Merger May Rescue Declining Suburbs

One of the emerging issues in urban policy is how to assist aging inner-ring suburbs that have fallen on hard times.

The scope of these challenges, the weaknesses of potential solutions, and the possible role for merging with an adjacent stronger central city as a tool are explored in my new Manhattan Institute report “Mergers May Rescue Declining Suburbs.”

I provide an overview of report in a column over at City Lab.  An excerpt:

In some ways, struggling inner-ring suburbs are harder to revive than central cities. For one thing, they are often “out of sight, out of mind.” Downtowns have the spotlight of the local media on them, and they attract attention from business and community leaders and local and national lawmakers. Inner-ring suburbs rarely get much attention until some serious problem emerges, as in the police shooting in Ferguson, Missouri, or the pay scandal in Bell, California.

These communities are also seeing increases in concentrated poverty and isolated minority groups. Black residents leaving central cities in the Midwest and Northeast often end up in these suburbs. As with previous moves into urban areas that were once off-limits, what originally seemed like the American Dream becomes a mirage or a nightmare as opportunities recede.

But unlike inner-city neighborhoods, inner-ring suburbs often have additional serious structural challenges. They often lack of good transit access, for example. They also sometimes are dominated by older, smaller Cape Cod or ranch-style housing that in need of repairs and out of favor in the market. And they don’t have the distinctive assets of central city downtowns to draw on. Central cities are frequently the regional seat of government, either a county seat or state capital. They have major institutions like universities and hospitals; they contain regional attractions such as zoos, museums, and sports teams; and many still boast legacy corporate headquarters, among other assets. This is true even in struggling places like Detroit and Cleveland.

But inner-ring suburbs usually don’t have these. As former East Cleveland Mayor Gary Norton put it, “A smaller place can do very, very well if the right elements are within its borders, or it can do very, very poorly if the right elements leave. The right elements left our borders, and without all the assets that a big city has, without the diversification, that’s a bad situation.”

Click over to read the whole thing. And be sure to check out the report, which includes data on all the suburbs contiguous to the central cities in various Midwest and Northeastern post-industrial cities.

Note that this is not a call for a one size fits all solution of merger. Nor is it an endorsement of large scale city-county mergers or “big box” regional governments.

from Aaron M. Renn
http://www.urbanophile.com/2017/09/19/merger-may-rescue-declining-suburbs/

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New York, San Francisco, or Get Out

Photo by Dmitry Avdeev, CC BY-SA 3.0

Someone once told me than when it came to tech and other high end talent industries, it was “New York, San Francisco, or get out.” This was before Peter Thiel made his famous statement, “If you are a very talented person, you have a choice: You either go to New York or you go to Silicon Valley.”

Another person I know once made a different argument. the case for his mid-sized city was that it was the perfect blend of “opportunity” and “access.” His argument was that in very small places you can get access, but there’s no opportunity. In the global cities you have opportunity, but it’s hard to get access. Somewhere down the hierarchy was the perfect blend of both.

I don’t doubt that’s true for some people. But in my experience the higher you go in the urban hierarchy, the better you have it for both opportunity and access.

There’s no doubt that smaller cities have great access in some respects. I’ve met mayors from any number of major US cities. But although I lived in both New York and Chicago, I’ve never met the mayor of either, and getting access would probably be very difficult.

However, what is the value of “access” in terms of the ability to personally talk with high level politicians or business leaders in a community? I would argue that the real question is what that access gets you, and from what I’ve seen it isn’t much.

Consider that Silicon Valley is a youth obsessed culture. You can come there even without a degree, and if you have the talent, have a chance to get in with a great firm or get funding for your own. There’s still an element of chance to it of course. But you aren’t going to be held back by lack of credentials or age.

New York is a different matter. It’s probably harder to come in as a penniless youth and make it big than it was back in the 70s. (That’s the topic of a future article). But I managed to find opportunities here that simply weren’t available in other cities, even ones in which I had better “access.” I see that similar things have happened to others, as they got sucked into New York, not just for the lifestyle, but for the superior professional opportunities.

I’d argue that from a practical perspective, the best opportunity-access combos for high talent people are in coastal cities like NYC and SF.

One thing I’ve noticed about smaller cities is that while some markers of social status are easier to achieve there – say getting onto the board of some non-profit – they are often seniority driven communities where older people still dominate all the real positions of power and there’s an incredible play it safe mentality when it comes to taking a chance on someone young and new who hasn’t been an overtly political pole climber.  Maybe it has something to do with the manufacturing background of many of the places I engage with.

The one thing I always tell smaller places about talent attraction is that they need to leverage their smallness to really provide genuine, rapid opportunity to people who can prove themselves. Actual professional or other tangible opportunities are a powerful motivator for people, even in an age in which people supposedly pick a place to live, then look for a job there.

Smaller and mid-sized cities should be the places where young talent can get recognized, get real step-up opportunities, and make it to the top faster (if they deliver the goods) than larger cities. Unfortunately, this doesn’t seem to be the case.

I always find it puzzling when I see people struggle to get traction in some smaller place, then knock it out of the park in a larger arena. Some of it is the cultural mismatch I talked about in a recent Governing column. But that cultural gap can be a real problem for smaller places that can’t seem to attract superstar or A-caliber talent.

Finding a way to provide genuine opportunities to top caliber people who are still in the pre-reputation phase may be one of the most important things communities need to do to keep those folks from ending up on the coasts.

 

from Aaron M. Renn
http://www.urbanophile.com/2017/09/18/new-york-san-francisco-or-get-out/

Why I’m Skeptical of “Trade” Deals

I like trade, but these “trade” deals not so much.

A couple of tweets illustrate why. Ben Lilliston tweeted that a NAFTA renegotiation should try to ban right-to-work laws. Richard Florida chimed in wondering if the same could be done for banning local economic development incentives.

These were posted in the spirit of twitter, but give an insight how these deals seem to work in real life. Vast numbers of lobbies try to insert provisions to achieve through a trade deal something that is really a domestic policy they would prefer anyway, or to otherwise circumvent the traditional democratic process.

The Trans-Pacific Partnership was supposedly something like 5,500 pages of text. Nobody could possibly read that whole thing. Something tells me you don’t need 5,500 pages to zero out tariffs, which is what most people probably think of when they think of free trade.

Instead these deals are full of all sorts of special provisions to favor influential domestic lobbies. They also include things such as special dispute resolution tribunals, which basically allow transnational groups of arbitrators to overturn domestic policies.

It is true that trade is about much more than simply shipping products around. One of the great attractions of doing business in China, for example, has been regulatory arbitrage. By utilizing subcontractors in China, developed world multi-nationals can avoid their own domestic labor an environmental standards.

But attempting to fix all this through incredibly long, baroque treaties would seem to be a fool’s errand. Maybe if we want to do trade deals we should stick to simpler agreements on things like tariffs instead of trying for some grand, sweeping agreement.

from Aaron M. Renn
http://www.urbanophile.com/2017/09/15/why-im-skeptical-of-trade-deals/

Migration Rises for College Degreed

I’m going to be putting out the September issue of my free monthly email newsletter including a roundup of some of the best links from around the web last month. So be sure to check out a sample and sign up. You get a free copy of my ebook when you do join.

Lyman Stone is the best analyst out there on migration. He writes at his Medium site and elsewhere. Today he put up an interesting analysis of the new ACS migration data.

One of his findings is that there has been a big divergence in migration trends post-2010. The college educated have seen their migration rates rise as they recovered from the effects of the Great Recession. Those with less than a college degree have sign migration remain flat or even shrink. This is just another illustration of the two-tier economy in the country.

If you’re a migration data junkie like me, be sure to check it out.

from Aaron M. Renn
http://www.urbanophile.com/2017/09/14/migration-rises-for-college-degreed/

How Much Value Do Economists Assign to Having Married Parents Who Aren’t on Drugs?

The house I grew up in.

Yesterday I posted my new column from the September issue of Governing magazine in which I write:

There are a number of people in the national media who make the argument that things aren’t so bad, that if you look at the numbers this idea that things are horrible in much of America just isn’t true. It’s easy for me to believe this is actually the case in a quantitative sense. But man does not live by bread alone. When you have an iPhone but your community is disintegrating socially, it’s not hard to see why people think things have taken a turn for the worse.

Conveniently the Wall Street Journal published an op-ed last week by Harvard economist Martin Feldstein called “We’re Richer Than We Realize” that makes the kind of argument I was talking about, right down to talking about iPhones:

Government statistics paint an excessively grim picture of what is happening to real wages and the growth of real national income. Although most households’ take-home cash has been rising very slowly for decades, their standard of living is increasing more rapidly because those wages can now buy new and better products at little or no extra cost. The government’s measure of real incomes gives too little weight to this increase in what take-home pay can buy….First, government statisticians grossly understate the value of improvements in the quality of existing goods and services. More important, the government doesn’t even try to measure the full contribution of new goods and services.

The other source of underestimation of growth is the failure to capture the benefit of new goods and services. Here’s how the current procedure works: When a new product is developed and sold to the public, its market value enters into nominal gross domestic product. But there is no attempt to take into account the full value to consumers created by the new product per se.

Or consider consumer electronics. New York University economist William Easterly recently tweeted an image of a 1991 RadioShack newspaper ad and noted that all the functions of the devices on sale—clock radio, calculator, cellphone, tape-recorder, compact-disk player, camcorder, desktop computer—are “now available on a $200 smartphone.” The benefits to consumers from these advances don’t show up in GDP.

I don’t dispute anything Feldstein says in the article, which to me sounds completely correct. If you’re a Journal subscriber, you should read it. But it’s very incomplete.

Feldstein says we should consider the full value of the product innovations we’ve created. He cites improvements in health, for example.

But where is the expansive treatment of the economic value – the negative economic value – of declines in social conditions? Is the fully expansive impact of violence in some of Chicago’s neighborhoods fully counted? Is the quality of life impact of having a mother strung out on opioids, or having a father who is just plain gone? What’s the impact of going from being able to leave your keys in your car and your house unlocked to realizing that burglary is a very real possibility? And speaking of health, what is the all in effect on a community of the declining life expectancy we’ve experienced? What’s the community impact of an HIV crisis?

The truth is that along with real economic progress there has been a parallel big degradation in the lived experience of life in much of America, a part of America largely invisible to and certainly not relatable to on a visceral level by most of those in booming sections of global cities. I’m all in favor of understanding the very real way that technology and other innovations have made our lives better, and fully capturing that in statistics. But we need to be equally as diligent in capturing and measuring the downsides of those trends, an effort I’ve read much less about in the papers.

from Aaron M. Renn
http://www.urbanophile.com/2017/09/13/how-much-value-do-economists-assign-to-having-married-parents-who-arent-on-drugs/

Economic Growth Is Not Enough

My latest column in the September issue of Governing magazine looks at the seeming disconnect between statistical economy growth and deep unhappiness and malaise in many communities. I use the town I grew up in to contrast the tremendous progress in economic well-being in many respects, coupled with a collapse of social capital and conditions. Here’s an excerpt:

But while life in these places was poorer and technologically rudimentary, it was socially intact and cohesive. Now, that’s inverted. Although the comforts of everyday life are in many ways better, social conditions have collapsed for many. What has happened calls into question the idea that social well-being is tightly linked to economic health — that just providing more and better jobs can by itself turn broken families and communities around.

….

There are a number of people in the national media who make the argument that things aren’t so bad, that if you look at the numbers this idea that things are horrible in much of America just isn’t true. It’s easy for me to believe this is actually the case in a quantitative sense. But man does not live by bread alone. When you have an iPhone but your community is disintegrating socially, it’s not hard to see why people think things have taken a turn for the worse.

Click through to read the whole thing.

from Aaron M. Renn
http://www.urbanophile.com/2017/09/12/economic-growth-is-not-enough/