At the end of any trend, everyone’s a true believer: this trend is so enduring, so broad-based, so based on unchanging fundamentals that it will never ever reverse.
One such trend is the white-hot growth of housing, employment, tax revenues, etc. in major urban magnets for global capital and talent: you know the usual suspects: Dallas, Atlanta, Seattle, Portland OR, Denver, Los Angeles, the San Francisco Bay Area, New York City and so on.
What these urban regions offer are strong job markets, a very desirable dynamic.
For example, over 400,000 jobs have been added to the San Francisco Bay Area in the past few years, basically an entire new city of workers. Very few states have added 400,000 jobs in the past few years, and fewer still have added so many high-wage jobs.
The synergies created by global capital, research universities, a flood of fresh talent and the entrepreneurial drive to conjure up the next IPO Unicorn have been beaten to a pulp. What hasn’t been glorified is the net result of these synergies:
1. Infrastructure that wasn’t designed to handle an extra million residents, and that can only be expanded at tremendous cost and in timelines of a decade or two.
2. Soaring wealth and income inequality as these urban economies become increasingly “winner take most” and housing has skyrocketed out of reach for all but the top 10%.
3. A zeitgeist of self-congratulatory hubris in which locals are confident “we’re so special” that talent and capital will continue to pour in regardless of how fast the quality of life is dropping.
What few seem to realize is much of the talent and capital are mobile and don’t actually have to put up with the declining quality of life in unaffordable, dysfunctional cities: the people and the capital can go elsewhere.
I call this class Mobile Creatives, and they are not just another set of workers.I described this class back in 2014, and it has expanded under the mainstream radar over the past five years.