Iowa: A Great Place to Build
Cities for People
Presentation by Joel Kotkin, Presidential Fellow in Urban Futures at
Chapman University and Executive Director, Center for Opportunity
Urbanism to the Smart Economic Development Conference
Des Moines, Iowa , May 4, 2017
What is a City for?
“a city comes into being for the sake of
life, but exists for the sake of living well.”
---Aristotle
Major Conclusions
• Iowa’s “real economy” provides positive outcome for
middle and working class residents
• Lower housing prices could lure skilled workers,
immigrants and millennials from coast
• American dream is fading along the coast for many,
but not in Iowa
In a post-industrial age, does stuff still matter ? …
it certainly does.
The New Heartland
Map produced with http://diymaps.net/us_12.htm
“We believe that over the next generation the Plains will,
as a result of the largest, longest-running agricultural and
environmental miscalculation in American history,
become almost totally depopulated. At that point, a new
use for the region will emerge, one that is in fact so old
that it predates the American presence. We are
suggesting that the region be returned to its original prewhite state, that it be, in effect, de-privatized.”
- Frank and Deborah Popper
Photo: anjan58
Distribution of Labor Force By Sector
Manufacturing Growth By State, 2009-2016
Source: EMSI Employment Data, 2016.2
Productivity Gains Since 2001
70%
Manufacturing,
59%
60%
50%
40%
Business, 29%
30%
20%
10%
0%
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
U.S. Bureau of Labor Statistics Major Sector Productivity and Costs Program, Labor Productivity
Index (output per hour)
Share of U.S. Exports by Type
60%
Share of Total Exports
50%
Manufactured Goods,
50%
40%
Services, 33%
30%
20%
10%
Agricultural, 6%
Energy Products, 6%
0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: U.S. Census Foreign Trade Statistics
Economic Multiplier Effect
Economic Activity Generated per Dollar of Sales, 2014
Manufacturing
$1.40
Agriculture, forestry, fishing, and hunting
$1.17
Transportation and warehousing
$1.05
Information
$0.86
Professional and business services
$0.66
Retail trade
$0.64
Wholesale trade
$0.60
Finance, insurance, real estate, rental, and leasing
$0.58
Source: U.S. Bureau of Econonmic Analysis Input Output Accounts
Where the food
is grown…
U.S. Agricultural Trade, 1976-2015
Billions
$160Market Opportunity for Ag exports
Global
$140
Exports, $133
$120
Imports, $114
$80
$60
$40
$20
2014
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
$1976
Value of Trade
$100
Source: Compiled by USDA ERS usingg data from U.S. Department of Commerce, U.S. Census Bureau.
Total Employment, 2008-2016
Grand Rapids-Wyoming, MI
Des Moines-West Des Moines, IA
Boise City, ID
Durham-Chapel Hill, NC
Madison, WI
Minneapolis-St. Paul-Bloomington, MN-WI
Omaha-Council Bluffs, NE-IA
Nation
Knoxville, TN
Chicago-Naperville-Elgin, IL-IN-WI
St. Louis, MO-IL
Dayton, OH
Akron, OH
Syracuse, NY
Wichita, KS
Albuquerque, NM
13.6%
8.3%
6.9%
5.9%
5.8%
4.4%
4.2%
3.8%
1.7%
1.2%
0.1%
(1.1%)
(1.9%)
(3.3%)
(3.6%)
(3.8%)
Source: Praxis Strategy Group analysis of EMSI 2017.1 data
Middle Class Occupations, 2008-2016
Grand Rapids-Wyoming, MI
Des Moines-West Des Moines, IA
Durham-Chapel Hill, NC
Boise City, ID
Madison, WI
Minneapolis-St. Paul-Bloomington, MN-WI
Omaha-Council Bluffs, NE-IA
Nation
Knoxville, TN
Chicago-Naperville-Elgin, IL-IN-WI
St. Louis, MO-IL
Akron, OH
Dayton, OH
Wichita, KS
Syracuse, NY
Albuquerque, NM
12.2%
6.5%
5.3%
5.0%
4.0%
2.5%
2.3%
1.7%
(0.1%)
(1.5%)
(2.2%)
(3.0%)
(3.1%)
(5.7%)
(5.9%)
(6.9%)
Source: Praxis Strategy Group analysis of EMSI 2017.1 data
High-Tech Industries, 2008-2016
South Dakota
Kansas
New York
Indiana
California
Michigan
Texas
Wisconsin
Iowa
Nation
Illinois
Minnesota
Florida
North Dakota
Missouri
Nebraska
Ohio
38.0%
37.7%
32.8%
31.8%
31.4%
31.3%
26.4%
26.3%
22.1%
20.9%
20.4%
15.6%
13.5%
13.4%
12.5%
12.4%
10.7%
Source: Praxis Strategy Group analysis of EMSI 2017.1 data
High-Tech Industries, 2008-2016
Madison, WI
56.6%
Des Moines-West Des Moines, IA
41.9%
Wichita, KS
37.1%
Akron, OH
21.8%
Syracuse, NY
21.7%
Nation
20.9%
Durham-Chapel Hill, NC
20.0%
Chicago-Naperville-Elgin, IL-IN-WI
19.0%
Grand Rapids-Wyoming, MI
17.8%
Minneapolis-St. Paul-Bloomington, MN-WI
12.3%
Boise City, ID
11.7%
Knoxville, TN
5.6%
Omaha-Council Bluffs, NE-IA
4.8%
Dayton, OH
Albuquerque, NM
St. Louis, MO-IL
1.0%
(3.8%)
(6.0%)
Source: Praxis Strategy Group analysis of EMSI 2017.1 data
STEM Occupations, 2008-2016
Madison, WI
21.9%
Grand Rapids-Wyoming, MI
17.5%
Des Moines-West Des Moines, IA
16.9%
Nation
7.4%
Minneapolis-St. Paul-Bloomington, MN-WI
6.8%
Omaha-Council Bluffs, NE-IA
5.2%
Knoxville, TN
3.8%
Chicago-Naperville-Elgin, IL-IN-WI
3.6%
Akron, OH
2.4%
Dayton, OH
0.7%
Boise City, ID
0.3%
Durham-Chapel Hill, NC
0.2%
St. Louis, MO-IL
Syracuse, NY
Albuquerque, NM
(1.6%)
(4.0%)
(8.7%)
Wichita, KS (18.8%)
Source: Praxis Strategy Group analysis of EMSI 2017.1 data
Is the Heartland about to experience a
demographic comeback? Iowa seems well
positioned
Net Domestic Migration
120,000
53 MAJOR MSA’S & 53 SECOND TIER MSA’S
100,000
80,000
60,000
40,000
20,000
0
2011
2012
2013
2014
2015
2016
-20,000
-40,000
-60,000
Major Metropolitan Areas (Over 1,000,000)
Second Tier Metropolitan Areas (500,000-1,000,000)
-80,000
Derived from Census Bureau data
Figure 20
Housing Affordability & Domestic Migration %
US MAJOR METROPOLITAN AREAS: 2000-2012
6%
### Notes needed
4%
% of 2000 Population
2%
0%
-2%
2.0-2.9
3.0-3.9
4.0-4.9
5.0-5.9
6.0-6.9
7.0 & Over
-4%
-6%
-8%
-10%
-12%
Median Multiple
Figure 21
Housing Affordability: 2016
DES MOINES & SELECTED METROPOLITAN AREAS
San Jose, CA
Los Angeles, CA
San Francisco, CA
New York, NY-NJ-PA
Seattle, WA
Portland, OR-WA
Denver, CO
Fresno, CA
Orlando, FL
Washington, DC-VA-MD-WV
Madison, WI
Charlotte, NC-SC
Dallas-Fort Worth, TX
Minneapolis-St. Paul, MN-…
Des Moines, IA
Atlanta, GA
Kansas City, MO-KS
Indianapolis, IN
Omaha, NE-IA
Wichita, KS
Table 1
Housing Affordability Rating Categories
Rating
Severely Unaffordable
Seriously Unaffordable
Moderately Unaffordable
Affordable
0
Median Multiple
5.1 & Over
4.1 to 5.0
3.1 to 4.0
3.0 & Under
2
4
6
8
10
Median Multiple (House Price/Household Income)
Derived from Demographia International Housing Affordability Survey
Net Domestic Migration: Midwest
METROPOLITAN AREAS 500,000+ POPULATION: 2000-2016
Des Moines, IA
Indianapolis. IN
Madison, WI
Columbus, OH
Kansas City, MO-KS
Omaha, NE-IA
Minneapolis-St. Paul, MN-WI
Wichita, KS
Grand Rapids, MI
Cincinnati, OH-KY-IN
Akron, OH
St. Louis,, MO-IL
Dayton, OH
Youngstown, OH-PA
Toledo, OH
Milwaukee,WI
Cleveland, OH
Chicago, IL-IN-WI
Detroit, MI
-15%
-10%
-5%
0%
Compared to 2000 Population
Derived from Census Bureau data
5%
10%
High Income Net Household Migration
“BRAIN CENTER” & NEW HEARTLAND STATES 2013-2014
Florida
Texas
Tennessee
$200,000 & Over
$100,000 - $200,000
California
Connecticut
Virginia
Maryland
New Jersey
District of Columbia
New York
0
Derived from IRS data
50
100
150
200
Attraction Ratio: Arriving per 100 Leaving Households
250
Why Millennials may be headed to the cities
and suburbs of Middle America
• Incomes are not sufficient for coastal areas
• Most will look for places to live a middle class
life, and raise families, although this will happen
later for them
• They will follow industries as they move to more
affordable areas
US Population by Age
2013
How Millennials View Marriage and Children
(% saying they…)
Do you want to have
children?
Do you want to get married?
5
7
25
Want
19
Not sure
Don't want
70
Based on ages 18-29, unmarried
and without children, n=305
74
Source: Pew Research Center
Percent who agree “homeownership is an
important part of the American Dream”
90
89
88
86
86
84
84
Total population
Millennials
82
Gen X
81
80
80
Boomers
Silent Gen
78
76
74
Base Age 21+
Source: Merrill Lynch – Age Wave, 2014
House Purchases: Under Age 35
2014-2015 NATIONAL ASSOCIATION OF REALTORS
Multi-Unit
7%
Other
4%
Townhouse
8%
Detached
House
81%
From National Association of Realtors, 2015
0%
Derived from Census Bureau data
Hawaii
New York
California
Nevada
Florida
New Jersey
Rhode Island
Massachusetts
Oregon
Georgia
UNITED
STATES
Home Ownership Rate
Worst 10 States: 25-34 Home Ownership
2015
40%
35%
30%
25%
20%
15%
10%
5%
25-34 Change in Home Ownership %
MAJOR METROPOLITAN AREAS 1990-2015
0%
-5%
United Staes California
Riverside- Sacramento San Diego Los Angeles
San
San
Francisco
Bernardino
Home Ownership Rate
-10%
-15%
-20%
-25%
-30%
-35%
-40%
-45%
Derived from Census Bureau data
San Jose
Where do millennials want
to live
Source : National Association of Home Builders
Even High-Wage Workers Cannot Afford Housing
Orange County Wages v. Qualifying Income
($000s)
ORANGE COUNTY
TO QUALIFY: $117.5K
100.3
88.3
77.7
79.4
56.9
41.5
24.0
28.3
Personal &
Retail
Construction Carpenter
Home Care Salesperson Laborer
Aide
Elementary Computer Nurse (RN)
School
Programmer
Teacher
Biomedical
Engineer
US 20-27 YEAR OLDS vs. 28-35 YEAR OLD
42
41
40
39
38
20-27
28-35
37
36
35
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050
2052
2054
2056
2058
2060
34
Source: Business Insider/Andy Kiersz, data from US Census Bureau
An aging population boosts the suburbs
% living in urban neighborhoods, by age group
30%
2000
25%
2014
20%
15%
18-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84
85+
Small Cities/Big
Opportunity
• Demographic trends and
growth create new
opportunities
• The need for new
infrastructure to connect to
national and world markets
• Role of Technology in
opening global markets
• Immigrants and millennials
a big opportunity
• Iowa is beginning to take
advantage --- but how
much?
Ports-to-Plains Trade Corridor
“Securing the Benefits of Trade
to North America’s Energy and
Agricultural Heartland”
Karl Marx: “the idiocy of rural life”
Is it still true?
Technology: The Great Equalizer?
• New Technology could telescope
the distance between
communities
• Younger workers can now choose
affordable lifestyle and still stay in
less dense areas
• Technology helps tie Iowa directly
to other global and US
metropolitan markets
Virtuality is Coming…
“I leave my house in the
country and drive 17 miles
through the blue grass. But
when I open my computer I
am at my center, it feels like I
am back in San Jose. It's a
kind of virtual Silicon Valley.”
Alan Hawse
Director of CAD Development,
Cypress Semiconductor
Green Telecommuting
Everyone telecommuting 2 days per week saves:
1.35 billion gallons of gasoline
26 billion pounds CO2
Estimates from American
Electronics Association
& EPA
Immigrants increasingly drive Midwest
population growth
Hispanics Moving to Iowa
Restoring Old Neighborhoods and Small
Towns to attract millennials and immigrants
The Political Challenge:
Get Beyond the Partisan Agenda
“There is no
Republican or
Democratic way to
clean streets."
New York Mayor Fiorello LaGuardia
Looking Forward for Iowa
• There needs to be upgrading of infrastructure connecting Iowa to
world markets
• Internet opens new opportunities
• Immigrants should be encouraged to settle here
• Iowa needs to offer vibrant urban, suburban and small town
environments to capture the next generation
• No need to apologize: the world is turning your way
• You just need to take advantage
Questions and Comment