The 2010s were a great decade for America’s big cities. The 2020 Census found that each of the top 25 cities in the country gained population. 14 of them had population growth of more than 100,000.

New York City led the way. Growing by an astonishing 629,000. Only 29 cities in America have a population of more than 629,000. New York City grew by about the total population of the city of Detroit (639,000) and three time more than the total population of the city of Grand Rapids (199,000).

New York’s 2020 population is 8.8 million. The most ever in the city’s history. More than all but 11 states. New York’s population is larger than the entire state of Michigan minus Oakland County.

The 2020 census count was conducted when New York City was getting hammered by COVID-19 and the press and social media were filled with stories that everyone was moving out of the city. Conventional wisdom had it that dense places––particularly big cities––were toast. Think again!

One of the dominant trends of the 2020 Census is that Americans are increasingly choosing to live in big metropolitan areas, most anchored by vibrant central cities. And those big metros with their vibrant central cities are also the most prosperous places in America.

The competitive advantage of big metros and their big cities was evident a decade ago. In a 2011 post about Manhattan, really all of New York City, I described that competitive advantage this way :

Manhattan is probably the highest cost place to do business in America. Not only high state and local taxes, but also high labor costs and, maybe most important, sky high real estate prices. In many ways it is the poster child for big government: big police and fire departments; big park system; public support for the arts; transit,transit, and more transit; one of the few cities with safety net programs over and above the state and federal safety net and on and on and on. Add to that lots of regulation, powerful public employee unions, lots of renters; sky high density; lots of immigrants, gays and folks of different races, religions and ethnicity and you have a recipe for what we are constantly told leads to economic disaster. Wrong!

Instead it is a place where knowledge-based businesses from across the planet are increasingly concentrating. It is one of America’s great centers of innovation and entrepreneurship. A place where the affluent (the 1%) and talent concentrate. It all adds up to one of the most successful economies in the country. So strong that it is the main engine of a metropolitan area of more than 22 million people (more than twice Michigan) in four states. A metropolitan area that is the third most prosperous big metro in the country, with a per capita income of more than $52,000. ($18,000 higher than Michigan’s.)

Turns out in the real world all those so-called liabilities are assets that lead to prosperity. A big city that works, a government that provides quality basic services and amenities, terrific alternatives to driving, density and welcoming to all. Combine those features with an entrepreneurial culture and you have a place where talent – from across the planet – wants to live and work. And where talent concentrates you get growth and prosperity, not decline and falling income and employment. To get back on the path to prosperity Michigan needs far more – not less – of what Manhattan has.

Michigan policymakers––from both parties––and Michigan business leaders, by and large, spent the last decade ignoring these Manhattan lesson. Pursuing instead a let’s make a Michigan low-cost place economic strategy. Clearly that strategy didn’t work.

The Census data makes clear that it is far past time for Michigan to put in place a new economic development strategy. Just as a decade ago, New York City offers the state a model for what the assets are that matter most to creating places where people want to live and to driving growth and prosperity.

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More than a decade ago we identified four common characteristics of high-prosperity non-energy-driven states:

• Over concentrated in knowledge-based services which are the sectors of the economy both growing and high wage
• High proportion of adults with a four-year degree or more
• Even higher college attainment in the state’s big metro(s)
• In those big metros a high proportion of adults with a four-year degree or more, particularly young professionals

The just released 2018 American Community Survey confirms the last point. High-prosperity states and regions have in common a concentration of young professionals in the big city of their largest region(s).

Nationally 36.2 percent of 25-34 year olds have a four-year degree or more. The proportion of 25-34 year olds in the big city of the big region in the top 10 per capita income, non-energy-driven states who have at least a four-year degree is quite astounding. Here are the stats:

• New York City: 52.5 percent. The big city in the big metro for New York, Connecticut and New Jersey
• Boston: 62.0 percent. The big city in the big metro for Massachusetts and New Hampshire
• Washington D.C.: 73.9%. The big city in the big metro for Maryland and Virginia. Also Baltimore is at 45.8 percent
• Seattle: 75.0 percent. The big city in the big metro for Washington state
• Denver: 59.9 percent. The big city for the big metro for Colorado

California is the other top 10 per capita income non-energy-driven state. It, of course, has multiple big metros. In Northern California San Francisco (79.2 percent), San Jose (55.8 percent) and Oakland (55.5 percent) all have high concentrations of young professionals. Los Angeles is at 40.8 percent. San Diego at 50.5 percent. Sacramento is at 41.3 percent.

The two highest per capita income Great Lakes states Minnesota and Illinois are anchored by high young professional concentrations in Minneapolis (62.7 percent) and Chicago (54.2 percent).

How are Michigan two big cities doing? Really good news in Grand Rapids. 51.0 percent, up from 35.8 percent in 2010. Not such good news for Detroit. It still is the national big city laggard. 16.1 percent, up from 10.8 percent in 2010.

As we explored in our recent Talent attracts capital post, concentrations of college educated adults, particularly young professionals is a major component of regions and states ability to retain and attract high-growth, high-wage enterprises. As we should have learned from Amazon HQ2, current and future talent concentrations are the asset that matters most to high-wage businesses. And you cannot have the needed talent concentrations without cities that have the high-density, high-amenity, transit-rich neighborhoods that young professionals are flocking to.

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Examining the growth of income over the past century, we find growth was broadly shared from 1945 to 1973 and highly unequal from 1973 to 2007, with the latter pattern persisting in the recovery from the Great Recession since 2009:

• Faster income growth for the bottom 99 percent of families between 1945 and 1973 meant that the top 1 percent captured just 4.9 percent of all income growth over that period.
• The pattern in the distribution of income growth reversed itself from 1973 to 2007, with over half (58.7 percent) of all income growth concentrated in the hands of the top 1 percent of families.
• So far during the recovery from the Great Recession, the top 1 percent of families have captured 41.8 percent of all income growth.

More evidence that the preeminent economic challenge of our generation is finding ways to combat the Great Decoupling. Where economic gains are increasingly concentrating at the top. We structurally have an economy where way too many households are not sharing in the benefits of a growing economy. It’s why we have proposed that a rising household income for all be the mission of state economic policy. We need to stop assuming that a low unemployment rate or growing economy/strong domestic auto industry leads to an economy benefiting all. It doesn’t.

In this post I want to focus on the report’s state and metropolitan area data, specifically for Michigan and Minnesota and metro Detroit, Grand Rapids and Minneapolis. The income data in the report comes from tax returns. So it is a different definition of income that you get from per capita income or median household income. The big differences are that the IRS income data include capital gains and does not include government transfer payments or employer paid benefits. The IRS income data is probably far closer to what each of us think of as our annual income.

Turns out using this definition of income the gap between the average household in the 99 percent in Minnesota and Michigan is huge. And that is particularly true between the three big metros.

The average income for bottom 99 percent taxpayers in the U.S. is $50,107. In Michigan it’s $42,825. In Minnesota it’s $56,728. Michigan’s average household income is 15 percent below the national average, Minnesota’s is 13 percent above. And Minnesota’s bottom 99 percent since the end of the Great Recession have enjoyed greater income growth. Average real income is up 16.4% from 2009-2015 in Minnesota compared to 14.1% in Michigan and 10.3% percent nationally.

Metro Detroit’s average household income using IRS data is $47,344; metro Grand Rapids’s is $47,150; metro Minneapolis is $65,792. The big difference between Michigan and Minnesota is the difference in prosperity between the big metros in the two states. This is true nationally because big metros are where American’s mass middle class is concentrated. The average bottom 99 percent metro Minneapolis household in 2015 had roughly $19,000 more income than a similar household in both metro Detroit and metro Grand Rapids. Metro Minneapolis’ average household income is 31 percent above the national average and 39 percent above both metro Detroit’s and metro Grand Rapids’.

In our Minnesota case study State Policies Matter: How Minnesota’s Tax, Spending and Social Policies Help It Achieve The Best Economy Among the Great Lakes States and in our metro Minneapolis case study Regional Collaboration Matters: How Metro Minneapolis has forged one of the wealthiest and most livable metropolitan regions in the United States we detail the state and regional policies that have made Minnesota and metro Minneapolis the most prosperous in the Great Lakes.

At the core it is an understanding that human capital is the asset that matters most to economic well being, not being the low tax/low cost place to do business. So that preparing, retaining and attracting talent is what matters most to economic success. And that requires public investments in education and infrastructure as well as quality basic services and amenities. Minnesota has been on this path for decades. Michigan has chosen for decades the low tax/low cost strategy. These data are more evidence that it is time for Michigan to change strategy.

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Cortright found:

The number of well-educated young adults living in the nation’s largest cities increased 19 percent between 2012 and 2016, about 50 percent faster than the increase outside these large cities.

Well-educated young adults were already highly concentrated in large cities, and are more concentrated today; in 2012, a 25 to 34 year old with a four year degree was about 68 percent more likely to live in a large city than the typical American; by 2016, they were 73 percent more likely to live in a large city.

He found that in 51 of 53 cities there has been growth. (The two with declines are Rochester, New York and Tucson, Arizona.) Detroit’s young professionals grew from 10,532 to 17,261. Grand Rapids grew from 12,517 to 18,012. Good news for both. But they both have a long way to go to be a talent magnet.

There were nine cities that saw the number of young professionals grow by more than 20,000 from 2012-2016. New York City is in a league of its own adding nearly 84,000 for a total of nearly 763,000. The other cities in the top nine were in order of their growth: Los Angeles, Chicago (no Chicago is not collapsing), Philadelphia, Austin, Houston, Seattle, Boston and San Fransisco.

This, of course, is not new. It’s a continuation of college-educated Millennials choosing to live in central cities in much larger proportions than previous generations. Why it matters to all of us, is that the regions that are anchored by a vibrant central city that is a talent magnet are high-prosperity regions.

Each of the top nine central cities listed above anchors a region with per capita income higher than both metro Detroit and metro Grand Rapids. Ranging from $51,566 in metro Austin to $84,675 in metro San Fransisco (which is a separate region from Silicon Valley) compared to $48,692 in metro Detroit and $46,519 in metro Grand Rapids. (You can find the regional per capita income data here.)

It is also worth noting that, with the exception of Houston, all are a finalist for Amazon’s HQ2. And, of course, Detroit and Grand Rapids are not.

Amazon’s HQ2 search is representative of the new reality that in the growing high-wage knowledge-based sectors of the global economy talent—those with a four-year degree or more—is the asset that matters most and is in the shortest supply. And that is directly connected to prosperity, measured by per capita income. Because knowledge-based sectors are the only part of the American economy that is both growing and high wage.

The lesson that Michigan needs to learn––and is having a hard time doing so––is that vibrant central cities––particularly Detroit and Grand Rapids––are essential to regional and the state’s return to high-prosperity. And that requires public investment in placemaking. As we wrote in our new state policy agenda report:

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The reality is that in the growing high wage knowledge-based sectors of the global economy talent—those with a four-year degree or more—is the asset that matters most and is in the shortest supply. This reality has been clear for more than a decade.

At both the state and regional levels Michigan’s policymakers, by and large, supported by the business community have chosen to ignore this reality. Rather they have focused on trying to revive Michigan’s 20th Century economy and sectors largely through lowering taxes and organizing an education system to prepare most Michigan kids—but not theirs––to work in the declining factory-based economy rather than the growing knowledge-based economy.

In 2006 we published A New Agenda for a New Michigan. It was clear to us then if Michigan did not change fundamentally we would not be competitive in attracting and growing the high wage jobs that are the key to prosperity. Here is what we wrote in 2006 about what mattered most to Michigan reversing that decline. By and large we have not acted on those recommendations and our conclusion would be the same today, unless we do we are going to be one the nation’s poorest states.

“This report is designed to answer the question “what really matters in better positioning Michigan and its regions for success in a knowledge-driven and entrepreneurial economy?”

We started with a clean sheet. We didn’t assume that state and local policy was the answer. Nor did we start with preconceived notions of what the right answers are.

Our basic conclusions are:

1. Our answer to the question “where do we want to go from here?” is a high prosperity Michigan. Measured best by a per capita income above the national average no matter how well the national economy is faring. This is a status we enjoyed for most of the first 70 years of the last century. After more than three decades of continuous decline compared to the nation, we are now consistently below the national average in both upturns and downturns.
2. The only reliable path to a high prosperity Michigan is to be concentrated in knowledge-based enterprises. There is a clear pattern across the country that the states, and most importantly metropolitan areas, with the most successful economies are those that are concentrated in high-pay, knowledge-based industries: information, financial services and insurance, professional and technical services and management of companies. In the past Michigan was able to flourish with an economic base concentrated in factories, farming and tourism. No more. In a flat world, these functions are either increasingly being done elsewhere or are lower-wage industries. Michigan is lagging the nation mainly because of our slow growth in the dynamic, high wage sectors of the knowledge economy. That combined with a still astonishingly high dependence on the now uncompetitive domestic auto industry mean that we almost surely will continue to lag the nation for the next several years.
3. Economies are regional. States and municipalities are political jurisdictions, they are not economic units. State economies can best be understood as the sum of their regional economies.
4. What most distinguishes successful areas from Michigan is their concentrations of talent, where talent is defined as a combination of knowledge, creativity and entrepreneurship. Quite simply, in a knowledge-driven and entrepreneurial economy, the places with the greatest concentrations of talent win. Metropolitan areas without concentrations of talent will have great difficulty retaining or attracting knowledge-based enterprises, nor are they likely to be the place where new knowledge-based enterprises are created.

So in a flat world, economic development priority 1 is to prepare, retain and attract talent. Our agenda to help better position Michigan and its regions to succeed in a knowledge-driven economy is centered on (1) developing a culture and (2) making key public investments that are aimed at preparing, retaining and attracting talent.

First, we need to resist the pressure to try to save jobs and enterprises which are no longer competitive. Such efforts are tilting at windmills (they won’t work) and, most importantly, take time, energy and resources away from doing what is needed to succeed in a flat world.

For the past dozen years, Michigan has centered its economic development strategy on cutting taxes. It didn’t work. And there is no evidence that it will work: the most successful areas around the US are not characterized by low taxes.”

This was the right approach to creating a high-proserity Michigan in 2006. It is the right approach to creating a high-prosperity Michigan in 2018.

The post Amazon says no to Michigan for HQ2. We aren’t surprised. appeared first on Michigan Future Inc..

It’s driven by talent.

The high-wage jobs and innovative companies that will define opportunities for prosperity now and in the future are the most dependent on one thing: the brainpower of high-skilled workers. Those companies, more and more, follow talent.

We recently looked for a quick answer to a question that we figured someone else had put together: where do college-educated millennials live? But we didn’t find anything that satisfied us. So we decided to pull some data and take a look.

We used the 2015 one-year American Community Survey data for every metropolitan statistical area (MSA) in the country. MSAs look different around the country, but they are areas characterized by high population density, with an area of even higher density at the core. Communities within an MSA are highly economically connected. So, the Detroit MSA is actually a six-county area including and around Detroit, and includes the cities of Dearborn and Warren. The Grand Rapids MSA includes the four counties of Ottawa, Barry, Montcalm, and Kent.

We were interested not in where college-educated Millennials are a disproportionate part of the population, but in the simple question of where they are, by the numbers. If we want to know what they are looking for—what attracts them—this is the purest answer. There are 14,970,508 college-educated Millennials in the country, out of our total population of 316.5 million. Where do most of those 15 million economic drivers live?

The Top Ten Cities for College-Educated Millennials

A whopping 36 percent of them live in one of ten Metro areas. In other words, the ten MSAs who have the greatest number of college-educated Millennials have over one-third of the entire country’s population.

It would be easy to explain this simply as, “Bigger cities will have more of everything.” To some extent that’s true. Except that: (1) It doesn’t make the fact that college educated Millennials are choosing big cities somehow irrelevant. It’s the main thing these people are choosing: lots of people, high density, and a strongly urban lifestyle. And (2) Each of the top ten metros—and many of the others—has a higher share of educated Millennials than its share of the nation’s population. New York, which has 9.4 percent of the nation’s college-educated Millennials, has only 6.3 percent of the nation’s population. LA has 4.2 percent of the college educated Millennial population, but 5.0 percent of the total population. Cities #5 and #6, the Boston and San Francisco MSAs, are the highest over-performers in this measure: they have almost twice the share of Millennials as they hold share of the population.

1. New York-Newark-Jersey City
2. LA-Long Beach-Anaheim
3. Chicago-Naperville-Elgin
4. DC-Arlington-Alexandria
5. Boston-Cambridge-Newton
6. San Francisco-Oakland-Hayward
7. Philadelphia-Camden-Wilmington
8. Dallas-Fort Worth-Arlington
9. Houston-The Woodlands-Sugar Land
10. Atlanta-Sandy Springs-Roswell

We also added up the number of college-educated 25-34 year-olds in all of the remaining metros that have a total population over one million (in 2015, there were 53 metros above this threshold). The remaining MSAs in the top 53 list host 33 percent of the college-educated Millennials in the country. Then 25 percent of the nation’s college-educated Millennials live in the remaining Metros.

This means that only six percent of college-educated Millennials live outside of an MSA.

Michigan’s Metros

Detroit was the 14^th largest MSA in the 2015 data, but 17^th in terms of college educated Millennials. Meaning it’s still not getting nearly it’s share—let alone a higher proportion, like the top performing cities are—of educated young people. Grand Rapids does slightly better in terms of proportion (0.34% of the nation’s educated Millennials, and 0.32 percent of the nation’s population).

When you look at the data and see that only six percent of the brains that will drive the future economy (because businesses will go where they go) choose to live somewhere besides a metro—and that over a third of the nation’s college-educated Millennials are being attracted by ten of the largest metros—there’s just no way to ignore what this means for Michigan. For the state to have a healthy, growing economy, Grand Rapids and Detroit need to become denser and provide a more robust urban lifestyle. There isn’t another path to prosperity for our state.

Read about how we think Michigan should respond right here.

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H.B. 2007 would preempt residential downzoning in cities, meaning a neighborhood couldn’t seek lower density than its current status. It would also preempt cities or counties from banning accessory dwelling units or duplexes in neighborhoods zoned for single-family homes.

That’s a laundry list of obstacles that developers nationwide face in building new homes in supply-strapped cities. H.B. 2007 would take the question out of the hands of local government, where lawmakers are often shackled by the wishes of NIMBY homeowners who don’t want to see more housing (and more people) in their communities. Essentially, by stripping cities of authority, the state is protecting its cities from their own neighborhoods.

I am normally an advocate for increasing local control, not decreasing it—especially in Michigan where it often seems the best interests of cities like Detroit are not exactly the driving force behind our legislature’s decision-making. But I find this approach interesting because it is a response to decreasing housing affordability, which has reached crisis levels in Portland. Poor people simply can’t afford to live there without spending a large portion of their income on housing. HB 2007 “fast-tracks” a development’s permitting process if it includes affordable housing. And by ensuring that multi-family units can’t be easily prohibited from single-family neighborhoods, the bill fosters increasing density and helps support affordability.

The Strategic Importance of Cities

The bill also acknowledges that our cities play an important strategic role in the economic development of the state and that growing major cities ability to attract and retain talent is critical to the state’s goals. Our report on how to make Michigan a high-prosperity state once again shows that ensuring our cities are places where talent wants to live and work is essential.

A lot of what Michigan needs to do to improve our cities is encourage “placemaking,” the infusion of character and activation into public spaces that is usually the result of increasing density and walkability. A risk of this bill is to historic preservation–an ethos and set of tools that are essential to providing that sense of authentic character in a city. Advocates in Portland seem split on the extent of danger HB 2007 enables, but there is reason to be cautious.

Improving Economic Integration

A serious benefit is the potential for greater economic integration, by decreasing the local power that that those in affluent neighborhoods have to curtail new affordable housing in their neighborhood. Integrating neighborhoods is one of the key levers identified in our recent report on how to improve outcomes for Michigan’s kids. And affluent NIMBY’ers fighting new housing density is a problem that exists in certain Michigan cities already (think Ann Arbor) and could start to exist in certain neighborhoods of Detroit, if not the city as whole.

I’m not sure Oregon’s approach would be the right policy solution for Michigan. But it’s an interesting experiment, and I’ll certainly be watching for the results—if it passes.

The post New bill in Oregon addresses housing affordability–by limiting local control appeared first on Michigan Future Inc..

Indicators of Ongoing Decline

The original report, entitled “’It’s safe to come, we’ve got lattes’: Development disparities in Detroit,” is distressing. Here are some high(low)lights:

• Jobs in Detroit held by people who live in the suburbs are up 16.6% since 2007. Jobs held by Detroiters have declined since 2007 by 35%.
• Housing values have remained flat since about 2011, and the average home value in Detroit is about half or a third of that in other Rust Belt cities.
• ACS data shows ongoing population decline since 2010.
• The rate of poverty has increased since the recession, from 33.2% in 2009 to 39.8% in 2014.
• Between 1999 and 2014, per capita income fell by 4.5% in the Central Business District and Midtown (combined), and by 29.3% in the remainder of the city.

Detroiters can verify that a lot has changed in the last few years. Many middle-class areas of the city are seeing property values increase. Those “third spaces” so important to placemaking—coffee shops, bars, restaurants, and other informal gathering spaces—along with retail, are growing in some areas of the city. Likewise some big signature developments and improvements from the riverfront to the hockey arena show that people are willing to invest in Detroit—or, again, in certain parts of it.

But “We’ve got lattes” belies the idea that the very visible changes in a small portion of the city might also be benefitting low-income, long-term, and usually black Detroiters. So far, the benefits are largely accruing to white suburbanites.

Revitalization Must Address People in Addition to Place

This report goes to the real structural difficulties of revitalization, and there’s a lot worth unpacking in this research and its implications for local policy. But the issue I want to point out here is the limitation of thinking about a city just as a place, full of hypothetical people but devoid of real ones. Detroit is full of particular people, and the city’s revitalization needs to address the barriers in their lives. And in Michigan, it’s not just Detroit that experiences these issues (though certainly in the greatest concentration, and accompanied by the greatest racial injustice). Detroit and its continued struggles are one lens through which to view Michigan and its challenges.

This is why, at MFI, we believe that for Michigan to be prosperous again, we need to push on a variety of levers that can improve access to opportunity for people. This means, in the long-term, improving education across the board so that all Michiganders can participate in the economy of the future. It also means removing barriers to the long-term unemployed to help them rejoin the work force. And it means ensuring that those who are living in poverty, often because of structural failings, are taken care of.

Simply streamlining business development or lowering corporate taxes may make parts of Detroit and Michigan look shinier, but it’s not improving the lives of the very particular people who live here.

The post A True Detroit “Comeback” Means Leaving No One Behind appeared first on Michigan Future Inc..

Given my longtime aversion to sponsored content, I was pleasantly surprised – make that thrilled- to read a sponsored piece that was published in a recent edition of one of America’s most respected magazines because it was thought-provoking and completely aligned with the work Michigan Future Inc. is doing to help boost prosperity in Michigan. The piece sponsored by Bank of America in The Atlantic, perfectly explains the need for American schools to shift from an over-emphasis on test-driven instruction to teaching and learning that gives students access to the broader skills that employers are seeking in modern employees.

The most competitive countries and companies already place great value on such intellectual agility. According to a recent survey of 291 U.S. hiring managers, creativity, critical thinking, and the social skill required to work well in teams were the top three criteria for job candidates today. And as industries become increasingly automated—the number of industrial robots used globally is roughly doubling every five years, from 69,000 in 2002 to 229,000 in 2014, to a projected 400,000 by 2018, according to the WEF—the need and market will grow for the people whose intelligence, interpersonal skills, and social conscience form the basis for strong corporate and national-economic growth..

While I’m impressed that Bank of America sponsored an article about this critical issue in the Atlantic, I wonder how much of the bank’s annual lobbying budget is dedicated to promoting these ideas among lawmakers or how many of its philanthropic dollars are dedicated to efforts that support 21st century education initiatives? If Michigan’s corporate community is any guide, likely not much. I’ve long wondered why our state’s employers – obvious stakeholders in the imperative to boost Michigan’s education fortunes – continue to be eerily mute on education issues. It’s certainly not because corporate leaders believe our schools are producing enough well-educated students to lead their businesses in the future. Michigan consistently gets low scores for educational attainment:

• Education Week’s 2016 Quality Counts state report card gives Michigan an overall score C- grade. For K-12 educational attainment, the report card gives Michigan a score of D.

• In its 2015 report “Leaders & Laggards: A State-by-State Report Card on Educational Effectiveness,” the United States Chamber of Commerce Foundation gave Michigan an overall “D” grade as well as “D” for academic achievement among African American students. The state earned an “F” for its educational progress since 2007.

• The 2016 Kids Count report from the Michigan League for Public Policy and the Anne E. Casey Foundation ranked Michigan 40th of 50 states in education.

Meanwhile, Michigan’s corporate community has been reluctant to engage in efforts to modernize and strengthen education in our state.

This is not to say that some business leaders haven’t tried to influence education in Michigan. The Detroit Regional Chamber has several education-related initiatives; often hosts meetings and seminars to discuss education innovations and has partnered with the City of Detroit to manage its Detroit Promise scholarship program. Business Leaders for Michigan has consistently pushed for more state money for higher education. The Ford Motor Company Fund has many education initiatives. And while I don’t agree with much (or any) of Betsy DeVos’ education agenda, I do give her credit for putting her time and money where her mouth is when it comes to influencing Michigan’s educational landscape. But these are the exceptions. Many business leaders have done little or nothing to help policy makers and educators understand that when they hire employees, they seek the broad skills that aren’t included in the curricula of most Michigan schools.

The bottom line is this: It’s not enough for only politicians, journalists, teachers unions and organizations like Michigan Future to engage in thinking about the state’s education agenda. Too many lawmakers in Lansing take their policy cues from business leaders for their voices to be muted. If companies want Michigan schools to turn out students who are collaborative, creative, critical thinkers and great communicators, they need to speak up.

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The places where talent is concentrating are increasingly big metros with vibrant central cities. Central cities because mobile talent increasingly want to live in high-density, high-amenity neighborhoods where you don’t have to own a car.

It far past time that Michigan learn this new reality: Place attracts talent. And talent = economic growth.

What follows are the placemaking priorities for Michigan to be competitive in retaining and attracting mobile talent

Metropolitan Detroit and Grand Rapids as the priority

The two metros make up more than half the state’s population. And, almost certainly, far more that half of the state’s gross state product and tax revenue. They are the engines of the Michigan economy today and will be even more so in the future as the economy becomes more knowledge-based.

The main reason why Minnesota is a high-prosperity state––with the best economic outcomes in the Great Lakes––and Michigan a low-prosperity state is that metro Minneapolis is high prosperity and metro Detroit and Grand Rapids are not. Take those big metros out and the two states don’t look that different.

So the key to Michigan’s return to high prosperity is metro Detroit and Grand Rapids becoming talent magnets and knowledge-based services centered. And that means that their two central cities must become preferred places for recent college graduates to want to live and work after graduation.

State policy needs to recognize the strategic importance of its two big metros and their central cities. In all the categories that follow making sure they work for metro Detroit and Grand Rapids should be a top priority.

State funding for basic services and amenities

Something needs to replace the decade of cuts to revenue sharing. The state has historically helped fund the provision of local services. The combination of stricter and stricter limits on local government’s taxing power and revenue sharing and transportation funding cuts results in even the best managed cities unable to provide the basic services and amenities needed to retain and attract residents.

If the state will not reinvest in cities, then there needs to be some new system of municipal finance put in place. Best done at the regional level. The current system leaves cities without the tax base to fund the services that are needed.

Public safety matters most. People aren’t safe and/or don’t feel safe they will leave and potential newcomers will not stay. This is police, but more. Lighting, clean, code enforcement, etc. matter too.

Amenities that matter most, after alternatives to driving, are parks and the arts.

Transportation is the lever that can best steer development

For decades we have had––and still do––policies that favor roads and suburban and rural communities. We need a change in transportation funding and policy that makes transit––in metro Detroit that needs to include light rail at least on Woodward from Detroit to Birmingham––biking, walking etc. a higher priority and steers funding towards big metros and their central cities.

21st Century transportation systems need to be far more balanced. Not just designed for cars, but for walking, bikes, and transit, transit, transit. Places with less car-centric transportation systems are going to do better at retaining and attracting mobile talent.

If we are serious about building a 21st  Century transportation system there are four steps we should take:

• Fund roads on the basis of population, not road miles
• Increase the funding for transit to the state constitutional maximum and––as Minnesota does––use general funds to fund transit
• Adopt complete streets as the basis for transportation design rather than the current policy of ever wider and wider roads to move cars faster and faster
• Stop major road expansion projects like the widening of I94 and I75 in metro Detroit

Why light rail? Across the country––in every region and in both red and blue states––big metros have made rail transit a key component of their development strategy. (You can find a list of all the metros with rail transit systems here. Its a very long list.)

These are the places that metro Detroit and Grand Rapids are competing with for both talent and business investment. They all have and/or are making big public investments in regional rail transit systems. In nearly every case they have passed tax increases, with active business and political support from across the region, not just the central city.

Restore urban development incentives

Quite simply the historic preservation and brownfield tax credits need to be restored. They worked. And there still is a gap between what the market will bear in terms of price (even with subsidies like Live Midtown and Live Downtown now in place in Detroit) and what it costs to redevelop.

For decades (and continuing) government has subsidized suburban housing (single family, home ownership). Why is that “right” and subsidizing urban housing (multifamily, likely mixed use, and largely rental) “wrong”?

Regulatory policy that favors walkable urbanism

At the state, regional and local levels regulatory policy––in addition to funding––favors drivable suburbanism rather than walkable urbanism. That needs to change so that central cities and inner ring suburbs can meet the growing market demand for walkable urbanism. Which means policies that:

• Are favorable to very high densities
• Are favorable to mixed use neighborhoods
• Do not discourage––maybe even encourage––rental residential development
• Have transportation designed to keep people in cities and help them move around without a car rather than making it easy to get out of cities in cars
• Understand that streets are first and foremost for people, not cars.

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