Sep 4, 2019

Axios Cities

By Kim Hart
Kim Hart

Happy Wednesday! Hope you're having a decent back-to-school/work/life week so far.

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  • Today's word count is 1,513 words, <6 minute read.
1 big thing: College towns are crushing it

Illustration: Sarah Grillo / Axios

College towns are emerging as economic powerhouses, thanks to their outsized share of the young, highly educated workers who are in such high demand.

The big picture: Major universities — particularly research institutions and those affiliated with nearby medical centers — employ tens of thousands of people and spend billions annually.

  • "But [universities'] power in an urban economy is not limited to what happens inside their doors. They generate billions more indirectly, through spin-offs and through the spending of their employees and — increasingly — their student bodies," Alan Mallach writes in his book, "The Divided City."

By the numbers: College-centric towns are well-positioned to see 11% employment growth over the next decade by leveraging their well-educated worker pools in STEM, health care and creative jobs, according to a recent McKinsey Global Institute study.

  • College towns' populations are young — more than three-quarters of residents are typically younger than 55 — and also highly educated, with 43% having a bachelor's degree or higher.
  • Major universities also have hefty R&D budgets. Successful research projects can lead to spinoffs, patents and lucrative commercial licensing of technology.

And now, instead of leaving for bigger cities right after graduation, a growing number of grads start businesses and hire people, creating new feedback loops of investment and driving more amenities that attract other talent to the area.

What's happening:

  • Ann Arbor, Michigan: The University of Michigan is cultivating its expertise in mobility. Toyota and Hyundai, for example, have opened large R&D centers there.
  • Boulder, Colorado: High-paying tech jobs have lured workers from Silicon Valley, as well as venture capital investors. But the cost of living is higher than other college towns.
  • South Bend, Indiana: The city retrofitted a dilapidated Studebaker factory as an "innovation hub," and Notre Dame in 2008 opened Innovation Park focused on turning its tech research into new businesses.
  • Ames, Iowa: It's one of the fastest-growing cities in Iowa, due in part to Iowa State's Research Park to draw STEM talent.
  • Champaign, Illinois: The U.S. Department of Energy's Argonne National Laboratory just signed an agreement to partner in a new University of Illinois research center there. It aims to be an ag tech and med tech hub.

That growing entrepreneurial ecosystem is relatively new for college towns, which historically haven't given much thought to economic development.

"20 years ago, if you wanted to start a business, capital was king. Now talent is king. Having those connections to that constant feedstock of graduates is very attractive to industries. It means certain areas that are a little farther from metro areas can carve out a niche."
— Scott Andes, National League of Cities

Yes, but: College towns still struggle to attract venture capital funding to spur high-growth companies to keep startups from leaving. And despite relatively low costs of living, these towns tend to have higher-than-average poverty rates.

What's next: Midsize post-industrial cities are increasingly leaning on universities and medical centers —"eds and meds" — to replace dwindling manufacturing jobs.

  • University cities — like Pittsburgh, home to Carnegie Mellon; Baltimore, home to Johns Hopkins; and St. Louis, home to Washington University — have the benefits of larger populations, an existing employment base and generally higher research budgets, Andes said.
2. Evacuations could go faster with self-driving cars

Illustration: Aïda Amer/Axios

About 1.5 million Floridians have moved inland to avoid the wrath of Hurricane Dorian. Such evacuations can be perilous — but in the future, networks of automated vehicles could help shuttle people out of harm's way more efficiently, Axios' Joann Muller and I report.

What to watch: Florida's population is projected to increase by 6 million people, to 26 million, by 2030, with much of the growth in vulnerable coastal regions.

AVs might help make evacuations more efficient, former Florida emergency management chief Bryan Koon, now a vice president at disaster consulting firm IEM, wrote in a 2018 blog post.

  • By communicating with other cars, they could travel faster and closer together, maximizing traffic flow and reducing traffic-jamming fender benders.
  • Smart cars could also identify less congested routes and even direct people to available shelters or hotels.

But, but, but: As people give up their cars in favor of ride-hailing, it's also possible there won't be enough vehicles to accommodate everyone who needs to flee in an emergency, Koon says.

Read the full story

3. D.C.'s growing low-cost housing gap
Expand chart
Adapted from Turner et. al, 2019, "Meeting the Washington Region’s Future Housing Needs"; Chart: Axios Visuals

The Washington, D.C., region already has a severe shortage of affordable housing, and that deficit will widen over the next 10 years, according to a new report out today from the Urban Institute.

Why it matters: The lack of affordable housing means many low-income families, especially renters, have high-cost burdens, live farther away from their jobs and have long commutes — or end up leaving the region altogether.

  • Without affordable housing, employers have to pay more to attract and retain workers. Washington is the 5th-largest employment market in the U.S., and recent employment has grown fastest in the low- and high-wage jobs.

The big picture: The region needs 374,000 additional housing units by 2030, according to the economic growth rate projected by the Metropolitan Washington Council of Governments.

  • 40% of those additional units would need to be in the middle-cost range, and another 38% would need to be low-cost units to match projected needs. Low-income employment is expected to grow faster than the number of high-paying jobs.
  • Overall, the D.C. region's building has not kept pace with its population growth. Since 2010, it has added housing units at only 56% of the rate produced during the 2000s.

Yes, but: Due to the high cost of development in the area, the market doesn't incentivize the creation of more lowest-cost housing units without significant subsidies. But it's unlikely that federal funding for public housing and vouchers will increase anytime soon.

What's next: Urban Institute researchers recommend that the local governments make targeted investments that preserve existing affordable housing units, while also incentivizing developers to build more in the low- and middle-cost ranges.

Read the full story

4. A proposed HUD rule on AI could allow for housing discrimination

Illustration: Rebecca Zisser/Axios

HUD recently proposed a rule that would protect financial institutions from liability for using algorithms to make lending decisions, as long as the technology used was produced or distributed by a recognized company, Miriam Vogel writes for Axios Expert Voices.

Why it matters: AI can inadvertently rely on characteristics that include or are correlated with race, gender and socio-economic class, so under the proposed rule, financial institutions could make illegal determinations and hide behind an AI product.

The big picture: Financial institutions are increasingly using AI to detect suspicious activity, optimize portfolios, recommend strategic investments, and assess creditworthiness.

How it works: Institutions may decide, for example, that unbanked individuals are less creditworthy, and using this factor in loan decisions could disadvantage people of color and women.

  • Nearly 17% of African Americans and 14% of Hispanic Americans are unbanked, compared to just 3% of white Americans.
  • 15% percent of unmarried female-headed family households are also unbanked.

What to watch: If the HUD rule is enacted, algorithms could obscure the reason for a credit denial.

Read the full piece

5. Baltimore's extreme heat risk

Average annual temperatures in Baltimore have gone up more than 3 degrees over the last century — nearly twice as much as the rest of the country — and this summer's sweltering temperatures disproportionately affected the city's poorer neighborhoods.

It's not just Baltimore: The urban poor in large cities across the country will experience more heat than the wealthy as the urban heat island effect intensifies.

  • A collaboration between The University of Maryland's college of journalism and NPR placed temperature and humidity sensors in homes in Baltimore's hottest neighborhoods and reported the impact on residents.
  • The in-depth project is worthy of your time.
6. Another college town thing: Food delivery robots

Illustration: Sarah Grillo/Axios

College students may soon have to share their campus sidewalks with thousands of 6-wheeled robots ready to deliver their dinners, Axios' Marisa Fernandez reports.

Driving the news: Food delivery company Starship Technologies announced plans in late August to deploy cooler-sized, self-driving robots to 100 U.S. college campuses by 2022.

  • Starship is targeting college campuses because students typically have little kitchen access beyond minifridges and microwaves. Demand for food delivery is high, and how the food is delivered is of less importance.
  • They're already making deliveries at George Mason University and Northern Arizona University. And they're set to deploy at Purdue University in Indiana on Sept. 9. Next up: the University of Pittsburgh.

Yes, but: Food service jobs are a staple in college towns. 43% of students in college full-time had a job in 2017.

  • The number nearly doubled for part-time students, according to the National Center for Education Statistics. Growing fleets of sidewalk robots could disrupt a workforce dependent on relieving college tuition and living expenses.
7. Urban files

Illustration: Sarah Grillo / Axios

America's worker deserts☝️(Courtenay Brown — Axios)

How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich (Jesse Drucker & Eric Lipton — NY Times)

The changing face of first-time homebuyers (Linda Poon — CityLab)

Could bicycles help save the planet and improve our cities? (Thor Hogan — Washington Post)

8. 1 scary thing: E-scooters are hurricane hazards

A commuter rides an e-scooter on the sidewalk in Los Angeles. Photo: Frederic J. Brown/AFP/Getty Images

City officials in Miami told electric scooter companies that they had until last Friday to make sure all of their scooters were pulled off the streets, CNBC reports. The city warned that the dockless vehicles could become projectiles when Hurricane Dorian hit Florida this week.

Why it matters: Scooter companies have mostly responded quickly and judiciously to the city’s request. The safety of their riders and the protection of their inventory depends on it, Axios' Sara Fischer writes.

Details: 

  • Six e-scooter companies operate in Miami, per CNBC, including Bird, Bolt, Uber's Jump, Lime, Lyft and Spin.
  • Some of those companies said that their scooter fleets in nearby cities like Fort Lauderdale and Orlando were removed from streets as a precaution.

Our thought bubble: The average dockless e-scooter weighs around 30 pounds. It makes sense that cities would want to limit the possibility of hurricane winds flinging those heavy vehicles into the air.

Kim Hart