Why small rural towns turn down economic development opportunities

Not every rural small town wants to add a meat processing plant:

Regional economic development officials thought it was the perfect spot for a chicken processing plant that would liven up the 400-person town with 1,100 jobs, more than it had ever seen. When plans leaked out, though, there was no celebration, only furious opposition that culminated in residents packing the fire hall to complain the roads couldn’t handle the truck traffic, the stench from the plant would be unbearable and immigrants and out-of-towners would flood the area, overwhelming schools and changing the town’s character…

The village board unanimously voted against the proposed $300 million plant, and two weeks later, the company said they’d take their plant — and money — elsewhere.

Deep-rooted, rural agricultural communities around the U.S. are seeking economic investments to keep from shedding residents, but those very places face trade-offs that increasing numbers of those who oppose meat processing plants say threaten to burden their way of life and bring in outsiders…

Nickerson fought against Georgia-based Lincoln Premium Poultry, which wanted to process 1.6 million chickens a week for warehouse chain Costco. It was a similar story in Turlock, California, which turned down a hog-processing plant last fall, and Port Arthur, Texas, where residents last week stopped a meat processing plant. There also were complaints this month about a huge hog processing plant planned in Mason City, Iowa, but the project has moved ahead…

The question of who would work the tough jobs was at the forefront of the debate, though many were adamant they aren’t anti-immigrant. Opposition leader Randy Ruppert even announced: “This is not about race. This is not about religion.”

On one hand, not all jobs are necessarily good jobs. On the other hand, there seem to be larger issues at play: who will get these jobs? What happens when all the workers – who may not share the background of the small town – show up? It would be intriguing to explore what changes to the processing plants would lead to support from community members: guarantees of local hires? Higher wages? No minorities hired?

It would also be worth tracking where these processing plants end up. What one community turns down may be seen as an economic savior in another area. For example, scholars have noted the rise of immigrant populations in American rural areas in recent decades including places like Iowa and Georgia which don’t have the traditional immigrant gateway big cities.

Census projects record proportion of foreign-born residents in 2060

Recent projections from the US Census Bureau suggest the immigrant population will continue to grow:

The nation’s foreign-born population is projected to reach 78 million by 2060, making up 18.8% of the total U.S. population, according to new Census Bureau population projections. That would be a new record for the foreign-born share, with the bureau projecting that the previous record high of 14.8% in 1890 will be passed as soon as 2025.

Yet while Asian and Hispanic immigrants are projected to continue to be the main sources of U.S. immigrant population growth, the new projections show that the share of the foreign born is expected to fall among these two groups. Today, 66.0% of U.S. Asians are immigrants, but that share is predicted to fall to 55.4% by 2060. And while about a third of U.S. Hispanics (34.9%) are now foreign-born, the Census Bureau projects that this share too will fall, to 27.4% in 2060. These declines are due to the growing importance of births as drivers of each group’s population growth. Already, for Hispanics, U.S. births drive 78% of population growth…

Foreign-Born Share of Population to Reach Historic High by 2060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The U.S. today has more immigrants than any other nation. As the nation’s immigrant population grows, so too will the number of children who have at least one immigrant parent. As of 2012, these second generation Americans made up 11.5% of the population, and that share is expected to rise to 18.4% by 2050, according to Pew Research Center projections.

This is the first time in 14 years the Census Bureau has made projections of the foreign-born population. Predicting future immigration and birth trends is a tricky process, and the bureau has substantially changed its projections from year to year in light of reduced immigration and birth rates.

While these numbers are sure to contribute to political debate about current policies, they continue trends started in the late 1960s where immigration policies were changed. Additionally, the projections suggest the United States is still a desirable place to immigrate to and that the growing foreign-born population is a significant contributor to the overall growing population of the US.

I would be interested to hear about the discussions behind the scenes regarding the 14 year gap in making such projections. How much of this was guided by politics? What are the upper and lower bounds of the confidence intervals for these projections? Have our projection abilities improved significantly?

Immigrants might save the American housing market?

The real estate market may be sluggish but some data suggests immigrants offer hope with their desires to own homes:

But in some groups the dream, at least of homeownership, is alive and well. During the past two decades, immigrants have accounted for 27.5 percent of all household growth, according to the Harvard Joint Center for Housing Studies. When it comes to growth among younger generations, the foreign-born population is even more significant, accounting for nearly all the household growth for those under the age of 45.

Last year, immigrant households made up 11.2 percent of owner-occupied housing according to the JCHS—that’s up from only 6.8 percent in 1994…

The exact rate of homeownership varies among different immigrant groups, but overall the share of immigrants who own homes is growing. In 2000, the rate of homeownership among immigrants stood at 49.8 percent, according to a study by the Research Housing Institute of America. By 2010 the rate was 52.4 percent, and by 2020 that number will climb to about 55.7 percent, the study predicts. In the third quarter of 2014 the overall homeownership rate in the U.S. was 64.4 percent, according to the Census Bureau.

There are several reasons behind the growth rate in homeownership for immigrants, but part of the impetus may be that many immigrant populations are less cynical about the idea of homeownership than their American-born counterparts. “They view homeownership as a piece of the rock. It’s a benchmark of being settled,” says Dowell Myers, a professor at the Sol Price School of Public Policy at USC. “They view homeownership as the American Dream and they buy into that.”…

Even more compelling are the possibilities for homeownership among the children of immigrants. “When you look at the children of immigrants they actually exceed the native born on a lot of measures: on income, on education, on homeownership,” says Masnick.

Is there some irony here if it is conservative and older whites and immigrants who buy into the American Dream of owning a home the most? Of course, they may not be buying homes in the same places given ongoing patterns of residential segregation as well as different preferences of urban, suburban, and rural living.

Chinese homebuyers flood LA suburb with big homes

Bloomberg examines an influx of large-home purchases by Chinese buyers in Arcadia, California:

A year ago the property would have gone for $1.3 million, but Arcadia is booming. Residents have become used to postcards offering immediate, all-cash deals for their property and watching as 8,000-square-foot homes go up next door to their modest split levels. For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.

The city, population 57,600, projects that about 150 older homes—53 percent more than normal—will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

This flood of money, arriving from China despite strict currency controls, has helped the city build a $20 million high school performing arts center and the local Mercedes dealership expand. “Thank God for them coming over here,” says Peggy Fong Chen, a broker in Arcadia for many years. “They saved our recession.” The new residents are from China’s rising millionaire class—entrepreneurs who’ve made fortunes building railroads in Tibet, converting bioenergy in Beijing, and developing real estate in Chongqing. One co-owner of a $6.5 million house is a 19-year-old college student, the daughter of the chief executive of a company the state controls.

Arcadia is a concentrated version of what’s happening across the U.S. The Hurun Report, a magazine in Shanghai about China’s wealthy elite, estimates that almost two-thirds of the country’s millionaires have already emigrated or plan to do so. They’re scooping up homes from Seattle to New York, buying luxury goods on Fifth Avenue, and paying full freight to send their kids to U.S. colleges. Chinese nationals hold roughly $660 billion in personal wealth offshore, according to Boston Consulting Group, and the National Association of Realtors says $22 billion of that was spent in the past year acquiring U.S. homes. Arcadia has become a hotbed of the buying binge in the past several years, and long-standing residents are torn—giddy at the rising property values but worried about how they’re transforming their town. And they’re increasingly nervous about what would happen to the local economy if the deluge of Chinese cash were to end.

Interesting look at how this affects one particular community. It seems to bring together several issues that might trouble the average American suburbanite:

1. An influx of immigrants. This is happening across the suburbs as many new immigrants move directly to the suburbs. At the same time, there are a number of ethnoburbs in the LA region so this is not unknown.

2. An influx of immigrants from China. The United States has an interesting current relationship with China and Americans didn’t treat Chinese immigrants well in early California. A large group of wealthy foreigners from a country with a huge economy and shadowy government might make some nervous.

3. This big money means older homes are being torn down and replaced with big houses. A large number of teardowns in an established community tends to attract attention as the homes can change the character of neighborhoods as well as raise prices (though this is also presented positively in this story as long-time residents can cash out).

All together, this rapid change will be worth watching.

“Are Mexicans the most successful immigrant group in the U.S.?”

Two sociologists argue that looking at where they start when they immigrate compared to their children’s outcomes, Mexicans may be the most successful immigrant group:

Like Chua and Rubenfeld, we found that the children of Chinese immigrants exhibit exceptional educational outcomes that exceed those of other groups, including native-born Anglos. In Los Angeles, 64 percent of Chinese immigrants’ children graduated from college, and of this group 22 percent also attained a graduate degree. By contrast, 46 percent of native-born Anglos in L.A. graduated from college, and of this group, just 14 percent attained graduate degrees. Moreover, none of the Chinese-Americans in the study dropped out of high school.

These figures are impressive but not surprising. Chinese immigrant parents are the most highly educated in our study. In Los Angeles, over 60 percent of Chinese immigrant fathers and over 40 percent of Chinese immigrant mothers have a bachelor’s degree or higher. In turn, their children benefit from their parents’ human and financial capital, giving them a boost in their quest to get ahead…

At what seems to be the other end of the spectrum, the children of Mexican immigrants had the lowest levels of educational attainment of any of the groups in our study. Only 86 percent graduated from high school—compared to 100 percent of Chinese-Americans and 96 percent of native-born Anglos—and only 17 percent of graduated from college. But their high school graduation rate was more than double that of their parents, only 40 percent of whom earned diplomas. And, the college graduation rate of Mexican immigrants’ children more than doubles that of their fathers (7 percent) and triples that of their mothers (5 percent)…

A colleague of mine illustrated this point with a baseball analogy: Most Americans would be more impressed by someone who made it to second base starting from home plate than someone who ended up on third base, when their parents started on third base. But because we tend to focus strictly on outcomes when we talk about success and mobility, we fail to acknowledge that the third base runner didn’t have to run far at all.

It sounds like measuring mobility rather than just outcomes leads to different conclusions. And, of course, the starting points for all groups when they come to the U.S. are based on long histories and social conditions and groups can receive very different receptions in the U.S.

I wonder how these findings would go over with the average American citizen: Mexicans are the most successful immigrant group? You wouldn’t suspect this with a lot of the rhetoric out there…

Opposing gentrified suburban strip malls in order to give immigrants and others cheaper business opportunities

Plenty of suburban critics detest strip malls for their ugliness, auto-dependence, and effect on traditional shopping districts. But, Kaid Benfield argues they may need to be protected from gentrifiers as they offer cheap real estate that can be taken advantage of by immigrants and others.

And yet:  As these properties have declined, so have their rents, making them affordable to small, often entrepreneurial businesses.  Particularly as immigrants have settled in inner suburbs (where many of these fading commercial strips are), businesses owned and patronized by the immigrant population have occupied many of these spaces, in some cases alongside small start-ups owned by longtime community residents as well.

The risk is that, as we reshape these old properties with new buildings and concepts, the replacement properties will be much more valuable than their predecessors; indeed, that’s why new development is appealing to investors and how it is made possible.  Overall, that’s a good thing.  But small businesses either go under, unable to afford new rents, or relocate as a result.  The logical place to relocate in many cases will be vacant storefronts in other strip malls in locations less attractive to the businesses’ clienteles.  What to do?…

According to Ritchey’s article, Asheville’s strip malls offer a setting for synergies to develop and help connect entreprenurial businesses to each other:  for example, establishments offering diverse but complementary products and services can share a customer base, trade ideas, and cross-promote.  This strikes me as analogous in some ways to synergies available to start-ups in more urban “business incubators.”

It makes a lot of sense to me and, in many parts of the country, it is newer Americans who are benefitting the most from these opportunities.  For them, a successful business in a strip mall is the American Dream at work.  Three years ago, Aaron Renn (The Urbanophile) and I wrote separate articles about a sort of organic economic revitalization being initiated by immigrants within the existing fabric of our older suburbs.

Interesting argument. Three quick thoughts:

1. Does this mean strip malls might be viewed differently in the future by suburban critics? While they might prefer strip malls are not built in the first place, this does seem like a good use of resources.

2. When people argue that small businesses are really important to the American economy, how many of these small businesses are in strip malls? Could the humble strip mall be one of the backbones of the American economy?

3. This is tied to larger issues about redevelopment in mature suburbs. In American metropolitan areas, many suburbs are built-out and have no large land parcels for new development. There is a lot of potential then for utilizing existing structures or knocking them down and doing something new. If people don’t like strip malls, what would replace them? How much density are suburban residents willing to accept in their neighborhoods or nearby?

Rioting in the Swedish suburbs

Youths are rioting in the Swedish suburbs after a recent violent incident involving police:

Hundreds of youths burnt down a restaurant, set fire to more than 30 cars and attacked police during a fourth night of rioting in the suburbs of Stockholm, shocking a country that dodged the worst of the financial crisis but failed to solve youth unemployment and resentment among asylum seekers.

Violence spread across the Swedish capital on Wednesday, as large numbers of young people rampaged through the suburbs, throwing stones, breaking windows and destroying cars. Police in the southern city of Malmo said two cars had been set ablaze…

The disturbances appear to have been sparked by the police killing a 69-year-old man wielding a machete in the suburb of Husby earlier this month, which prompted accusations of police brutality. The riots then spread to other poor Stockholm suburbs.

“We see a society that is becoming increasingly divided and where the gaps, both socially and economically, are becoming larger,” said Rami Al-khamisi, co-founder of Megafonen, a group that works for social change in the suburbs. “And the people out here are being hit the hardest … we have institutional racism.”

This sounds very similar to the context of the London riots a few years ago: the police are involved in a death and local residents respond in rioting while charging that this is part of a long line of negative actions taken by the police and government. However, we wouldn’t want to “commit sociology” by trying to explain such actions, would we?

This is a reminder of the state of some European suburbs where immigrants and lower-class residents live in run-down neighborhoods isolated from the native European society and opportunities for jobs and education. This is a different geography compared to the United States where rioting is linked to poor inner-city neighborhoods. But, the situations are alike: there is long-standing isolation, negative treatment from the government and police, and not much of a pathway to achieving the “good life” in society.