The City vs. The Suburbs

Stephanie Allen, Project Assistant

Earlier this month, Planetizen ran an article entitled “What Millennials Want, and Why it Doesn’t Matter.” The title was intriguing. We’re so focused on what millennials want—there are multitudes of articles every month detailing new research on what millennials say they want, on what they buy, on where they move, where they travel, their psychology, etc. And, obviously, we think it does matter what millennials want or we wouldn’t be doing so much research or writing and reading so many articles. We think it matters because millennials are the up and comers. They’re the young talent everyone wants to attract. They’re the future of our cities and towns and country. And, there are a lot of them (70 or 80 million depending on who’s counting). Of course we should care what they want. Right? 

I had to read the article. 

Spoiler alert: it turns out that it does matter what millennials want, surprise. However, and this really was surprising, at least when it comes to housing and transportation preferences, millennials want the same thing their parents and grandparents want these days: not to have to drive so much. 

Millennials, like their parents and grandparents, on the whole prefer to live in single-family homes in mixed-use areas where they rarely need a car. 

For a while we were told that millennials loved living in the city. In the past year, however, we’re seen a flurry of articles about millennials’ preferences for suburban living (e.g. “Generation Y Prefers Suburban Home Over City Condo” from The Wall Street Journal last year, “Think Millennials Prefer The City? Think Again” on fivethirtyeight.com, and “What if City-Loving Millennials Are Just a Myth?” on the urbanedge blog, just to name a few). One theory is that as millennals get older, make more money, want to settle down and perhaps raise children, they are following the lead of previous generations and moving to the ‘burbs. According to some who hold this theory, the reason so many older millennials still live in cities isn’t because they love city living, but rather that they came of settling-down age in a down economy and couldn’t afford to move to the suburbs. Instead, they stayed in their downtown apartments or turned to more affordable, low-income, in-town neighborhoods and began gentrifying them. Since they couldn’t afford suburbia, they bought the next best thing. 

Whatever your theory, the research indicates that millennials want to live in single-family homes outside of city centers. But, new research suggests that they don’t want to live in the sleepy, bedroom communities that attracted previous generations. They want compact mixed-use and they don’t want to have to rely on a car. 

Perhaps during all those extra years in the city in their 20s (compared to previous generations) they got used to the amenities of the city and the ease of walking, biking, and using public transit. According to Ben Cummins, author of the aforementioned “What Millennials Want, and Why it Doesn’t Matter,” it’s not just millennials who want compact mixed-use though. Preference surveys suggest that people of all ages prefer mixed-use neighborhoods to purely residential ones.

The thrust of Cummins’ article is that the majority of people across age groups prefer single-family homes in mixed-use neighborhoods, but most of those people don’t get what they want. Our housing stock is mostly split into apartments and condos in densely populated, mixed-use, urban areas and single-family homes in residential, suburban areas. In the city vs. the suburbs debate, there’s no clear winner. Both have things we want and living in either requires we sacrifice other things we want.

Perhaps this goes some way towards explaining why gentrified in-town neighborhoods are so popular. They typically include single-family homes but are mixed-use. They are often served by public transit and are both walkable and bikeable.

If we could somehow rework suburban areas to be more mixed-use and less car-centric, we might be able to please a lot of people. For the last couple of years we’ve heard all sorts of talk about the death of the suburbs. Maybe it is time for the car-centric, residential suburb to die and be reborn as a more walkable, more condensed, mixed-use suburb. Clearly Americans are still in love with the suburban idea, but the suburbs must change to accommodate changing ideals.

That is, unless the driverless car disrupts this whole desire for walkability and ease of transit and makes the car-centric, residential suburb once again supremely desirable. For more on that, check out Christopher Mims’ “Driverless Cars Fuel Suburban Sprawl” from The Wall Street Journal this week.

Joplin, Five Years Later

By Ranada Robinson, Research Manager

During this week five years ago, Market Street was on its way to Joplin, Missouri, where on May 22, 2011, a catastrophic EF5-rated tornado wreaked havoc. This deadly tornado wiped out entire areas of the city, affecting residents and businesses alike. To assist with post-tornado business recovery, Market Street provided pro bono assistance to the Joplin Business Recovery and Expansion Initiative. During our time there, we learned from the Joplin Area Chamber of Commerce that over 500 businesses were affected in some way; roughly two-thirds of Joplin’s businesses were operating, many in a temporary location; and that the status of over 100 businesses was unknown.

The tornado came on the heels of the Great Recession, which resulted in major challenges for the region. Declining populations in some communities, low average annual wages, high total and youth poverty rates, a relatively larger share of adults with no high school diploma, and the loss of a number of major employers were all issues that the Joplin Region was dealing with.

Five years later, Joplin has emerged as a case study for communities who experience natural disaster. The way the community and its leadership pulled together to overcome this awful circumstance is inspirational. The Joplin Area Chamber and its many partners are to be commended for their steadfast efforts to pull the city out of the debris and focus on its growth and success.

The following charts provide a data profile of the City of Joplin, which is located in Jasper and Newton counties. Because of the timing of the tornado, many of its impacts are not reflected in data until 2012. As the charts and tables will illustrate, Joplin has had slow but steady progress over the five years since the tornado. The city is gaining population and jobs, unemployment is declining, and the number of firms is increasing. However, as is not surprising, there is still a ways to go. Although poverty is decreasing in Newton County, it is increasing in Jasper County. Average annual wages significantly lag behind those of the state and nation, and per capita income has slightly declined. 

In the coming weeks, we will to share more insight into Joplin’s post-tornado efforts and highlight the economic development component of their resilience and dedication.

Population

Source: US Census Bureau

Population Index

Source: US Census Bureau

Employment

Source: US Census Bureau

Employment Index

Source: Economic Modeling Specialists Intl

Unemployment

Source: US Bureau of Labor Statistics

Average Annual Wages

Source: Economic Modeling Specialists Intl

Establishments

Source: Economic Modeling Specialists Intl

Per Capita Income

Source: Economic Modeling Specialists Intl

Poverty

Source: Small Area Income and Poverty Estimates

Youth Poverty

Source: Small Area Income and Poverty Estimates

Relocating a highway can potentially refresh a downtown

By Evan Roberston, Senior Project Associate
Op-Ed, reprinted from the Atlanta Journal-Constitution

At any given moment, communities across metro Atlanta spend substantial sums on transportation infrastructure. Projects vary in size and scope, and include building and repairing roads and bridges, adding entrance and exit ramps, or updating and adding traffic lights.

For the vast majority of people, these investments go by relatively unnoticed. After a year or two, we only remember the inconvenience it caused during our morning or evening commute. We judge their success by how safe we feel on the road and how much less we sit in traffic.

Outside of improving the flow of cars and trucks, we metro Atlantans usually don’t ask more from these investments. There is little expectation that they will result in the wholesale transformation of our community. But every now and again, an infrastructure project comes along that presents local residents with the opportunity to change course and position their community for future success.

In Douglas County and the city of Douglasville, community stakeholders are hoping to seize the relocation of Georgia Highway 92 as such an opportunity. When the project is complete, Highway 92 will brush along the eastern outskirts of downtown Douglasville rather than running directly through it. While highway relocations have typically had damaging effects on downtowns across Georgia – the impact on Douglasville can be different.

At present, many traveling along this stretch of the highway corridor are simply trying to get home, or go to work. They are driving through Douglasville’s downtown, and not driving to it. Once the relocation project is complete, downtown Douglasville, unburdened by commuter traffic, can reassert itself as the soul of Douglas County and establish itself as a regional destination.

The task at hand for our GeorgiaForward Young Gamechangers team, aptly named “Destination Downtown,” was to develop a way forward for, and position downtown Douglasville for, success. It was clear that this process would require the hearts and minds of Douglasville and Douglas County residents to be persuaded that transformation is possible.

We believe the public and private space in downtown Douglasville is anything but inflexible. Our recommendations include engaging in a tactical campaign to spark an open and honest conversation of what its downtown could become both short-term and well into the future.

Our team came up with an encompassing set of big ideas to cement downtown Douglasville as a destination for residents and visitors alike. Our ideas range in scope from creating an inviting gateway corridor that will connect Highway 92 with the core commercial district, to engaging in a community-wide branding campaign culminating in a “grand reopening” event. Finally, catalyst developments promoting a live-work-play lifestyle in downtown Douglasville can help solidify its revitalization.

Metro Atlanta’s transportation investments don’t need to solely impact our mobility. Whatever the investment may be, infrastructure projects allow us to view our built environment in new light and afford us the opportunity to make our communities and the broader region a better place to live. For one metro Atlanta area community, the relocation of a highway has given it the chance to rejuvenate its heart.

The Incalculable Benefit of Being “Major League”

By Alex Pearlstein, Principal, Vice President

Americans are famous for wanting things but not wanting to pay for them. New roads, world-class healthcare, online news, a handful of chocolate-covered peanuts in a supermarket bulk bin. I’d argue that you could add professional sports franchises to the list. Most local stakeholders love the idea of having a major league team in their community but balk at any public money being used to finance a new or upgraded stadium. There are exceptions, but recent history shows that voters time and again will reject proposals to bolster the fortunes of billionaires by building them free or heavily subsidized facilities.

Ironically, as soon as a franchise leaves for greener publically-funded pastures, it’s not long before the city is feverishly strategizing how to attract a new team to the market. Such is the case in Seattle, which lost the NBA’s Supersonics and now feels the stinging pain of that team’s success in Oklahoma City. Recent attempts to pursue a new stadium for a presumptive NBA franchise were shot down in flames by the Seattle City Council. Lesson being, it’s easier to keep a team than get a team, which is why “creative financing” and book-cooking is often used to finance new stadiums, as in recent successful efforts to fund facilities for the Minnesota Vikings, Los Angeles Rams, Milwaukee Bucks, and others.

The specter of a franchise relocation is often used as motivation for communities to fast-track new stadium proposals, rally the troops to resource them, and put them to a public vote (although to be avoided at all costs). St. Louis’ last-ditch attempt to keep the Rams and San Diego’s Sword-of-Damocles one year deadline to finance a new facility for the Chargers are two examples.

The bottom line question that’s always raised in discussions of the pros and cons of public financing for major league sports facilities is, “Are they worth it?” Ultimately, this is a subjective assessment because fiscal impacts rarely point to a positive outcome for communities either directly financing stadiums or on the hook for bond shortfalls. Certainly, the lack of a major league franchise doesn’t make or break local economic success. Austin, Texas is the largest U.S. city without a professional sports team, and they’ve done okay recently (read: top metro economy in the U.S. over the past decade). Of course, they also have putative pro teams at the University of Texas.

What potentially holds the most value for major league communities is perception – the internal and external validation that comes from being a “big league” town. Shared passions are cultivated among current residents and expats alike. A Buffalo-expat friend of mine still invests a seemingly bottomless well of emotional currency in the Bills and Sabres; his teams serve as a real and imagined link back to the city that helped define him. The sheer number of “expat bars” showing NFL games in Sun Belt metros across the country attests to the powerful bonds between people and their hometown teams (mostly, unfortunately, from Rust Belt metros like Cleveland, Pittsburgh, Detroit, and Buffalo). The brief rumored flirtation the Bills had with Toronto before committing to Buffalo under new ownership felt like a nail-in-the-coffin moment for many city boosters. “If we lose our pro franchise, we’re officially no longer relevant.”

In many of Market Street’s mid-sized client communities, when you ask stakeholders what – if money was no object – would take them to the next level of success, a surprising number of people say, “Getting an NFL team.” There just seems to be a confirmation of “arrival” of a city when it gets its first pro franchise. With global audiences in the tens and hundreds of millions routinely watching NFL, NBA, NHL, and MLB games, there’s an incalculable promotional benefit accrued to communities with pro teams. How many people in Latvia would know about Green Bay, Wisconsin if there wasn’t an NFL franchise there? Awareness might lead to interest, which might lead to investment.

So, as you can probably tell, my bias is that major league stadiums are worth public investment, within reason. That said, I’m a sports fan; ask someone whose life’s passion is the arts, and they might say using public money for a Sidney Opera House in Community X is a transformational move.

But every time I see the wellspring of immeasurable pride, passion, energy, and shared community that comes from a winning team – experiences that more than anything else seem to bind places together across racial, ethnic, age, and gender lines – I am convinced that you can’t put a price tag on it. Even losing teams connect people through shared misery (see Cleveland Browns). The below picture is from the Kansas City Royals’ public victory party after winning the World Series. ‘Nuff said.

Is it time to reconsider call centers?

By Matt Tarleton, Principal, Vice President

It was announced this week that Convergys – a provider of various information management, billing, and business support services – will bring 450 new call center jobs to Columbus, Georgia. These call center announcements are often met with measured enthusiasm, tepid applause, and occasional indifference among community leaders. Call centers have gotten a bad rap and in some cases, deservedly so. But not all call center projects are the same. While many are derided in economic development circles for low wages and frequent turnover, these are generalizations and at times they are not only inaccurate but also misguided perceptions of a project’s potential value to a community.

Customer service representatives are the most common occupation in the telephone call center sector nationwide (more than 46 percent of all jobs); these are the workers we picture when we think of a call center. According to Economic Modeling Specialists, Intl. (EMSI), the median hourly wage paid to a customer service representative employed in a call center in the United States in 2015 was $15.27. This exceeds the median wage paid to a variety of other occupations that employ millions and require some on-the-job-training but no further formal education beyond high school: medical assistants, nursing assistants, pharmacy technicians, freight movers, shipping and order clerks, receptionists, and nearly every occupation in the retail and food service sectors, including management and supervisory positions, to just name a few.

Team assemblers – the most common occupation within the “Advanced Manufacturing” sector that so many communities and region are targeting – earn a median wage of $13.95, roughly $1.30/hour below the median wage of a call center customer service representative. Has that stopped us from pursuing advanced manufacturing?

So where does the disdain for call centers come from? In 2015, just 18.4 percent of all occupational employment in the telephone call center sector earned more than the national median for all occupations ($21.13). So that’s why we don’t target call centers, right?

Well, just 14.9 percent of all occupational employment in the transportation and warehousing sector earn more than the national median. That hasn’t stopped nearly every community with an interstate interchange from targeting distribution operations.

Overall, more than 41 percent of our nation’s jobs pay a lower median wage than that which is earned by customer service representatives.

As the data illustrate, call center projects can provide employment opportunities with wages that are comparable to or exceed the wages of key occupations in business sectors that economic developers frequently target, from manufacturing to distribution. And they can provide a full-time employment opportunity with salary and benefits that is a desirable alternative to many individuals lacking formal education beyond high school and working in other customer service arrangements in sectors such as retail, food service, or hospitality.

But call center projects can also help advance other community and economic development objectives. The Convergys announcement in Columbus is a great example of one such ancillary benefit: the reuse of an existing, vacant facility. Convergys was fortunate to find a building that has recently been vacated by a similar operation. In many other communities, call center projects can represent greyfield redevelopment opportunities. Aging or obsolescent “big box” retail spaces are often highly flexible with abundant parking, key requirements of many call center projects.

Many negative associations have prevailed when it comes to call center projects, and the sector has certainly deserved some of the criticism that it has received. But call center projects can be a valuable addition to a community under certain circumstances. We’ve spent years dispelling myths about American manufacturing; perhaps we need to take a closer look at call centers and some of the myths that persist.

Talent Recruitment and Retention

By Katie Thomas, Project Associate

Across the country thousands of recent college graduates are gearing up to enter the labor market. The most recent data from the Bureau of Labor Statistics showed that at the end of February, there were roughly 5.4 million job openings, and a new survey from CareerBuilder recently reported that 67 percent of employers plan to hire recent college graduates[1]. This year’s college hiring outlook is the highest it’s been since 2007. Further, 37 percent of employers reported that they plan to offer graduates higher starting pay than the previous year, a sign of the growing competition for talent. The most in-demand graduates include those from Business, Computer and Information Sciences, and Engineering programs, with 76 percent of employers surveyed citing them as the most sought-after at their firms. 

In East-Central Wisconsin, the Fox Cities Regional Partnership has taken an innovative approach to ensuring that the region’s employers have the talented employee base they need to grow and prosper in the Fox Cities region. In 2015, the partnership, a division of the Fox Cities Chamber of Commerce, launched the Talent Upload program to connect college students with local employers. After a series of business retention and expansion visits with local employers, entry-level IT and engineering talent were identified as workforce gaps. In response, the program is offered to computer science, IT, and engineering students and provides a three-day, all-expenses paid trip to students at select universities to visit the Fox Cities region. Understanding the importance of quality of life, the program aims to familiarize students with the community and showcase its offerings as a place to live for young professionals. Additionally, it connects soon-to-be graduates with local employers and engages them early-on with the goal of retaining those students once they graduate. 

In South Dakota, the unemployment rate has been less than four percent since 2012, and in April 2016, the state had the lowest unemployment rate at 2.5 percent. In response to a tight labor market and a shortage of talent, the Build Dakota Scholarship Fund was launched. The program provides full-ride scholarships in high-need career areas at the state’s technical institutions. In exchange, scholarship recipients commit to working full-time in their field of study in South Dakota for a minimum of three years following graduation. In the first five years, 300 scholarships are projected to be awarded annually. The goal of the program is to grow the state’s workforce and alleviate some of the workforce shortages in order to support economic growth in key industries. Additionally, the hope is that after spending five years working and living in South Dakota, retaining those workers will be easier.

As our founder and CEO, J. Mac Holladay, highlighted last month, the availability of talent, quality of place, and quality of life are the new top site selection factors. Given the growing trend of millennials choosing a place to live before finding a job, quality of life and place factors ultimately can have a large impact on the region’s economic opportunities, as we continue to see more and more examples of companies following the talent. As such, communities across the country are stepping up and implementing a variety of new and innovative strategies to compete for talent, increase their region’s educational attainment rate, and ensure that there is a sufficient supply of talent for employers. In addition to quality of life and place improvements, new efforts are needed to develop – and retain – the existing residents, as well as attract and import new talent to the region. Even when the quality of life aspects are in place, regions like the Fox Cities are going the extra mile to expose young professions to the type of life they can enjoy if they choose to live there. As the economy continues to recover, there will continue to be more competition for talent, and therefore, it will be even more necessary to ensure that there is the type of environment that people want to live and work in, and one that has the talent and workforce to support job creation and economic prosperity. 

[1] CareerBuilder (2015). College Hiring Outlook Highest in Nearly 10 Years, According to CareerBuilder Survey [PressRelease]. 

Choices and real changes: Quality of life and place now top executive wish list

By J. Mac Holladay, founder and CEO.

On February 9, 2016 the Wall Street Journal ran an article by Eliot Brown titled “Office Glut Strains Suburbs.”  Brown reflected on many corporate headquarters “moving out of the leafy campuses and moving to downtown high-rises.”

He noted that the old Western Union campus in Saddle River, New Jersey, 30 miles from Manhattan last occupied by Pearson Education moved to Manhattan, New York and Hoboken, New Jersey.  The reasons: to be near “public transportation and a younger urban-dwelling workforce.”

General Electric left Fairfield, Connecticut for Boston and Con Agra went from its Omaha, Nebraska campus to downtown Chicago.  Weyerhaeuser left its huge campus in Federal Way for downtown Seattle, Washington, which is about a 30 minute drive north.

Closer to home, we see the same pattern being followed in Atlanta.  Kaiser Permanente moved its 900 person IT operation to midtown Atlanta.  Their Chief Information Officer, Dick Daniels, said this: “it was important to have a great location with the ability to walk to restaurants and shops and a location that was close to public transportation.”

NCR Corporation is moving its headquarters and 1000 people to be close to Georgia Tech and MARTA.  Mercedes is building its new headquarters next to the Sandy Springs MARTA station and State Farm moved operations to be near the Dunwoody MARTA station.  Veraforce, a leading insurance software provider, is moving to midtown from the suburbs.  Its location in One Midtown Plaza takes advantage of their internship program at Georgia Tech and the Technology Association of Georgia.  Veraforce’s Vice President of Development, Neil Snowdon, said “Midtown Atlanta is an ideal location for meeting with East Coast clients and strengthening our position within Atlanta’s dynamic tech community.”

After reading the various articles reporting these moves mentioned above, an interesting thing happened when I reviewed the 30th Annual Corporate Survey from Area Development magazine a few weeks ago. Even though the mix of corporate executives in the survey still represents many “traditional” sectors, the results of the survey tell a very different story than past years.  

Hopefully, to no one’s surprise the “availability of skilled labor” came out as a strong number one. Almost 93% of these executives rated it as important or very important, with over 58% ranking it as very important.

Highway accessibility came in second, but the real surprise is in the third slot is Quality of Life. Just barely below the highway number (88% to 87.6%), Quality of Life vaulted up to the third spot. That is FAR AHEAD of corporate tax rate (#7), state and local incentives (#9), and tax exemptions (#11). None of those were within 10 points of Quality of Life on importance to corporate executives. What was in days of old a key factor, right to work, came in a distant 16th a full 20 points behind Quality of Life.

These numbers reflect the reality that quality of PLACE AND LIFE is now at the top of most executive’s wish list along with the quality of the workforce. I am hopeful that Area Development and others will acknowledge that there needs to a much broader analysis of all the factors that make up quality of life. They certainly include health care access and affordability, public safety, open space and recreation options, downtown attractiveness, and quality public schools. As the recent headlines have proven, it is also vital to have an open and welcoming community and state. Discrimination will not be tolerated by the nation’s CEOs.

The message is clear.  Quality of place matters.  So does talent, openness, and access to public transportation.  These are becoming the top considerations for the best jobs in the economy.  Just another real change along the way.