A block model of different sized buildings and skyscrapers.
Sep 25, 2019

Axios Cities

Ready to read more impeachment news? Just kidding — this is a politics-free zone today.

Instead, this edition takes a closer look at how the intense battle for talent is playing out across the nation.

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1 big thing: Welcome to "hipsturbia"

Illustration: Aïda Amer/Axios

The suburbs are becoming cool again — as long as they resemble inner-city downtowns.

What's happening: As millennials settle down, have kids and look for cheaper houses and good schools, they're migrating out to the suburbs — and creating a different type of live-work-play district that developers are calling "hipsturbia."

"The people who are thriving in the knowledge economy want walkable, mixed-use, interesting environments. They want the village square experience. At the same time, they want affordable housing."
— Andy Lusk, partner at Lionstone Investments in Houston, at the Urban Land Institute conference

The big picture: Suburban growth slowed down in the aftermath of the financial crisis. Millennials just graduating from college headed to big cities, where the jobs were concentrated. Now, they're in a different stage of life, priced out of many cities and, thanks to the good economy, have more location flexibility.

  • Suburbs with good jobs, relatively easy access to nearby city centers and moderate weather are growing twice as fast as the closest cities, per census data.
  • These suburbs and smaller metros will see clusters of dense, mixed-use developments, where people may rely more on public or shared transportation.
  • That's driven in part by the massive student loan debt that has pushed homeownership later in life for younger generations, PwC partner Mitch Roschelle noted at last week's Urban Land Institute conference. "Especially with student debt, do you really want a car payment?"

It's not just young couples and families spurring the suburbs to evolve. Baby boomers and empty nesters are opting to stay in the suburbs and also pushing to make them more hip with recreation, retail and restaurants. (Brew pubs, coffee shops and yoga studios seem to be bare minimum requirements.)

What's happening: Major cities including San Francisco, Chicago and New York serve as anchors for smaller communities that are dubbed "hipsturbias," according to the Urban Land Institute.

  • Universities are often key to bringing in a constant supply of young people and employers who are looking for that talent pipeline often found in urban downtowns. This is true of Northwestern in Evanston, Illinois; Arizona State University in Tempe, Arizona; and Stanford in Silicon Valley.
  • Near Atlanta, Decatur and Alpharetta are among those trying to fit the formula.
  • Around NYC, the communities of Yonkers and New Rochelle fit the bill, as do the New Jersey towns of Hoboken and Summit.

The catch: A lot of suburban areas don't have the infrastructure to create the quasi-urban environment that appeals to the under-40 set.

Flashback: In early 2013, a NYT story famously coined the "hipsturbia" term when young creatives fled Brooklyn's growing affluence for communities like Dobbs Ferry or Tarrytown. It's now happening more in other cities as the younger cohort of millennials move into the next stage of life.

The bottom line: The "back to the 'burbs" trend won't happen across the board, and big cities will still attract young post-millennials. But suburbs with the right downtown-mimicking attributes can expect renewed attention from real estate developers and investors.

Go deeper: Millennials are moving to the exurbs in droves

2. Exclusive: Real estate playbook for rising cities

Illustration: Rebecca Zisser/Axios

One reason major cities are able to attract the most talent is that they have a wide variety of work options — and that means a variety of working space options.

The big picture: Not so long ago, it was a big deal for a co-working space to open up in smaller or "second-tier" cities because it signaled there was finally enough demand from newcomers looking for a cool place to work.

  • Now the focus is to create bigger, branded, physical places to attract more companies, entrepreneurs and investors, according to the new "Rise of the Rest Ecosystem Playbook" put out today by Revolution.
  • Between the lines: These developments are using the "if you build it, they will come" strategy, hoping to lure people wanting to escape the high prices of the usual hot spots.

The playbook breaks down 4 archetypes that are being built across the 43 cities that Steve Case has visited during Rise of the Rest tours.

  • "[E]very city, without fail, is trying to figure out how to retain the talent they have, encourage people who have left to return, and recruit new people to consider moving there," Case emailed.

1. Anchor Tenant: A key company that attracts others to cluster around it. (Detroit, Cincinnati, Green Bay)

2. Innovation District: A cluster of a mix of companies, sometimes in partnership with local government. (Phoenix and York, Pennsylvania)

3. Vertically Integrated: Complex or high-rise with space for accelerators, labs, co-working and corporate offices, designed to let startups move through "stages" in one place. (Columbus, Chattanooga)

4. Work-Live-Play: Mixed-use development that includes residential, commercial and entertainment and is pedestrian-friendly. (Orlando, Chattanooga, Tampa)

3. Where job skills anxiety is highest
Expand chart
Reproduced from Strada-Gallup Education Survey; Graphic: Axios Visuals

Nearly half of Americans think they need more education to move up in their careers, with younger, non-white and urban residents feeling a greater need for additional skills than their peers, according to the Strada-Gallup Education Consumer Survey of 350,000 people.

Between the lines: Whether people believe they need more education to advance their careers reflects the needs of the local labor market where they live. The tighter the job market, the higher the perceived need for more training.

  • In California, for example, 57% of workers without a college degree feel the need for more education. In North Dakota, only 32% feel this need.
  • People are more anxious about needing additional skills if they live in a state where a higher percentage of jobs require a bachelor's degree.
  • There's also a rural-urban divide: 53% of urban residents say they need additional education, compared to 43% of rural residents.

Noteworthy: Those who say they are likely to enroll in additional education within the next 5 years do not expect to do so at traditional post-secondary institutions. Adults without degrees say they'll look to employers, community colleges and trade schools.

Go deeper:

4. What cities and companies have in common
Expand chart
Reproduced from Strada-Gallup Education Survey; Graphic: Axios Visuals

Cities and companies need the same thing: skilled workers.

The catch: The metro areas that are more likely to benefit from a skilled workforce have populations that are less inclined to get additional education, per the Strada-Gallup Education Consumer Survey.

  • That's a big problem when you consider how many low- and mid-skilled jobs are expected to be wiped out by automation.

The impact: "The coming crisis centers around workforce availability as the baby boomer generation retires and takes a massive cut out of the labor pool, coupled with disruption from AI and machine learning," Chris Camacho, president and CEO of the Greater Phoenix Economic Council, told Axios. "There's a need for companies to scale technical training in the midst of a massive workforce shift."

Zooming in: The Phoenix-Mesa-Scottsdale metro area is on the higher end of the skills anxiety spectrum, with 50% of people saying they believe they need more education.

  • Tech companies — such as Apple, Cisco, Google, Intel — want a worker pipeline in Arizona because it is relatively close to (and much cheaper than) Silicon Valley.
  • They've teamed up with the 10 community colleges in Phoenix (with 65,000 students) to create industry academies to train people in specific in-demand skills.
  • "It's all about the talent pipeline," Camacho said. "Instead of all these companies doing it on their own, we're seeing them lean into building out the broader base for them to continue and grow and scale in a market that's cost-competitive."
  • That, in turn, helps Phoenix-area workers get the skills they need to stay competitive, too.

The bottom line: In cities and states where people express low motivation for enrolling in skills training, guaranteed higher wages or job placement is key to making it worth their while.

  • "The clearer the path people can see between education and the desired outcome, the more confidence they’ll have to act," Dave Clayton, SVP of consumer insights at Strada Education Network, told Axios.

Go deeper: The rise of corporate colleges

5. The new career path: apprenticeships

From left: Reggie Harden; Ryan Reed; Dolica Gopisetty (Photos: Accenture, IBM, AWS)

Apprenticeship programs are no longer just for plumbers and electricians. They are an increasingly popular way to groom workers for technical roles.

Why it matters: A number of metro areas (and suburbs) are leveraging their community colleges to create a pipeline of workers in tandem with wooing companies to set up shop there. Apprenticeships are more frequently part of those efforts.

  • I talked to 3 tech workers who've completed programs run by different tech companies.

Reggie Harden, 44, of San Antonio completed a 3-month Accenture apprenticeship after a 20-year Air Force career. He found the program through a local nonprofit that focuses on mid-career skills training. Soon after, Accenture hired him as a full-time employee as a Salesforce developer.

Ryan Reed, 38, of Raleigh wanted tech training after injuries forced him to retire from a 15-year career as a firefighter and paramedic. He struck out trying to find entry-level tech jobs without a degree, and he stumbled on a 12-month IBM apprenticeship in software programming. The pay and benefits were essential for him to support his 4 children while learning new skills. He's now a full-time IBM employee.

Dolica Gopisetty, 21, of Fairfax is a senior at George Mason University studying IT. She wants to get a job in cloud computing so she enrolled in AWS Educate, a noncredit training program the company helped develop at Virginia colleges to pick up specialized skills.

  • "It's not just about your degree, it's also about the skills you can learn on top of that to stand out from other applicants," she said.

Why you'll hear about this again: Apprenticeships allow companies to continuously adjust what and how they are teaching to fit current needs in factories, IT departments or data centers.

  • It also gives companies a way to create jobs in parts of the country where tech jobs are scarce. IBM, for example, offers apprenticeships in West Virginia, Missouri, Iowa and Louisiana.

What to watch: The rise of apprenticeships and in-house "academies" mean companies may rely less on traditional colleges to supply talent. That opens an opportunity for cities to tie school with employment as they try to attract and keep employers.

6. Urban files

Illustration: Aïda Amer/Axios

Ford's self-driving cars roll into Texas ☝️ (Axios)

How cities reshape the evolutionary path of urban wildlife (Wired)

Municipal borders have a huge impact on millions of people's daily lives. Here are a few of America's starkest. (Vice)

Miami isn't ready for a storm like Dorian, mayor says (Quartz)

7. 1 fun thing: "Chicagohenge"

A view of the Chicago's western streets Kinzie and Madison as the sun rises and falls straight down 1 of 2 days a year which is known as "Chicagohenge," Chicago, Sept. 22. Photo: Bilgin S. Sasmaz/Anadolu Agency/Getty Images

Monday was one of 2 days a year when the sun rises and sets in perfect alignment with Chicago's east-west streets, framed by skyscrapers, NPR reports.

  • On the spring and fall equinoxes, Chicagoans crowd around road medians and overpass railings to snap photos of the spectacle. The next one is March 19, 2020.
  • Its name comes from Stonehenge, the rock formation in England that lines up with the sun on certain days of the year.
  • "It's one of the rare instances I've experienced when hurried city drivers didn't seem to mind stopping for the many people moving in and out of traffic as they stared into a blinding orange glare," NPR's David Schaper wrote after watching the sunset from Millennium Park Monday evening.