Sunday, May 14, 2006

Kotkin on energy boomtowns and suburbia vs. the gas crunch

A couple Kotkin op-eds of interest today. The first from the LA Times talks about the new energy-driven boomtowns:
Three kinds of boomtowns have emerged in the last decade. The dot-com era created brainy, culturally savvy, "hip" cities such as Boston, San Francisco, Berlin, Montreal and Sydney. But they turned into very expensive places in which to do business and for the middle class to live.

Low-cost cities became the new boomtowns after the bubble economy burst in 2000. Business and tech firms headed to Phoenix, Reno and Fort Myers, Fla., and other no-nonsense, middlebrow places.

Now, the prospect of persistently high energy prices has fueled the latest wave of boomtowns, Rodney Dangerfield-like places that are finally getting respect — Calgary, Canada; Nagoya, Japan; Perth, Australia; Casper, Wyo., and Midland, Texas.
Houston may be the big city with the most to gain from continued high energy prices. Over the last decade, it relied largely on the huge Texas Medical Center, growing economic diversity, immigrant businesses and low housing costs to keep its economy running at close to the national norm. Energy's contribution to Houston's economy dropped from 82% in the 1970s to less than half today. But with local energy firms returning to the oil fields, job growth this year may exceed 3%, roughly twice the national average, according to Houston Federal Reserve economist Bill Gilmer.
In light of the historical growth patterns of the energy industry, it would be foolish to identify these cities as long-term boomtowns. As any Houston real estate developer or wildcatter can tell you, energy-based growth can slacken, sometimes quite suddenly.

Yet, whether in Japan, Australia or North America, the cities that flourish will be those that stick to the basics — producing goods and services for the global market, providing opportunities for middle-class citizens and a favorable environment for local businesses.

This may be less appealing to some than the hipster mantra of the late 1990s, but it also is something infinitely more sustainable.
His second is from the San Francisco Chronicle:
Suburbia will survive a gas crunch
It thrived in the 1970s, will adapt to latest spike
Perhaps the best way to test the thesis of higher energy prices constricting suburbia is to look at the experience of the 1970s. In that decade, Americans faced an even steeper price rise than that anticipated by almost anyone today. Worse, we were hopelessly unprepared for it, and far more jobs, particularly high-paying ones, were located in the urban core.

So what happened? People reacted, but not by jumping on mass transit in big numbers. In fact, transit use continued to decline from 6.4 percent of commuters to 5.3 percent between 1970 and 1980.

Nor did people move en masse to traditional older cities. In fact, the 1970s proved to be the only decade in the 20th century that overall urban population declined. Suburbanization proceeded apace, with jobs and people heading out to the hinterlands.

The energy-stricken '70s, notes Michael Carliner, an economist with the National Association of Home Builders, produced no discernible clamor for smaller houses or urban spaces. Driving, even by long-haul commuters, did not change much, although people did shift to more efficient, often foreign-made, cars.

Given this past experience, it's logical to expect more of the same this time. Higher gas prices will lead to fewer monster SUVs and more efficient cars, whether hybrid models or simply smaller, lighter versions of conventional cars. Home builders also may get smarter, as they did in the 1970s, using better insulation, double-paned windows and more efficient appliances, something that Carliner suggests might actually make new homes more attractive to buyers.

One compelling piece of evidence that we won't lose our reliance on automobiles: Even with a 23.7 percent increase in gas prices between 2004 and 2005, vehicle miles, according to the U.S. government, basically remained unchanged while gas consumption grew slightly.

Another thing that is unlikely to change is the trend toward urban decentralization. The evidence over the past two years shows a growing number of people moving from the largest cities to middle-sized and smaller communities.

Ultimately, higher energy prices cannot overcome the realities created by the car-oriented declustered environment in which we now live and work. As Paul Larrousse, director of the National Transit Institute, admits, the option for effective transit use has faded as the nation, and its jobs, have "spread out."

Then there is the little, often neglected fact about what most people like. In California, according to a 2002 Public Policy Institute Survey, well over 80 percent of adults prefer a single-family house. Most surveys find that what people want is privacy, space and, if they can get it, a walkable community closer to work.

In most cases, they will give up walkability for privacy, and even give up shorter commutes for privacy, space and good schools. Most people do not see dense urban living as a preferable option, no matter how much hip theorists, architects and planners think they should. Devotees of urban density, as planner William Fulton has suggested, live "a niche life" attractive to no more than 15 percent of the population.

It is not reasonable to expect people to give up their dream of a house in a low- or moderate-density area. This trend is somewhat universal; dreams of a "Latino based" urbanism -- engendered by the fact that poorer Latinos live in dense, transit-oriented areas -- are the product more of academic daydreams than a matter of Latino preferences. The powerful desire among immigrants to own a home, in fact, has done as much as anything to boost the U.S. single-family housing market.

Nor is this simply an American aberration. Wherever people have enough money to buy a suburban house, they will do so. This is true even at far higher energy prices than we can anticipate over the immediate future. Gas in Western Europe, for example, runs around $6 a gallon, yet virtually every major city there is experiencing rapid sprawl and increasing car use, albeit in largely more energy-efficient models.
It goes on to talk about the rapid rise of telecommuting - 15% per year - and how that is likely to accelerate with rising gas prices rather than a large-scale consolidation to a dense urban core or mass transit. I tend to agree: rising gas prices plus ubiquitous broadband, wireless, and Internet collaboration tools have telecommuting at a "tipping point" that could have a massive impact on work and society in the next few years. As they say, "may we live in interesting times."


At 11:27 AM, May 15, 2006, Anonymous Anonymous said...

I have to say that lumping Calgary and Houston in with Midland and Casper is amusing.

And even if energy employment made up 50% of our employment and grew at 3% annually for 10 years while the rest of the economy did nothing (which are pretty extreme assumptions), it would only be up to 67%. I don't see the current market dramatically reshaping Houston. Caper, sure. Bu we're a much bigger and more complex economy than that.

But beyond that, this all looks to me like an attempt to overcome one broad generalization with another. Will high gas prices kill the suburb? No. But that doesn't mean they won't encourage some people to move closer in.

Cities are complicated things, and cities are not inherently ideological. In the end, the answer is often "all of the above." Simply because the "creative class" isn't enough for a city to flourish doesn't mean it doesn't matter. I would bet that a lot of the readers of this blog wouldn't be in Houston if we didn't have great restaurants and a good arts scene and cultural diversity. But the idea that building some lofts will cause a city to thrive is silly.

We don't live in a "one size fits all" world. Different people will choose different lifestyles. Different cities will thrive in different ways. And the world is a better place for it.

At 1:18 PM, May 15, 2006, Anonymous Anonymous said...

It is interesting how anti-transit thinkers like Kotkin pretend that James Kunstler is the leader of the urbanist movement. They always manage to bring him up in articles like this, where they set up a straw man urbanist full of crazy ideas that they continue to decimate throughout the article. I think that more realistic urbanists, like Andres Duany, do not agree with Kunstler that suburbs will "dry up and blow away," but rather that they will densify and allow a greater range of transportation options than the typical cars-only approach common in today's suburbs. Also often mentioned by anti-transit writers are that Europe's cities are also sprawling, but they never mention that European suburbs almost always include transit and walkability, and usually are at density levels common in the USA in the 40s, and the extreme low density suburbs don't exist on that continent.

While I think Kotkin makes a good point about telecommuting, I can't agree with his argument that high gas prices now won't trigger a resurgance of urbanism because they didn't in the 70s. The problem with arguing that history will repeat itself is that history is not formulaic, and there are uncountable factors that existed then but don't now. I personally think that anti-urban cultural attitudes, exemplified by movies such as Death Wish, played one of the biggest roles in discouraging people from moving to cities in the 70s. Today's cultural climate is much more favorable to cities, as they are widely seen as having cultural amenities that suburbs can only dream of.

To sum up my windy rant, Kotkin is only setting himself up as an extremist by arguing with extremists. No one is seriously suggesting that suburbs will be boarded up because of high gas prices, but rather that they will be forced to adapt and finally accomodate a range of transportation choices rather than their current anti-choice structure.

At 9:44 AM, May 18, 2006, Anonymous Anonymous said...

Maybe it's the statistician in me that's amused, but think about the "urban lifestyles will only appeal to 15% of the population." With the US population approaching 300 million, 15% of that is 45 million people, more than the population of Texas and New York combined.

Fifteen percent is a pretty good market share for "urban-style" residential, which I don't think is anywhere near what currently exists.

At 2:10 AM, June 04, 2006, Blogger Zhang Fei said...

I personally think that anti-urban cultural attitudes, exemplified by movies such as Death Wish, played one of the biggest roles in discouraging people from moving to cities in the 70s.

I don't think movies like Death Wish are motivating people in places as diverse as Kuala Lumpur and Beijing to move out of the cities. The fact is that many people don't want to have to deal with mass transit when they can ride comfortably in their own vehicle. They don't want to squeeze into a 1,000 square foot apartment when they can live in double the space and have a front lawn.


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