Thursday, February 20th, 2014
I’ve got to admit that when I moved to New England from the Midwest, it was a bit of a disappointment. The Midwest tends to get dismissed as flyover country, and to the extent that people have formed an opinion of it at all, it’s generally not super positive: post-industrial, boring, narrow-minded, etc. New England by contrast enjoys a very high reputation and standing in the world as an intellectual and cultural center, as well as a bastion of progressive thinking.
I had spent very little time there, and that mostly in Boston. But my image of it was pretty much what you’d think of as Old England from Masterpiece Theater or something: quaint villages (albeit with Dunkin’ Donuts on the green), manor houses, and sophistication, though perhaps overlaid with an veneer of Boston hostility. In other words, my expectations were pretty high based on New England’s reputation.
Imagine my surprise when I moved there and discovered that it’s exactly like the Midwest in a surprising number of ways. Much of New England is a post-industrial landscape not that dissimilar to the classic Rust Belt, though occasionally with most attractive mill architecture and such. Its village centers have seen better days and even the town centers of places with big reputations are usually nowhere near the league of say Chicago’s nicer suburbs. Though voting Democratic, New Englanders largely display the same sorts of provincial attitudes ones finds in the Midwest. Many places are characterized mostly by lifers and people who don’t get out much. It has an aging population notably lacking in diversity.
I actually found Rhode Island surprisingly similar to where I grew up in Southern Indiana near Louisville. The state’s topography (oceanfront aside) is much like Southern Indiana – rolling hills and trees. Providence is like Louisville, with a smallish super-creative and talented core surrounded by a sea of blue collar communities. The two cities even seem to brag about many of the same things, like top quality restaurants. My brother made a nearly identical observation when he came to visit, exclaiming of West Warwick, “This is just like New Albany!” And he was right.
The same is true of much of the rest of the place. Most of Mass and Connecticut are similar. I grew up in a town called Laconia, Indiana. So naturally I had to visit Laconia, New Hampshire. During one visit to the lake district I took a drive home on US 3 and observed one depressed small town after another, no different from what you’d see driving through the Midwest. Northern New England’s mountains are more scenic than Midwest hills, but there are still plenty of places in Michigan, Minnesota, and Wisconsin – including many high quality lakes – which hold up very well.
I should note that the lakes are one area I did see some differences. Midwestern lakes tend to be nouveau riche as it were. Whereas something like Squam Lake has older cabins and such that have often been in families for generations and which were designed to be mostly hidden from view of the lake. People there tend to also love their classic wooden boats, which is definitely old school. This is one place the air of old money elite came through.
But for the most part, I was not overwhelmed. This is not to say that New England is no good. After all, I like the Midwest a lot. So saying that New England is like the Midwest isn’t necessarily an insult coming from me. But what I do find interesting is the radically different reputations of the regions, when they are far more alike than you might think – certainly more alike than say the Midwest and West Coast (or Texas). Clearly history plays a role here. But the present day realities are far different from the era of the Pilgrims. From a civic branding perspective, this shows that marketplace reputation can be in a sense divorced from reality for an extended period of time.
Wednesday, February 19th, 2014
Here’s one that’s been making the rounds of a guy going snowboarding through the streets of New York City. Not as cool as the Detroit urban skiing adventure, but still fun stuff. If the video doesn’t display for you, click here.
And this week a music break courtesy of Drag City recording artist Joanna Newsom. I’m not sure how to describe her music, but it’s good stuff. This track is called “Good Intentions Paving Company” (a Saul Bellow quote, I believe), from her 2010 album “Have One On Me.” If the You Tube embed doesn’t display, click here:
Tuesday, February 18th, 2014
[ Providence, Rhode Island was spared some of the worst of the urban renewal disasters and has a lot of intact neighborhoods. But there have still been some not entirely positive changes in the urban fabric in others. One such neighborhood is Olneyville. As you can see in this aerial, there's an old mostly intact neighborhood commercial center at the core, though with areas of demolition. The area is also cut off by a freeway.
In the piece below Jef Nickerson discusses a proposal for a strip mall in the area that would further degrade the urban fabric. (It's near the bottom left of the photo above). This is sadly what happens in many struggling areas where a desperate city approves suburban style "redevelopment" that's actually destructive to the only things giving the neighborhood appeal in the first place.
As an aside, I believe this development is across the street from the legendary Olneyville New York System Wieners. Somewhat oddly, the term "New York System" actually means "Rhode Island style." Here's a picture of the classic, complete with cheese fries and coffee milk (like chocolate milk, but made with coffee flavored syrup - another Rhode Island classic).
Rendering of proposed McDonald’s and Family Dollar store on Plainfield Street in Olneyville.
After learning of plans for a drive-thru McDonald’s proposed on Plainfield Street in Olneyville, I requested plans for the proposal from the Planning Department.
The developer is seeking master plan approval from the City Plan Commission for the construction of a McDonald’s and Family Dollar store in a separate building on a site which was cleared of existing structures last year.
Per the CPC agenda, the applicant seeks relief from front yard setbacks (they are requesting to set the building further from the street than allowed) and also for a special use permit for a drive thru for the McDonald’s. The applicant plans for a total of 56 parking spaces on the site (per the plans, 19 parking spaces in two rows between Plainfield Street and the Family Dollar Store). The McDonald’s is situated on a corner lot (Plainfield and Dike) with the drive thru lane wrapping around the building between it and the sidewalk. Pedestrian access to the McDonald’s is proposed to be via two crosswalks across the drive thru lanes and a third crosswalk from the Family Dollar store across the parking lot. Direct off-road pedestrian access to the Family Dollar store is only provided via crosswalks from the McDonald’s or via sidewalks crossing a driveway entrance on the Atwood side of the parcel.
According to ProvPlan, as of the 2000 census (the most recent data available) 59.5% of households in the Olneyville area have automobiles this compares to 52.5% Downcity. With such low car-ownership numbers, the residents of Olneyville are highly dependent on public transit, walking, and bicycles. Buildings separated from these forms of transit by parking lots with drive thru lanes are not the best way to serve this population. Olneyville is a major traffic artery to points west where car ownership rates are much higher (~80% in Hartford and Silver Lake). The residents of Olneyville should not be further burdened with automobile infrastructure catering to people outside their community.
The removal of the buildings at this site has widened a widened a gap in the street-wall along the south-side of Plainfield Street and Olneyville Square which only had small gaps between the Route 6 overpass and the eastern end of the square. For generations Olneyville has fallen victim to the automobile, first the highways, them the retail mindset that set in in the middle of the last century with places like the former Price Rite plaza, the car wash on Westminster, the Burger King with a drive thru and 60 parking spaces, and the gas station across from this site.
The Olneyville community has been working hard to bring street-life back to the square and Olneyville Housing are providing homes for residents who can walk to this area. Allowing auto-centric design at the southwest side of the square will make that area dead to walkability for generations more, just as we’re making progress on reversing prior generations of damage.
This isn’t about the proposed retailers (though I’m sure we could have a long discussion about the food choices we have in lower-income neighborhoods), this is about their physical manifestation in the neighborhood.
This post originally appeared in Greater City Providence on January 15, 2014.
Sunday, February 16th, 2014
A new study from Endeavor Insight called “What Do the Best Entrepreneurs Want In a City?” has been making the rounds. They interviewed 150 founders of fast growing companies in America to determine what those founders valued in a place to start a company.
Their conclusions are probably not news to most. Most people started companies where they already live (i.e., they didn’t move somewhere to start one), the most important thing they wanted in the city was access to talent, and the second thing was access to customers and suppliers. The report highlights that taxes and regulations were not major considerations. Quality of life items were mentioned by many. The “vast majority” of founders were in metro areas of over one million people and they were described as “highly mobile as young adults.” Their very direct conclusion stated up front is: “We believe that the magic formula for attracting and retaining the best entrepreneurs is this: a great place to live plus a talented pool of potential employees, and excellent access to customers and suppliers.”
This got a lot of press because it supports the standard urbanist narrative. And while I think there’s significant value and truth here, it’s important to drill down to understand the limits. Since many others have already touted the headline findings, I’ll take care of the caveats.
First, the reason people gave for picking a city to live was most frequently having “personal connections” or “specific quality of life factors.” The report doesn’t break down who said what, so we don’t know the ratio of these or their overlap. It shouldn’t be any surprise that personal connections such as being born in a place, family, etc. play a dominant role in people’s decisions on where to live. As for quality of life, I’ve yet to visit a place where people don’t boast of it. Think about it, how many people live in a place they think sucks, even if they do have a connection there? Some, surely (say a child moving to a place he doesn’t want to live to care for an aging parent), but I suspect not many. I think it’s natural for people to brag about the quality of life in places where they live, so I wouldn’t read too much into this. Based on what the report actually says, personal history or connections could overwhelmingly account for location decisions, with quality of life mostly an overlapping secondary indicator.
The companies whose founders were interviewed weren’t specified. It was only said that they were on the Inc. 500, had an average of 100 employees and $20 million in revenue, and had revenue growth of 600%. In other words, these are predominantly early to mezzanine stage companies. Unsurprisingly, a big concern of new and smaller companies is finding customers and suppliers, as well as employees. Often these firms are not even profitable, so things like taxes are irrelevant. But no customer means no company. And small, rapidly growing firms can’t afford to carry a lot of deadweight employees. Traditional business climate items generally loom larger as companies mature and already have an established customer, supplier, and employee base.
It may be that these companies tended to stay located where they were founded when they reach maturity, but that doesn’t mean they grew their operations in that place. That’s why Silicon Valley has fewer jobs than it did back in 2000 even though its companies have thrived. Many of them have grown their jobs base in places like Salt Lake City and Austin.
Additionally, the survey says the companies represent dozens of sectors, but doesn’t give a lot of detail. However, “media” and “software” were mentioned. Also, the among those founders citing talent as a key location factor, “technical” talent was the most commonly mentioned.
This implies to me that tech/media startups loom large in this survey. If true, this would also explain the lack of concern around business climate items. These industries are among the most lightly regulated out there. There have even been specific legislative exemptions to keep the internet space clear of regulation and taxes (such as on internet retail). Most communities think tech startups are key to their future, so bend over backwards to cater to them. You don’t need complex permits to start a tech company.
This means the business climate for technology firms and startups can be very different from what is experienced by other businesses. For example, a recent Rhode Island PBS roundtable featured executives from Hasbro and Banneker industries lamenting the state’s attitude towards business while Allan Tear of tech accelerator Betaspring took a much more positive view. They are all probably right. Life’s probably great if you’re Betaspring, but not quite so good if your company’s name includes “Industries” in it. In short, the experience of tech/media startups is relevant mostly only to other such startups.
Blogger Alon Levy once made a provocative observation that one reason India specialized in software and BPO industries was because those were the only ones that are viable in a country without much infrastructure. The China manufacturing strategy would be a non-starter there. You actually don’t need to invest much in real quality of life items like even universal sanitation or paved roads to have a tech cluster, as many cities in India prove. As long as you have an internet connection to other places you can sell your services to, you’re in business. (Did I mention that Indian outsourcing firms had a massive tax holiday on export revenues for an extended period of time?)
So media/tech are the companies naturally less likely to talk about old school type business climate items, especially when younger. But it’s worth pointing out what mature hypergrowth tech companies have tended to do at some point, namely put their European headquarters on the Emerald Isle where they can take advantage of the “Double Irish” and similar such techniques to all but zero out their tax bill.
I mention this because that the end of the report the authors cite a couple case studies to try to demonstrate the irrelevancy of taxes. Yet this study was in part funded by the Omidyar Network, the philanthropy of eBay founder Pierre Omidyar. Where is eBay’s European Headquarters? Dublin, Ireland. Think that’s because the CEO likes to drink Guinness?
I don’t want to suggest that talent is irrelevant or that taxes mean everything. I’ve clearly pounded the table on the opposite. But just because this survey flatters our conceits in such matters doesn’t mean we should take it to the bank. I see it useful information, but limited in scope to only a narrow segment of firms. I just don’t think this study justified the forcefully stated conclusion
Also, regarding the mobility of youth, this was defined from a Kauffman Foundation study that noted 75% of entrepreneurs started their company in a different city from where they received their final university degree. This is unsurprising and irrelevant. Colleges can be understood as “education factories” whose nature is to produce graduates. Much as actual factories export their widgets, colleges export graduates. This is especially true since many great schools are in proverbial “college towns.” I went to school at Indiana University which is in Bloomington. Bloomington is an awesome town, but how many of the 30,000+ students at IU can a town that’s otherwise only about 50,000 people absorb? This is a not very useful statistic of mobility in my view.
Lastly, the notion that regions of one million people or more are economically advantaged seems very right to me. In this regard, their survey foots to everything I’ve seen and written about. These cities have thicker labor markets, more talent, unique infrastructure (e.g., major airports), bigger local markets, more specialized suppliers, and more entrepreneurial ferment. I’ve long said that there’s a “minimum viable scale” of around 1-1.5 million people in a region you need to have to really succeed in the modern economy. Smaller places generally only have thrived to the extent that they’ve got a unique amenity like Bloomington’s Big Ten university. Since I took a critical eye towards this survey’s actual support for its findings, I thought I’d end on one where I think they hit it.
Thursday, February 13th, 2014
I haven’t had much to say about the Illiana Expressway, a proposed 50-mile road linking I-65 to I-55 across the far south suburbs of Chicago and Northwest Indiana.
The road has been controversial in Chicago because it was not one of the strategic initiatives of the regional GO TO 2040 plan, and thus in a sense makes a mockery of the years of planning and community dialog that went into that project. Many in the city, as well as various independent organizations like the Metropolitan Planning Council, have said the Illiana is a sprawl producer and poor use of precious financial resources.
Northwest Indiana has been foursquare behind it, and why wouldn’t they be? NWI is Indiana’s premier example of sprawl in its purest form. The population of Lake County has basically been flat since 1960, but during that time there has been massive abandonment of the northern county (Gary, Hammond, etc) in favor of new greenfield locations like Crown Point. The existing freeway infrastructure was designed to serve the old built up areas in the north. The Illiana would serve the new focus of the county further to the south. So naturally they want it. Even if the road is a financial loser, that’s an even bigger win for them since it means subsidies from the rest of the state.
Which is exactly the scenario that appears to be shaping up on both sides of the border. As I noted previously, this road is being billed as using a privatization scheme, but the reality is that the public is backstopping the finances. It uses a so-called “availability payments” approach in which the taxpayer guarantees the returns to the vendor and assumes all the revenue risk.
How big is that risk? Looks pretty big. Greg Hinz over at Crain’s Chicago Business has the story, noting that the Illiana Expressway will likely charge tolls that are four times as high as the rest of the tollway system:
Any company that tried to sell a product at up to four times the competition’s price likely wouldn’t stay in business very long. Customers would walk right away, and management at a minimum would find itself out of a job. But things work differently in the wonderful world of government.
The story is that, based on documents recently, and quietly, released by the Illinois Department of Transportation, it appears the road quite probably would have to levy tolls two, three and even four times those charged on other Illinois tollways.
Yes, you read that right. Four times now charged elsewhere in the metropolitan area by the Illinois Tollway. A cool $11.81 for an auto to drive the road’s entire proposed 47-mile length, and an icy $58.13 for a 16-wheeler.
With no toll at all on the nearby I-80, an existing expressway that runs about 10 miles or so north of the proposed Illiana, guess where the trucks are likely to end up?
As Hinz notes, private toll roads around the country are experiencing significant traffic shortfalls, even when offering a congestion free alternate to a choked up regular route. If that happens here and toll revenues don’t match up with forecasts even with jacked up rates, guess who loses? The taxpayers and motorists of Illinois and Indiana, that’s who.
Don’t expect any high profile bailouts. Rather, an increased share of the two state’s annual highway fund will have to be diverted to covering the shortfalls, crowding out spending elsewhere. This is one of the big fears in the rest of Chicagoland, where there’s a massive infrastructure investment deficit. (From a Northwest Indiana perspective, it’s who cares since it’s the rest of Indiana who will likely see their major projects cut).
The jury is still out on this, but the Illiana deserves serious attention as a potential boondoggle in the making.
Wednesday, February 12th, 2014
Rust Wire pointed me at this video from mid-2012 called “Saving East Cleveland” that was created by residents of that community. Angie Schmitt was struck by the lack of outward blame residents have, and so was I. Before getting to the film, a few of my observations and takeaways.
First, as noted there is a singular lack of blaming of outside forces for the decline of East Cleveland. While Angie highlights the sprawl narrative, I think there’s a more important element at play: race. Clearly race relations played a huge role in how East Cleveland ended up in its current condition. Yet this video shows a remarkable lack of animus about that, even where it might be legitimate. I found this a profound rebuke of those who stereotype black America as walking around looking to play the race card.
I see the attitude and approach of the people in the video as grounded in a clear-eyed, realistic understanding of the fact that no one is coming to save East Cleveland (a separate municipality, not the east side of Cleveland). Though it appears to be not that far from the university, medical and cultural district of Cleveland, this isn’t a place that seems likely to attract the attention of local billionaires or regional bigwigs or state government. All those actors are focused on saving Cleveland itself, and as is commonly the case, only select districts of that. If there are any solutions for East Cleveland, they are going to have to come from inside the city.
There’s a standard Rust Belt narrative of loss. But what we see here, unlike with white flight suburbanites, is a keen sense of the loss of social capital as embodied by their grandparents’ generation and the values it held. They understand the pernicious effect this loss of social capital has had on their community. (Incidentally, we witnessing the exact same dynamic of loss playing out in many parts of white America today – I even see it in my own family).
What then is left to start turning around East Cleveland? Only one thing: self-improvement. I see the film maker as trying to recreate that lost social capital by calling people to accept responsibility for their lives and their community. The lists of accomplishments recited before the interviewees says it clearly: these are successful role models from East Cleveland. It is possible conduct yourself well and succeed as a man or woman here. This is what we need to be as a community. Step it up.
In a sense, while a tougher road, neighborhood improvement through internal development may be more beneficial for the residents. How is neighborhood “improvement” generally implemented in America today? By substituting new residents for the old (gentrification). This might improve real estate values, but I’m not sure it improves the lives of those who originally lived in the area, unless they managed to reap windfall real estate gains.
Instead of gentrifying the neighborhood, the film maker says we should in effect gentrify the people. This is evident in how they view as successes – not traitors – those from East Cleveland who made it in life but ended up leaving.
This documentary is 40 minutes so you may want to watch it on TV. Unlike the typical film of Detroit or wherever filmed by (often out of town) upscale whites, this is a film by and for the black residents of East Cleveland. Definitely worth a watch. If the video doesn’t display for you, click here.
Pete Saunders also posted a take on it.
Wednesday, February 12th, 2014
Here’s yet another time lapse of LA, this one by Russian videographer Vadim Tereshchenko. It’s short and pretty cool. Best seen in full screen high definition, which it looks like you’ll need to click over to Vimeo to get. To do that, or if the video doesn’t display for you, click here.
Tuesday, February 11th, 2014
[ Daniel Hertz is back with another zinger originally posted over at his personal urbanist blog, which is a must read if you live in Chicago. If you're not familiar with his work, check out his posts on public safety inequality and school gentrification.
Today he takes a critical look at another topic: the prevalence of single-family zoning in the city. I myself am working on a piece with a somewhat divergent view from Daniel's, but I thought this was really great and wanted you all to see it.
As a companion piece to this, you might want to check out a post over at Better Institutions that makes a similar point re:Seattle. Here's their zoning map. Everything that is in solid gray without hash shading is zoned exclusively for single family homes.
But enough prologue, on to Daniel's piece - Aaron. ]
So one thing that happens when I bring up the fact that Chicago, like pretty much all American cities, criminalizes dense development to the detriment of all sorts of people (I’m great at parties!) is that whoever I’m talking to expresses their incredulity by referencing the incredible numbers of high-rises built in and around downtown over the last decade or so. Then I try to explain that, while impressive, the development downtown is really pretty exceptional, and that 96% of the city or so doesn’t allow that stuff, or anything over 4 floors or so, even in neighborhoods where people are lining up to live, waving their money and bidding up housing prices.
Then they make some non-committal grunt and change the subject.
But I’m not BSing here. Not only does the city make it illegal in the vast, vast majority of the city to build super-dense towers or medium-dense midrises in very high-demand neighborhoods like Lincoln Park or Wicker Park, but it even criminalizes your standard two- or three-flat apartment building in the majority of neighborhoods, meaning that a developer who wants to build some moderate-price housing in a moderate-demand neighborhood (like, say, Portage Park) has to deal with local segregationists.
Let me say that again: In most Chicago neighborhoods, it is illegal to build anything other than single family homes.
You don’t believe me. That would be really weird, you say. Well, here’s the map:
There you go. Everywhere that’s red, it’s single family homes or nothing. And that makes it look better than it really is. If we highlight all the places where you can’t build anything residential at all – because the land’s been zoned for manufacturing, or parks, or whatever – the places where you can even legally build a two-flat get squeezed even more:
Red = single family homes only. Yellow = non-residential use.
What kind of public interest could this possibly be serving?
PS – It is of course the case that developers sometimes get concessions from aldermen to rezone a plot of land they would like to build on. But when that happens, they’re susceptible to massive pushback from locals who would like to use the power of the government to segregate themselves from lower-income people, or to establish local housing supply ceilings for their benefit at great expense to everyone else.
In any case, the proof is in the pudding: walk around any of the city’s desirable non-downtown neighborhoods and see how many developments that added net housing units have been built in the last 10 years. The answer is precious few.
This post originally appeared in City Notes on January 27, 2014.
Sunday, February 9th, 2014
My recent repost of an article on Columbus, Ohio’s brand blew away the all time comment record for this blog, with 271 as of this writing.
One the discussions was around the extent to which Columbus and other Ohio cities draw mostly from the state or from a broader area. Obviously with Ohio State University, Columbus has a massive in-state draw. But what about people from out of state?
To try quantify this, I used the IRS migration data in my Telestrian system to sort out net migration into that which is with the state of Ohio, and that which is with other states. Before the data, a couple caveats. First, this is based on tax return data so probably understates student movements as many (most?) undergrads aren’t filing their own returns. Second, for multi-state metros like Cincinnati, someone moving from Ohio to the Kentucky or Indiana part of the metro area still counts in the total. The metro area is considered a unit. Also, movements within the metro area are ignored. With that, here’s the chart (click to enlarge):
As expected, Columbus has a huge in-state draw. But what surprised me is that Columbus actually has negative migration with the rest of the country. In effect, Columbus gains people from Ohio and exports them to the rest of the country. I’m sure the university has something to do with this, but it’s interesting nevertheless. Cincinnati shows the same pattern, only at a smaller scale. And Cleveland is bleeding people both to Ohio and the rest of the country. Keep in mind with Cleveland that a lot of the in-state outmigration is probably in effect suburban because of the nature of the way Northeast Ohio metros are set up.
To put this in perspective, I ran the same analysis for various other similar sized metros:
This was a shocker to me. Look at Nashville and Charlotte. It’s not so much that they have large net migration from out of state, but that they have very low net migration from inside. Though Nashville is the boomtown of Tennessee, it seems not to be sucking in people from the rest of the state.
Portland is also an interesting case. It appears to be like Nashville and Charlotte, but what this doesn’t show is that overwhelmingly the net migration to Portland is coming from California – 53,000 people worth. If you exclude both Oregon and California, Portland only drew a net of 21,000 people from the rest of the country. Contrary to what you might think, vast quantities of people (on a net basis) are not streaming into Portland from all over the country. It’s a regional draw.
Austin parallels Columbus a bit in that it has a huge in-state draw, possibly again because of the university. It also as a huge migration with California – 30,000 people. If you look at Texas plus California, that’s about half the total. Charlotte has a similar effect with New York and New Jersey migration.
Indianapolis is sort of a control with Columbus. It is primarily an in-state draw but does have a positive balance with the rest of the country. Keep in mind that it will inevitably lose some people to Sunbelt states for retirement. There’s not much you can do about that. But it’s an effect say North Carolina may have less of. The contrast with Columbus in out of state migration could be due to the lack of a major school there. I don’t know for sure.
Looking more closely at the 3C’s, here is their net migration with each other:
And here is the gross migration, which is the total number of people moving back and forth:
And here’s the percentage of metro area population that is living in the state they were born in:
There’s no radical difference. In fact, by my eyeball calculation, the difference between Columbus and Cleveland is almost entirely due to the former’s higher percentage of foreign born residents (again, partially an artifact of OSU). In their domestic population they are similar. Cincinnati is in the corner of the state and a three state metro. It’s easy to see that its born in state of residence figure is lower because of people who crossed a state line while not leaving the region, though I can’t quantify the exact figures.
Friday, February 7th, 2014
I’ve been saying a while now that Los Angeles is a sick man economy. It never really recovered from the peace dividend, and the metro area has fewer jobs now than in 1990, though in fairness that’s in part only because its exurbs are considered a separate MSA. Los Angeles used to have bigtime corporate strength in not just entertainment, but also aerospace and defense, energy, automotive, financial services, and more, all of which have withered apart from entertainment. Even foreign migration to the region is weakening. New York draws two and half times as many immigrants. LA retains a spectacular economy, a powerful immigrant-fueled small business sector, has the ports, etc. and is even still the largest manufacturing center in the country, but it’s pretty clear there are big time problems. This is particularly obvious in contrast to the booming Bay Area.
A recent report called “A Time For Truth” put out by a group called the Los Angeles 2020 Commission lays out some of the grim facts. Though focused on the city and not the region, and thus likely overstating problems on a regional basis, it highlights a lot of the issues. Here are a few sample:
Los Angeles is barely treading water while the rest of the world is moving forward. We risk falling further behind in adapting to the realities of the 21st century and becoming a City in decline.
Activity in most of our key economic sectors is flat or in decline. We have repeat- edly ignored or fumbled opportunities in one of this era’s major growth industries, the intersection of science and engineering — a field where our university-based intellectual capital ought to make us a leader. With the closure of Boeing’s plant in Long Beach, there is no longer a large-scale aircraft, space vehicle fabrication or assembly facility left in the area.
Three decades ago, LA was home to 12 Fortune 500 headquarters. Today, there are 4. New York, in contrast, has 43 and has continued to add major employers in the last decade.
We have developed a “barbell” economy more typical of developing world cities, like São Paulo, rather than a major American urban area. We are experiencing growth at the top of the income ladder and at the bottom, while the middle class shrinks year after year.
The report includes a lot of unpleasant truths that have been written about before by others like Joel Kotkin. Maybe a fancy pants commission will be listened to, however. In any case, it’s worth a read to get a local take on the city. There’s more to come as this report focused on conditions rather than recommendations, though for that reason perhaps it will be less controversial.