Archive for economic development

Canadian City Job Trends Outpacing National Average

Whether one looks at the recent monthly figures, or the five-, 10- or 15-year trends, most of Canada’s major cities have seen jobs growing faster than the national average.

This is intriguing. Canada’s economic growth is heavily dependent on resource extraction–whether oil, natural gas, lumber, coal or copper. This activity takes place far from most major cities, save for Edmonton (and even Edmonton is a 2-3 hour journey from the nearest oil sands project).

This urban job growth demonstrates how much overall economic development resources generate–and the more knowledge intensive nature of this activity in the 21st Century. The oil sector is no longer a pump pulling liquid from the ground and putting it in a tanker car.

Instead, Calgary office towers are filled with accountants, lawyers, engineers, more engineers, financing specialists, construction and project managers, etc. etc. all working directly or indirectly on energy-related activity in Alberta, BC and around the world. The Oil Sands are a brain-intensive activity. Forestry and coal, are less changed from their historic roots, but their influence drives employment in Vancouver, the hub for companies and for exports. The wealth this generates then flows through the economy as people buy homes, go to restaurants, and partake in cultural events.

In Toronto, the head offices of these legal and accounting firms provide further support. Moreover, in Canada’s economic hub shares are traded, mortgages for the vast workforce in Alberta processed, etc. As the strong energy economy bolstered the Canadian dollar following the 2009 recession, Canadian banks (Toronto based) went on a foreign acquisition spree, generating more employment.  If one excludes the structural change in manufacturing in the GTA, Toronto has been growing (job wise) almost as fast as the juggernauts in the West.  This can only be attributed to its connection to the resource sector–as a hub of financial and other business activity.

My conclusion: there is a symbiosis between Canada’s major cities and Canada’s continued place in the global economy providing raw resources. ALthough the cities have other sectors that don’t rely on resources–like software–these do not compare in terms of economic impact to the resource sector.

Anyone have a different explanation?

Hosting the Winter Olympics versus the Summer Games

With the London Summer Olympic Games starting this week, the critiques have been loud. Unfortunately both the Summer and Winter Games have been tarnished with the same brush.

The Winter Games, I would argue, can provide net benefits to a city and region if managed correctly. Here are three reasons to think differently about these games versus those of summer.

First, the Winter Games have fewer events and require fewer venues.

Second, the Winter Games often take place in the mountains, on snow and at venues that already exist in some form. Yes, some summer tree clearing might happen to make a ski run wider, or some grooming to make it steeper, and you might need a bigger lodge–but the ski hills already exist in most host cities. Ice rinks too, tend to exist, and additional ones that need to be built are more easily transformed into other recreational facilities should additional ice rinks not be required.

The Summer Games require a lot of custom facilities. Most cities don’t have an artificial whitewater kayak facility (nor want one), for example, nor do they have cycle dromes, enough swimming pools with spectator space, etc.  Beijing is finding that many of these custom venues today sit empty.

Third, hosting the Winter Olympics can provide an equal opportunity to lobby for outside funds to help construct infrastructure that improves the city. The Canada Line connecting the Vancouver Airport to Downtown in 20 minutes has made a dramatic difference to congestion and commute times, plus makes business and tourist travel more efficient. Without billions from the federal government (only promised to land and host the Olympics), this would not have been built–or at least not for 2010. The improved highway to Whistler was another achievement of Games planning.

And then there are the small things that make communities nicer places after the Games. New and refurbished ice rinks, expanded recreational opportunities, and better transit (new buses, more metro cars, etc.) benefit everyone.

And all this doesn’t include the city-spirit building that can happen, as Brent Toderian and others have discussed.

The Summer Games have a price tag that may be too high for the benefits received. But the Winter Games may not. Vancouver’s organizing committee officially broke even, however hundreds of thousands were given to a legacy fund (sounds like profit to me, reinvested wisely in sport and arts).*

It would be useful if a neutral party did some accounting and fact finding on the two types of Olympic Games.  Maybe there are some lessons for the Summer Games that can be learned.  Do they need to be so big?  Could two or three cities share in the hosting, specializing in different types of events?

 

The Heights: Anatomy of a Skyscraper (Book Review)

 

Kate Ascher, The Heights: Anatomy of a Skyscraper (New York: Penguin Press, 2011)

Skyscrapers are a vital component of modern cites.  They allow tens of thousands of people to work in close proximity, allowing them to share ideas.  Tall residential buildings have also become important to supporting vibrant 24 X 7 downtowns, keeping thousands in close proximity to downtown amenities after the workforce has gone home.

Anyone interested in understanding the modern city would benefit from reading Kate Ascher’s masterful tribute to the skyscraper.

Ascher inter-weaves detailed technical descriptions of building components with a overarching narrative covering the relationship between skyscrapers and broader human history and the history of science.  The beautiful illustrations and photographs assist in the visual appeal of this book that would proudly sit atop any coffee table.  Her descriptions of the technology, materials, mechanical  systems and engineering challenges involved in constructing tall buildings are fascinating and highly readable to a non-technical reader (such as me).  Yet, I suspect those with an engineering or construction background would find the descriptions equally compelling.

This book offers something for almost everyone, whether your interest lies in engineering, construction, real estate or cities.  As someone with a Ph.D. in history (although I work in the real estate investment industry), I was particularly drawn to Ascher’s discussion of the relationship between the economy, history of capitalism, history of technology and skyscraper evolution.

The industrial revolution and more specifically the mass-production of steel made the skyscraper revolution possible.

…the development of the internal steel skeleton permitted larger windows and more usable floor area…by the turn of the [19th] century, steel had replaced cast iron as the backbone of choice for new skyscrapers, and buildings of 15 to 20 stories [sic] had been completed in both New York and Chicago

The booming US economy from the 1880s through to 1929 allowed for a race to the sky that did not occur elsewhere, and New York and Chicago were the preeminent cities for this race..  Ascher describes how booming corporations each attempted to out-do each other in constructing ever taller buildings.  In 1930 there were vrtually no buildings with skyscraper technology outside of the USA.  This was an American phenomenon.

It was not until the post-world-war-two expansion in the 1950s and 1960s that the skyscraper race to the top began again (although the style was the plain, modernist rather than the ornate art deco of the 1930s notes Ascher). And this time, it was slightly more global with Europe joining in.

Ascher correctly notes that the tallest buildings of an era tend to begin just before an economic downturn. The twin World Trade Centre towers of New York began construction in 1972.  Although Ascher avoids much non-technical (and therefore political) discussion of these buildings, looking back as an historian, I might argue that they represented the culmination of America’s 20th century economic expansion—the end of an era.

When the skyscraper race began again, in the 1990s, Ascher notes it became an Asian era.  Here’s some perspective she offers on the Asian rise: before 1980, 85% of buildings over 500 feet high (150 metres) were in North America.  By 2008 72% of skyscrapers were outside of North America.

The Asian version has tended to be mixed use.  Whereas in North America skyscrapers tended to offer only office and occasionally residential, in Asia developers combine retail, residential and even hotels within a single building. The new Burj Khalifa in Dubai is presented as the prime example of this urban lifestyle building where people live, work and play.

Ascher covers an impressive range of subjects and knowledge in this book from history to civil, mechanical and environmental engineering. Her background is a Ph.D. in government from the London School of Economics followed up with time in the real estate and consulting sectors. Specialists in any of the myriad topics she covers will no doubt find the occasional fact or interpretation to quibble with, as I did. But these do not detract from what the book offers–a comprehensive, multi-disciplinary examination of skyscrapers and their relationship to economic and urban history.

Ascher ends with a good question: what would Jane Jacobs think of cites in which a large percentage of the population lives in skyscrapers?  Do they allow for enough informal interaction that Jacobs believed helps to build community?

Maybe these are good questions for the TED prize initiative around Cities 2.0. How to we better build communities in the sky?

The worst sports city in North America – it matters

ESPN recently ranked Toronto as the worst sports city in North America.  They calculated this based on a ratio of ticket prices to wins by the city’s teams.  Toronto’s sports fans loyally pay top dollar to see their favourite teams lose all too often.

I think this affects the psychology of the city, including the business community’s outlook. 

No matter how well things are going for Toronto, many of my friends, colleagues and network in Toronto refuse to believe in it.  They seem convinced they’ll soon be let down—that there is no more point in believing in Toronto’s solid economy than in a 3 game win streak by the Mapleleafs.

The sad state of the Maple Leafs, Raptors, Toronto FC and other teams is about more than sports.  The inability of these teams to win consistently and live up to expectations seems to create a pattern in peoples’ heads that they expect to be repeated elsewhere–such as in the city’s economic performance.  For nearly 3 years now I’ve been hearing it when I put evidence in front of people that Toronto will do (or is doing) fine in this era of global economic uncertainty.

For example, job growth in the knowledge sector has been strong over the past three years, right through the global economic turmoil.  Finance, professional services and information and culture sectors have together added tens of thousands of jobs since 2008. Despite this many in the commercial real estate sector have been convinced that office demand will fall (that this is a mirage of some sort).  Instead absorption has been strong, especially in 2011 as companies lease space in which to put these workers.

Since the global financial crisis began in 2008, Toronto has risen up the ranks of global business and financial centres, as well as the livability rankings.  Compared to most other world cities, and even Toronto’s own past, Toronto is thriving.

And it’s not all business.  Toronto’s international film fest, TIFF, has also risen in prestige and is now *the* place to showcase a new movie.  Bollywood even held its annual award gala in Toronto last year, illustrating the international nature of this city.  With over 50% of residents foreign born, and many from Asia, it’s as connected to Mumbai and Shanghai as to many US or European cities, whether economically or culturally.

Toronto is a city to believe in.  As hard as this is for a Vancouver Canucks fan to say, I hope the Maple Leafs start winning so more of my friends and colleagues in Toronto will start believing in their city too.  

Has low density hampered America’s educational achievement?

For decades, American high school students’ ranking in global achievement testing have been falling.  Is it possible that the very suburban communities that parents sought to help their children have actually hindered their performances, at least in aggregate?

I have a theory, and only a little circumstantial evidence.  But would welcome tips on actual studies or obtaining access to data to examine this question properly.  Here’s how the theory works:

First, there is a correlation between higher density cities and innovation (as measured by patents). It’s also widely accepted urban theory that this is because higher density places, like cities, force people to be exposed to and interact with new people, ideas and things constantly.  This makes them smarter, so the theory goes.

Second, there is a correlation between higher density cities and economic productivity. Doubling density increases productivity between 10 and 20 percent according to one study.

Third, earlier this week, Ryan Avent, pondering Ed Glaeser’s work, suggested that relocating high tech jobs from high density places like Silicon Valley to lower density locales like Raleigh may have hurt America’s economic productivity.

…is it really so strange to imagine that two decades of migration from productive cities with high average wages to less productive cities with low average wages would have a significant impact on national average labor productivity, on national wages, and on national employment and output growth? Raleigh is innovative, but one of the key’s to Raleigh’s success is the fact that its land is dirt cheap relative to the home base of many of the technology companies that have opened offices there: Silicon Valley.

So, if most American students live in lower density places than their peers in Europe and Asia, could it be possible that this–in part–is a reason for lower performance on science and math tests, which are basically a series of challenges or problems to solve.

Do children in higher density areas encounter informal problem-solving challenges far more frequently than their suburban counterparts and therefore have had more practice, more opportunity to hone their problem-solving skills?  The urban challenge may be how to communicate with someone from another country, or how to navigate a Razor scooter down a busy sidewalk, but it’s still a problem to solve. In one recent series of tests, students from rapidly growing and changing Shanghai were tops in the world. Coincidence?

If density matters for economic productivity and innovation productivity, surely it matters for education productivity.

Certainly, there are other compounding reasons why America has some catching up to do in the global education race.  But maybe a shift toward higher density living could help.  If nothing else, the college-educated, middle-class parents, who previously would have moved to suburbia in search of good schools,  might instead support new schools–or work hard to improve the existing ones–in their newer transit-oriented, higher density communities. This might benefit all children in the area, rich and poor.

What changed our view of cities in 2010

Thinking back on 2010, there were at least three noteworthy phenomenon that have helped change the discussion about cities and how we live in them.  Here are my three.  Feel free to debate, or add your own in the comments section.

1. The discussion and debate surrounding Richard Florida’s publishing of The Great Reset.  In Canada, bloggers and the media focused more on his argument about urbanization supporting the knowledge economy and broader creativity–the new economic reality for the 21st century.   In the US the discussion was more about the role of home ownership in slowing the needed economic restructuring, tying people to places with dying economies.  But everywhere, it got many thinking about the relationship between how we live, where we live, and the economy.

2. Walkscore.com saw it’s popularity and use expand, and received the funds to expand its offerings, adding more heatmaps, a transit score, commute report and a commercial property score.  Taken in conjunction with discussion coming from The Great Reset, walkscore provides some quantiative data on amenity density and walkability that can be correlated to economic or job growth.  By mapping features and amenities of a city, it’s allowing for discussion of what makes an ideal home location.

3. Social media is playing a growing role in city politics and city life.   Key city policies are now arguably discussed and debated on blogs and websites more than in town-hall or council meetings.  Naheed Nenshi harnessed social media to offer a more walkable and urban vision for the city and seize the mayor’s chair in Calgary.  And twitter has more people sharing urban events with each other and the world.

Women’s decisions shape cities

The choices and experiences of women are shaping 21st century cities–in fact, they also did so in the past, an often-overlooked phenomenon.

First, consider the choice to have fewer children.  In 1959 women in the US and Canada had on average 3.7 to 3.9 children in their lifetimes.  To look after this larger household, one person needed to make this their full-time job and the family needed the space offered in the suburbs.  The division of labour in the household and separation of residential from industrial and commercial spaces fit society.

Today, women in Canada have 1.6 children in their lifetime, on average.  In the US, although the national average fertility rate is 2.1, among college-educated women the number is closer to that of Canada.

This allows for a different urban development pattern, motivated in part by the choices of working women.  You can raise one or two kids in an apartment, condo, or urban townhouse much easier than four of them. Moreover, fewer children allows for the potential for more women to maintain careers while also being dedicated mothers.

Second, the expanding knowledge economy requires clusters of educated, innovative people.  Women earn 55% of bachelor’s and master’s degrees in the US and Canada. Knowledge-based companies (which could be anything from engineering firms to accounting, computer programing, or advertising) need to attract and retain talent.  They need women, as well as men, in order to keep their positions filled.

These big, structural changes in society and the economy require changes in the urban environment to accommodate them.

One change that is happening is a shift toward higher-density living closer to employment nodes such as downtowns and town centers.  Living in condominiums or (luxury) apartment rentals, are two more visible housing choices that many individuals and families are making in order to balance career and family or in the absence of children other lifestyle choices. There is also stealth density happening in the formerly-single-family neighbourhoods whereby duplexes, triplexes, and extra suites in houses are adding homes closer to employment nodes.

In larger metros (think Toronto, Chicago, etc.), where much of the housing is in the suburbs, and a long commute to downtown, we may see companies specifically locating satellite offices in the suburbs in order to hire the hidden talent pool of educated women who are available while their kids are in school.  Rather than being motivated by less expensive real estate prices in certain suburban business parks (as they were in the past), one Toronto-based commercial real estate broker told me that attracting the “9 to 3 labour pool” is motivating some of his clients’ decisions.

If women won’t or can’t come to them downtown, they’ll go to where the women are.  Not all women like (or will be able to afford) high-density urban living, but they’re still educated and talented.

What I expect to change in the suburbs, in response, is the type of office space in demand.  Isolated business parks may not be as attractive as office space in closer proximity to residential areas, perhaps attached to the community shopping centre or in a suburban “town center.”

Certainly, the types of jobs and careers available to the woman who chooses close-to-downtown, or downtown living for her family may be different than those in the suburbs.  The suburbs have traditionally offered more service-oriented “back office” type positions that are frequently lower paying.  However, this could change.

To some extent these isolated examples (so far) of moves to where the women are go against other urban workplace trends I’m seeing.  In particular, some major Canadian corporations have been or are in the process of consolidating their operations into a single downtown location (rather than have offices scattered throughout the metro areas).  Or maybe the motivator is the same: going where the people you want to hire live.

The location of job space is perhaps at a cross roads.  But it will be women’s choices that shape where new office space will be, as it always has been.

What do you see happening?

The Next Generation Takes Over a City

Evidence is mounting that younger adults live in and experience cities differently than their parents, grandparents or even older brothers and sisters did at their ages.

And, in Calgary this week, youthful adults used their smartphones and their feet to mobilize the vote for one of their own, 38-year-oild Naheed Nenshi, the unexpected new mayor.  He went from 1% support in the polls to victory with the help of an army of inspired youthful citizens who spread his messages.

The Calgary-born, Harvard educated Nenshi campaigned on a platform that included ideas to improve the functioning and design of the city, including design guidelines that would ensure greater walkability in new subdivisions. One of his key messages that people were talking about on the streets this week was about de-emphasizing the automobile in a city that lives and dies by the oil industry.  Despite the mild contradiction, a lot of Calgarians seemed to like this idea.

Nenshi’s election shows how a new generation with ideas—and a candidate who can articulate them—can seize control of a city.

This was a revolution in Calgary, long stereotyped as a place of white, socially and fiscally conservative cowboys with minimal educations.  Indeed many observers would characterize some past mayors (such as Ralph Klein) in this light.

Nenshi’s election reflects a different Calgary that I see gaining strength in every visit I make to the city.  From beneath the above-mentioned stereotype, over the past couple decades, a young, well-educated, energetic, idea-drive, tolerant and highly diverse population has been remaking Calgary into a vibrant global city. 

This was the logical next step—seizing control of city hall.

 Note, although the media has given some press to Nenshi’s minority and muslim background, it shouldn’t be overplayed.  The genius and power of this youthful movement he lead happened precisely because those two things didn’t matter to the voters, of all ages, he inspired with his ideas and fresh approach.

 Watch for this collaborative, youthful revolution to shake other Canadian and North American cities within the next 5 years, including Toronto and Vancouver.

Tax incentives vs fixing urban spaces first

What would be more effective in attracting a new cluster? Tax incentives? or improved urban infrastructure to attract and retain more people?  Or both?  What’s working (or not) in your city?

The province of Ontario (Canada) has announced tax incentives in order to build a digital animation cluster to rival those in Vancouver and Montreal.  This sector includes video game programming as well as movie special effects / post production work.

Presumably, they expect the focal point of this cluster will be in Toronto.  As nice as St. Catherines and London ON are (where a couple bigger animation firms are currently located), young computer graphics whiz kids will probably prefer to live in more urban, higher density and amenity-rich Toronto.

In fact, according to my friends at the Martin Prosperity Institute, people with creative occupations in SW Ontario disproportionately live in Toronto along the metro line corridors–yet I’ve heard most of them don’t take transit.  MPI’s map:

And I wouldn’t blame them for not taking the metro. To me it feels “scary old.”  It’s dark, dirty and rickety and I wouldn’t want to take it every day (and I’m a metro lover: I’d happily take Vancouver’s 25 year old sky train every day; I’ve lived in Mexico City and done that Metro every day too).  As a result of under investment in this system, I suspect many more people in Toronto drive than would do so if a clean, modern metro existed.

This further contributes to the crippling congestion in the Toronto area. The drain on the economy and quality of life must be enormous.  If I were a company considering taking the government up on their tax incentive offer, I would worry about retaining workers.  Toronto is a cool place, attracting talent to give it a try shouldn’t be a problem (plus a company can recruit from students at the local universities and technical colleges).  But will these people stay if their commute option is gridlock, old ricky metro, or a long go-train commute from a suburb (or a combination of drive in gridlock and go-train).

If the Ontario government has money to spare, and can subsidize industries, perhaps they can kick in a little more to partner with the city of Toronto and fix the transportation infrastructure.   This would also benefit their goal of being a more prominent global financial centre.

Should “Urban Studies” be a mandatory high school course?

More than half the world’s population lives in cities, and that percentage continues to grow.  Yet, how well do urban residents understand cities?  Do they know where housing comes from? what about food? or clothing?  How much does they average urban resident know about how cities are governed?  Or what legislation or bylaws affect their daily lives? (and how to get them changed?)

Too often lately I’ve been reading comments or quotes in the newspaper that suggest an otherwise intelligent, well-read person doesn’t fully understand how cities work.

Maybe, graduating from high school should require passing a course that includes (or is substantially) “urban studies.”

Here are some topics that I’ve learned about from life, work (or this blog), that many more people should understand.  And I certainly could have benefited learning about by age 18.  Feel free to add more suggestions in the comments.

1. Housing and housing costs.  Why are houses or apartments or condos in some cities and locations more expensive than in others?   Although there are complicated nuances worth elaborating on in a course, in essence it comes down to supply and demand.  If there are not enough homes where people want to live, then prices tend to go up (whether rents or purchase prices).

Too often lately I’ve read comments that suggest people don’t understand this basic issue.  High housing prices are not caused by greedy developers or landlords.  They charge what people are willing to pay (and most people try to find the best deal).  When the market is flooded with homes (look at many places in the US), prices go down.  When the government stops individuals from building or renting homes for profit, they don’t do it.  And the homes that remain become more expensive.

2. Container shipping by boat, rail or truck is how the food and clothes and other things we need and use in cities get to us.   Trying to stop container terminals, logistics facilities, and trucking routes, for example, without figuring out an alternative ways to nourish and clothe the people in cities, is pointless.  Sure, one location may not be appropriate and citizens can speak out, but they need to suggest alternatives that make more sense and show they grasp the consequences.  Preventing a logistics facility in one area might result in more truck traffic (and pollution) if goods have to be transported further. Similarly, stopping truck traffic on one main street diverts it, and may result in longer routes, more pollution, and higher prices.

3. Congestion.  Although on the surface building more roads seems like a solution, all the evidence points to the opposite.  The more roads, the more vehicle traffic.

These are three topics worth covering in a mandatory course.  Yes, they can be controversial and have multiple political sides–but so do most topics covered in history classes.  A student emerging from high school understanding both sides of the issue (or all three or four sides, in some cases) is far more prepared to be a productive, helpful person making our cities function better than someone who has no idea there even is a side or an issue–than someone who has no clue how the apple in her lunch or jeans on her legs got there.

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