Tuesday, July 10, 2012

CoolTown, USA 

Last Spring, I did a term-project for an Economic Statistics class, in which I tried to predict which cities in America were most likely to experience growth over the next decade. I pored over all types of city statistics – crime, local economy, racial makeup, etc – and came away from my research with a much clearer understanding of this country. But I did not come to the conclusion I expected.
The motivation for my research was personally driven. As a New York City native, I had observed the cost of living in NYC skyrocket over the last decade and one-half. As has been extensively documented, these cost-rises had driven many former New Yorkers to relocate to other cites in the country:

  • Outward Bound New Yorkers

Where They Went, 2000-09

By: E.J. McMahon and Robert Scardamalia
Between 2000 and 2009, nearly 60 percent of the New York out-migrants moved to southern states—with Florida alone drawing nearly one-third of the total. Thirty percent moved to New Jersey, Pennsylvania and Connecticut.

  • For New Life, Blacks in City Head to South


Suzanne DeChillo/The New York Times
Candace Wilkins, 27, left, of St. Albans, Queens, with her mother, right, and her grandmother. Ms. Wilkins plans to move to Charlotte, N.C.
http://www.nytimes.com/2011/06/22/nyregion/many-black-new-yorkers-are-moving-to-the-south.html?pagewanted=all

  • Charlotte has NYers in its web

Migrants find NC cheap & charming

  As can be seen from the above articles, most New Yorkers were attracted to smaller, more affordable locations in the Southeast US, cities like Charlotte, NC; Atlanta, GA, and perhaps Miami, FL. Bu I wasn’t satisfied with this data, mostly because as I thought about where I would possibly move to if I were to leave NYC, I tried to find ‘similar’ type cities. Interestingly, I didn’t find a suitable ‘replacement’ for NYC anywhere else in the US. The following is a list of the biggest cities in America, by population:
 As most already know, NYC is the largest city in America, with 8.2m inhabitants,  twice the size of the second-largest city, Los Angeles, CA, with a little less than 4m people.  The third-largest city, Chicago, has only 2.7 million residents, and Houston, TX, just over 2m. So then, NYC has the same population as the next largest cities in the US combined! Therefore, it is safe to say that none of those cities are comparable to New York City, population-wise.
The next crucial data to analyze in the chart is the city ‘density.’ New York, with 8m inhabitants, also is by far the most ‘dense’ city in the country, with 27,000 people per square mile. That’s very crowded. Los Angeles is about 1/3 the density (at half the population); Chicago a little less than 1/2 the density (at 1/4 the population) ; Houston, TX 1/9 the density (1/4 the population). The city closest to New York in terms of density is San Francisco, CA, with about 3/5 the density of New York, but only 1/10 the population. I  had visited  San Francisco in 2007, and found the city to my liking. The lifestyle is similar to New York in the urbanized areas, with a robust public transit system, and a fairly walkable cityscape. I thought to myself that if I were to leave the unique jumble of human activity that is New York, San Fran would probably be my destination.
But hold on. I had noted that San Francisco had some of the ‘feel’ of New York, due to its similar density (access to people), is nowhere near NYC in terms of population. One of the key factors in attracting immigrants to a place is ‘cosmopolitanism’, or a city being large enough, and therefore ‘diverse’ enough to attract a wide variety of people looking for ‘new opportunities’. San Francisco, with its 800k residents,  just barely meets my criteria (based on my visit there) for the minimum population for a city to be considered ‘big’. But my hometown of Manhattan (New York, NY) clocks in at twice that number – 1.6m – and almost twice the density. So, in my opinion, San Fran would have to show tremendous growth (immigration) in order to entice someone like myself to relocate there.  It is here that San Francisco fails to pass muster.
What follows is a list ranking the top 10 most-expensive cities to live in:

1. New York, N.Y.


Courtesy of Massimo Catarinella
Cost of Living Index: 218
Metro Population: 18,912,644
Median Household Income: $63,553
Average Home Price: $1.14 million

2. Honolulu, Hawaii

Cost of Living Index: 171
Metro Population: 902,564
Median Household Income: $67,066
Average Home Price: $689,781

3. San Francisco, Calif.


Courtesy of Mai Linh Doan
Cost of Living Index: 164
Metro Population: 4,218,534
Median Household Income: $74,876
Average Home Price: $808,481
Okay, so a city 1/10th the size of America’s largest city, has a higher cost of living, by about 11k dollars. It doesn’t take a genius to figure out that San Francisco’s connection to Silicon Valley and the high tech industries stationed there drives this phenomenon. But, technically speaking, that is an inefficiency. That data means that San Francisco is an important city for the American economy, but also that the city is not going to grow very rapidly in the neat future. In fact, it may decline, especially if many of the companies now based in the Bay Area, CA, decide to makes these types of moves:
Google (GOOG) is buying the huge Manhattan building that houses its New York City offices in a deal that values the property at close to $1.9 billion, The Wall Street Journal reported, citing unnamed sources.
The 18-story, 2.9-million-square-foot property at 111 Eighth Avenue, which covers an entire city block, between Eighth and Ninth avenues from 15th to 16th streets, is listed as the third largest building in Manhattan by square footage, Fortune reports. The Chelsea-neighborhood building is occupied with tenants like Nike (NKE), the Lifetime cable channel, and many telecommunication companies, according to the Journal. Google offices are in about 500,000 square feet of the building.
In other words, Silicon Valley will lose its cache, and fall in the wake of Silicon ‘Alley’:
As I concluded my study, I realized that while statistics and hard data are one  valid, it is equally important to take a ‘behavioral’ look at things; to look at things ‘as they actually work’. I noticed that, despite the rising costs of living in New York, the city’s population seemed to be rising at a steady pace, counter to what ‘logic’ would dictate. Why was this? It is instructive to refer to Mr. Michael H. Goldhaber:
Why should we elect Obama? One obvious reason is the mess the American
Economy (as traditionally defined) is in right now. Does this mean that
Obama and his economic advisors will come up with good plans for reviving
the economy and preventing a further slide? I suspect they would do better
than McCain and his crew, but also that they will not be very well equipped
themselves to understand the real problems. They come from the University of
Chicago or at best are of the Robert Rubin‑Larry Summers school, which in my
mind makes them more part of the problem than the solution. Still Obama, if
elected, will have a huge positive impact, I suspect. Let me explain, starting
with a bit of history.
The Post‑war Surpluses…
After World War I, the US became the leading world economy in conventional
terms. This status was considerably strengthened after WWII, which had mostly
destroyed other advanced economies, while building up huge reserves of
demand everywhere, demand which US industry alone was in any position to
satisfy. The US ran a long trade surplus, partly because it stimulated trade by
foreign aid, particularly via the Marshall Plan, which aided Western European
recovery after WWII. The trade surplus helped promote good factory jobs, and
the money earned through such jobs filtered through the rest of the economy,
keeping employment fairly robust. This was further aided by high military
spending, along with other government spending such as on the race to the
moon, which was often financed through borrowing.
The Deficits that Followed …
However, by the 1960’s, with the lengthy Vietnam War and a continued growth
in optimistic government programs, government priming of industrial efforts
expanded too much, and a cycle of inflation commenced. That problem was
added to in the early ‘70’s by the formation of OPEC, which led to an abrupt
rise in oil prices. That led in turn to a US balance‑of‑payments deficit.
Now, a strong argument can be made that a balance‑of‑payments deficit
resulting simply from high oil prices is not much of a problem; the OPEC
countries were just taking advantage of a situation they had relatively little to
do with, since the oil coming out of their territory they usually didn’t even
directly do much to produce, leaving that to western companies or contractors.
Their spending on luxury goods or armaments or their “recycling” the money
to the US by investing in US businesses only enriched some Americans at the
expense of others. (In fact, to the extent that the US was the main recipient of
recycled oil payments, it might even have benefited from payments made to the
OPEC countries by other oil purchasers.)
The main effect in the US, then of the initial oil shocks was to redistribute
money mostly upwards from factory workers to investors. But since a large
portion of US investment is channeled through institutions such as pension
funds, non‑profit foundations, university endowments and the like, the riches
from abroad were distributed more widely than to a small investor class.
However, the combination of inflation of wages through union contracts and
higher oil prices caused profits from domestic industries to stagnate or fall.
Then the heads of the institutional investors such as pension funds, along with
bankers who stood to profit from recycled oil investments and other capitalists,
pressed for a combination of measures. These included restraints on unions and
higher productivity, or failing that, moving production offshore to lower wage
countries. The wealthy and would‑be wealthy also pressed for lowered taxes for
themselves, In addition, a relative fall‑off in US innovation led to big gains by
exporters from countries such as Japan.
All of this increased the balance‑of‑payments crisis, since now (that is by the
1980’s) not only raw materials, but also manufactured goods were coming from
abroad. How was the US able to sustain this continued trade deficit? One main
reason was that the flow of attention to the US was and remains very large,
though it is now shrinking fast.
The Attention Economy to the Rescue…
Being tied together via advanced communication (i.e., attention) technologies,
the US is a huge and mostly inward looking audience, which means that US
stars have a built‑in advantage in dealing with the outside world. The larger
one’s existing audience, the more attention outsiders are likely to offer. This
advantage is compounded by the fact that English, spoken as a first language
by more than half a billion people, it is a second language for many hundreds
of millions if not several billion more. In addition, creators in the US have
figured out how to make action movies and video games that attract even
across language barriers to a surprising extent.
Being a fan makes you feel part of the most visible fan base; it also makes you
eager to please the stars you care about. IN the case of American stars on the
world stage, their existence exalts the whole country in the eyes of others. The
net outflow of payments in money was counterbalanced therefore by a net
inflow of attention payments. This meant foreigner were eager to get close to
the stars by various sorts of loans or investments in the US, with Japanese
investors at one point buying up Rockefeller Center in NYC and Arab investors
buying stores such as Saks Fifth Avenue. Neither of these probably made a
great deal of sense as strict monetary investments, but they made much sense
as homage to famous and star‑used institutions. In addition, living in the most
advanced attention economy has come to mean living with few restrictions on
expressions and a ready fan base for new stars, even if they come from abroad,
in whatever field they happen to be. America now depends on this openness to
maintain its place in the world.
….. But Then Came W…
All that has been eroded by Bush administration policies, however. Its
invasions of Afghanistan and Iraq, its use of torture, its condemning prisoners
to Guantanamo, as well as its resistance to immigration, has eroded, and if it
continues, will further erode the US attention advantage.
…So Now we Need O.
Due to his race, his personal background, his intelligence and relative youth,
Obama’s election, just by itself, will markedly change perceptions of the US. If
he is bold enough to follow through on his promises to change foreign policy,
especially around Iraq and in terms of increased diplomacy, as well as in
areas such as global warming, he will greatly increase the world’s willingness
to pay attention to everything American. The 200,000 person crowd he attracted
last week in Germany, plus the excitement about his candidacy in much of the
world already attests to this. He may be a “rock star” but that is just what we
need
The gist of Goldhaber’s piece is that anomalies and perhaps even ‘backwardness’ in conventional terms (stats) such as debt, cost-of-living, cleanliness, etc, can and will be tolerated if they can be counter-balanced by a high ‘attention’ ratio. Think of the hijinks many Hollywood celebs ‘get away with’ (Lindsay Lohan) repeatedly, simply because they are famous. Like it or not, that is simply the way attention works. Goldhaber applies the theory to the way in which the ‘outside world’ views and deals with America. I choose to apply it to the way Americans deal with New York.
Simply put, New York is to America, what America is to the world: it’s right now the place to be, to do business. Why? Because it is impossible to ‘ignore.’ I , as a native New Yorker, can easily dismiss LA and Chicago, and give not even a passing thought to Houston. Why? Because New York is, like America, inward looking. It is its own little world, a tiny place, really, but massive in its ability to align the minds of outsiders – domestic and foreign – to it. Its combination of diversity, population size and density, coupled with its being situated in the most ‘popular’ country in the planet right now, make New York irresistible from an attention perspective There is no comparable place in the United States. New York is actually more similar to London, UK, than Los Angeles. Ironically, London could be said to have been the ‘old’ New York, when England was the ‘star’ of its day, the now-fading industrial/money economy. But today, that honor   goes to New York, NY.
So, then, what the hell is ‘CoolTown, USA?’ CoolTown USA is a funny name I came up with for the areas in Manhattan (New York, NY) below 23rd street, from the Hudson River, to the East River:

As can be seen, ‘CoolTown’ comprises the following neighborhoods:
Chelsea; Gramercy; West Village; Greenwich Village; Soho; Little Italy; Tribeca; Chinatown; Lower East Side
(not shown on the map) Flatiron District ; MeatPacking District ;
Here are some descriptions of these neighborhoods, courtesy of wikipedia:
  • Chelsea:
People of many different cultures live in Chelsea. Above 23rd Street, by the Hudson River, the neighborhood is post-industrial, featuring the newly-hip High Line that follows the river all through Chelsea.[13][14] Eighth Avenue is a center for LGBT-oriented shopping and dining, and from 20th to 22nd Streets between Ninth and Tenth Avenues, mid-nineteenth-century brick and brownstone townhouses are still occupied, a few even restored to single family use.[15]
Since the mid-1990s, Chelsea has become a center of the New York art world, as art galleries moved there from SoHo. From 16th Street to 27th Street, between 10th and 11th Avenues, there are more than 350 art galleries that are home to modern art from upcoming artists and respected artists as well.[16] Along with the art galleries, Chelsea is home to the Rubin Museum of Art – with a focus on Himalayan art, the Chelsea Art Museum, the Graffiti Research Lab and New York Live Arts – a producing and presenting organization of dance and other movement-based arts. The community, in fact, is home to many highly regarded performance venues, among them the Joyce Theater – one of the city’s premier modern dance emporiums and The Kitchen – a center for cutting-edge theatrical and visual arts.
Chelsea has experienced a new construction boom, with projects by notable architects such as Shigeru Ban, Neil Denari, Jean Nouvel, and Frank Gehry
  • West Village:
Known as “Little Bohemia” starting in 1916,[1] West Village is the center of the bohemian lifestyle on the West Side, with classic artist’s lofts (Westbeth Artists Community), Julian Schnabel‘s Palazzo Chupi, and new residential towers designed by American architect Richard Meier facing the Hudson River at 173/176 Perry Street.
  • Greenwich Village
Greenwich Village,[pronunciation 1] often referred to in New York as simply “the Village”, is a largely residential neighborhood on the west side of Lower Manhattan in New York City. A large majority of the district is home to upper middle class families. Greenwich Village, however, was known in the late 19th to mid 20th centuries as an artists’ haven, the bohemian capital, and the East Coast birthplace of the Beat movement. What provided the initial attractive character of the community eventually contributed to its gentrification and commercialization.
At the current time, artists and local historians mourn the fact that the bohemian days of Greenwich Village are long gone, because of the extraordinarily high housing costs in the neighborhood.[25][26][27] The artists fled first to SoHo then to TriBeCa and finally Williamsburg[26] and Bushwick[citation needed] in Brooklyn, Long Island City,[26] and DUMBO.[citation needed] Nevertheless, residents of Greenwich Village still possess a strong community identity and are proud of their neighborhood’s unique history and fame, and its well-known liberal live-and-let-live attitudes.[27]
Greenwich Village is still home to celebrities, including many actresses/actors. The Village also has a bustling performing arts scene.
  • Soho
SoHo is a neighborhood in Lower Manhattan, New York City, notable for being the location of many artists’ lofts and art galleries, and also, more recently, for the wide variety of stores and shops ranging from trendy boutiques to outlets of upscale national and international chain stores. The area’s history is an archetypal example of inner-city regeneration and gentrification, encompassing socio-economic, cultural, political and architectural developments.[2]
  • Tribeca
Today, Tribeca is one of America’s most fashionable and desirable neighborhoods and is known for its celebrity residents. In 2006 Forbes magazine ranked its 10013 zip code as New York City’s most expensive.[4]
  • Lower East Side
The East Village was once considered the Lower East Side’s northwest corner. However, in the 1960s, the demographics of the area above Houston Street began to change, as hippies, musicians and artists moved in. Newcomers and real estate brokers popularized the East Village name, and the term was adopted by the popular media by the mid-1960s. As the East Village developed a culture separate from the rest of the Lower East Side, the two areas came to be seen as two separate neighborhoods rather than the former being part of the latter.[24][25]
In the early 2000s, the gentrification of the East Village spread to the Lower East Side, making it one of the trendiest neighborhoods in Manhattan. Orchard Street, despite its “Bargain District” moniker, is now lined with upscale and boutiques.
The neighborhood has become home to numerous contemporary art galleries.
As the neighborhood gentrified and has become safer at night, it has become a popular late night destination.[citation needed] Orchard, Ludlow and Essex between Rivington Street and Stanton Street have become especially packed at night, and the resulting noise is a cause of tension between bar owners and longtime residents.[30] [31]
Also, the Lower East Side is home to many live music venues. Punk bands play at C-Squat[citation needed] and alternative rock bands play at Bowery Ballroom on Delancey Street and Mercury Lounge on East Houston Street, while lesser known bands played at Tonic (which closed on April 13, 2007) on Norfolk Street and Rothko (now closed) on Suffolk Street.[citation needed] There are also bars that offer performance space, such as Pianos, the Living Room and Cake Shop on Ludlow Street and Arlene’s Grocery on Stanton Street.
  • Flatiron District
As of the 2000s, many publishers have their offices in the district, as well as advertising agencies,[8] and the number of computer- and Web-related start-up companies in the area caused it to be considered part of “Silicon Alley” or “Multimedia Gulch”, along with TriBeCa and SoHo,[9] although this usage declined considerably after the dot.com bubble burst.
  • MeatPacking District
Beginning in the late 1990s, the Meatpacking District went through a transformation. High-end boutiques catering to young professionals and hipsters opened, including Diane von Furstenberg, Christian Louboutin, Alexander McQueen, Stella McCartney, Rubin Chapelle,[9] Theory, Ed Hardy, Puma, Moschino, ADAM by Adam Lippes, and the Apple Store; restaurants such as Pastis; and nightclubs such as Tenjune. In 2004, New York magazine called the Meatpacking District “New York’s most fashionable neighborhood”.[10]
The most interesting thing about these Manhattan neighborhoods – all situated fairly close to each other -is the consistency of their ‘character’: art-oriented, bohemian, locales, centered around industries that are ‘cool’. Music, art, dance, fashion,  and the rapidly-developing ‘graphic arts’ tech industries currently occupy center stage in American consciousness, and all are well-represented in these New York neighborhoods. It makes all the sense in the world for anybody who aspires to some level of ‘stardom’ or even ‘fandom’ to gravitate to these areas of Manhattan.  And hopefully, if I end this post on that note, you’ll get the point.
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