Back to basics: what makes cities and regions great?
Editor’s note: This is an edited version of a talk given at the annual meeting of the Hampton Roads Economic Development Alliance.

by Joel Kotkin
for Virginia Business
May 2007

As I look at the evolution of regions in the United States, there is much to be optimistic about for your region, particularly given continued good leadership. But it may be instructive for you to look out for those things that have made cities great in the past. A great city is an amalgam of many things, and those things have resonated throughout history.

On many levels, your region has many of those things. First of all, your port has made you a central point in global trade — something that will add not only to your distinctiveness but to your ability to create a broad range of export-oriented jobs.

The second critical advantage has to do with costs. Although not cheap by the standards of many regions, Hampton Roads remains considerably less expensive than its immediate major competitors around Washington, New York or Boston.

This price differential has become ever more critical. In the past five years we have seen an enormous inflation of housing everywhere, but particularly in what one Wharton Business School professor calls “superstar cities” such as New York, Los Angeles, San Francisco and Boston. In most of these cities, less than one-quarter of median income families can afford a median-priced home — and in some the percentage is well under 10 percent.

We can see that superstar cities have had little or no job growth during the past 15 years with the exception of Washington, D.C. Up until recently, these areas could still grow to some extent because they attracted lots of college graduates and immigrants. But since the mid-1990s, these groups have been going elsewhere, to places where there is more job growth and greater opportunities to buy a house.

The migration of college graduates may be the most surprising development. You may have been told that college graduates prefer the “hip and cool” cities. That may be true when they are in their 20s. But at 30 or 35 they start looking for something different. They want to have a job rather than an experience, to buy a house and even to get married and have offspring.

As the price of housing has risen, more and more of these people are looking outside the superstar cities. Where are they headed? To places like Phoenix, Dallas, Charlotte, Raleigh and, according to our numbers, Newport News-Norfolk.

So here lies your great opportunity. As the nation grows from 300 million to 400 million by 2050, the pressures in the superstar cities will intensify. People will be looking for what I call “the opportunity frontier.” If you become that frontier, you could see new, and very high-quality, growth in decades ahead.
How can a region stay on the opportunity frontier? My approach lies in what I call a back-to-basics approach. To thrive, cities need to be places for the upwardly mobile, where ambitious people want to raise their families and build their businesses. This means, among other things, shifting away from the emphasis on big, cosmetic projects to addressing essentials like good-paying jobs, basic infrastructure, education and training.

What makes urban places great — whether in 15th-century Venice, 17th century-Holland or 20th-century New York — is making them work as places of aspiration. Getting this right — shifting our emphasis from the ephemeral to the basic — is imperative for all cities. We cannot forget history. Places that create conditions for upward mobility do this remarkably well. But, if we leave a large portion of the people in the city feeling that they have no future, the city ultimately will have none.

So let’s focus on what really matters. A successful city starts not with edgy clubs, museums and restaurants but with specialized industries, small businesses, schools and neighborhoods capable of regenerating themselves for the next generation. If the city is healthy, the amenities and the arts will follow, as they always have.

We must understand that the first basic is to create wealth, preserve, nurture and, most important, grow our middle class.

Joel Kotkin is Irvine senior fellow at the New America Foundation in California. His most recent book is “The City: A Global History,” published by Modern Library.