Urbanologist Joel Kotkin: Why growth-oriented cities like Houston, Phoenix and Atlanta reflect the future of global commerce

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

Joel Kotkin is the only American urbanologist who can tolerate actual living human beings. In consequence, he can write about the organic growth of cities as they really are, rather than as he might remake them with enough tax money and firepower. This is a long extract from a much longer article about Houston’s emergence as a world-class city, this despite the scorn that might be heaped upon it — at tax-payer expense — by urban monument-builders like Richard Florida. In this section of the article, Kotkin discusses what makes young, growth-oriented cities so dynamic by comparison to older, more-typically-urban urban environments.

Ultimately, it’s a question of defining what makes a city great. Many city planners today focus largely on aesthetics, the arts, and the perception of being “cool.” Academics and many economic-development experts link urban success to cities’ appeal to the “creative class” of college-educated young people. In this calculus, the traditional practice of gauging a city’s success by studying patterns of population or employment growth, or noting the opportunities available for working-class or middle-class families to flourish, rarely registers as important. One prominent academic, Rutgers University’s Paul Gottlieb, has even offered an elegant formula for what he calls “growth without growth”—focusing on increasing per-capita incomes without expanding either population or employment. Indeed, Gottlieb suggests that successful post-industrial cities might well do best if they actually “minimize” the influx of new people and jobs.

Such an approach may work, at least superficially, in an attractive older city such as Chicago, New York, or Boston, but it’s an unlikely model for most cities in a country where the population is expected to reach 420 million by 2050. Growth-without-growth cities might be great to visit, and they might prove exciting homes for the restless young or the rich, but it is doubtful that they can create the jobs or the housing for more than a small portion of our future urban population. For these and other reasons, the Houston model of the opportunity city—welcoming new jobs and new families—may prove far more relevant to the American future.

Chicago, the great growth city of the late 19th century, whose trajectory most resembles Houston’s, left many early visitors unimpressed. A settlement of barely 350 people in 1835, Chicago mushroomed to a population of 100,000 by 1860. Aesthetically pleasing the city was not; Chicago, a Swedish visitor commented in 1850, was “one of the most miserable and ugly cities” in the United States. But Chicago’s economy barreled ahead, while that of St. Louis, its midwestern rival, stalled. The more genteel St. Louis business establishment, noted the Chicago Tribune in 1868, “wore their pantaloons out sitting and waiting for trade to come to them,” while Chicago’s “wore their shoes out running after it.”

An updated version of that story has been playing out in several cities across the country over the past half-century. The years since World War II have seen the emergence of a new roster of opportunity  cities, including Los Angeles, Atlanta, Dallas, Phoenix, Charlotte, San Jose, Las Vegas, and, of course, Houston.

Like New York in the 19th century and the midwestern boomtowns of the early 20th, these cities have been led by aggressive entrepreneurs. They have appealed to newcomers, whether arriving from elsewhere in the country or from abroad, seeking a new start and a better life. Some of the cities have grown by nurturing new industries—Los Angeles with entertainment and aerospace, Las Vegas with gambling, and San Jose with electronics. Others, such as Phoenix, Dallas, Atlanta, and Charlotte, took advantage of their growth to challenge established cities in property development, banking, manufacturing, and other industries. 

These cities have redrawn the country’s demographic and corporate maps. In 1950, St. Louis, Cleveland, and Pittsburgh ranked among the nation’s ten largest metropolitan areas; today they have been replaced by Houston, Dallas, and Miami. Equally significant has been the shift in the location of the nation’s largest companies away from the traditional centers of commerce. In 1960, greater New York dominated the corporate world with 140 of the top 500 companies, followed by Chicago, Pittsburgh, and Cleveland. New York remains first among equals but now the region is home to barely 60 of the largest firms. In addition to Houston, cities such as Atlanta, Charlotte, and Dallas have also carved out a powerful presence in American business. 

These cities have achieved their success not through “growth without growth” but through the prodigious expansion of both employment and population. Over the past decade, Houston, Phoenix, and Dallas each have matched the employment growth of New York, Boston, San Francisco, and the Silicon Valley area combined. One of the most powerful weapons of opportunity cities in this contest is the growing divergence in costs between them and “superstar” cities. The latter clearly provide somewhat higher wages to professional, financial, and engineering workers. Yet for most people, the vast differences in the cost of living and real estate prices allows professionals working in Phoenix, Charlotte, or Houston to enjoy a considerably higher standard of living. 

Over time, these cost differences, as well as the associated continuing shift in employment opportunities, has begun to alter one of the most critical indicators of future economic growth: the flow of educated labor. Indeed, since the late 1990s there has been a rising outflow of workers with postsecondary education from increasingly expensive cities like Boston, New York, and San Francisco and a parallel shift toward more family-friendly, modestly priced metropolitan areas.

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