Tuesday, April 05, 2011

Pittsburgh 2025

Chris Briem is back in town and he's already Johnny on the spot with more good news about Pittsburgh:

New York and Pittsburgh had the highest effective rent increases from a year earlier, at 2.8 percent, followed by San Francisco at 2.7 percent, Reis said.

Pittsburgh “has held up really well,” said Jones of CBRE. The city’s concentration of employment in the energy industry has helped bolster rents, he said.

“They’ve managed to skirt the recession,” Jones said. “The market’s tight enough to support further rent growth. It’s a small market but one that’s performed really well.”

Pittsburgh is on a tear right now. I'm beginning to think that I haven't been bullish enough on the region's future. I didn't expect this shrinking Rust Belt city to escape the gravity of its past (save the public pension liabilities) so quickly.

Others are getting wind of the growth and opportunity. A reader of this blog (thanks for the email message) looked into the recently published McKinsey Global Institute report, "Urban World: Mapping the Economic Power of Cities". The baseline comparison is 2007 with projections offered for 2025. Check them out here. (Interactive map)

Pittsburgh should gain about 350,000 people. Before you get too excited (or freaked out), other Rust Belt cities (e.g. Detroit and Cleveland) are also expected to grow. More impressive is the GDP growth. Per capita, Pittsburgh is projected to go from $47,000 (2007) to $65,000 (2025). That's a healthy jump (~38%). GDP per capita growth rates for some other cities:

Seattle - 33%
Portland - 20%
Houston - 24%
Dallas - 34%
Chicago - 26%
Boston - 38%

I was most surprised by the lack of economic growth in Portland. You can see that Pittsburgh stands up well to some stiff competition. For the United States, it is a hot spot. To be sure, the population increase is modest. But I don't put much stock in such metrics. Most of that growth will come from net inmigration, not a robust birth rate or significant immigration. Pittsburgh will be attracting a lot of talent and will serve as the anchor for the Eastern end of the Chi-Pitts megalopolis.

1 comment:

Paul Wittibschlager said...

What do you want long term for the region? Low unemployment, lots of high tech jobs, lots of growth, money pouring into town, skyscrapers popping up in the core, suburbs expanding in all directions. It all sounds good, look at Dallas - Ft. Worth or Houston and that's what you'll get. Not bad but I don't want to live there. I think you should want a bit more for your community.

Consider modest employment growth. Think about how to build a better regional park system. Discuss how to clean the waterways. Make a regional plan for sustainability. Sounds like Portland.

Pittsburgh is situated in a beautiful region. I would hate to see it compromised for something so fleeting as jobs. Sounds like Pittsburgh, circa 1890.