Sunday, July 27, 2014

Confusing Population Change With Migration

Population growth and net outmigration happening in the same metro, at the same time at Pacific Standard magazine. 

Theme: Ironic demography.

Subject Article: "Do Millennials Prefer Houston and San Antonio to Dallas and Austin?"

 Other Links: 1. "10 Surprisingly Hot Markets for Millennials."
2. "How Many People Left Pittsburgh During the 1980s?"
3. "As Deaths Outpace Births, Cities Adjust."

Postscript: As national (and international) demographics have changed, perceptions have failed to keep pace. The outdated view holds that population change is primarily a function of domestic migration. More and more places around the world post birth rates unable to replace those who die. As women become more educated, families get smaller. Birth rates of immigrants glossed over the transformation in the United States. But even foreign born populations are beginning to converge demographically. Journalists need to get with the times.

Wednesday, July 23, 2014

Battle of the Public Intellectuals: Edward Glaeser vs. Richard Florida

The rent is too damn high in free-building Houston at Pacific Standard magazine.

Theme: Ironic demographics.

Subject Article: "Houston, New York Has a Problem: The southern city welcomes the middle class; heavily regulated and expensive Gotham drives it away."

Other Links: 1. "Cost of Living Is Really All About Housing: Places where the rent really is too damn high."
2. "Map: Cost of Rent."
3. "Not So Much ‘New York Poor’ as ‘Pittsburgh Rich.’"

Postscript: "California Screaming: The tech industry made the Bay Area rich. Why do so many residents hate it?":

Conway, an unofficial adviser, and a generous donor, to San Francisco’s mayor, Edwin M. Lee, agrees that something is going wrong in the city’s socioeconomics. But the solution, he thinks, is to bring more of Silicon Valley north. “In ten years, I would hope that eighty-five per cent of tech workers who live in San Francisco work in San Francisco,” he said. “For every tech job, there’s four support jobs, and we need to make sure those people live inside the city limits as well.”

Tech’s shift to the city is already under way. Last August, Yahoo caused a stir when it moved into the San Francisco Chronicle building; Square, the credit-card-processing company founded by Jack Dorsey, was already there, and Twitter’s offices are nearby. Conway supports the Mayor’s new “seven-point housing plan,” which calls for thirty thousand low-, moderate-, and middle-income homes. The developments are planned largely for former industrial sites like Candlestick and Bayview-Hunters Points—a wharf neighborhood that has had limited appeal; up to half of the city’s homicides take place there, and it adjoins a shipyard that’s still being cleansed of toxic and radioactive waste. In Conway’s dream, lower- and middle-income families (defined as four-person households earning $145,650 or less) will have a secure place in such housing, while market-rate homes will continue to attract job-creating tech workers.

In some ways, this is a puzzling solution to the real-estate crisis. Wouldn’t moving more tech companies into the city drive prices even higher? Conway thought that maybe techies could be induced to put down payments on the homes of their poorer employees. “It’s not building anything, but it’s taking qualified people who can afford housing but not the down payment,” he said. “And that’s probably the least costly.” The effort would have to be conducted in an ad-hoc way in order to get it done—a good-hearted C.E.O. here and there stepping up and launching a project.

Yet there’s a broader difficulty in solving San Francisco’s problems through tech growth: the industry, which derives its competitive edge from efficiency, appears to be better at capital accumulation than at job creation. This is one reason, some economists think, that unemployment has remained more or less flat since 2000, even as productivity has continued to increase. An old-line company like Citigroup has some two hundred and fifty thousand employees; Facebook, which is worth more, employs about six thousand, and most tech startups are far smaller. (When WhatsApp was acquired by Facebook, for nineteen billion dollars, it had fewer than a hundred employees.) Tech has brought good jobs to San Francisco, but almost any other industry, charged with similar growth, would have brought many more.

This has been no secret to those in power. Nine years ago, Ted Egan, who is now San Francisco’s chief economist, was hired by the Mayor’s Office to plot a long-term economic path for the city. He recommended four measures that would mitigate rising inequality. The city should try to diversify its tech growth away from Internet firms to include industries like biotech, which supplies large numbers of both specialist and nonspecialist jobs. It should work on attracting big companies, which offer residents a range of jobs, rather than only small startups, which rest on the shoulders of a few founders. It should promote tourism more creatively, and focus more intensely on sustaining its blue-collar industries. Egan submitted his report. City Hall appeared to love it. Then, he says, it was filed away.

There are problems on both sides of the housing market, supply and demand. But demand is the much bigger issue. More from the above article:

“If you’re in a region that is adding jobs, you need parts of that region to be pro-growth to allow the housing supply to increase commensurate with the jobs,” Gabriel Metcalf, the executive director of SPUR, a pro-growth urban-policy think tank, told me. Building advocates like Yarne and Metcalf, who are friends, blame San Francisco’s public process for slowing down construction and driving up housing prices. John Rahaim, the Planning Department’s director, encourages such growth but shares the widespread opinion that it would take a huge amount of building—some people say around a hundred thousand new units, over a period of years—to shift San Francisco’s supply-demand curve.

Adding homes at the high end of the market could also entice more rich suburbanites into town. Supply-side urbanists like Metcalf and Yarne solve the problem by zooming out on the map. It’s O.K. if San Francisco vacuums in the most affluent elements in the region, they say, provided that greater San Francisco doesn’t remain a suburban hinterland. Yarne is fond of pointing out that the BART commute from downtown Oakland to downtown San Francisco is a lot faster than most streetcar commutes within San Francisco. Let’s have more of that, he says, and turn the Bay Area as a whole into a clean, efficient metropolis.

Ironically, "supply-side urbanists" fail to see the big picture.

Tuesday, July 22, 2014

Irrational Choice Theory: The LeBron James Migration From Miami to Cleveland

LeBron James migration as economic development at Pacific Standard magazine.

Theme: Return migration.

Subject Article: "God Loves Cleveland: Why LeBron James — unparalleled NBA genius, heir to Michael (and Larry and Magic) — went home."

Other Links: 1. "Miami Is Dying."
2. "Quality of Place and Migration."
3. "In Cleveland, Income Growth Without Population Growth."
4. "Unhappy Cities."
5. "LeBron: I'm coming back to Cleveland."
6. "Cleveland has been on the rebound even before LeBron James news."
7. "That New York City Magic."
8. "Let the People Go: The Problem With Strict Migration Limits."
9. "LeBron's Location Decision."
10. "Kool-Aid Man (Family Guy)."

Postscript: A few months back, I read about a critique of the push-pull model for migration theory. At first, it was unsettling. Push-pull is the crux of rational choice. One place is better (pull) than another (push). Long ago, I decided the push factor was nonsense. Migration is aspirational, all pull. However, push-pull assumes that places develop and then people. I do believe, I think that migration is economic development. Still, I struggled to reconcile that with the critique of push-pull. Reconciliation came in the form of realizing that migration had a bad image. Relocation is a negative outcome, not a positive one. If someone moves, then something must be wrong. In both LeBron James migrations, everything was right. What was wrong was (is) how we perceive his journey.

Wednesday, July 16, 2014

Not About LeBron James: Economic Restructuring in Cleveland

LeBron James moved back to Northeast Ohio because that's where the action is at Pacific Standard magazine.

Theme: Legacy Economy and return migration.

Subject Article: "Cleveland has been on the rebound even before LeBron James news."

Other Links: 1. "The Center for Population Dynamics: Reports and Blogs."
2. "The LeBron James Story Has Always Been A Tale Of Two Cities."
3. "Is LeBron James Now The Most Powerful Person In Cleveland? No -- This Guy Is."
4. "Eds And Meds Economic Geography."
5. "The Pseudoscience of Jane Jacobs and Innovation Districts."
6. "This guy is nuts (end of story) ..."
7. "Jane Jacobs: Why Urban Planning’s Legendary Heroine is Famous for a Reason."
8. "Illusion of Local: Why Zoning for Greater Density Will Fail to Make Housing More Affordable."
9. "Cleveland's healthcare jobs power shifting from hospitals to research labs."
10. "Captive Labor Markets and Migration."

Postscript: In Northeast Ohio:

The study found that the medical sector has grown by 20 percent since the turn of the century, adding 177,000 jobs and offsetting losses in other industries. Momentum stalled during the recession but Moody's Economy.com projects the industry will add another 6,000 to 8,000 jobs over the next few years, Team NEO reports.

I don't know how much of medical sector growth is of the diverging tradable sort. But those kind of jobs drive migration and are associated with brain gain (i.e. more people with college degrees moving into the region than leaving). Furthermore, tradable Innovation Economy jobs are converging. Cleveland didn't benefit much from "The New Geography of Jobs." But that world is getting less spiky by the day. Your choice: Cleveland rich, or San Francisco poor?"

Friday, July 11, 2014

Affordable Housing: Geography of Supply and Demand

The geographic scale of supply and demand matters at Pacific Standard magazine.

Theme: Globalization and gentrification.

Subject Article: "Bakken Oil Boom Brings Growing Pains to Small Montana Town: An influx of workers leaves housing scarce—and the jail full."

Other Links: 1. "Illusion of Local: Why Zoning for Greater Density Will Fail to Make Housing More Affordable."
2. "Why Foreign Money is Irrelevant to Increasing Density."
3. "Everyone's Moving to Seattle, and It's Stressing Out Sushi Lovers."

Postscript: A bit of demography and geography for Frederick County, Maryland:

County planning director Jim Gugel said the area’s relatively low cost of living has historically attracted people.

“One thing that drives people to move to Frederick County and the outer (Washington) suburbs is the cost of housing,” he said.

It was business opportunities that brought Eagar to Frederick. He is a manager at XeoHealth, a health care technology company that aims to simplify claims. The business set up its U.S. headquarters in Frederick, he said, because of its strategic location near the I-270 technology corridor and airports.

I think this is a good example of how the geography of supply scales regionally. I live in this area and I can see the rapid (and ironic) shift of economic geography away from the urban core. Along those lines, read about how the future of urban density is in the suburbs.

Wednesday, July 09, 2014

The Geopolitics of Gentrification

Making geopolitical connections to gentrification in the United States at Pacific Standard magazine.

Theme: Globalization and gentrification.

Subject Article: "Chinese Lead Way as Foreigners Step Up Purchases of U.S. Homes."

Other Links: 1. "Illusion of Local: Why Zoning for Greater Density Will Fail to Make Housing More Affordable."

Postscript: I'm interested to know if the EB-5 investment visa helped pave the way for non-visa related real estate investment. Betting geographer David Ley could tell me, "Transnational Networks of Business Immigrants Between East Asia and British Columbia."

Tuesday, July 08, 2014

Demographic Tale of the Tape: Vox vs. FiveThirtyEight

Matthew Yglesias fails demography at Pacific Standard magazine.

Theme: Ironic demographics.

Subject Article: "Map: The 25 cities nobody wants to live in."

Other Links: 1. "Population Shifts Had Nothing to Do With Cantor’s Defeat."
2. "Vox is our next."
3. "Fastest-Shrinking U.S. Cities: Detroit and other Michigan cities continue to lose population."

Postscript: A journalist screwing up demographic analysis is nothing new. But I have to wonder if Yglesias' poor grasp of demography influences his understanding of the relationship between zoning regimes and housing affordability. Greater density makes a lot of sense with such a superficial look at population change.