Even if you’re happy where you’re living now, the current economic recession should force you to think about where you choose to call home.
Why?
Because history shows that major upheavals in our country spark huge demographic and economic shifts.
The Depression in the 1930s sparked an exodus from rural states to large cities; the 1970s recession saw huge population shifts from the Northeast to the Southwest.
Many people who didn’t make these shifts ended up in a region that remained economically handicapped for years.
So what areas of our country will be the winners — and losers — a decade from now?
If you work in real estate [1]— or if you just care intently about your own personal financial well-being — you should be asking yourself that question.
I read an interesting theory in a recent edition of Atlantic Monthly [2]. The author, Richard Florida, argues that many part of the U.S. have been stunted economically because of their overrealiance on ‘false’ drivers of growth — in particular, Southwest cities like Phoenix and Las Vegas.
“Although these places drew tourists, retirees, and some industry — firms seeking bigger footprints at lower costs — much of the cities’ development came from, well, development itself,” he writes.
Florida argues that these areas will be feeling the hangover effects for years.
“At a minimum, these places will take a long, long time to regain the ground they’ve recently lost in local wealth and housing values. It’s not unthinkable that some of them could be in for an extended period of further decline.”
Which areas will thrive?
Florida makes the case for population density as a driver of growth. Having people living in ‘close proximity,’ Florida argues, tends to generate more ideas, which get formulated into business plans and help spark economic activity.
This self-regenerating creativity feeds on itself, particularly in an economy that depends more on information than manufacturing things.
“[The economy] depends on generating and transporting ideas. The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, the highest rate of metabolism. Velocity and density are not words that many people use when describing the suburbs. The economy is driven by key urban areas; a different geography is required.”
The result of all this? The big — and dense — cities like New York and Chicago will maintain their economic vitality. Cities characterized by suburban sprawl — and its attendent waste of resources — will suffer.
Where does your community fit in this sort of analysis? What communities do you see in the future that will help support you and your livelihood? Would it affect your moving [3] or relocation decisions?
I know it will affect mine.
Tim Johnson — Relocation.com