The Political Geography of Market Urbanism

The later the economic boom, the greater the municipal area.

Theme: Demography and economic development

Subject Article: "Pittsburgh’s population challenges stand out."

Other Links: 1. "Jurrassic Park Houston, defending Texas exceptionalism, passing Chicago, Market Urbanism, and more."
2. "How soon will Houston pass Chicago? The question isn't whether we'll be the nation's third-largest city. It's when."
3. "Debunking Texas Exceptionalism."

Postscript: Real estate market economist Jed Kolko responded to my criticism of conflating population change with domestic migration by pointing out that population change strongly correlated (positively) with domestic migration. There I sat with a straw man argument on my lap. Or so it seemed. Data in aggregate often obscure more than they illuminate. For example, one of the largest domestic migration flows in the entire country is from Texas to California. That's a gaping hole in the assertion that restrictive zoning on building repels migrants. Demographics aside, greenfield development is a different animal from infill. Greenfields are cheaper and politically less encumbered. Economically, the Sun Belt is playing catch up with the Rust Belt (much like developing countries are chasing developed countries). This game of convergence is far from fulfilled. In fact, in recent decades, the wealthiest Rust Belt states have started pulling away again from the Sun Belt. So Sun Belt cheerleaders continue to hang their hats on population growth without fulling understanding the demographics. The Sun Belt is not exceptional. Most of it remains well behind the rest of the country.

Debunking Texas Exceptionalism

Winning the demographic lottery is nothing to crow about.

Theme: Ironic demography

Subject Article: "How soon will Houston pass Chicago?"

Other Links: 1. "Low Taxes And Economic Opportunity In Texas Lead To Youth Population Boom."
2. "An Urban Agenda for the Right."
3. "Shrinking City Chicago."
4. "The Texas Migration Miracle."
5. "Gentrification."
6. "Keeping a Strong Texas Economy."

Postscript: Out of one side of my mouth, I lampoon Texas Exceptionalism. Out of the other, I celebrate Houston's demographic exceptionalism:

“After 1982, the Anglo population of Harris County stopped growing,” said Klineberg. “And all the growth, of the most rapidly growing city in America, has been from the influx of African Americans, Latinos and Asians. And this biracial southern city dominated by white men has become, in the last 30 years, the single most ethnically diverse major metropolitan area in the entire country.”

Houston is special because of immigration, not domestic migration. State and urban policies do little to influence international migration. The touting of pro-business legislation and overall deregulation as the reason for the population boom is at least 75% nonsense (i.e. the part of population growth attributed to natural increase and immigration). As for zoning, or lack thereof, it takes a backseat to greenfield sprawl in terms of keeping housing costs affordable. The Sun Belt is nothing more than Rust Belt sprawl.

The Talent Migration Paradox

Better to develop people and have them leave than to attract and retain college graduates.

Theme: Migration and economic development

Subject Article: "Fastest-Growing U.S. Cities Import Their College Graduates."

Other Links: 1. "Joe Cortright Talent Dividend Metrics."
2. "Beyond the Creative Class."
3. "Talent Attraction Expert Joe Cortright."

Postscript: For the migrants themselves, attracting talent is economic development. For the destination community, migration is not economic development. The tale of two cities in terms of inequality concerns townies and outsiders. Tenured residents are left behind or pushed out of place.

The Geography of Aspiration

Migration analysis places too much emphasis on push factors and not enough on the pull of opportunity.

Theme: Models of migration

Subject Article: "The low skilled are less mobile geographically because of the meagre value of work."

Other Links: 1. "Income per Natural: Measuring Development as if People Mattered More Than Places."
2. "A Sharp Drop in Interstate Migration? Not really: New data procedures led to misperception of dramatic decline in U.S. population mobility."
3. "This Government Program is Reducing American Mobility. Here’s Why That’s Hurting Our Economy."
4. "Benefits of Bowling Alone."
5. "Why are Higher Skilled Workers More Mobile Geographically? The Role of the Job Surplus."

Postscript: Fueled by macroeconomic cycles, who migrates and why change over time. Manufacturing jobs didn't offer a skill premium, begetting the Great Migration. Sometime after WWII, probably in the late 60s or early 70s (oil crisis of 1973 as a big break), the script flipped. The better educated had more reason to move. Couple that with a low-skilled international migration that mirrored the Great Migration and kept employers happy with a cheap supply of labor. Fast forward to today, companies in the market for low-skill or middle-skill workers will have a tough time filling positions.

Social Innovation and Informal Housing Supply

Changing zoning regulations is an inefficient way to address the housing affordability problem.

Theme: Economic geography of housing affordability

Subject Article: "Silicon Valley’s Extremely Expensive Bunk Beds."

Postscript: High rents be damned, young people will figure out a way to live in the city. About 20-years ago, I did the DC internship thing. Most of the interns I knew were affiliated with a college program, which took care of the usual room and board concerns. I had no such luxury. Since Amnesty International provided a commuting stipend, I lived way out in the boondocks with the mother of my girlfriend. Rent was free. My internship supported the 4-hour round trip journey to work. The situation was less than ideal. But that's what I could afford. The urban advantage is an irrational choice.

The Futility of Trying to Attract (and Retain) College Graduates

The young and well educated are moving to the largest cities. They don't care about a lower cost of living or cool amenities.

Theme: Migration research

Subject Article: "Why the 'Cool Factor' Won’t Lure College Grads to Your City: Since 2000, grads looking for big cities with lots of jobs."

Other Links: 1. "And the Talent Dividend Prize Winner is ..."
2. "Do Jobs Follow People or Do People Follow Jobs?"
3. "Do Colleges and Universities Increase Their Region's Human Capital?"
4. "The Rise of the Creative Class: Why cities without gays and rock bands are losing the economic development race."
5. "Smart cities and attracting knowledge workers: Which cities attract highly-educated workers in the 21st century?"

Postscript: Over the last few months, I've had the occasion to interact with real estate developers. I was surprised to learn how little they knew about migration. The same goes for real estate market analysts. Which is to say, one can make a lot of money in real estate without understanding migration.

Are High Housing Costs Forcing Talent to Flee Silicon Valley?

The pull of opportunity, not the push of expensive real estate, drives migration from California.

Theme: Housing prices and migration

Subject Article: "Soaring housing costs forces talent to flee Silicon Valley."

Other Links: 1. "Find a New City."
2. "If the 1% stifles New York's creative talent, I'm out of here."
3. "The Ruse of the Creative Class."
4. "Not So Much 'New York Poor' as 'Pittsburgh Rich'."
5. "Innovation Geography: The Beginning of the End for Silicon Valley."
6. "The Lock-in Effect of California's Proposition 13."
7. "Domestic migration: Dreams of Californication."
8. "Proposition 13 Then, Now and Forever."

Postscript: Given all the bloviating about how market urbanism can fix California's housing affordability woes, this ditty from the Cato Institute now looks amusingly ironic:

Political analysts often argue about when the modern-day conservative movement in America began. Some say that it began with Barry Goldwater’s campaign in 1964. Others say it began with the election of Ronald Reagan in 1980. I believe that the conservative, anti-big-government tide in America began 20 years ago with the passage of taxpayer advocate Howard Jarvis’s Proposition 13 in California.

Proposition 13 was a political earthquake whose jolt was felt not just in Sacramento but all across the nation, including Washington, D.C. Jarvis’s initiative to cut California’s notoriously high property taxes by 30 percent and then cap the rate of increase in the future was the prelude to the Reagan income tax cuts in 1981. It also incited a nationwide tax revolt at the state and local levels. Within five years of Proposition 13’s passage, nearly half the states strapped a similar straitjacket on politicians’ tax-raising capabilities. Almost all of those tax limitation measures remain the law of the land today.

Jarvis's tax revolt horribly distorts the real estate market, pushing up prices in California and in states receiving the equity rich migrants looking to cash in on the subsidy that Cato celebrates. As per usual, political ideologies make for awful policy.

The Depopulation Bomb

Almost 50 years ago Dr. Paul Ehrlich published a book called The Population Bomb. Today, demographic hysteria concerns too few people.

Theme: Ironic demographics

Subject Article: "Are People Really Leaving Illinois In Droves?"

Other Links: 1. "The Rachel Carson Homestead."
2. "The Unrealized Horrors of Population Explosion."
3. "Redemptive existentialism and Berkeleian metaphysics: a synthesis in Beckett’s plays."
4. "Where does Chicken Little invest?"

Postscript: The population bomb never went off. The population bomb never existed. The same is true about the depopulation bomb. Population change is neither a metric of success, nor is it a useful policy goal.

The New Geography of Jobs: Talent Production Versus Knowledge Production

Pittsburgh is the best place in the United States to flip property. What explains the real estate boom?

Theme: Geography of innovation

Subject Article: "Carnegie Mellon Reels After Uber Lures Away Researchers."

Other Links: 1. "Pittsburgh becoming 'flip' city as real estate market heats up."
2. "From Metals to Minds: Economic Restructuring in the Rust Belt."
3. "The New Geography of Innovation."
4. "Do Jobs Follow People or Do People Follow Jobs?"
5. "Rust Belt Chic: Harvey Pekar."

Postscript: If you get a chance, do read The WSJ article about Uber poaching talent from CMU. I think a new economic geography is developing before our eyes. Explaining the real estate boom:

Pittsburgh missed the national housing boom of the early to mid-2000s, being a region where property values in many communities have either remained flat or grew at a snail’s pace. Historically, residents here also were less inclined to relocate from one house to another.

But in recent years, many neighborhoods throughout the city such as Lawrenceville have seen housing values appreciate by double digits as demand has been driven up by workers in medical, technology and the oil and gas industries, and as investors have swooped in to take advantage of the low prices and the high demand.

A lot of gentrification is amenity driven, and thus ephemeral. The gentrification of Pittsburgh neighborhoods is driven primarily by economic restructuring. Wages from global jobs are pouring into the city.