TIP Strategies is a privately held Austin-based economic development consulting firm committed to providing quality solutions for public and private‑sector clients.
This blog is dedicated to exploring new data and trends in economic development.
Via: The New York Times
Last August, the New York Times released a set of interactive charts illustrating domestic migration by state since 1900. This series came to mind while we were thinking about talent retention and attraction. This tool, based on data from the US Census, charts state of birth versus state of residence of the US population for more than 100 years. Alternatively, you can view where people living in a state came from.
Understanding the migration patterns of a community can provide a framework for the design of a talent management strategy. Though state-level data does not lead directly to a detailed approach, it can help illustrate a state’s top talent “trading partners” and serve as a preliminary tool for recruitment. The flow of residents can also reveal patterns of economic change.
For example, comparing TIP Strategies’ two home states, Washington and Texas, reveal different dynamics of growth in each state. In recent decades, Texas has dramatically increased its non-native population, while simultaneously retaining 82% of its native population. Those who leave the Lone Star state are often drawn to other parts of the West and South. This is a change from decades earlier when Oklahoma was the primary target of Texas’s out-migration.
By contrast, Washington, like all western states, has attracted migrants for over 100 years. It retains a high percentage of natives–70 percent–but more than 50 percent of its population in 2012 was born elsewhere. Washington’s deep connection to the West Coast can be seen in the view of its diaspora which reveals that the vast majority of those who do leave the state remain in the West, a pattern which has held for more than 100 years.
By: Richard Florida
As high-income people return to cities and urban neighborhoods, they bring much of their suburban lifestyle with them.
Most of us who are sometimes labeled “urbanists” believe the new age of the city is squarely upon us. Cities and urban neighborhoods once counted for dead are adding people, in some cases faster than the suburbs; at the same time, we’re seeing shortages of affordable housing in some of America’s largest and most vibrant cities. This is what Alan Eherenhalt dubs “the Great Inversion”—a reversal of fortunes in which cities grow as suburbs decline.
But a recent study indicates that the traditional suburban lifestyle continues to be widespread. The study, by Markus Moos of the University of Waterloo and Pablo Mendez of Carleton University, found that key features of suburban life not only remain commonplace in the suburbs but are often continued by high-income people even after they move to cities.
The study covered 26 of 33 total Canadian census metropolitan areas (CMAs) that range from large cities and metro areas like Toronto, Vancouver and Montreal to much smaller ones like Windsor, Regina and Kelowna. These 26 CMAs account for 65 percent of Canada’s population. Using data from Canada’s 2006 census on before-tax average income, the researchers grouped the CMAs into eight “neighborhood types” based on three key variables: homeownership rate, share of population living in a detached single family house, and share of people who commute by car. The eight community types range from the most “urban” (Category 1), where none of these three variables are more present in the neighborhood than in the metro as a whole, to the most “suburban” (Category 8), where all three factors are greater than across the metro area.
The researchers found that the great majority of the population in Canada’s metros reside in two types of neighborhoods at opposite ends of the spectrum. Between a third to more than half of CMA residents (depending on the specific metro) live in Category 8 neighborhoods, the most suburban type of neighborhood. On the other hand, between 13 and 33 percent of residents (again, depending on the specific metro) live in Category 1 communities, the most urban.
Their most interesting finding concerns the “consistently positive relationship between suburban ways of living and higher incomes.” Richer people, the researchers found, tend to own single-family homes and drive cars even when they live in highly urbanized neighborhoods. In other words, even though there is a diverse range of suburban and urban neighborhoods, the affluent people who live in them lead relatively similar lifestyles. As the rich move back to cities, they take their preferences for and abilities to purchase larger home or condos and private cars.
The graph below (from the study) shows individuals making at least $60,000 per year are almost twice as likely to live suburban versus urban lifestyles, whereas those residents making $0 to $9,900 per year are more evenly distributed among urban and suburban neighborhoods. Moreover, households making $100,000 per year are more than three times as likely to live in suburban rather than urban neighborhoods, whereas households making $0 to $19,900 per year are almost five times less likely to live in suburban as opposed to urban neighborhoods. In short, the rich are more suburbanized regardless of where these suburban ways of living occur—a downtown condo or a suburban detached home.
The relationship between income and suburban ways of living is strongest in older industrial metros and in those that depend on mining and resource industries, as well as those with larger shares of single family housing.
The authors qualify their findings, pointing out that the relationship between income and suburban ways of living is weakest in large metro areas like Toronto and Vancouver, where densities are higher and more affluent people live in downtown condos. As housing costs rise and commuting becomes more arduous, higher income people live closer to the urban core in condos and rentals. These higher income urbanites also begin to embrace alternative transportation patterns such as walking, cycling and especially transit, and begin to locate around transit hubs, outbidding lower income groups for transit accessible locations. (My recent report with the Martin Prosperity Institute found that higher-income creative class professionals often follow similar transit-influenced housing patterns in the U.S., as well).
On the flip side, the study documents the concentration of lower income groups in the suburbs of these larger metro areas, as some suburban neighborhoods have lower average incomes than their urban counterparts. This is partly the result of less advantaged groups being pushed out of the core and away from closer-in transit hubs. In some of Canada’s largest metros, then, not only are cities are looking more like suburbs—suburbs are looking more like cities.
These patterns and processes, especially homeownership among more affluent groups, combine to exacerbate economic inequality and spatial segregation within as well as across urban centers and suburbs, according to the study.
Cities are resurgent, but their comeback also calls into question our basic models of “urban” and “suburban,” blurring the hard and fast lines between them. As I pointed out a while back, high-income people in living in advantaged urban and suburban neighborhoods lead essentially similar lives. While their urban neighborhoods might be denser and have more tall buildings, and their suburban communities have larger lots and more single-family homes, people living in both types of communities shop in similar stores, send their kids to similar schools and enjoy similar amenities.
As the Great Inversion continues, city leaders, urbanists and all of us will find ourselves confronting these new realities of geography and class, as the distinctions between “cities” or “suburbs” continue to evolve and change.
By: Fawn Johnson
Condo construction in the city has essentially halted, and that’s driving up the cost of homes, as well as apartments in the trendy downtown neighborhood.
DENVER—Four years ago, Ryan Oestreich set up an RSS feed on Craigslist so that he could be the very first person to contact a landlord when an apartment became available. “Oh, my god, that was a trial in itself. If you weren’t the first person to see the apartment with a checkbook, you weren’t very likely to get the apartment,” he says.
Oestreich, 30, and his then-girlfriend (now wife) rented for three years while she finished her master’s degree in medical anthropology. They were living on his nonprofit salary at the Denver Film Society, so they needed a rental place for less than $700 a month. That’s possible in Denver, he says, but not in the desirable downtown high-rises or the trendy LoHi districts packed with brewpubs. It also means there is lots of competition for the cheaper places.
“Landlords could do whatever they hell they wanted to,” Oestreich says. “We had people who wouldn’t call us back.” And potential occupants had to be ready to sign a lease immediately. Buying a house was actually less traumatic for the couple.
Once Oestreich’s wife graduated and got a job, they had two modest salaries and could afford their small house in central Denver. They’re pleased to be in the city rather than in a suburb where they could have a bigger home. “We don’t need much space,” he says. “We like Denver. We like the city.”
The renter-to-homeowner trajectory is one many young adults still hope to follow, and it’s one reason millennials are attracted to a city like Denver, where the rental and home-buying markets are somewhat reasonable. But even here, it’s getting harder to afford that big step of settling down in the community. Single-family homes in Denver generally run around $300,000, and cheaper condominiums are hard to come by because of a building shortage.
RealtyTrac recently put Denver on the top 10 list of least affordable counties for millennials who want to buy homes. Denver’s median home price in April was $270,000, according to the real estate site. That’s a far cry from the $950,000 median in San Francisco or $455,000 in Washington—other popular destinations for millennials—but it’s still a lot of dough for people early in their careers.
“It is something that we’re aspiring to. Just not yet,” says Sara Stevens, a 27-year-old aide to Colorado’s junior senator, Democrat Michael Bennet.
Nationally, young people are twice as likely to be unemployed as the general population, and 60 percent of those who went to college are burdened with student debt. Getting millennials on the path to home ownership starts with getting young people out of their parents’ houses, says economist Mark Zandi of Moody’s Analytics. “There are 4.5 million more 20-somethings living with their parents today than in 2007,” he said at a recent housing conference sponsored by the Bipartisan Policy Center. “If you don’t get into an apartment, you’re not going to get into a home.”
With its active lifestyles, relaxed vibe, and relatively affordable cost of living, it’s no surprise that Denver is one of the most attractive cities for millennials. But the city may not be able to retain the young professionals who have flocked here if it can’t provide more opportunities for them to become homeowners. Denver is suffering from a crushing shortage of available condominiums, a cheaper option that often forms a bridge for young people between apartment renting and buying a stand-alone home.
Condo construction in Denver has plunged since the state Legislature passed a bill in 2010 making it easier for condo owners to sue their builders. Lawmakers were reacting to a spate of horror stories about shoddily-built condo buildings when they passed the law, which allows homeowner associations to file class-action lawsuits against builders if two or more units in their building have defects.
Since then, condo construction in Denver has basically stopped. In 2006 and 2007, condos and townhouses made up about one-fourth of newly built homes. In 2012, they made up 2 percent, the market research firm Metrostudy told the Legislature last year.
Denver’s elected officials don’t like the condo liability law, especially when they proudly tout their millennial popularity as a selling point for the region. “The millennials who come to Colorado and who want to buy product can’t buy product. And since that is the biggest segment of the population coming to Colorado, why are we disenfranchising them from home ownership?” groused Doug Tisdale, mayor of the Denver suburb Cherry Hills Village at a recent meeting of metro-area mayors.
Recent reports by the Organisation for Economic Co-operation and Development (OECD) and the credit rating agency, Moody’s, point to a significant threat to economic growth: the global aging of the population. While aging populations have long been identified as threat to the growth of developed countries, a number of developing and emerging countries are projected to join the ranks of “super-aged” countries—those where more than one in five of the population is 65 or older—in the coming decades.
Currently, only Germany, Italy and Japan meet this “super-aging” definition. However, the number of countries in this group is expected to rise to 13 in 2020 and 34 in 2030, including a number of key Asian economies like China and Hong Kong. Furthermore, 60 percent of all countries rated by Moody’s will move into the “aging” category (defined as 7 percent or more of the population above 65) by 2015. The ratings agency predicts this demographic shift will lower annual economic growth by 0.4 percent over the next five years and by 0.9 percent between 2020 and 2025. The OECD report, Policy Challenges for the Next 50 Years, points to several other factors anticipated to shrink global growth rates including climate change and rising wage inequalities.
More information is available from the following sources:
Moody’s press release: Aging will reduce economic growth worldwide in the next two decades
OECD Press release: Global growth to slow as wage inequality rises over coming decades, says OECD
Policy Challenges for the Next 50 Years: presentations, report and data sets
OECD Data portal (including a variety of data tools in progress as part of the OECD Data Lab):
List of key indicators
OECD Data Lab
By: Alan Flippen
Via: The New York Times
Annie Lowrey writes in the Times Magazine this week about the troubles of Clay County, Ky., which by several measures is the hardest place in America to live.
The Upshot came to this conclusion by looking at six data points for each county in the United States: education (percentage of residents with at least a bachelor’s degree), median household income, unemployment rate, disability rate, life expectancy and obesity. We then averaged each county’s relative rank in these categories to create an overall ranking.
(We tried to include other factors, including income mobility and measures of environmental quality, but we were not able to find data sets covering all counties in the United States.)
The 10 lowest counties in the country, by this ranking, include a cluster of six in the Appalachian Mountains of eastern Kentucky (Breathitt, Clay, Jackson, Lee, Leslie and Magoffin), along with four others in various parts of the rural South: Humphreys County, Miss.; East Carroll Parish, La.; Jefferson County, Ga.; and Lee County, Ark.
We used disability — the percentage of the population collecting federal disability benefits but not also collecting Social Security retirement benefits — as a proxy for the number of working-age people who don’t have jobs but are not counted as unemployed. Appalachian Kentucky scores especially badly on this count; in four counties in the region, more than 10 percent of the total population is on disability, a phenomenon seen nowhere else except nearby McDowell County, W.Va.
Remove disability from the equation, though, and eastern Kentucky would still fare badly in the overall rankings. The same is true for most of the other six factors.
The exception is education. If you exclude educational attainment, or lack of it, in measuring disadvantage, five counties in Mississippi and one in Louisiana rank lower than anywhere in Kentucky. This suggests that while more people in the lower Mississippi River basin have a college degree than do their counterparts in Appalachian Kentucky, that education hasn’t improved other aspects of their well-being.
As Ms. Lowrey writes, this combination of problems is an overwhelmingly rural phenomenon. Not a single major urban county ranks in the bottom 20 percent or so on this scale, and when you do get to one — Wayne County, Mich., which includes Detroit — there are some significant differences. While Wayne County’s unemployment rate (11.7 percent) is almost as high as Clay County’s, and its life expectancy (75.1 years) and obesity rate (41.3 percent) are also similar, almost three times as many residents (20.8 percent) have at least a bachelor’s degree, and median household income ($41,504) is almost twice as high.
By: Binyamin Appelbaum
Via: The New York Times
South Carolina’s unemployment rate dropped to 5.3 percent in April, lower than in December 2007, when it stood at 5.5 percent on the eve of the Great Recession.
The share of South Carolina adults with jobs, however, has barely rebounded.
As the chart below shows, the same contrast is visible in most states. Unemployment rates, the most familiar and famous of labor market indicators, are nearing pre-recession lows. But the shares of adults with jobs — or employment rates — look much less healthy.
The reason is that the numbers are not quite two sides of a coin. The employment rate counts everyone with a job, while the unemployment rate counts only people actively seeking work. It excludes most people who are unemployed.
After most recessions, the numbers have moved in sync as the share of the population neither working nor looking has remained fairly constant. But after this recession, the middle ground has ballooned as fewer people try to find jobs.
As a result, the employment rate has become the more accurate indicator of the nation’s sluggish and perhaps permanently incomplete economic recovery.
It shows that the economy is improving. Employment rates have climbed above the post-recession nadir in every state, although the improvements are often quite small. In Mississippi, the employment rate is just 0.1 percent above its recent low.
It also shows that the recovery has a long way to go. Employment rates have rebounded in some states with strong growth, like Utah, Nebraska and Montana. But only three states — Maine, Texas and Utah — have retraced more than half their losses.
(Maine is a curiosity. Its economy has expanded less since 2009 than any state’s except Connecticut. Conversely, North Dakota and South Dakota, two of the three states with the most growth over the same period, have seen little recovery in their employment rates — perhaps in part because their losses were relatively small.)
The slow progress hints at a bleak reality. Most economists do not expect employment rates to rebound completely. A growing share of adults is too old to work, because baby boomers are aging into retirement while fewer immigrants are arriving to take their places in the work force. The share of workers claiming disability benefits, or retiring early, also increased sharply in recent years.