Month: December 2017

How Can America Create the Startup It Needs?

I recently caught up with Dane Stangler of the Startup Genome project to talk about startups in the US. He talks about the general decline in startup activity, the geography of startups, how to create a startup cluster, and the role of broadband access in startup creation. If the audio player for the podcast doesn’t show up for you, click over to listen on Soundcloud.

Subscribe to podcast via iTunes | Soundcloud.

from Aaron M. Renn
http://www.urbanophile.com/2017/12/06/how-can-america-create-the-startup-it-needs/

Bringing Down Housing Prices in the Bay Area

Photo Credit: Alfred Twu

On Sunday the New York Times ran a story on the difficulties of building new housing in California, focusing on the city of Berkeley.  There’s a lot of good in the piece, including the insane difficulties of getting approvals to build even when you propose something in keeping with the existing zoning.

But it misses a lot too. Firstly, it focuses on building more multifamily housing in existing single family neighborhoods. That seems to be the main lever it believes needs to be pulled to bring down housing costs. The idea that the Bay Area might build more housing on greenfield sites – single or multifamily – isn’t even contemplated. Nor does the piece cite examples of where large scale infill densification actually rendered housing affordable in the absence of new greenfield construction. I’m not aware of any such cases.

That’s not to say that upzoning or densification are a bad things. I would support upzoning and building more infill in nodes proximate to transit stations. (I also think we should be honest that our intent in this is in fact to change the character of the neighborhood). But if you’re taking urbanized area expansion off the table, don’t ever expect to bring housing prices down materially.

The focus of these kinds of stories usually seem to be places like Berkeley, or San Francisco or Palo Alto or New York City. But these are special places. It’s not realistic to think you could ever build enough housing to accommodate the demand to live in them. Keep in mind that if prices fell by 50% in San Francisco, which would still be high, massive numbers of new people would contemplate moving there.  The housing crisis has to be solved primarily through building more workaday communities, not elite ones.

Also, the piece fails to note the role of various building regulations, impact fees, lawsuits, etc. in driving up the price to construct housing. The San Diego Union Tribune recently had a piece on housing prices in that city that details some of these. (They also note that about half of San Diego County land is off-limits to building, including some zoned for agricultural use only).

Lastly, I find it interesting that many of the same kind of people who complain about state preemption in other contexts are very happy to see the state of California disempowering localities to make land use decisions (a core function of local government).

In short, yes, we need to make it easier to build in existing neighborhoods and we need to allow increased density in some locations. But we shouldn’t pretend that building more apartments in the Berkeleys of this world will bring Bay Area housing prices down to affordable levels absent greenfield development (or a collapse in demand).

from Aaron M. Renn
http://www.urbanophile.com/2017/12/05/bringing-down-housing-prices-in-the-bay-area/

What Is the Future of Flyover Country?

Image via City Journal

My latest piece in City Journal is a look at the interior of the country and its future. It’s an introductory survey that points out that there isn’t a simple coasts vs. the rest, but that there are many distinct regions and cities with varying performance. Many interior regions and cities are doing very well while others legitimately struggle. But in most cases there are still significant hurdles that need to be addressed. Here’s an excerpt:

Cultural attitudes can also be crippling, particularly in the Rust Belt and rural areas. There’s a deep hostility to change and often an active suppression of the pursuit of excellence. In some communities, young people find their college ambitions squelched. Other communities have seen so little influx of newcomers that they’ve become culturally narrow and unwelcoming to outsiders, making it hard to build social networks in these insular places. Changing this social trait won’t be easy—yet it is, arguably, essential to all future change. The fact that the civic attitude in Columbus, Indiana, is so different from that of much of the Midwest is a key reason that it has outperformed.

Third, the region needs to develop its human capital. Today’s manufacturing jobs often require computer or other technical skills, for example, so communities need labor-force training programs to help workers develop advanced skills in these sectors. The knowledge-worker labor force also needs upgrades. The heartland suffers because of the “superstar” effect. In today’s world, the spoils often go to the very top of the hierarchy. The heartland is too often good, even very good, but not the best. An exception that proves the rule is Carnegie Mellon University’s computer-science department, which attracted companies like Uber and Google to set up shop in Pittsburgh. The heartland needs to develop more such leading departments in its universities and attract some top talent. To do that, changes in cultural attitudes will be crucial.

Finally, the nation’s interior regions need to find ways to innovate in new, next-generation industries and technologies. The fracking revolution is an example of a homegrown technology disruption that developed local wealth and jobs, while having a global impact on energy prices. Until the heartland can start leading with some of its own innovative industries and technologies, it will always be in a reactive position. It needs to learn how to play offense, not just defense.

Click through to read the whole thing.

from Aaron M. Renn
http://www.urbanophile.com/2017/12/04/what-is-the-future-of-flyover-country/

Productivity and Growth in the Digital Age

I mentioned the restoring American economy dynamism conference I attended earlier this week. I was able to record a podcast there with Jaana Remes, one of the speakers. Jaana is a partner at McKinsey and part of their in-house think tank the McKinsey Global Institute. You should definitely get on their list because they put out incredible research on trends in the US and global macroeconomy, as well as cities.

We talked about the challenge of economic growth in the US, the risks from robots, and the two-tier sorting of cities we’ve seen. If the audio player doesn’t display for you, click over to listen on Soundcloud.

Subscribe to podcast via iTunes | Soundcloud.

from Aaron M. Renn
http://www.urbanophile.com/2017/12/01/productivity-and-growth-in-the-digital-age/