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Sunday, February 12th, 2012

Facing Tough Facts in Louisville

Some of you know that I’m originally from Louisville, Kentucky. I grew up in rural Southern Indiana just across the river (inside the Louisville MSA), but also had family in the South End and spent a lot of time as a kid stomping around the neighborhoods near Iroquois Park. I love Louisville and it will always have a special place in my heart. I don’t write about it much these days because as the blog has progressed, I’ve been forced to trim back my reading of local news sites and Louisville web pages were on the cut list. So I’m not as plugged in to what is going on there these days such that I can competently opine upon them.

But researching my four part series on the bridge deal fiasco (see part one, part two, part three, and part four) turned my attention back to the city. So I wanted to do a three part mini-series on Louisville this week.

Today I want to talk about the unpleasant strategic situation Louisville finds itself in in many areas. These are the basic facts on the ground that need to be addressed. Any credible civic development strategy needs to take these into consideration. It’s never easy for local leaders to admit, even privately, when their community is in a tough spot. But in this case we need to highlight three key areas where the data clearly indicates a challenge for Louisville, namely: it is too small, it is in a poor geo-political location, and it has low educational attainment.

Louisville Is Too Small

The first thing we need to address is that the Louisville region is frankly too small to match its aspirations. I normally focus on metro areas in the greater Midwest with more than a million people. With only 1.3 million people, Louisville is by far the smallest. And it lacks the effective population booster enjoyed by some other cities.

Consider some other metro areas on the smaller end of the scale. Say Milwaukee at 1.56 million, Nashville at 1.59 million, and Indianapolis at 1.76 million. These don’t sound that much bigger than Louisville, but consider: Milwaukee is 21% bigger, Nashville is 24% bigger, and Indianapolis is 37% bigger. This makes a lot of difference in terms of supporting region-wide amenities, infrastructure, and initiatives. For example, it explains why Louisville doesn’t have a major league professional sports team while the other cities do.

What’s more, the effective population of those similar cities is sometimes even higher. For example, Indianapolis is ringed by small industrial cities like Muncie, Lafayette, Kokomo, Columbus, etc. that are independent metro areas, but still contribute to Indy in the form of things like Colts fans, airport customers, TV market size, etc. Milwaukee’s metro area population is artificially low because Racine County, with 200,000 people and which actually borders Milwaukee County, is considered its own metro area. Just upriver from Louisville, Cincinnati benefits from being so close to Dayton that in some cases they function as one large metro. Businesses and such that locate in Warren or Butler County can draw from both markets easily.

Louisville, by contrast, is surrounded by mostly very rural, sparsely populated counties. Thus it gets less boost from an extended trade area in terms of population heft. Though in fairness I suppose there is some labor market benefit from this as well. I have read that Louisville has among the highest percentages of exurban commuting. One reason may be that there are so few job opportunities in outlying areas.

Also, while Louisville has healthy population growth and is growing a bit faster than the US average, other similar regional cities are growing too, sometimes faster on a percentage basis and quantity basis. Louisville added 121,000 people in the last decade, But Indianapolis, Columbus, and Nashville all added more than 210,000 people. This means that not only are those cities bigger, but the gap in population grew by more than 100,000 for all of them. That’s the equivalent of a Clark County, Indiana.

Recognizing that you are smaller doesn’t mean you have to mentally classify yourself as some lower tier city. (Debates over tiers of cities seems to be a perennial favorite on message boards). But it does mean you should be careful about trying to play keeping up with the Joneses, especially when it comes to major regional capital investments. Because Louisville simply has fewer bodies to spread the cost across, it needs to be very careful where it chooses to invest. (More on that later). I might also suggest that while growth is good, strategies that are predicated on changing Louisville primarily through quantitative growth are unlikely to ever close the gap versus regional peers, so I would not even have that as a goal.

Louisville Is in a Poor Geo-Political Location

A maximally geo-politically advantaged city might be one that’s centrally located and a clear primate city for the state it is in. Think Minneapolis-St. Paul. It’s as centrally located as you’d want to be in a state like Minnesota. It is the state capital and home to the state’s flagship university. It contains over 50% of the state’s population and is dominant economically. You might say as downsides that it has a twin-city structure, is near a state border, and doesn’t have the Mayo Clinic, but these are minor in comparison to what it has.

But you don’t have to be this dominant to have advantages. Indianapolis, Columbus, and Nashville are centrally located and are state capitals. Columbus has the state’s flagship university and is in an urban-dominated state. Indianapolis is the only large city in the state and thus in a sense has no “domestic” competition.

Louisville by contrast has many geographic disadvantages. It is on the edge of the state of Kentucky, not in the center. It is on a state boundary that is also a major river crossing barrier in an era where water transport is no longer king. It isn’t the state capital. It doesn’t have the state’s flagship university. Kentucky is a rural dominated state that also has a number of severely depressed areas that require significant state investment. Lexington is clearly much smaller and is in a different size class, yet conceives of itself as an equal in some ways (if not superior, especially with the UK presence) and the state often treats it as such. In fact, Lexington can sometimes been seen as a more authentically Kentucky city with its horse farms and whatnot, while Louisville is seen with suspicion.

This puts Louisville in a very tough spot. All major cities are likely net tax exporters to their state, but Louisville sends a truly staggering amount to Frankfort that it never gets back. I think it’s something like $700 million per year out of Jefferson County. The state’s priorities are generally in the rural areas. While I wouldn’t call the state legislature hostile to Louisville exactly, it isn’t really focused on pro-urban policy. As is often the case in bi-state metros, Indiana and Kentucky love to engage in “economic development” by encouraging companies to move back and forth across the Ohio River. Discussion about building bridges across the river takes up lots of leadership time and attention that could be focused on other things.

To me this makes me think that Louisville ought to plan on having to go it alone with its own resources in a lot of areas and not count on too much help from others (though obviously it should look for it where it can). We are already seeing this in the bridges project, which it appears will be mostly toll financed by local motorists. But Louisville should work hard to try to close some of the gaps that are clearly addressable. For example, better cooperation between Louisville and Southern Indiana is critical. Also,Louisville should be working to build connections and goodwill throughout the rest of Kentucky where ever possible.

Louisville Is Poorly Educated

As I’ve noted many times, college degree attainment is overwhelmingly dominant in explaining urban success. Harvard economist Ed Glaeser crunched the numbers and found that their historic college degree attainment explained nearly everything about why some Frost Belt cities succeeded and others failed. CEOs for Cities has also quantified a lot this in their Talent Dividend research.

Louisville fares very poorly here. Louisville’s college degree attainment is only 25.8%. This puts it 5th lowest among all 51 metro areas in the United States with over one million people. College town Lexington sits at 31.2% Louisville trails the overall US average of 28.2%. To be blunt, that’s not good.

I’ve always said that Louisville is a quality over quantity town. The core of Louisville has great neighborhoods. Louisville clearly punches above its weight in areas like quality restaurants. And it has had a number of notable cultural successes: the important early recordings of the Louisville Orchestra, many important indie rock performers (e.g., Will Oldham, Slint, Rodan), and items like Actor’s Theater’s Festival of New American Plays. This immediately suggests to me going for a more Madison, Wisconsin type of feel than rather than trying to ape Indy or Nashville. Unfortunately, Madison is the state capital and home to a major Big Ten School, and is smaller such that those make a huge impact there. Louisville lacks those drivers and has such low education attainment that a high end strategy would be tough to pull off except in just a small portion of the old city.

This is really going to inhibit Louisville on the economic development and there isn’t a lot you can do other than focus on blue collar industries in the short term (their huge UPS hub being a prime example of this), with a more selective and focused strategy around high end sectors, while working to boost educational attainment over the longer term. There’s some good news here in that Louisville grew its educational attainment rate by nearly five percentage points in the last decade, 16th among large cities.

Good and Bad Applications

I’d like to highlight a couple examples quickly of how Louisville has excellently and poorly handled its strategic situation.

Let’s start with the good. Mayor Greg Fischer decided to make as one of his initiatives seeking to find better ways to collaborate with Lexington, which is only about 75 miles away. As the Courier-Journal noted, “he envisions Kentucky’s two biggest cities adding jobs as a ’super region,’ rather than competing over companies, private investment and state money.” I had a previous post on this very topic that includes a video interview with Fisher called “Super-Regionalism in Kentucky.” This is an example of Louisville recognizing that it is too small to go it alone in the marketplace and it would be better to have a partner, plus trying to build bridges to a historic rival. We’ll see how this turn out.

A not so good example is the Ohio River Bridges Project I mentioned earlier and linked to my series about. Here we have a region taking on a huge $2.5 billion capital project that is going to be paid for mostly with local money through tolls. A smallish region like Louisville that isn’t even growing particularly fast does not need to be building this type of gargantuan and expensive infrastructure. That’s why in my series I suggested significantly scaling back the project even further.

Better Benchmarking

On another but related note, I’d also like to highlight how Louisville benchmarks and measures itself against the wrong cities. In the popular press, Louisville is generally compared against Indianapolis and Nashville, and those other cities are often trotted out as a rationale for pursuing some policy. For example, local leaders said that Indy and Nashville had city-county mergers. Indy and Nashville were growing much faster than Louisville. Ergo, Louisville needed to merge city and county government if it wanted to catch up.

I’m not saying merger was necessarily wrong. The problem is that Indianapolis and Nashville are nothing like Louisville. They are in the same rough size category (though bigger as I noted) and nearby, but that’s about it. I’m not sure there’s a whole lot Louisville can learn from looking to those places.

On the other hand, a city like Cincinnati is much more similar to Louisville. It’s also a historic major river city in a multi-state metro, on the edge of the state, not the state capital, with rival cities inside Ohio, etc. It also shares the same type of insular culture (maybe even moreso). Yes, it’s bigger, more educated, and home to many corporations in a way Louisville isn’t. But it seems like there’s a lot that could be learned from comparisons there. If I were Louisville, I’d be looking to benchmark against other river cities, not places that are so different. When you look at how many of the historic river cities have fared, you see that most of them have struggled demographically and economically. Comparatively, Louisville actually looks quite good.

However, you rarely see Louisville comparing itself or looking to Cincinnati. Perhaps it’s because Cincy was always the “big city” for people in Louisville. It was perhaps always seen as in a different league than Louisville in a way say Indianapolis was not. Whatever the case, I’d suggest starting with Cincy and expanding to other older river cities.

To illustrate what I’m talking about, just check out this article that talks about Indy being the city Louisville should have been through the lens of the Super Bowl. I love this piece because the article itself and the reactions perfectly illustrate Louisville’s bi-polar nature, vacillating between self-flagellation and smug superiority. In any case, while I appreciate that Louisville being on the border between Indiana and Kentucky spawns some understandable rivalries between states, the comparison to Indy is flawed. I don’t believe Louisville could ever have done with sports what Indy did, even if it tried. That’s not a path for Louisville to regret going down. Nor is the type of downtown-centric development approach of Indianapolis a particularly good fit for Louisville IMO. (I’d tell Indy similarly that they aren’t likely to ever be able to replicate Louisville’s best qualities). I see articles like that one periodically, but rarely any similar articles featuring Cincinnati or another similarly situated city. Louisville needs to take stock of its situation and look for comparison places that more match its own situation.

Next up, a guest poster will take a visit to downtown Louisville. And I’ll revisit an old idea I had for the city.

More Louisville
Louisville: An Identity Crisis
The Case for 8664
An Examination of City-County Consolidation

Tuesday, December 20th, 2011

Chicago: What’s Changed? What Hasn’t? by Richard C. Longworth

[ After reading this blog post on Richard Longworth's own blog I went out and bought Global Chicago, which I think is still relevant today, even if some of the chapters that are mere compilations of Chicago's global assets won't excite out of towners. I wanted to share his post with you, which takes a look at where Global Chicago stands today - Aaron. ]

A few years ago, The Chicago Council published a book called Global Chicago, with two goals in mind. The first was a wake-up call to Chicagoans that their old industrial City of the Big Shoulders was gone, replaced by a global city with new strengths and challenges. The second was an attempt — probably the first anywhere — to study globalization's impact on cities by looking hard at one of those cities.

I was talking recently with the editor of the book, Charles Madigan, then a writer and editor at the Chicago Tribune (as was I), now Presidential Writer in Residence at Roosevelt University in Chicago. We were exploring what's changed in Chicago since the book came out, and what is unchanged — or still undone.

Perhaps the biggest change is that the wake-up call no longer is needed. The educational job is done. Chicagoans get it. Maybe we can take some credit, but mostly, it's the daily evidence of globalization's effect on the city that has convinced Chicagoans that it's not their granddaddy's economy any more. "Global city" and "Global Chicago" are buzzwords now.

The book listed many problems that absolutely needed to be solved — crumbling infrastructure, an antiquated public transportation system, a school system that fails the majority of its students. The sad fact is that so many remain unresolved to this day. As The Chicago Council and other civic organizations have written since, all these issues are still at the top of the city's agenda.

But one item barely appeared at all: how to pay for all this. The book appeared after the recession of the early Bush years, just as the false boom of the past decade began. Money seemed plentiful. It was more of a matter of fixing civic priorities than of financing them. The keywords of today's headlines — "budget," "debt," "deficit," "employees," "pensions," "taxes," "fees" — appear nowhere in the book's index.

How times do change (and remember, this was less than a decade ago). Urban financing, almost a non-topic then, is the Big Issue now. Chicago still needs to fix its schools, roads, sewers, public transport. But mostly it has to figure out how to pay its bills in an era of big debts and big deficits.

The city is awash now in financing ideas, including the privatization of public services like Midway Airport and a plethora of user fees to raise money. Some of this has already happened, like the privatization of the Chicago Skyway, which seems to be working, and of the city's parking meters, which isn't. But none of these new ideas, including privatization, was even on the civic agenda when the book came out. 

Chicago also is toying now with proposals for a casino or other forms of gambling to raise money. Back then, some leaders wanted a casino, but it never came close to being built. 

When the book came out, Chicago was on an upswing, drawing in people and business from around the world, growing in jobs and output. But decline lay around the corner. Since then, as a new report by Metropolitan Strategies says, Chicago has lagged the national average in economic growth, job creation, population growth, patent output and other measures of economic vitality.

Global Chicago celebrated a global city on the make. I suspect a new edition, published now, would be a more somber book.

Since then, Chicago has tackled two huge projects and succeeded at one, failed at the other. The success was Millennium Park, the huge and glittering downtown park that has given Chicago what it always lacked, which was a Tuileries, a central meeting place where the divided and balkanized city could come together. It also has changed the face of the city by revitalizing the Loop, the tattered old business district south of the Chicago River.

The failure was the bid to get the 2016 Olympic Games to Chicago. The bid itself was anemic and inadequate, not a patch of the Olympics project that Barcelona, for instance, used to remake itself. Perhaps more than anything else, the Olympics bid was the work of a tired old guard that, after Millennium Park, had run out of ideas. It was Mayor Daley's swan song, the last big initiative before he retired.

His retirement and the election of Rahm Emanuel as mayor is the most obvious change since the book came out. The book talked about how Mayor Richard M. Daley had taken the Democratic Machine created by his father, Mayor Richard J. Daley, and adapted it to the new chores of a global city. That Machine still exists, but with new people in charge. No one knows whether they will simply pour new wine into the old bottle, as did Daley II, or will reform Chicago politics from the ground up.

The financial sector of the city suffered back then from the lack of a major locally-owned bank. That hasn't changed. But in 2004, the big LaSalle Street markets, like the Board of Trade and Chicago Mercantile Exchange, were permanent parts of the financial landscape. Now the Merc is threatening to leave town to a more tax-friendly haven.

One question not asked in the book: is it possible to have a first-class city without first-class newspapers? No need to ask the question then: Chicago had two fine papers. The papers still exist but are so crippled by job cuts, coverage restrictions and bankruptcies that no one would call them first-rate.

The book talked about the impact of immigrants on Chicago. Even then, demographic shifts were reshaping the city. Both blacks and whites have moved out of the city. Immigration into the city has slowed (possibly a blip, due to the recession), meaning that Chicago lost 200,000 people between 2000 and 2010: it's now down no less than 1 million persons, or 25 percent of its population, since its industrial peak in 1950.

But there's more to this shift than raw statistics. First, the Chicago region is sprawling, with exurban town and counties growing, mostly with whites. Latino growth is weakest in the city, strongest in the suburbs. White population is shrinking in the inner ring suburbs, but is growing strongly in the center of the city.

What's happening is something that wasn't seen when the book came out — the Europeanization of Chicago. As in many European cities, the center of Chicago is increasingly going upscale, becoming a province of wealthier white global citizens, while both blacks and Latinos are pushed out of the city into the suburbs.

One cause and result of this is improving public schools — for some Chicagoans. There is considerable anecdotal evidence of good public schools in more upscale city neighborhoods, plus private schools for those who can afford them. But all other evidence indicates that schools in less favored parts of the cities haven't improved at all, and still fail to graduate 40 or 50 percent of their students.

The book focused on continued economic vitality but seldom asked: vitality for whom? As urban financing moves front and center, Chicago has to ask itself what kind of a city it wants to be. It clearly wants to be a global city, drawing in the sort of people who can afford to live anywhere. But can it do this without pricing everyone else out of the city? Those census figures mentioned above don't give confidence.

Finally, the question of Chicago's relationship to its region is more vital now than then. This doesn't mean its relationship to the broader Midwest, although this is still important. But rather, in these straitened times, how can the city take its immediate economic region — from Milwaukee through northern Indiana and into western Michigan — and get it work together across state lines, to reinvent itself as a global megacity, as so many other cities and regions around the world are doing? 

Richard C. Longworth is a Senior Fellow at the Chicago Council on Global Affairs, author of the book Caught in the Middle: America’s Heartland in the Age of Globalism, and host of www.globalmidwest.org.

This post originally appeared in The Midwesterner blog of the Global Midwest Initiative of the Chicago Council of Global Affairs on October 25, 2011.

Tuesday, October 4th, 2011

Race Matters in Milwaukee – Part 4: Segregation and Education by Nathaniel Holton

It has been suggested that education is the civil rights issue of our time, and there is no question that the black community continues to lag behind when it comes to all matters of education. This is especially so here in Milwaukee, where MPS reading scores lag behind those of other major urban school districts, state black reading scores are the worst in the nation, and the percent of blacks with a college education is lower here than it is in most other places. These are crisis-level facts.

This has not completely escaped the community’s notice. Everybody understands the importance of improving Milwaukee Public Schools. And while massive disagreement concerning proposed changes ultimately resulted in the prevailing of the status quo, rather than some sort of meaningful compromise or reform, at least the community showed that it was energized and willing to fight for local education.

But one thing that seems to continue to escape notice, maybe since the time that Chapter 220 was created, is the impact that segregation has on education.

Segregation and 4th Grade Reading Scores

The landmark study on segregation by the U.S Census Bureau ranked several dozen metro areas in terms of how segregated each is. Meanwhile, the Trial Urban District Assessment ranked 18 participating urban school districts in various standardized test scores. In total, 14 metro areas, including Milwaukee, were included in both studies. Each of these urban school districts contends with the issues of poverty and parenting that are frequently cited as the primary reasons for MPS’ struggles.

The graph below shows the level of segregation and the 2009 black 4^th grade reading scores of the 14 districts that were included in both studies.

The link between segregation and black 4^th grade reading scores is “significant“ at the 99% level, and segregation “explains” 45% of the variance in the reading scores. Note also that the link between segregation and overall reading scores (for all races) is significant at the 95% level and explains 37% of the variance in the reading scores. Milwaukee black 4th grade median reading score was second worst, ahead of only Detroit.

Segregation and Bachelor’s Degrees

The yearly American Community Survey keeps track of how many people ages 25 and older have acquired a bachelor’s degree. The graph below shows metro area segregation and the percent of the black population within the metro area that has a bachelor’s degree, averaged from 2006 to 2008. The correlation is significant at the 99% level and explains 32% of the variance in the percent of the black population that has a bachelor’s degree.

In this time, 12.3% of the black population in metro Milwaukee had a bachelor’s degree, the worst out of all of the metro areas included in the segregation study.

The graph below shows metro area segregation and the white/black bachelor’s degree disparity, defined as the ratio of percent of white people with a degree divided by percent of black people with a degree. Once again, correlation is significant at the 99% level and this time explains 30% of the variance in the white/black disparity.

Metro Milwaukee’s white/black degree disparity of 2.79 (34.3%/12.3%) was the worst out of all the metro areas in the segregation study.

What Does It Mean?

It is pretty clear that segregation and poor education outcomes correlate with one another. This does not prove that segregation causes poor education outcomes, or even that poor education outcomes cause segregation. But, as is the case with other socioeconomic indicators, segregation can be tied to the problems of Milwaukee that we all experience and are concerned with. It will be hard to move Milwaukee forward in jobs and education without impacting our segregation. With all of the talk about jobs and education during this election season, this is something that ought to be kept in mind.

This post originally appeared in The Milwaukee Drum on September 29, 2010.

Sunday, September 25th, 2011

A Decade in College Degree Attainment

Metro area college degree attainment, 2010

This week the Census Bureau released its 2010 data from the American Community Survey. The ACS is what contains many of the core demographic characteristics that are frequently opined upon, such as college degree attainment, commute times, etc.

It used to be that the Census Bureau collected this information during the decennial census using the so-called “long form” that went to one out of every ten households. But that was discontinued as of this census and has been replaced with with the ACS. The ACS reports data more frequently (annually for geographies larger than a certain size), but has a smaller sample size and so there’s lot of statistical noise that I don’t think we are used to dealing with yet. For example, in 2008 the Indianapolis metro area ranked #3 in the US for growth in college degree attainment over the course of the decade to date among metros greater than one million people. But in the 2010 data Indy ranked #28 on the same measure. There are fluctuations year to year and the margin of error needs to be accounted for in serious statistical analysis. Nevertheless, this is what we have to work with.

I’m going to roll out a series of posts covering the highlights of some of this data. I’ll start with educational attainment, since that is something that is so key to upward social mobility and urban economic success.

But first I’ll put in a brief plug for my Telestrian tool. The Census Bureau site for distributing this data is a disaster. As one Brookings senior fellow put it, “Lots of Census data yesterday, today. Lots of angles, stories, conclusions. One shared sentiment: new American Factfinder is AWFUL” and “New Factfinder making mainframe punchcards look appealing.” Telestrian is designed for very rapid basic analysis and comparative benchmarking moreso than simple fact lookups (though it can do that do). In fact, I generated every table, graph and map in this post in ten total minutes with it. Even if you aren’t in the market for a commercial product, there’s a no credit card required free trial period, so if you are interested in perusing the ACS data and don’t want to beat your head against the wall with the Census Factfinder, I encourage you to check it out. Telestrian doesn’t have every data element, but it has a lot of interesting stuff.

College Degree Attainment

College degree attainment (the percentage of adults with a bachelors degree or higher), is one of the most critical factors in urban success. If you’d like to know more, just check out all the great research on it under the heading of “talent dividend” over at CEOs for Cities.

The map at the top of the post is 2010 college degree attainment for metro areas. Here are the top ten, among those with a population greater than one million, showing total number of people with degrees and the attainment percentage:

And here’s the bottom ten:

While we are on the topic, here is a map of college degree attainment by state:

State college degree attainment, 2010

And here is county level college degree attainment for those counties covered by the 1-year ACS:

County college degree attainment, 2010

Changes in College Degree Attainment

Beyond just the raw 2010 numbers, it’s interesting to look at which places are growing their college degree attainment the most. That is, which places are growing their talent base. So here’s a look at metros by their change in college degree attainment over the last decade:

Change in percentage of adults with college degrees, 2000-2010.

Some places already have very high college degree attainment, which can make it tougher to grow even higher. Speaking of which, the US as a whole raised its college degree attainment as well. To some extent, this is purely a function of demographics. Older generations have lower educational levels than younger ones. (None of my grandparents had a college degree, and my father’s parents never even finished high school. I don’t think that was atypical for their day).

What might be more interesting to look at is whether places are increasing their college degree attainment faster or slower than the US overall. There’s a measure that does capture that. It’s called location quotient, and is used in economic analysis to measure the concentration of industries in certain locations.

An economist told me once that he likes to look at this for all sorts of things, not just industry clusters. The formula works for other stuff. I really haven’t seen this used before, so caveat emptor, but here’s a look at shifts in location quotient for metro areas over the course of the decade:

Metro area change in location quotient for college degree attainment, 2000-2010. Increase in LQ in blue, decrease in red.

The blue metro areas had a higher concentration of college degrees relative to the nation as a whole in 2010 than they did in 2000. The red ones a lower concentration. This is certainly an interesting area for further exploration.

While I’m on the topic, here’s the same chart, only limited to graduate and professional degrees. There’s some interesting variability here.

Metro area change in location quotient for graduate and professional degree attainment, 2000-2010. Increase in LQ in blue, decrease in red.

A Closer Look at Indianapolis

Just as one more granular example, I wanted to take a look at the Indianapolis vertical. Here’s 2010 college degree attainment for the city, metro, state, and America as a whole:

College degree attainment, 2010

As we know, urban regions tend to be more highly educated. Here we see that while Indiana is one of the lowest states in terms of college degree attainment, the Indy metro area actually beats the US average. However, the city of Indianapolis falls short of the US average. Because Indy is a consolidated city-county government that includes a lot of inner ring suburban areas, it’s hard to draw conclusions about the true urban core, but it does seem clear that the center is less educated than the periphery of the metro.

Now lets look at the change in attainment for the decade:

Change in the percentage of adults with a college degree, 2000-2010.

Here we see that the rich get richer, as Indy metro not only started out on a higher base, but had the best showing in attainment growth as well. OTOH, going back to our LQ measure, Indiana actually boosted its LQ while the Indy region was stagnant. That’s because this is a percentage point change, not a percentage change, and growing from a low base makes it easier to boost LQ. It’s one of the quirks of that formula.

The poor showing of the city of Indianapolis is something that should definitely be worrying. It would be interesting to do a similar analysis for other metros, but alas that’s all for today.

Sunday, June 12th, 2011

On Urban Education

I talk to people all the time about attracting families to want to live in the urban core, and always they bring up the same barrier: school quality. There’s no doubt that far too many urban school systems perform abysmally and that quality of schools can be a huge factor for families deciding where to live. The conventional wisdom would suggest that until we fix the schools, we’ll never attract families back to the city.

But what if that reverses cause and effect? What if rather than improving the schools before we can attract families back to the city, it will be attracting families back to the city that improves the schools.

I think it is more likely the latter and there’s already plenty of evidence mounting out there. I noted a couple years ago that a number of my Chicago friends who had kids were simply unwilling to sacrifice their urban lifestyle in the way that previous generations did by moving out the suburbs. So they’ve pursued a variety of options. Some have gone the Catholic school route, but believe it or not I know several people who have their children in Chicago Public Schools. A few of these are magnet schools, but some are also well regarded neighborhood schools. As I’m preparing to list my condo for sale, I’m noticing that the elementary school district you are located in is now a factor in a way that it wasn’t not all that long ago. Any number of people with pre-school children are actively involved at their local schools, hoping to improve the quality so that when their kids are ready to start, they will feel comfortable sending them there. As more and more “choice consumers” decide on the public schools, quality continues to improve where it is happening.

I’m even seeing this in Indianapolis on a smaller scale. Several upscale professionals who live in downtown Indianapolis send their children to IPS’s Center for Inquiry magnet school. Most IPS schools remain terrible performers – the state is poised to take over several of them – but select magnet and neighborhood schools are starting to see nibbles from parents with choices.

None of this is intended to belie the urgency of education reform. Of course that’s imperative. But ultimately I think that a lot of the improvements in schools are going to be driven as much by bottoms up organic change as by top down structural reform.

Tuesday, March 8th, 2011

Thematic Maps Made Easy

Thanks to those of you who checked out Telestrian, my new data analytics and visualization venture. I want to kick off an occasional series of posts demonstrating what it can do. In an effort to not make it be too salesy, I’m going to use the tool to derive some interesting insight.

Today I want to look at thematic maps. Even if you need to map data I don’t have, you can do it with Telestrian for the map types I support. So if you have any type of data – election data, sales data, etc. – and want to map it, read to the bottom to see how.

The Telestrian system goes well beyond just letting you look up facts by place and date. You can run actual queries against the data. And for most of the queries, you can render the results directly to a thematic (choropleth) map in about 30 second end to end. It’s almost trivial to make extremely powerful charts using this. Let’s look at a few examples.

Here’s one, looking at the the results of the 2010 Census so far. This is the percentage change in population for counties in states where the redistricting files had been released as of the end of last week vs. the last Census:

There are lots of web sites that create maps, but they almost all have major weaknesses. One of them is that almost all of them use Flash as the technology, which is great for web interactivity, but terrible if you actually want to take your map with you and put it in a presentation or document. Telestrian is different because its maps are rendered as actual image files (PNG) that you can right click and save off to take with you. As I demonstrated in a previous example last week, you can also scale the image to pretty much any size you want with no resolution loss or distortion. Images are great for presentations or basic documents, but if you are interested in using this in a pamphlet or other production graphics work, Telestrian will also export the map in scalable vector graphics (SVG) format you can hand off to your graphic designer to format and put right in your publication. So the first Telestrian difference is that it generates formats you can actually use.

Another issue with a lot of mapping sites is that they are designed as web eye candy. They look cool, but you really can’t do a lot to change them. The data is presented how it is presented. But Telestrian gives you tons of control over how you render the data, ranging from the query you execute to the colors and more.

Here I decided to run a map based on a percent change function. I also took advantage of a built in capability that lets me assign a different color type for values above and below a threshold value. In this case, I used zero as the threshold, so blue counties are those that grew in population, and red are those that declined. I used a five bucket (quintile) sort with five positive and five negative quintiles to assign colors. You can also see that I don’t need data for every single county just to create the map.

You can use other values as your threshold. Two built-in functions let you threshold on the national value or, for state maps, the state value. It’s automatic – the system will pull the appropriate value for you. The meaning of this obviously is dependent on the data. Or you can just pick a threshold yourself. Here’s an example where I plotted the unemployment rate in October 2010, highlighting only those counties with an unemployment rate of 11% or more:

Here I selected a monochrome color scheme just to highlight the counties, and just set the ones below the threshold to white (empty).

Here’s the last national county map I’ll do. It’s a monochrome map showing the counties that had any migration (in or out) with Franklin County, Ohio (Columbus) between 2000-2010. I’m just using this to map the migration shed of that county:

Think states are completely irrelevant today? Think again. Lest you think this is entirely Ohio State driven, note that it is based on tax return data, so undergrads leaving home to go to school might not even show up. Also, if you map Marion County, Indiana (Indianapolis) you get a similar pattern. There’s clearly still some level of migrational affinity for staying within the same state. I’ve really enjoyed comparing the size and composition of migration sheds for various counties and metro areas as it is very illuminating.

Speaking of metro areas, let’s do a map of those. I mentioned that you can apply various functions in your queries. In addition to just raw value, you can also map things like total change, percent change, per capita, density, percentage of a parent value, etc. One of the functions supported is location quotient. This is normally used to measure the concentration of employment in various industry clusters. But an economist in Columbus was telling me he found it useful for all sorts of things, especially as the math works for any hierarchical data element. So here let’s take a look at the change in location quotient for college degree attainment for US metro areas from 2000 to 2009:

Again, positive changes are in blue, negative in red. You can easily get the raw data if you want too, and further analyze it. Because location quotient and change in location quotient are built in, again it takes virtually no time to run this. You just pick the value from a drop down.

I find this interesting because it shows where degrees are concentrating and deconcentrating. In order to have a positive change in LQ, you basically need to increase your educational attainment at a faster rate than the nation as a whole. That’s harder to do when you’re on a high base. Some places like NYC managed it. Others did not. So while a map to total attainment might show major spikes, this shows some areas with lower attainment that really upped their game. If you pull up the bottom a lot, you can actually deconcentrate something on a national basis even if the folks at the top still improved.

I’m still exploring this way of measuring it, and it would be interesting to see a true pro’s take, but I think this is an interesting dimension, though certainly not the only one, on which to look at some of these measures.

Here’s one of the percentage of the population that are binge drinkers (2009 data):

Hello, Wisconsin! This shows a state map and that I have colors other than red and blue. It also shows another method of assigning colors, this one what I call the “intensity” method, which is actually the default. In this method, we don’t create discrete buckets, but rather scale the color continuously in a manner directly proportional to the data value. In a case like this, a quintile sort might have implied major differences in value that aren’t there in the data. Maps like this don’t work well with outliers, but for a lot of things – population of the states for example – it can be perfect.

All of the example above show system assigned colors. That’s the fastest way to do it. But you can choose your own color assignment thresholds if you’d like. In fact, you absolutely need to do that to do time series maps, etc. Here’s an example from my Indiana census post of total change in Hispanic population that I did where I selected the thresholds myself:

This also shows the state level county maps Telestrian can do. The system supports national maps of states, metros and counties, or state level maps of counties. You can’t define or create arbitrary maps, which is the one price you pay of making everything so simple.

Here’s one more state map, this one Michigan counties for percent change in jobs from 2000 to 2009, positive change in blue, negative in red, intensity color assignment:

Lastly, I promised that you could map literally any data you wanted, so let’s see how. It can be so difficult to create thematic maps without special tools or technical skills, I thought I would extend it to any type of data you wanted. You can’t (yet) save the data into the Telestrian system and use the rest of the system functions against it, but you can map it.

You do this by uploading a comma delimited file with the data. Let’s see an example of the original red-blue map, this one the 2008 presidential election results. I created a file that contains President Obama’s margin of victory. Here’s a sample of it:

As you can see, that’s pretty simple. In fact, I have downloadable templates for all available maps with the names and codes. All you have to do is drop your data into it and upload the file.

Let’s do a red-blue monochrome based on a threshold of zero and we get this map:

No legend needed for this map, so I turned it off.

I can’t think of how this could get much easier for a non-technical user.

I won’t show this here, but if you do have a bit of technical skills, you can actually directly control the colors by including an RGB color string in the file instead of a data value. This can be useful for highlighting a particular county or state or something.

I hope this shows how easy mapping can be. Other than the Obama one, which took longer since I had to download the process the data by hand, and the Indiana Hispanic map, which took about a minute because I had to type in my own thresholds, the rest of these maps again only took me about 30 seconds each to create. And they are in image format I could plop directly in here.

You an read much more about the nuts and bolts to mapping in The Telestrian Guide to Thematic Maps.

Again, I hope you found these maps interesting, and that you’ll give Telestrian serious consideration for your own thematic mapping needs.

Wednesday, October 20th, 2010

Core City Educational Attainment

I’ve noted before how the fate of central cities and their regions seem to be linked. While again I can’t draw an arrow of causation, it’s rare to see a thriving region with a sinking central city.

It’s almost a truism that one of the most important drivers of urban success is educational attainment. So let’s take a quick look at educational attainment in core cities, using my Midwest metros as a proxy.

This probably isn’t a terribly surprising graph. Note the very low educational attainment of the city of Cleveland and Detroit. This highlights clearly the challenge facing those regions.

Here’s another view, looking at the change in college degree attainment between 2000 and 2009.

Another illuminating graph. We see again Cleveland and Detroit at the bottom, failing to even keep pace with the national average. On a more positive note, St. Louis saw a very strong increase, which bodes well for that city.

Just something to ponder. Note that I excluded my traditional look at Louisville because a city-county merger skewed the stats.

Tuesday, September 14th, 2010

Nuvo: A Mayor for the New Millennium

[ I've written extensively about Carmel, Indiana on this blog - see, for example, Next American Suburb. It's an Indianapolis suburb with a very aggressive agenda of suburban retrofit, and I believe a "secret weapon" for the region. David Hoppe of Nuvo, Indy's alt-weekly, is my favorite local writer on arts and culture. He interviewed Carmel Mayor Jim Brainard, creating an interview that is an absolute must read for urbanists everywhere. Brainard does an incredible job of laying out the case for a more progressive urban vision in a way that speaks to the average person. Nuvo graciously allowed me to run an extended excerpt, but there's much more where this came from so please read the entire interview at Nuvo's web site. You won't want to miss it - Aaron ]

The only mayor in Carmel history to be elected to four terms, Brainard has presided over a remarkable period of growth that has seen his community’s population grow from 25,000 to 85,000, with a median household income of $89,414, compared to $47,966 for the state as a whole.

Even more remarkable is that Brainard has achieved this growth and political popularity in one of America’s most conservative political strongholds (McCain carried Carmel with 61 percent of the vote in 2008; Bush received 74 percent in 2004) by championing policies that place the arts and environmental sustainability high on the civic priority list. While the rest of Indiana has been getting failing grades for air and water quality, Carmel took first place in the Climate Protection Awards presented by the U.S. Conference of Mayors in 2008. And while public funding for the arts in Indianapolis has been cut to pre-2000 levels, Carmel is investing $150 million in a new performing arts center, slated to open this coming January.

NUVO: How did the arts and environment become policy priorities in Carmel?

Brainard: I grew up in a household where my dad was a school music teacher. My mother was a piano teacher. So I suppose that had something to do with it.

But we’re in competition in central Indiana. This region is in competition with cities all over the world. Carmel’s not in competition with Indianapolis or vice versa. We’re in competition with cities across the globe. If I am the owner of a tech company, I can choose to put that tech company anywhere, so long as I can attract the top talent I need.

So how does central Indiana compete? We can compete by creating cities that are beautiful, sustainable cities with good public education. It’s important to remember that one of the things that’s distinguished America from every other country all over the earth is that we were the first to provide free public education. Maintaining that system is absolutely key to making cities successful.

From an economic standpoint, it makes a lot of sense for a city to invest in the arts. For every dollar of investment, six to eight dollars are returned to the taxpayer.

Last fall, a Kennedy School study at Harvard showed the average household in the U.S. drives 104 miles a day. That’s not sustainable from a lot of aspects. But it’s particularly not sustainable from a city financial standpoint because we’re building all these roads and maintaining these roads.

Have you gone for a romantic walk with your significant other recently, past the Walmart parking lot on one side and the six-lane road on the other? Probably not. And the reason you haven’t is because it’s not any fun! It’s not romantic. It’s not pleasing to the eye.

So we’re bringing the buildings back up to the street. Let’s go up a little higher. Let’s accommodate the car, but let’s accommodate them underground with garages. Let’s get people walking in the community. Let’s have options for people who don’t want to live on a big lot. That means apartments and condos and townhomes. And as we build this more walkable, sustainable community, one of the ways we make it beautiful is to have art. Public art.

We started a policy, as many other cities have across the country, of spending one percent of our general reserves for support of the arts about six years ago. Over time we’ve been able to buy a lot of public sculptures, support a lot of arts organizations.

NUVO: What would you say are some of the biggest misconceptions that critics of cultural policy have?

Brainard: We haven’t had that many critics in Carmel. We have a very well-educated group of citizens. I think the last census of folks with a college degree showed us fifth highest in the county. It makes a huge difference. People are willing to listen and analyze because they’re trained – not because they’re different people – because they’ve been trained through the university process not to make quick judgments until they get all the facts.

And we’ve cut their tax rates. I think that’s a large part of it. I’m in my fourth term and residential taxes are lower in Carmel today than they were in 1986. So I think we have confidence from a lot of people in town that we are careful when we make major decisions. They’re not done on a whim, but carefully thought out and part of an overall strategy to keep our taxes low and our quality of life high.

Strategic spending can be a good thing. It can actually keep your taxes down. If we spend on things that attract businesses here that pay the majority of taxes, it means our own taxes don’t have to be as high. So far our strategy’s worked out beautifully. We’ve attracted a tremendous amount of investment. Almost one-third of Carmel’s property tax revenue comes from business. Normally in a city, it’s 10-13 percent.

NUVO: People critical of public investment in the arts often say it’s an elitist enterprise.

Brainard: I think that, in some cases, can be valid. In our case, that’s why we’re focused on public sculpture in the downtown area that can be enjoyed by anybody who wants to walk down the street. You don’t have to pay a high-priced ticket to get in. That’s exactly one of the reasons we’re raising an endowment to support our performance venues – to hold ticket prices down.

I have a relative who was married in Costa Rica last summer. One of the buildings we went to see was their opera house. It was a copy of the Paris Opera House that was built, I think, in 1895. You think about San Jose, Costa Rica in 1895, it probably wasn’t a very developed place yet. I envision dirt streets and jungle. Yet they built this beautiful replica of the Paris Opera House. It’s as if you stepped into Europe. I was talking broken English with the cab driver that took us there and he said the best thing about it is that government supports it enough that people like him can afford to go. He said he was able to see Pavarotti for five U.S. dollars.

And I thought, “that cab driver’s right.” We need to have programs that make it affordable for families and hardworking folks that maybe don’t have a lot of money. I think everybody involved in the arts needs to remember that.

NUVO: It creates a higher level of aspiration in the community.

Brainard: It gives people hope. It allows them to dream and to think and learn. Everybody should be able to afford to go to a concert or see a play. That’s why we already do a lot of outdoor concerts, a lot of free events. We want to continue those. Now, granted, artists like to get paid and make lots of money, and so there will be some events priced higher than others.

NUVO: Are there other ways in which cultural policy informs the community?

Brainard: The arts have played a part for centuries, going back to the Greek playwrights, in forming public opinion and being a vital part of a representative democracy. If we’re going to have a representative democracy, the arts are a way of communicating and discussing ideas. I happened upon a conversation in one of our outdoor cafes in Old Town just a few days ago. I overheard a group of six adults who were having dinner together, discussing the expression on the face of one our sculptures, a statue of a woman carrying a bunch of groceries, whether she’s happy or unhappy. It was fascinating to eavesdrop and hear this discussion about the expression on her face and what it meant. I’m thinking this is good. This is what art’s supposed to do. It’s supposed to inspire conversation and thought. Flower baskets are nice, but they’re not going to create conversation.

NUVO: Don’t you think public transportation has to play a part in helping people understand what a greater Indianapolis metro area can be?

Brainard: Without question we need better pubic transportation in this region, to be connected and to be able to get around. People say it’s so expensive, but what I didn’t realize until I was mayor is that to rebuild just a mile of county road is $5-7 million dollars. And you have to maintain that forever. That’s why so many cities are bankrupt. They can’t maintain the infrastructure of a sprawling development pattern.

I was looking at a comparable city in California. They have 150 miles of roads and the same population we do. We have 400 and some miles of roads. So we’re spending three and half times more on our roads – probably more because they don’t have winter. Then you have to police further out. You need fire stations. Providing decent services to the public goes way up when you have sprawl.

We appreciate that some people prefer to live on big lots – I do, I’m guilty along with everybody else – but there are a lot of folks who don’t want that yard any more. So we’re trying to provide options. When you do that, it makes public transportation more economically feasible. It’s really hard when everybody’s sprawled out. But when you’ve got dense clusters in areas, public transportation makes a lot more sense.

We – I mean, the Indianapolis region – [are] the largest metropolitan region in the country without a light rail or some form of subway system in the country today. Mayor Ballard has been pushing it. I’ve been impressed with him. I think he saw great public transportation systems in his military career when he was stationed in Europe and he wants to do similar things here.

One of the things public transit will allow him to do within a quarter mile of the stations – those areas generally develop in a very dense way. That creates an opportunity for a tremendous amount of redevelopment of those cores around the train or subway station. You get a lot of private sector investment because you know you’re going to have “X” number of people leaving that train station every day.

NUVO: What do you say to people who claim adopting green ideas involves sacrifice?

Brainard: I don’t see it as a sacrifice. Building a city that works better, is more economical, more sustainable and more beautiful – I don’t see that as a sacrifice. I see that as an improvement. And I think it’s evidenced by the fact that as we build this new downtown area, the population is skyrocketing in comparison to other, comparable cities.

Somebody said to me, “I wish so many people wouldn’t move here. I liked it when it was small.” I said, “Well, I suppose we could do that. We could not pick up the trash. Let some chuckholes start. Have some really blighted neighborhoods. Instead of people wanting to come, they’d want to leave.”

If you build an attractive place, people are going to want to come. They vote with their feet. And they’re voting in favor of Carmel.

You can read the rest of this interview at Nuvo Newsweekly’s web site.

Sunday, August 29th, 2010

Urban Universities Done Right: Chicago’s “Loop U”

Many American cities have focused on university based development as a catalyst for their downtowns and urban spaces. Louisville has promoted the growth of its university affiliated hospital complex on the east side of downtown. Indianapolis and Chicago both built major urban renewal type campuses – IUPUI and UIC respectively. The University of Wisconsin anchors the core of Madison, and similar patterns are repeated in college towns across the country, or in college neighborhoods like Chicago’s Hyde Park.

In my view “eds and meds” is quasi-public sector. Like government offices, they can act as an anchor of sorts, but are more rarely sources of dynamism. Also, while they attract investment and people, the interests of the university are often not aligned with those of the neighborhoods, leading almost inevitably to various town-gown type divides.

One notable exception to the standard pattern is the expanding collection of over 30 downtown Chicago colleges that has become known as “Loop U”. From a Sun-Times story from last year:

When most college students go off to campus for the first time, they typically end up in a dorm overlooking a grassy quad, classroom buildings, or perhaps the football stadium.

Not so at “Loop U,” a nickname for a recent phenomenon that this fall will bring more than 65,000 college students to live and study at more than 30 institutions of higher learning in and around downtown Chicago.

A recent report published by DePaul University says the downtown population of college students has grown 25 percent in just the last five years, making it the “biggest college town in Illinois.”

Unlike traditional campuses, in which the institution owns all the land and every building is a college building, downtown dormitories (and classroom buildings) are interspersed along city streets like Wabash, Michigan and State, blending in with the existing buildings.

I consider Chicago’s Loop U possibly the most successful example of urban university development in America. It has had an almost totally positive impact on the urban fabric of the Loop, and generated zero controversy or negativity. There are a number of elements of this that I think distinguish the Loop U approach in a positive way and make it a model that every city should study.

1. Diversity of institutions. Unlike a large, monolithic institution like Ohio State, there are over 30 different institutions in downtown Chicago. These range from a community college to the School of the Art Institute to Chicago to specialty design and culinary schools, Northwestern University medical school, a branch of DePaul, etc. This diversity has the same effect that Jane Jacobs described for diversity of uses. They bring different types of people to the Loop at different times of the day, and operate on different schedules, contributing to major activity from morning till night. Also, the diversity of institution types means that you don’t have a single profile of student who stands demographically apart from the rest of the city. While perhaps not a perfect match, the students at Loop U collectively look at a lot more like the city’s overall population than the students at most schools.

2. Small Sizes, Urban Form. A typical college campus – like UIC, for instance – is usually a huge tract or superblock site devoted entirely to university activities. The university often takes great pains to establish their perimeter, and even extend control over “buffer zones”. The essence of most schools is that they in some way stand apart from the city.

But with the Loop U institutions, while they are collectively large, most of them are of reasonable size. And they typically inhabit urban buildings that are on the same block with other types of buildings such like any other downtown structure. Some institutions, such as specialty interior design school Harrington College, actually rent space in multi-tenant commercial buildings. Larger schools like Columbia College have many facilities spread all over. Even Northwestern University hospital plays as nice with the urban fabric as any such facility is likely to.

Because land in downtown Chicago is so valuable, it isn’t feasible to acquire a large superblock site. And what land you do have, you need to use efficiently. This has led to a situation where the vast majority of the colleges are integrated with their environment and don’t stand apart from it. That’s a rarity.

This has lots of benefits. For example, the School of the Art Institute of Chicago built a dormitory at Randolph and State. The ground floor houses a Borders Books that is always jammed. The students themselves are frequently hanging out on State St., contributing to the street activity at all hours, and also counteracting the stuffy, sterile business/conventioneer vibe that infects too many downtowns. People see these young artsy types out there and think, “Hey, this place must be pretty cool.”

3. Neighborhood Compatibility. The rarefied intellectual atmosphere of a university often does not speak to or address the concerns of interests of the residents and non-university related businesses in a given area. Things like art galleries can have a limited appeal to those who are more concerned with quality of primary and secondary schools, jobs, crime, traffic, etc.

But the Loop is an upscale business district. This has the advantage that the people who work in the Loop, or who live in the greater central area, are the profile of people who might take advantage of programs and institutions that colleges create for their own students. I think of the Film Center at SAIC, for example, indisputably the city’s premier film venue. What the colleges produce is an amenity and potentially of interest to a far larger percentage of the non-university people in the area than is typically the case.

4. The Practical Arts. Several of the institutions are either arts related, or provide career training in technical fields. I noted Harrington College earlier, but there are many other similar types of schools. Most of these cater to people who already live in Chicago, thus they provide a critical workforce development function for the creative industries in the city. Without these schools, the city’s theaters, design firms, restaurants, etc. would find themselves facing a very different labor force situation.

5. Planting the Flag. The growing prominence of Chicago’s Loop as an educational and cultural center has created a pull whereby it is almost mandatory for area institutions to maintain a point of presence downtown. So DePaul, Northwestern, the University of Chicago, etc. all have facilities in the Loop. This creates connectivity between those institutions and downtown, which is a good thing.

A diversity of institutions, catering to a diverse student body, predominantly small to medium in size, scattered throughout an area, in urban buildings that are part of, not apart from, their surroundings, hopefully featuring a healthy dose of creative and technical fields, and which create open to the public type amenities – that’s the way to do an urban university district right. That’s not to say you can’t have a large medical campus or university campus. There’s a role for those things. But especially in a CBD or near-CBD type district, the Chicago approach to higher education has much to recommend as a development strategy. It’s a model that should be more thoroughly documented and discussed in urbanist downtown development circles.

Tuesday, April 13th, 2010

Ryan Avent: The Urban Economy

[ I'll say it again, Ryan Avent is the best urbanist economics blogger out there. Be sure to check him out at his personal blog, The Bellows, and on the Economist's Free Exchange blog. In the meantime, enjoy this piece he graciously allowed me to reprint. - Aaron ]

I am generally a fan of the American Prospect and a very big fan of the people who work there, but the magazine’s latest issue, which highlights “The Post-Boom City” on the cover strikes me as a whiff all the way around. I discuss the Special Report on manufacturing here, but I also want to say a few things about Alec MacGillis’ piece on Richard Florida and urban development.

I don’t have much time for the quasi-accusations of hucksterism leveled at Florida. He’s never been shy about self-promoting, and he’s certainly done well for himself publicizing and evangelizing about his ideas, but major American cities aren’t exactly naive old grannies being suckered in by Florida the conman. Florida has a view on urban development. He’s accepted thousands of dollars to come talk about it with city leaders around the country. If those cities can’t make a good judgment about what they ought to do next, that’s not Florida’s fault.

The criticism of his actual ideas is a trickier topic. MacGillis makes some reasonable points, to which I’ll get in a minute. But I think that he, and many others, haven’t really begun to wrestle with the nature of urban economics and the way it relates to broader policy issues like inequality. MacGillis writes:

A tautology lies at the heart of Florida’s theory that has limited its instructive value all along: Creative people seek out places that draw a lot of creative people. Florida has now taken this closed-loop argument to another level by declaring that hence-forth, the winners’ club is closed to new entrants.

That tautology doesn’t just lie at the heart of Florida’s theory; it describes the actual functioning of urban economies. The value in economically dynamic cities is the people that populate them. Where once, firms would pay high land prices to be near coal deposits or harbors, based on the economic advantages those amenities conferred, they now pay high land prices to be near talent. This yen to concentrate in particular areas has a number of dynamics. Firms want to be near customers and clients. Workers want to be near firms. Firms want to be near workers. Where there are lots of firms and workers, there will also be businesses serving those workers — in business and in the provision of consumption opportunities — and those services attract additional firms and workers. Everyone wants to be where everyone is, and it’s tough for anyone to go somewhere else because somewhere else is where people aren’t.

The result is an urban geography that’s very lumpy. People clump together, because there are gains to doing so.

But what makes a successful clump changes over time. The economics that underpinned the older manufacturing economy supported clumps that don’t necessarily make economic sense today. With declines in transportation and communication costs, it became affordable to move plants away from expensive city land, and that’s precisely what many businesses did. In cities that were also home to a substantial knowledge economy sector, this ultimately proved to be a boon. By outsourcing their manufacturing (and later, their back office) components, firms could reduce the overhead on the offices of those who still needed to be in the city, improving margins (and making more room in the city for others who needed to be there, thus increasing the return to everyone of being in the city).

The result is a world where the key to urban success is a critical mass of workers with high levels of what economists like to call human capital. And because there are returns to scale at work, there is an element of the zero sum here. Or to put it another way, the world where every big city has its own fair share of talent is not a stable equilibrium; it will decay into a world with haves and have nots. And indeed, that’s what we have seen in recent decades. Educational levels in cities one hundred years ago strongly predict educational levels in cities today. And cities with high shares of college graduates have absorbed more than their share of new college graduates in recent decades.

These dynamics have important implications for the way we think about policy, and I wish more people appreciated them.

Now, the above is not a death sentence for a city that’s not one of the main metropolitan dynamos. It takes all kinds, and there will be smaller regional talent centers that prosper. Proximity to a dynamic economy is also a means to success. Location in the northeastern corridor, for instance, is quite lucrative, and a number of decaying industrial towns that might otherwise have met a Detroit-like fate are enjoying economic revivals thanks to the strength of the broader NEC economy.

But what do you do if you are in a town that is a long way from generating a self-sustaining concentration of human capital, and which is relatively remote from bigger urban economies? The options are not pretty. Cities in that situation will tend to find that the better a job they do educating their local residents, the faster their towns depopulate; a good education is a ticket out.

Reading the Prospect, you’d think that the key to saving these old industrial towns is to find ways to support American manufacturing. All that’s been standing in the way of their continued success, it seems, is the decline of unions and a cheap renminbi. This just isn’t so. Different policy choices might have slowed the decline of manufacturing employment in America, but they would not have stopped it — or the consequent decline of manufacturing-dependent cities.

I’ll tell you what I think MacGillis gets right, and what makes these issues very difficult to address. People are not simply cold, rational calculators who will make a determination about where in the US they can maximize the return to their skillset and move there. Even as cities experience serious decline, some — millions of — people will stay behind because that’s where friends, family, and other connections are. And that’s why dismissing the problem of urban decline as just a healthy part of economic adjustment is an unsatisfactory answer.

But the solution here is not to hope that we can restore the industrial days of yore. I’ll tell you what I think we ought to be focusing on. First, I think it’s inappropriate to dismiss the importance of increased investment in education. Noam Scheiber recently wrote about manufacturing, saying:

Now it would be great if everyone would go to college and be able to thrive in the post-industrial economy. But, in reality, there’s always going to be a significant portion of the population that doesn’t get beyond high school. Which means that an economy with almost no manufacturing is probably an economy with much greater income inequality.

True, not everyone is going to go to college, but that’s not necessary. Marginal increases in the supply of college educated workers will increase competition for high skill jobs — slowing wage growth for such positions — and reduce competition for low wage jobs — boosting wage growth for those positions and thereby narrowing inequality. The bottom lines is — we are not anywhere near the point at which the capacity of young Americans to increase their skill level has been reached. Lots of kids get too little education, and that’s a bad thing for the economy, for inequality, and for American cities.

Secondly, it’s worth thinking about how infrastructure can boost the quality of life for everybody, including workers who can barely afford to live in the most dynamic cities and workers who have decided to live in declining cities. Better housing and transportation policies can slow growth in costs that consume over half of household budgets. Rules that make it easier to build homes within easy traveling distance of jobs centers reduce housing costs. Building retail and jobs within walking distance of homes allows families to opt for living situations with low transportation cost levels (and low transportation cost variability). Investments in things like broadband significantly expand consumption possibilities for those living in areas without many entertainment amenities. And better communication and information infrastructure may help struggling cities to leverage up the talent they do have by enhancing connections within the cities and within broader regions.

Third, we should do a better job treating ailing cities. Economically speaking, investments in a doomed city will only retard that city’s decline, meaning that more people suffer in its economic doldrums for longer. But the case for aid to distressed cities is like the case for unemployment insurance — the aid prevents a damaging decline which outweighs the negative incentive effects.

MacGillis quotes David Lewis saying:

What [Florida] ignores is that places have sunken infrastructure — not just in roads and buildings and sewers but the stuff that matters…

There are two ways to look at this. One is that all of these amenities are just temporarily underused. Eventually, the price of things like vacant homes and buildings will fall enough to attract new tenants and everything will work out. In that case, temporary aid might be in order — countercyclical aid — to prevent the decline from feeding on itself and getting out of hand.

Another view is that the decline is permanent — those buildings will never again be filled. In that case, aid is still justified. Why? Well, we’d like to avoid a fiscal death spiral that leads to serious declines in public services. Cities don’t disappear over night, and residents shouldn’t be subject to infrastructure that’s falling apart and a police force that can’t stop crime. Aid may also prevent residents from becoming trapped in the failing city. Rapid declines in property values will make selling homes — and migrating — difficult. Deterioration in local schools will likewise limit migration opportunities for younger residents.

But so long as declining cities are still there, there will be cries to try and rejuvenate them with various public programs — tax incentives to lure new companies, public funding for stadiums or convention centers, bail-outs for failing firms. These kinds of things are simply not helpful. The issue is this: it’s never clear what transition is going to look like and what the right distribution of people and capital is going to be. In providing aid to struggling cities, then, we want to facilitate that transition, not impede it. We want to make people more mobile, even as we work to generate a high quality of life in growing cities and declining cities. We don’t want to lock up resources in declining cities, either by propping up failing companies or by trapping people in hopeless situations.

These topics are complicated. And counterintuitive; no one likes thinking that the right thing may be for one of America’s largest cities to shrink until it disappears. But it’s worth remembering that the industrial revolution swept away whole occupations and completely redrew the urban geography of America and Europe. Cities which had been major regional capitals for centuries were suddenly backwaters, while major metropolises exploded out of nothing.

Technology is producing and will continue to produce a similar shift. Whole sectors will vanish, and take millions of jobs with them. Cities dependent on those old sectors will struggle to survive, and for some places this will be a losing struggle. This is not the kind of thing that progressives should want to stand athwart yelling stop. Instead, they need to find away to promote progressive ends — mobility, opportunity, and security — while embracing economic shifts that are, on the whole, empowering and a source of great prosperity.

This post originally appeared at The Bellows. Reprinted with permission of the author.

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