate. This relationship has been well demonstrated by William Fischel of Dartmouth University. Other factors have had little impact. Construction cost increases have been near the national average in California. Other factors, like underlying demand as measured by domestic migration, have been lower in California than in Texas..

Comparing Texas and Florida: The contrast with Florida is similar. Housing affordability in Florida was comparable to that of Texas as late as the 1990s. However, with strict planning control of land for development in Florida, land prices rose substantially when profligate lending increased demand.

Comparing Texas and Portland: Further, the Texas housing market avoided the huge price increases that have occurred in Portland (Oregon), which relies on extensive restrictive land use regulation. In 1990, Portland house prices relative to incomes were similar to those of the large Texas metropolitan areas. At the recent peak, the median Portland house price soared to approximately 80% above Texas prices. Portland did not experience the price collapses of California, but due to the greater price volatility associated with smart growth price declines in relation to incomes that were five times those of Texas.

How the Speculators Missed Texas: Speculation is often blamed as having contributed to the higher house prices that developed in California and Florida. This is correct. Moreover, with some of the strongest demand in the United States, Texas would seem to have been a candidate for rampant speculation. After all, it happened back in the 1970s when a huge oversupply of housing, industrial, retail and office space collapsed in the face of falling energy prices.

But it did not happen this time, despite solid population growth. During the housing bubble, Dallas-Fort Worth and Houston ranked second and third to Atlanta in population increases among metropolitan areas with more than 5 million population. Austin is the nation’s second fastest growing metropolitan area with more than 1 million population. Each of these metropolitan areas had strong underlying demand, as indicated by domestic migration data.

Yet the speculators were not drawn to the metropolitan areas of Texas. This is because speculators or "flippers" are not drawn by plenty, but by perceived scarcity. In housing, a sure road to scarcity is to limit the supply of buildable land by outlawing development on much that might otherwise be available.

However, the speculators did not miss California and Florida. Nor did they miss Las Vegas or Phoenix, where the price of land for new housing rose between five and 10 times as the housing bubble developed. Despite their near limitless expanse of land, much of it was off limits to building, and the exorbitant price increases were thus to be expected.

The Threat: Yet, despite the success of the less restrictive land use policies in Texas, there are strong efforts there to impose more smart growth policies. The impact could be devastating, especially from strategies that ration land that would raise land and house prices, as has occurred in California and Florida. In 2009, Governor Perry vetoed a bill that would have required the state to promote smart growth. Federal initiatives, under proposed climate change and transportation acts could do much to destroy not only the affordability of Texas metropolitan markets, but could also make Texas less competitive in the decades ahead.

Photograph: Suburban San Antonio (by the author)

Wendell Cox is a Visiting Professor, Conservatoire National des Arts et Metiers, Paris. He was born in Los Angeles and was appointed to three terms on the Los Angeles County Transportation Commission by Mayor Tom Bradley. He is the author of "War on the Dream: How Anti-Sprawl Policy Threatens the Quality of Life.”