Tag Archives: creative class

From studying San Diego, five features cities need to grow

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A new study of San Diego’s development suggests five factors that lead to city growth:

According to Walshok and Shragge, five major characteristics of civic culture are necessary to move forward:

1) A risk-oriented culture adept at managing uncertainty. A central feature of San Diego’s experimental history and prevalence of small industries is a civic culture and business community that embraces risk.
2) Entrepreneurial talent: Civic leaders, scientists, business professional. San Diego’s long history of creating opportunities for people who want to challenge the status quo or create something new has resulted in an unusually large aggregation of entrepreneurial civic, business, and scientific leaders.
3) Integrative civic platforms. San Diego’s civic culture is highly inclusive, cross-functional and interdisciplinary. Institutions that span the boundaries between communities of ideas and practice have proliferated; in many other regions such entities continue to be siloed.
4) Multiple gateways through which ideas and opportunities can be developed. There is no one Establishment, Inc., in San Diego. There are actually many centers of gravity vis-a-vis leadership and access to resources. San Diego is characterized by an open innovation environment that allows people to easily move among social groups and within hierarchies.
5) A culture of reinvestment: Time and money. The absence of multinational corporations until recently, the century-long reliance on the federal government as a key customer, and the lack of accumulated family wealth have required a civic culture characterized by people investing significant amounts of personal time and resources to achieve civic goals. This is enhanced by the fact that those who come to San Diego stay because of their attachment to the place.

Sounds interesting for two reasons:

1. This sounds like a combination of the creative class bringing in new talent, ideas, and business and a committed growth machine of business and civic leaders. If this works in San Diego, the next question to ask is whether this particular combination and set of circumstances is generalizable to other cities.

2. San Diego doesn’t get much attention in urban sociology. Although it has the 8th largest population in the United States (and 17th largest metropolitan area), it is dwarfed by nearby Los Angeles, is all the way at the corner of the country, and doesn’t stand out for any particular reason outside of fantastic weather.

We had a chance to spend a few days in San Diego a few years ago and enjoyed some of the sights including the San Diego Zoo, Sea World, and the USS Midway. Here is the view toward the city from the deck of the USS Midway:

SanDiegoFromUSSMidway

We enjoyed our visit though it required a lot of driving around.

Older workers left behind when companies move back to the city?

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As some companies choose to return to the big city, are older workers left behind?

After decades of big businesses leaving the city for the suburbs, U.S. firms have begun a new era of corporate urbanism. Nearly 200 Fortune 500 companies are currently headquartered in the top 50 cities. Many others are staying put in the suburbs but opening high-profile satellite offices in nearby cities, sometimes aided by tax breaks and a recession that tempered downtown rents. And upstart companies are following suit, according to urban planners. The bottom line: companies are under pressure to establish an urban presence that projects an image of dynamism and innovation…

For longtime employees, however, corporate moves to the city mean longer commutes and disrupted schedules and family life. And the corporate quest for youth and innovation can leave some workers feeling slightly unwelcome.

“We joked about the older suburbanites being excluded from the new [business] model,” said Jon Scherf, age 42, a marketing professional who left Hillshire shortly before its December 2012 move to downtown Chicago. “They would’ve been happy to have me but they’re also happy to bring in new blood.”…

For longtime employees, it has been a more complicated switch. Melissa Napier, treasurer and senior VP of investor relations at Hillshire, bought a house in Downers Grove in 2007 and lives there with her husband and two sons. While she now attends more social and networking events downtown, her commute, once a 10-minute drive, now gets her home at 7:30, an hour later than before…

But the employers that sought them out in the city are unlikely to follow them back to the suburbs, said Mr. Phillips of the Urban Land Institute.

Now that I think about it, I don’t remember Richard Florida, known for analyzing the young creative class that wants urban amenities, discussing the possible impact on older workers. I suppose the argument could be made that attracting young workers, wherever they might work, would help raise all boats. But, as long as the perception continues that suburbs are better places for raising families due to their schools and safer spaces, this divide between younger/urban workers and older/suburban workers may continue.

The best ROI in hipster neighborhoods

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If you are looking to make some money in real estate, check out these hipster zip codes:

Real estate data provider RealtyTrac conjured some numbers to support what everyone already knows or suspects— that, as a developer or landlord, investing in rental housing in “hipster” nabes is a solid idea. Chicago gets three hits on RealtyTrac’s just-published top 25 list of hip zips for high return on rental properties, in descending rank: 60625 (Ravenswood, Albany Park); 60647 (Logan Square, Bucktown); and 60642 (Noble Square, River West, Goose Island). Yup, they got all the usual suspects. The above chart, interactive and expandable at the source, shows the equation for investment success in “nascent hipster markets”: a high proportion of 25-34 year-olds; a ready stock of renters; a low vacancy rate; and a climbing but still low median home price relative to average rents. Wouldn’t you know it— these are the basic conditions for any successful rental investment, almost anywhere. Why all the fuss over hipsters? Probably because the “culture” that follows this trendy group around usually matches up closely to rapid gentrification. In other words, it’s the hipster as beacon. For the frugal renter trying to stay away from big money, there’s a different use for this list. Stay tuned for follow-up RealtyTrac analysis on “top hipster zips for fix-and-flip profits.”

While hipster may appear to be a lifestyle choice, this article is a reminder of the economic conditions involving hipsters. They also have money and are interested in moving into less-than-perfect neighborhoods that have the appropriate grittiness and authenticity. Thus, a savvy investor might find properties in neighborhoods on the rise and with the influx of hipsters make some money.

It would be interesting to then look at how these investment work out over time. Getting in at the right point is important but how does that investment then work out over a long period of time? What happens when hipsters stop moving in or the neighborhood is no longer the hot one? We need to see not only this data but a ROI curve.

Quick Review: The End of the Suburbs

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I recently read The End of the Suburbs, written by Fortune journalist Leigh Gallagher. On one hand, the book does a nice job describing some recent trends involving, but, on the other hand, the book is mistitled and I think she misses some key points about suburbs.

1. If I could title the book, I would name it something like “The End of the Sprawling Suburbs” or perhaps “The End of Sprawl.” Neither title is as sexy but she is not arguing that the American suburbs will disappear, rather that demographics and other factors are shifting toward cities. There is a big difference between ending suburbs and seeing them “grow up,” as one cited expert puts it.

2. Some of the key trends she highlights: the costs of driving (the whole oil industry, maintenance/gas/insurance/stress for owners, paying for roads/infrastructure), a changing family structure with more single-person and no-children households, changes among millennials and baby boomers who may be looking to get out of the suburbs in large numbers, a push toward New Urbanism in new suburban developments to increase density and strengthen community, and builders and developers, like Toll Brothers, are looking to build denser and more urban developments with more mixed-uses and smaller houses.

3. But, here are some big areas that I think Gallagher misses:

a. While she highlights the benefits of New Urbanism, does this lead to more affordable housing? In fact, the need for more affordable housing is rarely mentioned. As certain areas become more popular, such as urban neighborhoods that attract the creative class, this raises prices and pushes certain people out.

b. The main focus in the book is on big cities in the Northeast and Midwest. While she mentions some Sunbelt cities, like Las Vegas and Los Angeles, there is a lot more to explore here. There are particular patterns in Northern cities compared to newer, more sprawling Sunbelt cities. And in a book talking about the end of sprawl, how could she not mention Portland’s fight against urban sprawl in the last few decades?

c. It is an intriguing idea that cities and suburbs are starting to blend together. But, some of the examples are strange. For example, she talk about how there is increased poverty in the suburbs, which then could make cities more attractive again. There are still some major differences between the two sets of places, particularly the cultural mindsets as well as the settlement patterns.

d. She highlights thriving urban cores – but what about the rest of big cities? While Manhattan and Chicago’s Loop might be doing all right, what about the poorer parts of those cities? The recent mayoral race in NYC involved this issue and many have complained in Chicago that most of the neighborhoods experience little government help. In other words, these thriving urban and suburban developments often benefit the wealthier in society who can take advantage of them.

e. It isn’t until the last chapter that she highlights some defenders of sprawl – people like Joel Kotkin or Robert Bruegmann – but doesn’t spend much time with their ideas. Indeed, the book reads as if these trends are all inevitably moving toward cities and defenders of suburbs would argue critics of suburbs have been making these arguments for decades.

4. Two questions inspired by the book:

a. Just how much should the American economy rely on the housing industry? Gallagher suggests housing is a sign of a good economy based in other areas rather than one of the leading industries. Sprawl can lead to boom times for the construction and housing industries but it can also face tough times. Perhaps our efforts would be better spent trying to build up other industries.

b. Is the century of sprawl in America (roughly 1910 to today – there were suburbs before this but their mass development based around cars and mass housing really began in the 1920s) an aberration in our history or is it a deeper mentality and period? Gallagher suggests we are at the end of an era but others could argue the suburbs are deeply culturally engrained in American life and have a longer past and future.

Overall, this is an interesting read summarizing some important trends but I also think Gallagher misses some major suburban trends.

Texas is America’s future?

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A libertarian economist argues Texas is a bright spot for America’s future:

Since 2000, 1 million more people have moved to Texas from other states than have left.

As an economist and a libertarian, I have become convinced that whether they know it or not, these migrants are being pushed (and pulled) by the major economic forces that are reshaping the American economy as a whole: the hollowing out of the middle class, the increased costs of living in the U.S.’s established population centers and the resulting search by many Americans for a radically cheaper way to live and do business.

To a lot of Americans, Texas feels like the future. And I would argue that more than any other state, Texas looks like the future as well — offering us a glimpse of what’s to come for the country at large in the decades ahead. America is experiencing ever greater economic inequality and the thinning of its middle class; Texas is already one of our most unequal states. America’s safety net is fraying under the weight of ballooning Social Security and Medicare costs; Texas’ safety net was built frayed. Americans are seeking out a cheaper cost of living and a less regulated climate in which to do business; Texas has that in spades. And did we mention there’s no state income tax?

There’s a bumper sticker sometimes seen around the state that proclaims, I WASN’T BORN IN TEXAS, BUT I GOT HERE AS FAST AS I COULD. As the U.S. heads toward Texas, literally and metaphorically, it’s worth understanding why we’re headed there — both to see the pitfalls ahead and to catch a glimpse of the opportunities that await us if we make the journey in an intelligent fashion.

Joel Kotkin would likely agree. A few thoughts after reading the full story:

1. There are several examples of people moving to Texas from California or the Northeast and finding that they really like Texas. But, the examples tend to emphasize Austin, a city known for plenty of cultural amenities. With its culture, UT-Austin campus, and tech companies, Austin looks like a cool place for the creative class. What about the other major areas in Texas? Why not stories about moving to Houston and Dallas, bigger cities and metropolitan areas with their own industries (oil, etc.)? How representative of Texas is Austin?

2. There is little discussion in the story about Latino residents. The primary focus in on Americans who have moved to Texas from other states but what about the influx of immigrants from Mexico? How are they doing? Are there some differences in their experiences as a whole versus those who are held up as successes in the article?

3. This is another article in a long line of opinions about which American state best represents the country or provides a glimpse into the future. What about California, a more progressive melting pot? What about the Washington D.C. metropolitan area, home to a number of the wealthiest counties in the United States? How about Illinois, held up in a more negative light in recent years for pension woes, too many governments/taxing bodies, bullish politicians, foreclosures, and violent crime? Perhaps we should look to Florida, specifically at the diversity in the Miami area or the aging population throughout the state? I realize people are interested in spotting trends but it is hard to select ideal types from 50 states and hundreds of big cities.

4. The story plays out Texas’ connections to the American pioneer and frontier story. This works but there is also a different culture and set of social norms in Texas. Even if business is thriving and people are moving in, does this necessarily mean many Americans would want to act or live like Texans? Is it all simply about a decent job and affordable housing? Yes, everyone may be American but outsiders and Texans themselves will tell you that the state is a land onto itself.

Is a bohemian lifestyle still possible in New York City?

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Given the high cost of living and the other changes in society, can residents live as bohemians in New York City?

Is it still possible to be a bohemian in today’s New York City, where average rents now surpass $3,000 a month? Or are the rents just too damn high? And — if they are — what does this mean for the future of artists and intellectuals of the sort who have long been as much a part of the natural order of the city as pigeons and locust trees?

These are some of the questions provoked by an article in the Spring issue of N+1 magazine on “Cultural Revolution” signed by “The Editors.” There’s far too much Trotsky in the piece for my taste, but it does raise some interesting points about the arts and the way we think about social class. The piece is the latest item in a long New York tradition of articles describing the status anxiety and actual difficulties of people with top-shelf educations who are among the minority of their college classmates to take on risky individual creative ventures that are not particularly remunerative…

I’m not saying any of this is good, only that it is hardly new. This great New York Times piece on Gabby Hoffman growing up in the Chelsea Hotel illustrates perfectly the great class disruption of life in bohemia, where high culture meets low incomes.

Of her childhood, Hoffmann says now: “We lived in a classless society. We’d spend a summer at Gore Vidal’s house in Italy, but we were on and off welfare” when she was a baby.

Or read Patti Smith’s Just Kids. God was she poor when she came to the city. “New York has closed itself off to the young and struggling,” Smith told the New York Observer in 2010. “New York City has been taken away from you … So my advice is: Find a new city.” Her recommendation then is now back in the news: Detroit.

I wonder what Richard Florida would say about this. While he pushes a sort of modern bohemia idea through his concept of the creative class, that group is not lower-class in the same ways as bohemians. They may be creative types but they are primarily white-collar workers with means who have found ways to translate their creative expression into a certain professional lifestyle.

This could be extended to a broader question: is there much room in most global cities for those with less means, whether they are bohemians or immigrants or lower-class? And then going further, if there is some room for them, how much can they really participate in city life and influence decisions that affect them and the entire city?

Bike sharing programs in Chicago, NYC, Boston, Washington D.C. skew white

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The Chicago Tribune looked at the locations of the new Divvy bike sharing stations in Chicago and found overall they were more accessible to white residents:

By design, the Emanuel administration’s freshly launched Divvy bike-sharing network is centered in crowded neighborhoods. But one byproduct of the strategy is that the new transportation alternative is far more convenient for white residents than those who are black or brown, a Tribune analysis shows…

Federal and local taxpayers bankrolled $22.5 million in seed money for the bicycle system, but to thrive and eventually expand it needs to quickly attract a solid customer base and demonstrate financial viability…

Nearly half of all whites in the city live within a short walking distance — a quarter mile or less — of spots the city has designated for bike rental and drop-off, according to the analysis, which overlaid census data on the locations announced for Divvy stations.

By comparison, fewer than 19 percent of Latinos and nearly 16 percent of African-Americans live within a quarter mile of the bike stations, the data show…

In New York, nearly three times the size of Chicago, about 20 percent of white residents but only 8 percent of blacks and Latinos live within a quarter mile of a docking station for that city’s new Citi Bike system, the Tribune found. The two-year-old Hubway system in the Boston area puts a docking station within a quarter mile of 44 percent of the white population, but just 26 percent of Hispanics and 19 percent of blacks.

The proximity gap closes somewhat in the Washington, D.C., area, where the Capital Bikeshare system places a docking station within easy one-quarter mile reach of half of all white residents, 44 percent of Hispanics and 31 percent of African-Americans, according to the newspaper’s analysis.

A recent user survey released by Capital Bikeshare concluded that not only are 80 percent of the responding customers white, but nearly six in 10 are men, nearly two-thirds are under 35 years of age, 95 percent have an undergraduate college degree and 56 percent have a postgraduate degree.

Are bike sharing programs a new strategy for attracting or retaining young professional males in cities? Is bike sharing primarily a program aimed at the Creative Class and tourists? This would not be surprising as plenty of cities are looking to expand their downtown populations of young professionals.

It would be interesting to hear more about the process that went into locating the bike stations in Chicago. How exactly did the city try to balance population figures with economic figures? Now that I think about, we tend not to hear such insider information from Chicago…

Another thought: why not also map the bike locations by social class? Even for whites, are the bikes located more in upper-end neighborhoods or are they aimed at the working class?

Facebook to build $1.5 billion data center in…Iowa

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In looking at the geographic dispersion of major data or server centers, it looks like Iowa is pretty popular:

Facebook is building a 1.4-million-square-foot data center on the outskirts of Des Moines, Iowa, according to a local report.

With a price tag estimated at $1.5 billion, the massive facility would join the data centers Facebook has already built in Prineville, Oregon and Forest City, North Carolina, as well as a third under construction in Luleå, Sweden…

Like Oregon and North Carolina, Iowa has become a hotbed for internet data centers. Google runs a facility in Council Bluffs, Iowa, while Microsoft operates a data center in West Des Moines. Facebook’s facility is set for Altoona, a small town north-east of Des Moines.

Companies such as Facebook are attracted to such places in part because local governments provide tax breaks for these enormous computing facilities. According to local reports, Facebook has asked for additional tax credits for using wind power to help the new facility.

It appears tax breaks win again. But, the Des Moines Register also noted some other enticing features of the area:

Iowa has been competing fiercely with Nebraska for the data center, code named Catapult…

City officials and leaders of the companies say Altoona is prime real estate for data farms because it meets all of their primary needs:

• Access to an extensive interstate fiber optic cable system, already installed within the city and running along Interstate Highway 80.

• Proximity to adequate power and water utilities. (A large MidAmerican substation is less than half a mile from the 200-acre site.)

• Open and affordable land with low natural disaster risks. (Coastal cities often face the threat of hurricanes and earthquakes.)

• Transportation access near the crossroads of interstate highways 80 and 35 and U.S. Highway 65.

What would happen if Iowa were to pull these tax breaks? What about having an educated workforce – it looks like Des Moines has a decent share of the “creative class” as measured by Richard Florida.

It would be interesting to put this is a larger Midwestern context. Would these tech companies consider the Chicago area, with or without the tax breaks? How about Ann Arbor or Madison? Are other places even competing for data centers – and if not, why not?

Correlations that get at why big cities lean toward Democrats

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Richard Florida discusses several reasons, based on correlations, why big cities now so clearly lean toward the Democratic party:

Density played a key role in the metro vote. (To capture it we use a measure we of population-based density, which accounts for the concentration of people in metro). The average Obama metro was more than twice as dense as the average Romney metro, 412 versus 193 people per square mile. With a correlation of .50, density was an even bigger factor than population (where the correlation is .34). The reverse pattern holds for the share of Romney votes; the negative correlation for density (-.51) was significantly higher than that for population (-.33)…

The chart below plots the relationship between a metro’s share of college grads and its share of Obama votes. The line slopes steeply upward showing how the share of Obama votes increase alongside metro density. The share of college grads in a metro is positively correlated with the share of Obama votes (.42) and negatively with the share of Romney votes (-.44)…

The chart above shows the relationship between the share of the creative class and the share of Obama votes across metro areas. The line slopes steeply upward, indicating a considerable positive relationship. The share of creative class workers is positively correlated with the share of Obama votes (.40) and negatively with the share of Romney votes (-.41)…

Republicans may still be the party of the rich, but most of the country’s more-affluent metros lined up squarely in the Obama camp. The correlation between the average wages and salaries of metros and the share of Obama votes is positive (.50) and it is negative for Romney votes (-.51). This makes sense too, as larger metros have greater concentrations of knowledge-based talent and industries and are wealthier to begin with. (The associations we find are even more substantial for metros with more than one million people, with the correlations increasing to .71 for Obama and -.72 for Romney.) This follows the “Red State, Blue State, Rich State, Poor State” pattern identified by Andrew Gelman of Columbia University, who infamously found that while rich voters continue to trend Republican, rich states trend Democratic.

Florida argues this is evidence of class-based differences in American life, specifically, differences between the creative class and those in knowledge industries compared to the rest of the United States.

However, this raises a few questions:

1. The analysis here seems to be done across metropolitan areas while some of these voting patterns break down as we compare cities versus suburbs. For example, there are those who suggest it is really about cities and inner-ring suburbs that vote Democratic while more further flung suburbs and exurbs vote Republican. See earlier posts about the analysis of Joel Kotkin – here and here.

2. Making claims with correlations with tricky. Florida acknowledges this before he rolls out the analysis: “As usual, I point out that correlation points to associations between variables only, not causation.” But, then why stop the analysis at correlations here? Looking at the relationships just between two variables at a time ignores the complex relationships between factors like race, class, location, jobs, and more. Why not quickly run some regressions?

3. If this analysis is correct (and we need more in-depth analysis to check), why are Republicans so bad at appealing to the creative class?

Creative class fared better in economic crisis than working and service classes

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Richard Florida discusses how the creative class weathered the economic crisis better than blue-collar workers:

The crisis hit hardest at blue-collar workers, while creative class workers and metros with higher shares of creative class jobs fared considerably better. The unemployment rate for creative class workers, which was 1.9 percent in 2006 before the crisis, increased to just 4.1 percent in the years following the recession’s official end — an increase of 2.2 percentage points. The unemployment rate for workers in blue-collar jobs increased from from 6.5 percent before the onset of crisis to 14.6 percent at its end, more than three times higher than that for creative class workers and a jump of more than 8 percentage points. The unemployment rate for workers in routine service jobs increased from 5 percent to 9.3 percent at its end, more than double that for creative class workers a 4.3 percent jump…

Even after controlling for all those things, the analysis found that having a creative class job dramatically reduced a person’s chance of being unemployed over the course of the crisis. All others things being equal, we found that having a creative class occupation reduced an individual’s probability of being unemployed by 2.0 percentage points between 2006 and 2011. Having a creative class job had a bigger effect on the probability of being unemployed than holding a college diploma and about the same effect as having an advanced degree…

The study also found that while unemployment rates were lower in metros with higher shares of creative class jobs, the biggest benefit for creative class workers came in regions with lower shares of creative class jobs. The impact of having a creative occupation on the likelihood of being unemployed, the study found, was slightly stronger in metropolitan areas with lower shares of creative workers…

These results, along with our findings related to the other major occupational groups, are indicative of a structural change taking place in the U.S. economy. This shift is characterized by high — and growing — unemployment in Working Class occupations, whereas the relative position of creative workers improved in the years following the recession.

These final sentences are key: the economic crisis exposed some of the larger structural issues in the American and global economy. The creative class, those with education, social status, and access to the white-collar and high-tech jobs often found in certain metropolitan areas that are producing a lot of wealth, did better in the economic crises. It didn’t mean that no creative class jobs were lost but relatively fewer jobs were lost. On the other hand, more working-class jobs were lost. On top of this, the working and service class didn’t have the same resources to weather the economic storm. When the value of investments, such as housing values and retirement plans, shrunk and jobs dried up, there wasn’t much to fall back on.

This situation is not likely to be fixed quickly. For example, it takes time to get education and only roughly a third of American adults have a college degree. It also takes time for a broader economy to shift away from a service and consumption oriented economy to one that creates more high-paying, information-age jobs.