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Joel Kotkin is the author of The City: A Global History and is Presidential Fellow in Urban Futures at Chapman University in Orange, Calif. He is also a senior fellow with the New America Foundation in Washington and a senior fellow with the Center for an Urban Future in New York.In the first decade of the 21st century, several critical analyses have emerged about the future of American cities. This paper attempts to lay out a new notion: that of "Opportunity Urbanism." This concept stresses a region's ability to create jobs, offer affordable housing, and present entrepreneurial openings to a growing and highly diverse population as the surest signs of urban vibrancy. It embraces the fundamental principle that one of the primary historic roles of cities has been to nurture and grow a middle class -- to be an engine of upward social mobility.
Our emphasis on a city's ability to provide opportunity for a broad spectrum of citizens differs from what some consider the main current of today's urban policy thinking. We recognize that concerns about income inequality have been voiced, even by senior policymakers and analysts. Nevertheless, contemporary trends in thought regarding city development concentrate not on upward mobility, or even on the middle class, but on what might best be called an "elite" strategy.
In one view, the fate of urban areas -- and of cities in general -- depends largely on the area's ability to attract the wealthiest individuals, the people with the highest skills, and those who can perform the most rarefied economic functions. The resulting "superstar cities" cater largely to the upper classes and to those who serve them; generally, those cities are becoming too expensive for middle-income individuals or families.
Another popular formulation concludes that to remain vibrant, cities must lure the so-called "creative class" of skilled workers with urban amenities, social attitudes, and cultural offerings. The emphasis here is on the so-called "war for talent." Cities that win this battle, the theory goes, emerge as the avant-garde in technology, culture, and the expanding global economy.
Implicitly, these approaches give short shrift to the need to accommodate either an expanding population or a wide variety of social groups. These formulations emphasize "quality" as opposed to "quantity"; each superstar city should be preoccupied with the struggle to boost its attractiveness to elites, as opposed to seeking ways to keep the doors of opportunity and homeownership open to the working and middle classes. Instead, superstar cities offer what New York Mayor Michael Bloomberg has called "a luxury product."
A handful of urban regions -- San Francisco, Boston, perhaps Seattle and Portland -- could conceivably succeed with such a strategy. These areas have relatively low percentages of undereducated people, and boast nested concentrations of high-end industries. But it is difficult to see how such areas could accommodate an American population that is expected to rise from 300 million today to at least 400 million in 2050.
For this reason, we believe that "opportunity cities" represent the predominant model for America's urban future, including for some of the more hard-pressed older, industrial cities. Because of widening differences in housing and other costs, there has been a decisive demographic tilt towards cities such as Phoenix, Dallas, Atlanta, Charlotte and Houston.
In a perhaps less-understood phenomenon, these cities are also showing marked gains in attracting high-wage employers and educated migrants, including members of the ballyhooed "creative class." These are, of course, the very jobs and workers that are widely thought to be concentrating in more elite places.
Increasingly, this shift has included a movement of large corporate headquarters and of higher-end jobs to these opportunity cities. Firms that need to compete globally generally expand in business-friendly places that possess decent infrastructure and amenities, and that can accommodate a broad range of employees.
In defining our concept of "Opportunity Urbanism," we rely heavily on a detailed investigation of trends in Houston, an understudied city that has enjoyed some of North America's most rapid economic and population growth over the past generation. We have studied Houston not as an end in itself, but to explore the fundamental economic and demographic dynamics of what Houston Mayor Bill White has defined as, first and foremost, an "opportunity city."
The Economic Basis of Opportunity Urbanism
A critical characteristic of opportunity cities is their ability to provide their growing populations with housing and other amenities at a reasonable cost. In contrast, as other communities become built-out and reach their development boundaries, the lack of available land constrains their ability to provide new, reasonably-priced housing options. Sometimes this is a result of natural barriers; sometimes, of political ones.
Our analysis suggests that the primary issue in the relocation of skilled individuals and companies is the amount of effort required in a given location to secure basic household necessities: a reasonably-priced home, clothing, food, and bundle of entertainment and other consumption items. Executives and recruiters in opportunity cities believe this difference gives them a critical edge over their counterparts in superstar cities. Houston executive recruiter Chris Schoettelkotte explains the advantage this way:
"People from other areas say that you guys don't make much down there. [But] the guys from L.A. make the same amount of money in the same field here. We pull them from Wharton, the Ivy League, and Stanford and they get paid through the nose… Houston can get the talent."
This is not to say that all decisions about where to live rest on economic factors. Indeed, as cities such as Houston become wealthier, concern with quality of life issues has risen. Ultimately, however, economics seems to be the determining factor in understanding migration and job creation patterns. Quality of life is a complex issue, but in the end it is determined for most people by the kind of life they can afford in a given place.
The tradeoff between salaries and the cost of living has long been recognized, but rarely quantified. One measure of the dramatic differences across urban areas is the ACCRA Cost of Living Index, produced by the Council for Community and Economic Research. This index shows that the high-cost metro areas of New York, San Francisco, and Los Angeles top the chart. In contrast, the sixth-largest metro in the U.S., Houston, has the lowest cost of living of the major metro areas, less than half that of New York City, followed closely by Charlotte. This means that someone who earns $100,000 in New York City would have to earn only $42,110 in Houston to enjoy a comparable standard of living.
What we have found, then, is that most working people have more real income -- measured by what they can buy, given their average incomes -- in a place such as Houston than they do in superstar cities such as New York, Los Angeles, or San Francisco.
"High-End" Job Creation
One common claim made by the advocates of elite urban strategies is that opportunity cities produce largely "lousy" jobs in comparison with the "good" jobs associated with Boston, Seattle or San Francisco.
This approach misses many critical points and fails to address important differences in historic evolution. It's true that cities with fast-growing populations create many jobs to service local growth. This does not necessarily mean, however, that opportunity cities have lagged behind in creating high-end jobs. Since the 1990s, opportunity cities have actually often outpaced superstar cities in overall "quality job growth" -- higher wage jobs -- by a wide margin.
Critical areas to watch are financial, business, and professional services. These generally higher-wage activities are said to be peculiarly well-suited for established "global cities," and for cities favored by the much acclaimed "creative class." Some believe that these cities are the largest growing source of high-wage jobs.
Yet the evidence, particularly during the past six years, demonstrates that most opportunity cities have produced far more higher-wage jobs. Indeed, even New York City, traditionally the major center for these jobs, steadily has been losing its share; since 1993 the New York City region's percentage of such jobs has dropped from twice the national average to close to the norm.60 Instead, the biggest gainers include Riverside, Miami, Phoenix, Dallas, and Houston. San Francisco, Boston, and New York, which enjoyed modest growth in high-wage jobs before 2000, have suffered significant net losses since then.
Finally, advocates of elite cities claim, with some justification, that salaries for high-end professionals tend to be higher in superstar regions. This is particularly the case for parts of the financial community in New York City, where multi-million-dollar bonuses greatly inflate average wage rates. However, in no major industry are such earners illustrative of trends on the median level. Once the cost of living adjustment is calculated, the median earnings in most professions turn out to be higher in opportunity cities than in their superstar counterparts. For the most ambitious investment banker or prospective dotcom billionaire, it may be financially more lucrative to locate in New York City or San Francisco instead of Houston, Phoenix, Dallas, or Riverside. But for the most high-wage earners, this will not be the case.
This summary was drawn from a longer piece. To read the entire paper, including a discussion of demographic trends that favor "opportunity urbanism" and policy issues related to the approach, click here.
POSTED BY: adambosnyc (July 25, 2008 12:17 PM)
After reading several articles indicating where young professionals should locate based on cost of living it does not seem to take into account that these new "opportunity cities" simply do not have the same vibrance as more traditionaly alive cities such as NYC or San Francisco. Where would they all live if price werent a factor? Try New York. Dallas doesnt quite have the same panache. 600 dollar rent will never change this.
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