Category Archives: Economic development

Two UMW Daughters of the ’60s

Birmingham By Peter Galuszka

Just a few days ago, Elena Siddall, a Mathews County Republican activist and Tea Party Patriot, posted her account on the Rebellion of being a social worker in New York in the 1960s and the wrong-headedness of Saul Alinsky, a leftist organizer who had had a lot of influence back in the day, among others. I won’t comment on Ms. Siddall’s lively account and conservative point of view. But I do notice one thing: she is a 1963 graduate of what is now the University of Mary Washington, which then was considered the female side of the University of Virginia (campuses being segregated by sex back then).

I have a tie as well to Mary Wash, which is now coed. My daughter graduated from there last year and my cousin-in-law, now living in Tennessee, went there was well before moving on the U.Va. nursing. Our family experience at Mary Wash has been a big positive and I support the school. So, it is with considerable interest that I noticed that the Spring 2014 issue of the University of Mary Washington Magazine had a cover story of a different kind of graduate than Ms. Siddall with some very different views.

So, in the interest of providing some equal time among women who came of age during those years of intense ethical and political awareness, I thought I’d toss in the magazine story to further the debate and show that not every Eagle from Mary Wash thinks like Ms. Siddall (no disrespect intended).

The story has to do with Nan Grogan Orrock, class of ’65, the daughter of an Abingdon forest ranger, who got the civil rights fever when it wasn’t always easy for a young, white woman in Virginia to be an activist. But activist she was, from exhorting her classmates to join protests, to spending summers and other time in the Deep South demonstrating with African-Americans in SNCC, to staring down the real possibility of being beaten or killed and to even today, when she’s been active in the Georgia legislature shaking things up, such as trying to get the Confederate flag off public buildings.

The article, written by Mary Carter Bishop, class of ’67, is intriguing. The writer is a career journalist who was part of a team that won a Pulitzer in 1980 for the Philadelphia Inquirer when that paper was one of the liveliest and best in the nation.

As Bishop writes:Nan Grogan Orrock ’65 is among the South’s most veteran and well-respected advocates of social change. She is one of the longest-serving and most progressive members of the Georgia legislature and has left her mark on every sector of social justice: civil rights, women’s rights, worker rights, gay rights, environmental rights.

“She’s chased after cross-burning Ku Klux Klansmen, cut sugar cane in Cuba, started an alternative newspaper, organized unions, led strikes, been arrested a bunch of times, and still stands on picket lines. At 70, she’s far from done. I had to finally get to know her. The week before Christmas, I flew to Atlanta and sat down with her at the State Capitol.”

Please read both accounts – Ms. Siddall’s and Ms. Bishop’s article – and see ideas through opposite prisms of the 1960s involving two obviously very bright women.

Sure Looks Like a Brain Drain

Exerpt from map published in CityLab. Purple = net in-migration. Gray = net out-migration.

Exerpt from map published in CityLab. Purple = net in-migration. Gray = net out-migration.

by James A. Bacon

Richard Florida’s latest demographic research project presents an interesting twist on the old “domestic migration” data we’ve all seen (well, we’ve all seen it if we’re regular readers of Bacon’s Rebellion!) The U.S. Census tracks “domestic migration” — the movement of American citizens from one locale to another — and commentators have made much of the fact that some metros are consistent population losers while others are consistent gainers.

While the migration data is useful, there is much it doesn’t tell you. It’s one thing if your region is seeing an influx of college grads and Ph.Ds and quite another if you’re getting flooded with high school drop-outs. Florida broke down the migration data by education level to determine which metros were enriching their human capital, which metros were diluting their human capital and which were simply exporting their human capital. You can see his presentation at CityLab.

In some ways, the data presents the same picture. Big Northeastern and Midwestern cities like New York, Chicago, Philadelphia and Detroit lost population across all education categories between 2011 and 2012. But other cities showed more complex patterns. The Washington and San Francisco metros saw a net in-migration of people with college degrees and advanced degrees and a net out-migration of the less-than-college educated. Not a bad trade — you gain the people who contribute the most to the economy and tax base and you shed people the most likely to wind up on food stamps and unemployment insurance!

Here are the details for Virginia MSAs. Take the numbers for Charlottesville, Blacksburg and Harrisonburg with a grain of salt. Their massive outflow of college grads and Ph.D.s undoubtedly reflects the outsize demographic impact of local universities — hundreds of students come in with high school degrees and leave with sheepskins.

domestic_migration2
Richmond saw the greatest net in-migration of any Virginia metro during this period, although the newcomers were a mixed bag educationally. The region saw a bigger influx of people with less-than-high-school education levels than college and post-graduate combined. Roanoke experienced what can only be called a brain drain — no, make that a brain hemorrhage — losing large numbers of educated residents while receiving equally large numbers of ill-educated citizens.

This data is fundamental to economic development. Political and civic leaders need to know not only how many people are coming and leaving but what their net education level is — whether the region is building human capital or seeing it shrink. Each region needs to track this data over time. And, if it wants to have any kind of future in the entrepreneurial knowledge economy, it needs to attract citizens with the highest level of education who are likely to contribute the most to the economy.

The prognosis from this one year’s worth of data is not good for downstate Virginia. Throwing out the figures for Bristol-Kingsport (which is mostly Tennessee) and the three college towns, I conflated results for Hampton Road, Richmond, Roanoke, Lynchburg, Danville and Winchester. Here is the composite tally:

composite

That’s just one year but it looks like a major brain drain to me. We should be terrified. But we’re not. We should feel a sense of urgency. But we don’t.

Denying Truth on the Outer Banks

Sun Realty

Sun Realty

By Peter Galuszka

North Carolina’s Outer Banks have always been a touchstone for me – in as much as anyone can associate permanence with sandy islands being perpetually tossed  around by tremendous wind and water forces.

The Banks and I go back to 1954 and Hurricane Hazel when I was an infant. They mark many parts of my life. So, I read with great interest The Washington Post story by Lori Montgomery about how real estate officials in Dare County and other coastal parts of North Carolina are trying to alter clear-cut scientific projections about how deeply the islands will be under water by 2100.

State officials say that the ocean should rise 39 inches by the end of the century. This would mean that 8,500 structures worth $1.4 billion would be useless. Naturally, this has upset the real estate industry which is pushing for a new projection of an 8-inch rise 30 years from now. Think of it like a photo in a rental brochure. You don’t choose shots of dark and stormy days. The skies must be blue.

Ditto science. The insanity is that so many still don’t believe what is going on with climate change and carbon dioxide pollution. Over the past several years, Virginians, many of whom vacation on the Outer Banks, endured and paid for former Atty. Gen. Kenneth Cuccinelli’s legal attacks against a former University of Virginia climatologist who linked global warming to human activity. The assaults went nowhere.

Instead of addressing such profoundly transitory events, too many in the region say it isn’t so or pick away at what is really happening as we speak. And as Mother Jones magazine points out, it isn’t because weather change deniers, usually conservatives, don’t understand science.

The Outer Banks are an extreme example because of their incredible fragility. Anyone with even a cursory understanding of the islands knows that they are completely under the thumb because they are where two major ocean currents meet.

The only reason Hatteras has developed at all is the Bonner Bridge, an ill-conceived, 51-year-old span over Oregon Inlet so decrepit that it is often closed for repairs. Replacing it has been constantly delayed by the lack of funding and the threat of lawsuits. The federal government has been complicit for decades by spending at least hundreds of millions on sand replenishment programs or offering flood insurance coverage.

About 15 miles south of the bridge is Rodanthe, a flyspeck village just south of Pea Island National Wildlife Refuse. It is at the point of the Banks that sticks out farthest into the Atlantic and is under the strongest attack by ocean currents and storms. Route 12, the only way to evacuate by car when a hurricane comes, is on a narrow spit of constantly shifting sand trapped between the ocean and Pamlico Sound.

I’ve been going to Rodanthe for years. Starting in the 1980s, friends and I would pool our money and  rent one of the big beach houses. We have been constantly amazed how the distance between the structures and the surf is disappearing. One favorite spot was “Serendipity,” a skinny, tall beach house that we rented perhaps twice and featured fantastic views from the top-floor bar.

It was dressed up as a bed and breakfast in the movie ”Nights At Rodanthe,” a 2008 weeper starring Richard Gere and Diane Lane. The film was panned and the house was equally threatened. In fact, the next year, the owner had the whole thing placed on a truck and moved nearly a mile down the coast where there’s a little more sand.

More hurricanes followed, cutting a new inlet a few miles into Pea Island and its watery bird impoundments. The oceanfront houses we used to rent are in trouble. The ones across Route 12 now have dramatic new views.  A small, new bridge spans the inlet.

One can argue that building on the Banks is madness, global warming or not. There’s a lot of truth to this. But rising ocean water is truly going to accelerate the changes no matter how hard politicians or North Carolina’s real estate industry say it isn’t so.

Coming up: Car-Lite Burbs

David Grannis

David Grannis

A California developer is teaming with Daimler AG to bring buses, shuttles and ride sharing to an Orange County community — with no government subsidies.

by James A. Bacon

Rancho Mission Viejo south of Los Angeles is developing a 23,000-acre planned development with all the amenities one would expect from an affluent California community: parks, hiking/biking trails, yoga and fitness studios, community gardens and a hacienda-style clubhouse. But the biggest selling proposition may be the potential to slash living expenses by thousands of dollars yearly by living a car-lite lifestyle.

Working in partnership with Daimler AG’s Business Innovation group, Rancho Mission Viejo will introduce to its Ladera Ranch community in July a service that provides residents access to scooters, cars, circulator buses, destination shuttles, Car2Share carpooling and other bundled transportation services, all accessible through a smartphone app. Those services will be provided as well to the neighboring Sendero project, with an expected 14,000 new residents and workers in five million square feet of commercial space, now under development.

David Grannis, a partner with pointC Partners, who is leading the initiative for the developer, says the goal is to cut the cost of mobility in half from the $14,000 or more it takes to own and operate an automobile today in south Orange County, California. Households in the target demographic typically own two or three cars. “I’m not telling you to get out of your car,” he told attendees of the 2014 LOCUS conference in Washington, D.C., earlier this month. “I’m telling you to get out of your third car.”

If successful, the transportation-as-a-subscriber-service initiative could transform the economics of automobile transportation. Daimler, parent company of Mercedes Benz, could evolve from a company that primarily manufactures and sells automobiles into a company that provides mobility services. Other auto companies that are exploring similar strategies could follow suit. The new business model could slash the cost of mobility for Americans, improving their standard of living, while shifting people out of single-occupancy automobiles into buses, vans and other shared-ridership modes, thus burning less gasoline and releasing less greenhouse gas.

Experience has shown that moral suasion — it’s good for the environment — doesn’t work very well, Grannis says. When Rancho Mission Viejo offered the option of environmentally beneficial solar roofs or granite counter tops, 97% of buyers selected the granite counter tops — until the recession came along and people appreciated the fact that photovoltaic roofs could reduce their energy bills. He sees the mobility service the same way. A handful of people will go for it because it’s the right thing to do; the rest will embrace it because it saves them thousands of dollars per year. “It’s economics, all economics.”

The Ladera community in Rancho Mission Viejo

The Ladera community in Rancho Mission Viejo

Rancho Mission Viejo’s multimillion-dollar experiment, says Grannis, responds to confluence of environmental, regulatory and demographic trends.

On the regulatory front, California has mandated massive cuts in greenhouse gas emissions, which will require major shifts in transportation habits and development patterns. It is all but illegal to continue building the kind of low-density suburban communities associated with heavy automobile use and high GHG emissions. At present, 80% of Ladera Ranch residents drive alone to work, most of them to destinations outside the community. None of them bicycle or ride transit to work. To meet regulatory goals, the developer has to find a way to reduce the solo commute.

Another trend is demographic. Rancho Mission Viejo is focused mainly on Baby Boomers and Millennials. Boomers are selling the houses they lived in when raising families. As they age and find it more difficult to drive, Boomers are concerned about losing their mobility. They also see walkability as a fitness imperative. They want communities where they can get around on foot. Buses, vans, bikes and scooters complement walkable neighborhoods very nicely. Meanwhile, Millennials are less enamored with car ownership than previous generations. If they can find a less expensive mode of transportation, they will gladly take it.

People still want to live in well-designed communities such as Rancho Mission Viejo where they enjoy access to good schools, open space and lots of healthy activities, says Grannis. Automobile ownership is superfluous. What matters is mobility and access. And that’s what the venture with Daimler will provide them.

Transportation-as-a-service represents the next great evolution of the automobile industry. Grannis equates the innovation in importance to Henry Ford’s assembly line that introduced cheap cars and to the financing revolutions that made it easier for people to buy and lease cars. The next big step will be to eliminate much of the cost and risk associated with auto ownership.

A necessary prerequisite for making transportation-as-a-service work is to design walkable communities. Rancho Mission Viejo is planning compact residential neighborhoods with sidewalks and commercial districts with complete streets.  The next step is pitching the service to a population not accustomed to it by making it as easy as consulting your smart phone to reserve a ride, and by providing incentives, offering rewards and making it fun. Continue reading

When the Bubble Pops

Image credit: Commonwealth Institute

Image credit: Commonwealth Institute

by James A. Bacon

Northern Virginia is so much more prosperous than the Rest of Virginia that it’s difficult for we RoVians to appreciate what is happening north of the Rappahannock. But the picture isn’t pretty. Gripped by the realities of sequestration and budget cuts, the Washington region has one of the worst-performing economies in the country at the moment. And when Northern Virginia sneezes, as the saying goes, Virginia catches cold. Virginia’s current budget travails can be traced directly to NoVa’s economic ailment.

Two new reports drive home the message that Northern Virginia, the state’s economic locomotive for the past three or four decades, has experienced an unfortunate confrontation with reality.

First, CityLabs has published a list, drawn from Bureau of Labor Statistics data, listing the 10 jurisdictions that gained the most jobs in 2013 and the 10 that lost the most. Three of the 10 biggest losers — Arlington County (-1.1%, Fairfax County, -1.2% and the City of Alexandria (-1.4%) — were located in Virginia. Interestingly enough, neither Washington, D.C., nor any Maryland jurisdiction was included in the list of Top 10 biggest losers, which I would attribute to the facts that sequestration has clamped down hardest on military spending and that Northern Virginia’s economy is more military-dependent than D.C.’s or Maryland’s.

Second, the Commonwealth Institute (working in collaboration with two other regional think tanks) has published a new report, “Bursting the Bubble,” on the challenges of living in the national capital region.  The broad conclusion:

Income inequality is growing. Employment levels for people without a college education are far lower than before the recession. Unemployment rates for several groups of workers, including those without a college degree, remain high. Black workers and young workers were particularly hard hit by the recession, even when compared to other areas residents with similar education levels. The high cost of living in the region is pushing many families to spend more than they can afford on housing, while others trade more affordable housing for long and expensive commutes.

The region has many successes worth celebrating. But broadly shared prosperity is not one of them.

College-educated workers are earning more than before the recession; everyone else is earning less. States the report: “While wages are rising at the top and declining at the bottom nationwide, the divergence is more extreme in the national capital region.”

“Bursting the Bubble” looks at a longer time-frame than the CityLabs article — the period from 2007 to 2012. Over those five years, which includes the Obama administration’s economic stimulus phase and ends before the CityLabs data picks up, public administration jobs (which disproportionately hires college grads) increased by 40,000 jobs while the construction sector (with mostly less-than-college grads) lost a comparable amount.

income_breakdownThe wage growth that did occur was overwhelmingly concentrated in Washington, D.C. Every other jurisdiction (but Stafford County) saw median incomes decline.

These employment and income trends make life especially hard for the poor. Between the high cost of housing, the high cost of child care and the long commutes, families need higher incomes to stay out of poverty. Adjusted for living costs, the region’s poverty rate is 13.4%, only a little lower the nation’ adjusted poverty rate of 15.3%.

The highest-cost housing (ranked by median home sales prices in 2012) was located in the metropolitan core — Arlington County the highest, followed by Alexandria, Washington, D.C., and Fairfax County. (It would be interesting to see a ranking based on the cost of housing per square foot.) Many homeowners are still struggling, especially in heavily African-American jurisdictions in Maryland’s Prince George County. Three percent of mortgages in the metro’s Maryland jurisdictions are in foreclosure compared to o.5% in Virginia.

Bacon’s bottom line: There’s only so much that state and local government officials can do to counteract the inevitable squeeze of federal government spending. Uncle Sam’s long-term budget crisis is far from over. The federal government will continue to be a drag on the regional economy for a long, long time. While there is a reasonable prospect that all the super-smart people who moved to the region will manage to reinvent the economy along more entrepreneurial, private-sector lines, that adjustment will take years to occur. Continue reading

Will Virginia Cities Be among the 600?

wi-fiMadrid-based GOWEX, which specializes in creating wireless smart cities, aims to bring free Wi-Fi connections to 600 cities around the world by 2018 in partnership with Cisco, the American networking giant. (Read details in the “Datamorphosis” blog.)

The Spanish company has an interesting business model. Everyone with a smart phone can get on the Wi-Fi network for free; an upgrade (€8 in European cities) gets them a connection that runs 12 times faster. GOWEX also sells advertising targeted to a person’s specific geographic location. The company charges the host municipality nothing but the city gets a network that can serve as the backbone for such solutions as smart transport and parking, urban safety, traffic management and smart tourism.

Cowex undoubtedly will find its way to the Washington metropolitan area. Will Richmond, Hampton Roads and Virginia’s smaller metros be among the 600? If we aren’t vying for a GOWEX-Cisco solution, is anyone considering an alternative that offers comparable Wi-Fi capabilities? Virginia cities aren’t in the vanguard of change — GOWEX is already in 90 cities around the world, and we’re not among them. Will we at least keep up with the global pack — or will we fall behind?

Is anyone even thinking about these things? All I hear is crickets chirping.

– JAB

The Rise of Walkable Urbanism and “the End of Sprawl”

foot_traffic_aheadby James A. Bacon

The Washington metropolitan region is the national model for “walkable urbanism” in the United States — more so even than metropolitan New York, according to the findings of “Foot Traffic Ahead: Ranking Walkable Urbanism in America’s Largest Metros,” a report released this morning by LOCUS, an organization of smart-growth real estate developers, and Smart Growth America.

The study identified 558 WalkUPs — regionally significant activity centers characterized by a high level of walkability — in the nation’s 30 largest metros. Forty-five of them are located in the Washington region, about half in the District of Columbia and half in surrounding Virginia and Maryland jurisdictions. The overall walkability exceeds even that of New York. While Manhattan is the single-most walkable place in the United States, it accounts for only 0.3% of the New York metro region’s land mass, and outer jurisdictions dilute its overall walkability, explained Christopher B. Leinberger, LOCUS president  and co-author of the report, during the LOCUS annual conference.

Washington’s lead in developing “walkable urbanism,” in contrast to the “drivable suburbanism” that dominated U.S. growth and development between World War II and the Great Recession of 2007-2008, should stand the region in good stead as it faces an economic future made insecure by the retrenchment of its main growth industry, the federal government. Walkable urbanism is closely correlated with the presence of a highly educated workforce, and a highly educated workforce is closely correlated with faster economic growth. While correlation does not necessarily mean causality, an argument can be made the the desirable attributes of walkable urbanism make it easier to attract and retain educated workers who, in turn, contribute to economic growth.

The report findings suggest that there will be future demand for hundreds of millions of square feet of walkable development over the next generation, said Leinberger. “This is likely the end of sprawl.”

A clear sign of shifting market preference is the 74% premium the market is willing to pay for office space in WalkUPs compared to space in Drivable Urbanism.  That’s the reverse of 30 years ago when suburban office parks enjoyed a marked advantage, Leinberger said. Even excluding the New York market, which skews the results, WalkUps enjoy a 44% edge, he said.

While Washington was the star metro, some surprising regions have been coming on strong thanks to dramatic shifts in development patterns in the post-2008 development cycle. Metropolitan Atlanta, which only 20 years ago was the poster child of sprawl, has concentrated 50% of its development in WalkUP districts comprising only 1% of the region’s land mass. Perhaps even more surprisingly, Detroit has seen similarly focused re-development in downtown, midtown and a handful of urbanizing suburbs.

Leinberger attributed Washington region’s success to five main factors. First, the region has the highest overall education level of any metro in the country, Second, the region has been aggressively expanded its Metro rail system; 80% of the WalkUPs in the region are, or soon will be, served by Metro. Third, for the most part local governments put in the right kind of zoning around their Metro stations, encouraging walkable, mixed-use development. Fourth, the region’s real estate industry has mastered the discipline of developing WalkUPs, which are inherently more complex and expensive than green-field development. And fifth, the public sector has done an exceptionally good job of “place management” — creating quality walkable places.

While rail transit gives a big boost to walkable urbanism, said Leinberger, it is not essential. One out of five WalkUPs in the Washington region are not connected to the Metro. Also, many small cities and towns have walkable places. “It sure does help but it is not required.”

Emerick Corsi, president of Forest City Enterprises Real Estate, agreed. “Walkable can be built anywhere,” he said. He cited the example of a town miles outside of Los Angeles where his firm is converting an old shopping center into 2 million square feet of new buildings with the capability to expand a lot more by going “totally vertical.” There is no transit but the development will be highly walkable, he said.

Leinberger predicted that real estate development in the foreseeable future will be driven by the desire to meet the demand for walkable urbanism. The process won’t necessarily be smooth. Some metros — San Antonio, Kansas City, San Diego — have continued to sprawl. Providing affordable housing in the most desirable areas will be a challenge. But if Leinberger is right and the most walkable regions prove to be the most economically dynamic regions, the success of metros like Washington, Boston, New York and even Atlanta and Detroit will be clear for all to see.

Tea Party Populism vs. Eric Cantor

teddy roosevelt By Peter Galuszka

Political analysts and the media are still trying to tease out the meaning of soon-to-be-former House Majority leader Eric Cantor’s primary loss last week to an obscure college professor.

Two major themes seem to be emerging. One is what the Tea Party’s role was and what the Tea Party really is. The second is how the Big Media missed the story of winner David Brat’s surprising strength, although a number of local publications did get it, including the Chesterfield Observer, a suburban weekly that I write for (although not about politics) and won a special accolade in this morning’s New York Times.

The Times also had a piece Sunday on its front page noting just how closely tied Cantor is to Corporate America. Aerospace giant Boeing saw its stock plummet just after Cantor was clobbered. Over the years, Cantor has gladly done the bidding of big companies, notably in managed care and finance. His donors provide a ready chart.

He’s backed the continuation of the Export-Import Bank that helps guarantee loans for foreign sales (to Boeing no less) and helped kill a bill that would have increased the capital gains tax made by alpha-seeking and ultra-rich hedge fund managers. Cantor does know about big business because he is a lawyer and has a degree in real estate. His wife, Diana, has worked for such Wall Street behemoths as Goldman Sachs. And, of course, Cantor was hatched and grew up in Richmond’s cliquish business community.

The interesting trend here is how Brat, touching a surprisingly sensitive populist nerve, targeted Cantor’s cozy links to Big Business along with the usual complaint menu about illegal immigrants and government spending. Brat hit Cantor for various corporate bailouts, including TARP, backing Medicare Plan D and two unfunded wars.

Such criticism resonated with his supporters, who are conservatives. But unlike the country club Republicans of yesteryear, these voters might be throwbacks to the Gilded Age during the era of gigantic trusts. I am strolling through Doris Kearns Goodwin’s “The Bully Pulpit” which looks at Theodore Roosevelt and William Taft at the turn of the 19th century and it is fascinating reading.

Being a Republican then meant being an upstart and independent-minded troublemaker, not a defender of the status quo and big business interests. The public seemed remarkable well informed and the media was filled with brilliant journalists like Ida Tarbell, Lincoln Steffens and S.S. McClure who took apart trust-builders such as John D. Rockefeller.

There was a real sense that too much economic power was being concentrated in two few hands and if you look at what’s happening today with the mergers of airlines, cable companies and banks, you get an uneasy sense of déjà vu. The result back then was long-standing legislation like the Sherman Anti-Trust Act and bodies like the Federal Trade Commission. The concerns were inequality, lopsided economic clout and the tendency for big companies to abuse their power.

It is in this sphere where the Tea Party types, whomever they are really, might be on to something. I’m all for leniency and compassion on immigration issues but I have to say that some of the anti-Cantor comments might have harkened back to the days of McClure’s Magazine and Tarbell’s extraordinarily detailed dissection of Standard Oil.

Sadly, the journalist profession has been gutted by cost-cutting, which is one reason why the Beltway types missed the Cantor story and scrappy little papers like the Chesterfield Observer got it. If there is growth in the news media, the hot trend is setting up “data-driven” Websites but as the Times notes, these proved inadequate as well in last week’s election because they relied on imperfect data. In other words, garbage in, garbage out, no matter how lively the prose is. What really matters is shoe leather journalism and not numbers crunching.

On-the-ground reporting can capture important clues such as how Cantor misused his Majority Leader bodyguards and Black Suburban SUVs to keep his constituents at bay on the rare occasions he actually sought them out. Otherwise, he seemed to be sequestered at expensive steakhouses. Voters pummeled by the Great Recession got the message.

Add up all of these trends and you might start understanding why Cantor’s defeat was so important. It posits who exactly the Tea Party is and what they actually stand for. It could be the start of a movement as historically significant as the one 125 years ago.

The Rise of Innovation Districts

innovation_districts
by James A. Bacon

The landscape of innovation has been dominated in the post-World War II era by places like Silicon Valley and the Research Triangle, suburban corridors of disconnected corporate campuses, accessibly only by car. But a new model — the innovation district — is emerging, contend Bruce Katz and Julie Wagner with the Brookings Institution in “The Rise of Innovation Districts: A New Geography of Innovation in America.”

In recent years, a rising number of innovative firms and talented workers are choosing to congregate and co-locate in compact, amenity-rich enclaves in the cores of central cities. Rather than building on green-field sites, marquee companies in knowledge-intensive sectors are locating key facilities close to other firms, research labs, and universities so that they can share ideas and practice “open innovation.”

Innovation districts are emerging in cities across the United States and abroad. Most of them are located in the urban core, often older industrial areas, that are being “re-imagined and remade.” Others are arising in traditional suburban office parks, which are scrambling to compete. Continue Katz and Wagner:

Innovation districts represent a radical departure from traditional economic development. Unlike customary urban revitalization efforts that have emphasized the commercial aspects of development (e.g. housing, retail, sports stadiums) innovation districts help their city and metropolis move up the value chain of global competitiveness by growing the firms, networks and traded sectors that drive broad-based prosperity. Instead of building isolated science parks, innovation districts focus extensively on creating a dynamic physical realm that strengthens proximity and knowledge spillovers.

What is driving this shift? Katz and Wagner argue that the evolution of a knowledge- and technology-intensive economy is altering the value of density and proximity. Density and proximity accelerate the exchange of ideas, the transfer of knowledge and pace of innovation. No one company can master all the knowledge and all the disciplines it needs, so businesses increasingly rely upon networks of industry collaborators. The desire to embed themselves in these collaborative networks has driven many companies from the isolated suburban office campus to denser urban neighborhoods that can support such networks.

Another critical trend is the growing demand among workers for more walkable, mixed-use neighborhoods. This preference is particularly strong among young, tech-savvy workers coveted by innovative companies.

The Katz-Wagner paper is must reading for anyone who is convinced, as I been preaching, that the traditional economic development model in Virginia, which dates back to the 1960s-70s era, is outdated and not working anymore. Yes, Virginia can blame some of its current economic woes upon federal sequestration and budget cutting but the malaise runs deeper. Virginia’s economic performance has fallen from a national pace-setter to middle-of-the-pack. We have been slow to understand and respond to the changes that Katz and Wagner describe. We have been slow to innovate the institutions of economic development.

The City of Richmond’s futile pursuit of a baseball stadium and slavery museum in Shockoe Bottom is a perfect example of misplaced priorities. The irony is that, here in the Richmond metropolitan region, the city is better positioned than any of its suburban counterparts to take the economic lead. Proto-innovation districts are sprouting on the fringes of downtown, especially in Shockoe Bottom, Manchester and the Virginia Biotechnology Research Park. Downtown, with its walkable, bikable streets, its proximity to Virginia Commonwealth University, its diversity of housing types, its historic architecture and its cross-fertilization of science, business and the arts, is precisely where innovation districts logically would take hold. This is the economic future of the Richmond region. The ballpark hoo-ha suggests that city leaders just don’t get it.

Richmond’s suburbs, like suburban communities across Virginia, also need to take heed. Economic development no longer favors the green-fields. The logic of the knowledge-innovation economy favors walkable urban places. Virginia’s suburban counties are woefully short of such places. As the innovation-district movement gains momentum, suburban communities will find it more and more difficult to attract big commercial office projects to build their tax base. The writing is on the wall: Suburban counties need to create walkable, mixed-use, amenity-rich districts of their own or find themselves as disadvantaged in the economic development game as the cities were a half-century ago. Making that transition while protecting the integrity of neighborhoods full of single-family dwellings will be the great challenge of the next generation.

Behind Cantor’s Big Loss

cantorBy Peter Galuszka

There’s big political news tonight as House Majority Leader Eric Cantor loses a Republican primary to upstart economics professor David Brat, a Tea Party favorite.

While Brat’s challenge was noticed nationally, few expected Cantor to go down. But with more than 80 percent of precincts in the 7th Congressional District reporting, there’s no way Cantor can catch up.

There are a lot of takeaways from this defeat which has attracted national attention. Some of them are rather ugly. Here’s a quick list:

  • Republicans can’t play it both ways. They can’t be Bushies and vote for his big spending programs and then try to lead the parade of the Tea Party insurgency. That’s phony and voters know it
  • Brat sadly chose to run against immigrants, notably those here outright illegally or who perhaps lack documents because of ICE bureaucracy or were brought here as children. Some resolution is badly needed but Brat’s successful milking of this issue pushed resolution back for months if not years. The issue should be met with compassion, not nativist American hatred, which Brat has chosen.
  • The dynamics of Henrico County and the Richmond power structure have changed dramatically. Cantor was the home-grown boy, heir to Tom Bliley and he had everybody in his pocket, especially the old Richmond power structure and the Richmond Times-Dispatch. His wife was on the board of Media General, the former owner of the newspaper, and it predictably loved everything young Eric did. He was like the Paul Trible of yesteryear. But MG screwed up financially and had to sell out to Warren Buffett. While the editorial stances haven’t changed, the shakeup by the Sage of Omaha means a lot under the surface.
  • Does this mean there’s a resurgence of the Tea Party? The national media will see it that way. To be honest, I haven’t really figured the Tea Party out. I don’t know if they are tri-cornered hat crazies or serious Libertarians.

The old order is fading. The old coziness and sense of entitlement are gone.