Category Archives: BIDs

Some Key Aspects of the New Normal for Downtowns: the “good news” ©

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Article 1

N. David Milder

Author’s Note for Downtown Curmudgeon Blog and Newsletter Readers

A number of readers of the Downtown Curmudgeon blog have asked me to write an article on the new normal for downtowns that I have referred to in many of my blog postings in recent years. In response, I have planned a series of articles that will be posted over the coming six to eight months.

This is the first in that series and focuses on providing a description of the critical characteristics of the new normal and some of the emerging challenges downtown organizations now may face under it. Proper treatment of this subject requires sufficient space and cannot be done within the usual short take format of most blog posts and email blasts. While I have tried to be economical in my use of words, this article is almost 12,000 words long, even when I have skimped on examples and skipped using data tables and other illustrations. I have divided it into two parts. Each part will be posted to my blog and emailed separately.

Later articles in this series will cover such topics as the arc of downtown revitalization, the potential implications of the new normal for downtown development projects and BID programs.

Part 1 – What’s Now Normal for Downtowns: The Good News

1. The Expectation and Ability of Downtowns to Prosper.  When I first became involved in downtown revitalization issues back in the mid 1970s, downtowns across the nation were weakening and often visibly decayed because of the impacts of business and residential flight, suburban residential growth, suburban sprawl, the rise of shopping malls, the creation of suburban office clusters, the fear of downtown crime, business flight, reduced investment, etc. (1). Civic and business leaders often despaired that their downtowns were literally going to hell, with few prospects of salvation in sight.

While these declines were most easily noted in cities after the urban riots of the late 1960s, the decay soon also was being found in many non-rioting big cities as well as in many of our older and well-established suburbs, large and small.

Early downtown revitalization efforts that used urban renewal, office growth or physical improvement (“beautification”) strategies were almost complete and disheartening failures. In too many instances they created sterile fortress dominated environments that were antithetical to pedestrian activity and multi-purpose downtown trips – and very hard to rectify – or “decorated coffins,” prettier, but still devoid of activity and growth.

However, about 15 to 20 years ago, our downtowns started to tell a far different story, one that has grown stronger and stronger with each passing year. More downtowns appeared to have bottomed out and then established an upward thrust on their revitalization arcs. Today, the increased flows of pedestrian traffic, the after five o’clock activity levels, the new or rehabilitated buildings, the shops and entertainment venues, the influx of businesses and jobs, and the growing numbers of downtown residents all signal that many of our downtowns have advanced quite far on their revitalization arcs and are doing quite well. Still other downtowns, often inspired by and following the best practices of their more successful brethren, are rapidly improving.

These prospering downtowns are large (e.g., Midtown Manhattan, Center City Philadelphia, downtown Chicago), suburban (e.g., Wellesley MA, Old Pasadena CA, Englewood NJ) and even relatively small (e.g., Cedarburg WI, Galena IL, Durango CO, Brattleboro, VT).

The new prosperity of our downtowns is powerfully described by Paul Levy and Lauren Gilchrist in a recent publication they prepared for the International Downtown Association:

“Downtowns across the United States are thriving. From Boston to San Diego, Seattle to Miami, cities are diversifying their economies and land use, restoring and enlivening public spaces. During the last three decades, city centers have been adding  arts, culture, dining, education, medical, and research institutions, along with hospitality, leisure, and sports venues. Simultaneously, there has been a dramatic and sustained increase in residents, living both within business districts and adjacent neighborhoods.

Places once shunned as empty and unsafe at night are being redeveloped at higher density and are thriving after dark. They  have become preferred places for work, entertainment, and living. Patrons of downtown regional destinations mingle with office workers, resident young professionals, empty-nesters, and, in many cities, an expanding number of families with children. The trends of diversification, animation, and residential revival are occurring as well on and around urban colleges, universities, medical centers, research parks, and other urban commercial zones” (2).

This trend of resurgence has been accompanied by the appearance of a capable cadre of downtown leaders, managers and professionals.  If all the answers to our downtown problems are not yet known, today’s downtown leaders seem confident they can develop viable solutions to them as they emerge in their districts. The 1,000+ BIDs and numerous local Main Street operations provide these leaders with the needed organizational vehicles.

We certainly have come a long way, and it is important that the progress that has been made be amply recognized and celebrated. However, there is still a way for our downtowns to go. While downtowns overall have been strengthening, the pattern is understandably uneven.  Downtowns started their revitalization arcs in different places, with some facing many more serious problems than others. Furthermore, downtowns also differed in the types and levels of redevelopment assets and financial resources they could mobilize. Finally, if a downtown’s revitalization is to really take hold and last it must be viewed as a perpetual process.

Bottom line: in the new normal for downtowns, they prosper!

2. Significantly Reduced Fear of Crime. For several years I have been writing about the apparent significant reduction in the fear of crime or its effects on our downtowns. However,  the “crime problem” still exists in some districts, usually those where nighttime activities are not well established or that have problems associated with gangs or the use and sale of methamphetamine.

I came to this conclusion not on the basis of any series of systematic research or solid opinion surveys, since I could not find any to analyze, but because my visits to many downtowns indicated that consumers, investors and businesses no longer seem to be engaging in the downtown injurious behavior patterns that the fear of crime previously caused. The thriving downtowns with vibrant after dark activities noted by Levy and Gilchrist above are consistent with this conclusion.

The crime problem did not cause the post WWII decline of our downtowns. That was the result of greater auto use, the move to the suburbs by residents and shoppers, followed by the move of retailers and office based businesses and the consequent downtown disinvestments. However, for about three decades, crime did make downtown revitalization extremely difficult. Crime became one of the most important factors corporations looked at when considering new locations for offices, retail stores, restaurants and entertainment facilities, and all too often downtowns were deemed too dangerous and undesirable. The fact that Levy and Gilchrist can state that downtowns “have become preferred places for work, entertainment, and living” means that the avoidance behaviors of shoppers, residents and businesses are no longer occurring, making the crime problem moot.

It is important to understand why the downtown crime problem has diminished so substantially, because it can shed light on the effectiveness of the policies and programs of our municipalities and downtown organizations and the processes by which they were formulated and implemented. Nationally, since about 1993 or 1994, FBI statistics have famously shown a continuing decline in the number of criminal acts normalized by population, i.e. the crime rate. Its abeyance in our large cities has received much media attention because it has been so significant, though it also has been uneven, with our poorer cities showing fewer declines. Statistics on the number of crimes occurring in and around our downtowns, when available, reflect that trend. However, our downtown crime problem was less a result of the number of crimes perpetrated in a district or its crime rate, but more about downtown users’ fears of becoming victims of criminal acts while in the district. For example, in the 1970’s, 80s and most of the 90’s, the leaders in many of the large downtowns I visited reported their frustration that the fear of crime was a very damaging problem, although their crime rates were average or even low compared to other parts of their communities.

Academic research findings supported this disconnect: statistically the fear of becoming a crime victim in the downtown is not strongly associated with how many criminal acts occur within the district:

“Evidence provided by many studies suggests that the relationship between the fear of crime and actual crime rates is very loose and indirect. One study, for example, found that although the likelihood of being robbed was actually 20 times greater in Washington, D.C. than in Milwaukee, the residents of Milwaukee only felt slightly safer than did the residents of Washington. Another study concluded: ‘the patterning of fear across areas does not match the patterning of crime levels. Although some studies do find that actual victims of crime are more fearful than non-victims, it is not the case that areas with higher crime or victimization rates have residents who are more fearful.’ There is a weak correlation between fear levels and crime rates” (3).

The fear of crime hurt downtowns by causing the residential, worker and visitor avoidance behaviors and lack of investment described above that strangled the economic and social life out of these commercial districts — even when crime rates were low. For example, a study I did of three outer borough downtowns in NYC showed that how safe trade area residents felt in their downtown during the day had a stronger impact on their visitation rates than how they felt about the merchandise they could buy there, the physical attractiveness of the downtown or the ease of getting there (4). The fear of crime also impacted on those who did visit their downtowns by influencing where and when they would walk and how many destinations they would visit. That diminished a key competitive advantage of downtowns: multifunctional multi-destination visitor trips.

The programs needed to reduce the number of crimes can be quite different from those that can effectively reduce fear. Our downtowns most needed programs that could reduce fear and such programs were not easy to fund, design or implement.

In a later article in this series, I will present an analysis of the causal factors I think best explain the reduced fear of crime problem in our downtowns. Because of limitations on the existence or availability of needed data, this analysis will not claim to be definitive, but it hopefully will be received as thoughtful and provoke discussions and research on this topic within the downtown revitalization community. At this time, as “teasers,” here are some of the points I will expand upon in the upcoming article:

— What the cities and BIDs did definitely had strong impacts on reducing the fear of crime, but some programs were probably not as important as many might think, while other effective actions may have gone unnoticed or under appreciated

–Jane Jacobs was very probably correct when she argued that more pedestrians on the streets would help reduce the fear of crime and that, in effect, successful urban revitalizations self-heal their fear of crime problems. But, how were the crime problem’s impacts overcome in the initial revitalization stages before the pedestrian flows were sufficiently strong to heal the fear of crime problem?
— Much anecdotal evidence suggests a destination’s magnetism can offset fear of being a crime victim in a downtown user’s decision-making calculations. With revitalization, a downtown gains numerous destinations with stronger magnetism, so the impacts of fear may be meaningfully offset by them
— In 1970s and 1980s, a lot of the fear of becoming a victim of a downtown crime among the downtown’s trade area residents was generated and/or validated by downtown residents, workers, merchants, etc. or those who had fled their downtowns, who sent negative messages through their personal social networks. By now, they have either died off, shut up, or been drowned out by the new downtown users who instead are sending very positive messages through their personal social networks
— Today’s downtown users are often wealthier, better educated and younger than those in the 1970s and 1980s. These characteristics tend to make people feel more empowered and less likely to be fearful.

Bottom line: in the new normal, in downtowns well along on their revitalization arcs, during daytime or after dark, downtown users do not frequently engage in avoidance behaviors associated with the fear of becoming crime victims.

3. The Emergence of Downtowns As Their Communities’ Central Social District.  For decades, the terms Central Business District, CBD and downtown were used almost interchangeably because, functionally, downtowns were dominated by retail stores, office based businesses, professionals and government agencies, along with some hotels and maybe entertainment venues. Early downtown revitalization efforts were able to attract office tenants and –aside from the impacts of fluctuations in our economy — downtowns have continued to grow office-based activities. Retailing was far more difficult. By the late 1970s and through the 1980s, national retailers might locate in enclosed downtown shopping centers or off-street networks, though these centers seldom met expectations and did little to liven downtown sidewalks. By the late 1980s major retail chains began to again consider downtown street level storefronts, and this interest picked up considerably over the 1990s.

Levy and Gilchrist have argued convincingly about the importance of people working downtown wanting to live in or near the downtown. However, to my mind, equally important to the resurgence of downtowns has been the emergence of a group of interrelated functions focused around the downtown being the community’s Central Social District (CSD): housing, restaurants and watering holes, vibrant public spaces and other locations for informal entertainments, and formal cultural and entertainment venues (5). These CSD functions establish a downtown as a place to relate to and play with significant others and makes living and playing variables as important as working, selling and buying in any viable formula for downtown success. The interrelatedness, the “dynamics,” among the CSD functions is important. For example, living downtown would be far less attractive without these other CSD functions being present. Conversely, without the downtown residents many of these CSD functions would have far fewer customers and less pedestrian traffic after dark to help reduce the fear of crime.

Underlying all of these CSD functions is the ability to spend quality time with loved ones and significant others. For example, a recent report on participation in cultural events found that: “The level of enjoyment and the opportunity to spend time with loved ones play the most influential roles in deciding whether to attend a cultural event (6).

Below are a few comments on some of these CSD functions that I believe are most important.

Housing. Without a doubt, housing in and very near to downtowns has had a huge beneficial impact. Its importance has been noted by countless others in recent years. The strength of downtown housing was amply demonstrated by how well it did, comparatively, during the Great Recession.

As Eugenie Birch noted in her seminal study, in the 1970s and 1980s, downtown residential populations declined in America’s larger cities. But, in the 1990s, downtown populations grew by 10 percent, a marked resurgence. Furthermore, in these downtowns homeownership rates more than doubled during the thirty-year period, reaching 22 percent by 2000 (7). Since then this growth has continued.

Overall, these new downtown residents contain higher percentages of young adults (Millennials), empty nesters, and the college-educated than other communities in their regions (8). They often have created subcultures characterized by creativity, hipness, tolerance and a sense of being empowered in downtowns and nearby neighborhoods.

The growth of downtown housing is not restricted to large cities. In New Jersey, for example, significant downtown housing projects have been constructed in such communities as Cranford, Englewood, Hoboken, Livingston, Morristown, New Brunswick, Rahway, Somerville and South Orange. Much of this also has been stimulated by a work connection: the downtown housing’s proximity to a commuter rail station.

While the demand for downtown residential units is substantial, and downtown living has its ardent fans, not everyone wants to live in a big city downtown. For example, a national survey done for the National Association of Realtors found that only 8% of the respondents preferred a city downtown residential location, while 11% preferred living in city residential areas. Another survey found that Millennials preferred living in a suburb (43%) to living in a city (17%) by almost a three to one margin (9).  Creative Millennials, however, may well have a greater preference for urban living than their non-creative brethren. Whatever the situation, there plainly are a sufficient number of them living in and near our downtowns to have an undeniably positive impact on housing and other functions. The same point is true looking at the overall demand for downtown housing: most people may not want to live in a downtown, but the demand has sufficient numerical strength and emotional depth to continue to be a very viable engine for downtown economic growth. Indeed, the demand is strong enough that in many downtowns only those who are fairly well off or able to share rents can now afford downtown residences.

Restaurants. Restaurants not only provide food, but also entertainment in the forms of people watching and observing restaurant operations as well as providing felicitous opportunities for social interactions. If clustered, they also can help bring downtown streets to life after dark. Furthermore, they bring in a lot of customers that retailers can benefit from if they are open for business and sufficiently proximate.

Developing restaurant niches has become an essential, if too often underappreciated, ingredient in the revitalization strategies of most downtowns, especially those that are of comparatively small or medium size. They can be especially important in suburban downtowns, e.g., Cranford, Englewood, Hoboken, Morristown, Ridgewood and Teaneck in NJ, where niches of 20 to 35 restaurants are not uncommon. There is usually strong demand in suburbs with affluent, time-stressed residents. They also often play important roles in small rural or metro fringe communities, e.g., Sherwood, WI. One reason is that it is often possible for some type of downtown eatery or watering hole to be economically viable in communities with populations in the 1,000 to 5,000 range, where a GAFO retail operation would likely have far less viability (10). Restaurants also are often urban pioneers. Drawn by lower rents, they may succeed because, as research has shown,  “a poor (restaurant) location can be overcome by a great product and operation” (11). Restaurant niches can also be large and extremely important assets in downtowns where retail is not very strong, e.g. downtown Austin, TX and downtown Morristown, NJ.

Downtown merchants can benefit from lunchtime restaurant customer traffic, but from the eateries’ dinner traffic only if they are open after 6:00 p.m. The stores of retail chains are more likely to be open in the evenings than the small merchants.

Vibrant Public Spaces and Informal Entertainments. Formal entertainment venues such as museums, theaters, movie houses, concert halls have long been located in or very near their downtowns. Our national downtown resurgence has witnessed countless successful projects that have created or strengthened formal entertainment venues, such as:

  • The refurbishment of grand old theaters, e.g., the Pantages and El Capitan in Hollywood; the Paramount in Rutland, VT; the Ohio Theater in Columbus, OH;
  • The revitalization of theater districts, e.g., Cleveland OH, Houstoun TX, New Brunswick NJ
  • The creation of performing arts centers, e.g., Newark NJ; Raleigh NC; Englewood NJ; White Plains NY; Carmel IN; Greenville SC;
  • New or expanded art museums, e.g., Berkeley CA; Los Angeles CA; Chicago IL; New York, NY; Roanoke VA; Seattle WA; San Antonio TX;
  • The revival of small town movie theaters, e.g. Crosby ND; Bucksport ME; Clayton NM; Old Forge NY.

While the contributions of such projects to their downtowns’ economic health is undeniable, it strikes me that the emergence and strength of what I have come to call “informal entertainments” is of equal and possibly greater importance.

During the decades of our downtown “troubles,” countless pedestrian malls were built and closed, and many of the public plazas built by office developers in exchange for greater building densities turned into playgrounds for drug dealers and sleeping places for the homeless. Other plazas were so badly designed or located that absolutely no one used them. Also, during the “troubles,” many of our parks were vandalized and/or badly maintained.

Today, our downtowns increasingly have attractive, well-activated public spaces, be they parks, public squares, building plazas and even some pedestrian malls. Here are some examples of the places I have recently visited that quickly come to mind: Bryant Park, Central Park, The Highline, Paley Park, Herald Square, Times Square and Madison Square in Manhattan; Millennium Park in Chicago; Discovery Green in Houston; Rittenhouse Square in Philadelphia; Mitchell Park in Greenport, NY; Brooklyn Bridge Park, Brooklyn; Division Street in Somerville, NJ.

A lot of this is due to the influence of William H. Whyte and his numerous apostles (12).  The emergence of organizations such as the Central Park Conservancy and the BIDs and municipal agencies that placed a high value on the creation and/or maintenance of vibrant public spaces also stoked this movement.

Great public spaces are not just attractive; they also broaden and strengthen a downtown’s entertainment niche (13). They do so by providing opportunities for people to engage in activities that they enjoy and that also interest and amuse nearby people-watchers. Think of the ice skaters drawing the ever-present crowds above the rink in Manhattan’s Rockefeller Center. Similarly, in Manhattan’s Bryant Park, you’ll find young men and women seated and watching each other and chess players, who always attract an audience. Greenport, NY, a much smaller community, has used a carousel and waterfront location to create a wonderful public space where people can watch and be watched by other people. Other downtowns have fostered entertainment with facilities such as:

  • A model boat pond
  • A children’s pony ride
  • Tables where people can play chess, checkers, or dominoes
  • A Wi-Fi hotspot to access and cruise the Internet on a laptop
  • A place to catch the sun — a favorite pastime for office workers and young tourists in the spring and summer
  • Places to buy food and eat lunch alfresco
  • Outdoor cafes for sipping coffee and eating snacks
  • Slot car racing for kids
  • An interactive surface that passersby can not resist looking at to see their reflections – and how people next to them react when they see their own.

Visitors will “perform,” if the opportunities are there. To sail a model boat, a suitable pond or pool is required. To sit in the sun and people watch requires an attractive place with benches and chairs to sit on.

Sometimes an informal entertainment requires special personnel. For example, in Meredith, NH, local residents, hotel guests and second homeowners are really into bird watching; birding tours for them of the Meredith area might require a knowledgeable and experienced “birder” to guide them.

Nationally, households in the top income quintile account for about 50% of consumer entertainment expenditures, while long term forces have been reducing the ability of middle-income households to afford formal entertainments. In contrast, Informal entertainments are usually public and priced right – either free or, when there are fees (e.g., to ride a carousel), affordable. They are also “sticky” activities. Retailers can feed off of the traffic the informal entertainments bring in, as demonstrated by the busy pedestrian traffic on the street next to Mitchell park in Greenport, NY and the hotel that was built next to it. Informal entertainments are also liable to be open when the public would want to use them as opposed to theaters, concert halls etc. Most often they are children friendly – and therefore mommy friendly, too.

The Creatives Connection. Richard Florida has made the “Creative Class” and its association with dense urban environments so well known and widely accepted that there is no need to expand upon it in this article. However, it is mentioned here because the interrelated CSD functions are what draws creatives so strongly to downtowns and their nearby neighborhoods. Of course, a downtown’s density and compactness also facilitate the social networking, interactions and collaborations that have become so essential in the innovation process.

Bottom line: in the new normal, downtowns are great places to live and to play as well as work.

4. There Are Behavioral and Attitudinal Trends That Now Support Strong Downtowns. Besides the increasing numbers of downtown residents, the growing pedestrian counts and popularity of downtown venues, etc., here are just some of the societal level behaviors and preferences that are making more people increasingly eager to live, work and play in our downtowns:

  • Americans are very time pressured and this has heightened their appreciation of such things as: short and easy commutes and living close to their work places; having lots of shops, restaurants, parks and entertainment venues within a reasonable walk of their abodes and being close to mass transit (14)
  • Most households in the US do not have children. Such households are much more likely to prefer urban living than households with children as demonstrated by the numbers of singles and empty nesters who now live in downtowns or nearby neighborhoods. However, if cities cannot improve their educational systems, then the outflow of young parents to the suburbs will likely continue (15). Their perceived alternative choices are unpalatable: either paying $20,000 to $30,000 in after tax dollars a year per child for a private school or risking their children being badly educated in a public school
  • America’s infatuation with the auto, which helped fuel the post WWII population flight to the suburbs and suburban sprawl, appears to be on the decline. Recently the U.S. Pirg reported that, after 60 years of annual increases in driving, in the middle of the 2000s, the number of miles Americans drove began to drop. Part of this is caused by retiring Baby Boomers who are no longer commuting, but more influential are the Millennials who “aren’t driving cars” and soon will be our largest age cohort. Moreover, another study at the Transportation Research Institute at the University of Michigan found that these young people are getting driver’s licenses in smaller numbers than previous generations (16).
  • Conversely, a 2013 study done by APTA found that:
    • “Millennials are multimodal, they choose the best transportation mode (driving, transit, bike, or walk) based on the trip they are planning to take.
    • Communities that attract Millennials have a multitude of transportation choices, as proven by Millennial hotspots, popular zip codes where residents have self-selected into a multi-modal lifestyle” (17).
  • The end of suburban sprawl? Our cities are now growing faster than our suburbs. Furthermore, John K. McIlwain, an ULI senior resident fellow, has argued that the Great Recession just may have triggered the demise of sprawl: “Suburban sprawl, that seemingly inexorable, inevitable spreading of the population to the outer edges of metropolitan areas, may well be over in the United States.” The major thrust of his argument is that: 1) there is no large demographic group to drive suburban housing demand; 2) there is a large supply of available suburban housing, and 3) consequently, these factors were more causally responsible for was the recent low rate of single-family home production than the recession’s housing crash (18). While the end of sprawl may be debated – some argue that the pivotal behavior of the Millennials will alter as they age, nest and procreate – it seems safe to conclude that, minimally, it probably has been substantially weakened.

Bottom Line: In the new normal there now are strong behavioral and preference patterns within our population that support successful downtowns.

Endnotes

1. Small rural downtowns also went into decline, but because of other economic factors.
2. Paul R. Levy and Lauren M. Gilchrist , DOWNTOWN REBIRTH: DOCUMENTING The LIVE-WORK DYNAMIC IN 21ST CENTURY U.S. CITIES. Prepared for the International Downtown Association By the Philadelphia Center City District. October 2013 – pp. 57, p.8
3. N. David Milder, “Crime and Downtown Revitalization,” Urban Land, Sept. 1987, pp. 16-19  https://www.ndavidmilder.com/wp-content/uploads/2012/05/dt_crime_article.pdf
4.  N. David Milder, et al. Downtown Safety Security and Economic Development.  New York: Downtown Research and Development Center. 1985 – pp. 141, pp.38-39.
5. I first came across the term Central Social District in a paper by Richard Rosan some years ago. Unfortunately, I cannot find it either in my files or on the Internet, so I cannot say that my use here concurs with his. Borrowing from factor analysis in statistics, I see the central social district as the underlying dimension or factor and housing, restaurants, public spaces, etc., as the constituent strongly inter-related and measurable variables
6. LaPlaca Cohen /AMS Planning & Research Corp, Culture Track 2011 Market Research Report, pp.87, p.7. Italic emphasis added in quote.
7. Eugenie L. Birch, Who Lives Downtown, November 2005, Washington, DC, The Brookings Institution, Living Cities Census Series. pp. 20
8. See Birch above and Richard Florida, http://www.theatlantic.com/magazine/archive/2013/10/the-boom-towns-and- ghost-towns-of-the-new-economy/309460/
9. Belden Russonello & Stewart LLC, “The 2011 Community Preference Survey: What Americans are looking for when deciding where to live”, Analysis of a survey of 2,071 American adults nationally conducted for the National Association of Realtors. March 2011, p. 16; Morley Winograd and Michael D. Hais, “The Millennial Metropolis” 04/19/2010 http://www.newgeography.com/content/001511-the-millennial-metropolis .
10. Bill Ryan, Beverly Stencel, and Jangik Jin, “Retail and Service Business Mix Analysis of Wisconsin’s Downtowns,” Center for Community & Economic Development, University of Wisconsin – Extension Staff Paper, Sept. 1, 2010.
11. H. G. Parsa,  John T. Self, David Njite and Tiffany King, *Why Restaurants Fail,” Cornell Hotel and Restaurant Quarterly, August 2005.
12. William H. Whyte, “The Social Life of Small Urban Spaces”. Conservation Foundation. 1980.
13. This section on informal entertainments is taken from: N. David Milder, “Rethinking Downtown Entertainment Niches,”  Downtown Trends 2008: Part II         https://www.ndavidmilder.com/wp-content/uploads/2012/05/rethinking_downtown_entertainment_niches.pdf
14. N. David Milder, “The Nexus of Time Pressure, Downtown Proximity, Convenience And Customer Service: downtown retailing’s best friend,”  Downtown Trends 2008: Part II           https://www.ndavidmilder.com/wp-content/uploads/2012/05/time_pressure.pdf
15. See: Morley Winograd and Michael D. Hais, “The Millennial Metropolis” 04/19/2010 http://www.newgeography.com/content/001511-the-millennial-metropolis and William Sander and William A. Testa, “Children And Cities,” 08/23/2013 http://www.newgeography.com/content/003889-children-and-cities
16. John Schwartz, “Young Americans Lead Trend to Less Driving,” New York Times, May  13, 2013 ww.nytimes.com/2013/05/14/us/report-finds-americans-are-driving-less-led-by-youth.html?pagewanted=2&_r=0&hp&pagewanted=print
17. APTA, Millennials & Mobility: Understanding the Millenial Mindset, 2013 –pp.47  http://www.apta.com/resources/reportsandpublications/Documents/APTA-Millennials-and-Mobility.pdf
18. John K. McIlwain, “The Great Recession: A Slayer of Sprawl,” Urban Land, April 5, 2012, http://urbanland.uli.org/Articles/2012/April/McIlwainSprawl?utm_source=uli&utm_medium=eblast&utm_campaign=040912

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Crime Downtown: Does Anything Work?

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Editors’s note: The Downtown Curmudgeon is very happy to welcome Lawrence Houstoun as a guest columnist. Larry is well known for his two books on downtown BIDs as well as for his many articles on a wide variety of downtown subjects ranging from housing and office workers to public spaces and bicycle ridership. I think you will find his column on downtown crime — as is usual with his writings — thoughtful,  provocative, well written and worth reading. Without further ado, here’s Larry:

Crime Downtown

In the 1970’s, many of the  business centers of America’s older cities had reputations for widespread crime. The media–news as well as fiction– contributed greatly to the scary reputations. One evening TV news director was said to set priorities with this slogan—“If it bleeds, it leads”. As customers and businesses abandoned the traditional places to shop and run their businesses a great deal of commercial real estate was marked down and / or abandoned. Few believed that central business districts would ever recover. Long neglected buildings, dimly lighted blocks, empty stores—all contributed to the negative images of America’s downtowns.  Various remedies were suggested.

In reviewing the types of measures tried, this article focuses on business improvement districts (BIDs) which are functioning in 1500 downtowns in North America. Their mission is simply to strengthen economically the business prospects of private enterprises  operating in a shared environment. Business led boards of directors share the costs and set the priorities. At that time, no priority ranked higher than reduction of crime and fear of crime.

The numbered sections below are approximately in order of the period in which each remedy was popular.

  1.  More Cops

Often, the first attempt at economic  recovery was  an appeal to the affected municipalities to increase police presence downtown. The common response to these requests was that there was not enough money in the local budgets for even a token police expansion. Police departments added that business districts had less crime than many residential neighborhoods and did not warrant priority.

  1. More People

Writing in 1961 (“ Death and Life of Great American Cities,” Vintage) , urbanist Jane Jacobs noted the frequently expressed desire to increase the number of police  in order to reassure pedestrians. Jacobs wrote that there would never be enough police  for this purpose. She argued instead that the most successful technique to reassure pedestrians in cities is the presence of more pedestrians. She   observed that empty sidewalks, not ones packed with people ,are the most frightening.

In the 1970’s, crime and fear of  crime had induced many businesses to move to what appeared to be locations  less frightening. Downtowns lost businesses and their former convenience as places to work and shop. The media were full of reports of “urban crime”, widely believed to be concentrated in the downtowns, places which were familiar to shoppers and office employees. Fewer shoppers induced more people to avoid traditional commercial centers.

  1. More Patrols: Business Improvement Districts (BIDs)

Wearing distinctive uniforms, these radio equipped men and women were invented by the early BIDs to reassure pedestrians that the  downtown is safe because official-looking  “Ambassadors” were watching. Although they lack police powers, they were sold as being the “eyes and ears” of police departments. If something is wrong, the uniformed “Ambassadors” have cell phones and can reach the police through the BID central office.

A lot of BID assessment dollars have been directed toward this crime “remedy”. The University City BID in Philadelphia, for example, has “42 Safety Ambassadors patrolling neighborhood streets on bikes and on foot seven days a week from 10am to 3am.” BIDs typically believe that these staff members provide a measure of protection to persons on sidewalks. In addition to the safety benefits, these men and women may also provide walking escorts, vehicular services and homeless outreach. In 2012, this totaled 120,571 patrol hours in University City.

In practice, these  BID patrollers probably do reassure some uneasy pedestrians simply by their visible presence. Visibility comes with  a price, however. To be effective, there must be enough of them throughout the business districts to be readily seen by pedestrians, including during evenings  when pedestrians are  going home  from entertainment and  dinner after dark. To meet this challenge requires  more than two shifts to maintain coverage ,  accounting for holidays, vacations, sick leave, etc. This implies a substantial personnel payroll, including the costs of management and staff training, and often  amount to a third of BID total budgets. ( While BIDs emphasize their security role, these men and women may also be assigned to count homeless and code violations or assist drivers in emergencies.

Unfortunately, there is no reliable research revealing the extent to which  the uniformed personnel succeed in their primary mission—lessening fear on the sidewalks. For example, do otherwise fearful pedestrians actually shop or dine more often because uniformed BID employees patrol the district? No one knows.

Unhelpful Research

Much that appears to be research, however, provides little or no useful information to guide subsequent downtown leaders.  With a quarter century of experience, there is surprisingly little qualified examinations of any aspect of BID functions. Some research studies lump all  BID services together, in which case groups planning such organizations cannot profit from this experience; eg  what BID services actually make a significant difference? Some observers believe that simply keeping sidewalks  clean is a sign to criminals that the district is a bad place for them, who then may avoid it. Some researchers see the existence of a BID itself as sufficient to reduce crime. The announced completion  of a study in Los Angeles, for example, suggested that any shape or content of BIDs cuts crime in the study  areas, regardless of the nature of its services. Apparently, if a BID existed in or near an area where the study team worked and crime was lessened it seemed that the existence of any form of BID contributed to that improved condition. Did strolling “safety” Ambassadors or substantially enhanced lighting ,for example, make a difference? What about keeping shop windows lighted after normal hours? These and comparable alternatives are not reported.

Unanswered Questions

Another university based  study team, also working in Los  Angeles, studied the effect of zoning in eight  relatively  high crime areas with different forms of zoned land uses. The team found that “mixed commercial and residential zoned areas are associated with lower crime rates than are commercial-only zoned areas. “ This report reads in part: “Our results suggest that mixing ‘residential only’ zoning into commercial blocks may be a promising means of reducing crime”. Readers can come to their own conclusions regarding the utility of this advice as a tool for minimizing crime– zone it away? Move the commercial district?

Do walking patrols during daylight hours make pedestrians feel safer or reduce crime as many BIDs claim? Does maintaining walking patrols all night warrant the substantial added cost?  If the BID can generate sufficient pedestrian traffic, does this make a difference in fear or crime levels?  There is no reliable evidence to justify any of these substantial BID expenses. If police could lessen crime or fear at something like half the unit cost of armed officers, would this not be a popular police option in commercial areas?

For a brief while a Rutgers University based social scientist, George Kelling, put forward an attractive theory, suggesting that poorly maintained urban properties sent a signal to criminals that such an area of social disorder was a good place to operate—that is, the existence of “broken windows” and poor  maintenance, encourages more misbehavior. BID expert David Milder, countered that an excessive amount of attention to sidewalk sanitation often distracted BIDs from fundamental requirements such as redeveloping  commercial centers, business recruitment, facade improvements, etc.

Positive Results

If social science research provides little guidance in designing programs to overcome  crime and fear of crime , there are scattered examples of successful working programs that warrant examining. One or two bars in the East Falls, Philadelphia neighborhood were generating a rash of hold ups. The BID purchased and installed a half dozen motion detecting cameras.  Periodically or when a problem was reported, the local police checked the cameras for evidence. It turned out that the responsible people lived in the neighborhood. The sight of the camera installation scared off the bad guys and the crime wave ended. On the assumption that it might come back, several merchants volunteered to monitored the cameras. Among the selling points, the BID leadership stressed that the cameras were “on duty” 24 hours a day .

Downtown Washington DC BID was among the earliest districts to offer closed circuit tv  as well as uniformed patrols as part of  their public safety services. Noting the effect of the Boston Marathon terrorist attack, the BID has issued a “leadership paper” designed to enhance property owners, managers and businesses ability to respond to “natural and man made disasters.”

An area on the Brooklyn,  NY  waterfront long known for its crime, organized walking patrols in the early days of the BID (Brooklyn Navy Yard.) The board felt that reducing crime was its sole need and proceeded on that basis. Some years later, it was agreed that the patrols were no long heeded and the program was ended or “mothballed”.

The Circumstances Have Changed; Have the BIDs?

Crime is not what it used to be in America’s cities. Far from the days when  fear was widely seen as the ultimate obstacle to urban recovery, most Downtowns are now filled with stores and places to eat and they have managed that transformation without traditional department store anchors. Old office buildings, converted to attractive, middle income places  to live , brought customers closer to stores and restaurants for their mutual benefit. People are enjoying places that were written off not long ago . BIDs are formed  and properties are attracting investments in commercial centers without worries about fear of crime. A new optimism has replaced the old pessimism. The reduction of fear in shopping districts as implied by the growth of residents in central cities has been part of a broader change in public attitudes about cities.

In a paper published in 2000 (http//www.RickNevin.com/uploads/Nevin 2000Env Res author Manuscript.pdf)(PDF),  Rick Nevin found that America’s crime rates correlate closely  with the use of lead in gasoline. As  lead emissions increased, crime increased. As the use of lead declined, crime rates declined. Nevins wrote that use of Tetraethyl lead in gasoline explained 90% of the variations of violent crime in America and explained comparable results in a half dozen  other countries.  America has been looking in the wrong places and at the wrong manifestations of urban crime and therefore  solutions  to this important problem remain beyond our grasp. Patrolling Ambassadors, more cops, rezoning, the mix of BID programs seem not to matter, nor does their location.  If Nevins’ research  continues to hold up, the success has been the direct result of Federal regulation

One sees fewer BID reports claiming that  Ambassadors or other BID programs were responsible for a decline in crime or fear during the period when urban crime had improved nationally. These claims of success included a great many downtowns without BIDs. Indeed, the “urban crime” that was once seen as downtowns’ insoluble economic problem has attracted none of the merchant hysteria or the urban flight of earlier years. Did BIDs correct the problems of crime and fear? Certainly not.

Nevertheless, for the most part the walking patrols continue. What message are downtown leaders sending?

Lawrence Houstoun

So…Surprise! You have a lot of suburban creatives…

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Posted by N. David Milder

Introduction. Within the economic development community considerable attention has been focused on young, hip knowledge workers and artists. These young hipsters are part of what Richard Florida has termed the Creative Class. Nationally, they have been drawn in recent years to very dense urban areas that they have helped revitalize, from both residential and business perspectives. It is for these reasons that many economic development organization (EDO) leaders have based their revitalization strategies and business marketing programs on the attraction and growth of these “young creatives.”

However, Florida’s definition of the creative class is in terms of occupations, not age. The occupations Florida uses to define the creative class are from the Standard Occupational Classification (SOC):

  •  Super Creative Core: Computer & mathematical; life, physical & social science; architecture and engineering; education, training and library; arts, design, entertainment, sports, media
  •  Creative Professionals: Management occupations; business & financial operations; legal; healthcare practitioners & techs; high-end sales & sales management

chart

Going unnoticed –as is probably the case in many of our nation’s large metro areas – is the fact that the heavily suburban counties in Northern NJ also have a lot of workers in these creative class occupations. For example, in 2010, Bergen County had 148,150; Middlesex 141,550; Mercer 112,050; Monmouth 86,350; Somerset 74,600 and Morris 103,500 (see table above). Importantly, many creatives also live in these counties: e.g., in 20011 the numbers of resident creatives were: Bergen 196,892, Middlesex 163,910, Mercer 74,541, Monmouth 125,545, Somerset 80,624 and Morris 120,035. As a result of career stages and geographic location, these “suburban creatives” are older, more likely to have families, have higher earnings and higher net worths, and live in single-family homes than the urban hipsters. Moreover, the suburban creatives are equally, if not more, creative and entrepreneurial. Significantly, they do not have to be attracted to these counties — they are already there. They account for a significant part of the healthy and very desirable residential areas in these counties. Also, the downtowns in these counties that have been able to respond to the suburban creatives’ lifestyles and spending patterns have had successful revitalizations: e.g., Englewood, Red Bank, Ridgewood, Westfield, Morristown, etc.

The presence of the creatives means greater job growth. DANTH’s analysis shows that in the 14 Northern NJ counties that Regional Plan Association includes in the NJ-NY-CT Metropolitan Region, there is a correlation of .81 between the number of creatives in a county’s workforce and the number of new jobs projected between 2010 to 2020 by the state’s Dept. of Labor; the correlation between creatives who live in the counties and their job growth was .92. Looking just at the eight heavily suburban counties of Bergen, Passaic, Middlesex, Mercer, Monmouth, Somerset, Morris and Ocean the respective correlations are .84 and .93. In the 14 counties, there is a strong association, .91,  between the number of creatives who live in a county and the number of creatives who are in a county’s workforce.

Economic Strategy and Program Implications. Many EDOs in Northern NJ, be they EDCs, SIDs or municipal or county departments, may want to alter their strategic thinking, marketing and recruitment programs to better leverage their considerable creative manpower assets.

Because economic development in these counties is heavily viewed through retail and office development lenses, one area in which these assets have been minimally leveraged by EDOs is the creation and growth of small businesses operated by creatives. DANTH’s trends analysis suggests that the creatives can be expected to be increasingly entrepreneurial in coming years:

  • Nationally, the workforce is becoming increasingly composed of “contingent” workers, often creative freelancers. One estimate, by Intuit, sees as much as 40% of 2020’s workforce being contingent. Many young creatives have long followed the freelancer path at the beginning of their careers. Older creatives, who are either laid off or seeking career changes, have also followed this path later in their careers. We can expect more of them to do so in the future.
  • Many boomers are changing their careers as they enter the pre-retirement 55-64 age group, which has a high rate of entrepreneurialism compared to other age groups
  • Retired boomers are increasingly starting new careers because they still want to be active and/or they need the income.

The young creatives and their more mature colleagues bring different asset and need sets to starting a business in terms of training, experience, the size and reach of their professional social networks, and their financial resources. Nevertheless, both groups will:

  • Most probably be inexperienced as entrepreneurs and may need to acquire skills in marketing, bookkeeping, business planning, etc.
  • Need to raise capital (mostly new firms with employees)
  • Possibly need to hire employees (the non-freelancers)
  • Need attractive and convenient places to meet and exchange ideas with other new entrepreneurs and potential clients/customers
  • Need commercial spaces for their new businesses (the non-home office operations)
  • Prefer business locations where these needs can be maximized, especially those that are really easy to get to on foot or by car, bus or rail.

The range and depth of these needs will differ mostly not by age, but, as indicated above, between those who are freelancers with no employees and those who are creating firms, usually incorporated, with employees.

Given the relative dispersion in the suburban counties, their stronger downtowns, often their county seats, (e.g., Freehold, Morristown, Somerville, New Brunswick) may be the best geographic locations for meeting these needs. Their existing economic agglomeration offers a density of businesses, government offices, commercial spaces, professional and financial services, restaurants, coffee houses and watering holes in a reasonably walkable area. But, to meet the most pressing needs of the new and budding entrepreneurs, these downtowns may have to develop a more specialized “entrepreneurial infrastructure.” By doing so, the downtown itself becomes a kind of informal incubator/accelerator. Some possible components of such an infrastructure are:

  • A cadre of technical assistance/entrepreneurship advisors available at nearby colleges and universities or at a SBA Small Business Development Center or at local business consulting firms or through organizations such as SCORE. Helpful would be a mechanism to easily link the entrepreneurs to the types of advisors they need
  • Besides commercial banks, SBA, and personal investors, these new and developing companies would benefit from having access to other sources of capital such as angel investors, venture capitalists and crowdfunding. Here again, a mechanism to help link the entrepreneurs to these various types of investors would be helpful
  • Coworker spaces are finding increasing acceptance across the nation. They can be used by freelancers, new companies or small existing companies. They can function as a kind of “business incubator lite” or provide some business acceleration functions for older firms
  • A full blown business incubator and/or a business accelerator
  • A variety of relatively small and affordable spaces for a) freelancers who do not want to work at home or in a coworker space and b) firms that either are too large for or also do not want to be in a coworker space. These spaces can be in the downtown or elsewhere within a reasonable drive of the downtown
  • A mechanism to help link freelancers to project opportunities and where they can get things like health insurance
  • A permissions and approvals process that is truly timely and affordable for new firms be they startups or new move-ins. Most jurisdictions that think they have a good process upon close inspection are shown to need significant improvements.

(Note: this list is not meant to be exhaustive, but suggestive.)

Some of these components or parts of them may already exist in and near the downtown. Others will have to be created whole or in part.

Some pilot organization is needed to:

  • Design the downtown’s entrepreneurial infrastructure in terms of its components. This effort should bring into play the major local government agencies having economic development responsibilities, relevant EDCs and any downtown SIDS/BIDs. Most importantly it also should bring to the table major landlords and experienced businesspeople who live and/or work in the county, especially those who are experienced business investors or well networked with those who are
  • Create an implementation plan that would cover how it would be financed and who would do what
  • Create an organization to manage this infrastructure or designate an existing organization to do so.

Downtown and County Benefits. Some potential benefits of such a program are:
For a downtown:

  • Better business retention through the strengthening of some of its small businesses: helping some survive and others to grow in the downtown.
  • A stronger cadre of freelancers with an increased ability to afford needed downtown goods, services and amenities
  • Significantly more small businesses wanting to locate in the downtown
  • Significantly more small businesses wanting to use the downtown’s goods, services and amenities
  • The development of an image of the downtown as a very business friendly place that is exciting because it is savvy about what small firms need to grow and succeed — and it provides those things
  • The consequent greater attractiveness of the downtown as a business location to other and even larger firms, with associated impacts on commercial rents, the assessed values of commercial buildings, property taxes, jobs, etc.

For its county:

  • A program to help increase the success rate of the county’s growing number of county residents who become new entrepreneurs, be they freelancers or incorporated
  • A program to help more of the county’s existing small businesses to grow, with commensurate job growth and need for additional commercial spaces
  • A program that will spawn new firms with new jobs and a need for additional spaces
  • The ability to develop a business marketing program that puts the “creatives” spin on the county’s skilled workforce and leverages its small business development advantages to attract older and more substantial firms.

So You Don’t Have a Lot of Hip Young Professionals…

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Posted by N. David Milder

Introduction

For over a decade Richard Florida and Joel Kotkin have dueled over the proper way to analyze regional economic growth and their conflicting political and urban/ suburban preferences. They do agree, however, on one very basic and critical point: in today’s world, economic growth is very dependent on knowledge and geographically will tend to flow to areas where the knowledge workers cluster. (1)

Unfortunately, many within the economic development community have come to have a disproportionate amount of focus on and regard for one type of knowledge worker, the young hip urban professional. Too often communities feel unable to secure their economic futures because they have few young hip professionals or are led into futile attempts to attract them. Frequently overlooked are other assets that these young hipster deficient communities do have and that could be leveraged into economic growth.

Attention to young urban professionals within the economic development community predates the Florida-Kotkin “debates,” emerging in the 1980s. Once called “yuppies,” by the 1990s that term had became pejorative and worn out because of the segment’s behaviors and luxurious lifestyle. Later, around 2000, Richard Florida came along with his creative class theory that helped refocus attention on young knowledge workers and artists whose presence and behaviors shaped the hip, open-minded and welcoming urban communities that are conducive to growing creative class clusters. (2) About the same time downtown real estate developers and retailers had discovered the economic clout of these young well-educated urbanites, whom some referred to revealingly as “walking wallets.” Some developers of downtown residential buildings even had them specifically designed to suit this market segment in terms of apartment layouts, amenities and leasing policies. (3)

Googling “the importance of hip young professionals in economic development” brings up a host of articles that proclaim the economic significance of having a throng of young professionals in your community. For example, an article in the Richmond Times Dispatch stated:

“Based on lessons learned from “urban hub dynamics,” the long-term economic prosperity of metropolitan areas will be based, in part, on how quickly a region can become recognized as one of these preferred places for young professionals to live and work today.” (4)

However, there has been a well-known unevenness in the ability of metro areas to grow and/or attract young, hip knowledge workers. Consequently, many cities that did not have a lot of young professionals or that were losing them to hipper cities, have taken on action programs specifically aimed at wooing them, e.g., Cincinnati, Pittsburgh, Richmond, Memphis, Tampa, Indianapolis, Baton Rouge, St. Louis, Milwaukee, Tallahassee, and Fresno. (5).

Even within young professional rich metro areas, the geographic distribution of the young professionals usually is lopsided, taking on a split that leaves the suburbs well behind the urban cores. Does that mean that these suburban communities and their downtowns are doomed economically because of their young professionals deficits?  For them to try to replicate big city hip neighborhoods on a much smaller scale in and around their downtown areas may be an appealing strategy, though one of often questionable viability. Consider Richard Florida’s explanation of why young professionals are drawn to urban locations:

“Urban living provides them with thicker job and dating markets, opportunities to share rent with roommates, and plenty of things to do in their off hours, from bar-hopping to attending graduate school.” (6)

Suburban communities that want to erase a young professionals deficit need to have sufficient and appropriate “thicknesses” and should ask:

  • Are they basically bedroom communities with a supportive downtown or are their downtowns regional commercial centers?
  • Can they generate enough knowledge worker employment opportunities nearby?
  • Can they provide a density of entertainment/leisure activity options that approaches those of large urban neighborhoods?
  • Can they reach a young professional critical population mass that can attract other young professionals?
  • Can they provide affordable and attractive downtown rental housing and will the landlords do leases when roommates are involved?

Perhaps suburban communities and metro areas with young professional deficits should have a more realistic perspective on the economic advantages of young professional populations and then take an in-depth look at other assets that they do have for leveraging economic growth.

Putting Young Professionals in Perspective as Economic Growth Assets  

Discussions of young professionals often conjure up images of brilliant young entrepreneurs such as Bill Gates, Steve Jobs, Larry Page, Sergey Brin and Mark Zuckerberg, who in their 20s founded huge high technology companies in a garage, a dorm room or a makeshift office. (7) These young business titans seem to demonstrate the superior entrepreneurship, high tech know-how and inventiveness of young professionals, an image that is also reinforced by reports of slower adoption of digital technologies by older age cohorts. (8)

Entrepreneurship. Some very credible research done for the Kauffman Foundation clearly shows that people in the 20-34 age group are not the most entrepreneurial, but the least. For example, a 2009 report by Dane Stangler found that:

 “Contrary to popularly held assumptions, it turns out that over the past decade or so, the highest rate of entrepreneurial activity belongs to the 55-64 age group. The 20-34 age bracket, meanwhile, which we usually identify with swashbuckling and risk-taking youth (think Facebook and Google), has the lowest rate. Perhaps most surprising, this disparity occurred during the eleven years surrounding the dot-com boom—when the young entrepreneurial upstart became a cultural icon.” (9)

 Furthermore, another Kauffman study by Robert Fairlee published in 2011 found that between1996 and 2010 the 20-34 age group’s proportion of new entrepreneurs dropped from 35% to 26%, while the 55-64 age group’s proportion rose from 14% to 23% (10)
Freelancers are self-employed, not committed long-term to a client or employer and usually not incorporated. They can be in a wide range of industries and occupations. In many of our urban creative clusters, “creative freelancing” also is a growing trend. For example:

“In a 2005 report, the Center for an Urban Future estimated that 22,000 “creative freelancers”—writers, artists, architects, producers, and interior, industrial, and graphic designers—lived in Brooklyn, an increase of more than 33 percent since 2000. The Brooklyn Economic Development Corporation has dubbed the area from Red Hook to Greenpoint the “Creative Crescent.” (11)

Many of these freelancers are Millennials, i.e., people born between 1977 and 1993. The online freelancer job mart oDesk (sic) had a survey done of “independent workers (freelancers) worldwide who had been active on odesk within 180days.” Unfortunately, no data was provided on how many respondents were from the USA, but, given that oDesk is based in CA and the website operates in English, one might reasonably presume that most respondents were American. Almost 2,000 of the freelancer respondents were Millennials and their views about entrepreneurship are revealing. They are certainly enthused by entrepreneurship though their understanding of the concept is rather untraditional: it is divorced from the notion of starting a business. As Rieva Lesonsky summarized their views:

  • For 90 percent of Millennials surveyed, being an entrepreneur means having a certain mindset, rather than starting a company.”
  • “Aspects of this mindset mentioned included being a self-starter, risk-taker, visionary and someone who ‘spots opportunity.’ ”
  • “Millennials see themselves as building entrepreneurial careers whether they work for someone else or freelance – they don’t necessarily have to start their own businesses.” (12)

In this respect, the Millennials’ “new entrepreneurship,” in both attitude and deed, may help channel them to corporate careers since it is exactly what corporations now are looking for in new hires. According to Eleonora Sharef of Hireart.com:

 “The most successful job candidates… are ‘inventors and solution-finders,’ who are relentlessly ‘entrepreneurial’ because they understand that many employers today don’t care about your résumé, degree or how you got your knowledge, but only what you can do and what you can continuously reinvent yourself to do.” (13)

 Creativeness/Inventiveness. Prima facie, it seems absurd to think that creativity and inventiveness halt completely or significantly after people reach 30 or 35. While there appears to be a lot of conventional wisdom on this subject and a number of opinion-based articles, there are surprisingly few rigorous studies. Also, the linguistic boundaries between being creative and being inventive or innovative are unclear, which makes analysis difficult. That said, if we take even a quick look at artists, be they in the visual or performing arts, they certainly appear to be creative well past their 30s, as the careers of people as diverse as da Vinci, Monet, Degas, Cezanne, Picasso, Matisse, Pollack, Grant, Olivier, Brando, Hepburn, Wilder, Lean, Ford, Allen, Kazan, Spielberg, Bach, Casals, Horowitz, Rachmaninoff and Perlman demonstrate. However, within those careers, many of the artists achieved one or more new styles or techniques that others saw as innovative and inventive. Cezanne, Matisse and Picasso, for example, were well known for their innovations, which continued on through the length of their careers. Among writers, many continued to produce works late in their lives, a small sample of whom might include Charles Dickens, Henry James, Mark Twain, Herman Wouk, Philip Roth, Agatha Christie, George Simenon and John Le Carré.

If we look at the worlds of science and technology a similar pattern emerges, with the exception of mathematics. Within academia it is commonly held that great mathematical achievements are overwhelmingly done by those under 30. Yet, Isaac Newton, who did indeed invent calculus when he was 24, then went on to invent modern physics when he was in his 40s. While Albert Einstein, Werner Heisenberg, Niels Bohr and James Watson did their best work in their 20s, Michael Faraday, Max Planck, Ernest Rutherford, Fritz Haber and Louis Pasteur did theirs in their 40s. (14)

Many of our digital wunderkinds have achieved or try to keep on making significant innovations later in their lives. Steve Jobs certainly made a splash in his 20s when he and Steve Wozniak invented the Apple computer, but he later founded Next and Pixar and many observers feel that his decades later contributions to the iPod, iTunes, iPhone and iPad were of equal or even far greater significance. Bill Gates also made major digital innovations while in his 20s and now is working on globally eradicating major diseases and improving education. Sergey Brin and Larry Page founded Google with their innovative search algorithm while in their 20s and now have their company working on such things as driverless cars and carbon free energy generation. Elon Musk helped found PayPal while in his 20s and now is involved in Tesla electric cars, SpaceX rocket launchers and SolarCity, a provider of solar energy systems. Furthermore, Silicon Valley is known for its many “serial entrepreneurs.”

One rigorous and interesting research project written in 2008 by Benjamin Jones at the Kellogg School of Management reported that the age of the innovators when they attain “great achievements in knowledge” is getting older and older: “The great achievements in knowledge of the 20th Century occurred at later and later ages. The mean age at great achievement for both Nobel Prize winners and great technological inventors rose by about 6 years over the course of the 20th Century. This aging phenomenon appears to be substantially driven by declining innovative output in the early life-cycle.” (15) Moreover, this research seems to show that “a 55-year-old and even a 65-year-old have significantly more innovation potential than a 25- year-old.” (16)

They Like Dense Urban Environments.  If young creatives are not more entrepreneurial or innovative than other age cohorts, then why have they captured the attention of so many within the economic development community? It is not because they play a critical role in Florida’s defining of the creative class, in which the pivotal, all important concept is that of the work people do, whatever their age or education. As Florida has explained, he developed his theory as an alternative to human capital theories of regional development:

 “Human capital theory uses educational attainment (typically the percentage of adults with a college degree), a very broad measure that excludes such successful entrepreneurs as Bill Gates and Steve Jobs, who didn’t graduate from college. My creative class measure is based on the work people actually do, as measured by detailed Bureau of Labor Statistics data. This allows researchers and economic developers to zero in on the actual occupational categories – science and engineering, arts and culture, business and management, meds and eds – that make up the creative class and other occupational classes….

 The creative class is not just a proxy measure for college graduates. Roughly three?quarters of college grads in America work in creative class jobs, but four in ten members of the creative class— 16.6 million workers—do not have college degrees.” (17)

 A more viable explanation of why the economic development community has focused so much of its attention on one subset of the creative class, the hip young creatives, is not the kind of work they do so much as where they like to live and their leisure time and entertainment activities. For decades, the economic development community was searching for a way to revitalize our nation’s urban areas. Numerous researchers, including Florida, Eugenie Birch and, even in some writings, Kotkin, have demonstrated that young professionals’ lifestyle preferences provide a potential solution path: they like living in dense urban environments and are flocking to them. (18)

Also interesting is that fact that this same research has shown that empty nesters, too, like dense urban living and are downsizing from their suburban single-family homes to urban apartments and townhouses. However, the economic development community has focused far less attention on the empty nesters than it has given the young hipsters.

While the hip young creatives may prefer living in dense urban areas, suburban areas can also attract large numbers of residents whose occupations fall within Florida’s definition of the Creative Class. (19) For example, in 2011, Morris County, NJ has 123,629 residents, 49% of the 269,714 in the labor force, who are in management, business, science, and arts occupations. (20) Many non-Millennial knowledge workers who have children prefer living in the suburbs. What proportion of them will move to urban core areas when their nests empty is unknown, but the odds are that significant numbers will stay in their suburban homes and/or communities, perhaps in their own downtowns in newly built or refurbished apartments. Other creatives/knowledge workers, the “lone eagles,” prefer to live and work in scenic rural “Valhallas.”(21)

Attraction for Employers. Many companies like to recruit the best and the brightest out of our nation’s top colleges and universities because they think they are accessing new ideas and techniques. Nonetheless, many firms also have a preference for hiring younger people that is based on bottom line reasoning. For example, it is not unusual to see a number of stories in the media about the age preferences in corporate hiring and the difficulties that people over 40 have in finding new jobs. Many firms prefer to hire younger people because they will work at lower salaries for longer hours, will probably be healthier and have more distant pension payouts than older and more experienced workers. One observer cited data showing that associates in one global law firm work an average of 2,462 billable and unbillable hours a year, 47 to 49 hour a week, though others in the industry claim the weekly total is probably closer to 60 hours. (22) It is not uncommon in New York City to hear claims that firms in the advertising, entertainment and legal industries “like to eat their young.”

Corporations also like to hire freelancers because of lower salary and benefit costs. As noted above, many firms may also like the millennial freelancers’ new  entrepreneurial mindsets.

How this will affect corporate office locational decisions remains to be seen. Certainly there is an interest in tapping this labor market segment in regions where they are present. Often, firms may not have to locate in downtowns to tap this labor market. When making locational decisions many firms will look at labor pools defined by 30 to 45 minute travel times, which means that many urban core young knowledge workers can be tapped from many suburban locations. Some firms may decide for suburban or urban locations depending upon the situation. Google, for instance, has not moved to San Francisco though it has hundreds of white buses transporting its employees everyday from the city to and from its headquarters Mountainview complex, an hour’s drive away. Yet, it also has a very large presence in Manhattan. Also, reverse commuting has been growing in many metro areas.

Population Size. The Millennials, of which the young urban hipsters are a subset, constitute the largest generation, about 23% of the US population, but they are outnumbered by the combined populations of the older and still largely active Gen X with16%, Younger Boomers 14%, and Older Boomers 10%. (23)

 Some Suggested Take Aways

  • There is little doubt that urban areas with a cluster of young hip creatives have a strong asset capable of driving a good part of their revitalization efforts
  • But, if you don’t have a heap of hip young creatives in or near your community, you may have lots of older creatives or some other assets, e.g., gas and petroleum trapped in shale rock, upon which your economic revitalization can be built
  • There probably are more knowledge workers and artistic people who are older than 35 years of age than younger
  • These “mature creatives” are more entrepreneurial and, at a minimum, just as innovative and creative as the younger group
  • In metro areas that are rich in knowledge workers, many of them probably live and/or work in suburban communities and these communities should have revitalization strategies that clearly recognize and leverage this asset
  • It should not be forgotten that many non-Millennial knowledge workers and artists also often live and/or work in dense urban areas, e.g., office workers, teachers and researchers, doctors, lawyers, nurses, architects, etc.

Disclosure

The author is not a Millennial, though he is quite fond of his friends and relatives who are.

ENDNOTES

1.  See for example: Richard Florida, The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life, Basic Books, 2002, pp. 402; Joel Kotkin, The New Geography: How the Digital Revolution Is Reshaping the American Landscape, Random House.(November 2000) pp. 256. The family of terms creatives, young professionals, young urban hipsters, knowledge workers, artists are used in this article as basically referring to very similar if not entirely completely congruent groups of people, some being subsets of others.

2. Richard Florida, “Competing in the Age of Talent: Quality of Place and the New Economy,” January 2000, pp. 55

3. Personal interviews with developers from 2003 through 2007

4. John W. Martin and Jack Berry, “Winning young professionals,” Richmond Times Dispatch,  May 20, 2013

5 Haya El Nasser,  “Mid-sized cities get hip to attract young professionals,” Yahoo! News, October 10, 2003

6. Richard Florida, “The Fading Differentiation between City and Suburb,” Urban Land, January 31, 2013, Article 

7. Tom Agan, “Why Innovators Get Better With Age,” New York Times, March 30, 2013

8. Maeve Duggan and Joanna Brenner, “The Demographics of Social Media Users — 2012,” PewResearchCenter, February 14, 2013. http://pewinternet.org/Reports/2013/Social-media-users.aspx ; Kathryn Zickuhr, Generations and their gadgets, Pew Internet, Feb 3, 2011  http://www.pewinternet.org/Reports/2011/Generations-and-gadgets/Report.aspx?view=all

9. Dane Stangler, “The Coming Entrepreneurship Boom,” Ewing Marion Kauffman Foundation, June 2009, pp. 6 p.4. Kauffman’s research looks at “all new business owners, including those who own incorporated or unincorporated businesses, and those who are employers or non-employers.”

10. Robert W. Fairlie, “Kauffman Index Of Entrepreneurial Activity 1996 – 2010,” Kauffman Foundation, March 2011, pp. 28, p.9.

11. Kay S. Hymowitz, “How Brooklyn Got Its Groove Back: New York’s biggest borough has reinvented itself as a postindustrial hot spot.” City Journal, Autumn 2011,  www.city-journal.org/printable.php?id=7527

12. Rieva Lesonsky, “Millennials Are Rewriting the Rules of Work and Entrepreneurship” reports on a survey that had a full sample of 3,193, of which 1,958 were Millennials and was done by Millennial Branding for oDesk. For the oDesk slideshow on the report see: http://www.slideshare.net/oDesk/millennials-and-the-future-of-work-survey-results

13. As described in Thomas L. Friedman, “How to Get a Job,” New York Times, May 28, 2013, NYT Article here

14. See: http://www.scieditco.com/images/agescientists.html

15. Benjamin F. Jones , “Age and Great Invention,” Kellogg School of Management,  April 2008

16. See Tom Egan above

17. Richard Florida, theatlanticcities.com/jobs?and?economy/2012/07/what?critics?get?wrong?about?creative?class/2430/

18. Eugenie L. Birch, “Who Lives Downtown,” November 2005 • The Brookings Institution • Living Cities Census Series, pp. 20

19. Kris Hudson, Wall Street Journal, May 15, 2013,”Is Generation Y a ‘Game Changer’ for Housing?”

20. Source: U.S. Census Bureau, 2007-2011 American Community Survey

21. See: Philip M. Burgess, “Lone Eagles Are a Varied Species,” The Rocky Mountain News, April 12, 1994 and Joel Kotkin, The New Geography cited above

22. Steven J. Harper, “The Tyranny of the Billable Hour,” New York Times , March 28, 2013, http://www.nytimes.com/2013/03/29/opinion/the-case-against-the-law-firm-billable-hour.html

23. Pew Research Center’s typology of generations was used with national census data for 2011 to compute these population estimates.