Wednesday, June 25, 2014

Friday, June 20, 2014

Density Boondoggles: Innovation Districts

Zero-gravity innovation at Pacific Standard magazine.

Theme: Geography of innovation.

Subject Article: "Does Innovation Always Lead to Gentrification?"

Other Links: 1. "Confronting Suburban Poverty in America."
2. "Anchor Institutions and Economic Development: From Community Benefit to Shared Value."
3. "The Rise of Innovation Districts: A New Geography of Innovation in America."
4. "Knowhow and the Wealth of Nations: Overcoming the Productivity Curse."
5. "Modeling Migration."
6. "Is Israel Losing Its ‘Startup Nation’ Title?"
7. "Pittsburgh officials put out welcome sign for immigrants."

Postscript: The density fetish is wrapped in Michael Porter's theory about industry clusters. Vivek Wadhwa debunking the cluster myth:

Legions of consultants have been advising regions to build science parks next to research universities and to offer financial incentives to selected industries to locate there, touting Harvard professor Michael Porter’s cluster theory. Porter had observed that geographic concentrations of interconnected companies, specialized suppliers, and service providers gave certain industries a productivity and cost advantage. His followers postulated that by bringing these ingredients together into a “cluster,” regions could artificially foment innovation.

They couldn’t. The formula doesn’t work. The top-down industry cluster is a modern-day snake oil.  Chile proved that it is people, not industry, who power innovation.

People develop, not places.

Wednesday, June 18, 2014

Demographics: 1; Gentrification Hysteria: 0

Xenophobic anti-gentrification hysteria at Pacific Standard magazine.

Theme: Demographics and bad journalism.

Subject Article: "When Brooklyn juries gentrify, defendants lose."

Other Links: 1. Urban Dictionary entry for "groovy uvy".
2. ".@zephoria Not even if you count Hispanic people is Brooklyn 50% white. @nypost should correct that article."
3. "Population of Kings County, New York: Census 2000 and 2010 Interactive Map, Demographics, Statistics, Graphs, Quick Facts."

Postscript: Xenophobia is deeply ingrained in our society. It's a bias that informs poor analysis. Nate Silver takes down the New York Times:

I warned you to be suspicious of novel theories about the defeat of House Majority Leader Eric Cantor in his Republican primary last week. It probably had something to do with Cantor’s identification with the Republican establishment at a time when it is deeply unpopular. But to the extent that Cantor’s defeat was like an earthquake, that means we can’t pin down its causes all that precisely. We might even think of it as having been somewhat random. Why did Cantor’s district give way when so many others held? (Only 1 to 2 percent of Republicans running for re-election to the House of Representatives have been denied their nomination since 2010.)

But here’s one such theory, as described by a New York Times article published Sunday: Perhaps Cantor’s defeat — and the near-defeat of Republican Sen. Thad Cochran in Mississippi — has something to do with migration patterns. If more people are moving into areas where they are less familiar with the incumbent, perhaps the incumbency advantage has waned. ...

... But it’s less clear that this has much to do with migration patterns, or at least not in the way that The New York Times proposes. More of the evidence contradicts rather than supports its hypothesis, in fact.

The theory doesn’t align well with the results in Virginia. If migration to Virginia was a major contributor to Cantor’s defeat, you’d expect Cantor to have done worse in counties where there were more transplants.

Instead — as can be seen in the graphic below — there was essentially no relationship between the percentage of the population that was born outside Virginia (as based on American Community Survey estimates) and the share of the vote that Cantor received in a county.

The newspaper jumped to the newcomer conclusion because that's the stock stereotype at hand. Silver has carved out a career using social science techniques to dispel the mythologies of conventional wisdom. Outsiders change things, except when they don't.

Tuesday, June 17, 2014

Quality of Place and Migration

At Pacific Standard magazine, why don't we rank places in terms out-migration rates?

Theme: Brain drain and real estate development.

Subject Article: "Young adult survey: LI needs more housing options, jobs to keep us here."

Other Links: 1. "Symposium on Small Towns, Understanding Rural Migration: Myths, Trends, and Opportunities Exposed."
2. "Not So Much ‘New York Poor’ as ‘Pittsburgh Rich’."
3. "A geographer rolls his eyes at the Horizon District development pitch."
4. "Long Island’s Young People: Why They Will Continue to Leave Long Island."
5. "Symposium on Small Towns challenges narrative of rural decline."

Postscript: Headline, "Manchester is 'ugly, unfriendly and lacking vibrancy', hard-hitting tourism poll finds":

Mancunians may think their city is the best place on the planet... but many overseas visitors are not so sure, a summit on improving the city has heard.

People in other countries view Manchester as ‘ugly’, ‘unfriendly’ and ‘lacking vibrancy’, according to a hard-hitting poll into the city’s tourism appeal.

But the good news, at least, is that these stereotypes are shattered when travelers actually visit the city.

That's right. When outsiders visit the city, the perception changes from negative to positive. Whereas, a place might have a positive image undermined only by residing there. Geographic stereotypes significantly impact migration patterns. Real estate development projects do not.

Thursday, June 12, 2014

Housing Affordability and the New Geography of Jobs

Housing affordability is about income, not supply constraints, at Pacific Standard magazine.

Theme: Economic divergence of innovation.

Subject Article: "Bill Witte on Housing Affordability: A Supply and Demand Problem."

Other Links: 1. "Race, Jobs, and Gentrification."
2. "The Planning Report: Insider's Guide to Planning & Infrastructure."
3. "The Case For Investing In California Businesses."

Postscript: From Toronto Life, "Stuck in Condoland":

She got the unit pre-construction for less than $300,000, which was a steal, because really she’d purchased much more than space: she bought the dream Toronto and its developers have been selling throughout this decade-long boom. She was single in the city, blonde and svelte, with a well-paying career-track job and, soon, a condo on the edge of clubland. Toronto would be at her feet and at her service. ...

... Shannon and Paul bought into the New Toronto brand: the vertical city of luxury living, cultural experience, Momofuku food and trendy boutiques. That’s how the lifestyle is marketed by politicians and developers alike, and it’s incredibly appealing to young adults in all their forms: staid professionals, graduating millennials, hipsters. ...

... Condos are the only affordable option when the average detached Toronto home costs $965,670. The reason prices have shot so high is because no one is building new detached or semi-detached homes for the city’s emerging glut of new families. For developers, the payoff of condo construction far outstrips that of detached housing. The lack of supply explains why every empty nester’s house—even a dilapidated gut-job reno that reeks of cat pee—sparks a bidding war when it goes to market. ...

... Condo developers generally boost their profits by selling smaller units and more of them. There’s also a tax incentive: provincial and municipal land-transfer tax rates are higher for units valued at more than $400,000, so that price has become a kind of magic number for developers and buyers alike: $399,900 is a de facto maximum price point, discouraging the construction of larger units that would cost more. The dependency on pre-construction sales also skews the market. Developers minimize their risk by selling as many units as they can before they ever put a shovel in the ground—70 to 80 per cent of units must be sold before a lender will provide construction financing. Smaller units sell fast on launch weekend to eager young first-timers. But buyers of larger condos generally prefer to see the unit before they buy it, which means developers must carry the cost and the risk of those unsold units until construction is complete, sometimes years later.

Greater density informs greater dislocation, income inequality, and segregation. It's not a solution for gentrification. It is one of the causes of gentrification.

Wednesday, June 11, 2014

Race, Jobs, and Gentrification

Houston, we have a gentrification problem at Pacific Standard magazine.

Theme: Geog 101.

Subject Article: "Fighting Gentrification With Money In Houston."

Other Links: 1. "Bill Witte on Housing Affordability: A Supply and Demand Problem."

Postscript: Why are Worcester's housing prices stuck?

What accounts for Worcester's lower incomes and weak real estate prices? A look at Worcester's largest employers may shed some light on the question. These include big insurance companies such as Hanover, Commerce, Mapfre USA; abrasives and materials — as in Saint Gobain; St. Vincent Hospital and UMass Memorial Health Care; colleges — like Holy Cross, WPI, and Worcester State; and some pharmaceuticals researchers.

The common thread among all these employers is relatively slow growth when compared to the high technology employers located further east. Moreover, many of these employers hire many workers that do manufacturing and service jobs with relatively low pay and a smaller number of higher paid jobs — including executives, doctors, scientific researchers, and professors. ...

... Worcester economic leaders I've interviewed like to tout its low real estate prices as a draw to potential employers. But those low prices do not mean that real estate in the city is a good investment unless there is a catalyst for faster economic growth that would boost demand — and hence prices.

Or, Worcester could reduce the supply of housing, and hence raise prices. But the central issue for housing affordability is demand, not supply. Which is why no-zoning Houston has a gentrification problem.

Tuesday, June 10, 2014

Not So Much ‘New York Poor’ as ‘Pittsburgh Rich’

Popping the cool city migration bubble at Pacific Standard magazine.

Theme: Ironic migration.

Subject Article: "Career ambitions, higher cost of living erode Austin’s ‘Slacker’ vibe."

Other Links: 1. "'Pittsburgh Rich' or New York poor?"
2. "A Message to the City Builders of Tomorrow."
3. "Young people are NOT leaving Pittsburgh: Statistics in hand, Chris Briem is happy to explode the myth of a continuing exodus."
4. "The Rise of the Creative Class: Why cities without gays and rock bands are losing the economic development race."
5. "Young And In Debt In New York City."
6. "Watch out Portland, Pittsburgh's lookin' hip: Is it really possible we are actually, authentically cool?"
7. "The young people myth: Pittsburgh is attracting talented young workers and could be poised to become one of the nation’s most youthful cities."

Postscript: I've woven a bunch of blog themes into this little post. A good as spot as any to double down on the producer city versus consumer city. Check out page 11 of this presentation. The scholar compares Pittsburgh with Asheville, two metros with similar gains in college graduates. Pittsburgh has 4 out of 4 positive labor market outcomes associated with its brain gain. Asheville has 0 out of 4. Portland, OR is also 0 for 4, sporting negative labor market outcomes across the board. I think the difference is talent production instead of talent attraction. Amenities as a lure wastes talent. A more organic boost to the college educational attainment rate informs a better labor market and healthier economic development.

Saturday, June 07, 2014

Racism, Reparations, and Migration

The broader category of xenophobia deserves more attention in the discussion about reparations at Pacific Standard magazine.

Theme: Human rights and migration.

Subject Article: "The Case for Reparations: Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy. Until we reckon with our compounding moral debts, America will never be whole."

Other Links: 1. "How Housing Discrimination Created the Idea of Whiteness."
2. "Story of Ireland: The Age of Union."
3. "Black, British And 'Brain Drained': Playwright Takes Charge In Baltimore."
4. "'I was constantly moaning in London'" When actor and playwright Kwame Kwei-Armah left the UK to become artistic director of Baltimore's Center Stage theatre in 2011 he jumped headfirst into America's racial politics."

Postscript: I'm playing around with the idea that racism as a discourse fits within the broader category of xenophobia. Xenophobia is often confused (conflated?) with xenophobia. The rancor in Vancouver, BC over rising housing prices is a good example:

“The fact these millionaires (buying real estate in Vancouver) are mainly Chinese is not relevant to the debate, and that is why I am a bit distressed that this is being characterized as a racist discussion,” says Ian Young, the Vancouver correspondent for the South China Morning Post.

The geography of gentrification in Vancouver is relevant. That the real estate investment comes from China matters. But the spotlight continues to be on the suspected gentrifiers. Pointing a finger at a gentrifier is not racist. It is xenophobic. Xenophobia transcends racial discourse. The United States hasn't had "thirty-five years of racist housing policy." The United States has had thirty-five years of xenophobic policy. We cannot have a meaningful discussion about reparations without broadening the scope of the discussion to xenophobic citizenship law and practices.

Monday, June 02, 2014

Superstar Neighborhoods and the Concentration of Wealth

When grappling with gentrification, easier to deal with the demand than increase supply at Pacific Standard magazine.

Theme: Gentrification and migration.

Subject Article: "Superstar Cities."

Other Links: 1. "Giving Up on Urban Neighborhoods."
2. "Turning Real Estate Market Fundamentals on Their Head."
3. "No MetroCard Needed: Bikes Change Your Brooklyn Apartment Hunt."
4. "The Geography of Anti-Gentrification: Google Buses and the World Trade Center."
5. "Tech booms: Too hot for jobs."
6. "On being priced out of downtown Detroit."
7. "The rise of the global capital: ‘Many ambitious Dutch people no longer want to join the Dutch elite. They want to join the global elite’."
8. "The Silicon diaspora: why the tech geeks are swapping Old Street for Stratford, Croydon and Kentish Town."
9. "AIG Sees Labor-Cost Arbitrage as Jobs Move to Philippines."

Postscript: "Hong Kong’s West Kowloon Cultural District – and its real estate: Were this an emerging arts hub in almost any other city, property prices would surely be soaring in anticipation."

As with much of Hong Kong’s high-end housing, West Kowloon’s residential market has gone into reverse. Prices are at present about 13 per cent off the highs, in line with falls elsewhere in the city, after the government introduced cooling measures – such as a tripling of stamp duty on purchases made by foreigners. It also coincided with the economic slowdown in China, a crackdown on corruption and lavish spending by the new government in Beijing, and the prospect of higher borrowing costs as the US Federal Reserve begins tapering its asset purchases. Knight Frank expects property prices to fall up to 15 per cent by the end of the year, while many analysts are even gloomier.

Emphasis added. The "cooling measures" attack demand for residential real estate. Zoning deregulation and more construction cannot target gentrification pressures in this manner. I've yet to encounter any consideration of demand side policy regarding gentrification in the United States. This is an egregious oversight.