“A Different Vision for Cities”

Presentation to Illinois City County Managers Association

By Joel Kotkin, Chapman University and Center for Opportunity Urbanism Peoria, IL Feb. 9, 2017

What is a City for?

“a city comes into being for the sake of life, but exists for the sake of living well.” ---Aristotle

Main Conclusions

• There’s a major opportunity to take leadership in the Heartland, but Illinois is lagging

• Much of Illinois politics and positioning is all about Chicago, but suburbs and small towns may be as or even more important

• The state structure has failed, much as the federal government. Time to consider a more localized approach

(5.6%)

(2.2%)

(0.5%)

2.9%

3.1%

3.6%

6.5%

8.0%

11.0%

14.8%

25.6%

Michigan

Ohio

Illinois

Pennsylvania

Wisconsin

Indiana

Minnesota

New York

California

Florida

Texas

Total Job Growth, 2001-2016

Source: EMSI Covered Employment, 2017.1

(4%)

(2%)

2%

3%

4%

6%

6%

8%

10%

10%

25%

Illinois

Michigan

Ohio

New York

Pennsylvania

Minnesota

Indiana

California

Florida

Wisconsin

Texas

STEM Job Growth, 2001-2016

Source: EMSI Covered Employment, 2017.1

-120,000

-100,000

-80,000

-60,000

-40,000

-20,000

02001 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 2014 2015

Domestic Migration: Illinois2001-2009 & 2011-2015

Derived from Census Bureau data

Data not

collected

for 2010

-3,000,000 -2,500,000 -2,000,000 -1,500,000 -1,000,000 -500,000 0

New York

California

Illinois

New Jersey

Michigan

Ohio

Massachusetts

Louisiana

Connecticut

Pennsylvania

Net Domestic MigrationsSTATES WITH BIGGEST LOSSES: 2000-2016

Census Bureau data Figure 7

-5.0% -4.0% -3.0% -2.0% -1.0% 0.0%

Bloomington

Carbondale

Champaign-Urbana

Chicago

Danville

Moline-Rock Island

Decatur

Kankakee

Peoria

Rockford

Metro-East (St. Louis)

Springfield

Relative to 2010 Population

Net Domestic Migration %: IL MSA’s2010-2015 (ILLINOIS COUNTIES ONLY)

Derived from Census Bureau data

The New Heartland

Map produced with http://diymaps.net/us_12.htm

Distribution of Labor Force By Sector

Manufacturing, 59%

Business, 29%

0%

10%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Productivity Gains Since 2001

U.S. Bureau of Labor Statistics Major Sector Productivity and Costs Program, Labor Productivity Index (output per hour)

$1.40

$1.17

$1.05

$0.86

$0.66

$0.64

$0.60

$0.58

Manufacturing

Agriculture, forestry, fishing, and hunting

Transportation and warehousing

Information

Professional and business services

Retail trade

Wholesale trade

Finance, insurance, real estate, rental, and leasing

Economic Multiplier EffectEconomic Activity Generated per Dollar of Sales, 2014

Source: U.S. Bureau of Econonmic Analysis Input Output Accounts

Manufacturing Growth By State, 2009-2016

Source: EMSI Employment Data, 2016.2

0.3%

2.9%

4.6%

5.6%

6.3%

8.4%

9.1%

10.5%

13.4%

16.4%

24.1%

Pennsylvania

Illinois

California

Texas

Wyoming

Wisconsin

Minnesota

Ohio

Florida

Indiana

Michigan

Manufacturing Job Growth, 2010-2016

Source: EMSI Covered Employment, 2017.1

0

3

6

9

1950 1960 1970 1980 1985 1990 1995 2000 2005 2010 2015

Me

dia

n M

ult

iple

Pri

ce t

o In

com

e R

atio

The New Heartland

California

Northeast Corridor

Other West

Other South

Annual Data Begins at 1980

Housing Affordability Compared MAJOR METROPOLITAN AREAS: 1950-2015

Derived from Census Bureau, Harvard University and Demographia.

-1,000,000

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

Under $200,000 $200,000 - $300,000 $300,000 - $400,000 Over $400,000

Ne

t D

om

est

ic M

igra

tio

n: 2

01

0-2

01

5

Median House Price (Third Quarter 2015)

Net Domestic Migration & House Prices2010-2015 MIGRATION & 2015 MEDIAN HOUSE PRICES

Derived from Census Bureau & National Association of Realtors data

Majormetropolitan

areas

Housing is the main factor differentiating regions

23% 35%

300%

55%

915%

0%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1000%

Goods Services Otherthan Rents

Rents OVERALLCOST OF

LIVING (RPP)

AverageHouse Value

Hig

h C

ost

of

Livi

ng

Co

mp

are

to

Lo

w

Prospective Home Buyer

Prospective Renter

Derived from ACS: 2010-4: City Sector Model 2015 Revision

Metropolitan Cost of Living: Range 2014381 METROPOLITAN AREAS

Figure 1

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Nevada

Montana

Washington

Colorado

New Jersey

New York

Oregon

Massachusetts

California

Hawaii

United States

Median Value to Household Income Ratio

10 States with Least Housing Affordability2015

Derived from American Community Survey

The US Experience: More Dispersion, More Denial by Planners, Pundits and some

developers

“We’ve reached the limits of suburban development .People are beginning to vote with their feet and come back to the central cities.” HUD Secretary Shaun Donovan Feb 2011

Core Municipality Share of GrowthMAJOR METROPOLITAN AREAS: 1950-2010

Core Municipalities

9.9%Suburban

Areas90.1%

Derived from US Census Bureau data

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

All Residents City Residents SuburbanResidents

Small TownResidents

Rural Residents

Resident High Satisfaction %

Living Preference %

Pew Research Center, 2009 Figure 21

Satisfaction & Living PreferenceBY RESIDENTIAL LOCATION

-800,000

-600,000

-400,000

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

Core Counties Suburban Counties

Figure 22

US Movement to Suburbs ContinuesMAJOR METROPOLITAN AREAS: 2010-2015

From: US Census Bureau data

1.3%

15.2%

46.2%

22.3%

14.9%

1.3%

13.4%

41.6%

27.3%

16.4%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Urban Core:CBD

Urban Core:Ring

Earlier Suburb Later Suburb Exurb

Shar

e o

f P

op

ula

tio

n2000

2012

Percentage of Population by City Sector52 MAJOR METROPOLITAN AREAS: 2000-2012

Derived from 2000 Census & 2010-2014 American Community Survey

Urban Core: CBD

12.6%

Urban Core: Ring6.8%

Earlier Suburbs30.3%

Later Suburbs39.7%

Exurbs10.6%

Job Growth by Urban Sector: 2010-201452 MAJOR METROPOLITAN AREAS

Derived from County Business Patterns (US Census Bureau) Figure 24

Why Millennials will head to suburbs and Middle America

• Incomes are not sufficient for coastal areas

•Most will look for places to live a middle class life, and raise families, although this will happen later for them

•They will follow industries as they move to more affordable areas

From 15 Economic Facts About Millennials PDF

84

8180

86

89

74

76

78

80

82

84

86

88

90

Total population

Millennials

Gen X

Boomers

Silent Gen

Percent who agree “homeownership is an important part of the American Dream”

Source: Merrill Lynch – Age Wave, 2014Base Age 21+

How Millennials View Marriage and Children (% saying they…)

Source: Pew Research Center

Based on ages 18-29, unmarried and without children, n=305

70

25

5

Do you want to get married?

Want

Not sure

Don't want

74

19

7

Do you want to have children?

0% 10% 20% 30% 40% 50%

Country

Small City

Suburb

Big City

Country

Small City

Suburb

Big City

Millenials

Older Generations

Source: Frank N. Magid Associates

Millennial Life Style ChoicesCOMPARED TO OLDER GENERATIONS

Cu

rren

t

Res

iden

ce

Idea

l Pla

ce

to L

ive

Where do millennials want to live

Source : National Association of Home Builders

Detached House81%

Townhouse8%

Multi-Unit7%

Other4%

House Purchases: Under Age 352014-2015 NATIONAL ASSOCIATION OF REALTORS

From National Association of Realtors, 2015

5.3%

11.6%

13.0%

15.0%14.2%

13.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Urban Core:CBD

Urban Core:Inner Ring

Early Suburb Later Suburb Exurb OVERALL

Small Areas (Zip Code Analysis Zones)Figure 32

Age 5-14 Population % by Urban Sector52 MAJOR METROPOLITAN AREAS: 2010

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1850 1900 1950 2000

Population: City of Chicago1850-2010

Derived from Census Bureau data

-900,000

4,330,000

-2,000,000

-1,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

City of Chicago Suburbs

Population Change: Chicago & SuburbsILLINOIS COUNTIES ONLY: 1950-2015

Derived from Census Bureau

Urban Core: CBD

12.6%

Urban Core: Ring…

Earlier Suburbs30.3%

Later Suburbs39.7%

Exurbs10.6%

Job Growth by Urban Sector: 2010-2014In 52 Major Metropolitan Areas, 7 in 10 new jobs are in the suburbs

Derived from County Business Patterns (US Census Bureau)

1.1%

24.7%

45.0%

18.3%

10.9%

1.2%

24.6%

44.9%

18.5%

10.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Urban Core:CBD

Urban Core:Inner Ring

Earlier Suburb Later Suburb Exurb

2010

2013

Population by City SectorCHICAGO IL-IN-WI METROPOLITAN AREA: 2010-2013*

Derived from 2010 Census & *ACS (2011-5): City Sector Model 2015 Revision

Detached House81%

Townhouse8%

Multi-Unit7%

Other4%

House Purchases: Under Age 352014-2015 NATIONAL ASSOCIATION OF REALTORS

From National Association of Realtors, 2015

Projected national number of 20-27 and 28-35 population cohorts, 2014 to 2060

34

35

36

37

38

39

40

41

42

20

14

20

16

20

18

20

20

20

22

20

24

20

26

20

28

20

30

20

32

20

34

20

36

20

38

20

40

20

42

20

44

20

46

20

48

20

50

20

52

20

54

20

56

20

58

20

60

20-27

28-35

Source: Business Insider/Andy Kiersz, data from US Census Bureau

An aging population also boosts the suburbs

% living in urban neighborhoods, by age group30%

25%

20%

15%

18-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85+

2000

2014

JAMES MADISON ON CONCENTRATION OF POWER

“The accumulation of powers legislative, executive, and judiciary in the same hands ... may justly be pronounced the very definition of tyranny.“ Federalist No. 47

http://www.brookings.edu/research/papers/2012/03/states-budgets-gordon

This localist preference extends to attitudes toward state governments , many of which have grown more powerful and intrusive in recent years, notably in California; some 72 percent of Americans , according to Gallup, trust their local governments more than those of their states.[ii]

http://www.gallup.com/poll/176846/americans-trust-local-government-state.aspx

$0

$100

$200

$300

$400

$500

$600

$700

Under1,000

1,000-2,499

2,500-4,999

5,000-9,999

10,000-24,999

25,000-49,999

50,000-99,999

100,000-249,999

250,000& Higher

Population Range

Figure 45Derived from Census Government Database

Spending per Capita by Government SizeUNITED STATES MUNICIPALITIES: 2008

Fire, Police, Libraries

Roads, Parks & Recreation

$0

$100

$200

$300

$400

$500

$600

$700

Under1,000

1,000-2,499

2,500-4,999

5,000-9,999

10,000-24,999

25,000-49,999

50,000-99,999

100,000-249,999

250,000& Higher

Population Range

Figure 46Derived from Census Government Database

Debt per Capita by Government SizeUNITED STATES MUNICIPALITIES: 2008

Public purpose debt

at end of year

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Under2,500

2,500 -4,999

5,000 -9,999

10,000 -24,999

25,000 -49,999

50,000 -99,999

100,000 -249,999

250,000+(Chicago)

Pe

r C

apit

a

Median Debt per Capita: 2014ILLINOIS MUNICIPALITIES: 2014 BY POPULATION

From: Illinois Comptroller data.

Bonded debt,

revenue bonds &

alternative

revenue bonds

• After all is said and done, he --- the citizen --- is really the city. The city is going wherever he goes. “

Frank Lloyd Wright, The Living City, (1958)

Questions and Comments