Thursday, May 23, 2019

The Dead South - In Hell I'll Be In Good Company

The New Shame of Our Cities

The New Shame of Our Cities
by Joel Kotkin

A metropolitan economy, if it is working well, is constantly transforming many poor people into middle-class people, many illiterates into skilled people, many greenhorns into competent citizens. . . . Cities don’t lure the middle class. They create it.
                        —Jane Jacobs
Perhaps no song has been belted out more often than the one that claims that America is moving “back to the city.” Newspapers, notably the New York Times, devote enormous space to this notion. It gained even more currency when the Obama administration sec­retary of Housing and Urban Development, Shaun Do­novan, pro­claimed that the suburbs were “over” as people were “voting with their feet” and moving to dense, transit-oriented urban centers.
This celebration perhaps reached its crescendo when Amazon initially announced its move to Crystal City, Virginia, and Queens, New York. “Big cities won Amazon and everything else,” Neil Ir­win of the Times predictably enthused. “We’re living in a world where a small number of superstar companies choose to locate in a handful of superstar cities where they have the best chance of re­cruiting superstar employees.”
In fact, however, these views are more aspirational, or even delusional, than reflective of reality. Overall, data suggests that we are not seeing a great “return to the city” but, with few exceptions, a continued movement out to the suburbs and less dense cities, nota­bly in the sunbelt. The spurt of urban core growth that occurred immediately after the housing bust turned out to be remarkably short lived, with the preponderance of metropolitan growth—roughly 80 percent—returning, as has been the case since at least the late 1940s, to the suburbs and exurbs. Indeed, at no point did Census Bureau estimates show net domestic migration from suburbs to core cities, only a reduced rate of migration in the opposite direction. 
Even the country’s most influential urbanist, scholar Richard Florida, now suggests that the great urban revival is “over.” Rather than the usual belief that density leads to productivity and innovation, a new Harvard study demonstrates that, between 1970 and 2010, suburban areas have overall steadily increased their economic advantages: the share of suburbs making up the top ranks of all urban and suburban neighborhoods (measured as the top quartile) went from roughly two-thirds in 1970 to almost three-quarters by 2010.

Shifting Demographics:
Exaggerating the Urban Renaissance

Even at the peak of the urban “renaissance,” most of the population and job growth continued to occur in the suburban periphery. Cities achieved some parity in growth rates in the period between 2009 and 2011, as presidents Bush and Obama provided “a covert bailout”  to banks, universities, and government bureaucracies concentrated heavily in and around urban cores.
Yet as the rest of the economy improved, and urban land prices rose, population movement again shifted away from the dense inner city to less compact, more affordable locales. Analysis of census data by demographer Wendell Cox found that the core counties of the metropolitan areas with populations of more than one mil­lion, after losing only ten thousand net domestic migrants in 2012, experienced an outflow of nearly 440,000 by 2017.
This has occurred even in the most exemplary “creative class” cities. In New York, a city coterminous with five counties, the net domestic migration loss has been 1.1 million since 2010; and much of this is to surrounding suburbs, which account for five of the top seven destination counties in the nation for fleeing Gothamites. New York’s borough of Brooklyn, the acclaimed epicenter of early twenty-first-century urban dynamism, lost population in 2017 and 2018. In fact, in 2018, New York, Los Angeles, and Chicago all lost residents to the rest of the country. Net domestic migration has also plummeted in San Francisco by 80 percent since the early 2010s. The key here has been surging housing prices, which eat up much of the big-city wage premium that many boosters focus on.
Critically, this trend has taken hold among the generation that many predicted would sustain the urban “renaissance”: millennials.  In fact, as a new Brookings study shows, millennials are not moving en masse to large, dense cities but away from them. According to demographer Bill Frey, the 2013–17 American Community Survey shows that New York now suffers the largest net annual outmigration of postcollege millennials (ages 25–34) of any metro area—some 38,000 annually—followed by Los Angeles, Chicago, and San Diego. New York’s losses are 75 percent higher than during the previous five-year period.
By contrast, the biggest winner is Houston, a region many plan­ners and urban theorists regard with contempt. The Bayou City gained nearly 15,000 millennials (net) last year, while other big gain­ers included Dallas–Fort Worth and Austin, which gained 12,700 and 9,000, respectively. The other top metros for millennials includ­ed Charlotte, Phoenix, and Nashville, as well as four relatively ex­pensive areas: Seattle, Denver, Portland, and Riverside–San Bernardino. The top twenty magnets include midwestern locales such as Minneapolis–St. Paul, Columbus, and Kansas City, all areas where average house prices, adjusted for incomes, are at least 50 percent lower than in California, and at least one-third less than in New York.
Perhaps even more significant has been the geographic shift with­in metro areas. The media has frequently exaggerated millennial growth in the urban cores. In reality, nearly 80 percent of millennial population growth since 2010 has been in the suburbs. Even in the Bay Area, the tech industry’s global epicenter, suburban Silicon Val­ley has continued to grow its STEM base rapidly, while San Francis­co has recently seen a rapid slowdown in tech jobs. Perhaps density, massive homelessness, and filthy and disorderly streets, not to men­tion unaffordable living costs, lose their appeal as couples contemplate childbearing.
Dense, high-priced cities still attract young people straight from college, but many don’t stay long. The average resident in the down­town areas so popular with postcollege millennials has lived in the same house for approximately 2.4 years, compared with seven or more years in the suburbs and exurbs. As economist Jed Kolko has observed, the perceived “historic” shift back to the inner city has turned out to be a relatively brief phenomenon. Since 2012, suburbs and exurbs, which have seven times as many people, are again grow­ing faster than core cities. Suburbs are also seeing a strong net move­ment among educated people, those earning over $75,000, and espe­cially those between the ages of 30 and 44.

Progressive Politics, Regressive Economics

During the last decade, several urban cores—notably New York, Boston, Seattle, Denver, and San Francisco—have enjoyed significant growth. Yet at the same time, as Florida notes in his New Urban Crisis (2017), this process has served to enlarge “deepening economic segregation between a prominent elite and stubborn pov­erty, as well as a shrinking middle class.”
In the past, the traditional urbanist notion, advanced by the late Jane Jacobs, maintained that cities grew best not by “luring” talent but by “creating” a middle class from its existing residents. Yet now, according to two recent Oregon studies, lower-income people in cities experience less upward mobility than people from rural areas. Indeed, according to Pew research, the largest gaps between the bottom and top quintiles can be found in some of the most progressive metropolitan areas, such as (in order from largest to smallest divides) San Francisco, New York, San Jose, Los Angeles, and Boston. In all these “superstar” cities, the middle-class family is rap­idly disappearing, even as poverty remains stubbornly high.
This reflects national phenomena. Research by urban analysts Joe Cortright and Dillon Mahmoudi shows that the number of high-poverty (more than 30 percent below the poverty line) neighborhoods in the United States has tripled in the last half century, from 1,100 in 1970 to 3,100 in 2010. Despite some steady growth of poverty in suburbs, the ratio of the impoverished, according to the American community survey, is still two-thirds higher in urban cores than in the suburbs. Thus recent growth in the cores seems to have done little to address poverty or inequality.
new study by the Center for Opportunity Urbanism found that, in most cities, unbalanced urban growth has exacerbated class divisions, while doing little to address the decline of middle-class households. Philadelphia’s central core, for example, rebounded be­tween 2000 and 2014, but for every one district that gained in in­come, two suffered income declines. In 1970, half of Chicago was middle class; today, according to a new University of Illinois study, that number is down to 16 percent. Meanwhile, the percentage of poor people has risen from 42 to 62 percent. Urban analyst Pete Saunders describes the city today as “one-third San Francisco and two-thirds Detroit.” 
See Full Article HERE

Tuesday, May 21, 2019

The Problem with the CASA compact for Small Cities

The Mayor of Cupertino brilliantly summarizes the problems with the CASA Compact for small towns
(2 minutes)

The Density Delusion

California’s housing crisis and the density delusion

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Once seen as a human-scale alternative to the crowded cities of the past, California’s cities are targeted by policy makers and planners dreaming of bringing back the “good old days,” circa 1900, when most people in the largest cities lived in small, cramped apartments. This move is being fronted by well-funded YIMBYs (“yes in my backyard”), who claim ever greater densification will help relieve the state’s severe housing crisis.
The goal, as stated by one YIMBY journalist, is startling in its retroactive boldness. “Getting people out of their cars in favor of walking, cycling or riding mass transit.” notes Liam Dillion, “will require the development of new, closely packed housing near jobs and commercial centers at a rate not seen in the United States since at least before World War II.”
Besides being ahistorical — this kind of housing was restricted to the urban cores a few of the largest metropolitan areas — many residents of these districts, including in California, gleefully abandoned this lifestyle for a more private, lower-density and family friendly lifestyle as soon as it became practicable. In fact, millions of people moved here from crowded cities, small towns, rural areas and other countries to enjoy this lifestyle.
The density delusion
The density-seeking measures such as state Sen. Scott Wiener’s highly contested SB827 seek to dismantle local zoning to boost densities, allegedly to address state’s housing affordability crisis. High density housing is far more expensive per square foot to build than townhouse or single-family construction. Nearly all the new market-rate housing built in the state is “luxury” by middle-income standards, and more expensive than what it replaces.
In reality, the YIMBY’s suggestion that new, dense housing will improve affordability for all is patently absurd. Decades of densification in Los Angeles has seen ever higher rents, displacing low-income, especially minority households. Many former transit customers have been driven to lower-rent areas with less transit service, precipitating a massive decline in ridership, even as billions continue to be spent building new rail lines. The Wiener Bill could exacerbate this trend, and likely increase the need for low-income housing, already well beyond the capability of public coffers.
Nowhere, here or abroad, has densification materially improved housing affordability, whether for low income households or the larger number of middle-income households. Density-oriented policies have helped drive prices up so high that Bay Area, $200,000 salary engineers cannot afford a home near their headquarters. In the meantime, many young families are increasingly leaving the state for less heavily regulated and less expensive states like Texas, Nevada and Arizona. Among those under 35, 80 percent of all homes purchased nationwide are single family houses and virtually all surveys of millennials express an overwhelming desire for this kind of residence.
Crowding to save the planet
Planners and most academics, including many conservatives, have long favored densification policies, but concerns over warming now serve as the densifiers “killer app.” This claim to improve the environment is also largely specious. Even the pro-density UC Berkeley Termer Center, acknowledges that virtually banning urban fringe development will account for barely 1 percent of the proposed state GHG reduction by 2030 — a pittance for polices that could drive house prices and rents even higher. On a global basis such restrictions represent statistically irrelevant noise, 0.003 percent of current annual worldwide emissions.
State enforced density also creates other unanticipated effects like ever higher levels of congestion and emissions. The whole policy assumes density will force more people unto transit, a dubious suggestion with transit ridership plunging in both Los Angeles and the Bay Area. The idea that in the age of Lyft, Uber, and eventually autonomous cars, more people will be forced onto traditional transit is deluded, at least without coercion beyond the stomach of most Americans.
Finally, in their zeal to squash single-family homes and suburbia, the zealots ignore the many positive environmental attributes — such as water retention, species habitats, tree cover and improved health outcomes — that can be achieved, as MIT’s Alan Berger has noted, in modern suburban development. In addition, suggests Britain’s Hugh Byrd, low-density communities are ideally suited for an eventual transition to solar energy generation in ways that high rise cannot emulate.
Modest proposals to address the affordability crisis
The false premises preferred by the forced densifiers do not mean we should not expand housing of all types; there is plenty of high density zoned property available for purchase by developers for denser housing. Local zoning also should encourage repurposing surplus retail and office space, creating new product that does not destroy neighborhoods or displace people. But ultimately, prices can only be brought down by allowing more construction on the fringe, restoring the competitive market for the price of land. Economists Edward Glaeser and Joseph Gyourko have shown that higher land prices are largely responsible for coastal California’s exorbitant house prices.
Finally, if we want to build more affordable housing, we look at non-profit organizations — including churches and charitable groups — to build housing without the need to create high returns or raise rents on their market-rate customers.
California sorely needs to build more housing, but can do so without forcing everyone back to the “glory” days of the city of tenements.
Joel Kotkin is the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University in Orange and executive director of the Houston-based Center for Opportunity Urbanism ( Wendell Cox is principal of Demographia, a St. Louis-based public policy firm, and was appointed to three terms on the Los Angeles County Transportation Commission

Sunday, May 19, 2019


There was once a Countryman who possessed the most wonderful Goose you can imagine, for every day when he visited the nest, the Goose had laid a beautiful, glittering, golden egg.

The Countryman took the eggs to market and soon began to get rich. But it was not long before he grew impatient with the Goose because she gave him only a single golden egg a day. He was not getting rich fast enough.

Then one day, after he had finished counting his money, the idea came to him that he could get all the golden eggs at once by killing the Goose and cutting it open. But when the deed was done, not a single golden egg did he find, and his precious Goose was dead.

Those who have plenty want more and so lose all they have.

Who Rules America?

Who Rules America?

Joel Kotkin's new book fingers Silicon Valley as the new elite. Is he right?

In The New Class Conflict, Joel Kotkin argues that the socially and politically ascendant groups in contemporary America are the oligarchs of Silicon Valley and a complex of elite journalists, think-tank pundits, and academics that he dubs the clerisy. The nouveaux riches of the tech world are increasingly intent on remaking society in accordance with their own passions, reports Kotkin, an urban studies scholar at Chapman University. The clerisy, meanwhile, promotes and provides ideological legitimation for elite goals. The effect of the two groups' efforts, he concludes, is to concentrate wealth and power in a shrinking number of hands, leaving the middle class stranded and subject to ever more evident economic decline.

Kotkin does not claim that either group is a monolith. Different factions within each class compete for access to wealth and political influence, and they also exhibit some differences in cultural commitment. But overall, Kotkin suggests, there is a persistent pattern: Contemporary elites are socially liberal but relatively blasé about the bread-and-butter impact of a broad range of policies that drive a growing wedge between those at the top and everyone else.

Thus, for example, tech leaders press a green agenda whose elements include support for mass transit and opposition to suburban living. Such policies implement the oligarchs' moral and æsthetic preferences, and sometimes they create business opportunities for the oligarchs' class (as when they invest in and promote putatively green technologies). But the same policies pose risks for the well-being of many ordinary people, by constricting their options and limiting their access to resources.

Similarly, while Bill Gates may call for higher taxes on the rich, many tech firms (Kotkin points to Twitter and Apple) seem quite happy to ensure that tax burdens fall not on them but on the middle class. (Gates's own Microsoft, for instance, has "shaved nearly $7 billion off its U.S. tax bill since 2009 by using loopholes to shift profits offshore.")

Despite its social liberalism, Kotkin suggests, the tech industry is visibly focused on business models in which disregard for privacy is central. Some commercial intrusions (sometimes compatible with contractual and property rights, sometimes not) may be annoying but relatively benign. But the industry has also generally appeared quite willing to facilitate surreptitious state monitoring of multiple facets of interpersonal communication as well.

Kotkin also criticizes the tech industry for business models that disregard people's privacy. These range from annoying but relatively benign commercial intrusions, such as the collection of browsing data to enhance the targeting of on-line advertisements, to cooperation with the National Security Agency's monitoring of our communications. Kotkin also highlights the tech industries' expansion into the broader media world, where their money is being used both to reinvigorate existing media outlets (such The New Republic and the Washington Post) and to create new ones (such Pierre Omidyar's First Look media, home to Glenn Greenwald's The Intercept). In this way, he argues, they create new platforms that allow their allies in the clerisy to enforce environmental and social orthodoxy.

What might a libertarian make of Kotkin's analysis?

Class used to be a significant theme in libertarian political commentary. Though Karl Marx's account of class conflict is better known, Marx acknowledged his indebtedness to earlier French classical liberal theorists of class, such as Augustin Thierry, Charles Comte, and Charles Dunoyer. Class analysis also figured powerfully in the rhetoric of many later libertarians, notably Karl Hess and Murray Rothbard during their alliance with the New Left (and, with a more right-wing populist flavor, in Rothbard's later work as well).

For Marxists, class position is determined by economic actors' relationship with the means of production. The ruling class rules, on this view, because it controls capital, while other classes are subordinate to it because they depend on access to the assets the rulers control. In libertarian class theory, by contrast, class position is a function not of the resources you own but your relationship with the state. Dominant classes are constituted by their relationship with political power. The source of their resources is their ties to the state, and the use to which they frequently put those resources is the manipulation of the state to achieve their goals.

Libertarians and Marxists will frequently identify the same groups as making up the dominant social classes: top elected or appointed officials, for instance, or dominant figures in the military-industrial complex. But while the Marxist might treat a Pentagon contractor as a member of the ruling class simply because of the resources she or he owns, the libertarian would explain the contractor's wealth and class position by stressing the role of the state's war machine and its incestuous ties with the "defense" industry.
Today, unfortunately, you're more likely to encounter class analysis in the discourse of the Marxist left, and perhaps the Tea Party right, than in that of classical liberals and libertarians. Perhaps this is a function of a desire to avoid unsavory associations. Often, I fear, it reflects an instinctive valorization of the successes of those who have made it in today's marketplace, no matter how unfree those markets may be. The worry seems to be that using the rhetoric of class to criticize influential groups in our society will somehow give aid and comfort to those who promote a politics of envy and resentment. But I think this worry is unwarranted. It is possible to acknowledge the creativity and determination of people who actually succeed by contributing to the welfare of others through creativity and peaceful, voluntary exchange while also criticizing social stratification and the abuse of power.

Kotkin is not a libertarian, but his account overlaps helpfully with a libertarian critique of contemporary class relationships. He tends to focus on members of the Silicon Valley elite's attempts to gain political power—for themselves personally and for their class. But it's worth emphasizing that the tech world's ties with the state are much more pervasive than those created by intermittent political campaigns, or even by their campaign donations.

The concentration of wealth in Silicon Valley would be unimaginable without a patent and copyright regime, created by political fiat, that confers monopoly power on a limited number of actors who can use this power to extract wealth at exorbitant rates from businesses and consumers dependent on their products and services. "Intellectual property" rights shore up Silicon Valley firms' control over software and other elements of their businesses, offering the premiums monopolies always make available to those who hold them. The creativity and drive of Valley entrepreneurs is real, but so is the mark-up that intellectual property laws allow them to charge.

The Valley's links with the NSA, and other profitable government contracts, also concentrate wealth in hands of the oligarchs, who are actively involved in vigorous D.C. lobbying. So do Bay Area land use regulations that dramatically raise the cost of living, limit access to housing and commercial space to the wealthiest people and firms, and route wealth to those who have already managed to gain access to land in the region.
The clerisy obviously depends on the state for influence, too. Elite journalists succeed by maintaining access to key political players, generally secured using fawning coverage and stenographic reporting of official positions. Pundits link the media with political elites and work for think tanks that frequently contract with state entities to provide rationales for the policies the establishment favors. Academics frequently rely on state-proffered grants to conduct research. State-mandated licensing requirements channel people into higher education when they might otherwise be inclined to seek alternate means of training. Tax money funds many academic institutions, and tax-secured student loans feed the wealth of universities.

Thus, the class groupings on which Kotkin focuses are (as I have no reason to think he would deny) creatures of the state. The cultural, political, legal, social, and economic environment misshaped by the oligarchs and the clerisy is a product of government intervention.
Kotkin understandably and rightly challenges the results of this intervention. In stark contrast to many contemporary commentators, he emphasizes that economic growth is crucial if the decline in middle-class and working-class living standards is to be reversed. High-minded talk about "sustainability" often serves as an excuse to leave the wealth of elites undisturbed while refusing to pursue policies with the potential to boost the incomes of everyone else. Kotkin stresses that those who care about reversing class polarization must support growth-oriented policies. He also emphasizes the snobbery and disregard for middle-class preferences and aspirations evident in elite groups' disaffection for the suburbs—though he does not address the ways, such as highway subsidies and the use of eminent domain, in which suburban development has been a function not only of consumer demand but also of policy outcomes designed to benefit developers. Silicon Valley isn't alone in its ability to play the lobbying game.