Wednesday, May 19th, 2010

Is It Game Over for Atlanta?

My latest post is online at New Geography. It’s called “Is It Game Over for Atlanta?

Many of America’s large cities went through a period of hypergrowth before leveling off: Chicago, Detroit, Los Angeles, etc. Some transitioned to a successful maturity, others did not. Today’s growth stories like Houston, Dallas, and Atlanta will be no different. One day their growth period will end, then we’ll see what they are really made of.

In my piece I outline the evidence that Atlanta might be the first of these to be peaking out, thanks to a surprising plunge in in-migration, a lack of infrastructure investment, declining ambitions, new competition, and a recession-interrupted transformation to a more urban city. Other than for its airport, there’s little reason anyone has to be in Atlanta these days. If Atlanta were a stock, I’d be thinking about shorting it and buying into some of its scrappier regional upstart competition. It’s time for a gut check in the Capital of the New South.

17 Comments
Topics: Demographic Analysis, Economic Development, Public Policy, Strategic Planning, Transportation
Cities: Atlanta

17 Responses to “Is It Game Over for Atlanta?”

  1. Jim Russell says:

    Interesting analysis, but I’d disaggregate the net migration numbers before drawing any conclusions. Has the inmigration really cratered? On the balance, I agree. But I wouldn’t be surprised to discover that Atlanta is more attractive now than it ever was.

  2. JoeP says:

    As an Atlantan of a dozen years, I can say that the issues are real, but the question is premature. Atlanta still continues to have a large young population and enough talent to grow. And the region still snags companies from other regions due to amenities. On a certain level, I think that Atlanta and its peers deserve to struggle so that they can improve and invest in transit and more urban development. That said, as the article noted, the city has become more dense in the last decade. It has hit another momentum threshold (sure it’s stalled with the nation, but it hit a certain critical mass that demanded more dense development). However cities like Charlotte offer talent (and also an airport hub, albeit smaller) with less hassle.

  3. David says:

    Thanks for posting, good article.

    The issue for Atlanta as you point out is that it simply lacks the highway miles. It’s not like anyone decided to build DFW or Houston any differently, simply the need to connect Dallas to the other cities in its state created far more lane miles over which to expand its metro area. If Macon was as big as Houston, and Savannah was growing like Austin or San Antonio, Atlanta would be in a very different situation, with 8 lanes going further out of the city.

    Houston also needed a 2nd beltway when they built IAH airport, which also gives it a transport advantage over Atlanta. But long-term I don’t think it will match DFW because it doesn’t have as many directions to grow. People are already hesitant to commute from anywhere west of Katy to the Energy Corridor. Meanwhile, Dallas has two major freeways running parallel north of the city to Oklahoma – over flat land. No Appalachian Chain, desert, or Gulf of Mexico stands in the way of Dallas’ growth.

  4. Darrell says:

    You are right on point with your comments regarding Atlanta. I would like to add that as of 2009, Atlanta’s net migration was over 17,000 people, down from over 42,000 in 2008. Interesting point is that we have almost the same number of jobs that exist today as existed in 2000, be we’ve added over a million more people during this period.
    We are experiencing increases in taxes and utilities, including the highest water and sewer rates in the country. In return we are receiving less service.
    We have organizations focused on recruiting industries based on an old model of lower costs, which is a no win situation for Atlanta given the global economy where there are always lower costs and more productive locations. There has been very little effort in retaining and growing our own companies because that would require a new set of skills. Our economic development effort over the last ten years is an example of Einstein’s definition of insanity: doing the same thing over and over again and expecting different results.
    During the last ten years Atlanta has experienced the closing of some substantial economic engines such as the manufacturing facilities of Ford, General Motors and Lucent/Alcatel’s that resulted in the loss of thousands of jobs directly by them and their network of suppliers. In 2002 before the closing of General Motors and Ford, it was estimated that these two companies along with Blue Bird Corp. and their suppliers accounted for 41,000 jobs and $2.6 billion to Georgia’s Gross Product. I doubt if as much effort was placed in retaining these companies as we spent on attracting KIA Motors located near the Georgia border with Alabama.
    Another challenge for Atlanta is that we are not creating enough high-growth entrepreneurial companies due to the lack of innovation here. A study by Ocean Tomo for BusinessWeek ranked the twenty-five most inventive cities in the world, which included Silicon Valley, Boston, Tokyo, Seoul, Minneapolis/St. Paul, Houston, etc. but no mention of Atlanta. Even though innovation (and the companies that put innovation into practice) is important to the health of our economy it does not appear that the lack of innovation has raised much concern in Atlanta.
    Some will use the excuse that Atlanta’s economy is being impacted by extraordinary circumstances beyond our control. I say that we are experiencing the fruits of an outdated economic development effort. The Atlanta region, like many other communities is experiencing a major economic shift as evidence by persistent unemployment above 10 percent, record home foreclosures and severe public school, city and state revenue shortfalls.

  5. Dan says:

    Aaron, I hope that you hand out a very quick banning to “white like me” up above.

  6. Perhaps Aaron has already deleted the offending comment–as I have no idea what Dan in Comment #5 is referring to.

  7. Yes, I deleted it. I maintain a very liberal commenting policy, but almost never have to delete a comment.

  8. Regine says:

    When I read this post yesterday, the first thought that came into my mind was “Atlanta is the mecca for educated Black Americans, regardless”. It’s what gives Atlanta is cache. But I decided not to. I’m glad I didn’t after reading about Aron’s decision to delete an obviously offensive comment. If probably would have been more fodder for the poster.

    I lived in Atlanta for a short period in the mid 1990s having moved there from DC. The lifestyle was not for me; but I can tell you a lot of people love Atlanta. Some of the people who would consider living in Dallas or Houston are very turned off by the wild wild west mentality of East Texas.

    Aron, I really enjoy your posts. You are one of the very few who advocate for a more inclusive urban policies. Thanks a bunch.

  9. John Morris says:

    No doubt about it, so much of Pittsburgh’s black community is now in places like Brooklyn, DC, or Atlanta.

    In so many ways, the burgh is really a European city now. Oh so cool and liberal, but with most of it’s remaining black community pushed out of the central parts of town.

  10. John Morris says:

    Never saw “the comment”.

  11. Patrick says:

    Yes, I think Atlanta is preparing to decline. I visited there for business in 2009, and used transit exclusively to get around, particularly in Buckhead. Ouch. The place had so little soul or streetlife. To be sure, there are some pockets of decent urbanism, which a friend showed me around, but the dominant paradigm is pretty well established, and it’s not pretty.

    I found Darrell’s point above about innovation compelling, and I think I saw this demonstrated by the vast number of chain restaurants compared to local restaurants in various parts of Atlanta. While admittedly an unscientific observation, there did seem to be a higher chain:local ratio in Atlanta than other US cities I’ve visited recently. Even their signature transit-oriented developments, such as Atlantic Station, were largely exercises in corporate urbanism.

    Recently, the AJC ran a column commenting on the difference between where Charlotte and Atlanta where heading that was also relating the differences between NC and GA. Here it is:

    http://www.ajc.com/opinion/high-speed-rail-lines-289551.html

    The AJC seems to have deleted the comments, which were dripping with thinly veiled racism, comingled with contempt for virtually every element of modern city life.

    Atlanta seems to suffer on multiple vectors- cruising on an intensely auto-based infrastructure that still has considerable limitations, running out of water due to poor resource management, a state government filled with the leaders of the hateful commenters on AJC website that loathes the city itself but loves the money it generates for their rural constituents, a culture that is not interested in innovation as much as franchising existing business models, and deep seated insecurities and fear based on race.

    At the same time, its model was extremely prosperous for them over the last 40 years. For Atlanta and other cities, there is an interesting question: if your culture is too rigid to pivot, how long can you coast on old success?

  12. Pdiddy says:

    You make a lot of good points in the article, and certainly Atlanta has a lot of issues facing it. However, there are a few things that will really help Atlanta in both the short term and the long run, when compared to other Southern cities:

    -Education. Atlanta has a hugely educated workforce, and is home to such prominent institutions as Georgia Tech, Emory, and the Morehouse School of Medicine. Perhaps Raleigh could compete in this category, but it doesn’t have the sheer number of educated graduates that Atlanta has.

    -Transportation. Yes, I said transportation. Atlanta is the only city in the south with a heavy rail system. MARTA is the 8th mosed used transit system in the county. Atlanta has the highest percentage of commuters who use transit to get to work out of any major city in the south. Recently, the legislature passed a transportation bill that could pump $7 billion into metro atlanta transportation projects. In addition, the Beltline is already underway, with several miles of trails already completed and open, and a couple of major multi-million dollar parks opening soon.

    -Appearance. Despite stereotypes, Atlanta is a beautiful, hilly, tree-filled city. Cities like Houston and Dallas can’t compare.

    My overall thought is that Atlanta is not preparing to decline – rather, it may be entering a phase of steady, relatively sustainable growth, with more people moving intown. Of all of the competing cities you mentioned, Houston is the only one that could even be discussed on the same level as Atlanta. Have you been to Charleston or Charlotte? They are simple not on the same scale to compete with Atlanta. The Globalization and World Cities Study Group considers Atlanta a “Beta +” world city, on par with Barcelona, Washington and Dubai, while Houston is a “beta -” on par with Kiev and Montevideo. Cities like Charlotte clearly did not make the list.

  13. Darrell, thanks for the interesting tidbit on Atlanta adding 1.5 million people but having the same number of jobs. That’s an interesting factoid.

  14. Patrick mentions that Georgia has a “state government filled with the leaders of the hateful commenters on AJC website that loathes the city (Atlanta) itself but loves the money it generates for their rural constituents…”

    In some ways, this reminds me of Oregon back in the early 90s, minus the racial aspects. Back in those days, our tax revolt was in full swing, the Legislature was dominated by rural interests (and by the Republican Party)–and only some serious infighting between the moderate and conservative GOP factions kept the Republicans out of the governor’s office as well. The rural parts of the state generally view places such as Portland and Eugene as Sodom and Gomorrah, and there were numerous attempts by downstate interests to use the statewide initiative to interfere with Portland’s urban planning (including an attempt to abolish Metro, our MPO–this attempt failed).

    What happened? A few things: 1) The conservative wing of the GOP won the fight–the Oregon Republican party was, for a long time, purged of moderates; and 2) much of the immigration into the state consisted of moderate voters who had no stomach for such nonsense. Now, the shoe is on the other foot–Portland and its suburbs right now dominates state politics.

    The same thing could conceivably happen in Georgia, should the demographics of the state continue to evolve. I imagine the General Assembly is somewhat gerrymandered–the party split among the members appears to be greater than the general population (which contains a large number of independents). But should a tipping point occur, Georgia might find itself a solidly blue state, if decades worth of gerrymandering and other means to limit the political power of blacks can be undone.

  15. Regine says:

    It’s so true; cities like Charlotte, Raleigh or even Dallas do not have the depth of talent like Atlanta does. Atlanta with it’s “too busy to hate” mentality attracts bright people who are looking for nice homes, cultural activities, and opportunity. Race is secondary.

    The demographics of Atlanta and D.C. are similar – a large population of highly educated black professionals from around the world – but Atlanta was always known as the place to go “if you wanted to make money!”

    Also corporate employment has stagnated for many reasons. I think we all can agree the days of the huge multinationals is past it’s glory days as a viable business model. Atlanta has a great built-in advantage with its history of supporting small businesses.

    Perception as well as local culture is very important when evaluating a city’s future. I think it’s way too soon to write off Atlanta.

  16. Alon Levy says:

    I’m not sure what to think about Atlanta’s education level. Georgia’s public school system sucks (unlike, say, Texas’s, which is about average, recent textbook revisions notwithstanding). Atlanta still attracts educated people from elsewhere, but that’s not always enough.

    As for transportation: yes, Atlantic built MARTA. But then it underfunded it. It’s not just rural interests that hate the city; it’s also suburban interests. The only suburban county that opted into MARTA is DeKalb, which is majority-black. The rest try to keep it away, so that blacks from the city won’t be able to visit easily. Atlanta may be too busy to hate, but Cobb County isn’t.

    My overall thought is that in a city that went from 110% of US per capita income in 1997 to 95% in 2008, decline isn’t a hypothetical.

  17. Ben says:

    “[MARTA] was built before Portland’s system and is far better than light rail to boot.”

    Better, really? Care to explain this? I’ve lived in Atlanta and Portland. I find that while MARTA rail may cover more miles than the MAX, MARTA never really took me anywhere I wanted to go unless my destination was the airport — and I’m a public transit advocate! I still have a lot of friends there, and only ONE of them uses MARTA and that’s because she lives in Decatur and works in downtown Atlanta.

    On the other hand, when I lived in Portland I rode the MAX all the time without even trying, simply because it was convenient and went where I wanted to go (and I didn’t even live near a MAX stop!).

    And what about the buses? Riding the buses in Portland is a dream. Frequent service, usually on time, clean, and most of them go on routes that are easy to figure out (e.g. the 75 or the 20). Not to mention the transit tracker phone number that you can call to get real-time arrival info for your current stop. Atlanta’s buses? Ewww, and good luck trying to figure out where they go!

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