Category Archives: Demographics

Tracking the Forgotten Virtue: Thrift

by James A. Bacon

More interesting data from WalletHub: In a ranking of 150 metropolitan regions by 16 metrics indicating the degree to which local populations adhere to responsible household budgeting practices, Virginians fare better than their peers in any other Southern state — and that’s not just a reflection of the outsized influence of Northern Virginia, which is wealthier, better educated and culturally distinct from the rest of the state.

Charlottesville ranked 11th nationally, followed by Washington at 23th, Roanoke at 25th, Richmond at 45th and Hampton Roads at 56th.

WalletHub’s metrics encompass average credit scores, non-mortgage indebtedness, foreclosure rates, percentage of population paying only the minimum on credit cards, percentage of the population spending more than they make, delinquency rates on loans, and related measures.

Education and income are important measures of economic well being but I would argue that household thrift is just as important. Social scientific surveys of happiness and well being consistently show that, beyond a certain point, additional income brings only increment gains in happiness. The pleasure gained from the acquisition of a flashier car, a bigger house or a newer big-screen TV is fleeting. The anxiety that stems from economic insecurity and the risk of losing one’s possessions is enduring. Households that live within their means and set aside some savings, I would hypothesize, tend to experience greater life satisfaction (or conversely, less anxiety) than households that spend money carelessly on frivolous or passing pleasures — even if they accumulate fewer material possessions.

This perspective is almost entirely lacking in the public policy debate in the United States today. Economic well being is measured almost exclusively by the rate of economic and income growth and, secondarily, the distribution of income. As a consequence, government policy is geared overwhelmingly toward goosing consumer expenditures. Anything that stimulates consumer spending, even if it means saving less and borrowing more, is regarded as beneficial to “the economy.” Thus, we witness today the revival of policies last seen during the real estate mania of the 2000s designed to lower mortgage borrowing standards and encourage more lending to the poor. The fact that these very same policies induced poor people into buying houses they couldn’t afford to pay for, much less keep up, and unleashed a wave of foreclosures that obliterated what little wealth most of these people possessed seems not to deter policy makers in the least. The idea that people of modest means can live perfectly happy lives without racking up debt seems alien to the American political psyche.

An ability to resist the siren call of excessive indebtedness, I would argue, is a major contributor to happiness and life satisfaction. The most responsible budgeters in the nation, by WalletHub’s standards, are clustered in the upper Midwest — in metropolitan regions centered in and around Minnesota and Iowa. It’s difficult to avoid the conclusion that cultural factors are at work, perhaps related to the Germanic and Scandinavian heritage of the populations. The other large cluster — not quite as thrifty, but more financially responsible than the country as a whole — is the Mid-Atlantic/Northeastern region, of which Virginia is a part. The South and parts of the Southwest are a budgetary disaster zone whose citizens, who are more likely to be poor, have shredded their household budgets. Thrift and frugality were never part of the Southern cultural tradition — either among the Anglo-Saxons or the African-Americans who settled there.

It would be interesting to know how Virginians came to embrace the household budgeting practices of states to the north rather than the south. Are cultural attitudes different here? Has state public policy played a role? Does the school curriculum, which teaches economics and personal finance, make a material contribution?

One last point: While it makes intuitive sense to link personal budgetary responsibility to life satisfaction and happiness, there may, in fact, be little correlation. Compare the map above with the happiness map published previously on Bacon’s Rebellion. The South is one of the happiest regions in the country! Maybe happiness is spending other people’s money.

Brat’s Strange Immigrant-Bashing

BratBy Peter Galuszka

It must have been an interesting scene. Congressional candidate David Brat had been invited to a meeting of the Virginia Hispanic Chamber of Commerce along with his Democratic rival Jack Trammell to outline his views on immigration and undocumented aliens.

Brat, an obscure economics professor who nailed powerhouse Eric Cantor in a Republican primary for the 7th Congressional District in June, danced around the topic, according to a news account.

It took several attempts to get him off his spiel on just how wonderful free market capitalism is to actually address the issue at hand. Before him were a couple dozen business executives, many of them Hispanic.

They, naturally, were interested in Brat’s views because of his over-the-top Latino-baiting during the primary campaign. One of Brat’s ads trumpeted: “There are 20 million Americans who can’t find a full time job. But Eric Cantor wants to give corporations another 20 million foreign workers to hire instead.”

Finally, Brat claimed, “I have never said I’m against legal immigration.” He later said, “nations that function under the rule of law do well.” Brat also said he wants to “secure” the U.S. border with Mexico. Trammell said he supports the DREAM Act that could provide a path to U.S. citizenship for some of the 11 million undocumented aliens in this country.

Brat’s immigrant-baiting and his “rule of law” smacks of a lot of ugliness in American history. “Know–Nothings” of white Anglo Saxons beat and harassed Catholic immigrants, primarily from Ireland. Chinese were harassed on the West Coast and Japanese-Americans were locked up in concentration camps during World War II. Jewish newcomers were met with restrictive covenants and college quotas.

In Richmond during the 1920s, efforts by Catholic Italian-Americans to build a monument to Christopher Columbus were fought by the Ku Klux Klan, which insisted that any such statue not dirty-up Monument Avenue and its parade of Confederate generals. Columbus had to go elsewhere in the city.

There’s a new twist and judging from Brat’s behavior on Tuesday. He seems uneasy by getting so out front on immigrant-bashing. He’s not the only Republican to take such strident stands. Look at New Hampshire, where Scott P. Brown, a Republican, faces Jeanne Shaheen, a Democrat, in a closely-watched race for the U.S. Senate.

Groups backing Brown, such as John Bolton, the surly former U.S. Ambassador to the United Nations, have run anti-Shaheen ads showing throngs of people clambering over a border just before showing Islamic militants beheading James Foley, a journalist and New Hampshire native, according to the New York Times. The ad was pulled after the Foley family complained, the Times says.

A major coincidence is that the Times‘ description of New Hampshire almost matches that of Virginia’s 7th Congressional District. Neither seems a hot bed of immigrant strife and threats.

The Granite State has one of the smallest populations of illegal immigrants in the country, the Times says. Of the state’s 1.3 million residents, only 5 percent are foreign-born and 3 percent are Hispanic.

The Virginia district has a population of 757,917 of whom 12.7 percent are foreign born and 4.9 percent are Hispanic. Most of the residents, 74.3 percent are white.

The district runs from the largely white and well-off western Richmond suburbs in Henrico and Chesterfield Counties and scoots northwest across mostly rural farmland to east of Charlottesville and up to Madison. With only 7.6 percent of the people living below the poverty level, it isn’t exactly a barrio of Los Angeles.

It is hard to imagine hordes of brown-skinned people swarming from up Mexico or Central America displacing the managerial executives, small business people and farmers in the Seventh. People that Brat seems to be worried about are employed in other nearby areas, such as the poultry plants of the Shenandoah Valley. But those workers are there because of local labor shortages. One wonders where Brat gets his ideas that illegal immigrants are going to steal true-blue American jobs in his district.

Last June during the primary, there was plenty of news about thousands of young Hispanic children coming across the southern border from Central America. At the time, there were estimates that up to 90,000 such children might come illegally into the U.S. this year. Many are fleeing gang violence in their homelands.

This is apparently what Brat is running against – a bunch of poor, 12-year-old Nicaraguans out to steal jobs and provide cover for Islamic terrorists. Their plight is a serious issue, but it is a humanitarian one. Brat chose to make it an odd classroom lesson in economics. He says the U.S. should not put up “green lights” and “incentivizing children from other countries to come here illegally and at their own peril.”

The news from the border seems to have calmed down since June. Brat may have found that now it is likely he’s going to Washington, playing the Hispanic-baiting card may not work as well on the national scene as it apparently did in his mostly-white district. It could be why he was hemming and hawing so much before the Virginia Hispanic Chamber of Commerce.

Illegal immigrant Ayn Rand

Illegal immigrant Ayn Rand

Perhaps other Republican politicians are having the same epiphany. As the New York Times writes: “Republicans have long relied on illegal immigration to rally the conservative base, even if the threat seemed more theoretical than tangible in most of the country. But in several of this year’s midterm Senate campaigns — including Arkansas and Kansas, as well as New Hampshire — Republicans’ stance on immigration is posing difficult questions about what the party wants to be in the longer term.”

There’s another strange contradiction with Brat. He’s a former divinity student interested in probing how unfettered free market capitalism can magically make the right choices for the betterment of mankind.

He draws a lot of his thinking from Ayn Rand, the famous thinker, refugee from the Bolsheviks and backer of her own brand of anti-government capitalism.

It may interest Brat that by today’s standards, Rand would have been an illegal immigrant.

EPA Carbon Rules: Ask the SCC

The SCC: An Emerald Palace?

The Emerald Palace or the SCC?

By Peter Galuszka

Last week, State Corporation Commission drew attention when its staff wrote to the U.S. Environmental Protection Agency, at the EPA’s request, to respond to one of the biggest proposed steps the nation has seen in cutting carbon dioxide emissions.

The report sparked considerable interest and confusion over what the SCC staff actually meant when it predicted that proposed EPA rules to cut carbon emissions 30 percent below 2005 levels by 2030.

The staff report, written by William H. Chambliss, SCC general counsel, said that EPA’s proposed limits would cost Virginia ratepayers from $5.5 billion to $6 billion extra. It claims that the state would have to shut down fossil-fuel, predominately coal-fired, plants producing 2,851 megawatts and replace it with only 351 megawatts of land-based wind power. This would badly impact the reliability of the state’s power supply, the staff said.

My immediate question was why so much and where, exactly? Precisely what power stations would have to be shut down? Where did the ratepayer increase numbers come from? Is there is a list of all the coal-fired plants affected? Dominion Virginia Power, the state’s largest utility, has long-standing plans to shut down two aging power stations at Yorktown and Chesapeake with about 920 megawatts of power? How does that factor in?

So, I contacted Ken Schrad, the spokesman for the SCC, by phone and email and asked some questions. He kindly provided the following answers (in italics):

Where are the affected plants precisely?

The numbers come directly from the EPA’s own spread sheets and the EPA does not identify the specific units.” 

How many plants are coal-fired?

Of the 2,851 MW, EPA predicts 2,803 MW of coal units and 48 MW of combustion turbines which could be natural gas or oil-fired CTs. Assuming Yorktown and Chesapeake are included in the EPA estimate, SCC staff knows that those planned retirements total approximately 920 MW.  The output of those units varies depending on when operating (summer or winter).”

Where does the 351 megawatt of land-based wind power, the only available replacement source for the lost fossil-fuel power, come from?

“The 351 MW figure is also direct from the EPA’s analysis which does not identify where EPA believes these undeveloped projects would ultimately materialize.  As staff noted in its comments, the SCC has approved the only request the Commission has received for a certificate for a wind project (Highland New Wind).  Approved in December 2007, the project envisioned up to 20 turbines with each turbine capable of producing up to 2MWs.  That project has not been built.   DEQ now has regulatory responsibility for permitting most solar and wind projects in Virginia. “

How do you answer criticism from environmental groups that Virginia has already attained 80 percent of the EPA’s carbon reduction already?

“Staff has no information regarding this assertion, the costs incurred to reach such a figure, how that attainment level was achieved, or the starting point from which such has materialized.”

The SCC staff recommends that the EPA adopt “an alternative carbon emission rate of 1,216 pounds of carbon dioxide per Megawatt hour of power. The EPA is proposing tighter limits of 843 of CO2/MWh for plants to attain by 2020 and levels of 810 pounds of CO2/MWh for plants to comply by 2030 because it would be more affordable. How much more affordable would the SCC’s suggested rate be?

” Staff recognizes there will be a considerable amount of expenditures to achieve the alternative emission rate.  It is a level envisioned in the integrated resource plan (IRP) filed by the utility company and reviewed every two years by the Commission.  The projected cost to achieve that level has not been quantified.  Instead, staff made a conservative analysis of the impact of the EPA proposed standards resulting in its determination that the alternate carbon emission rate would not require an additional expenditure of $5.5 to $6 billion.”

The SCC staff says that attaining EPA goals could cost ratepayers an extra $6 billion. Dominion is considering a third nuclear unit at North Anna that might cost from $10 billion to $14 billion. Wouldn’t the ratepayers have to pay for that, too?

“If built, the costs of another nuclear unit would be recovered over the expected life of the unit which could be 60-80 years.  There is a disconnect between taking a net present value figure (staff comments) and comparing it to something that is not.  Also, the added nuclear unit is envisioned in one of the IRP compliance plans. So, that was factored into the conservative analysis performed by staff which produced the projected additional $5.5 – $6 billion figure.”

I also asked Ken why the SCC did not issue a press release about the SCC reply to the EPA. He said that the SCC does not normally issue a press release when it responds to requests by federal agencies for comment.

Fair enough, but I have a few takeaways on the other answers. I am still not exactly sure where the 2,851 megawatts-to-be-shut-down figure comes from.

Next, the SCC staff complains that when this amount of generation goes offline (assuming it actually does), there will be pitifully little left on the renewable side to replace it. The only plant sited is a 40 megawatt one in Highland County that was approved by the SCC in 2007 (a lifetime in renewable energy terms) and has yet to be built.

What about plants for offshore wind farms, not to mention Dominion’s own plans for an experimental offshore wind station? The answer seems to be that we don’t know because another agency (DEQ) now licenses that sort of thing. If that’s the case, one wonders why the SCC staff didn’t give the DEQ a ring on their phone and ask for a seven-year update on what’s doing in wind and solar? Instead, they used seven-year old figures, apparently to minimize the importance of renewable power in rather sweeping terms.

One reason why Virginia’s renewable percent is a low 6 percent, compared to its neighbors, is that the General Assembly has refused to set mandatory renewable portfolio standards that require 20 percent or so of future generation to come from renewables.

Why so? The first ones to ask are the utilities – Dominion, Appalachian Power and the cooperatives. It seems that they don’t want any threat to their grids that they have poured billions into over the decades. Talk renewable and they’re like babies crying for the base-loaded bottles.

In any event, Virginia is not the only state to question the EPA rules. Oklahoma has as well. Big industry doesn’t like the proposed rules either. And the EPA is asking regulators like the SCC for input. One can’t blame them for responding. Forgive me if I don’t understand their response.

More Coal Industry Propaganda

coal woman By Peter Galuszka

If you read a blog posting just below this (the one with the coal miner with an intense look on his grit-covered face), you will see how hyperbole, confusion, misunderstanding, ignorance and one-sided arguments twist something very important to all Virginians – how to deal with carbon dioxide and climate change – into a swamp of disinformation..

The news is that the State Corporation Commission has responded to the federal government’s proposed rules that carbon emissions be cut 30 percent below 2005 levels by 2030 by complaining that it would cost ratepayers up to $6 billion.

This is because Virginia utilities may have to shut down 2,851 megawatts worth of electrical generation with only 351 megawatts (at present) of “unreliable” wind power to replace it.

The image one gets from the presentation of the blog post is that it is “The EPA’s War on Virginia” with the haggard-looking miner thrown in, we are given the impression that it is more of the “War on Coal” that the coal industry has been promoting in recent years to blunt much-needed mine safety laws and moves to police highly destructive mountaintop removal practices.

The author does not address any of this. But since he’s handing us the “War on Coal” propaganda line, let’s take his arguments apart. This won’t take too long.

  • The author fails to note part of the Richmond Times Dispatch story upon which he bases his opinions. There is a very important comment: “It appears the staff has misread the rule,” said Cale Jaffe, director of the Southern Environmental Law Center’s Virginia office. “Analyses that we have reviewed show that Virginia is already 80 percent of the way to meeting Virginia’s carbon pollution target under the Clean Power Plan. “Almost all of those reductions are coming from coal plant retirements and natural gas conversions that the utilities put in place long before the Clean Power Plan was even released,” Jaffe said.
  • That said, let’s take a look at coal-fired plants in the state which are the biggest carbon offenders. For starters let’s look at Dominion Virginia Power, the state’s largest utility. It has already converted three coal-fired plants – Altavista, Southampton and Bremo Bluff – to biomass. The 50-plus-year-old Yorktown plant (335 megawatts) is due to retire in 2015. Another aging plant – Chesapeake (609) megawatts — is also due to retire by 2015. The point here is that these plants are being closed because Dominion realizes that it is just too hard to keep 50 or 60 year plants operating efficiently and cheaply. It would be like keeping that 1960 Corvair because you don’t want to put oil workers out of work.
  • Dominion’s biggest problem and the biggest single air polluter in the state is the Chesterfield station with 1380 megawatts. Yes, it does need more controls. Then there’s Clover (882 megawatts) and Mecklenburg (138 megawatts). That brings us up to 2400 megawatts that might need upgrades. Let’s see. The two nuclear units at North Anna put out a little more than 1,700 megawatts just so we get some scale here. Dominon also has Virginia City (585 megawatts) which just opened, uses coal and biomass and has advanced fluidized bed burning methods.
  • Out west, Appalachian Power has 705 megawatts at Clinch River and 430 megawatts at Glen Lyn. Two of those three units there were built in (my God!) 1944 so I guess the blog author wants to keep those great granddaddies running to save miners’ jobs. Actually they are so unneeded that they have been on extended startups.Besides these Cogentrix has a couple small, modern plants in Portsmouth and Hopewell.
  • One reason there so little renewable generation (6 percent) is that the utilities do not have mandatory renewable portfolio standards to force them into wind and solar, etc. Virginia’s neighbors do.

All of this gets back to Jaffe’s point that the blog author so easily ignores. A lot of the carbon cuts are going to come from plants that are aging and are going to be closed anyway.

The SCC may complain about the $6 billion but guess what, you beleaguered electricity users? If Dominion puts a third nuke at North Anna, that’s easily $10 billion. Is that going to raise rates sky high? Where’s the outcry? It’s almost double what helping save the planet from carbon dioxide will cost.

The blog author’s hyperbole about the poor coal industry shows his ignorance of the topic. Virginia’s rather small coal industry (No. 12 in production) reached its peak in 1991. Natural gas has displaced a lot of expensive coal. Gas prices would have to triple to make Central Appalachian coal competitive again. There’s lots of metallurgical coal for steel, but the Asian economic slump has dropped prices maybe 60 percent.

I won’t comment on the author’s lame and misunderstood point about climate change not happening.

The blog author may want to blame that on Obama and the EPA but that would be almost as ridiculous as his blog post. I decline to name him because I don’t want to embarrass him.

Why We’re Being Railroaded On “STEM”

 csx engineBy Peter Galuszka

When it comes to education, a constant mantra chanted by the Virginia chattering class is “STEM.”

How many times have you heard that our students are far behind in “STEM” (Science Technology Engineering and Mathematics)? We have to drain funding from more traditional areas of study (that actually might make them better human beings like literature, art or history) and give it to STEM. The two types of popular STEM are, of course, computer science (we’re all “illiterate” claims one journalist-turned computer science advocate) and biotechnology.

But how important is STEM, really? And if Virginia joins the STEM parade and puts all of its eggs in that basket, will the jobs actually be there?

The fact of the matter is that we don’t know what jobs will be around in the future and like the famous generals planning for the last war, we may be stuck planning for the digital explosion of Bill Gates and Steve Jobs that is like, so, 25 years ago.

To get an idea where markets may be, look at today’s news. Canadian Pacific is making a play for CSX railroad (headquartered in Richmond not that long ago) because of the unexpected explosion in fracked oil.

CP handles a lot of freight in the western part of Canada and U.S. where some of the most impressive new fracked shale oil are, namely the Bakken fields of North Dakota and Alberta. CP wants access to eastern U.S. refineries and transshipping points, such as a transloading spot at the mouth of the York River. CSX is stuck with dirty old coal where production and exports are down, although it has an extensive rail network in the Old Dominion.

The combined market value of the two firms is $62 billion — a far bigger potential deal than the $26 billion Warren Buffett paid for Burlington Northern Sante Fe in 2010. There are problems, to be sure. CSX isn’t interested and the Surface Transportation Board, a federal entity, nixed a matchup of Canadian National and Burlington a little while back.

But this isn’t really the point. The point is that the Old Steel Rail pushed by new sources of oil and to some extent natural gas has surprisingly turned domestic economics upside down. Many of the new oil fields are in places where there are not pipelines, so rail is the only answer. In 2008, according to the Wall Street Journal, six or so American railroads generated $25.8 million in hauling crude oil. Last year that shot up to $2.15 billion.

So, what does that mean for students? A lot actually, especially when we blather on about old-style STEM that might have them inventing yet another cell-phone app that has a half-life of maybe a few months. Doesn’t matter, every Virginia legislator, economic development official and education advocate seems to be hypnotized by the STEM genie.

A piece I just did for the up-and-coming Chesterfield Observer on vocation education in that county:

“The recent push to educate students in so-called STEM (Science, Technology, Engineering and Mathematics) may be case in point. The goal is to churn out bright, highly trained young people able to compete in the global economy with their counterparts from foreign lands.

“A subset of this area of concentration is computer science, which goes beyond knowing the basics and gets into the nitty-gritty of learning code and writing computer languages. By some accounts, such skills will be necessary to fill more than 2 million jobs expected to become open in the state by 2020.

“Critics question, however, if overspecialization in technology at earlier ages prevents students from exploring studies such as art and literature that might make them better rounded adults. And, specialization often assumes that jobs will be waiting after high school and college when they might not be.

“Peter Cappelli, a professor of management at the Wharton School of the University of Pennsylvania, has written about such problems of academic overspecialization in national publications such as The Wall Street Journal. He recently responded to questions from the Chesterfield Observer via email.”

“Not many science grads are getting jobs in their field,” Cappelli says. “The evidence suggests that about two thirds of the IT (information technology) grads got jobs in their fields, about the same for engineering. There is no guarantee in those fields. It’s all about hitting the appropriate subspecialty that happens to be hot. There are still lots of unemployed engineers and IT people.”

So there you have it. In my opinion, the over-emphasis on STEM training has the unfortunate effect of producing young adults who have one goal in mind – getting a job and making money, not helping humankind. And, if you insist on STEM, why not branch into something where there are actually jobs namely petroleum engineering, geology and transportation engineering.

I’ll leave the dangers of added petroleum cargoes in trains to another post.

The Uphill Climb for Virginia Schools

by James A. Bacon

Why aren’t we making more progress improving the academic performance of Virginia’s school children? Many reasons have been advanced. Some say that school divisions don’t get enough money or that the money is unfairly distributed between schools. Others say that the public school system is over-regulated, bound by bureaucracy and resistant to innovation. Yet others blame society at large (sliding work ethic, the distraction of electronics) or point to the different emphasis on education among different racial/ethnic groups.

But there is another explanation that gets very little attention. Could the root of the problem be demographic? Could Virginia schools be struggling to raise academic achievement scores because school children increasingly are drawn from the ranks of the poor?

The correlation between poverty and socioeconomic status is well known. The challenges of poverty and economic insecurity — homelessness, frequent moves between school districts, family dysfunction, domestic violence, inadequate nutrition — distract poor children from focusing on school work. There is a cultural overlay as well: Because poor children tend to come from less educated parents, they grow up in households where reading is not emphasized and academic achievement is not stressed.

It is an indisputable demographic fact that poor women bear more children than middle-class and professional-class women. According to “Fertility of American Women: 2008,” published by the U.S. Census Bureau in 2010, the breakdown by income category looks like this:

fertility_by_income

The poorest women, typically unmarried women, have the most children. Not only do they tend to have more children, they tend to have them at younger ages than higher-income women who typically wait until they complete their educations and get married before bearing children. Thus, to cite an extreme example, a poor family in which successive generations of women give birth at age 18 produce two generations of offspring in the same length of time as a more affluent family in which a woman has her first child at 36.

When poor women give birth to more children and they do so at an earlier age, the result is that the student body of school systems is significantly poorer than the population at large. Here is a list of the 10 Virginia school divisions with the largest gaps between general poverty rate and poverty among children under 18 (a proxy for the poverty rate of children in the school system):

largest_poverty_gaps

Source: 2012 U.S. Census Bureau data

The same pattern prevails in every school division in Virginia with the exception of five small localities with large university populations in which the number of “poor” is skewed by the presence of college students. (To see the poverty gap for all Virginia school divisions, click here.)

Even with a fair amount of upward economic mobility — poor people lifting themselves out of the ranks of the poor — the tendency of the poorest women to bear more children at a younger age continues to fill up school houses with their poor progeny, with all the economic and cultural disadvantages they suffer. I subscribe to the idea that many school divisions could be doing a better job with the resources they have — the horror stories I could tell you about the City of Richmond school system! But the problem is bigger than bad schools, bad teachers or inadequate funding.

The question that should concern us all: Will the trend of schools filling up with poor children get better or worse over time?

Bonus question: What does this mean for the ongoing debate on the war on poverty? Does the persistence of widespread poverty in the U.S. represent a failure on the part of U.S. institutions to foster upward economic mobility? Or does it reflect the fact that poor people replenish their ranks faster than people can raise out of poverty?

Burbs Beware: Office Jobs Moving Back to D.C.

dc_office_spaceNot only are Millennials migrating to the Washington metropolitan region’s urban core, it seems that businesses are, too, in a reversal of the decades-long trend of businesses moving out of the central city to outlying counties.

Vacancy rates have risen in Washington, D.C., due to the contraction of legal services and government contracting tied to federal government spending. But according to commercial real estate firm JLL, private-sector tenants from Maryland and Washington accounted for 300,000 square feet of new leasing activity in the District. Reports Virginia Business magazine:

Doug Mueller, a senior vice president at JLL, noted that the migration is heavily populated by associations, technology companies and professional services firms. “The quality and location of office space with easy access to mass transit, abundant amenities and housing options also has a visible and tangible impact on attracting and retaining top talent,” he said in a statement.

According to JLL’s Office Insight report for the third quarter, since the start of 2014, a total of 21,200 private-sector office jobs have been added to the metro D.C. economy.

In an office market with tens of millions of square feet of space, 300,000 square feet is a rounding error. What’s significant is not the volume of space being occupied — although 21,200 office jobs is nothing to sneeze at — but the trend: jobs migrating back to the urban core. For decades, Virginia enjoyed a huge competitive advantage over the District with its dysfunctional government, poverty, crime and decaying neighborhoods. Now, despite bad schools, high taxes and expensive real estate, D.C. has something that educated Millennials and the businesses that employ them are looking for — walkable urbanism.

Next question: Is this trend unique in Virginia to the Washington metropolitan region or is it occurring in Hampton Roads, Richmond and the smaller metros as well?

– JAB

Good Ruling on Congressional Redistricting

The 3rd Congressional District

The 3rd Congressional District

 By Peter Galuszka

A panel of federal judges in Richmond has scrambled the carefully laid plans of legislators, most of them Republicans, to pack African-American voters into one congressional district to give the GOP an advantage in some of the  state’s 10 other districts.

The panel of U.S. District Court judges decreed that the General Assembly’s 2012 decision to draw new boundaries in the 3rd Congressional District stretching from Richmond east to several Tidewater cities was in error.

The state has until next April to redraw the 3rd District, now represented by U.S. Rep. Robert C. “Bobby” Scott, a Democrat who is the state’s only African American congressman.

That will undoubtedly impact other districts represented by white Republicans including U.S. Rep. Randy Forbes of the 4th District, U.S. Rep. Scott Ringell of the 2nd District and Robert J. Whitman of the 1st District.

This is indeed an interesting start to what could end up being a messy line of dominoes falling. And it shows just how wrongheaded politicians are when they tinker with voters by race by packing people of color in one district so races in other ones will be decidedly less competitive.

It also raises other questions about ways the GOP is doing its best to minimize the influence of young and non-white voters through the use of voter identification cards and other means.

To get an idea of how nuts the 3rd District is, look at a map. Moving west to east, it goes through eastern Richmond and Henrico County, swoops down the James River peninsula, and hop-scotches parts of the 1st District to include heavily African-American parts of Newport News and Hampton. Then, the District crosses Hampton Roads to include heavily black parts of Norfolk and Portsmouth and then heads west again to take also-black parts of counties on the south shore of the James River.

Scott is Virginia's only African-American Congressman

Scott is Virginia’s only African-American Congressman

This scheme packs African-Americans into one unit while mostly-white parts of Virginia Beach, Norfolk and Chesapeake and Williamsburg are covered in the 1st, 2nd and 4th Districts, all represented by white Republicans. Mostly-black Petersburg, a city of 32,000, was taken out of the 4th District and put in Scott’s 3rd District, giving white Republican Forbes of the 4th District an advantage.

Democrats such as State Sen. Mamie Locke have long complained about schemes that hop-scotch geography to give white candidates an advantage. They want tighter, more contiguous districts.

One can tell just how serious this is when Del. William Howell, the Republican House Speaker, had nothing to say about the court’s decision. He will have to somehow help navigate drawing up new district plans.

He’s really under the gun. He can’t just set up a road block as he did with Medicaid expansion and tell Democratic Gov. Terry McAuliffe where to stick it. If Howell shuns a bipartisan effort, then McAuliffe would likely veto whatever he and his colleagues come up with. Then it would go back to the judges to decide.

It is in Virginia’s interest to make sure all of its districts and not just ones for Congress are shaped to allow for more competitive races. Very few elections for state positions are contested. This, in turn, ruins bipartisan consensus and makes the primaries, usually for Republicans, more consequential than the races themselves. The results are either legislative gridlock or laws that have little to do with the wishes of many voters.

Another issue that needs to be addressed is what Mother Jones magazine has identified as a large-scale, national effort, mostly by Republicans, to make it harder for minorities and young people to vote. They tend to vote Democratic and helped Barack Obama win the presidency in 2008 and in 2012.

Since 2012, 22 states have passed new voting restriction laws that shorten voting hours or require a government-issued identification card or proof of citizenship. North Carolina has perhaps the worst of such measures. There are shorter hours and no more same-day registration to vote. It even gives the nod to “poll watchers” who can stand around outside polling places and hassle voters about their eligibility to vote. I guess that means if you look black or Hispanic or youthful, you get rousted by vigilantes. The odd part is that states, including Virginia, went for more restriction when there wasn’t much evidence of voter fraud.

To be sure, Virginia’s redistricting efforts were begun by federal initiatives such as the Voting Rights Act which gave Bobby Scott an opportunity to win as an African-American in the early 1990s. The Voting Rights Act was meant to ensure that minorities were represented but that concept has been cynically morphed into a Frankenstein that keeps minorities “packed” in a district or districts so whites maintain their hold on most of the other districts in a state.

The court’s decision is most welcome. Let’s hope it grows into a movement to return democratic competition and ends undemocratic restrictions like demanding extra and unnecessary pieces of identification for qualified voters.

 

Petersburg’s Renaissance

PetersburgBy Peter Galuszka

Petersburg has been a special place for me.

Years ago, when I’d pass through, I always felt I were driving onto the set of a 1950s or 1960s movie set in the South such as “Cape Fear” starring Gregory Peck and Robert Mitchum. A somnambulant ease pervades the place as does the down-home friendliness you don’t get in pretentious Richmond 30 miles to the north up Interstate 95.

I got to know Petersburg a lot better when my two daughters went going to high school there at the Appomattox Regional Governors School for the Arts and Technology. Drawing from localities from Richmond to Isle of Wight and Franklin, the school body was bright, diverse and creative.

Driving my children if they missed the bus from Chesterfield was a pain but the effort was worth it since they had some fine teachers and avoided the White Toast trap of entitlement one gets into in more affluent suburban schools.

That’s when I was introduced to Petersburg’s nascent arts community. I went to plenty of “Fridays for the Arts” celebration and hung out at Sycamore Street with the kids.

Returning again recently, I found that the arts scene is really taking off. They  seem to be at a sustainable critical mass.

It is due primarily to the city’s policy of remaking itself by setting up an arts district that is nationally recognized as historic and offering tax credits and abatements for newcomers to renovate properties they buy from the city. The big expansion at the Fort Lee military base in 2005 really helped (although it’s due for a cut).

I wrote about it in a cover story in Style Weekly. The heroes and heroines are far-sighted city officials, arts willing to risk a lot remaking some truly historic buildings and the next wave, restaurants that aren’t owned by franchises, coming in.

Not everything is wonderful. Petersburg still has a weak public school system and a poverty rate of 28 percent, a point higher than Richmond’s. But it also doesn’t have the in-fighting among powerful interest groups that far bigger Richmond does. There’s no endless debate over building a baseball stadium in Shockoe Bottom (to line pockets of developers) or keeping it at the Boulevard.

There’s no high level brinksmanship about where to put a Children’s Hospital.

In Richmond, you see, ball fans and sick children are the last ones to be worried about. What matters is Mayor Dwight Jones, Bill Goodwin, Michael Rao, the Timmons Group and the editors of the Richmond Times Dispatch. They are important and you are not.

You don’t get that in Petersburg. The little city (population 32,000) that has a historical richness than rivals Richmond’s doesn’t think it is better than anyone else.

Millennials Want a New Kind of Suburbia

Image credit: Demand Institute

Image credit: Demand Institute

by James A. Bacon

The Millennial Generation (18- to 29-years old) will be a predominantly suburban generation, contends a new study by the Demand Institute based on a survey of 1,000 Millennial households. Significant majorities of the younger generation aspire to owning a single-family home and consider automobiles a necessity, while a 48% plurality expresses a preference to live in the “suburbs” over an urban or rural environment.

These findings, the authors contend, contradict “myths” perpetuated by advocates of smart growth and urbanism that Millennials “all want to move to the city and rent; they don’t want to own things; they won’t need cars anyway — and there will be a massive slump in demand because they are all going to be living single in their parents’ basements for the foreseeable future.”

Phew! It’s hard to know where to start with this. The study does provide a useful benchmark for what Millennials are thinking and it reaches at least one very interesting conclusion. Unfortunately, the analysis totally clouds the debate by misstating what smart growthers and urbanists are actually saying and by what employing what our old friend Ed Risse terms “core confusing words.”

The Demand Institute does make some useful observations. While there are only 13.3 million households headed by Millennials today, young people will emerge from their parents’ basements. Their number will swell to 21.6 million households by 2018. Almost four in five expect their financial situation to improve within the next five years, and three out of four plan to move. The reasons they list for wanting to move: 71% for a better home or apartment, 59% for more privacy or space, 50% to establish a household, and 48% to own, not rent. While Millennials have delayed family formation, 30% are married today, 64% expect to be married within five years, and 55% expect to have children within five years.

Three out of four Millennials believe home ownership is important, and 60% plan to purchase a home within five years. When they do rent or buy a new home, 61% want more space. Sixty-two percent want to either rent or purchase a single-family dwelling for their next home.

Here’s where it gets interesting for those following the urban vs. suburban debate: Millennials’ locational preferences are:

48% suburban
38% urban
14% rural

Those who say it’s important for their next home to be within “a short drive” of grocery stores, restaurants and retail outnumber those who say it is important to be within walking distance by more than two to one. Meanwhile, 88% of Millennials own a car, down only one percentage point from 2001.

Among the study’s main conclusions: “The suburbs are going to remain important destinations for young families, but the ideal suburban location for Millennials may not be the same as it was for previous generations. Communities that can offer the best of urban living (e.g. convenience and walkability) with the best of suburban living (e.g. good schools and more space) will thrive in the coming decade.”

Very good. I believe that to be true. One of the great challenges of the next two or three decades will be urbanizing the suburbs, or, to be more precise, to replace the “suburban sprawl” pattern of development characterized by large lots, segregated land uses and autocentric streets with a more traditional “urban” pattern of small lots, some mixed-use and walkable streets.

The authors confuse the issue, however, by their indiscriminate use of the words “suburbs” and “suburban.” They do not differentiate between close-in suburbs where single-family dwellings have small lots and walkable streets and the far-flung “exurbs” on the metropolitan fringe where single-family dwells have large lots and rely exclusively upon automobiles. I would argue that while Millennials assuredly seek to live in communities with good schools and reasonable taxes, they are far less interested than previous generations in living in the “exurbs.” However, it is impossible to prove or disprove that argument with the way the authors constructed the survey.

As for dispelling the “myth” that all Millennials want to live in the city, rent an apartment and give up their cars, the authors have created a straw man. I don’t know of anyone who says “all” Millennials want those things. But the Demand Institute’s own data suggests that a significant number do. Thirty-six percent of Millennials say they expect to continue to rent multi-family housing over the next five years; 24% say they want the same amount of space, and 15% want less space. Thirty-eight percent say they prefer to live in an urban environment. As for transportation, 48% say they take mass transit at least once a week, 22% say they walk and 15% ride a bicycle. I would suggest those numbers represent a major shift from previous generations. It would be nice to compare those preferences with those of Generation Xers 20 years ago. The Demand Institute data would mean far more if we could put it in a generational context.

Bacon’s bottom line: In actuality, there is a big shift in Millennial preferences compared to those of previous generations. A big percentage of Millennials prefer urban lifestyles and a bigger percentage prefer a “best of both worlds” approach typical of the older, denser suburbs. There is little evidence here that Millennials are craving an “exurban” lifestyle of big houses on big lots in locations that make them dependent upon cars for long commutes. The study missed a chance to make that clear.