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Heartland Intelligence – Aaron M. Renn

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There have been some big changes for me. We relocated from New York to Indianapolis, where I’m doing consulting work for the Indy Chamber. I’m no longer full time with the Manhattan Institute but am still a contributing editor at City Journal and still have multiple projects in the works there. I’ll continue to write for other publications too, as with my recent Atlantic piece on J. Irwin Miller and Columbus, Indiana. More on my move below.

For several years I’ve published a monthly newsletters on cities that was mostly a roundup of the month’s best links. I put that on hiatus while I was completing my move.

Now that I’ve landed in Indy, I’m relaunching my newsletter as a paid subscriber only briefing called Heartland Intelligence. For a price of $5/month, Heartland Intelligence will provide data, analysis, and insight into the greater Midwest region and its cities as we come into a critical election year where this region will determine the outcome. I will also continue to include my curated list of the best links of the month.

Heartland Intelligence will be free until April, so please subscribe to check it out risk free over the next two months. Even once it goes paid, I will also be publishing a short, free version to all subscribers, so you’ll want to be on the list for that regardless.

My existing newsletter subscribers have all been added to the free version of the newsletter and can upgrade if they like. New readers can subscribe below.

This post is a sample of what Heartland Intelligence will be. A version of it already went out to my existing newsletter subscribers. So even before signing up you can get a flavor of what it’s going to be like.

I am planning to use the Substack platform for this. It’s new to me so please bear with any transition bumps. One benefit of Substack is that old newsletters will be available as a blog feed. Check it out at https://aaronrenn.substack.com/

Pittsburgh Global City

I recently made a short visit to Pittsburgh, a source of frequent media articles about Rust Belt revival. Summary:

  • Pittsburgh has managed to create a genuine bubble of global city in the urban center.
  • Home to Apple, Microsoft, Facebook and Google – drawn by Carnegie Mellon University.
  • Duolingo recently first local startup to achieve $1B valuation. As noted by Chris Briem and Mike MadisonPittsburgh’s draw is predominantly for corporate research, not startups.
  • Briem: “Duolingo not withstanding, Pittsburgh continues to stand out for its lack of organic entrepreneurial growth & there have been very few $billion-ish startups incubated in Pittsburgh in recent decades.”
  • In-city neighborhoods like Shadyside have outposts of national upscale retailers like Apple, Lululemon, Patagonia, and Williams-Sonoma. Besides Pittsburgh, only much larger regions Chicago and Minneapolis have accomplished this in Midwest.
  • City of Pittsburgh has legacy built form similarities to coastal cities: dense, geographic constraints, walkable in-city commercial districts, transit friendly. Also has legitimate “deep history” and unique city culture and dialect.
  • Pittsburgh metro is a top 10 major metro city for transit commuting at 5.6% mode share – higher than LA, Minneapolis, SLC, San Jose, Denver.
  • Pittsburgh’s metro demographics are highly unusual. Has lowest share of children (<18) and highest share of seniors (>=65) of any major metro; has more deaths than births
  • Pittsburgh is by far the whitest major metro in the US at 85.3%.
  • Black population is declining in city and in hot neighborhoods like East Liberty, suggesting some displacement is occurring. This is possibly a legitimate example of gentrification in the Midwest (see below).
  • Nearly 50% of metro residents aged 25-34 have a college degree – seventh highest in US – higher than Seattle, Austin, Denver .
  • See recent City Journal article on city by native John Tierney.
  • See article on 40% reduction in opioid deaths last year in Pittsburgh

Heartland Data: Black Population Change

The Heartland’s demographic divergence shows up in sharper relief when examining black population change. Select metro areas for Black Only population change based on Census estimates.

RankMetro Area20102018Total ChangePct Change
1Fargo, ND-MN4,546 (2.2%)14,007 (5.7%)9,461208.12%
2Des Moines-West Des Moines, IA28,195 (4.9%)37,254 (5.7%)9,05932.13%
3Minneapolis-St. Paul-Bloomington, MN-WI250,717 (7.5%)325,384 (9.0%)74,66729.78%
4Columbus, OH279,455 (14.7%)343,458 (16.3%)64,00322.90%
5Madison, WI27,083 (4.5%)31,229 (4.7%)4,14615.31%
6Indianapolis-Carmel-Anderson, IN280,916 (14.8%)323,858 (15.8%)42,94215.29%
7Lexington-Fayette, KY52,392 (11.1%)59,219 (11.5%)6,82713.03%
8Grand Rapids-Wyoming, MI67,619 (6.8%)76,401 (7.1%)8,78212.99%
9Louisville/Jefferson County, KY-IN176,040 (14.2%)193,930 (14.9%)17,89010.16%
10Cincinnati, OH-KY-IN258,984 (12.2%)280,131 (12.8%)21,1478.17%
11Omaha-Council Bluffs, NE-IA70,000 (8.1%)75,021 (8.0%)5,0217.17%
12Kansas City, MO-KS259,538 (12.9%)273,482 (12.8%)13,9445.37%
13Rochester, NY128,302 (11.9%)131,214 (12.3%)2,9122.27%
14Buffalo-Cheektowaga-Niagara Falls, NY141,795 (12.5%)143,961 (12.7%)2,1661.53%
15Milwaukee-Waukesha-West Allis, WI265,896 (17.1%)268,160 (17.0%)2,2640.85%
16Pittsburgh, PA198,671 (8.4%)199,103 (8.6%)4320.22%
17St. Louis, MO-IL519,266 (18.6%)519,190 (18.5%)-76-0.01%
18Cleveland-Elyria, OH422,588 (20.4%)421,393 (20.5%)-1,195-0.28%
19Detroit-Warren-Dearborn, MI986,026 (23.0%)970,319 (22.4%)-15,707-1.59%
20Chicago-Naperville-Elgin, IL-IN-WI1,680,657 (17.7%)1,616,695 (17.0%)-63,962-3.81%

Observations:

  • Several regions with low historic black population share – Fargo, Des Moines, MSP, Grand Rapids – are showing robust black population growth
  • Conversely, the four metros with black population decline are the four with the highest black population share.
  • Pittsburgh both had low initial share and regional black population stagnation.
  • Sorting by total population, Minneapolis and Columbus, both with large Somali refugee increases, rank #1 and #2. Unclear how much black population change is driven by int’l vs. domestic migration. Indianapolis is #3 with about 2x the total influx of #4 Cincinnati.

Moving to Indianapolis

As noted, my family just moved to Indianapolis. We are living in a near downtown neighborhood called Fletcher Place. Why? Some reasons are prosaic. I moved to NYC as a single and left married with a two year old. Both my family and my wife’s are in Indiana. When our son was born and people asked if we planned to stay, my reply was always, “No plans to leave right now, but the Upper West Side is full of kids and 90% of them are 5 and under, so odds are I’ll become a statistic eventually.”

There’s a lot to miss about NYC and I have nothing negative to say about it. I continue to say that in many ways it’s the greatest city in the world.

But there’s a positive draw to Indy too. It was fine when I left in 2014, but even just in the last five years, the city has improved radically. I am actually already enjoying better bread, coffee, ice cream, meats, diners, etc. than I had in NYC. Yes, better – not just cheaper. The Red Line BRT makes transit viable in Indy for the first time – and we’ve been using it.

As I said in my recent study, several Midwestern cities are actually highly competitive with the Sunbelt in their product on offer. Indy is one of them. While some things like the national economy can’t be controlled, I truly believe Indy is legitimately positioned to be able to start becoming a much bigger national talent draw. And I want to be part of making that happen, not just saying somebody needs to make it happen.

Heartland Housing Challenges

An NYT article on development controversies in Louisville shows how coastal narratives define local politics in the Heartland, to the region’s detriment. A developer proposed a $250M project with 421 apartments, a 250 room hotel, office and retail space plus 1,202 parking spots. Opponents claim it failed to provide affordable housing, and the city required an affordable apartment set aside of 5% to approve it.

Louisville has a surfeit of affordable housing. This Zillow link will show estimated housing values in the South End. This neighborhood is steps from Frederick Law Olmsted designed Iroquois Park. There’s a bus line on New Cut Rd. I know the neighborhood and have had family there for 30 years, including my step sister today. Houses are available for less than $100,000.

Louisville, as with many Heartland communities, has a poverty problem disguised as a housing affordability problem. Though high for-sale housing prices in select neighborhoods do exist there as in other similar communities (a legitimate issue for reasons I will address in the future), most housing is modestly priced and actual decline is a problem in some areas. Yet community activists, including in this case an urban policy professor, insists on applying the same affordability framing from coastal places like Brooklyn or San Francicso to very different kinds of places.  As Akron planning director Jason Segedy has written, “In Middle America, ‘Gentrification’ Is a Useless Word.”

Heartland communities do have housing challenges. There’s a critical need to develop indigenous analytical and policy tools to understand and address the challenges of these places. Right now there is an inequality of policy ideas that, like other items, is skews to the coasts.

Cultures of Corruption

The Detroit News ran a major special investigative report on a massive corruption scandal in the UAW and Fiat Chrysler Automotive. Excerpt:

Fiat Chrysler executives, armed with $12.5 billion in taxpayer funds, started funneling bribes and illegal payments to UAW officials within days of the automaker emerging from bankruptcy in June 2009, The Detroit News has learned, partially squandering a second chance financed by American taxpayers. Prosecutors allege the money was part of a broad attempt by Fiat Chrysler executives to secure labor concessions from the UAW by keeping labor leaders “fat, dumb and happy.” The government’s four-year investigation has revealed how labor leaders misused the bailout’s historic second chance by embezzling money from worker paychecks, shaking down union contractors and scheming with auto executives….The corruption spanned at least four generations of UAW leaders, a mix of presidents, vice presidents and the union’s junior varsity. According to the government, there was a band of thieves at the UAW’s Solidarity House headquarters along the Detroit River, swindlers in regional offices in the heartland and shakedown artists on the East Coast.

Corruption is endemic to all human endeavors, but some places are more corrupt than others. Some Heartland cities like Detroit and Chicago have become notorious for corruption. This leads not just to low quality governance (including at companies), but also severely inhibits economic developments. Corruption will never be completely eliminated and some level of wheeling and dealing is probably a necessity to make government function, but reducing the level of corruption to a more normal level is critical for these places to become more competitive.

Heartland Culture

Fantastic “One Nation Under a Groove” video produced by Detroit’s tourism org. Totally, uniquely Detroit. Exactly on point for what Heartland cities should do. NB: Nearly one million views on this video so far.

Daily Mail: Poignant images of Pittsburgh’s African American community from 1935 to 1975 by famed photographer Charles ‘Teenie’ Harris capture pivotal moments of the city’s rich history

Justin Glawe: Peoria Is a Pizza Destination

WBEZ: How Chicago Bars Got So Many Old Style Signs

Twitter user chi_geek: “This will be a VERY LONG thread on what’s been lost in Chicago over the last decade: buildings, signs, businesses”

Heartland News and Analysis

Pete Saunders: The Midwest: Nationally Important, But Still A National Enigma

NYT: Can a coal town reinvent itself? – It’s important to note that unlike cities like Detroit, Appalachia was never genuinely prosperous. The region was a major inspiration for LBJ’s war on poverty.  See also on Grundy “The Sickest Town in America” from the Atlantic in 2015. The problems of Appalachia are different from the problems of the industrial Midwest and Northeast.

NYT: Opioid Deaths Rise When Auto Plants Close, Study Shows – “The study, published Monday in JAMA Internal Medicine, found that opioid deaths were about 85 percent higher among people of prime working age in counties where automotive assembly plants had closed five years earlier, compared with counties where such factories remained open.”

Philadelphia Inquirer: Penn State and Pa.’s public colleges are among the nation’s costliest — and are surprisingly empty – The reference is to Penn State’s regional campuses, not the flagship. Universities below the first tier (roughly top 100 national universities) are facing significantly demographic and financial challenges. In a region with falling demand (i.e., fewer local high school students graduating), this will be a particularly acute challenge.

Midwest Startups: 2019 Startup Cities Rankings

Noah Smith: How America’s Second-Tier Cities Can Catch the Superstars

Jason Segedy via Twitter: “Great job by @AkronOhioMayor crews painting thousands of fire hydrants. Small, but incredibly important things like basic maintenance of infrastructure makes a huge difference in how our neighborhoods look and feel.” – Correct message here that continuous, incremental improvements at a rate faster than the market as a whole in terms of amenities and public goods and services is key to reestablishing the confidence to invest.

NYT: Noncompete Pacts, Under Siege, Find Haven in Idaho – California does not enforce non-competes, seen as a key policy plank in their startup success. As Californians flock to Idaho, that state takes a different direction. This is a good example of how heartland states are sometimes heavily politically dominated by incumbent businesses. This hinders their ability to adjust to new economy realities. It also reveals a key desire of these incumbents: a captive labor force, something Jim Russell has long observed as an underlying aim of many brain drain initiatives.

Heartland Cities

The Times of Northwest Indiana: Former Gary Mayor Richard Hatcher Dies at Age 86 – Hatcher was among the most prominent of first wave black mayors in the US. See Pete Saunders excellent analysis of the three different waves of black mayors in the US for important context on Hatcher.

WSJ: Chicago Property Prices Stagnate, Trail Even Crisis-Stricken Hong Kong

Chicago Mag: Why Illinois Will Rule the Meatless Future – This article suggests Illinois will dominate raw material and production, but not R&D/IP, meaning this is in fact a negative development for the state and city.  Chicago is a center for food and consumer goods industry, but leading edge food R&D like Impossible Foods is now emerging up in Silicon Valley. Chicago must be a center of R&D/entrepreneurship for this sector or lose out on most of the value.

Detroit Free Press: 5 years out of bankruptcy, can Detroit avoid another one?

City Lab: Can the Most Stubbornly Suburban of Suburbs Make a More Urban Future? – Oakland County, MI

City Journal: Akron’s Working Class Future – podcast with city planning director Jason Segedy

Buffalo News: Uneven real estate valuation growth belies citywide renaissance

Dayton Most Metro: Reflections on a City of Epic Proportions

NYT: Vermont, Oklahoma and Now Topeka, Kan., Want You – Topeka is using the same cash incentive approach as Vermont and Tulsa, but upping the ante to $15,000 instead of $10,000. These programs have all generated national press, but in my view give off a whiff of desperation. I would not recommend adopting this strategy without careful calibration.

Culture

NYT: After 10 Years of Hopes and Setbacks, What Happened to the Common Core?

NY Mag: In the 2010s, BuzzFeed Made the World a Meme

Buzzfeed: Alienated, Alone And Angry: What The Digital Revolution Really Did To Us – We were promised community, civics, and convenience. Instead, we found ourselves dislocated, distrustful, and disengaged.

NYT: The Class of 2000 ‘Could Have Been Anything’ – The high school yearbook is a staple of teenage life. But for some, it reflects the devastating toll of the opioid crisis.

Venture capitalist Paul Graham writes about having kids.

Economy

Fed statistics via Kurt Anderson on Twitter: “Fraction of all US wealth owned by Boomers & Gen-Xers when the average member of each was age 35: Boomers (1989): 21%; GenX (2008): 8% The average Millennial turns 35 in 2023. Right now they own 3%. There will surely be political implications.”

City Lab: How elite occupations create inequality

Surprisingly, only a small percentage of top earners work in the tech sector or in fields like computer programming. There is some evidence that the adoption of information-technology has disproportionately benefitted workers with higher levels of education. But that does not explain why there are so many doctors and lawyers in the top 1 percent.

WSJ: The U.S. Furniture Industry Is Back—but There Aren’t Enough Workers

NYT: Earning Income on the Side Is a Large and Growing Slice of American Life

NYT: Where the frauds are all legal – Welcome to the weird world of medical billing / See also NPR: For Her Head Cold, Insurer Coughed Up $25,865 – Examples of why socialized medicine is highly likely in the US within five years.

The Atlantic: The Great American Eye Exam Scam – related to the above

NYT: Fertility Rate in U.S. Hit a Record Low in 2018

International

Paul Graham via Twitter: “Whoah, of the top 100 most popular domains, only 2 are in the EU and neither porn sites nor subsidiaries of US companies. And they’re both the same company: http://bbc.com  and http://bbc.co.uk . And after Brexit, the number will be zero.”

Dan Wang: Thoughts on Chinese Technology

London Review of Books: A Whiff of Tear Gas in Hong Kong

NY Mag: Boris’s Blundering Brilliance – Brexit has given the U.K’s self-seeking Prime Minister the opportunity to show he actually knows what he’s doing.

NYT: Brexit’s Advance Opens a New Trade Era – The decisive Conservative victory in Britain leaves no doubt that in today’s global equation, national interests are supreme and globalization is suspect.

Reuters: Hungary government scheme sparks marriage boom. Will babies follow?

NYT: The Chinese Roots of Italy’s Far-Right Rage – The country’s new politics are often attributed to anger over migrants. But the story begins decades ago, when China first targeted small textile towns.

Urbanism

The Atlantic’s City Lab site, one of the biggest and most important urban focused media outlets in America – and one to which I’ve contributed guest pieces – has been sold to Bloomberg media. About half the staff is losing their jobs.

NYT: A Few Cities Have Cornered Innovation Jobs. Can That Be Changed?

NYT: Watch 4 Decades of Inequality Drive American Cities Apart

Thriving and stagnant places are pulling apart from each other. And within the most prosperous regions, inequality is widening to new extremes. That this inequality now so clearly correlates with city size — the largest metros are the most unequal — also shows how changes in the economy are both rewarding and rattling what we have come to think of as “superstar cities.” In these places, inequality and economic growth now go hand in hand.

Hyperallergic: The Radical Side of Suburbia – A look at Amanda Kolson Hurley’s book Radical Suburbs.

NYT: Prime Mover: How Amazon Wove Itself Into the Life of an American City (Baltimore)

NYT: Silicon Valley’s Newest Rival: The Banks of the Hudson

Curbed: A Decade of Demolitions in NYC

McKinsey Global Institute: Affordable Housing in Los Angeles

NYT: Where Are the Tech Zillionaires? San Francisco Faces the I.P.O. Fizzle

Washingtonian: The Very Uncivil War Going Down in America’s Most Civil Suburb – Honing in on one aspect of the story, it doesn’t strike me that opposing the sale of public parkland for development is a NIMBY stance.

Washington Post: How a crumbling road in Syracuse is sparking a conversation about reparations (from October)

Transportation

Journal of Urban Economics: Is Uber a substitute or complement for public transit?

The Guardian: A tale of two metros: how the London tube beat the New York subway

WTOP: Major Amtrak, VRE expansion set under $3.7 billion Virginia-CSX deal

Alon Levy: What I Mean When I Say Cities Have no Transit

Alon Levy: Little things that matter – jerk

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Featured image credit: Miyin2 CC BY-SA 4.0



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