Thursday, April 24, 2014

Explaining Gentrification: Global Jobs Versus Local Jobs

Explaining ironic gentrification in Pittsburgh at Pacific Standard magazine.

Theme: Global talent migration.

Subject Article: "Pittsburgh renting rates rising quickly."

Other Links: 1. "The cost of blight: vacant and abandoned properties."
2. "Urban Decline in Rust-Belt Cities."
3. "Explaining Gentrification."
4. "Sky's the limit for Atlanta rents: Ponce City Market leases are just a sampling."
5. "University Circle aims to help small businesses rise with the neighborhood: gentrification 101."

Postscript: Lack of housing supply is not the only cause of gentrification. In this post, I show how global labor markets push up rents in shrinking cities where the housing supply is ample to meet demand. Yet gentrification still exists.In a forthcoming post, I explore the real estate bubble in Stockholm, Sweden as another possible cause of gentrification.

Monday, April 21, 2014

Explaining Gentrification

Constraints on talent supply, not affordable housing, better explains gentrification at Pacific Standard magazine.

Theme: War for talent.

Subject Article: "Housing markets: The spectre haunting San Francisco."

Other Links: 1. "Rudy Giuliani: Press Release - Mayor Giuliani Cleaned Up New York City."
2. "Aberdeen, the city outpacing even London’s property boom."
3. "Oil and gas expansion to create 20,000 Scottish jobs."
4. "Bright Flight From Silicon Valley."

Postscript: I don't buy the argument that housing supply is the primary driver of gentrification. "Still More Bounce in California":

Silicon Valley tops the list of highest paid metropolitan areas when it comes to tech talent, with an average annual salary of $108,603 and an average annual bonus of $12,458. The seven percent year-over-year increase in salary was partially driven by those tech professionals earning more than $250,000 being included in this year’s results. Excluding those highly paid professionals, Silicon Valley salaries still increased at a greater rate than the national average or five percent year-over-year.

Looking at median rent as a share of median income, the supposedly exceptionally tight San Francisco market isn't the least affordable city. It ranks 7th nationally. To date, all I've read is anecdotal data supporting the claim that artificial housing supply restriction is the culprit for gentrification. Meanwhile, gentrification is occurring just about everywhere (even in dying Rust Belt cities) in a variety of policy geographies.

Thursday, April 10, 2014

The City Is Dying

The ironic geography of dying cities at Pacific Standard magazine.

Theme: Demographic decline.

Subject Article: "Population of rural America continues to fall."

Other Links: 1. "Peak Urbanization."
2. "The Era of Dying Places: Everyone Is Starved for Talent, but Migration Is a Thing of the Past."
3. "Urbanization As Opportunity."
4. "Los Angeles Is Beginning to Look a Lot Like Pittsburgh."
5. "Which Poor Neighborhoods Experienced Income Growth in Recent Decades?"
6. "The Case for More Babies."

Postscript: For example, Los Angeles is dying:

But the most worrisome blow by far is a scathing verdict on Los Angeles’s civic health that was delivered in a one-two punch — the second on Wednesday — by a committee of lawyers, developers, labor leaders and former elected officials who make up something of the Old Guard here. The Los Angeles 2020 Commission presented a catalog of failings that it said were a unique burden to the city: widespread poverty and job stagnation, huge municipal pension obligations, a struggling port and tourism industry and paralyzing traffic that would not be eased even with a continuing multibillion-dollar mass transit initiative.

Their conclusions amounted to an indictment of a city and its culture, a place that the commission said was brimming with talent and resources but was nonetheless falling behind other major cities across the globe.

“Los Angeles is barely treading water, while the rest of the world is moving forward,” the commission said. “We risk falling further behind in adapting to the realities of the 21st century and becoming a city in decline.”

It was a good run.

Wednesday, April 09, 2014

Peak Urbanization

The city is dying at Pacific Standard magazine.

Theme: Demographic decline.

Subject Article: "Austin or Bust: America's Biggest Cities Lose People to the Urban B-List."

Other Links: 1. "Bright Flight From Silicon Valley."
2. "The End Of Geography."
3. "End Of Urban Hierarchy."
4. "Rust Belt Geographic Arbitrage: Buffalo."
5. "After years of brain drain, young people are moving back to Buffalo."
6. "Mesofact Migration."
7. "Website of Samuel Arbesman."
8. "The World Is Spiky: Globalization has changed the economic playing field, but hasn't leveled it."
9. "Why the Rent Is Too Damn High."
10. "People Develop, Not Places."

Postscript: To presage the next post, a teaser:

In developed countries, the urbanization project is basically complete. The remaining urban growth will play out almost entirely in developing countries. In 2010, the urban population in the regions that the United Nations classifies as less developed stood at 2.6 billion. In 100 years, it is likely to be three times larger. Moreover, as Angel (2012) shows, the historical pattern of urban growth suggests that over this time horizon, urban population density in developing cities could easily fall by half.

Emphasis added. If not for immigration, that would be obvious by now in the United States.

Tuesday, April 08, 2014

Bright Flight From Silicon Valley

Talent outmigration ravaging Silicon Valley at Pacific Standard magazine.

Theme: Ironic talent migration.

Subject Article: "Cities See a 'Bright Flight': Highly Educated Americans Increasingly Move to More Affordable Metro Areas in South, West."

Other Links: 1. "Is Silicon Valley Similar to Detroit?"
2. "Tech-savvy drawn to warm climate and cool image of Barcelona."
3. "Silicon Rust."
4. "In Silicon Valley, a New Investment: Eviction."
5. "Los Angeles Is Beginning to Look a Lot Like Pittsburgh."
6. "Bye-Bye, Baby."

Postscript: Blog fodder for my next post, moving down the urban hierarchy:

As a professional thirtysomething who has lived in both New York and Los Angeles, I sometimes feel as if everyone I know is hatching plans to flee to somewhere less expensive, less massive, less hectic, and—again for good measure—less expensive. I know people who have moved in recent years from Los Angeles to Charlotte, from Boston to Durham, from New York to Seattle, from the Bay Area to Denver. Thanks to new U.S. Census data, I now know I am not going crazy. The flight to second-tier cities is thriving.

While the big name prognosticators cling foolishly to the past and claim the world is getting spikier, the undercurrents of flat world have finally gone mainstream. Goodbye, Silicon Valley.