Every year, the Texas Transportation Institute, and traffic monitoring firms like Inrix and Tom-Tom trot out scary sounding reports that claim that Americans lose billions or tens of billions of dollars worth of time sitting in traffic. And just as regularly, highway advocates parrot these dire sounding numbers as the justification for spending billions and billions on highway expansion projects (like a Texas plan to spend $70 billion in the next decade).

All these estimates and this case hinge on one crucial assumption:  What dollar value travelers attach to time savings?  But as a lawyer might argue, all of these studies are “assuming facts that are not in evidence.” Everyone complains about how awful and burdensome traffic congestion is, but when presented with an opportunity to buy a quicker trip, do people put their money where their mouth is? As we saw earlier this month in Louisville, given the opportunity to save several minutes time by paying a toll to use that city’s new, wider I-65 bridges, many travelers opted to save a few bucks by driving over the older, parallel–and un-tolled–highway bridge.

There’s a rule of thumb that travelers value their time at something close to half their wage rate.  The 50 percent rule is based on statistical inference from studies of traveler behavior (“revealed preference”) and surveys of what people say they would do when confronted with a range of hypothetical situations (“stated preference”).  There’s a range of estimates, centered mostly on 50 percent of the wage rate, which is the official standard used by the U.S. Department of Transportation, and works out to about $12.50 per hour (in 2009).

But what’s been lacking is solid, experimental evidence: when people are actually presented with a choice to spend some specific dollar amount to save a few minutes of travel time, do they actually pony up?

The implementation of high occupancy toll (HOT) lanes in a growing number of metropolitan areas provide us with exactly the kind of experimental evidence to evaluate travel times.  A recent paper from the University of Washington’s Austin Gross and Louisiana State University’s Daniel Brent explores driver behavior on high occupancy toll lanes.

An important feature of these lanes is that they use dynamic pricing:  the amount of the toll varies depending on the level of traffic.  The system is calibrated to adjust the price every five minutes, and raises (and lowers) the price so that traffic in the HOT lane moves along at at least 45 miles per hour.  When there’s light traffic, the toll is low; when traffic is heavier–and the HOT lane offers a faster trip relative to the road’s un-tolled lanes–the toll is higher.

Three years ago, Zachary Howard and Clark Williams-Derry at the Sightline Institute pointed out that preliminary data from Washington’s Highway 167 HOT lanes implied that travel time values were a lot lower than everyone suggested. They noted that most drivers were unwilling to pay any amount to speed up their trip, and the very small fraction of travelers that were using the HOT lanes were paying a toll that valued their time savings at something like $12 an hour, a figure that they came up with by dividing the number of minutes saved by the toll rate.

But Gross and Brent point out that the time savings are only part of the value:  It’s not just a quick trip people want, it’s a reduction in uncertainty about when they’ll arrive.  If you need to catch a plane, start a meeting, or open your shop at a certain hour, you’ll pay extra for the certainty of arriving on-time.  It’s worth noting, for example than many more users pay tolls to use the HOT lanes in the morning–i.e. going to work–than they do in the afternoon–going home; this difference reflects the distinction between reliability as opposed to time savings. Reliability trumps time savings in most toll-payers calculus:

The main result is that VOR (value of reliability) is vastly more important than VOT (value of time); in fact in several specifications the VOT is insignificant. In the base specification the reliability ratio (VOR/VOT), is 7.5 indicating that reliability is much more important in using the HOT lane than time savings. These results suggest that the simple estimates of VOT on HOT lanes vastly overestimate the true VOT, and that much of the purchase decision is actually based on improved reliability.

Gross and Brent use data on about a million observed trips to estimate how much value the users of the system attach to their travel time savings and to the increased reliability of their trip.  They estimate that the typical user values travel time savings at about $3 per hour, and reliability improvements at about $23 per hour. This estimate, particularly of the value of  travel time savings is much lower than is regularly used in analyzing and justifying transportation investments.

Gross and Brent also use surveys of transponder owners, combined with census data to estimate the typical income of HOT lane users. Unsurprisingly, higher income households are much more likely to be HOT lane users–the median income of HOT lane users is over $100,000 annually, much higher than for commuters in the corridor. This is also important because it signals that even higher income households have a much lower value of time than is generally assumed in modeling and project evaluation.

Using too low a value of time means that DOTs overestimate the economic utility of projects–and also over-estimate the revenue that tolled projects produce. In the case of the Highway 167 HOT lanes, much lower value of travel time means that the HOT lanes have produced only about a third of the revenue that was projected before the lanes were opened.

If travelers attach so little value travel time savings, this calls into question the rationale for investing public funds in highway projects. Benefit-cost analyses used to justify highway projects count the estimated travel time savings, often valued at around $15 per hour, as the benefit of the project. If the real value of travel time savings is something like $3 an hour, that reduces the benefits by about 80 percent. So if a project had a benefit cost ratio of 5 to 1 under a $15 value of travel time assumption, it would essentially have no net value if travel time were valued at only $3 per hour.

As with Louisville’s new tolled bridges, the experience with HOT lanes is a kind of natural experiment that tells us how much value people attach to travel time savings. In the case of the HOT lanes, the economic evidence is that the tolling promotes greater efficiency, by giving those who value travel time savings–and actually travel time reliability–the option of paying for and getting a higher level of service. But it also suggests that many investments of scarce public resources in additional unpriced road capacity isn’t economically worthwhile for the travelers who use it.

 

 

What City Observatory did this week

1. The long journey toward greater equity in transportation. The observance of Dr. Martin Luther King’s birthday got us thinking about how far we’ve come–and how far we have yet to go–having a truly equitable society. We reviewed two recent studies that address lingering racial disparities in transportation. The first sheds some evidence on “driving while black”: given their higher probability of being pulled over for traffic infractions, blacks seem to be quite cautious drivers, with average speeds 8 percent slower than other drivers. A second study shows that there are racial disparities in ride-hailing services; passengers with black-sounding names were more likely to have rides cancelled.

2. Beer and crowd-sourced data. The number of breweries in the US has nearly tripled in the past decade. We’ve used a variety of data sources, including crowd-sourced directories of microbreweries to plot the density of microbreweries in cities across the country. To this, we’ve added Treasury Department data on the total number of breweries per capita in each state. Some clear regional patterns emerge, with the most breweries in the Northeast and Pacific Northwest and the fewest in the South.

3. Has Louisville figured out how to eliminate traffic congestion? Louisville has just started charging tolls to vehicles using its new multi-billion dollar bridges over the Ohio River. But the tolls only apply to three of the five bridges–which creates incentives for drivers to use the non-tolled routes. While we don’t have actual data on traffic patterns, we were able to take a quick look at area traffic cameras. They show that the 10-travel lanes of the new I-65 bridge were nearly empty at rush hour on a recent Tuesday afternoon. Meanwhile, an older, slower, narrower bridge–without tolls–had substantial traffic.

4. An experiment in transportation economics. It turns out that Louisville’s decision to toll some bridges and not toll others creates a kind of natural experiment that will provide some useful data on how much value travelers attach to the time savings associated with highway improvement projects. The economic justification for these investments is that the value of travel time savings exceeds the costs of building new capacity. If users aren’t willing to pay a toll to get these time savings, its a signal that there may be no good economic reason to expand the roads.

Must read

1. What have we learned about the causes of gentrification?  Two economists for the Philadelphia Federal Reserve have written a review of recent literature on neighborhood change, published in the latest edition of Cityscape. Jacklyn Hwang and Jeremy Lin explore the causes of gentrification, and offer a comprehensive tour of recent scholarship on the subject. They conclude that the answer to the question posed by their article remains elusive. Socioeconomic upgrading appears correlated with central city job growth, improved urban amenities and declining crime, but the patterns of causality are complicated and unclear.

2. How housing choices impair adult friendships. Writing at Vox.com, David Roberts considers the connections between our low density land use patterns and the nature of our adult relationships. Our lower density communities and auto-oriented lifestyles work against three of the critical ingredients that sociologist believe are key to forming friendships: proximity, repeated and unplanned interactions, and an environment that permits us to let our guard down. The antidote? Wallkable communities and lively public spaces that facilitate spontaneous interactions.

3. Infographic on road-pricing equity. Economists love road pricing, but often seem to be the the only ones. Nobody likes to pay for something they perceive to be free, but frequently the most powerful argument is that road pricing will hurt the poor, because tolls represent a larger economic burden for low income households. A new infographic from the UCLA Institute for Transportation Studies tackles that question head on, comparing who pays and how much for a road widening depending on whether its paid for with road pricing or a sales tax increase. The poor actually pay more–and benefit less–when new roads are paid for from sales taxes. (And the USC analysis leaves out the fact that the poor are much less likely to own cars in the first place). A useful tool for talking about the equity implications of road pricing.

 

New Research

1.  The Changing Shape of Metropolitan America. Luke Juday of the University of Virginia has updated is invaluable dashboard of radius-based measures of metropolitan socio-economic characteristics to include the latest 2015 American Community Survey data. Juday’s work summarizes census data on educational attainment, income, age, and race and ethnicity by distance from the center of the metropolitan area for each of the 50 largest US metro areas. The dashboard shows the difference between 1990 and 2015 values for each of these variables.  Here’s the composite analysis of the 50 largest metros of educational attainment by distance from the central business district (you can also see similar charts for individual metropolitan areas, as well).

This chart shows the growing concentration of well-educated adults within 3 miles of the center of US metro areas. Adult educational attainment is higher now than in 1990, but has grown most rapidly in these close-in neighborhoods. Not surprisingly, there aren’t large differences between the 2012 and 2015 data; the two series are based on overlapping samples from the American Community Survey. This is an terrific resource for neatly summarizing the geography of change within metro areas.

2. The 2015 American Housing Survey. The Census Bureau and Department of Housing and Urban Development released the results of the 2015 American Housing Survey which provides detailed data on the housing stock and neighborhood characteristics of 25 of the nation’s largest metropolitan areas. The Census website offers a table creator that lets you generate your own cross tabulations of data for particular metropolitan areas. Variables include everything from income, rents, reasons for moving, to the size and amenities of housing units, to data on litter, abandoned properties and whether nearby houses have bars on their windows.

 

What City Observatory did this week

1.How urban geometry creates neighborhood identity. Our colleague Daniel Hertz is back this week with an examination of the way we look at and think about neighborhood identities. He points out that in many urban neighborhoods the amount of land taken up by single family homes creates the impression that most families must live in such buildings. But because they are so space efficient and usually concentrated, multi-family homes–though less visually apparent–may  actually be home to a larger fraction of all households. This subtle perceptual bias is important because it underscores widely repeated notions of what kinds of development are and aren’t “in keeping with the character of the neighborhood.”

2. Peak millennial?  Not yet. Not soon. And not about to undermine urban revival. The New York Times published a contrarian article suggesting that the nation’s recent urban rebound might be undermined by the cresting of a demographic wave. We pushed back at City Observatory, pointing out that the number of 25 to 34 year olds in the nation’s population will continue to increase through 2024 (and plateau but not decline thereafter). More importantly, the growth in the number of young adults in urban centers has been propelled not primarily by the size of this age cohort, but instead by the growing relative affinity of young adults for urban living. Compared to the 1980s and 1990s, 25 to 34 year olds today are much more likely to live in urban neighborhoods–a trend that shows no signs of abating.

3. Suburban renewal. Its been a long time since big cities pursued heavy-handed strategies of urban renewal, demolishing whole neighborhoods–usually of modest income households, and communities of color. In Marietta, Georgia, however, that old tactic got a new lease on life when the city government used local tax revenues to buy up, then demolish hundreds of affordable apartments. In their place, the city leased out the land to Atlanta’s new major league soccer franchise to use as a practice facility. While such a policy would undoubtedly create enormous outcry in a city, it goes almost unremarked upon in the suburbs. Perhaps this reflects a deeply ingrained but seldom-voiced bias in our views about place: Suburbs are for rich, mostly white people. Cities are for poorer people and people of color. Anything change that runs counter to this worldview (like gentrification of a Brooklyn neighborhood, or efforts to build affordable apartments in suburbs like Marin County) is an affront to the order of things.

4. Does gentrification lead to increasing movement out of neighborhoods? It’s often assumed that when a neighborhood gentrifies, we see a large increase in movement out of the neighborhood by existing residents. A new study published in the Urban Affairs Review compares out-migration rates from gentrifying and non-gentrifying neighborhoods. It finds that the overall migration by renters from gentrifying neighborhoods is no higher than in non-gentrifying neighborhoods. The study does detect a small increase in the number of involuntary moves by renters, finding about 2.6 percent more involuntary moves over a two-year period in gentrifying neighborhoods.  But to put that number in context, in gentrifying and non-gentrifying neighobrhoods alike, more than half of all renters (54 percent) move out after two years. The study shows that gentrification has no effect on the rate at which homeowners move from neighborhoods.

Must read

1. How to Price Parking. Don Shoup has famously written an entire tome on how and why to price parking. But where to start?  Next City has published the tale of one company’s successful effort to apply Shoupian principles to its own parking. The story is told by Evan Goldin, who was a product manager (and parking lot manager) for transportation network company Lyft. When Lyft moved its operations to San Francisco in 2014, it decided to start charging for parking, and used the net revenues to subsidize other employee transportation choices, including transit. It took some tweaking with prices and policies, but the result has been positive for everyone: those who need and value a dedicated parking space are assured of having one, and those who don’t drive have some of their commute costs subsidized by those who drive. While the article is entitled “How I helped to change the commuting culture at Lyft,” it’s clear that the commuting changed in response to a change in prices, not because of a kumbaya transformation of the company or its employees.

2. Infrastructure “Clash of the Titans” at Brookings. Two of the nation’s leading economists–both from Harvard–former Treasury Secretary Larry Summers and Triumph of the City author Ed Glaeser, debated the economic merits of a national infrastructure investment push.  Summers stressed the macroeconomic argument in favor:  more government spending at a time of historically low interest rates is likely to help stimulate long-term economic growth. Glaeser took a more skeptical position, and stressed the microeconomic view: infrastructure projects ought to be subjected to clear cost-benefit tests, and it makes sense to insist that most projects be financed by user fees that place the costs of building such projects on those who will benefit. Pricing not only pays for projects by provides strong incentives to build only those projects that have an economic return. You can read Brookings synopsis of the event or watch their speeches on-line at the Brooking website. Also worth reading: Matt Kahn’s take on the debate: (he’s the one who came up with “Clash of the Titans.”)

3. The Crane Count. We’re always on the lookout for great urban indicators. Here’s one from the Seattle Times: the count of high rise construction cranes working in leading cities around the country. Its a simple visual indicator of how much central construction activity there is in different cities. Some 62 cranes are currently working in Seattle and 58 in Chicago. Two of the nation’s most expensive (and vertical) markets have many fewer cranes–San Francisco has 24 and New York just 21. They’re currently rivaled by much smaller cities including Portland (25), Denver (19) and Austin (20). One way we’ll cope with our shortage of cities is by building up, and the crane count is one way of tracking where that’s happening.

4.  The unintended consequences of inclusionary zoning. Seattle’s in the process of developing a set of inclusionary zoning requirements as part of its Housing Affordability and Livability Agenda (HALA). Sightline’s Dan Bertolet has been crunching the numbers to assess how these requirements will affect the profitability and probability of building new apartments in Seattle.  The news isn’t good: for many types of development, the requirements are so costly that its likely that developers won’t go ahead with projects. If fewer market rate units get built, the tenants that would have occupied them will likely end up competing for housing with low and moderate income renters, bidding up the price of existing apartments. Bertolet estimates that losing just one 250 unit apartment building would have the net effect of wiping out about half a year’s progress towards improving the city’s affordable housing supply. While well-intended, a badly designed inclusionary zoning program could easily make the city’s housing affordability problems worse.

New Research

1.  Is your smartphone cutting you off from face-to-face interactions? A new study from the University of Milan looks at the connection between smartphone adoption and use and face-to-face interactions and life satisfaction. One of the regular findings of the happiness literature–using survey data on self-reported well-being is that a person’s happiness generally increases with amount of time they spend interacting with friends. Using data from Italy’s version of the general social survey, Valentina Rotondi, Luca Stanca, and Miriam Tomasuolo show that for smart phone users, the positive effect of spending time with friends is significantly reduced.

2.  The best city websites.  If you’re like us, you’re regularly searching the web for interesting information about cities. Kyle Zheng  has compiled a useful and well-organized directory of many of the best sites worldwide. His “Master City” website is organized both by area of interest (placemaking, walkability, sustainability) and had a city-by-city listing of websites.

 

January 17 is the day we celebrate the life and dream of Dr. Martin Luther King, Jr.  This year is also the first year that we’re observing a national day of racial healing. We thought we’d take a minute to reflect on two recent studies that provide some strong statistical evidence for the unfortunate persistence of racial discrimination in transportation: “Driving while Black,” and discrimination in taxi hailing.

Driving While Black

“DWB.”  Driving while black.  Its a sad and scary fact of life in many communities in the United States.  African-Americans are much more likely than other drivers to be pulled over for routine traffic infractions.  Federal data on traffic stops show a clear difference by race: Black drivers are about 31 percent more likely to be pulled over for a traffic infraction than white drivers.

If you’re white, it might not be something you notice.  In theory, it might be possible to discount this, if there were evidence that African-Americans were somehow more reckless than other drivers (not that we think that’s a plausible explanation).  But a new analysis of travel data suggests that if anything, African-American drivers are significantly more cautious than others (an observation that is fully consistent with DWB).

The evidence comes–almost in passing–in a new paper on  inter-metropolitan differences in transportation system performance entitled “Speed.”  Written by economists Matthew Couture, Gilles Duranton, and Matthew Turner, it presents a  systematic set of estimates of travel speeds in different metro areas. One of the complicating factors of speed estimation is that speeds vary by length of trip, time of day, and trip purpose.  In general, shorter trips involve lower speed travel. That makes sense:  if you’re just traveling a mile or two, especially between your home and some other destination, its likely you’ll travel mostly on local streets, with stop signs and traffic signals. But for longer trips, it makes more sense, even if its not the shortest distance, to travel part way on higher speed arterials or limited access freeways. Couture and his co-authors use detailed micro-data on trip taking in the National Household Transportation Survey to estimate variations in speed across metropolitan areas, after controlling for differences in trip distances and other demographic factors.

While its almost a footnote to the study, the author’s report the variations in driving speed according to a range of demographic characteristics.  Some of their findings correspond with our stereotypes about driving behavior.  Men drive faster than women.  Older people drive more slowly.  And as they note, race has a significant relationship with average driving speeds.  From their report:

Women are about 0.5% slower than men. Age is more important. A year of age is associated with 0.3% slower speed. Black drivers drive about 8% slower.

Its interesting to compare the differences in driving behavior by age and race.  If each year of age reduces your average speed by about three-tenths of one percent, that means that the typical black driver travels at about the same speed as a white driver who is about 26 years older.  For example, a 25 year-old black driver would, according to these estimates, be expected to drive about as fast as a 51 year-old white driver.

These results are powerful evidence that DWB is real, that it affects driving behavior, and that the disparity in traffic stops is probably even greater than indicated by the gross statistics.  Black drivers travel at speeds that are essentially the same as drivers that are a generation or more older than they.  And if black drivers are going much more slowly, it seems like they ought to be less likely, all other things equal, to commit traffic infractions, than other drivers.

Discrimination in Taxi Hailing

Its a classic story of discrimination. A yellow taxi drives past an African-American whose arm is outstretched to hail a cab, and instead pulls in a few dozen feet further down the block to pick up a white fare. In theory, at least one of the advantages of transportation network companies–the computer-based ride-hailing services such as Lyft and Uber is that they should be more race blind. Indeed, there’ some evidence that these services have expanded for-hire transportation to neighborhoods that have often been under-served by traditional taxis.

But despite the technological advances, it appears that racial discrimination still persists. A new paper “Racial and Gender Discrimination in Transportation Network Companies,” from economists Yanbo Ge, Christopher R. Knittel, Don MacKenzie, Stephen Zoepf looks at discrimination by ride sharing services. The researchers constructed an extensive experiment using transportation network companies in Seattle and Boston. They sent a team of testers including men and women, Blacks and whites, to take about 1,500 rides in each city. They found found that drivers for ride-sharing services are prone to discriminate against African Americans, making blacks wait longer for rides when they can identify the race of the ride-hailer and more frequently cancelling rides when alerted to African American-sounding names.

In Seattle, blacks waited an average of 35 percent longer than whites. In Boston, they found that customers who had black-sounding names were about twice as likely to have their ride requests cancelled, compared to customers with white sounding names. There was also evidence of discrimination by gender as well: women tended to be taken on more circuitous–i.e. more expensive and profitable–routes to their destinations.

Conversations about race and discrimination are frequently made more difficult by the very different lived experiences of blacks and whites. For those who haven’t been discriminated against in a traffic stop or in trying to hail a taxi because of the paler shade of their skin, its hard to understand whether these experiences are real and commonplace. The data presented in these two studies is a quantitative reminder that it is still quite real.

You know the feeling: you’re thirsty, you’re primed for a cool, refreshing beverage, and the anticipation has your taste buds tingling. But you pop the cap on the bottle only to find that the beer has turned skunky.  It’s very disappointing.  Well, we had a small taste of funky beer a couple of week back at City Observatory. Today, we want to wipe that taste out of our mouths, and present some other data that helps triangulate the geography of US microbreweries. First, a look back.

Many of you read our post ranking the density of microbreweries in the nation’s 50 largest metropolitan areas. To construct this index, we relied on a GIS tool constructed by BreweryMap.com (which allows us to do radius searches for microbreweries). The BreweryMap.com tool is, in turn, built on top of a database constructed by breweryDB. And while it appears to be one of the most comprehensive sources of detailed information on microbreweries, it is far from perfect. A number of CityObservatory readers, looking at our rankings, and then clicking through to their local cities, found that listings in many cases included breweries that were closed, mis-located and in a few rare cases non-existent (maybe not yet open).

The underlying data for BreweryMap comes from crowd-sourced data. BreweryDB makes it clear on their website:

The team at BreweryMap.com is aware that the database is less than perfect. They invite users to send corrections to breweryDB:

BreweryMap uses BreweryDB to provide information about the beers and breweries. If you find a brewery that is missing or incorrect, please click the edit button on the brewery info window to go to brewerydb.com and add or correct info. The world will appreciate your contribution and you’ll get a nice warm fuzzy feeling in your heart!

State level brewery data

While there’s something deeply democratic about crowd-sourced data, it inevitably comes with a degree of noise and a margin of error that is larger than we find in more professionally curated and quality-checked data. Its always a good idea to cross-check crowd-sourced data against other independent information sources (which is why we dug up some market survey data on microbrewed beer consumption by media market). Another way to triangulate our findings is by looking at data from the Treasury Department’s Alcohol and Tobacco Trade and Taxation Bureau. Breweries have to be licensed by the federal government–they pay a tax on every barrel brewed–and this produces a reliable and comprehensive count of breweries. Unfortunately, the published aggregations of this data re available from ATTTB only at the state level. While these data may be more consistent than crowd-sourced counts, that doesn’t mean they’re perfect: it’s likely that some breweries that closed during a year are still in the database, and some licensees may be counted even though they haven’t yet brewed beer; others may be temporarily inactive.

The federal data show a striking increase in the number of breweries in the US, especially in the past eight years or so. While the microbrewery revolution traces its roots to the 1980s, there was a period of fast growth in the late 1990s (as the total number of breweries rose from just a few hundred to nearly 2,000). That number plateaued for most of the decade of the 2000s, but since 2009, has taken off again. The number of breweries in the US has tripled, to nearly 7,000.

This growth has been widespread. Today, every state has at least a dozen breweries. Overall, California has the most breweries (927) and the District of Columbia, Mississippi, and North Dakota have the fewest (13, 14, and 15 respectively). If we normalize these counts by population, we can identify the states where breweries are most common. The following chart uses the state level data prepared by the ATTTB to compute the number of microbreweries per capita in the US.  Vermont leads the list, with more than 116 breweries per million population, followed by Maine, Montana, and Oregon, which each have more than 70 breweries per million population. The typical state has about 20 breweries per million population.

When we map these data, some clear regional patterns emerge. In the following map, darker colors correspond to higher number of breweries per capita, and lighter colors correspond to fewer breweries per capita. Breweries are most common in the Pacific Northwest and in the Northeast, and are least likely to be found in the middle South. (You can scroll over each state to see the number of breweries and our count of breweries per million population.)

Its great, of course, to see the flourishing and spread of local craft brewing. At City Observatory, we really enjoy tracking these numbers (despite their limitations). But like you, we suspect there’s one thing we enjoy more, and it comes in a pint glass. Prost!

In the middle of The Invention of Brownstone Brooklyn—a book published in 2011, but no less relevant today—Suleiman Osman turns the tables on the people who have long been the heroes of urbanist lore.

Speaking of the insurgent middle-class professionals who, starting in the 1950s and 60s, began to organize to stop to the massive urban renewal projects of Robert Moses and others, Osman says: “Perhaps the anti-Moses movement deserves an inverted version of the charge thrown at modern planners. If Brooklyn’s new white-collar professionals loved people, they hated the public.”

What does it mean to hate the public? And how could the people who stood up to clearance for highways be villains?

Brownstone Brooklyn tells the story of the first generation of gentrifiers in the rowhouse neighborhoods across the East River from Lower Manhattan. For Osman, it is an essentially countercultural movement. The “brownstoners” struck out for Brooklyn because the Upper East Side and Greenwich Village were getting too expensive, sure. But they also rejected those places—and the people who lived there—as part of a corrupt modern society, caught up in a deracinated, atomized culture increasingly dominated by the impersonal global market. Brooklyn was a place where you could live an authentic life in a “real neighborhood”: one deeply connected to local history (even if, as Osman writes, much of that history had to be rediscovered or simply made up), and where commerce meant a corner bodega owned by a family on the next street instead of a national chain.

But though some brownstoners may have claimed a kind of grassroots populism, from the very beginning they had a tense relationship with the working class Italians and Puerto Ricans they encountered in Brooklyn Heights and Park Slope. On the one hand, their presence created the kind of “diversity” and “authentic” characters that made Brooklyn different from Manhattan to begin with.

On the other, brownstoners’ project of neighborhood renewal often meant restoring townhomes that had been broken up into boarding houses to their original single-family conditions, evicting several low-income households in the process. Many of the people who thought of themselves as refugees from the harsh real estate market of Manhattan may have been anguished to realize they were landlords and villains in Brooklyn. But the fact that their movement was commonly referred to as “unslumming” shows that a kind of economic restructuring was integral, not incidental, to the project.

Moreover, the move from Greenwich Village to Boerum Hill was an escape from larger market forces only in a very incomplete way. After all, most of the new arrivals still commuted back to white collar jobs in Manhattan; a 1971 survey of brownstone owners found they were 99 percent white, 60 percent held graduate degrees, and 98.7 percent had earnings in the top fifth of New York City households. As they brought their purchasing power to Brooklyn, they more deeply implicated their neighbors in the very markets they had supposedly been trying to flee. And in some cases—as in their long campaign to convince skittish banks to make loans to support the purchase and rehabbing of “obsolete” 19th century townhomes—they explicitly lobbied to bring to bear the massive power of Manhattan capital to transform their new neighborhoods.

At this point, brownstoning might have reevaluated what kind of movement it was. As this process pushed the frontier of “authenticity” (and affordability) further south, they might have realized that “modernity” was not something that could be left on the other side of the East River; that their idyllic urban villages were in fact sites of increasing competition for housing and cultural expression.

Instead, in Osman’s telling—and in passages that will ring true to many observers of local politics today—the movement doubled down on a politics of authenticity and local purity. Sometimes this politics had a progressive gloss, as when they opposed the mass displacement of locals for urban renewal clearance. But that reading became harder to sustain when they opposed large middle- and low-income housing developments in an area with rapidly increasing housing prices, or when they lobbied against school desegregation. The common thread here is a commitment to local control as a way of preserving cultural distance, and local authenticity, from mass society—as represented by both freeways and public housing.

And this is where, finally, we get to what it means to love people but hate the public. Brownstoning was a movement that romanticized the participants in Jane Jacobs’ “street ballet,” but which was committed to holding the city as a whole at arm’s length. Ironically—and unfortunately—this way of relating to urban life is the progenitor of much of contemporary gentrification and anti-gentrification thinking. When Osman quotes the very same people speaking of their roles both as “frontiersmen” transforming “wild,” “undiscovered” Brooklyn and as defenders of these wilds from the rapacious, homogenizing forces of capitalism and government-led development, he could just as easily be capturing Crown Heights in 2016 as Brooklyn Heights in 1959.

That is, the people who are most invested in building their ideal environment—which almost always means reshaping an existing community to new specifications—are also the most sensitive to new forces whose influence threatens their own. That’s not just an observation about gentrification: it also applies to the family that bulldozes a farm to build a dream home on the edge of the city, only to complain bitterly when someone else ruins their pastoral view when they bulldoze the next farm over. But it certainly applies to the people who invented Brownstone Brooklyn, “reclaiming” a very particular (and often ahistorical) historical identity, and then just a few years later fought furiously to retain their particular interpretation of the neighborhood against the next wave of newcomers. Maybe debates about gentrification feel so circular and unproductive because what presents as two opposing sides is in fact a snake’s head and its tail.

There are two mistakes holding each other up here. The first is defining “urbanism” primarily as a countercultural project, which inevitably means rejecting any number of “incompatible” cultures and the people who identify with them. In some cases, this looks like brownstoners telling their working class neighbors that the longstanding practice of modifying their homes had to end in deference to professional class ideas about historic preservation. At other times, it looks like a 1970s anti-Burger King campaign that alternated left critiques of mass consumer culture with warnings about people who eat fast food being “purse-snatchers, muggers, and criminals.”

The second, related mistake is retreating to neighborhood-level politics, rather than broader political movements to reshape the city. Osman argues convincingly that the brownstone movement, in both its pro- and anti-gentrification forms, contributed to the breakup of the New Deal coalition, as much of the “new middle class” decided that unions and working class political machines were part of the establishment against which they were rebelling.

Of course, many of their critiques—and those of the unlikely sometimes-allies they found in radical black and Puerto Rican political organizations—were correct and necessary. Modernist planning really was profoundly indifferent to the “collateral damage” of its great public works, and the New Deal coalition really was profoundly influenced by racism.

But the new localist order they helped to create didn’t shed these problems. By closing down boarding houses and preventing the construction of new housing, both market and subsidized, the brownstoners’ “renewal” ultimately created neighborhoods nearly as homogenous as if they had been swept clean by Robert Moses’ bulldozers. (In fact, those modernist campuses are now some of the more demographically diverse parts of New York’s wealthy areas. The Cadman Plaza development, which was furiously fought by new Brooklyn Heights residents in the 1960s, sits in a Census tract that is 64 percent white; across the street, a Census tract with pristinely preserved brownstones is 82 percent white.) And in reinforcing the local power of those increasingly homogenous communities, they created durable coalitions against change, whether in the form of new housing or school integration.

The question Brownstone Brooklyn raises is whether this movement might have taken a different path. Could they have joined an urbanist movement whose first principles were not about a personal search for authenticity, but rather a commitment to a common well-being—the kind of housing, schools, public spaces, and access to regional amenities that anyone might need to build their own version of the good life? Could they have helped to transform Moses-era New Dealism to be democratically accountable without giving up on powerful citywide policy tools—ones capable of reshaping, rather than reinforcing, massive inter-neighborhood inequality?

Most importantly: Can it be done today?

What City Observatory did this week

1. A Toast to 2017:  Beer and Cities. Its traditional to begin the New Year with a delicious beverage, and more and more Americans are choosing to celebrate with a locally brewed ale. That’s gotten much easier in the past decade, as microbreweries have flourished around the country. Microbreweries are a decided urban affair. The website BeerMap.com claims to have inventoried more than 1,000 microbreweries within five miles of the center of the nation’s 50 largest cities.  Using their tabulations, we’ve computed the density of microbreweries for each of these cities, and produced a ranking.  See where your city stands on this list.

2. How not to make housing more affordable. In the face of rising affordability problems, there’s enormous pressure on elected leaders to do something–anything–to address the situation. Two recent proposals in the Pacific Northwest caught our eye. Both would provide subsidies to households. British Columbia’s Liberal government has proposed matching first-time homebuyer’s down payments–up to $37,500, while a landlord’s group in Oregon has suggested that the state create a $20 million fund to provide rent subsidies (rather than enacting rent control). While both proposals would provide some relief for their direct recipients, economics suggests that in the face of a tightly constrained housing supply, both measures would mostly serve to bid up rents and housing prices–actually making overall affordability problems worse.

3. Brownstone Brooklyn and the challenge of urban change. Daniel Kay Hertz offers his review of Suleiman Osman’s “The Invention of Brownstone Brooklyn.” The book chronicles the movement of middle-class, mostly white professionals from Manhattan in the 1950s and 1960s, looking for authentically urban neighborhoods in Brooklyn. Paradoxically, it turns out that while seeking authenticity, these migrants loved the people, but disliked the public. Brownstoning was a movement that romanticized the participants in Jane Jacobs’ “street ballet,” but which was committed to holding the city as a whole at arm’s length. Ironically—and unfortunately—this way of relating to urban life is the progenitor of much of contemporary gentrification and anti-gentrification thinking.

4. Pollyanna’s ridesharing breakthrough.  You may have seen the headlines last week about a new study claiming that with a ridesharing app and appropriate route assignment software it would be possible to reduce traffic 85 percent in Manhattan. It’s not quite that simple of course. The study in question looks only at replacing current taxi trips with pooled 4-passenger or 10-passenger vehicles. The real problem with this study is that it falls prey to three major fallacies that bedevil much of the techno-optimism about urban transportation, including a failure to consider induced demand, putting too much faith in big data, and assuming that a relatively simple mathematical model can fairly simulate the behavioral responses to a different transportation set-up.

Must read

1. High Transit construction costs.  Last week, with great fanfare, New York City finally inaugurated its long anticipated Second Avenue subway. We have a two-fer hear. At Vox, Matt Yglesias writes about the tragedy of the new subway: which has taken vastly longer, cost vastly more, and produced far less than subway development projects in other advanced countries, something that’s long been documented by Alon Levy at Pedestrian Observations. Building a kilometer of subway in New York costs six times as much as it does in Paris, London, or Copenhagen. Yglesias explores the many reasons for the higher costs: unnecessarily larger stations, deeper tunnels, intransigent unions, poor oversight, and more. Writing at the Frontier Group’s blog, Tony Dutzik piles on, adding that we shouldn’t overlook the fact that highway projects tend to be hugely over-priced as well, and in many cases produce minimal or negative social benefits. And he notes that cost overruns, as well as high price tags, serve as a formidable obstacle to thinking we can reasonably expect to do things differently, in a big way. To these diagnoses we can add the “hitch your wagon to a sacred cow” theory: when multi-billion dollar projects get going, they tend to come with a long list of elaborate add-ons to placate a wide range of constituencies as a way of selling the project.

2. Federal infrastructure spending makes us poorer.  Writing at Strong Towns, Chuck Marohn challenges the conventional wisdom that a big influx of federal infrastructure funding is a good thing for the nation, especially struggling small towns. While it may seem like free money, generous federal capital grants for road construction often lead local governments to borrow to come up with matching funds and have led to sprawling development patterns, which directly raise utility costs for cities and counties, and in the long run, saddle them with prodigious maintenance costs. The emphasis on funding “new” capacity creates competing, peripheral business locations that effectively undercut the economies and tax bases of older, more central locations.

3. Change local incentives to get more affordable housing. The California Apartment Association convened a policy forum to explore ways to address the Golden State’s growing  housing affordability problem, and heard from invited speakers including Trulia’s Ralph McLaughlin, Sonja Trauss of the Bay Area Renters Federation, and Mac Taylor the Legislative Analysts Office. There’s a 19-page report that summarizes the key issues they identified. We would highlight key finding number 4: changing local incentives. A central problem is that local governments have little incentive to approve affordable housing in their jurisdiction. Cities get much more tax revenue from commercial rather than residential development, and also do better fiscally with expensive single family homes than affordable apartments. Individual local governments also face a kind of prisoner’s dilemma: allowing apartments when neighboring jurisdictions don’t means that your community may bear the brunt of the impacts. While these incentive effects may be more prominent in California thanks to the state’s arcane Proposition 13 property tax system, this incentive problem underlies affordability challenges in many cities around the country.

New Research

1. City Street Grid Visualizations.  Streets are the skeletal structure of the city, and the network of streets–their width, spacing, number of intersections–defines the fabric of urban interaction. The University of California, Berkeley’s Geoff Boeing has created a series of same-scale diagrams of city street grids that allow an easy, intuitive comparison of different cities.  Each of the following blocks shows a single mile-square segment in the center of a large city.

Boeing built these maps using Open Street Maps and Python. And he’s posted the code for creating similar maps of any other city in the world.  This is a great tool for urban planners to use to better understand and communicate the way streets shape the way we experience our urban environments.

2. Metropolitan Economic Conditions Index.  Last month, the St. Louis Federal Reserve‘s indispensable FRED economic data website expanded the list of metropolitan areas for which it computes an economic conditions index.  The index, developed by Fed economists Maria Arias, Charles Gascon, and David Rapach, illustrates how a region’s gross metropolitan product (the local analog of gross domestic product) is performing relative to other metropolitan areas. Their analysis shows that different recessions affect metropolitan areas in different ways. Some metros experienced severe downturns in 1990 and 2001, while others largely avoided contraction. Nearly all metros felt the effects of the Great Recession, but the effects were more severe and prolonged in some areas than others. The site allows users to display data for any of the 50 largest metropolitan areas for the period from 1991 onward. The chart below compares the economic trajectories of Portland and Minneapolis-St. Paul.  It shows Portland’s economy has overall grown faster, but has been more “boom-and-bust”–growing faster in expansions, and declining more sharply in recessions. This is a useful tool for understanding the cyclical sensitivity of metropolitan economies.

What City Observatory did this week

1. How diverse are the neighborhoods white people live in? Data from the newly released 5-year American Community Survey tabulations give us an updated picture of the demographics of urban neighborhoods. A new report from the Brookings Insitutiton’s Bill Frey shows that the typical US metropolitan area is continually becoming more diverse. But it’s still the case that the typical white resident of a large metropolitan area lives in a much less diverse neighborhood. We take a close look at Frey’s data and plot the relationship between metro level diversity and the experienced neighborhood level diversity of the typical white resident. There are surprisingly wide variations among metropolitan areas; in some very diverse metropolitan areas, the typical white resident lives in a neighborhood with a relatively low level of diversity. These results reflect the continuing importance of localized patterns of segregation.

2. Tying it all together. As we look forward to 2017, we reflect on some of the key lessons that we think we’ve learned at City Observatory.  Here we’ve highlighted some of the principal insights in four broad areas: the growing importance of city centers, the shortage of cities, the need to re-think transportation policy and the challenge of segregation, integration and neighborhood change. We have links to some of our most useful commentaries in each of these areas.

3. Housing supply is catching up to demand. We know that ordinary humans find little solace in the economist’s admonition that rising rents will ultimately be counteracted by an increase in housing supply. The big problem is timing: demand can change quickly, and supply only slowly, so rents can go up until supply catches up. In some particularly hot markets, there’s growing evidence that this is just what is happening. In one of the hottest markets–Seattle–the city is on track to build as many apartments this year as in the preceding half century. And rent increases there and in some other large cities have slowed and in a few neighborhoods, actually declined. As more supply is added in the months and years ahead, its likely to have a further effect on rents.

4. Who pays the price of inclusionary zoning? One of the political attractions of inclusionary zoning is that it seems to be a way to force developers to pay for affordable housing without requiring scarce public funds. Portland’s newly adopted inclusionary zoning requirements include the kinds of density bonuses and other concessions that are common in inclusionary housing programs, but also include a tax break for developers. Plans to give developers a tax exemption for all of the units (not just affordable ones) in high rise apartments could push the subsidy per unit over $200,000, according to city estimates. And property tax exemptions don’t just cost the city forgone revenue: three-quarters of the revenue loss will be felt by schools and other local governments.

Must read

1. Making America great again isn’t about money and power, says Robert Shiller in the New York Times. Many urbanists are leery of the implications of the incoming administration’s promise to “Make America Great Again.” Nostalgia for a poorly remembered bygone era is unlikely to be a good guide to policy in the 21st Century. Economist Robert Shiller, (recipient of the 2013 Nobel in his field), has some potent observations on what leads to greatness: and in his view, its has a lot to do with the kind of communities we build. He specifically invokes Jane Jacobs, and her view of how cities generate the kind of innovation and prosperity that drive our economy: “Cities grow organically, she said, capturing a certain dynamic, a virtuous circle, a specialized culture of expertise, with one industry leading to another, and with a reputation that attracts motivated and capable immigrants.” Shiller warns that the Trump Administration needs to avoid undercutting the conditions that have enabled cities to grow, thrive and create opportunity.

2. Silicon Valley’s self-serving vision for self driving cars. Writing in the Fiscal Times, David Dayen takes a critical view of the hype about the disruptive potential of self-driving cars. Many of the imagined futures assume that the public sector will make massive investments in new infrastructure–like dedicated lanes for high-speed autonomous vehicles. If the utopian vision of fleets of self-driving cars hinges on a massive public subsidy, that transforms this new technology into a kind of scam, according to Dayen: “I think normal people would call what we have here a grift. The car companies want to commandeer public infrastructure as a massive subsidy for their business model. And in the zero-sum world of government spending, such a scheme necessarily crowds out transportation that everyone can afford to use. ” The point is strongly made, but its helpful to remember that plain-old human driven cars also depended for their success on massive public investment, plus a fundamental re-writing of the rules of the road in a way that literally gave the right of way to vehicles over humans. It’s probably worth thinking about that as we move forward.

3. The devilish details of implementing an inclusionary zoning process. The Sightline Insitute’s Dan Bertolet sifts through the byzantine details of Seattle’s proposed mandatory inclusionary housing requirements. In its much ballyhooed Housing Affordability and Livability Agenda (HALA) civic leaders in Seattle reached a handshake deal to implement mandatory inclusion for new development in the city–but left the details to be hammered out by the city’s planning department. Bertolet looks at the complex system they’ve drafted, which divides the city into three broad areas (based on rents), requires three different levels of inclusion (ranging from 5 percent to 11 percent in each), and which offers varying density bonuses in different zones. There’s a lot to digest here in terms of the practical, real-world difficulties of implementing such a program. One such insight: density bonuses may be useless to developers in situations where adding another story would require them to shift from relatively cheap wood construction to all-concrete and steel. Ultimately, he argues, the success of the program will depend on striking a delicate balance between inclusionary requirements and regulatory relief. Just how delicate a balance? Bertolet writes: “Just two 200-unit apartment buildings rendered infeasible by MHA per year would effectively negate the benefits of all of the subsidized units produced by the program.”

New Research

1. Where walking is hazardous to your health. For several years, Smart Growth America has annually produced “Dangerous by Design,” a report taking on the grim but necessary task of detailing the number of pedestrians killed by cars in the US.  Over the past decade, the toll is 46,149 deaths. As is now well understood using the word “accident” to describe these pedestrian deaths amounts to Orwellian blame-shifting. It turns out there’s little random about the pattern of deaths, either in their locations or demographics. A series of metropolitan areas in the US South–especially in Florida–again top the charts in pedestrian fatality rates. These are the same places that have arterial street networks that were mostly designed and built in the automobile era, and which consign pedestrians to second-class status. Not owning a car is clearly a serious risk factor. As the report points out, the elderly, the poor and people of color–who are less likely to own cars and drive–are disproportionately the victims of vehicular death. Designing cities to move cars quickly kills people who walk.

2. How cities promote social interaction. Economist Ed Glaeser, author of Triumph of the City famously described cities as “the absence of space between people.” A key aspect of the urban experience is facilitating interaction between different people. Konstantin Buchel and Maximilian von Ehrlich of the University of Bern undertook an analysis of  anonymized phone records from Switzerland looks into the ways that urban density influences the range and nature of networks of social contacts among residents. Not surprisingly, their study finds that the likelihood of contacts between any two people decreases with distance. But the authors find that density doesn’t so much increase the number of contacts, but the diversity and richness of those contacts. They confirm the idea that denser locations promote the strength of so-called weak ties (that people have networks with less overlap from their friends and colleagues and thereby have greater reach).

 

Plans to subsidize renters and homebuyers will likely just fuel housing cost inflation

Rising rents and home prices are becoming unbearable–or at least politically unpalatable–in cities around North America.  Over the past year, two Pacific Northwest cities, Portland and Vancouver, have seen some of the biggest rent and home price increases anywhere. Portland’s reported double digit rent increases in early 2016 were among the highest in the nation. By one reckoning, Vancouver’s home prices were up 24 percent over the previous year, although, as we’ve noted, there’s been a good deal of noise in home price estimates there. The political pressure that rising prices and rents have produced is generating some novel policy suggestions.

In Vancouver, the British Columbia provincial government has announced that it will match the down-payment that first-time homebuyers make to purchase a new residence. The program, announced by Premier Christy Clark–whose ruling Liberal government faces the voters in the new year–would give first time home buyers up to $37,500 to match their down payments.  Up to 40,000 households might qualify for the credit.

Portland just adopted a poorly designed inclusionary housing requirement, and now state legislators are looking at repealing the state’s ban on city-imposed rent control programs. In response, a local landlords group has proposed that the state instead enact a rental subsidy, roughly modeled on the federal Section 8 voucher program. The proposal is that the state would allocate something on the order of about $20 million per year to provide rent subsidies of around $100 per month to as many as 20,000 low and moderate income households.

Both of these proposals intervene on the demand side of the marketplace, giving some homebuyers (Vancouver) or renters (Portland) more buying power to help them better afford new homes or apartments. While its hard to argue that such subsidies won’t be of some benefit to their direct recipients (households that get subsidies will be able to more easily afford housing than otherwise), the economics of these proposals are clear and ugly.  By giving more households more money to bid for housing, these measures amp up demand, but do nothing–at least not directly or in the short term–to raise supply. Greater demand in the face of fixed supply means one thing: even higher prices and rents.

The underlying economic problem in both Vancouver and Portland is that the growth in demand for housing–for urban living, especially in this part of the world–has dramatically outstripped the supply of housing. Adding even more demand in the form of subsidies is like pouring gasoline on the fire.  More prospective renters and buyers, with more money in their pockets will bid up the price of housing still further.  UBC economist Joshua Gottlieb called the BC proposal “shockingly illogical”:

“It’s a pretty bad idea. It is counter-productive and if you give people more purchasing power, they will be able to bid up the prices of the homes that they’re looking at, and that price increase will eat up any benefit from the subsidy. The same people who were going to compete for a home at $500,000 are still going to be competing for that same unit, but at a higher price. They’re just going to compete away the benefit. The only people who gain are existing homeowners or developers who benefit from these higher prices. . . . it’s not going to increase supply and it’s supposed to increase demand, so how is it not going to increase prices?  . . .  There’s no way there was any serious economic analysis.

The same problem holds for the Oregon rental voucher program.  Giving thousands of renters more buying power in the face of an already tight market and a constrained supply of rental units is likely to accelerate rent increases. In both Oregon and British Columbia, the necessary solution is on the supply side: building more housing.  And the money that would be spent on homebuyer or renter subsidies would be better spent on measures to add to the housing stock, especially for low income households.

As we’ve said, the housing affordability crisis ought to be a teachable moment for economists. At its root, the problem cities are experiencing are about supply and demand.  The only way to craft effective solutions is to apply some fundamental economic analysis to the problem. Rent and home purchase subsidies may help out a few individuals, but only at the cost of making the affordability problem worse for everyone else.

Just say the words “urban renewal” and you immediately conjure up images of whole neighborhoods–usually populated by poor families and people of color being dislocated by big new publicly funded development projects. It seems like a relic of the past.  But it appears to be getting a new lease on life in the suburbs. For a couple of years now, we’ve been following the story of Marietta, Georgia, where local officials used $65 million in taxpayer funds to buy up and begin demolishing some 1,300 apartments along Franklin Road. This is a striking case where the displacement of low income families was an explicit objective of public policy, rather than the side-effect of a changing real estate market. The tale raising some interesting questions about how we talk about neighborhood change, and whether we’re really open to economic integration in all places–city and suburb.

In a few weeks, the new Atlanta United franchise of Major League Soccer will kick off its inaugural season. The team’s been preparing at the verdant practice facility in the Atlanta suburbs.

What isn’t apparent from this picture is the fact that hundreds of old but serviceable apartments were demolished to make way for these spacious fields. The Marietta apartment complexes had been built in the 1960s, and, when new, were a preferred upscale location for single professionals and young married couples. Over the decades, the apartments aged and the mix of occupants changed. Franklin Road shifted to families with increasingly modest incomes—a process housing economists call filtering, which is the primary source of affordable housing throughout the nation. Along the way, the economic and and racial makeup of the apartments transformed from nearly 90 percent white in 1980, with a poverty rate around five percent, to 20 percent white in 2010, with a poverty rate of nearly 25 percent.

Despite the usefulness of filtering, which increased the diversity of suburban Marietta, the city perceived these units as growing concentrations of poverty and, thus, a problem. So it used the proceeds of a voter-approved bond measure to purchase and begin demolishing the housing complexes. It’s worth noting that no one ever claimed that the buildings themselves were a problem, despite their age. Rather, it had everything to do with the demographics of their occupants. In all, the city’s plan calls for acquiring and demolishing almost 10 percent of the city’s multi-family housing stock.

Caution:  This post contains graphic images of housing displacement. Viewer discretion is advised.

Marietta’s plan is proceeding apace. The city re-christened Franklin Road as “Franklin Gateway” to signal change. It began demolishing the apartments last year. Here, we’ve used imagery from Google Maps show what’s happened where one of these complexes—the Woodland Park Apartments—once stood.  This is what they looked like in 2011.

Early this year, the demolition was nearly complete. All that remains of  the old apartment complex is its driveway, a partial brick wall and metal gate, and two patches of evergreen shrubbery, flanked by a stand of pine trees.

The latest Google imagery shows the city’s unfolding plan for development. The site will become the training facility for Atlanta United, the area’s new major league soccer team. For use of the 32 acres formerly covered by apartments, the team will pay the city $1 per year for the first ten years of a thirty-year lease.

The demolition of the apartments on Franklin Road represents a kind of national blind spot when it comes to talking about neighborhood change. In any large city—say New York, Los Angeles or Washington—the wholesale demolition of affordable housing to provide discounted land for new businesses would undoubtedly be treated as the most pernicious form of gentrification. But because it happens in a suburb, somehow it doesn’t count, or at least isn’t objectionable.

Perhaps this reflects a deeply ingrained but seldom-voiced bias in our views about place: Suburbs are for rich, mostly white people. Cities are for poorer people and people of color. Anything change that runs counter to this worldview (like gentrification of a Brooklyn neighborhood, or efforts to build affordable apartments in suburbs like Marin County) is an affront to the order of things. The apparent prevalence of this outlook shows just how hard it will be to make progress on economic integration.

The number of young adults is increasing, not declining, and a larger share of them are living in cities.

Yesterday’s New York Times Upshot features a story from Conor Dougherty–”Peak Millennial? Cities Can’t Assume a Continued Boost from the Young.” It questions whether the revival in city living is going to ebb as millennials age, and the number of persons turning 25 decreases in the years ahead.

In our view, the story offers two mistaken premises: first, that the growth of young adults in cities has been driven primarily by the large size of the Millennial generation, and second, that the affinity of young adults for cities is waning. Our research shows that neither of these premises is true. The movement of young adults to the city has been gathering steam for more than 25 years, and the number of young adults in cities was actually increasing during the 1990s–at a time when the number of 25 to 34 year olds nationally was actually declining. And the relative preference of young adults for city living continues to increase.

The argument that as millennials age they will increasingly move to the suburbs mistakenly conflates life-cycle effects with generational change. As individuals age, the likelihood that they’ll live in different places changes. After high school, there’s a large migration to college towns. Young adults, starting out in their careers are disproportionately likely to rent and live in cities compared to other Americans. As they get older, find partners and have children, they’re more likely to own homes and live in the suburbs. This general pattern of succession holds for most recent generations as they age. But what’s different–and important–is how many people are in each generation, and how long they remain in each stage in this process. What’s happening now is that today’s young adults–the so-called Millennial generation–are both more numerous than the immediately preceding generation and are demonstrating a greater propensity to spend a larger share of their early adult years living in cities.  That’s the essence of what our research (and that of many others) shows has been happening.

The Upshot story takes issue with this thesis in two respects.  First, building on an argument advanced by USC’s Dowell Meyers––which we addressed when it first came out–Upshot says that the fortunes of cities will wane because the number of persons turning 25 years of age will decline slightly in the next decade. Second, Upshot says that as individual millennials get older, they’ll tend to move to the suburbs in greater numbers.

The essence of the Upshot story is two claims: (1) that the impact of millennials on cities will decline because their numbers will decrease, and (2) that their propensity to choose to live in urban settings will decline. Let’s consider each of these ideas in turn.

Numbers

The number of 25-34 year old millennials will increase by about 3 million over the next 7 years; this is the stage in the life cycle when they are most likely to live in cities.

Is the move to cities being buoyed by the rising number of millennials, and will their numbers decline soon, and therefore cause a decline in cities?

What’s interesting is that in 2015—for the first time—Millennials (those born between 1980 and 2000) constitute all of the persons aged 25-34. At the time of the last decennial census (2010), about half of the 25- to 34-year-old age group was composed of people in the tail end of generation X, and half were the early wave of Millennials. So strikingly, what the Census data shows is that the total number of 25 to 34 year olds in the US will increase from now through 2024. This chart shows the Census Bureau’s estimates of population aged 25 to 34 based on historical data through 2014 and its projections through 2035.

During the 1990s the number of 25 to 34 year olds actually declined as Baby Boomers aged out of this age group and were gradually replaced by the numerically smaller Generation X. Between 2000 and 2010 the number of Gen-Xer 25-34 year-olds increased slowly, with all of the aggregate increase in this age group being recorded after 2008. So, to the extent there was a movement back to the city in the 1990s, and the first half of the 2000-2010 decade, it was propelled not by an aggregate increase in the number of 25-to-34 year olds in the nation, but the changing relative preference of young adults for urban locations.

So, what we—and others—have recorded as the movement of young adults back into cities has, until very recently, little to do with the size (or preferences) of the Millennial generation. In fact, as they turn 25, and as they now dominate this age cohort, the next decade will be the time when the Millennial generation’s effect on cities will be most fully felt. Rather than declining, the number of 25-to 34 year olds in the United States will increase each year from now through 2024, rising from 44.1 million in 2015 to 47.6 million in 2024. In reality, the Millennial wave of urbanism is just now hitting the beach.

The outlook after 2024 (when the 25-34 year olds will increasingly be “post-Millennials”) is not for a dramatic demographic collapse. Rather than a peak, the young adult population stabilizes at a fairly high plateau above 47 million 25 to 34 year olds through 2035. So there is little basis for forecasting a decline in the key population group that has driven urban growth.

Preferences

With each passing year, 25-34 year olds, especially those with a four-year college degree or more education are more likely to live in close-in urban neighborhoods than other Americans.

Are young adults becoming less likely to live in cities?

At City Observatory, we’ve tracked the carefully tracked the location of urban residents in America by age group over the past three decades.  We’ve measured the relative preferences of young adults for close-in urban neighborhoods (census tracts within three miles of the center of the central business district).  The relative preference is the probability that a young adult will live in a close in neighborhood compared to the probability than any other resident of any age would live in such a neighborhood. These figures are drawn from Table 5 of our Young and Restless report; we’ve computed relative preference by dividing the probability that a person aged 25 to 34 lives within a three-mile radius of the center of the CBD of one of the 51 largest metropolitan areas, and compared it to the probability that the average resident of a metropolitan area live in this radius. If 11 percent of 25 to 34 year olds live in the 3 mile radius, and 10 percent of the population as a whole lives inside that radius, the relative preference is 10 percent (11 percent/10 percent)=110 percent, meaning that a 25 to 34 year old is 10 percent more likely than the typical resident to live in this area.

Since 1980, the relative preference of young adults for close-in neighborhoods has increased steadily. In 1980, young adults were 10 percent more likely than all metro residents to live in these neighborhoods; in 1990 12 percent more likely, in 2000 32 percent more likely; and in 2010, 25 to 34 year olds were fully 51 percent more likely to live in close-in neighborhoods than other metro residents. The relative preference of 25 to 34 year olds with a four-year degree to live in such neighborhoods was even higher:  over 100 percent in 2010.

Another way of looking at this is examining census data on where young adults live.  The University of Virginia’s Luke Juday has prepared a revealing set of charts that show the concentration of the young adult population by distance to the city center for all of the nation’s 50 largest metro areas.  He has comparative data for 1990, 2012 and 2015.  The data–just as in the statistics cited above–show that in the aggregate, the share of young adults living in close-in neighborhoods has increased and the share living in more distant neighborhoods has decreased. The orange line shows the share of young adults (age 22 to 34) as a share of the population in 1990.  The magenta and teal a lines show the share of young adults in 2012 and 2015 (respectively).  The share of young adults living in close in neighobrhoods (which had been higher in the center in 1990) increased over the next two decades. The share living in the suburbs declined. The steepening of this gradient is clear evidence of a growing relative preference of young adults for central locations.

This essential finding is actually the core of several well regarded academic papers.  Edlund, Machado and Siviatchi show that well-educated prime-age workers are increasingly concentrated in neighborhoods closer to the center of the metropolitan area. Couture and Handbury have replicated our findings, reporting:

More young adults are migrating to cities

Finally, almost in passing, the Upshot article resurrects a claim made in 2015 by FiveThirtyEight.com’s Ben Casselman, which had asserted that more young adults were now moving from cities to suburbs than vice versa, and claiming “Whether by choice or economic circumstance, young Americans are still more likely to leave the city for the suburbs than the other way around.”  We had a lengthy back-and-forth with Casselman at the time, but the University of Virginia’s Luke Juday pointed out that the data that Casselman used from the Currently Population Survey effectively missed millions of young adults, and disproportionately missing those living in cities. Juday’s analysis shows that actually the reverse is true–young adults are increasingly moving to cities:

Over the past 5 years about 3 million more Americans age 20-29 moved from suburbs to principal cities than from cities to suburbs, with last year being the largest net gain for cities yet.

The Takeaway: More Young Adult Urban Growth is Coming

The number of 25 to 34 year olds—the key group driving urban living, will not decline, but will grow between now and 2024. The urban wave we’ve experienced starting in the 1990s, and accelerating in the past decade wasn’t propelled by generational growth, so much as by a growing preference for urban living by young adults. The shift of young adults to cities, drawn by urban amenities, is increasingly confirmed by academic researchers, and is borne out by the latest Census data. 

Data Notes

The Census data for our of estimates of the 25 to 34 year old population come from three sources. Data for the period prior to 2010 comes from the archive of historical Census population estimates (https://www.census.gov/popest/data/historical/index.html).

Data for the period 2011 to 2014 comes from Annual Estimates of the Resident Population for Selected Age Groups by Sex for the United States, States, Counties, and Puerto Rico Commonwealth and Municipios: April 1, 2010 to July 1, 2014, Source: U.S. Census Bureau, Population Division, Release Date: June 2015. See: https://www.census.gov/popest/data/. Census projections of the population by year and age for the period 2015 through 2035 come from the 2014 Census Population Estimates series http://www.census.gov/population/projections/data/national/2014.html.

* Note the discontinuity in the data between 1999 and 2000 reflects the disparity between the Census Bureau’s annual intercensal estimates of the 25-34 year-old population and the actually higher number of 25-34 year olds enumerated by the 2000 decennial Census. It’s likely that the actual number of 25-34 year olds was underestimated in the intercensal estimates, during a period of significant immigration).

At City Observatory, we post several new commentaries each week on a variety of urban themes, and aim to provide discrete, coherent analyses of specific questions, and contributing to the policy dialog about cities. At the start of a new year, we’d like to pull back a bit, and reflect on what we think we’ve learned, and how these varied pieces add up to a cohesive vision.

So what follows is not a manifesto, but more an outline of of the knowledge assembled in our work at City Observatory, since we started in October 2014. Here’s a list—not entirely exhaustive—of what we came up with, grouped into four big themes:

The growing economic importance of city centers

The demand for cities is rising.

Talented young people are increasingly choosing to live in urban centers.

People are increasingly seeking dense, diverse, interesting, transit-served, bikeable and walkable communities.

This is leading to a surge in city center jobs.

Cities are powering the nation’s economic growth in this cycle.

Cities are cleaner, greener, and safer than ever before.

The economic advantage of cities is growing in providing convenience and experiences.

The shortage of cities

We have a shortage of cities, the growing demand for city living is outstripping the supply of great urban spaces, which is producing higher housing costs.

Our land use planning systems, dominated by homevoters, make it too hard to build new housing, especially in the most desirable locations, driving up housing prices.

Hyper-local decision-making can shut out important voices and lead to more segregated cities.

We’ve effectively made the most desirable kinds of housing—dense, diverse mixed use neighborhoods with narrow streets, and a varied range of housing types—illegal.

Other prosperous countries with attractive cities have very different ways of zoning that allow more traditional urban neighborhoods.

The need to rethink transportation policy

 

The big subsidies to parking—socialism for car storage in the public right of way—undermines biking and walking and drives up the price of housing.

There’s no such thing as a free way—taxpayers subsidize car ownership significantly, causing people to drive much more than they would otherwise.

The engineering rules of thumb that are used to forecast traffic, set road widths, require parking are pseudo-science, with perverse effects on cities and humans.

The way we design our roads costs thousands of lives a year. It’s time for another road safety revolution.

When it comes to public transit, what matters is reliability and convenience—not whether it’s rail or bus.

Land use is as important to public transit as the actual transit infrastructure. It’s especially important to have destination density—of jobs, amenities, homes—near transit stations.

The challenge of segregation, integration, and neighborhood change

Economic segregation is growing, the rich and the poor live apart from one another in our cities, this is a product both of the secession of the rich, especially to exclusive suburban enclaves, and by the concentration of poverty.

Gentrification, though rare, is actually reducing economic segregation.

Poor households living in gentrifying neighborhoods are no more likely to move away than poor households in non-gentrifying neighborhoods and report higher incomes and greater satisfaction with their neighborhoods than those living in non-gentrifying neighborhoods.

Unless housing supply increases in high demand locations, rents and home values will rise, and the poor will be priced out of neighborhoods.

High-inequality neighborhoods actually reduce inequality at the city and metro level.

Obstructing new development, even new higher-income development, is a recipe for aggravating problems of affordability and displacement.

Policies that aim to put the burden of paying for affordable housing on developers are unlikely to work. Their margin is too small, and the incentive effects will lead to less housing being built.

The scale of public investment in affordable housing is dwarfed by the housing market—but we can do better.

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In the coming year, we’ll look to dig deeper into each of these propositions, and add others to our list. If you take issue with the positions we’ve staked out here, can offer relevant evidence that confirms, denies or sharpens these propositions, or have other ideas that are candidates for this list let us know. We look forward to continuing this conversation in 2017.