Aaron Renn's latest article in the Manhattan Institute is about how America's top cities can "grow to new heights." Usually when we talk about urban problems, it is because of failures. But in this case, it is about problems of success (though I suppose you could argue these are still failures).

Cities such as New York and San Francisco have, in his view, stopped thinking like growth cities and that is leading to high home prices and overburdened infrastructure. But we all know that these problems are not unique to only "superstar cities."

Not surprisingly, Aaron argues that we need to stop implementing land use policies that only exacerbate our housing supply problems. Things like rent control and inclusionary zoning. And in some cases, it may be time for states to start intervening in local planning decisions.

For the full article, click here.

So I was wrong. Amazon didn’t pick Toronto for HQ2. It instead picked Crystal City, Virginia (Washington) and Long Island City, NY (New York City). More on that, here, in the NY Times. Confession: My prognostication was at least partially about trying to create a self-fulfilling prophecy.

In any event, it’s interesting to consider the locations that they did pick – as well as the fact that they ended up picking multiple cities. This was not part of their RFP. Though, many have convincingly argued that this process was over before it even began. HQ2 was always going to end up on the east coast, near one of Bezos’ homes.

Nevertheless, urbanists such as Aaron Renn took the announcement as a direct repudiation of the American heartland. He believed that Amazon would be far more cost conscious in their decision making and ultimately elect for a lower cost locale in the middle of the country. Instead, the coastal hegemony won out. 

Joe Cortright of City Observatory correctly predicted that Amazon would, for a few reasons, parlay their HQ2 search into multiple smaller locations (HQ2, HQ3, and so on). One of the reasons for this is that it gives the company more leverage when it comes negotiating subsidies on a go-forward basis. If NYC doesn’t want our next round of hires, we’ll take them to Washington.

Looking at the locations, one of the first things I noticed is that both are just outside of their respective “downtowns” (across a body of water), as well as adjacent or on the way to an international airport. Crystal City is across the street from DCA and Long Island City is a 15 minute drive from LGA. Both are situated on top of higher order transit. Makes sense to me.

Now, who wants HQ4?

Years ago Aaron Renn coined an urban paradigm that he labeled “the new donut.” The old donut, of course, is one that many of you will know well: poor downtown (hole in the donut) and wealthy suburbs (ring around the hole in the donut). This is a well documented phenomenon in many American cities.

The new donut reflects today’s return to city centers. It is the filling in – albeit only partially – of the middle of the donut. The reason I say only partially is because the data clearly suggests that, in many cases, there’s now a trough between the immediate core and the outer suburbs. 

In 2015, the University of Virginia published a study called The Changing Shape of American Cities. It looked at things like educational attainment and per capita income in 1990 and then compared it to more recent 2012-2015 data. But most significantly, it plotted this data against “miles from city center.” (I discovered this study via City Observatory.)

Here are educational attainment and per capita income for the 50 largest metro areas in the US. The orange line is 1990 data. The brown line is 2012 data. And the blue line is 2015 data. The x-axis is “miles from city center.”

Compared to 1990, it is clear that there has been noticeable spike in education and income in city centers. For the above composite index, more than 50% of adults over 25 now have a bachelor’s degree. But it has also accentuated the trough that appears to sit, on average, about 5 miles out from the center. 

In some metro areas, such as Charlotte (shown below), there has almost been a complete inversion. Education and income were highest 5 to 10 miles out from the center, but that has since flipped, along with a dramatic spike right in the center.

This is the new donut. If you’d like to see the graphs for all 66 American cities that form part of the study, you can do that here.