Tag: economic development

• Detroit. Move here. Move the world.

  As part of the Amazon HQ2 bid process, a number of cities produced videos. I only discovered them today and so maybe some of you also missed them when they were released last fall. There are videos from Detroit, Boston, Pittsburgh, Philadelphia, Dallas-Fort Worth, Las Vegas, Louisville, Atlanta, and maybe others that I am still missing. 

  Some of the videos are bad. (I’ll let you make your own judgement calls.) I like the idea behind Atlanta’s video, which is the journey of someone named Georgia physically delivering their bid to Seattle. And Philadelphia’s video made me feel really nostalgic about my time there. Those were some great years. 

  But my favorite video is Detroit’s video. It feels authentic. The footage is outstanding. And it feels powerful. Though it is probably too long. It was a good reminder that I’m overdue for a visit. So here is Detroit’s video. If you can’t see it below, click over to YouTube.

  [youtube https://www.youtube.com/watch?v=DO4J_PC1b5M&w=560&h=315]

  2018.08.23

• A global hub for urban innovation

  Dan Doctoroff, the CEO of Sidewalk Labs (and the former deputy mayor of New York City), was recently interviewed by BNN Bloomberg about the company’s plans and ambitions for Quayside here in Toronto. 

  He talks about the project; their interest in timber construction; how the company, Sidewalk Labs, might ultimately make money; and how their mission is to create a global hub for urban innovation.

  This last point is, of course, the most exciting opportunity – both for Sidewalk Labs/Alphabet and for Toronto. And it’s why many people believe that Quayside will end up a far greater (economic development) coup compared to HQ2.

  The interview is only 10 minutes. If you can’t see it embedded below, click here.

  https://webapps.9c9media.com/vidi-player/1.5.1/share/iframe.html?currentId=1461888&config=bnn/share.json&kruxId=InSaVlLc&cid=%5B%7B%22contentId%22%3A1461888%2C%22ad%22%3A%7B%22adsite%22%3A%22ctv.bnn%22%2C%22adzone%22%3A%22ctv.bnn%22%7D%7D%5D

  2018.08.16

• Learning about O-zones

  I spent this evening reading about Opportunity Zones, or “O-zones”, in the United States. 

  For a census tract to become an O-zone, it has to have a poverty rate of 20% or higher, or the median household income has to be less than 80% of the surrounding area. Governors are also only able to designate 25% of their eligible census tracts.

  Here is a map of the areas that have been designated as Opportunity Zones.

  

  Here is how these O-zones work. (All excerpts taken from this Forbes article.)

  The law’s engine is a new breed of financial product, the opportunity fund, that offers investors a trifecta of attractive tax breaks. Here’s how it works. Investors who sell assets have 180 days to plow their taxable capital gains into an approved opportunity fund, which must hold 90% of its assets in Opportunity Zone projects. To put money to work fast, the law requires that the funds invest all of their cash within some specified time frame. (The Treasury Department is still deciding on that and other crucial details.) Tax on the original reinvested gain isn’t due until 2026, and the taxable gain is cut by 15%. Meanwhile the new opportunity investment grows tax-free, like a Roth IRA, provided it’s held for at least ten years. (If it’s sold earlier, it can be rolled into another opportunity fund and remain tax-free.)

  Here is how it could get the real estate industry to take action.

  For real estate developers, O-zones offer cheap real estate and unlimited, untaxed upside if a neighborhood takes off. Developers must do more than stash cash in crumbling property. To qualify for tax perks, they must make swift and significant upgrades (at least equal to the cost of the initial purchase). With real estate projects come new office buildings, industrial districts, restaurants and affordable housing—all of which can lay the groundwork for an economic boom. “The real estate aspect is a great catalyst to attract new businesses,” says AOL founder Steve Case, an early supporter of the O-zone initiative, whose Rise of the Rest Fund invests in backwater areas. “But it’s the startups that will be the real job creators.”

  And here is how it could influence where new businesses decide to locate.

  “If Facebook could have chosen to locate itself in an Opportunity Zone, like the Tenderloin in San Francisco, the investors would’ve paid no capital gains on their equity,” says Parker, who presumably would have been one of the big winners. The promise of mega-returns could send VCs, investment banks and private equity firms scrambling to launch their own opportunity funds to create incubators, scour second cities for overlooked talent or move portfolio companies into O-zones. “It wouldn’t surprise me if a lot of Silicon Valley VCs started to tell founders, ‘We’d like you to go over the bridge to Oakland, or we’d like you to go to Stockton,’” Parker says.

  If you’d like to learn more about Opportunity Zones, check out the Forbes article.

  2018.07.20

• Planners on bikes getting coffee

  Over the weekend, Jason Thorne, who is the General Manager of Planning and Economic Development at the City of Hamilton, tweeted this out. He said, if Jerry Seinfeld can do Comedians In Cars Getting Coffee, then he was going to do Planners On Bikes Getting Coffee. And that’s exactly what he did in Barrie with their Chief Planner, Andrea Bourrie.

  I immediately responded by asking: Is this really a thing you are doing? Because if not, it is something you should absolutely start. He was kidding but I think the response he received on Twitter got him reconsidering if he should make it a thing. I think this is a great idea, and so I hope he does consider it. If you agree, maybe send him a tweet.

  I have a GoPro, gimbal stabilizer, and a bicycle. So if this doesn’t become a thing, maybe there needs to be a Developers On Bikes Getting Coffee.

  2018.06.05

• Tech salaries and brain drain

  The Globe and Mail recently ran an article arguing that tech salaries in Toronto are significantly less than those in the US and that it is leading to “alarmingly high rates” of brain drain. The claim is that the average tech salary in 2017 was US$73,000 in Toronto, compared to US$140,000 in the Bay Area or US$129,000 in New York City. 

  However, if you adjust these salaries for each city’s cost of living, the numbers look like this (chart taken from the same article):

  

  Now all of a sudden Toronto is lumped together with the Bay Area and New York City. It was adjacent to London even when you didn’t adjust the salaries. As Tobi Lütke – CEO of Shopify – points out in his Twitter rebuttal of the article, housing is the determining factor in this adjustment: “Toronto is a very expensive city, and Austin isn’t.”

  Lütke also points out, in case you’re in the market, that Canadian-based Shopify pays its tech employees well above market, provides stock compensation, and is currently “hiring like crazy”. But perhaps more importantly, he stresses the importance of Canadians building the economy of the country in which they are from. I feel exactly the same way.

  2018.05.05

• How should mid-sized cities really compete?

  Jennifer Keesmaat – the former chief planner of Toronto – recently published an article in Maclean’s called: Toronto’s unaffordable. Why can’t Halifax or Saskatoon take advantage? Her argument: 

  “The hard truth is that many mid-sized cities won’t win the future because they are stuck on a suburban growth model. If the future is green and walkable, they will be left behind.”

  The model city that is held up is Portland – a terrific mid-sized city of only 640,000 people that has used progressive land use policies to build a livable and dense urban center. (In all fairness, the Portland MSA has over 2.4 million people.)

  Now, if you’re a regular reader of this blog you’ll know that I have a penchant for dense urban centers. I live and I work downtown. And I would happily trade square footage for a more sensible commute and lower transportation costs.

  But after I read the article, I couldn’t help but think that progressive land use policies, alone, aren’t enough. Cities, like social networks, experience network effects. That’s why there’s so much talk these days of winner-take-all urbanism.

  All of this is not to say that progressive urban policies are a bad thing. Quite the opposite. I just think there are many other factors at play if we’re talking about taming the hegemony of our global cities.

  2018.01.24

• Winner take all, or most, economy

  The world is increasingly spiky. Inequality is growing and it is increasingly geographic in nature. We know that people tend to make more money in urban areas compared to rural areas – even when they possess the exact same level of education. The returns to being smart and educated are simply greater in cities.

  But they also depend on the size of the city. Mark Muro and Jacob Whiton of Brookings recently published data looking at labor market performance – by metro size – from 2009-2015 (right after the financial crisis). What they found is that larger metropolitan areas simply performed better than smaller ones.

  

  In summary:

  City size matters because it’s a major influence on city prosperity and adaptability as well as local worker fortunes. Bigger cities are more productive. They are more innovative. They draw better-educated workers by offering higher wages.

  The situation is even more pronounced across the pond. According to the New York Times (quote from Richard Florida), a third of Britain’s gross domestic product comes from London alone.

  What is far less clear is what should be done to address the decline of some of the smaller cities in America – cities that are stagnating and feeling left behind. But perhaps the first step is acknowledging what has happened and what remains feasible in today’s global economy.

  Here is another quote from the above NY Times article:

  Mr. Trump’s promise to relieve the pain by reviving the coal and steel industries, by keeping immigrants out of the country and by raising barriers against manufactured imports is only a rhetorical balm to satisfy an angry base seeking to reclaim a prosperous past that is no longer available.

  That rhetorical balm.

  2017.10.22

• Is Trump good for Canada?

  Richard Florida and Joshua Gans just published an article in Politico called: Trump Is Making Canada Great Again. The overarching argument is that as the US closes its borders, Canada benefits. The best and brightest from around the world are coming here.

  This fall, international student applications at the University of Toronto were up 70% compared to last year. And numerous companies in Toronto are reporting “steady, double-digit increases” in the number of job applications from Americans.

  This is exactly what I was getting at when I made the pithy prediction that Amazon is going to choose Toronto for HQ2. It’s about access to human capital (though I acknowledge the political reality of selecting a city outside of the US). 

  Perhaps here or here might work for a location.

  Here is an excerpt from the Politico article that starts to speak to the importance of foreign-born workers in the US:

  As of 2013, foreign-born workers in STEM fields—science, technology engineering and math—accounted for nearly a fifth of workers with bachelor’s degrees in the United States, 40 percent of those with master’s degrees and more than half of those with Ph.D.s. In the San Jose metro area, consisting largely of Silicon Valley, immigrants comprise more than 55 percent of adults who hold advanced degrees.

  Here is a chart showing the US and Canadian metros with the highest percentage of foreign-born residents:

  

  And here is a chart showing which metro areas receive the most venture capital dollars (in millions of US dollars):

  

  As to be expected, Toronto, Vancouver and Miami lead in terms of the percentage of foreign-born residents. Though, I would bet that Toronto’s foreign-born population is far more diverse than those of Vancouver and Miami.

  However, when you look at venture capital dollars invested, Toronto is nowhere near the top. Vancouver isn’t even on the list. And I suspect that some of you are surprised to see Miami sitting in between Chicago and Seattle (arguably a city that overperforms in tech relative to VC dollars invested). I was.

  Perhaps Trump will help with this by making Canada great again.

  2017.10.03

• The first North American night mayor

  

  With Mirik Milan (Night Mayor of Amsterdam) speaking at the upcoming NXT City Symposium here in Toronto, I figured it was time to revisit the topic of night mayors. If you’re new to this topic and/or the blog, you can get yourself up to speed here (scroll down).

  Firstly, this idea is clearly spreading and it just crossed the pond. Last month on August 24, 2017, New York City Council voted to create the “Office of Nightlife.” It’s a small start. The office will have an annual budget of $300,000. But that’s okay.

  As far as I know, NYC is now the first major North American city with government humans focused on leveraging the benefits of the nightlife industry.

  For the record, my post “Why Toronto needs a night mayor” was published in March 2016. It was obvious that the idea was already spreading throughout Europe and I was hoping that this city (Toronto) take notice and decide to lead within North America. New York City decided to do that instead.

  Secondly, CityLab published an article today called how to be a good night mayor. It is about what NYC can learn from the European cities who are already experimenting with this kind of office. Perhaps my favorite is the recommendation to “reflect your own city’s DNA.”

  Of course, having a night mayor is one thing. Making it highly effective is another. In that regard, it is still early days for North American night mayors, and night mayors in general. Who will truly lead?

  Photo by Alina Grubnyak on Unsplash

  2017.09.26

• Houston, the global city

  Houston doesn’t often get a lot of love in urbanist circles.

  Though since Ed Glaeser published Triumph of the City and declared Houston’s unfettered sprawl the secret sauce for housing affordability, it is now frequently held up as the shining example of why housing supply matters.

  But this is a hotly debated topic. 

  Ed Glaeser would argue that increased supply is the key to housing affordability. But Richard Florida would likely be quick to point out that Houston is also one of the most unequal and segregated cities in America. It is not the model we should be following.

  But let’s be positive today on the blog.

  At the bottom of this post is a great talk by Stephen Klineberg called: Houston, The Global City. Klineberg is a Professor of Sociology at Rice University and the founder of the Kinder Institute for Urban Research.

  In this hour long talk, he outlines, among other things, the remarkable transformation of Houston from a one-industry town (oil) comprised predominantly of white people to a mixed economy where every major ethnicity is now a minority.

  He also argues that Houston is at the forefront of the demographic shifts happening all across the country and that, without this inflow of immigrants over the past couple of decades, Houston today would probably look a lot like a decaying rustbelt city.

  It’s a good watch.

  If you can’t see the video below, click here.

  [youtube https://www.youtube.com/watch?v=SJdWYXIr_qE?rel=0&w=560&h=315]

  2017.09.23