On today's episode of Feudal Future hosts Joel Kotkin and Marshall Toplansky are joined by Tracy Hernandez. Tracy Hernandez is the Founding Chief Executive Officer of the Los Angeles County Business Federation (BizFed), a nonprofit, massive grassroots alliance of 180 top business networks that counts among its more than 400,000 business members a diverse demographic, industry sector, and geographic array of small and large employers of over 3.5 million people in Southern California. (BizFed 2020)
[6:00] Marshall shares an innovation graph of the past 5 years for multiple states. California has been at the bottom of innovation growth. Marshall comments that our innovators are leaving our state by storm.
[12:00] Dee Dee Myers and GoBiz. Joel shares his thoughts about Newsom and the implications of appointing the wrong people with power.
[19:00] Prop 19. App Based Drivers in California. Tracy shares how the state could have crippled thousands of contractors with the pass of Prop 19.
[32:00] Restaurant Owners and Shutdowns. Tracy and Joel defend small business owners that are in near bankruptcy due to shutdowns.
The episode ends with a question from Tracy. “What will the tipping point be for California business owners?”
This show is presented by the Chapman Center for Demographics and Policy, which focuses on research and analysis of global, national and regional demographic trends and explores policies that might produce favorable demographic results over time.
One impact of the coronavirus has been to accelerate some trends that were already present in the marketplace beforehand. One of these has been the accelerating flow of people into new talent magnet communities and the relative stagnation of some of the larger, established coastal cities.
This is evident in the new Talent Attraction Scorecard 2020 from EMSI, which largely draws on data up through 2019. They find states like Texas, Florida, and Arizona having many of the most robust talent attraction markets as ranked based on a basket of measuring including migration, job growth, and new job openings.
Among counties with a population greater than 100,000, Maricopa, AZ (Phoenix) and Clark, NV (Las Vegas) finished at the top. There were four Texas suburban counties in the top 10, and there were 12 counties in Florida in the top 40.
Many of the winners were mid-sized, suburban counties, though some more urban counties like Fulton, GA (Atlanta) have surged in the rankings.
Again, this is based on pre-coronavirus data. It confirms that the performance of America’s largest superstar city markets had fallen off towards the end of the decade. With the economic and demographic fallout from the coronavirus hitting these markets hard, these places look likely to stay at the bottom of the charts for at least the near-term future.
Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker and writer on a mission to help America’s cities and people thrive and find real success in the 21st century. He focuses on urban, economic development and infrastructure policy in the greater American Midwest. He also regularly contributes to and is cited by national and global media outlets, and his work has appeared in many publications, including the The Guardian, The New York Times and The Washington Post.
The big news this week is all the different tech companies announcing their moves to Texas.
The big one for Houston is the announcement that HP Enterprise is moving its HQ from Silicon Valley to Spring just north of Houston - a long-term legacy benefit of Compaq Computer (which was acquired by HP and kept substantial operations here).
“Houston is also an attractive market for us to recruit and retain talent, and a great place to do business,” Mr. Neri said, adding that as one of the largest and most diverse cities in the country, “Houston provides the opportunity over time to draw more diverse talent into our ranks.”
And some more detail from their press release: (hat tip George)
"Why Houston?
Houston has long been our largest U.S. employment hub, and construction has been underway since the beginning of the year on a new, state-of-the-art campus in the area. Houston is also an attractive market for us to recruit and retain talent, and a great place to do business. The most diverse city in America and the fourth largest, Houston provides the opportunity over time to draw more diverse talent into our ranks – a key priority for HPE as we work to be unconditionally inclusive.
We also anticipate long term cost savings associated with this move that we can reinvest in key areas of our business and innovation."
And finally a repost from Facebook that digs into what that increased affordability really means for employees:
"Hewlett-Packard announced its leaving Palo Alto for Houston. $1,100 is the average rent in Houston. $3,350 is the average rent in Palo Alto.
Just to give a concept of how much the extra $2,250 a month that saves is. $530 is the average monthly payment on a car. $460 is the monthly individual cost of health insurance. $400 is the average monthly cost of food. $145 is the average monthly spending on gas for a car. $130 is the average monthly cost of car insurance. $1,665 a month total.
Those 5 things which are just as essential for people in Palo Alto as Houston and cost about as much in both places cost that much.
If an HP employee moved to Houston and cut rent cost down, but chose to save $585 more a month and put it in a 401k paying 5% for 10 years, they’d have $92,700 or 7 years average rent in Houston.
Those 5 things are also essential, so let’s just say an HP employee moved to Houston and saved the entire $2,250 a month for 10 years. $27,000 saved a year. $357,000 saved over 10 years. 27 years worth of rent in Houston. 9 years worth of rent in Palo Alto.
A lot of people have a lot of different reasons for companies leaving, but I think the rent factor and how it’s extremely hard for employees to live is the problem.
Hewlett-Packard was the birth of Silicon Valley and it’s leaving.
I don’t see it as unlikely a future where Facebook, Uber, Google and more could join."
Then there are the other stories on Elon Musk's and Oracle's moves to Austin:
"California, with its steep housing costs, raging wildfires and strict business regulations, has been losing residents to other states, with Texas as the most popular exodus destination. Of more than 653,000 people who left California last year, about 82,000 went to Texas, more than any other state, according to census figures.
Or, as The Stanford Review wrote in a nod to the native Texan George Strait, “All of California’s Exes Are Moving to Texas.” (????) ...
California and Texas — two economic powerhouses, one led by Democrats and the other by Republicans, with respective populations of 40 million and 29 million — are in many ways natural frenemies. It is a rivalry made up of In-N-Out versus Whataburger, of Disneyland versus the State Fair of Texas, of tacos versus, well, other tacos."
"Taxes, a more affordable cost of living for employees, a lower cost of doing business, and less competition for talent are among the top drivers for the companies’ moves, though there is also a growing sense that culture is a factor, as well."
Tory Gattis is a Founding Senior Fellow with the Urban Reform Institute and co-authored the original study with noted urbanist Joel Kotkin and others, creating a city philosophy around upward social mobility for all citizens as an alternative to the popular smart growth, new urbanism, and creative class movements. He is also an editor of the Houston Strategies blog.
There’s no longer any question that Los Angeles has arrived as a global city—if Hollywood’s reach doesn’t make the case then the Asian money behind its new skyline and preparations for a record-setting third Olympiad should.
The more apt question these days is which Los Angeles excites the world?
The Los Angeles of Rodeo Drive? Or the Huntington Gardens? Or Disneyland?
And there’s the rub—because none of those places is in the City of Los Angeles.
Rodeo Drive and the Huntington Gardens are both in the larger territory known as Los Angeles County. The former is famous as the high street of Beverly Hills, the latter a staid cultural preserve in San Marino.
Those two toney and independent towns are on opposite sides of LA County, which covers 4,000 square miles and includes 88 municipalities altogether.
You have to expand to the larger concept of Southern California to get to Disneyland, which is in Orange County, directly south of LA.
LA gets a lot of credit for its neighbors’ achievements, as well as its own—but the outsized image is a two-edged sword.
The latest report from the World Trade Center of Los Angeles provides some insights, giving data on foreign-owned businesses with operations in Southern California.
You might expect LA County to punch above its weight on foreign investment as the undisputed center of the sun-dappled landscape, with its population of 10 million approaching half of the region’s total. Among the assets likely to appeal to foreign investors at the practical and executive levels are the biggest airport in Southern California, twin seaports that are the busiest in the U.S., three research universities, 76 hospitals, numerous renowned museum and performance venues, nine professional sports teams, and 66 Consulates General.
Yet LA County looks to be just another option for foreign investment on Southern California’s expansive landscape.
There are nearly 12,000 foreign-owned firms in Southern California, and LA County is home to fewer than half of them.
The same goes for the 461,447 jobs at foreign-owned enterprises throughout the region–and for the $18.1 billion in annual wages they generate.
The numbers get worse for LA County when you consider investments coming from key overseas markets, including the UK, a leading trade partner of Southern California.
UK businesses combine to account for 76,000 jobs and $6.1 billion in annual payroll in Southern California, with about two-thirds of each total landing outside of City of Los Angeles or LA County.
A number of other top 10 sources of foreign investment in Southern California also index low for LA.
Los Angeles is a global magnet when viewed from afar.
But consider LA within its regional setting of Southern California and it’s about on par with a lot of other places that are miles away from Hollywood or the ports or a courtside seat to watch LeBron James perform for the world-famous Lakers basketball franchise.
The data on foreign-owned businesses and where they locate in Southern California serve to concentrate the mind on LA’s problem, which range from a federal corruption probe of City Hall to rampant encampments of rough sleepers and a municipal budget devastated by Covid-19 while feckless politicians fiddle.
Meanwhile, some of the best public schools are down in Orange County, there is world-class golf out in the Riverside County burg of Palm Springs, and you’ll find world-class resorts up in Santa Barbara County.
And you can check just about anywhere for better roads.
LA’s image is big.
But it seems foreign investors have learned that hype doesn’t fill potholes.
Over 200 attendees joined our panelist for a webinar hosted by Urban Reform Institute on December 4. If you missed the event, you can watch the video below:
On today's episode of Feudal Future hosts Joel Kotkin and Marshall Toplansky are joined by Pete Saunders. Pete Saunders is a writer and researcher whose work focuses on urbanism and public policy. He has been the editor and publisher of the Corner Side Yard, an urbanist blog, since 2012. A practicing urban planner, he serves as the community and economic development director for the Chicago suburb of Richton Park, Ill., and is the principal for PDS Consulting, an urban-planning consulting and research firm.
Marshall begins the show asking Pete what he thinks Chicago can expect being under a new Biden administration. Pete began to explain that not everything seems cut and clear and to be wary buying into a new administration so quickly. Pete went into details and programs that Biden could implement in order to unite Chicago and establish them once again as a metropolitan powerhouse.
Joel chimed in and was curious to see if the new administration would be able to help the crime rates in Chicago. Pete stated that the crime is not something an administration can change, but that it is more of a societal change that needs to happen.
Marshall added that not only crime was something to be concerned about, but also the amount of talent Chicago raises in its own states, and exports out to other parts of the US and how that was taking away from Chicago. Joel added that if Chicago wants to make changes, they need to be more welcoming to new business and create an environment that is welcoming to the business owners. Pete agreed without hesitation.
As the episode ends, Joel and Pete look hopeful in seeing Chicago make steps to revive the Midwest and give power again to the middle class.
"Back in September, the governing body in Harris County, Texas—the Commissioners Court—voted 3-2 to take over the respected Harris County Toll Road Authority (HCTRA). They created a government corporation that will divert toll revenues to things like flood control and help to pay for deepening the Houston Ship Channel. This political move undercuts the widely followed principle of most U.S. tolling: users-pay/users-benefit. Harris County will receive a $300 million lump sum from HCTRA, followed by $90 million a year indefinitely.
Another part of the deal calls for refinancing HCTRA’s $2.7 billion worth of toll revenue bonds to take advantage of today’s historically low-interest rates, with estimated savings of $60 million per year. That’s a move HCTRA could have made on its own, in the interest of delivering better value to its toll-paying customers. And its well-managed counterpart in the Dallas/Ft. Worth metro area—the North Texas Tollway Authority—the same month announced its own debt refinancing, but without any revenue diversions.
The Houston change was decidedly political, with the three Democratic commissioners voting in favor while the two Republicans voting against it. One of the Republicans, Steve Radack, was quoted in the Houston Chronicle saying, “This is a money grab. They are going to use it to pay for things that are normally paid for via property taxes.” Also opposing the takeover was David Hagy, executive director of the American Council of Engineering Companies, who supported the sensible refinancing but not the county’s money grab. And the Transportation Advocacy Group urged the Commissioners to at least use the diverted funds for transportation purposes.
I wonder how the rating agencies will view this politicization. HCTRA’s current bond indenture, as well as state law, limits the use of surplus revenues to non-toll roads, streets, and highways, according to a Q&A provided by the Harris County budget office. If that’s true, there might be grounds for bondholder litigation.
Moreover, while short-term thinking would say this is only a small amount of revenue diversion, the real danger is that it sets a precedent and provides no safeguards against future raids on HCTRA’s toll revenues. Transportation professionals know what has happened to the Pennsylvania Turnpike when that state’s legislature imposed Act 44 mandating that the Turnpike divert $450 million per year to the state DOT for transit subsidies. The Turnpike has had to significantly increase its bonded indebtedness, and enact large annual toll rate increases to meet the new debt service. That same fate could await HCTRA’s toll payers the next time Harris County faces budget shortfalls."
Tory Gattis is a Founding Senior Fellow with the Urban Reform Institute and co-authored the original study with noted urbanist Joel Kotkin and others, creating a city philosophy around upward social mobility for all citizens as an alternative to the popular smart growth, new urbanism, and creative class movements. He is also an editor of the Houston Strategies blog.
I’m happy to share our new George W. Bush Institute report, “Cities and Opportunity in 21st Century America.” This report is the first in our new Blueprint for Opportunity series, which aims to explore the challenge of expanding opportunity and economic mobility in America, particularly in U.S. cities, and to lay out a market-oriented opportunity agenda. We plan on publishing additional reports in the series approximately once a quarter over the next couple years.
This report examines how America is doing in promoting economic mobility, why cities and neighborhoods so strongly influence economic mobility for people who live there, and which metropolitan areas are outperforming as engines of opportunity. Our second report will consider lessons from history on cities and opportunity and recent trends remaking the geography of opportunity in the U.S. cities, and subsequent reports will focus on particular policy areas like metropolitan economic development, new business creation, the future of work, the role of anchor institutions, housing attainability, and more.
J.H. Cullum Clark is a Director in the George W. Bush Institute-SMU Economic Growth Initiative and an Adjunct Professor of Economics at SMU in Dallas. His work focuses on policies to expand opportunity and economic mobility in America’s cities. He worked for 25 years in the investment industry, at two Wall Street firms in New York then as CEO of his own small investment company for 18 years. He is co-author of a forthcoming book on the metropolitan areas of the “Texas Triangle” region that Texas A&M Press will publish in 2021. He serves on the boards of the leading charter school network in North Texas and several arts and civic organizations in Dallas.
On today's episode of Feudal Future hosts Joel Kotkin and Marshall Toplansky are joined by guests Joe Payne and Tony Lemus. Joseph E. Payne is the President and Chief Executive Officer of Arcturus Therapeutics. Arcturus therapeutics is a leading clinical-stage messenger RNA medicines company focused on the discovery, development and commercialization of therapeutics for rare diseases and vaccines.
Their conversation begins with Marshall asking Joe about different vaccines that are being approved rapidly and how they are receiving emergency permits for the market. Joe breaks down scientifically how mRNA works with the body and how the results look promising for covid19. Arcturus is in the middle of phase 1 and 2 trials with over 100 participants. Joe continued, highlighting that their vaccine could be a single dose vaccine as well as a low dosage.
Tony joined the conversation and added that the predictive models, coupled with the clinical trials, using AI, has sped the process of approval and are able to leap-frog the FDA with less red tape.
Joel brought up a problem. If multiple vaccines come out, which ones will be the best? Joe states that efficacy is the current issue, but the conversation will shift to convenience; cost and single administration. Joel continues and asks if this vaccine will stop the wave of pandemics due to the virus. Joe states that COVID-19 is here to stay regardless of the vaccine and that it will take time for herd immunity to develop.
As the episode ends, Joe explains how the beauty of mRNA vaccines is through a non-viral delivery and how this vaccine will be the benchmark for future pandemics.
Join the discussion on a new policy agenda for home ownership and opportunity in our post-pandemic economy.
Hosted by Urban Reform Institute
Panel 1
J. H. Cullum Clark - Director, George W. Bush Institute
Anne Snyder - EIC, Comment Magazine
Pete Saunders - Writer, Researcher
Karla del Rio Lopez - Lead Partnership specialist, U.S. Census Bureau
Charles Blain - URI
Panel 2
Wendell Cox - Principal, Demographia
Joel Farkas - Manager, Pioneer HoldCo
Mark Boyce - Founding Partner, True Homes
Ted Nelson - President/COO, Newland
Joel Kotkin - Executive Director, URI
Date: December 4, 2020 Time: 11:30AM – 1:00PM (Central Time)
Infinite Suburbia is the culmination of the MIT Norman B. Leventhal Center for Advanced Urbanism's yearlong study of the future of suburban development. Find out more.
Authored by Aaron Renn, The Urban State of Mind: Meditations on the City is the first Urbanophile e-book, featuring provocative essays on the key issues facing our cities, including innovation, talent attraction and brain drain, global soft power, sustainability, economic development, and localism.
Email this Blog entry
