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Looking Ahead: America and Richmond to 2050

Speech by Joel Kotkin, Chapman University to VCU 23rd Real Estate Trends Conference, October 7, 2013


Long Term Fundamentals • U.S. only advanced country with large, growing population • Huge resource base • Economic system most resilient among advanced countries • Affordable housing attracts key demographic groups • Dispersion and decentralization is the future


More Crowding to Come: US Population Growth 1960-2050

Source: Bureau of the Census, CensusScope


Labor Force Growth 45% 35%

Growth in Age 15-64

United States, 37%

25% 15% 5% -5% -15% -25% -35%

China, -10% Europe, -21% Korea, -30% Japan, -39%

-45% 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 U.S. Census Bureau, International Database


Ratio of Elderly to Working Age Population 65 & OVER PERSONS PER 15-64 YEARS 0.9 2010

0.8 65 & Over Persons per Under 15

0.82

2050

0.7 0.6

0.53

0.5

0.45

0.4

0.1

0.37

0.36

0.3 0.2

Calculated from UN Population Prospects: 2010 Revision

0.34

0.26 0.19 0.12

0.09

0.0 China

Europe

Japan

Singapore

United States


Declustering: The New Demography • Nationwide people heading to smaller towns and cities • Social trends strongly prosuburban • Growth shifts to “opportunity regions”


Top States for New Plants, 2010


Population trends 2012 Population

2001-2012 Growth

2013-2023 Projection

Great Lakes

58,204,741

3%

1%

Plains

40,198,802

14%

6%

Inland West

31,937,817

21%

7%

Left Coast

18,754,371

10%

5%

NE

41,377,960

6%

3%

SoCal

20,738,971

10%

5%

SE

60,684,462

14%

5%

Third Coast

16,421,390

16%

7%

Miami

5,729,000

12%

6%

NY

19,109,549

3%

3%


Cities of Aspiration, Demographic Trends: DOMESTIC MIGRATION

2007-2012 (Excluding 2010) Divided by 2007 Population (Census Bureau) 7.00% 5.00% 3.00% 1.00% -1.00% -3.00% -5.00%


Share of 2000 Population

Net Domestic Migration by Population MAJOR METROPOLITAN AREAS: 2000-09, 2010-12 4% 3.7% 2% 0%

1.4% Over 10M

-2%

5M-10M -2.5%

2.5M-5M

0.6% 1M-2.5M

-4% -6%

From Census Bureau Data

-8% -10% -12%

-11.3%

Other


Housing Affordability & Domestic Migration % US MAJOR METROPOLITAN AREAS: 2000-2012 6% ### Notes needed

% of 2000 Population

4% 2% 0% -2%

2.0-2.9

3.0-3.9

4.0-4.9

5.0-5.9

6.0-6.9

7.0 & Over

-4% -6% -8% -10% -12%

Median Multiple

Figure 12


Workforce Wages & Qualifying Incomes ORANGE COUNTY & INLAND EMPIRE $120,000 $100,305 $88,258

$80,000

Orange County Wages $79,414

$77,745

$60,000

TO QUALIFY: Riverside-San $56,908 Bernardino: $42,420

$40,000

$41,453

Construction Laborer

Carpenter

Elementary School Teacher

Computer Programmer

Nurse (RN)

Biomedical Engineer

$0

$24,042

Personal & Home Care Aide

$28,280

$20,000

Retail Salesperson

$100,000

TO QUALIFY: Orange County: $117,471

“Qualifying income (with 10% down payment)” data from National Association of Realtors & actual wage data from California Employment Development Dept.


Richmond MSA Net Domestic Migration, 2000-2010

Blue: Moving out of Richmond Orange: Moving in to Richmond Source: IRS Migration Data


2000-2010 Washington-Arlington-Alexandria, DC-VA-MD-WV

13,504

New York-Northern New Jersey-Long Island, NY-NJ-PA

12,877

Virginia Beach-Norfolk-Newport News, VA-NC

8,194

Charlottesville, VA

2,535

Net Losses -690

Raleigh-Cary, NC

-825

St. Louis, MO-IL

-1009

Charlotte-Gastonia-Rock Hill, NC-SC

-1091

Atlanta-Sandy Springs-Marietta, GA

Source: IRS Migration Data


Cities of Aspiration, Demographic Trends: CHANGES IN COLLEGE GRADUATE POPULATION 2007-2011 Percentage Change: Age 25 and Over (ACS)

Washington, DC-VA-MD-WV Seattle, WA San Jose, CA San Francisco, Oakland, CA Riverside-San Bernardino, CA Richmond, VA Raleigh, NC Oklahoma City, OK New York, NY-NJ-PA Los Angeles, CA Chicago , IL-IN-WI Charlotte, NC-SC Boston, MA-NH Baltimore, MD Austin, TX 0.00%

5.00%

10.00%

15.00%

20.00%

25.00%


Cities of Aspiration, Quality of Life Outcomes: TRAFFIC CONGESTION Time Lost in Peak Hour Congestion: 2012 Average (INRIX) 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%


“We’ve reached the limits of suburban development .People are beginning to vote with their feet and come back to the central cities.” HUD Secretary Shaun Donovan Feb 2011


Preferred vs. Actual Community Type

2011 Community Preference Survey, Belden Russonello & Stewart. Conducted for the National Association of Realtors


Preferred vs. Actual Housing Type

2011 Community Preference Survey, Belden Russonello & Stewart. Conducted for the National Association of Realtors


Population Growth by Distance from Core US MAJOR METROPOLITAN AREAS: 2000-2010 9,000,000 8,000,000

Data from Census Bureau

Population Growth

7,000,000 6,000,000 5,000,000

8,566,000

4,000,000 3,000,000 2,000,000 1,000,000 0 -1,000,000

3,473,000 2,989,000 1,105,000

206,000 -272,000

Figure 21


Fastest Growing Counties Over 100,000 2010-2012

Williamson, TX Loudoun, VA Hays, TX Orleans, LA Fort Bend, TX Midland, TX Forsyth, GA Montgomery, TN Prince William, VA Osceola, FL

7.94% 7.87% 7.56% 7.39%

7 39%

7.16% 7.14% 7.07% 7.04%

Data from Census Bureau

7.04% 6.97%

6

6.5

7

7.5

8

8.5


City of Richmond & Suburban Growth SHARE OF POPULATION GROWTH: 2000-2010 & 2010-2012 100%

Share of Metropolitan Growth

90% 80%

Source: Census Bureau

95.6%

70%

72.7%

60% 50% 40% 30%

27.3%

20% 10% 0%

4.4% 2000-2010

2010-2012


Groups Shaping our Future Demography

• Key demographic groups: Immigrants, Millennials, Aging Boomers --- mostly in suburbs • Millennials start to grow up • Shift in geography of family: key to long-term growth


White-Non-Hispanic Share of Population US: 1960-2050

100% 90%

Source: Bureau of the Census

80% 70% 60% 50% 40% 30% 20% 10% 0%

1960

2010

2020 Projection

Figure 26


Foreign Born Share of New Households US: 1970-2010

70% 60% 50%

Source: Myers & Pitkin

40% 30% 20%

Total

10% 0%

Owner Renter

1970-1980

1980-1990

1990-2000

2000-2010

Figure 27


A Majority of Immigrants Now Reside In The Suburbs

U.S. Census Bureau, 2007 American Community Survey


Change in Asian Population: 2000-2010 BY CORE CITIES & SUBURBS

Increase: Major Metropolitan Areas

3.0 2.5 2.0 1.5 1.0 0.5 0.0

Core Cities

Suburbs

Figure 29


Cities of Aspiration, Demographic Trends: CHANGES IN FOREIGN BORN POPULATION 2007-2011 Percentage Change: (ACS)

35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00%


Millennials rival Boomers Population in Millions 81.6

81.0

57.3

Millennials (Age 12 - 30)

Gen X (Age 31 - 44)

Boomers (Age 45 - 64)

U.S. Census Population Projections, 2008


Millions

Number of 30 - 45 year olds in United States

2050, 88.09 Million

90

2025, 74.73 Million 80

2010, 66.14 Million

70

60

50

40

30

20

10

0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 Source: Praxis Strategy Group Analysis of U.S. Census Population Projections, Released 2008


Millennials and the Family Sources of Happiness of 13-24 year olds 76

85% plan to get married

72 53

52

43

35

77% probably or definitely want children

Associated Press/MTV Survey, 2007


Millennial Life Style Choices COMPARED TO OLDER GENERATIONS Current Residence

Big City Suburb Source: Frank N. Magid Associates

Small City Country

Millenials Older Generations

Ideal Place to Live

Big City Suburb Small City Country 0%

10%

20%

30%

40%

50%

Figure 34


Change in 5-17 Population: 2000-2010 MAJOR METROPOLITAN AREA EXAMPLES 60% Source: Census Data

50% 40% 30% 20% 10% 0% -10% -20%

Change


No Children: Housing Affordability METROPOLITAN AREAS: WOMEN AGED 15-45: 2010 10%

Variation from National Average

8% 6% 4%

VARIATION FROM NATIONAL AVERAGE Median Multiple (Median House Price/ Median Household Income) 2001-2010 Average

-2% -4%

No own children at home Higher where higher density

3.0%

2% 0%

9.7%

1.3% Affordable (3.0 & Under)

Moderately Seriously Unaffordable Severely Unaffordable Unaffordable (3.1-4.0) (4.1-5.0) (5.1 & Over)

-2.5% Population per Square Mile


Share Under Age 15, 2012 Inland West

21.5%

Plains

21.2%

Third Coast SoCal

20.7% 20.1%

SE

19.2%

Great Lakes

19.1%

Left Coast

18.7%

NY

18.4%

NE Miami

18.0% 17.3%


Millions

Number of 65 - 100 year olds in United States 90

80

2050, 88.55 Million

2030, 72.09 Million

70

60

50

2008, 38.69 Million 40

30

20

10

0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050

NewGeography.com

Source: Praxis Strategy Group Analysis of U.S. Census Population Projections, Released 2008


90% of people over fifty would rather stay put than move - AARP

“They don’t want to move to Florida, and they want to stay close to the kids. What they are looking for is a funky suburban development – funky but safe.” - Washington-area developer Jeff Lee. Photo: Vlastula


Empty Nesters: To Less Dense Areas MAJOR METROPOLITAN & SMALLER AREAS 6.0% 4.0%

Change in Share of Cohort

2.0% 0.0% -2.0% -4.0%

Major Metro Core Cities

Major Metro Suburbs

Smaller Areas

-6.0% -8.0% -10.0% -12.0% -14.0%

65-74 Population in 2010 Compared to 55-64 in 2000 Source: US Census Data


Looking Ahead: Richmond and America in 2050 • • • •

Affordable Housing and Business Climate Key Attractors Focus on immigrants, millennials and aging boomers Both suburbs and center- city are critical to retaining regional edge Take Advantage of Richmond’s position in burgeoning southeast


JOELKOTKIN.COM A vivid snapshot of America in 2050 focusing on the evolution of the more intimate units of American society—families, towns, neighborhoods, industries. It is upon the success or failure of these communities that the American future rests.


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Joel Kotkin Presentation  

Presentation by Joel Kotkin at the 23rd annual VCU Real Estate Trends Conference.

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