Wednesday, October 29, 2014

Innovation Geography: The Beginning of the End for Silicon Valley

At Pacific Standard magazine, innovation is increasingly flat (not spiky).

Theme: Economic convergence.

Subject Article: "L.A. tech economy is underrated, venture capitalist Peter Thiel says."

Other Links: 1. "Bay Area growth crisis: 114,000 new jobs created and 7,000 new housing units."
2. "Big tech start-ups bypass Silicon Valley."

Postscript: Whatever you want to call the economic era after manufacturing (if you think there is a successor to manufacturing), I see evidence of convergence. Economic convergence is decline. In less normative terms, convergent economic activity diffuses geographically. Economic activity that used to concentrate in Silicon Valley now happens elsewhere. The world goes from, in Richard Florida parlance, spiky to flat. However, the world still looks spiky, but less so. I'm not interested in the false dichotomy (spiky vs. flat). I'm interested in the trend (spikier vs. flatter or divergent vs. convergent).

Monday, October 27, 2014

The Other Side of the Growing Disconnect Between Where You Live and Work

Importing cheap labor into high wage regions at Pacific Standard magazine.

Theme: Globalization and gentrification.

Subject Article: "Workers paid $1.21 an hour to install Fremont tech company's computers."

Other Links: 1. "The Geography of Foreign Investment in Real Estate."
2. "Consumer City."

Postscript: Rents don't have to rise for gentrification to occur. "The Housing Crisis We Don’t Talk About":

Chester is what is known, in real estate industry jargon, as a “weak market city.” The phrase means what it sounds like. The city is poor and its economy stagnant. The median home sale price in Chester in 2012 was $20,000, compared to $69,350 in nearby Wilmington and $98,000 in Philadelphia. Fewer than half of Chester’s working-age adults are employed, and a third of the population is living at or below the poverty line. In a city where median rent is $790, 51.5 percent of households pay 35 percent or more of their income to their landlords.

I think economic dislocation should be defined as "gentrification". The focus on the one side of the housing affordability equation (i.e. rent) has informed some really bad policy recommendations.

Friday, October 24, 2014

Congratulations, Your City Is Dying!

Shrinking cities have stronger economies at Pacific Standard magazine.

Theme: Ironic demography.

Subject Article: "Low birth rates can actually pay off in the U.S. and other countries."

Postscript: Most people are well aware of the legacy costs stemming from an aging population. Less discussed are the costs of a young and growing population. That a growing population is better than demographic decline is just assumed. Once again, folk wisdom drives policy instead of analysis.

Friday, October 17, 2014

Seattle, the Incredible Shrinking City

The gentrification of your single family home at Pacific Standard magazine.

Theme: Gentrification and migration.

Subject Article: "Scrunched in Seattle: Is this hipster hovel the future of the American city?"

Other Links: 1. "Tech Company Wagons Ho! Geography of the Urban Land Rush."
2. "Overflowing Fairfax Homes Split Neighbors."

Postscript: Read the following this morning, thinking about the connection between concerns about gentrification and NIMBYism:

Your question posits whether there is a need for more housing in East Dallas, which I find somewhat off the mark. I suspect, rather, that developers are speculating on a potentially profitable market for people who want to live here. That said, I’m OK, in general, with some new apartment and condo development in East Dallas. My support depends entirely on what is being torn down and where, plus the size and appearance of what is to be built. If the wrecking ball and huge North Texas-style developments are headed for our older, traditional, single-family homes and neighborhoods, I object. A number of Dallas developers have been steadily decimating East Dallas since the 1950s. Once upon a time, Live Oak and Ross were known as Painted Lady Rows, a beautiful gateway to downtown … leveled for parking lots, gas stations and cheap, soon blighted, commercial buildings and apartments. We almost lost the incredible Swiss Avenue in the 1970s. Then the 1990s McMansion craze began its broken-tooth effect on previously charming streetscapes. If this is another wave of destruction headed for what’s left of historic East Dallas, please, let’s exercise caution before there’s little left. Guess what’ll happen once the developers have milked their short-term profits and the market for people willing to pay to live here disappears along with the old neighborhoods and the charm?

Passive residential displacement (is that gentrification?) can take two forms. The first, being priced out of a neighborhood, is the common understanding of the term "gentrification". Less common is the kind described above in the quoted passage. The quality of the neighborhood changes and no longer feels like home. The two forms of passive residential displacement weave together, but the common thread is a sense of place (how we define home).

Turning the concept on its head, consider preemptive gentrification. I want to move my family to a neighborhood where the schools are better and the streets safer. I can't because the rent is too damn high there. But I have no standing, no claim to that place because it isn't my home. I can't afford it. Tough luck.

Being priced out of a place is quite common. It would be more common if residents didn't go through extreme measures to stay put or move into the best school district. The main rub, outside of academic considerations, concerns quality of place and sense of home. But such changes could render a neighborhood more affordable. We balk because it no longer feels like home.

Wednesday, October 15, 2014

Tech Company Wagons Ho! Geography of the Urban Land Rush

Tech companies build suburban campuses in the urban core at Pacific Standard magazine.

Theme: Innovation geography.

Subject Article: "Space Shift: As Wealthiest Flock to Supertall Condos, Offices Go Horizontal."

Other Links: 1. "Are Millennials Willing to Spend Most of Their Income on Housing?"
2. "Why Technology Firms Are Moving Downtown."

Postscript: Millennial housing choices subsidize tech labor costs when firms locate downtown (while retaining a suburban-like footprint):

Seattle boasts the highest number of micro-dwellings in the country—3,000 at last count. It also permits the most audaciously minimal units, some as small as 90 square feet. That’s about the size of two prison cells put together.

It’s not for the claustrophobic, but it does come with perks—including the chance for millennials and those with modest incomes to settle in vibrant urban neighborhoods. Their presence, in turn, injects new energy to the heart of the city while tamping down suburban sprawl. Micro-housing reflects a growing zeitgeist—to stop accruing, go minimalist and reduce one’s footprint. Indeed, the name of Seattle’s leading micro-housing development company is called Footprint.

Tech companies, looking to employ well-educated millennials, are expanding their urban footprint. Millennials, looking for city-living and proximity to work, are actively shrinking their urban footprint to lower the cost of rent (or homeownership) forced up by in-migrating tech companies.

Monday, October 13, 2014

Solving the Hispanic Mortality Paradox

Place-based metrics make people seem poorer than they are at Pacific Standard magazine.

Theme: Ironic demography.

Subject Article: "Why Hispanic-Americans live longer: The mystery that has puzzled researchers for decades."

Postscript: I've told this tale before. How does one figure out if global cities undermine state sovereignty when the data are national and not urban? Geographer Peter Taylor grappled with this question. Geographic units of analysis are social constructs. The bias is built into the metrics. What we measure tells us more than the measurements. Scholars studying domestic poverty have fallen into this place-trap.

Thursday, October 09, 2014

A Global City of Eds and Meds

Putting "Flyover Country" on the global mental map at Pacific Standard magazine.

Theme: Globalization and urban redevelopment.

Subject Article: "Rochester downtown building sells for $10 million."

Other Links: 1. "The Geography of Foreign Investment in Real Estate."
2. "Are Millennials Willing to Spend Most of Their Income on Housing?"
3. "Urban Decline in Rust-Belt Cities."
4. "Increasing spatial and economic polarization in America’s older industrial cities."

Postscript: The problem with eds and meds global neighborhoods in Buffalo:

Henry L. Taylor Jr. has focused much of his work on reviving East Side neighborhoods, from the area around Futures Academy – in the shadow of the Medical Campus, but hardly benefiting from it – to the Commodore Perry neighborhood now being eyed for transformation.

Globalization will continue to pop up in the damnedest places. But the benefits won't trickle down to the poor located in isolate neighborhoods. Tremendous wealth will reside cheek by jowl with tremendous poverty. Looking at Rust Belt cities in aggregate washes out the few places where wages and rents look quite similar to those of thriving global cities, which is why gentrification in shrinking cities strikes many as ironic (or simply unbelievable).

Wednesday, October 08, 2014

The Urban Geography of Globalization: Global Neighborhoods

The rise of nano core neighborhoods at Pacific Standard magazine.

Theme: Globalization and urban geography.

Subject Article: "Growing clout of global cities offers property opportunities: Top urban centres will seek to attract talent with non-traditional business districts, and investors should be looking at these new zones."

Other Links: 1. "Housing in New York, London is attractive as an investment for outsiders because it's scarce!"
2. "What draws Chinese investment? It's simple, says foreign capital expert: Direct flights to China and a Top 25 university. @LuskCenter talk."
3. "The Politics of Anti-NIMBYism and Addressing Housing Affordability."
4. "Affordable Housing: Geography of Supply and Demand."
5. "Downtown Mountain View's 303 Bryant St. sells for record price."

Postscript: I'm attempting to pivot away from critiquing the supply-side model of housing affordability. I am mainly interested in how the migration of global labor (people toiling in diverging, tradable jobs) transform regional economies. Nano core neighborhoods are popping up in cities that no one confuses as global. Tradable eds and meds are driving real estate appreciation in Rust Belt cities such as Pittsburgh and Buffalo. Tracking the migration of this labor force cohort should be a leading indicator of globalization and the associated real estate dynamics detailed in my latest post.

Tuesday, October 07, 2014

Are Millennials Willing to Spend Most of Their Income on Housing?

At Pacific Standard magazine, Millennials prove to be the source of urban gentrification.

Theme: Globalization and gentrification.

Subject Article: "Panel: Lack of affordable housing hurts economic development."

Other Links: 1. "Arcade Fire, Spike Jonze Steal Youth In ‘The Suburbs’ Video: Canadian indie rockers' clip is a somber comment on adulthood."
2. "Transit struggles with North America's move downtown: Millennials' desire to live near their workplaces strains cities from Toronto to Los Angeles."
3. "Urban Development: Faster Greener Commutes Key to Sustained City Growth."

Postscript: From Portland, Oregon to Brooklyn, NYC, a common theme emerges. Some people are willing to endure an irrational migration to a place where the return (i.e. wages) on living in the city doesn't justify the cost (i.e. rent). Ed Glaeser, Jed Kolko, and Albert Saiz looked at this "Consumer City" conundrum. In their model, certain amenities fill the deficit between wages and housing costs. In effect, a streetcar could subsidize lower wages in a cool city. Employers are happy. Real estate developers are happy. Apparently, Millennials are happy with the arrangement. Clearly unhappy are tenured residents who cannot afford the amenity dividend, as the research of Rebecca Diamond demonstrates.

Monday, October 06, 2014