Strong Cities, Strong Communities Northwest Indiana

Carol Coletta, vice president of community and national initiatives, delivered a keynote address at the Strong Cities, Strong Communities symposium in Gary, Ind., a Knight community, July 22, 2014. Below is an edited version of her speech.

Every week it seems like someone, somewhere unveils the new new thing in urban economic regeneration.  Last month, it was innovation districts. Before that, it was green jobs.  Before that it was the announcement of a new Silicon Valley (or prairie or bayou or glen).  Before that it was biotech clusters everywhere.  Before that it was convention centers and stadia.  Before that it was festival marketplaces.

This is nothing new.  When I started in this business, my first job was to promote a downtown theme park.  My second job was running a Main Street that had been converted to America’s “longest pedestrian mall.” 

I remember when those seemed like really good ideas.

So when someone comes to town promoting the latest wisdom on urban economic competitiveness, I advise you to listen with skepticism.

OK, now that I’ve set myself up….

The theme of this conference is Strong Cities, Strong Communities.  I feel like I’ve spent my life trying to figure out what makes a city strong.  I’m sure many of you have, too.

Can I get a sense of who is in the room? 

Government?  Business?  Developers?  Nonprofits?

Gary?  Northwest Indiana? Thank you for being here and for the work you do for Gary.

I’ve been thinking about this the past few days as I considered what I might say to you today.  And I’ve concluded this:

There are some things we know about the changes underway in cities and our economy that are clear and will endure.

There are some things for which we have new and strengthening evidence.

And there are some things that are, what I would call, emerging - glimpses of a future that is not yet evenly distributed.

Let me take a shot at sorting out for you -- and for me -- which is which.

As I look at all the factors that affect a city’s economic success, there are two that underpin everything else: talent and opportunity.  These two rise to the top of the priority list.  They are clear and will endure.

The term “talent” is imperfect, shorthand for people with at least a four-year college degree.  Bear with me, now, because no, these are not the only talented people.  But these are the only talented people we can count.

And if you can count more of them, that’s a really good thing for your city.  Because it turns out the percentage of college graduates in your population explains 58 percent of your metro area’s success – if you measure success by per capita income. 

Imagine that. Fifty-eight percent. If anything explains 58 percent of your success, you would think you would make it a priority, right? 

But honestly, I had a discussion yesterday with the senior staff of a governor I admire -- who shall remain unnamed – about what makes a city resilient… a city that can withstand economic shocks and bounce back quickly.  And they wanted to count everything but talent. 

They wanted to predict and fix for resilience, but they wanted to count imports, exports and business investment.

It should be clear that cities should make talent – its development, attraction and retention -- the foundation of their economic development strategies.  This means making sure that everyone has a chance to reach his or her full potential – not just because it’s good for the individual, but because it’s good for all of us. 

But right alongside side developing Talent, cities must also create Opportunity.

The foundation for creating opportunity is education.  (See, it’s hard to go wrong investing in education.)  But as any educator knows, that’s not enough.  New research is pointing us to a few other essentials to accelerating upward mobility -- one of which hasn’t had nearly enough attention.  Growing up in economically integrated neighborhoods -- in other words, having people of different incomes living in close proximity to one another and, in effect, sharing their lives in public as people in community naturally do -- results in far more upward mobility for people than does growing up in an economically segregated neighborhood.

I don’t know about you, but if where you’re born dictates where you end up – if ZIP code is destiny – the American dream is dead.

Some people hear growing more talent and more opportunity as conflicting goals.  But contrary to another misleading myth, people with less education do better economically when they live in communities with people who have more education.  No matter who you are, you are better off if you have educated neighbors.

So here’s what we know:

Talent – or the percentage of your population with a four-year degree -- is the best predictor of a community’s economic success.

Talent is mobile. 

Young talent – 25- to 34-year-olds with college degrees -- are more mobile. 

People with less education do better economically when they live near people with more education.

Economic mobility is harder to achieve today.

And it is harder still if you live in concentrated poverty.

If you want to point to the two factors that influence the success of cities more than all others, the research points clearly to talent and opportunity.  These factors are clear and enduring.

Then there is a factor where there is new and strengthening evidence of its importance to the success of cities.  You won’t find it surprising.  That factor is place.

Why place?

Because place ought to be an accelerator of both talent and opportunity.

Our communities need talent.  The “gettable” talent is young, since people are much more likely to move before age 35 than after age 35.

What kinds of places help us get and keep them? 

Places with vibrant core cities.

Over the past four decades, there has been a steady increase in the relative preference of young adults (ages 25 to 34) for close-in neighborhoods – that’s the Central Business District in metropolitan areas and the 3-mile radius around it.   In fact, college-educated young adults are more than twice as likely to live in these close-in neighborhoods than are other Americans.

This is a 40-year trend that just keeps accelerating.

Sixty-four percent of college-educated 25- to 34-year-olds say first, they choose the city they want to live in.  Then, they look for a job.  (Women, by the way, are more likely to say that then men.) 

Eighty-five percent of millennials say they prefer urban-style living, and the numbers prove that they are acting on their preferences.

And now, jobs are following them.  I just got a look at a soon-to-be-published report on recent trends in business locations, and it’s clear that business is following talent back to the city.  In fact, since the recession, in the major metro areas, all of the new jobs have been created in America’s core cities.  That’s a complete reversal of what was happening before the recession.

It’s also true that since the recession, housing prices in America’s most walkable neighborhoods – the ones with higher WalkScores and that have more daily destinations nearby -- have recovered far more quickly than housing in neighborhoods where you have to drive to get to everything.

See the pattern here? These are no longer anecdotes.  This is happening in cities all over the U.S.

To compete for talent, you have to offer the kind of lifestyle choice young adults in particular are showing a strong preference for today -- mixed-use, mixed-income, walkable, bikeable, transit-served neighborhoods with lots of street life.

Good places attract and keep good talent (which is job 1 in economic development). 

Good places also play a critical role in the economic mobility that is at the heart of the American Dream.

One of the deadliest mistakes we’ve made in the way we build our cities has been the stack of public policy decisions that isolated poor people in poor neighborhoods.  In places with concentrated poverty and high levels of economic segregation, your ability to overcome the circumstances of your birth is made much tougher. 

But it’s not just a disaster to build places in ways that isolate poor people.  It’s a disaster to build places in ways that isolate all of us.

How do ideas spread if we have to make appointments to see each other?  How do the happy accidents that spark new ideas occur if there is not a robust civic commons in which to gather? How do you create a vibrant street life if everyone drives everywhere?

It’s hard to believe that we once thought separating uses and separating us was a good idea.

New and strengthening evidence now tells us that the most valuable places have centrality, density and diversity.

Finally, there is a third category of factors emerging that I believe tell us something about what may be important to the success of cities going forward.  The evidence is insufficient – to date.  I don’t expect these factors to become more important than talent, opportunity and place. But they are on my radar and I believe should be on yours.

I’m calling these localness and loyalty.

Here’s why they made my list.

When I led CEOs for Cities, we did a series of reports we called “Things Look Different Here.”  It was all about difference – the special qualities of a place that made it different from all other places.  If you know Michael Porter’s work on competitive advantage, you know that difference is one of the three generic ways to build advantage.  (Low cost and focus are the other two.)

Cities have the difference advantage built in. But typically, the people “in charge” ignore it or, worse, run away from it, desperately trying to fit in and copy every new city fad. 

How refreshing, then, to see a new generation reject that thinking and create bespoke cities.  They are starting every kind of interesting business under the sun and slowly bringing the rest of the world along for the ride.

I was looking at the latest issue of Travel and Leisure last week, and found profiles of Seattle’s renewed Pioneer Square and some of its independent businesses with names like Rain Shadow Meats Squared and London Plane – together billed, by the way, as a “micro-neighborhood” – and of Athens, Ga., with 5&10, Agora Vintage, Jittery Joe’s and Independent Baking Co.

It seems like every city -- every neighborhood -- now has its own beer; soon it’s own donut.

As brand exhaustion sets in – seriously, how many more Gaps does the world really need? – I believe the city that puts its distinctiveness on display, has a deep understanding of its differences and can spin economic vibrancy out of difference will have real advantage.

Loyalty is the second factor.  I think of loyalty as engagement on steroids.  Are people passionate about their city?  Will that turn that passion into action on behalf of their city?  And for the most mobile citizens, will they maintain some measure of fractional loyalty to their city? 

Two weeks ago, the world – especially those of us in Miami -- learned that LeBron James decided to return home.  Here’s how he explained it to Sports Illustrated:

“This is not about the roster or the organization. I feel my calling here goes above basketball. I have a responsibility to lead, in more ways than one, and I take that very seriously. My presence can make a difference in Miami, but I think it can mean more where I’m from. I want kids in Northeast Ohio, like the hundreds of Akron third-graders I sponsor through my foundation, to realize that there’s no better place to grow up. Maybe some of them will come home after college and start a family or open a business. That would make me smile. Our community, which has struggled so much, needs all the talent it can get.”

LeBron maintained his loyalty to his hometown of Akron, even when he moved to Miami.  And when he quit Miami, he reassured the disappointed, “Miami will always be my second home.”

Cities like Akron and Miami and Gary  – in fact, all of our cities -- need all the talent they can get – even if that means they are only awarded “fractional loyalty” – just a piece of someone’s heart -- only “second home” status.

If I were in your shoes, trying to rebuild Gary, I would, like the mayor has said, start with Gary’s assets – its proximity to Chicago, the Lakefront, and the people who have some piece of their hearts invested here.  How can you put that talent to work rebuilding Gary.

That’s because there was a time -- not so long ago – when you could get 10 guys in a room and make almost any decision about a city’s future.  Today?  Good luck with that.

The future of a city is not made with a few broad strokes by a few key people. The future is a product of thousands of people making small decisions every day about what they believe about the future and their role in it.

That’s why this thing we call “community development” is so damn tricky.  It is, in so many ways, a product of the decisions we all make. 

You don’t change a community overnight.  You know that.  You change it one decision at a time.

In 1981, The Chicago Tribune published a story about Chicago it titled “City on the Brink.”  Calling Chicago an economic invalid, the story quoted a professor of urban sciences, who said, “I see very little hope for locating economic activities again.”

Well, you know what happened.  Conventional wisdom is not always so wise.

When it comes to cities, the end of the story is never pre-ordained.

I would challenge you as community leaders to put everything you are asked to support to three tests:

Will this decision increase the supply of talent?

Will this decision increase opportunity?

And will this decision increase the quality of this place?

As someone who believes that the fate of our nation rests in the success of America’s cities, I deeply appreciate the work you are doing and will do to make your community all it can be.

About the John S. and James L. Knight Foundation

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