Tuesday, September 26, 2006

Kotkin on cities as engines of upward social mobility

Joel Kotkin has an excellent piece (pdf) in the most recent Democracy Journal on the diverging city models in America. I highly recommend all 14 pages, but I'll try to put extensive key excerpts here, including the ones that mention Houston. I apologize in advance for the length of this post - there's a lot of good stuff in here.

Urban Legend
The craze over coffeeshops and condos won’t revive American cities.
Improving urban life for the middle class will.
“A metropolitan economy, if it is working well, is constantly transforming many poor people into middle class people . . . greenhorns into competent citizens,” the great urbanist Jane Jacobs wrote. “Cities don’t lure the middle class, they create it.”

Sadly, in recent decades, this notion of cities as mechanisms for upward mobility has broken down. Many cities, rather than trying to uplift their working class and nurture a middle class, have chosen to concentrate on luring the affluent, the “hip,” and the young as their primary development strategy. In some cases, such as in Boston, New York, and San Francisco, this has created the basis for a new kind of urban area, the “boutique city,” which effectively abandons the middle class for the allure of an elite-based strategy focused on top-tier business services, arts, and hip culture.

Many other cities, particularly hard-pressed former industrial centers such as Baltimore, Cleveland, Philadelphia, and Detroit, have attempted to follow this “cool city” model without much success. They may have developed Potemkin villages of coolness in their center, but they remain among the poorest and most neglected regions of North America. Cleveland, for instance, with its much-ballyhooed downtown renaissance catalyzed by the Rock and Roll Hall of Fame, ranked first in urban poverty in 2004.

In contrast, there is a group of cities which most commentators consider chronically unhip—primarily sprawling new cities of the South and West—but which are actually the most dynamic in the creation of middle-class residents. These cities—such as Phoenix, Houston, Charlotte, and Las Vegas — traditionally have put their focus on their basic infrastructure and economic competitiveness and, for the most part, enjoy relatively low costs of living, particularly for housing. As unhip as they may seem, it is these cities that present a model for how urban America can not only rejuvenate itself, but rejuvenate America’s central promise of upward mobility as well.
Cities of Aspiration
Surveying the urban landscape, one lesson of the past few years starts to become clear: It is hip to be square. In an age of loft condos and lattes, the least-appreciated American urban form may turn out to be the one that still best adheres to the traditional role of cities as generators of upward mobility. These are the new Sunbelt cities—places like Houston, Charlotte, Orlando, and Phoenix—whose sprawl and rough edges often elicit derision from traditional urbanists, even as they attract newcomers and create middle-class jobs and entrepreneurial opportunities. Between 1994 and 2005, the Phoenix area expanded its job base by 52 percent, Orlando by 48 percent, Charlotte by 31 percent, and Houston by 25 percent. In comparison, New York and greater Chicago expanded by only single digits, while the Cleveland, Baltimore, and Philadelphia areas all lost jobs.

The differentials in housing are, if anything, starker. In cities like San Francisco, less than one tenth of households can afford a median priced home; in Phoenix, one-third can do so, as can over half in Dallas, San Antonio, Charlotte, and Houston. Of course, one can argue that there are cities with even lower housing costs, notably in the depressed Midwest. But unlike those old industrial centers, the Sunbelt cities are in a rapid growth mode, creating large numbers of new jobs while attracting new residents both domestically and, increasingly, from abroad.

What drives the growth of these cities are the very aspirations that have created great urban centers throughout history. Phoenix and Houston, in terms of their job growth and appeal to those seeking a better life, resemble New York, San Francisco, Chicago, or Pittsburgh at the turn of the last century. Like the great American boomtowns of the nineteenth and early twentieth centuries, today’s aspirational cities are protean, being constantly redefined by newcomers. In fact, almost a third of all Phoenix residents, according to the 2000 Census, arrived only five years ago or less. The prototypical Phoenician, or Houstonian, like their counterpart in New York a century earlier, is often someone who came with little more than hopes to create a better life. “We came with nothing. We came here because it had wealth that was increasing. You can find opportunities,” Phoenix entrepreneur Deb Weidenhamer told me. “People come here for a new start and come with ambitions. . . . Longevity here doesn’t matter here. You can be here 10 years and it’s like you’re an old fogey—on the East Coast you’d be like a newcomer.”
Equally important, the lower cost of living in most aspirational cities translates into a better life, including for professionals. San Francisco and Silicon Valley may generate higher wages in fields like software of financial services, but weighted against the cost of living, Phoenix, Dallas, and Houston actually deliver to their workers, in real terms, higher purchasing power.
Towards a New Urban Strategy: Back to Basics
Late-twentieth-century cities like Houston, Phoenix, Charlotte, or Dallas were essentially built to meet the tastes of the mass of Americans for a detached house, a yard, and an automobile commute. They also enjoy, for the most part, more up-to-date infrastructure, such as major airports surrounded by lots of land allowing for expansion, which is increasingly critical to urban growth.
Perhaps the most spectacular example of this approach (back to basics) can be found in Houston. For decades, the city has focused largely on the fundamentals of growth, pressing relentlessly to dredge its harbor, improve drainage, and construct state-of-the-art industrial facilities. With a gritty efficiency, the city has transformed itself into a major global center, assuming leadership of the world’s energy industry and quietly built the world largest medical complex. [Full disclosure: I am a working on a project about the future of Houston for the Greater Houston Partnership (Tory: as am I). I have also worked on projects in Los Angeles, New York, St. Louis, among other cities, all of which, along with Houston, I feel free to criticize.]

This did not happen by coincidence. During the 1990s, Bob Lanier, the son of an oil refinery worker who grew up in nearby Baytown, served as mayor. When he took office, the city was in deep trouble; it had lost 200,000 jobs in the near-total economic meltdown after the energy bust of the 1980s. Its once proud skyline was filled with “see through” towers, empty of workers. Lanier, a former developer and lifelong Democrat, helped turn the city around by doing the little things and doing them right, such as filling potholes, streamlining regulations, reducing crime, and improving services to the city’s varied neighborhoods. Most of all, Lanier focused on infrastructure: roads, sewers, and cleaning the streets. At a time when many cities have chosen to eschew road building and actually encourage gridlock, sometimes with the hope of forcing greater densification, Houston has chosen to build new roads, including tollways, as well as an expanding mass-transit system. As a result, it is among the few major American cities to see commute times diminish over the past decade. (Actually, based on the TTI data I remember, I think they have diminished compared to the early 80s, the peak of the last oil boom, when we were the worst in the nation, but I'm not sure they've improved since '96. Still, we've done substantially better than pretty much all other major metros - not to mention many smaller metros - at restraining congestion growth.)

This is not to say Houston is without problems. It has higher than average rates of poverty and large areas of poor housing. It is also struggling to accommodate upwards of a 100,000 Katrina evacuees, many of them poor African Americans. Yet what has come out clearly in scores of interviews and discussions with a broad array of Houstonians — from business leaders and current Mayor Bill White to community activists and Katrina refugees—is that many residents regard opportunity as their city’s primary attribute. Certainly, people do not move primarily to humid and flat Houston for the weather or topography; they come largely for the chance to succeed.
The Future of American Cities
Ultimately, the critical question for cities boils down to what essential purpose they should serve. Are cities to become, as H.G. Wells predicted over a century ago, largely entertainment districts—what he called “places of concourse and rendezvous”? Or have cities, as George Gilder has argued, been rendered irrelevant as economic units by technology? After all, a broadband hook-up in Bismarck, North Dakota is just as connected to the world economy as one in Brooklyn. It could well be that our major cities, under current trends, will devolve into socially bifurcated regions increasingly irrelevant to America’s mainstream political culture, islands of ultra-affluence and poverty, many of whose residents are either temporary or part-time.

As a lifelong urban dweller, I don’t believe our cities’ best days must lie behind them — particularly if we are to include more-sprawling, multi-polar cities such as Phoenix or Houston. Cities still possess many critical assets such as historic neighborhoods, freight and rail connections, major hospitals, universities, and research institutions, which make them invaluable assets to the surrounding regions and the nation as a whole. There are also intangible assets that make the fate of cities critical to the future of the republic. For one thing, they are repositories of much of our historical memory; no matter how much the suburbs and exurbs evolve, they are unlikely to provide the sense of place and cultural focus that resides in the urban core. This is most true in older cities, like New York, Philadelphia, and Boston, but also, to a much more limited extent, the case in younger, more vital places like Houston, Dallas, and Charlotte.

And as our aspirational cities today show, America’s urban centers can still be, with the right leadership and smart policies, the engines of upward mobility that have powered this country for the past century. But to do so they must pursue such basic strategies as encouraging entrepreneurial growth, reducing regulatory and tax barriers to business, creating efficient transportation systems, improving education, and prioritizing public safety and public open space. It would be far better to spend the hundred of millions now wasted by many cities on convention centers, boutique hotels, performing arts centers, and subsidized condo development on these more essential services, the true sinews of an expanding urban economy.

To be sure, fancy bookstores, organic markets, sushi bars, and art galleries are important parts of urban life, but they only represent a critical factor for a small slice of the population. And they will come along naturally, as arts and amenities tend to, with economic growth and wealth creation; focusing on amenities first gets the urban equation completely backward.

Great cities are about many things, but none more than being a place for a broad spectrum of people to improve their lives and that of their families. Great cities are about real diversity of ages, family types, and incomes—not just agglomerations of the affluent and those who serve them. What we want for our cities is what we should want for our country as a whole: to be a place of great opportunity, hope and a better life, particularly for those for whom this is still part of their American dream.


At 10:25 PM, September 26, 2006, Anonymous Anonymous said...

Unfortunately, even as we have grown and have been successful in many ways, we Houstonians have also been guilty of throwing away plenty of money on "convention centers, boutique hotels, performing arts centers, and subsidized condo development" to quote Kotkin. Just go pay a visit to Downtown.

I agree with much of of Kotkin says. I took an urban economics course with Barton Smith at the UH. One day in class, Smith mentioned that when prices get to be very high in an urban area, that is usually a signal that the urban area should stop growing. What you have in places like San Francisco, Boston, et.al, are cities whose citizens have effectively become a kind of landed gentry because they are sitting on expensive housing. To wit, much of this problem is also man made because of zoning, land use constraints, etc.

This dynamic you find in these expensive cities can work against them because their costliness creates a kind of "monetary" barrier to entry which can block out new business formations, new job creation, and new people from moving in. These cities might not produce many new jobs, but their citizens don't feel the effects of this economic sluggishness because their cities are not attracting many newcomers.

At 2:18 AM, September 28, 2006, Anonymous Anonymous said...

Here’s the thing I have to criticize about the article, if you want educated and ambitious younger people to come and work in your city and form the foundation for a future population, you have to offer them more than a job and four walls and a roof. Younger people also want lifestyle and if you don’t cater to that lifestyle, your city is going to end up like a Detroit or Cleveland. That is the real problem with those cities, they lost their urban residents in the 1960’s and they never came back. It isn’t because those areas are poor. The Detroit metro area is very wealthy, but the money is in the burbs. The only thing saving places like Houston, Dallas, and Phoenix from similar fates is that their city limits have been able to expand to essentially engulf what would be suburbs in more traditional cities.

I think the biggest success in recent times is actually Atlanta. It has a huge, booming economy. Yet, in the past, its urban population was in dire straights. Crime was rampant and the tax base was leaving the city for the burbs. Yet recently the city is rebounding. Younger people are moving back into the urban neighborhoods. High rise development in Midtown and Buckhead is surging. It is a magnet city for younger, educated professionals who want to form a life there. Atlanta is competing with cities like New York, San Francisco, Boston, and Seattle. Yet, Atlanta still has relatively affordable housing and hasn’t given up more traditional rambler developments in the suburbs.

This is the model. For all the talk about people moving to Phoenix and Houston, the average education levels and average salaries are still lower than most major metropolitan areas. I can tell you from experience that I have gotten plenty of strange looks when I tell people I am going to move to Houston after grad school. More than once I have heard, “Why?” It is not a draw, especially with people who you want to form the future tax base. And the crime rates in cities like Dallas and Phoenix (being one and two recently with Houston not far behind) show that there are many uneducated, petty criminals that inhabit these cities. Many people moving to these cities are either (1.) less educated, or (2.) less ambitious; either way they are moving for cost-of-living reasons, not because they see the area as the future incubator of their career. You have to give the most desirable workers a reason to come and stay.

At 7:27 AM, September 28, 2006, Blogger Tory Gattis said...

What you say about Atlanta is happening in Houston. Have you seen how many townhomes are going up inside the 610 loop? Check out this story on Ch.11:


Avg education and salaries are lower in Houston, because we are always attracting new waves of immigrants to our opportunities, including the vast industry of home construction - which is much more limited on the coasts. The issue is not averages, but how fast people move up once they're here.

I agree that Houston does need a pipeline of young, educated professionals, and that we haven't been marketed well. Our low cost of living does give us a pretty good livestyle, with plenty of discretionary income. The people we attract - inc. young people - are those that have seen it with friends when they've visited, or experienced that lifestyle themselves and then moved elsewhere. I've seen plenty of web posts by people who didn't realize what they had in Houston until they lived in a few other cities and their glamor wore off. Then they find a way to come back. But I agree that people who have had no experience of Houston don't find it appealing based on our national perception.

At 9:17 PM, September 28, 2006, Anonymous Anonymous said...

I think additional reasons why Houston has a leg up on the "rust belt" cities:

1) It is in the sun belt, and even though people do not like the heat and humidity, they like the cold even less
2) Major immigration center. How much of that is legal is up for debate, but Houston is a major center for Latin American, as well as Asian immigration. Have you seen our Chinatown? It is growing like crazy!
3) Pro-business environment (not always a plus, but helps create jobs)

Now, for cities that may be doing even better than Houston, like Atlanta, some of what you write is true, but I think mostly you are just confirming the negative perception of Houston and Texas in the national eye. And I strongly disagree with the assertion that Houston is not an "incubator for careers". It is one of the best places in the US to start a career!

Yes, maybe there are a lot of poor people, but that is partially because it is such an immigration center. And places like New York and Boston owe much of what they are today to the sweat and labor of immigrants.

As for what your friends or colleagues think when you tell them you are moving to Houston - let's face it - people have biases and prejudices. How many of these people have even been to Houston? How many of them have ever really given the city a chance?

They are probably not thinking of Rice University, the Texas Medical Center, NASA, the Menil collection, the many performing arts companies, the great restaurants, and the fun areas of town like Montrose, Rice Village, Uptown, and the wonderful weather for 7 months of the year. They are just confirming that, as Tory has written about previously, Houston needs to do a better job of marketing itself to the rest of the country. In some ways, that's a good problem to have!

At 10:14 PM, September 28, 2006, Anonymous Anonymous said...


Thanks for the link. I realize that Houston is redeveloping their downtown and midtown areas. I think that is a great step forward and I am happy that they have finally presented residents an alternative to the car. It’s just that Houston needs to continue forward because they are about 10 years behind Atlanta in this respect. With that in mind, the article you posted touted the success of places like Phoenix (it’s a place, not a city) which seems to run contrary to the success Houston has seen lately.


I would agree that being in the Sun Belt is a huge draw for Houston. The fact that Houston is home to the corporate headquarters of many major multinational companies is also a huge plus. Houston is an immigration city (which is a plus adding to the city’s life) but so is New York. New York City is still one of the largest areas of immigration in the country. So, Houston can’t simply rely on these advantages.

Anyway, I agree that Houston needs to do better in marketing itself. I think the redevelopment of city life will help. Face it, people are staying single longer and they want to enjoy a vibrant urban lifestyle. This is especially true for highly educated professionals who will be the tax base that will support the community going forward.

Finally, as far as the stereotype, I am simply stating the obvious. Houston does not have the most desirable national image. I grew up in Texas and went to UT and, to be perfectly honest, had a pretty poor view of Houston. But all is not lost! Atlanta and the South in general had a terrible image! But Atlanta has turned this around. Twenty-five years ago a non-Southerner moving south to work in Atlanta after college simply didn’t happen. Now it is common.


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