Friday, June 29, 2012

Salad Days In Des Moines

Turning around your city is a tough chore. Yesterday's bad news fuels the pessimists. With scarce inmigration, each person who leaves is magnified. Yet when the perception does change, the rebound gathers steam quickly. See Des Moines, Iowa:

The phrase “Des Moines is changing” has become a mantra in the past five years as the community has undergone a visual, architectural and cultural transformation right before our eyes. ...

... Perhaps the biggest accomplishment has been building the growing sense of pride in Des Moines. The event transforms the urban cityscape of downtown into a giant concert venue.

“It makes you interpret where you live in a different way,” Rossi said. “That kind of opens people’s eyes to other things that are possible. They perceive Des Moines in a different way.”

When residents see their community as a cool place with a cultural life capable of supporting 80/35, it creates an impression of their own home as a cool and dynamic place, a place you’d want to live.

Only a few years ago, city leaders understandably worried about the “brain-drain” that resulted in talented young folks leaving Iowa for more exciting cities.

“Everyone talks about how Des Moines is changing, and there’s so much potential,” Haverkamp said. “I think a lot more people believe in that now because they are seeing things happen.”

Emphasis added. The biggest problem I encounter in Rust Belt cities is the inability to interpret the urban environment in a different way. Generally, outsiders do that. It's a migrant thing. You see the world differently when you leave your hometown.

One doesn't have to migrate to think like a migrant. Perhaps Des Moines has unlocked that bit of wisdom. Or, a small group of outsiders saw something in the city that the locals couldn't imagine.

Thursday, June 28, 2012

Western New York Rising

Buried under decades of decline, the Economist reports green shoots in Buffalo and Rochester. The rebound is small compared to the overall malaise. Counter-trends have to start somewhere. More ironic demography in Buffalo:

One of the common things you hear from people is the phrase, "The young people are moving away." If our metro is so much like a repelling magnet, where are the young people seeking refuge locally?

Buffalo, of course.

To find the accompanying data, I used the Census Bureau's Profile of General Demographic Characteristics: 2000 and the Profile of General Population and Housing Characteristics: 2010. The first chart shows the median age of each county subdivision as listed by the Census. This means that there are not any villages listed below, but purely towns and cities.

As you can see, Buffalo (highlighted in purple in the righthand chart) is the only subdivision to become younger. A fair argument would be that -0.4 years is not very much. You could argue that Buffalo might not look like it is getting that much younger at all. Many of the places bordering Buffalo are under three percent, such as Amherst, Tonawanda (Town), Cheektowaga, and Lackawanna.

But wait a second, what's the median age in Buffalo again, compared to the rest of the county?

Oh yea, 33.2 years old. Who's close? - No one.

Like Cleveland, the overall story is shrinking city. There goes another decade down the brain drain. Also like Cleveland, there is hidden brain gain. The former narrative is receding, the latter one increasingly assertive.

The resident cynics and cranks are quick to dismiss the data as wishful thinking. Worse, the silver lining will somehow allow us ignore the doom and gloom desperately in need of repair. We must be vigilant or the status quo apathy will win the day. Instead, brain drain anxiety runs amok. Buffalo will remain a loser unless we aggressively promote bicycling and prove to recent graduates that downtown is cool.

Those in the know already realize Buffalo is cool. Rust Belt Chic, not Creative Class chic, will abate sprawl and put the city back on the national map. That's how I explain Buffalo, the urban core, getting younger.

Ironic Talent Attraction

The Iowa Test was one of the nationally standardized assessments I remember enduring as a child. I think it has fallen out of favor. I never encountered the exam once my family left Erie, PA in the late 1970s. The legacy of the experience informed a perception of Iowa as erudite and exceptionally literate. The geographic stereotype endures:

"We have lower unemployment because historically we have had high migration," says Dave Swenson, an Iowa State University economist. "We put the people we can to work. Those we can't, we say 'take a hike.' They don't leave because we don't love them. They leave because we can't use them."

"There is a tremendous amount of demand for Iowa-raised talent," he adds, with accountants, health care workers and other professionals relocating to Midwest cities such as Kansas City, St. Louis and Minneapolis.

Emphasis added. As the post-innovation economy continues to take shape, I expect talent producing hubs such as Iowa to benefit. Instead of firms located in Kansas City, St. Louis, or Minneapolis fighting over the state's human capital exports, businesses will cluster around where the talent is produced.

In early 2009, I noticed a story about IBM opening a plant in Dubuque, Iowa. The thinking was that this would give IBM a competitive advantage in securing scarce talent. A harsh critique of the practice that helps to further the understanding of the strategy:

Work that stays onshore is mainly sent to what are called Global Delivery Facilities (GDF’s), two of which were created at heritage IBM locations (Poughkeepsie, NY and Boulder, CO) while starting new ones in Dubuque, IA and most recently Columbia, MO. IBM’s public position is they are creating jobs in smaller towns when in fact they are displacing workers from other parts of the US by moving jobs to these GDFs or to offshore locations.

In the case of Dubuque and Columbia, IBM secured heavy incentives from state and local governments to minimize their costs in these locations and are achieving further savings by paying the technical team members, most of whom are new hires or fresh college grads with no experience, a fraction of what experienced support personnel would require.

The Dubuque facility is characterized as a high-tech sweatshop. Furthermore, the efficacy of the novel choice of location is in doubt. Whatever the case, I see more evidence of the Innovation Economy diffusing instead of agglomerating.

In "The New Geography of Jobs", Enrico Moretti explains the long cycle of an economy. Forces of agglomeration and rising wages are features of the increasingly dominant economy. Forces of diffusion and lower wages indicate a waning economy. Has the Innovation Economy reached a tipping point? Evidence to the contrary:

The new migration follows a long period in which San Francisco lost residents to states such as Arizona and Nevada, which offered jobs, cheaper housing and warmer weather. During the decade that ended in 2010, an average of 9,000 people a year left San Francisco for other parts of the U.S., according to California's Department of Finance. The city of roughly 800,000 continued to grow due to immigration from abroad. But in the fiscal year ended last June 30, net domestic outflow fell to 3,400 people, the best performance since fiscal 2000.

While there are no migration data for late 2011 or this year, employers and economists say the renewal of San Francisco's tech scene is luring many workers from elsewhere. Local tech companies including Zynga and Twitter Inc. have expanded in San Francisco, and many techies who work at Facebook Inc., Google Inc. and Apple Inc., in Silicon Valley to the south, are opting to live in the city, too.

Agglomeration, right? Not so fast. The decline in net domestic outflow may be a function of the recession. More people stay put during a downturn. Also, parts of Silicon Valley are diffusing to downtown San Francisco. Regional residential patterns are shifting. Richard Florida looks at the "the new geography of technology centers":

Seattle takes first place, besting Silicon Valley, which ranked on top on the original 2002 version of the index. This is not as surprising as it might seem. Seattle is, after all, home to Microsoft, Amazon, and many other high-tech powerhouses.

Silicon Valley (that is the San Jose metro) takes second, followed by the greater San Francisco metro, which has gained ground as large numbers of key high-tech talent and firms have come to prefer more urban locations, such as Twitter, Zynga and Salesforce.com.

Over the course of a decade, Seattle has displaced Silicon Valley as top dog. However, the list is full of the usual suspects that Moretti mentions as on the good side of the Great Divergence. There is no Dubuque surprise.

I think the main takeaway is the shake up in hierarchy. There are cost savings to be had in the other places not named Silicon Valley. 2002 and the publication of "The Rise of the Creative Class" look more like an apex than the ushering in of a new era. By that year, the forces of agglomeration behind the Great Divergence (the concentration of people with college degrees in a few places) are at least 30-years old. How long is the Innovation Economy's upward trajectory supposed to last?

The boom in Pittsburgh portends the coming earthquake. There's a Great Divergence within the Rust Belt. For the period of 2000-2008, Pittsburgh was one of the top-10 (#3) gainers in college educational attainment. Worcester (#1), Baltimore, Indianapolis, Akron, and New Haven also make the cut. Relevant to the this post's introduction, Des Moines, Iowa was good enough for 10th best. These new winners are indicators of diffusion, not agglomeration. The Innovation Economy is spreading out, now reaching the old industrial superpowers that have long been on the wrong side of the Great Divergence. Traditional talent exporters are the kings of the next economy.

Wednesday, June 27, 2012

Pittsburgh Hot American City Of The Future

****Correction: Please see comments for clarification regarding the Praxis Strategy Group's Pittsburgh and Denver report. Looks like the Tribune-Review invented some content that I repeated here at Burgh Diaspora.****

"Pittsburgh, PA, will become the next hipster haven." Why? Click on the link:

With its affordable housing, thriving student population, emerging arts and hip-hop scene, and fast-growing job market, Pittsburgh is quickly becoming the newest hipster haven.

Emphasis added. I started blogging about Pittsburgh and brain drain six years ago. At the time, I couldn't have imagined that I would live to read such a claim about my favorite dying Rust Belt city. Fast-growing job market?

Indeed, Pittsburgh's rapid transformation over the lifespan of my blog is staggering. Unbelievable. Which brings me to a sensational claim I made to a writer for Salon:

“I’ve been saying to people in Pittsburgh for years, ‘What Seattle was in the ’90s, you’re going to be that big.’ And they’d laugh. But the data show it,” says Russell. “The editor of the Pittsburgh Post-Gazette keeps saying the biggest problem in Pittsburgh is brain drain. And I’m like, you’re 20 years too late. Why are you torpedoing your own in-migration? When you’re running around saying you have a brain drain problem, what you’re saying to the world is, ‘We’re a loser.’ But if you can convince people the data are true as opposed to the mesofacts, then you open the sluicegates.”

Consider the sluice gates wide open. Don't pay attention to the nonsense warning about the population numbers coming from the Praxis Strategy Group. This turnaround doesn't deserve an asterisk. Yesterday's decline isn't a good predictor of the future.

Seattle is a great analogy for Pittsburgh. In "The New Geography of Jobs", Enrico Moretti traces the divergence of Seattle and Albuquerque. From the book:

Today most people think of Seattle as one of the most pleasant cities in America, weather aside. But when Microsoft moved there in the late 1970s, the crime rate was significantly higher than Albuquerque and there were 50 percent more robberies per capita. The quality of Seattle schools was mixed, museums were run-down, and the culinary scene, now so interesting and eclectic, was unremarkable. ...

... Just a few years earlier, The Economist had labeled Seattle the "city of despair." In an article on the alarming decline of the local economy, its correspondent reported that "the country's best buys in used cars, in secondhand television sets, in houses, are to be found in Seattle, Washington. The city has become a vast pawnshop, with families selling anything they can do without to get money to buy food and pay the rent." Expectations about the future were so low that a giant billboard appeared near the airport saying, "Will the last person leaving SEATTLE - Turn out the lights."

Fast-forward to 1989:

Pity Seattle? Or pity Pine Bluff, Ark.? The new edition of Places Rated Almanac lists Seattle as the most livable city in America, No. 1 out of 333 American metropolitan areas surveyed. Pine Bluff is No. 333, after ranking third from the bottom in 1981 and second from last in 1985.

Seattle folk are not so sure that being No. 1 is all that terrific. The city has been touted in a number of surveys in recent years as a wonderful place to live. Thousands of people have been flocking there, more than a few of them from California. Now, Seattle has slow-growth groups trying to control congestion and development and discourage more newcomers.

Seattle went from city of despair to most livable in about a decade. Of course, Microsoft had a lot (if not everything) to do with that. Microsoft moved from Albuquerque to Seattle because the founders of the company (Bill Gates and Paul Allen) grew up there. Seattle's subsequent boom was dumb luck.

Pittsburgh's boom is anything but. There isn't a Microsoft underwriting the dramatic change in fortune. The demographic devastation of the 1980s has taken decades to unwind. It's still unwinding. Despite the strong headwinds, the regional economy started to pick up steam about 5-years ago and powered (relatively speaking) through the recession. I suspect the handwriting was on the wall when Whole Foods opened (2002) in East Liberty. That makes today's "hipster haven" headline a 10-year journey out of a Seattle-like darkness. Rust Belt Chic is the new grunge.

Monday, June 25, 2012

How Return Migration Will Save The World

I'm prominently featured in Will Doig's latest "Dream City" column over at Salon. The title of the piece ("Moving home: The new key to success") and the use of the term "boomerang" are unfortunate. Shacking up in your parents' basement while weathering the economic downturn is not what I have in mind. That's not a knock on Doig's work. In my opinion, the story turned out well. Return migrants are "quietly making an impact on cities."

Three questions arise from the claim:

  1. What kind of impact?
  2. How much impact?
  3. What's in it for the return migrants?

Before this whole return migration narrative gets away from me, I want to address the rise and fall of Creative Class theory (hat tip Brian Kelsey @ Civic Analytics). Richard Florida has many critics. Frank Bures recently sums up the most damning:

Today, Cre­ative Class doc­trine has become so deeply engrained in the cul­ture that few ques­tion it. Why, with­out any solid evi­dence, did a whole gen­er­a­tion of pol­icy mak­ers swal­low the cre­ative Kool-Aid so enthu­si­as­ti­cally? One rea­son is that when Florida’s first book came out, few experts both­ered debunk­ing it, because it didn’t seem worth debunk­ing. “In the aca­d­e­mic and urban plan­ning world,” says Peck, “peo­ple are slightly embar­rassed about the Florida stuff.” Most econ­o­mists and pub­lic pol­icy schol­ars just didn’t take it seriously.

This is partly because much of what Florida was describ­ing was already accounted for by a the­ory that had been well-known in eco­nomic cir­cles for decades, which says that the amount of college-educated peo­ple you have in an area is what dri­ves eco­nomic growth, not the num­ber of artists or immi­grants or gays, most of whom also hap­pen to be col­lege edu­cated. This is known as Human Cap­i­tal the­ory, men­tioned briefly above, and in Hoy­man and Faricy’s analy­sis, it cor­re­lated much more highly with eco­nomic growth than the num­ber of cre­ative class work­ers. “Human cap­i­tal beat the pants off cre­ative cap­i­tal,” Hoy­man said. “So it looks like growth is a human cap­i­tal phenomenon—if you’ve got a lot of edu­cated peo­ple. We’re in a knowl­edge econ­omy, where human cap­i­tal is worth a lot more than just show­ing up for work every day.” In other words, if there was any­thing to the the­ory of the Cre­ative Class, it was the pack­age it came in. Florida just told us we were cre­ative and valu­able, and we wanted to believe it. He sold us to ourselves.

Emphasis added. Those two paragraphs do not do the essay justice. Throughout, I was all agog for the next sentence. Upon finishing, I was filled with dread. What if boomeranging back for Rust Belt Chic becomes the next empty promise of economic revitalization?

"Jim Russell said moving to Braddock is the new key to success. I read it in Salon."

The difference is that I'm not offering a new theory. I'm using established migration theory to better understand how talent moves and relates to economic development. Pittsburgh's population is declining but college educational attainment rates are rising fast. What gives?

Over the weekend, I finished "The New Geography of Jobs" by Enrico Moretti. I wanted to disagree with his arguments. I expected to dislike his book. Instead, I find a theoretically rich text that makes me rethink how I understand talent migration. I highly recommend reading it, especially if you are interested in economic development and innovation.

I can take what I've learned from Moretti and apply it on my next project. I'll never have all the answers. Sorry, I'm out of silver bullets. Today I'm right. Tomorrow I'm wrong. But there is something interesting going on with return migration, in the Rust Belt and around the world. We need to better understand its impacts and how it can improve our communities.

Friday, June 22, 2012

Media And Migration

As I have amply documented, journalists help to propagate the brain drain myth. The fallout from such sloppy reporting can be disastrous. Economist Michael Clemens back in February about a UK Minister's misreading of research into possible links between unemployment and immigration:

But the minister’s myth propagates anyway, with help from a docile press. The BBC article on the minister’s speech, for example, simply quotes the minister’s false interpretation of the MAC report, without qualification. The article does not bother to interview any of the MAC report’s authors, who could clarify what they did or did not say. The BBC article does bother to interview anti-immigration activist Sir Andrew Green, who (shocker!) shares the minister’s sadly fictional interpretation of the MAC report.

The posting date for the BBC article is February 2nd. Fast forward to today. The leader of the Labor Party, Ed Miliband, talking about the damage immigrants had done:

“It was a mistake not to impose transitional controls on accession from eastern European countries,” he said. “We severely underestimated the number of people who would come here. We were dazzled by globalisation and too sanguine about its price.”

What is the "price"?  More from the same article:

Referring to the former Labour prime minister’s slogan, he said he would not promise “British jobs for British workers” but warned that the country needed to be mindful of regions and sectors where local talent had been locked out of job opportunities.

Emphasis added. Perception is now reality. A false interpretation drives policy. Politicians will pander. I understand the efficacy of banging the drums of xenophobia. But that doesn't absolve complicit members of the media.

Pointing the finger at the media is easy enough. Lack of due diligence isn't the crux of the problem. The issue is territoriality, place-centric thinking. Brain drain anxiety and anti-immigration are two sides of the same coin. Home, Heimat, is threatened. Migration restructures our spatial relationships. That assault is much bigger than good social science research.

Thursday, June 21, 2012

Quality Of Place And Migration

I'm not a fan of placemaking strategies and place-centric economic development. I get downright angry when I see the two approaches linked to talent retention. The Martin Prosperity Institute promoting boondoggles in Detroit:

The major issue for Detroit’s technology and talent is retaining and further attracting talent. A recent study on Detroit by Sumeet Ahluwalia, Rikki Bennie, Brett Henry and Graham Macdonald, sheds light on the issue of retaining talent in Detroit. A Brain Drain/Gain index was applied to Detroit, which displays whether an area loses its educated population after graduation, or gains educated individuals. Detroit was found to be in a brain drain situation as many issues such as living conditions are deterring well-educated people from staying in Detroit. This is not due to a lack of schools or students as Detroit has a high college, graduate and professional student population. Retaining talent has become an issue and certain companies in Detroit are finding that the number of qualified students graduating into the region is not keeping up with the open opportunities, according to a 2011 Bloomberg report. Here lies one of Detroit’s biggest challenges, which is providing better quality of place for residents.

Emphasis added. Well-educated people are leaving high quality places all over the country in large numbers. Detroit needs to attract residents, not retain them. The advice offered is bad, counterproductive. It will undermine economic development.

The best places have the highest rates of outmigration. They are economically vital. The churn lends itself to diversity, tolerance, and innovation. Successful retention will inform the exact opposite. People develop, not places.

Tuesday, June 19, 2012

Eurozone Crisis Migration

Demography Matters tackles the migration fallout from the Eurozone crisis:

Mass migration from peripheral countries in the Eurozone--the Portugal-Italy-Ireland-Greece-Spain combination often cited in the press--seems inevitable. Critically from the perspective of these five countries, all save Ireland have had very low rates of net population replacement from the 1980s on. The emigration of so many people from these countries--often the young, often the talented--is going to have serious effects on the long-term futures of these countries, just as it may benefit (if all is handled well) the countries in northern Europe and elsewhere receiving these migrants.

Thoughts?

I figured I would respond with a post of my own. If periphery outmigrants follow historical pathways (most likely), then I see trouble. Much of the talent would stay within the Eurozone (e.g. Greece-to-Germany). This is akin to kicking the proverbial fiscal can down the road. The periphery should engage in a riskier migration:

Then, as the conversation inevitably turned to the latest eurozone horrors, Oliviera made a plea. “There is such high unemployment in Spain and Portugal, they should send their people over here [to Brazil] to get work – they can work and then send money back home [to Europe] and then go home themselves after 10 years!” he earnestly explained. After all, he added by way of example, Brazil currently needs about 60,000 engineers a year – but only 40,000 are graduating inside Brazil. So why not get those European engineers, or other young graduates, to travel as migrant workers? “We have a need for 20,000 more engineers! We have a need for migrants!” he explained. Why not use Latin America as a source of remittances for eurozone families starved of cash?

Exporting talent helps to forge strong trade linkages. Any remittance flow would be gravy. Germany can't offer the growth opportunities that Brazil (or Mexico) can. Heck, I would encourage graduates from Boston universities to leave the States and hit up Sao Paulo. The return on investment is so much better there than anywhere else domestically.

We are so focused on the fact that people are leaving we don't pay attention to where they are going. It matters. A story I read this morning:

Perhaps Michigan will benefit from the worldly experiences our youth gain elsewhere, if the magnetic pull of Pure Michigan can draw them back someday.

I met one such young man, Dan Redford, in his senior year at Michigan State University. He flew the coop and now makes his home in Beijing, China. ...

... At some point in the future, Dan Redford will return to Michigan and our state will get its ROI (return on investment) from his global experience and perspective.

Not all global experiences and perspectives are equal. Mr. Redford is from Frankenmuth, MI. I've never heard of the place. When he left town for Michigan State, that was brain drain for Frankenmuth. When he moved to Beijing, that's brain drain for Michigan and the United States. The smaller the scale of territory, the bigger the ROI for landing in Beijing.

Hypothetically, let's say Redford graduates from MSU and moves to Portland. He hears that it is a fun city. The United States retains the talent. But Frankenmuth and Michigan still suffers from brain drain. The Portland experience and perspective aren't as valuable as the one in Beijing. The migrant's and everyplace concerned, save Portland, just got poorer. China Dan is a much bigger win for Frankenmuth and Michigan than Portland Dan.

Pittsburgh Chef Celebrates Rust Belt Chic

Rust Belt Chic neighborhoods are hot right now. Talent is attracted to these landscapes. For example, consider North Shores Collinwood in Cleveland:

Rather than open one new restaurant in the underperforming neighborhood, Glazen is working with multiple parties to simultaneously launch five — instantly turning the area into a destination.

"I'm calling it Project Light Switch," says the 62-year-old owner of ABC Tavern, XYX the Tavern, and Viaduct Lounge. "I'm so excited about the idea of the best people in the city combining to go turn on a neighborhood."

While far from a sure thing — Glazen puts the odds at around 30 percent — the obstacles continue to melt away. Glazen has spoken to all of the city's best chefs and operators, many of whom have expressed a desire to be a part of the project. Those chefs include Michael Symon, Jonathon Sawyer, Steve Schimoler, and others. Real estate deals are all but done on five separate spaces in the immediate area.

Regarding superstar chefs, Cleveland has a big edge over Pittsburgh. Concerning Rust Belt Chic, Pittsburgh gets the nod. Renown chef Kevin Sousa is opening up a restaurant in underperforming (to put it mildly) Braddock:

It will be called Magarac. The name -- Croatian for donkey -- honors the imaginary Croatian steel worker who is the Paul Bunyan of steelmaking, and is embodied in a statue at the hulking Edgar Thomson Steel Works in North Braddock.

The ironic location of the new eatery is only half the story. Sousa is moving his entire family from Polish Hill to Braddock:

"Braddock gives me the vibe," Mr. Sousa said. "It's on the cusp of something. It's where Lawrenceville was 15 years ago."

Sousa is beating Whole Foods to the punch. Go ahead and call it ruin porn or exploitative gentrification. Then get out of our way. We've got work to do.

Narratives And Migration

A good story drives migration. The truthiness of the tale isn't important. If a large number of people buy in, then game on:

One factor driving the trend toward downtown and away from suburban markets is what Cushman & Wakefield calls a "reverse migration" that has large organizations moving back to downtown cores.

"There is also a desire to attract and retain the top talent that is increasingly moving in to urban centres, and increasingly looking to work, live, and play in the city," it said.

I'm not convinced that moving an office downtown will win the war for talent. What I think is irrelevant. Firms are leaving suburban Canada for the urban core. At some point, businesses remaining in the suburbs will be at a real disadvantage. Innovative workers are more vital than inexpensive real estate. Toiling in the burbs is for losers.

Go ahead and dig up the numbers. The suburbs aren't dying! Your story has already sunk.

Monday, June 18, 2012

Ironic International Economic Development

Image matters. Perception shapes reality. Pittsburgh's boom shouldn't surprise anyone. Buoyed by a shrinking population, the urban landscapes of the movie "Deer Hunter" are still fresh in our minds. One can find plenty of real Rust Belt examples to justify contemporary condemnation. The Mon Valley remains on the periphery of globalization. Thus, Pittsburgh is no Seattle.

Mexico is no Brazil. Brazil is part of BRIC. Mexico is a drug lord war zone with millions of workers streaming over the border to the United States. The story:

“Brazil has had two powerful narratives,” said Gray Newman, an economist for Latin America at Morgan Stanley. “If you believe in China, you believe in Brazil. That counted for a lot. The second narrative is that ‘We’ve become a normal country and created the conditions for the emergence of a middle class.’ Those narratives are so powerful.”

Mexico’s story has not been as positive, Mr. Newman said, with its fortunes tied to the United States and the government engaged in a war against powerful drug gangs. Even with the tide turning in their favor, Mexicans are so gloomy they do not see it, analysts say.

Emphasis added. Even with the tide turning in their favor, Pittsburghers are so gloomy they do not see it. As Mexico vs. Brazil demonstrates, narratives matter. And for all the love that the US Chamber of Commerce showers on Pittsburgh and Denver, we're still left with this junk:

Despite the growth of jobs here, annual population figures are either flat or growing slowly, the report warns.

"Pittsburgh's new challenge is not in stemming an outflow of residents, but in improving its performance in attracting new ones," it said.

The cause for celebration is job growth. Is this not the best way to improve performance in attracting new residents? I gather that the Praxis Strategy Group wrote the report. I've been unable to find a copy online. The warning is meaningless, a rehash of the old narrative. It's vapid.

Without robust population gains, Pittsburgh is Mexico. Mexico can surpass Brazil in every economic metric. As long as murders associated with the drug trade continue to dominate the headlines, Mexicans are still invading America. No one will believe the job growth happening right in front of them.

Flat World Of Innovation

Geography matters more than ever. The world is flat. These two sensational claims aren't mutually exclusive. At the top of the urban hierarchy, between global cities, the world is flat. The forces of agglomeration are annihilating distance. As economic globalization diffuses, CBDs further down the urban hierarchy join Flat World. Fast Company with the emerging geography:

New York, yeah. Silicon Valley, of course. But Greenville? Cleveland? Baltimore? These cities are famous for many things. Their lively tech scenes aren’t one of them. Yet as we’ve revealed in a series of articles over the past few months, some of the most innovative businesses and ideas are springing up in the least likely places. The reasons for the shift are complex and differ from one city to the next, but in many cases, they boil down to this: The Internet has lifted the cost and geographic barriers of starting a business. That, combined with the proliferation of local incubators and other support networks, has freed entrepreneurs all over the country to innovate, and take risks, without losing their shirt. Barriers remain: Talent still hugs the coasts and funding can be woefully hard to snag, even for the most dogged entrepreneurs. But the momentum persists. Who knows? Maybe the next Facebook will emerge from Phoenix, Arizona, or Grand Rapids, Michigan.

Barriers are lowering. Barriers remain. The two drags on the Flat World of innovation are talent migration and venture capital flows. As distance increases, so does the perception of risk. We go where we know. We invest in whom we know. Diaspora networks are one great exception to these rules. Talent and money flow all around the world, geography be damned.

Transnationals are the agents of diffusion for globalization. Talent leaves, ideas and foreign direct investment are sent home. Two places are linked. Proximity doesn't matter. I've observed the same phenomenon in play for Rust Belt cities, namely Pittsburgh, Cleveland, and Youngstown. Ironically, brain drain is fueling the Rust Belt resurgence. Talent connectivity with New York, Silicon Valley, and Chicago is informing the innovation boom Fast Company notes going on in Cleveland:

“When you think of startups, you tend to think of what the popular press covers, Facebook and really young firms,” Dearborn says. But focusing on sexy young things can miss an enormous swath of potential innovators with experience under their belts. JumpStart’s average applicant is in his mid-40s and out of traditional industry--not necessarily your hip-innovator profile, but definitely undervalued.

Many of these older entrepreneurs bring ideas that were the results of recreational tinkering, either at the lab or the factory: useful innovations their bosses deemed either too small-potatoes or too off-industry to pursue, Dearborn says. Others walk in the door with their early-retirement package in hand, looking to fund phase two of their careers. “Older workers bring not just experience with them, they bring a whole network of people” to realize the idea, Dearborn says.

Emphasis added. When return migrants come back to Cleveland from New York, "they bring a whole network of people" from the biggest hub of globalization. The two barriers to the Flat World of innovation are overcome with talent churn.

Like international brain circulation, Rust Belt return migration is transforming the economic geography of the United States. The rise of Rust Belt Chic is indicative of this trend. Now the appeal of the urban frontier attracts more than just wayward natives. Talent magnets (e.g. Portland) are yielding the stage to talent producers (e.g. Cleveland).

Friday, June 15, 2012

Rust Belt Resurgence: World Is Flat

You've received the memo about Rust Belt Resurgence. What do you make of the trend? How is US urban geography changing? How watching HBO is doing your homework:

In a recent episode of HBO’s Girls, Hannah, the character played by show creator Lena Dunham, has a late night phone chat with her sorta-boyfriend during a pilgrimage to her hometown of East Lansing, Michigan. The most notable thing about her trip isn’t that she’d just had sex with another dude, but that said dude had a giant apartment. "Why doesn't everyone who's struggling in New York move back here and start the revolution?” she muses. “It’s like we're slaves to this place that doesn't even really want us." ...

... Hannah does have a point about East Lansing. The jobs crisis has caused young people to thumb their noses at the biggest cities and move to places like New Orleans, Austin, or the Rust Belt to save money, help with revitalization efforts, or become a big fish in a small pond—a far more aggressive (though perhaps more constructive) form of gentrification than my move up to Harlem.

Many people who move to cheaper cities have no sympathy for those of us who can’t afford decent lives in places like D.C. or San Francisco or Boston. A commenter on a recent piece about a young, privileged woman applying for food stamps suggested the writer move out of the "hyper-saturated market" of New York. "I think society should subsidize people's lives, but not their dreams," he wrote. "Maybe you should just move to Omaha and sell real estate."

Emphasis added. I blogged about "Hannah" talent economics back in April. The expense of living in New York is a function of having to be there. There is no alternative. The world is spiky.

Living in a big, global city has been expensive for awhile. Gentrification opportunities are still abundant. The Rust Belt has always been cheap. Then why does Hannah's story seem new?

The world is flat. We are finally getting used to the idea that we don't have to be in New York. The freelancer boom:

“The network transforms the locus of work from the desktop to the human,” said Fabio Rosati, the chief executive of Elance, which has over 500,000 active contractors worldwide. “You don’t need physical infrastructure to be anywhere. You need a new workplace.” By 2020, he thinks, one in three workers will be hired online, perhaps never to meet an employer or work in a company building.

Better to be a member of the 1099 economy in Cleveland than Brooklyn. In Ohio City, Hannah can own her own hip Victorian and carve out a career as a writer. Talent continues to stream to NYC out of habit. And yes, as the NYT article elucidates, flatworlding is still small and emergent. It's also on HBO.

Tuesday, June 12, 2012

Rust Belt Reboot: Buffalo

I was pleasantly surprised to hear my own voice yesterday on NPR's "Morning Edition" show for the story about Cleveland's resurgence. I believe the quote came from an interview I did last year while at the Global Cleveland Summit. Whatever the case, the timing was impeccable. I was touching up a presentation for some research Richey Piiparinen and I have done concerning Latino migration to Northeast Ohio. I thought the board of Global Cleveland might be interested in how we unearthed the hidden migration to Cleveland's urban core. (We used the same methodology to infer Latino migration patterns.)

I flew into Cleveland early last Saturday with the downtown rebound in mind. I wanted to see if the view from the sidewalk matched the data analysis. Leading up to the business trip, I was semi-joking with Richey that Cleveland was turning into Portland, OR. Investigating the West Side, I quipped that Cleveland was already Portland. I was (am) dead serious.

Sunday night, I had dinner with the person who hired me to craft the boomerang migration strategy for Global Cleveland. Kauser Razvi (Strategic Urban Solutions) is a treasure trove of thoughts and ideas about where US cities are heading. She mentioned something about Whole Foods being a leading indicator for neighborhood revitalization, whereas Starbucks is a lagging indicator (moving in after gentrification). I suspect (haven't confirmed) that she was referring to this ditty in Salon:

If you ask Whole Foods why it’s breaking ground on a store in Midtown Detroit this month, it’ll say it wants to be part of “an incredible community” and “make natural foods available to everyone.”

And that may be. But it’s also true that the Austin, Texas-based retailer has made a science of putting down roots in urban locations at what often seems to be just the right moment. In Washington, D.C., near Logan Circle in 2000, Uptown New Orleans and the East Liberty section of Pittsburgh in 2002, Boston’s “Latin Quarter” in Jamaica Plain in 2011 — areas that other specialty grocers might have considered unworthy of goat cheese and ostrich eggs, but that were actually on the verge of a boom that, lo and behold, kicked into high gear as soon as Whole Foods moved in.

Emphasis added. Did Whole Foods do a simple cohort analysis to get in front of the trend? That's tough to say. Whole Foods is, itself, a force of gentrification. However, there is a clue in a different part of the Salon post:

“Before a Whole Foods goes in, if there’s not much private investment in that district, there’s no data for developers to look at,” says Reid.

Whole Foods fills that data void. The financial capital starts flowing. The East Liberty bet way back in 2002 is telling. Pittsburgh? These were the days of Richard Florida telling tales of CMU grads leaving in droves for Creative Class cool Austin. WTF, Whole Foods?

Like Richey and I did for urban core Cleveland. As Ben Winchester has illuminated brain gain in rural Minnesota. There are numbers beneath the bad numbers, hiding vital migration. Whole Foods found opportunity. We see trends the rest of the world is missing.

Enter Gregory Conley and "a smarter, wealthier" Buffalo:

One of our more modern nicknames for Buffalo is the City of No Illusions. However what I see is that there are people in and around this city perpetuating a damaging illusion of failure and mediocrity. When in actuality, Buffalo is on the verge of a comeback. It's not a Detroit. It's a Pittsburgh.

This is a cliché. With data access so easy these days (cue Aaron Renn's Telestrian), everyone is a demographer. Nothing will shut up the negative nabobs. NPR isn't listening to them. Neither are prospective migrants. DIY geographic analysis is akin to the Whole Foods Effect. Talent attracts talent. Now is a good time to move back to Buffalo. Did you catch those pretty maps?

There's more. The most surprising "overheard in Cleveland" moment came on Monday afternoon. I'll paraphrase. An outsider who moved to New Portlandia wished out loud that she could claim to be a native daughter. Wouldn't it be cool to be Rust Belt Chic?

Thursday, June 07, 2012

Kickstart Rust Belt Chic Youngstown

Way back in 2008, I met Hunter Morrison, Phil Kidd, and John Slanina in Erie, PA for a Rust Belt Bloggers Summit. The three made the journey from Youngstown and enticed me to come back with them and see the city. My initial reaction to the visit:

My imagination ran wild as I took stock of the Youngstown's numerous assets. Mill Creek is a park located within walking distance of downtown. Beautiful large houses and even mansions surround the park. I envisioned biking through the park from my home to downtown, where I worked for a start-up located in one of the grand buildings currently being renovated. The park should be extended to the doorstep of downtown to encourage such a commute and entice the students to come down from Youngstown State University (YSU) to recreate in Mill Creek. YSU is mostly a commuter campus and I would put all the parking at the downtown entrance of the park.

The parking lot suggestion didn't go over too well with the urbanist crowd. Thus ended my brief career as a city planner. Youngstown State University is within easy walking distance of downtown Youngstown. But it might as well be 1,000 miles. That chasm must be bridged. Much has been done already on that score. The city needs more ideas and action. Almost 4-years later after I met him, Mr. Bacon is Johnny on the spot:

Six graphic design students at YSU have created a mural they want to put up on the windows of the Youngstown Business Incubator in downtown Youngstown as part of the city's revitalization.

The project is costly and the students are asking for the public's help to raise the necessary funds.

John Slanina of the Youngstown Business Incubator said the students came up with the idea to improve the streetscape of downtown. He said when the students approached YBI with the pictures, they were "stunned" at what the students were proposing.

The mural is 70 vinyl panels measuring more than 300 feet long and will cover three storefronts. Slanina said 40 companies use the space in the three YBI buildings, and 13 have physical offices there, so the project will impact 350 employees.

The project's theme is the "metamorphosis of downtown Youngstown" and the mural features bright, vivid colors depicting butterflies, flowers and the jungle.

The students are trying to raise $7,350 for the project by June 29 and as of Wednesday evening, they had $2,887 in pledges. Money has been collected from all over the world, Slanina said.

My own take is that this Kickstarter project is an inexpensive way to increase the connectivity between downtown Youngstown and the university campus. The students (and their professor) are civic entrepreneurs. The Rust Belt urban core is their classroom. You can revitalize your community without spending millions of dollars (see my above vision for Youngstown). That said, the idea does cost some money. The video for the Kickstarter proposal (click on this link to fund it):


Wednesday, June 06, 2012

Logistics Pittsburgh

Blog post title not catchy enough? How about "From Rust Belt to Exporting Giant"? That got me to click through. Pittsburgh is at the center of three major corridors. I like to write about the DC connection. Chris Briem (Null Space) is Mr. Cleveburgh. The third leg that I have almost completely ignored is featured in the latest issue of Global Trade (click on that title if you haven't already):

Sister cities along the Ohio are booming. Greater Cincinnati ranked 16th on the ITA's list of top exporters, shipping $17.6 billion in 2010. The Pittsburgh metropolitan area ranked 20th and exported $17.6 billion (sic). Meanwhile 39th-ranked Louisville shipped $6.2 billion. Among the top metropolitan exporters, Pittsburgh was one of the fastest growing, with merchandise exports between 2009 and 2010 growing 46 percent over this period.

Emphasis added. The dollar figure for Pittsburgh's exports is incorrect. It should be $12.2 billion. That bit of fact checking dispensed, what a fabulously glowing review of Pittsburgh's and the Ohio River corridor's exporting prowess. There must be a bunch of people involved in economic development exchanging high-fives over the piece. I might have picked the most boring and subdued passage. Seriously, read it.

More relevant to my blog, check out this part of the article:

“The pioneering things that have happened in the region the last several years make it more attractive for young people who might have left to come back,” says [Lucas Piatt], at age 35 representative of the development’s target demographic. “Pittsburgh is an attractive urban environment now, and we are competing for young people who might look at Boston or New York to look here. Industries are coming back, jobs are coming back, and people are coming back. Our developments are for people who want the hustle and bustle, who like the excitement of living in a place like New York or Boston.”

While people “laughed at us” a few years ago for investing in downtown development, Piatt says, no one is chuckling now. Rather, Millcraft’s developments have waiting lists.

“After 20 years of people leaving the region,” he says with pride, “now they are coming back.”

Pittsburgh isn't just faring relatively well. It is booming. Over the last week, I've thought a lot about boomtowns coming out of the recession of the early 1990s when I was a young adult trying to find work. Two cities were rumored to have jobs-'o-plenty, Minneapolis and Seattle. I had luck in Minneapolis. I got a firsthand look at Seattle over a year later. The other hot destination floating around the nomad circuit was Austin. I didn't hear much about employment, but the scene was outstanding (think Portland, OR). What would be the analogous three today?

Seattle's clone is easy. Pittsburgh. Right now, Pittsburgh is booming like Seattle was. More from that gusher in Global Trade:

In Pittsburgh, young graduates of top-rated local schools like Carnegie Mellon create video games for global markets, an export category rising fast toward the levels of historical export leaders like mining and metal products.

Oh, yeah! I'm drinking the Kool Aid today. And just to let Chris Briem know I'm still reading his Twitter feed:

A Disney spokesperson tells me that Jessica Hodgins now oversees the Disney lab in Cambridge. Based in Pittsburgh, she also oversees Disney labs there and in California. Jonathan Yedidia is the lone senior researcher still working at the Disney lab, though there are a trio of professors who work as consultants, along with a cadre of post-doctoral researchers and interns.

Not a coincidence that the US Disney labs are run from Pittsburgh. Did you hear about the animation studio cluster? Did you catch the trailer premier on the MTV awards show for that new Emma Watson flick? Pittsburgh is a hot commodity.

Now for the disappointment. I don't have a good analogy for Minneapolis and Austin. Any suggestions?

Tuesday, June 05, 2012

US Geography Of Economic Divergence

Not that the Rust Belt-Sun Belt (high tax-low tax) dichotomy ever made much sense to me, but US regional geography is in the process of exploding. Economist Enrico Moretti tackles the task of defining the emerging landscape in his book, "The New Geography of Jobs". I hope to read it myself over the course of my business trip to Cleveland this coming weekend. For now, I'll settle for digesting the reviews:

Not coincidentally, by 1990, Moretti writes, the difference between the Albuquerque and Seattle in the number of workers with a college education had grown to 14% and in 2000 to 35%. Salary levels followed. In 1980, college grads in Seattle “were making just $4,200 more than college graduates in Albuquerque; they are now making $14,000 more.”

The presence of many college-educated residents changes the local economy in profound ways, affecting both the kinds of jobs available to residents and the productivity of all workers. In the end, this results in high wages not just for the skilled workers but also for workers with limited skills. This is the most surprising part of the story.

The downside is that winners tend to become stronger, and losers tend to lose further ground. This “Great Divergence” is troubling, he writes. A country that is made of up regions that are drastically different from one another “will end up culturally and politically balkanized.” While communities in the United States have always differed from one another, with some hubs of wealth and others hubs of working-class families, the economic distance from top to bottom today has never been larger.

Richard Florida has carved out a career talking about how college graduates are sorting into a small group of talent pools. I don't see Moretti adding anything substantive to that narrative. I'll be looking for something more profound when I get access to the text. I think both Moretti and Florida are describing the United States before the last financial crisis.

In terms of housing prices, the deck is being reshuffled:

Housing price growth rates for the 61 MSAs that had a population of one million or more in 2000 show a large amount of variation.  While prices dropped by more than 50 percent in Las Vegas, Riverside, Sacramento, and Orlando, prices fell by less than 10 percent in Buffalo, Pittsburgh, Austin, and Oklahoma City. Some of the biggest declines have occurred in warm-weather MSAs that saw large increases in prices prior to the peak.  Some of the smallest have been in places where the economy has been less adversely affected by the downturn, such as Texas and Oklahoma.  Interestingly, there is quite a bit of variation in older northern MSAs.  While prices have fallen by about 50 percent in Detroit and about 30 percent in Cleveland, they are down by much less in Rochester, Pittsburgh, and Buffalo.

Emphasis added. Buffalo (#1) and Pittsburgh (#2) top the list for holding value. Those two cities stand in stark contrast with Cleveland and Detroit. Yet Moretti paints the Rust Belt with one broad brush stroke:

If you look at the economic map of America today, you do not see just one country. You see three increasingly different countries. On one hand there are cities like Seattle, San Francisco, Raleigh-Durham or Austin, with a strong innovation-based economy and workers who are among the most creative and best paid on the planet. At the other extreme are former manufacturing centers like Detroit, Flint or Cleveland, where jobs and salaries are plummeting. In the middle, there is the rest of America, apparently undecided on which direction to take.

Pittsburgh is a former manufacturing center. It's either an outlier or a sign of things to come. Perhaps neither here nor there, Richard Florida is putting his chips down on Pittsburgh as an icon of a different new geography. I'd like to know what Moretti thinks about Pittsburgh.

Within the Rust Belt, there is tremendous variation, whether you are considering housing prices or educational attainment. There is a great divergence. On the whole, I think former manufacturing centers (e.g. Greenville, SC and Chattanooga, TN) are doing better than most Sun Belt boomtowns. I don't know where that leaves the likes of Cleveland. I'll find out more this Saturday while on a Rust Belt Chic tour there.

Monday, June 04, 2012

Migration Inflection Point

Despite persistent high unemployment, some Sun Belt boomtowns continue to attract migrants. Charlotte is a good example. Mesofacts and momentum keep the dream alive long after economic opportunity has evaporated. Grounded in reality or not, status quo migration patterns are a good bet to continue. Michael Barone with the exceptions to the rule:

Continued domestic out-migration from high-tax states? Certainly from California, where Gov. Jerry Brown wants to raise taxes even higher. With foreign immigration down, California is likely to grow more slowly than the nation, for the first time in history, and could even start losing population.

Fortunately, governors of some other high-tax states are itching to cut taxes. The shale oil and natural gas boom has job-seekers streaming to hitherto unlikely spots like North Dakota and northeast Ohio. Great Plains cities like Omaha and Des Moines are looking pretty healthy, too.

It's not clear whether Atlanta and its smaller kin -- Charlotte, Raleigh, Nashville, Jacksonville -- will resume their robust growth. They've suffered high unemployment lately.

But Texas has been doing very well. If you draw a triangle whose points are Houston, Dallas and San Antonio, enclosing Austin, you've just drawn a map of the economic and jobs engine of North America.

Texas prospers not just because of oil and gas, but thanks to a diversified and sophisticated economy. It has attracted large numbers of both immigrants and domestic migrants for a quarter century. One in 12 Americans lives there.

Barone thinks we are at a "demographic inflection point". He sees immigration and the move from high-tax states to low-tax states as the two major forces that have shaped the last economic epoch (~40 years). What's next?

Barone's theory about tax-driven migration creates, in my estimation, a blind spot. His model cannot account for Pittsburgh's boom. Nor can he make sense of spiraling real estate prices in super expensive Park Slope. Why are so many people moving to high-tax locales? In terms of migration, I think we are having a Berlin Wall moment. The world we thought we knew so well has dramatically changed. We need to be searching for new paradigms.

The Liminal Economy

Author Salman Rushdie introduced me to transnational identity. We dehumanize international migrants. They are the bastard children of some homeland and persona non grata in the "receiving" country. They are between localities. These liminal peoples now define the current economic geography. Rushdie on the current epoch:

“We live in the age of migration. There are more people now living in countries in which they were not born than in the rest of human history combined.

Look at any big city in the world and you see a pluralised, hybridised, diverse culture. The end of the monoculture is the phenomenon of our generation.

“I myself am a migrant, a first generation migrant to this country. A thing that happens to migrants is that they lose many of the traditional things which root identity, which root the self.

“The roots of self are the place that you know, the community that you come from, the language that you speak and the cultural assumptions within which you grow up.

“Those are the four great roots of the self and very, very often what happens to migrants is that they lose all four - they’re in a different place, speaking an alien language, amongst people who don’t know them and the cultural assumptions are very different. You can see that’s something traumatic.

“The question both indigenous and communities of migrants have to ask themselves is the question of adaptation - what do you absorb from the world in which you live, what do you retain from the world from which you came and how do you make that transaction?”

Emphasis added. Cities are the end of the monoculture and the rooted. This landscape of trauma fuels innovation and creativity. This, not density and proximity, is the engine of economic development.

Thanks to the age of migration, we live in an urban world. But Rushdie is not talking about moving from a rural area to an urban one. His peer group is an elite class, agents of globalization. International flows of both skilled and unskilled workers are driving global economic development. The Talent Economy is a liminal economy, something that is of decreasing benefit to those stuck in place.

Friday, June 01, 2012

Missing Migration

Migration is an entrepreneurial act. A decrease in geographic mobility will dampen the startup spirit. Migrants are less risk averse. Cities attract lots of migrants. Thus, we see entrepreneurial activity cluster in urban environments. That's my alternative theory to that of the density/proximity dividend.

Along comes a study (hat tip Washington Post) concluding "that purchasing a house reduces the likelihood of starting a business by 20-25%" in the United Kingdom. The rationale offered is financial. There is only so much capital to go around. Without reading the paper, my reaction is to blame how owning a home is a drag on geographic mobility. Skimming the research, I see the following consideration (i.e. control):

We also checked that our findings are not more generally driven by individuals" mobility decisions by focusing on workers who live in the same region throughout the period of analysis (approximately 80% of the observations).

I'm trying to wrap my head around this. I'm not sure I understand the control. I would hazard to guess that a homeowner is significantly less likely to leave the region. I'd be interested in evaluating the residual observations (20%) that did leave the region. Were they more entrepreneurial than those who stayed? The sample size is probably too small, but you get the point. I'm still of the opinion that it is the migration that matters.

Positive Migration Pittsburgh

The job numbers out today are disappointing. Meanwhile, the labor force numbers in Pittsburgh continue to look strong. Pittsburgh isn't just doing marginally better in a time of struggle. It is among the strongest job markets in the entire United States:

Need a job? Move to Oklahoma City if you're into open space. Or maybe Washington, DC, if you're a political nerd. Or, even New Orleans, if you'd like liberal open container laws.

This week the BLS released its analysis of the employment situation across Americas major metropolitan areas. I've broken down the ten big city regions faring best and the ten faring worst into the two graphs below.* First, here's where the job markets are relatively thriving. 

Pittsburgh is one of the ten big city regions faring best. Need a job? Move to Pittsburgh. Apparently, people are heeding the call:

The U.S. Census Bureau    uses a basic formula to determine migration patterns for metropolitan areas. It counts the number of people moving into a given market from anywhere else (whether another country, a different state or another part of the same state) and then subtracts the people who leave.

Miami-Fort Lauderdale emerged as the big winner with a migration surplus of 71,406 between July 1, 2010, and July 1, 2011, based on the Census Bureau's latest estimates. ...

... On Numbers used the Census Bureau's estimates to generate daily migration averages for all 366 metropolitan areas, which can be found in the following database. Use the tab to isolate the list to a single state, or merely hit the Search button to see everything at once.

Miami added 195.6 persons per day and topped the rankings. Chicago was dead last (#366) losing almost 81 people per day. Pittsburgh chimed in at 32nd best, netting a little over 14 migrants daily. That puts the metro in the top 10% for inmigration. That's a stunning turn of events. Rust Belt Pittsburgh is a hot destination.