What makes metropolitan and regional economies thrive? The keys are talent, innovation, connections and distinctiveness, says Joe Cortright, an economist in Portland, Oregon. Joe’s firm, Impresa, specializes in regional economic analysis, innovation and industry clusters. He is a non-resident Senior Fellow at the Brookings Institution and a Senior Policy Advisor for CEOs for Cities, a national network of urban leaders dedicated to creating cities for the future.
I talked to Joe as part of the HOK Planning Group’s exploration of the city of the future. I found his theory on the Green Dividend – a computation of the actual economic benefits that people and places (like Portland) gain from green behavior – particularly interesting. Full disclosure: It made me want to pack up my bikes (kids and wife welcome to join us) and move to Portland.
JG: What is your vision for the city of the future?
JC: At CEOs for Cities we have developed a framework that helps cities think about what they need to do to succeed. We outlined four issues that cities must pay attention to: talent, innovation, connection and distinctiveness.
By talent we mean that cities need talented workers and good human capital.
A city has to nurture new ideas and innovation. The ability to generate new ideas and businesses is what makes places successful in a global economy.
A city must have connections to the wider world and also within the community so you can work together and tap into all your community’s resources.
The point about distinctiveness is the most important issue for cities. There is no single model for the city of the future. One failing of public policy work is that it often assumes there is only one model for cities to follow. While there are common elements like talent, innovation and connections, they all mean different things in different places.
The challenge is for each city to figure out its special niche so that it can define its strategic opportunities. What can they do differently or better than others? What about their populations, DNA, culture, traditions, history and specialized knowledge make them unique?
What are examples of cities that have distinguished themselves?
Different kinds of economic activity are concentrated in different places. Silicon Valley, for example, is the center for high technology. Places like San Diego and Boston are centers for biotechnology. Hollywood and New York are at the center of the U.S. entertainment industry.
What is the relationship of a city’s core vitality to the housing prices in a metropolitan area?
An essential characteristic of cities that function well and that are connected is that they work at the center. They have vibrant urban neighborhoods that attract people with choices. They maximize the benefits that cities provide in terms of density and interaction. This is important to stimulating innovation and to being an attractive place to live.
The U.S. experienced a housing bubble from the late-1990s through 2006. Throughout the last couple of years, housing prices have dropped precipitously. In general, however, housing prices are down much less in the close-in neighborhoods of most metropolitan areas than they are in the suburbs. And cities with the strongest core neighborhoods tend to be least affected by the downturn. The housing price bubble has hit hardest in the places with the weakest close-in neighborhoods.
This signals that people are attaching an increased market value to the opportunities that exist in cities. Part of this is the opportunity to drive less and to have more transportation choices. This is the reversal of the era when our suburban housing was supported and subsidized by very cheap gasoline. That era is coming to an end.
What cities have strongest and weakest cores?
The City Vitals report that we developed at CEOs for Cities is a tool for benchmarking urban economic health. We developed a statistical method for ranking the strongest and weakest urban cores. For statistical purposes, we describe a close-in neighborhood as an area within five miles of the center of a central business district.
The cities with the strongest urban cores are places like New York, Seattle, Chicago, Portland and San Francisco. The places with the weakest urban cores would include Detroit, Phoenix, Los Angeles and Indianapolis.
What is the “Green Dividend” that you talk about?
There is a widespread belief that sustainability, green behavior and conservation are simply forms of noble self-sacrifice – that they are well-intended but not economically justifiable. The Green Dividend refutes that belief by computing the actual economic benefits that people and places gain from green behavior.
In particular, we studied how much value cities gain when their citizens can drive fewer miles. We specifically looked at Portland. The typical person in the U.S. drives about 24 miles per day, while the typical person in Portland drives 20. Four miles a day doesn’t sound like much, but when you multiply that across a population of more than two million throughout a full year and factor in a very conservative estimate of the cost of operating a vehicle, that works out to more than one billion dollars a year. That’s how much people in Portland save in out-of-pocket costs because they don’t have to drive as much as the typical American. That is $1 billion they aren’t spending on cars and gasoline and thus can spend on housing, food, recreation and everything else. We think this produces a local economic benefit. It could be a reason Portland has the second-highest number of restaurants per capita of any large U.S. metropolitan area. (Watch a CEOs for Cities YouTube video describing the Green Dividend.)
What should politicians be doing to prepare our cities to succeed in the future?
Think about things like Social Security, the way we pay for health insurance and how we fund public transportation. All these systems were put together in the 1930s or earlier, in a much different era with a much different world view and economy.
The challenge for today’s political leaders is to redesign our institutions, agencies and policies to align with today’s world. Politicians need to ask questions like, “How do we encourage more investment in human capital and raise the quality of the workforce? How do we create alternatives to automobile travel that allow people to people drive less and still do everything they need to do?”
What should planning firms like HOK be doing?
The very serious concerns about global warming should be motivating planning firms to think sustainably. In city planning, this means taking advantage of and intensifying the inherent environmental benefits of city density. Planners need to give people more choices and accessibility.
There are lots of mutually reinforcing things planners can do. Instead of focusing on any one issue like housing, transportation or economic development, we need to consider how all those elements can come together to change a city’s fabric and to make it work better.
It seems like the time is right to try out new ideas. Are you optimistic?
There are good reasons to be optimistic. Though the U.S. federal government resoundingly rejected the Kyoto Protocol, we’re seeing cities adopt their own goals and strategies for reducing greenhouse gas emissions. There is a huge amount of interest and experimentation going on.
If you look at the attitudes of our citizens, people tend to be way ahead of our government and policymakers. Most people agree that global warming is a serious problem that we have to do something about. They also have a general idea that we need to make changes in our lifestyles.
The big challenge is for us to have a strong vision and to approach these changes with optimism. We don’t want people to think, “Oh, no, this is going to force us to change.” We want them to believe that we are making our cities work better in ways that will also improve their lives, and I think they will.
What cities are doing things right?
I vote with my feet, so I am here in Portland. Vancouver is impressive. There’s a lot happening in New York.
The proposed congestion pricing to help control traffic in New York was a good idea that didn’t come to fruition, but they have not stopped there. San Francisco has an innovative plan for adopting a real-time, Internet-based system for charging for parking.
What can individuals do to help our cities?
Everyone has to make good choices and we all should look for ways to drive less, protect the environment and support local businesses. All that stuff is good, but reducing our individual carbon footprints by itself won’t get us where we need to be.
The key is that government policy sets the table for all our choices. In the past — particularly with the automobile — we have greatly subsidized behavior that produces very negative social consequences. You do your best to live a very green lifestyle, but you can’t ride on a light rail system that hasn’t been built.
The collective decisions we make and the set of choices we provide to people are critically important. We have to have public policies that give people more options and the right signals. Individuals can influence who is creating these policies.
What are some resources for learning more?
The CEOs for Cities website is helpful.
Douglas Farr’s book, Sustainable Urbanism: Urban Design With Nature, is a good resource.
The Center for Neighborhood Technology in Chicago does great work on urban sustainability and policy issues.
Walkscore.com is a website that creates an index of walkability. You can enter any address in the U.S. and it will provide a score from 0-100 ranking how walkable that address is based on things like how far it is to schools, libraries, coffee shops, parks, retail, restaurants and services. It isn’t perfect, but this is a terrific tool for giving people a tangible idea of what they might instinctively know. It’s a good way to think about cities.
Unfortunately, our past thinking has been greatly influenced by the idea that if you can drive long distances quickly, then you have a good city. That’s not the right way to think. The issue is not how far you can drive, but what you can get to easily. People value accessibility.
How many miles a day do you drive?
I work out of my home office in Portland, which means I have a very short commute and no congestion! But I used to commute 50 miles each way to a job I had for more than 10 years, so I know both ends of the spectrum.
Twisty Portland bike lane photo above by Payton Chung.