Pierce County’s Future Lies with Itself

• Presentation by Joel Kotkin, Chapman University and Center for Opportunity Urbanism February 19, 2015

Small Cities/Big Opportunity

• Demographic trends and growth create new opportunities

• Role of Technology in opening global markets

• Pierce County Offers life-style that appeals to most of the population

• You are not a backwater if you can look beyond the waves

Declustering: The New Demography

• Nationwide people heading to smaller towns and cities

• The search for affordability critical to many middle class families

• Freedom to work dispersed due to technology

-11.3%

-2.5%

1.4%

3.7%

0.6%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

Over 10M 5M-10M 2.5M-5M 1M-2.5M Other

Shar

e of 2

000 P

opula

tion

Net Domestic Migration by Population MAJOR METROPOLITAN AREAS: 2000-09, 2010-12

From Census Bureau Data

0% 1% 1% 2% 2% 3%

Detroit, MIChicago, IL-IN-WI

Philadelphia, PA-NJ-DE-MDNew York, NY-NJ-PA

Los Angeles, CARiverside-San Bernardino, CA

Boston, MA-NHMiami, FL

Atlanta, GASan Francisco-Oakland, CA

Washington, DC-VA-MD-WVDallas-Fort Worth, TX

Seattle, WAPhoenix, AZHouston, TX

Largest Metropolitan Areas: Growth 2012-2013

Derived from ; Census Bureau

data

-400,000 -300,000 -200,000 -100,000 0 100,000 200,000

New York, NY-NJ-PAChicago, IL-IN-WI

Los Angeles, CADetroit, MI

Philadelphia, PA-NJ-DE-MDSan Jose, CA

Boston, MA-NHRiverside-San Bernardino, CA

Miami, FLWashington, DC-VA-MD-WV

San Francisco-Oakland, CAAtlanta, GASeattle, WAHouston, TX

Dallas-Fort Worth, TX

Largest Metropolitan Areas: Domestic Migration NET: 2010-2013

Derived from ; Census Bureau

data

14,000 18,200 41,200

59,100 75,500

187,800

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Popu

latio

n G

row

th

Population Growth by Distance from Core SEATTLE MSA: 2000-2010

Data from Census Bureau

10.4%

41.2%

36.3%

12.0% 10.5%

36.2%

40.3%

12.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Urban Core Earlier Suburban Later Suburban ExurbanBy City Sector

20002010

Seattle MSA Population % Distribution BY CITY SECTOR: 2000 & 2010

From City Sector Model

Puget Sound Region - Urban Growth Centers and regional growth

2,748,895

3,690,942

942,047

117,555 283,266 165,711

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1990 2010 Change

Total region Population

Urban Growth CenterPopulation

Source: PSRC Centers Monitoring Reports, 2002 and 2013.

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

2.0-2.9 3.0-3.9 4.0-4.9 5.0-5.9 6.0-6.9 7.0 & Over

% o

f 200

0 Po

pula

tion

Median Multiple

Housing Affordability & Domestic Migration % US MAJOR METROPOLITAN AREAS: 2000-2012

Figure 10

### Notes needed

6.2

3.9

4.8

3.8 4.1

4.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Seattle Tacoma King: Balance Pierce:Balance

Snohomish MSA

Med

ian

Hous

e Va

lue/

Med

ian

Hous

ehol

d In

com

e Price-Income Ratio: 2013

SEATTLE MSA & COMPONENTS

Calculated from ACS 2013 data

The Suburban Future and the Future of Middle Class

“We’ve reached the limits of suburban development .People are beginning to vote with their feet and come back to the central cities.” HUD Secretary Shaun Donovan Feb 2011

-1.6%

-4.3%

4.5%

1.5%

-0.2%

-4.6%

3.9%

0.9%

-6%

-4%

-2%

0%

2%

4%

6%

Urban Core Earlier Suburban Later Suburban Exurban

Perc

enta

ge P

ont C

hang

e in

Sha

re

By Functional City Sector

Population

Employment

Population & Employment: 2000-2010 PERCENTAGE POINT CHANGE BY CITY SECTOR

Figure 13

0% 20% 40% 60% 80% 100%

Mobile Home or Other

Apartment

Attached or Townhouse

Detached

Consumer Housing Preferences NAR/SMART GROWTH AMERICA SURVEY: 2012

Has Everything Changed After the Great Recession?

Not really… suburbs, further out suburbs continue to grow much

faster

Distribution of National Office Space MID-YEAR 2013

CBDs (Downtown)

26%

Suburban (Outside CBDs)

74%

Source; Derived from Costar

Figure 16

Canaries in the Coal Mine

*Immigrants and their Children *Young families

*Millennials

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Age in 2012

US Population by 5 Year Age Cohort 2012 PER AMERICAN COMMUNITY SURVEY (ALL)

Source: ACS

Figure 18

0 5 10 15 20 25

2018

2013

Households Headed by Millennials (millions)

13.3

21.6

Source: 2013 Demand Institute Housing and Community Survey

20.2%

46.1%

20.6%

13.2%

19.3%

42.0%

24.4%

14.3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Urban Core Earlier Suburban Later Suburban ExurbanBy City Sector within Major Metropolitan Areas

2000 (Ages 20-29)2010 (Ages 20-29)

Figure 20

Ages 20-29: Population: 2000 & 2010 MAJOR METROPOLITAN AREAS: CITY SECTOR MODEL

-4,000,000

-3,000,000

-2,000,000

-1,000,000

0

1,000,000

2,000,000

3,000,000

0-14 15-29 30-44 45-59 60-74 75 & Over

Age in 2007

Core CitiesSuburbsOutside Major MSAs

Change in Population by Age Cohort US: 2007-2012: UNADJUSTED (NO BIRTHS)

Source: ACS

Figure 21

0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

Chicago, IL-IN-WIPhiladelphia, PA-NJ-DE-MD

New York, NY-NJ-PASan Francisco-Oakland, CA

Washington, DC-VA-MD-WVAtlanta, GA

Boston, MA-NHPhoenix, AZ

Los Angeles, CADallas-Fort Worth, TX

Seattle, WAHouston, TXDetroit, MI

Miami, FLRiverside-San Bernardino, CA

Change in 20-29 Population

Derived from Census Bureau

data

Note: US 20-29 Growth 4.0%

Age 20-29 Population Change: 2010-2013 15 LARGEST METROPOLITAN AREAS

Space Preference

Want more space

Want the same amount

Want less space

61% 24%

15%

Source: 2013 Demand Institute Housing and Community Survey

Where do millennials want to live

Source: National Association of Home Builders

0% 10% 20% 30% 40% 50%

Country

Small City

Suburb

Big City

Country

Small City

Suburb

Big City

MillenialsOlder Generations

Source: Frank N. Magid

Associates

Millennial Life Style Choices COMPARED TO OLDER GENERATIONS

Figure 25

Curre

nt

Resid

ence

Id

eal P

lace

to L

ive

Home Ownership

Plan to purchaceAlready ownWill not purchase

15

25

35

45

55

65

75

85

Believes ownershipis important long-

term goal

Believes ownershipis an excellent

investment Source: 2013 Demand Institute Housing and Community Survey

60% 24%

16%

15.0%

45.3%

23.1%

16.5%

12.0%

40.5%

29.7%

17.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Urban Core Earlier Suburban Later Suburban Exurban

Dis

trib

utio

n

By City Sector within Major Metropolitan Areas

20002010

Figure 27

Age 5-14 Percentage Distribution: 2000 & 2010 BY CITY SECTOR: MAJOR METROPOLITAN AREAS

0% 4% 8% 12% 16% 20%

Detroit, MIBoston, MA-NH

Atlanta, GANew York, NY-NJ-PA

Chicago, IL-IN-WILos Angeles, CA

Riverside-San Bernardino, CAMiami, FL

Seattle, WASan Francisco-Oakland, CA

Washington, DC-VA-MD-WVPhiladelphia, PA-NJ-DE-MD

Dallas-Fort Worth, TXPhoenix, AZHouston, TX

Growth in Residents with BA+ Degrees 2007-2012

Derived from ; Census Bureau

data

$100,305

$88,258 $79,414 $77,745

$56,908

$41,453

$28,280 $24,042

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000Bi

omed

ical

Engin

eer

Nurse

(RN)

Comp

uter

Prog

ramm

er

Elem

entar

ySc

hool

Teac

her

Carp

enter

Cons

tructi

onLa

bore

r

Retai

lSa

lespe

rson

Perso

nal &

Home

Car

eAi

de

Workforce Wages & Qualifying Incomes ORANGE COUNTY & INLAND EMPIRE

TO QUALIFY: Riverside-San Bernardino: $42,420

Orange County Wages

TO QUALIFY: Orange County: $117,471

“Qualifying income (with 10% down payment)” data from National Association of Realtors & actual wage data from California Employment Development Dept.

0%

10%

20%

30%

40%

50%

60%

70%

1970-1980 1980-1990 1990-2000 2000-2010

TotalOwnerRenter

Source: Myers & Pitkin

Foreign Born Share of New Households US: 1970-2010

Figure 30

0 200,000 400,000 600,000 800,000

San Francisco (18.8%)

Chicago (15.2%)

Seattle (58.5%)

Atlanta (69.5%)

Riverside-San Bernardino (54.0%)

Dallas-Fort Worth (49.9%)

Miami (25.4%)

Washington (55.5%)

Houston (53.8%)

New York (15.7%)

Foreign Born Population: Fastest Growing MAJOR METROPOLITAN AREAS: 2000-2012

Derived from ; Census Bureau

data

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Core Cities Suburbs

Incr

ease

: Maj

or M

etro

polit

an A

reas

Change in Asian Population: 2000-2010

BY CORE CITIES & SUBURBS

2008, 38.69 Million

2030, 72.09 Million

2050, 88.55 Million

0

10

20

30

40

50

60

70

80

90

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050

Mill

ions

Number of 65 - 100 year olds in United States

Source: Praxis Strategy Group Analysis of U.S. Census Population Projections, Released 2008 NewGeography.com

Prime Target for Pierce County

“The Young Old” as opposed to the “Old Old”

14.9%

45.3%

24.0%

15.8% 13.0%

42.2%

26.9%

17.9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Urban Core Earlier Suburb Later Suburb Exurb

Shar

e of

Boo

mer

Gen

erat

ion

Popu

latio

n

By Functional Sector within Major Metropolitan Areas

2000 (Ages 35-54)2010 (Ages 45-64)

Figure 35

Boomer Shares in Major MSAs 2000 & 2010

City Sector Model

Big Changes in Composition of New Entrepreneurs

Share of All New Entrepreneurs (1996, 2010)

Technology: The Great Equalizer?

• New Technology could telescope the distance between communities and allow “down-shifting boomers” to remain engaged in workforce

• Younger workers can now choose affordable lifestyle and still stay in less dense areas

• Technology helps tie Pierce County directly to other global and US metropolitan markets

Rise in Telecommuting

34 Million

63 Million

2009 2016

Forrester Research Projection

The Key to a Smart Local Strategy

This above all: to thine own self be true

William Shakespeare

A Useful Insight

“If you need a campaign to prove

you’re hip and cool, you’re not.”

Michigan talk radio host on Governor Jennifer Granholm’s

“Cool Cities” initiative

Strategy for Pierce County Growth

• Focus on diversification and growth of higher wage industries

• Develop and network for tsunami of “young old” • Market as a great place for families and

immigrants seeking affordable quality of life

Small Cities and Towns Key to American Democracy

“The intelligence and the power are dispersed abroad and instead of radiating from a point, they cross each other in every direction.”

Alexis de Tocqueville

Questions and Comment