Houston Strategies

Opportunity Urbanism op-ed in the Chronicle

It came out today as the lead op-ed in the Sunday edition, paired nicely with David Brooks' column on Houston vs. San Francisco. Unfortunately the online edition does not include the COLA incomes graph that's in the print version, so I will include it below along with the full text for posterity (Chronicle links are not known for longevity).  I'm not thrilled with the headline they chose - since our topic is Opportunity Urbanism, not economic diversity - but the subhead is good.  You can also check out Nancy Sarnoff's column about Joel's luncheon speech here and the full report here.  Enjoy - looking forward to your thoughts in the comments.

Kotkin, Gattis: Economic diversity helps Houstonians live well
Lower costs help middle- and working-class residents enjoy higher standards of living

By Joel Kotkin and Tory Gattis

October 18, 2014

Over the past decade, we have witnessed the emergence of a new urban paradigm that both maximizes growth and provides greater upward mobility. We call this opportunity urbanism, an approach that focuses largely on providing the best policy environment for both businesses and individuals to pursue their aspirations.

Although contrary to much of the conventional wisdom about cities and regions, this is not a break with traditional urbanism, but instead a reinforcement of old traditions. Long ago, Aristotle reminded us that the city was a place where people came to live, and they remained there in order to live better. "A city comes into being for the sake of life, but exists for the sake of living well." In the end, opportunity urbanism rests on the notion that cities serve, first and foremost, as engines to create better lives for the vast majority of its residents.

The Houston and luxury models

The Houston metropolitan area reflects the idea of opportunity urbanism more closely than any major metropolitan area. Across a broad spectrum - income growth, new jobs, housing starts, population growth and migration - no other major metropolitan region in the country has performed as well over the past decade. This was among the first major metropolitan regions to replace the jobs lost in the recession and has experienced by far the largest percentage job growth since, with Dallas-Fort Worth second.

In many ways, opportunity urbanism contrasts with the prevailing urban planning paradigm - variously called new urbanism or smart growth - which seeks to replicate the dense, highly concentrated monocentric city of the past. This approach posits the notion that policies of forced density, through regulatory mandates and often subsidies, are critical to attracting both young, educated people and the global business elite. This approach describes the successful city, in the words of former New York Mayor Michael Bloomberg, as "a luxury product."

This notion of the "luxury city" worked, at least for some, in well-appointed older cities such as New York, San Francisco and Boston. Unlike most American cities, these boast long-established dense cores and transit-oriented areas where residents are employed. They possess great amenities tied to their pasts, from world-class art museums and universities, to charming historic districts, parks and public structures.

But this model of urbanism does not fit the profile of most American metropolitan regions, which tend to be far more recent in their development, more dispersed and overwhelmingly dependent on cars in terms of commuting. Indeed, most of the fastest-growing regions in this country - Houston, Dallas-Fort Worth, Oklahoma City, Raleigh and Nashville - function in a highly multipolar model that contrasts sharply with that of cities like New York, Boston or Chicago.

Prospects for upward mobility

The luxury paradigm has worked for some in some cities, but has failed, critically, in providing ample opportunities for the middle and working classes, much less the poor. Indeed, many of the cities most closely identified with luxury urbanism tend to suffer the most extreme disparities of both class and race. If Manhattan were a country, it would rank sixth-highest in income inequality in the world out of more than 130 countries for which the World Bank reports data. New York's wealthiest 1 percent earn one-third of the entire municipality's personal income - almost twice the proportion for the rest of the country.

Indeed, increasingly, New York, as well as San Francisco, London, Paris and other cities where the cost of living has skyrocketed, are no longer places of opportunity for those who lack financial resources or the most elite educations. Instead, they thrive largely by attracting people who are already successful or are living on inherited largesse.

They are becoming, as journalist Simon Kuper puts it, "the vast gated communities where the 1 percent reproduces itself."

Not surprisingly, the middle class is shrinking rapidly in most luxury cities. A recent analysis of 2010 Census data by the Brookings Institution found that the percentage of middle incomes in metro regions such as New York, Los Angeles and Chicago has been in a precipitous decline for the last 30 years, due in part to high housing and business costs.

A more recent 2014 Brookings study found that these generally high-cost luxury cities - with the exception of Atlanta-tend to suffer the most pronounced inequality: San Francisco, Miami, Boston, Washington DC, New York, Chicago and Los Angeles. In recent years, income inequality has risen most rapidly in the very mecca of luxury progressivism, San Francisco, where the wages of the poorest 20 percent of all households have actually declined amid the dot com billions.

Like other large cities, Houston also suffers a high level of inequality, but its lower costs have helped its middle and working class populations to enjoy a higher standard of living than their luxury city counterparts. The promise of the opportunity urbanism model also can be demonstrated by smaller income disparities between racial groups, higher GDP growth, less expansion of poverty and the greater production of high-paying mid-skilled jobs. In these aspects, opportunity cities like Houston greatly out-performed their often more celebrated rivals.

But for this model to continue to succeed, Houston must confront many challenges, some of which are a direct product of its successful growth. Opportunity urbanism is not a libertarian fantasy; government must and should play an important, even expanding role. There remains, as we spell out in our report, enormous need to expand the region's infrastructure, and, most important, to improve the educational institutions of the region, from the troubled grade schools to expanding vocational programs and building up the area's still inadequate higher education.

How to measure 'living well'

The one statistic that best encompasses the success of the Houston opportunity model and exposes the weakness of smart growth is the cost-of-living adjusted average paycheck (see chart).


Despite the assertions of New York Times columnist Paul Krugman, among others, that the Texas urban economy is based on low wages, Harris County's average household income is above the national average; close to that of Boston. But once the cost of living is factored in, Houston does far better for its citizens compared to any of the legacy cities.

Houston, with Dallas-Fort Worth a strong second, is able to provide its citizens the highest standard of living, as measured by average annual adjusted wages, of any major metro area in America. This is different from subjective "quality of life," but includes such basics as jobs, housing and overall cost of living.

In the end, the key advantage and promise of opportunity urbanism lies in finding ways to help residents fulfill the basic aspirations of citizens. Far more than glittery events or celebrity culture, what really matters is whether a city helps improve the often mundane conditions of life. "Everyday life," observed the great French historian Fernand Braudel, "consists of the little things one hardly notices in time and space."

This approach follows Aristotle's notion of the ultimate purpose of cities - about serving as an engine for improving lives.

It is a great thing that America continues to boast some of the most luxurious, edgy and attractive urban districts in the world. But we also need cities that can nurture new and innovative businesses, while accommodating families, middle- and working-class people with a high standard of living. Opportunity urbanism, and cities like Houston, provides that option.

Kotkin is an author, executive editor of NewGeography.com and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University. Gattis writes the Houston Strategies blog.

Labels: opportunity urbanism

posted by Tory Gattis @ 7:05 PM