Think Big, Plan Small, Team Up
As a special collaboration, we proudly feature insights by Stephen McKnight, Vice President of Community and Market Assessments, Fourth Economy Consulting.
Small towns are hot. They’re hip. They’re attracting investment. Am I crazy? Don’t think so and here’s why. Large urban centers and small towns have more in common than you may first think. Big cities are really a mosaic of small towns (neighborhoods) that share a common economic market. That is certainly true of Pittsburgh, my hometown, with more than 50 distinct and colorful neighborhoods comprising the whole. Some of these neighborhoods may be doing better than others no doubt, but by most accounts a growing love and resident attachment to them continues to grow.
Last month I had the privilege to present a keynote address at the Eastern Shore Land Conservancy’s Rural Jobs Summit, in Easton, Maryland. It was a perfect opportunity to do a little research and share some observations on 4 key factors influencing investment decisions we see favoring smaller towns—their character, thinking and planning.
This is an easy one I know, but that does not make it less impactful. We all know the world is flat, and getting flatter by the nanosecond. Can you remember a day without smart phones? – So two years ago. Technology continues to accelerate the pace of change, create new occupations (ever hear of a VP For Social Media?), and enable a real 24-hour workplace resulting in unprecedented levels of product and service output along with growing work-life balance challenges. The work place and markets are more mobile and fluid with choices on where to live or locate a business increasingly based on personal preference and ability to attract talent with fewer geographic market constraints.
Energy costs continue to reach new highs, driving a fundamental rethinking of where and how we live and work. For the first time, the cost of transportation is commonly considered a housing expense. The big losers in this dynamic are the traditional single-use suburbs, built by and for the automobile. Coupled now with ever increasing cost structure to operate that 3,000 square foot detached mc-mansion, struggles there will likely continue. And federal energy policy remains murky while the political dialogue that surrounds it is disingenuous at best. In the end, urban settings big and small will win out as residents and the investment they represent continue to seek more active transportation options (walking, biking) and public transit.
“Commurbanism” is a Fourth Economy term intended to characterize people’s desire to live in or be associated with a small town community but with amenities commonly found in larger urban centers – transit, bike paths, cultural venues, civic spaces, walkability – and at much less cost. Pew Research Center studies and surveys regularly document the human preference to live in smaller towns and neighborhoods. A study from the University of Minnesota highlighted that while the United States has become more urbanized over the past 100 years as a relative percentage of the population, the actual number of people living in rural areas increased between 1970 and 2010 from 53.5 million to 59.5 million. A New Geography study points out that in the last 10 years “urban areas with fewer than a million people expanded by 15%, compared to barely 9% for larger urban areas.” A recent McKinsey study observed that, “’middle-weight’ cities, many of them well under a million, have already started taking a larger percentage of the world’s urban growth.” And the numbers and studies tell only part of the story as many rural areas were reclassified as urban in the last census as more people moved into these smaller towns and cities.
If you needed a tipping point in this discussion, I submit the Millennials are it. Age 18 to 33 roughly, they represent 33 percent of our population. They are just now coming of age, are ethnically diverse, and represent the most educated of any of our previous generations. They grew up with social media. They are less “formal religious” (church goers) but often identify as “spiritual”. Millennials are delaying marriage, kids and sometimes jobs in favor of community service or social causes. They rent longer and can easily view roomates as a long-term proposition. The leading edge of the Millennials is just now beginning to start their own businesses and build their formal professional networks. They are thinking global and possess the “knowhow” to reach those markets. This is the group that is now filling our large and small urban centers, moving into old warehouses, art districts and favoring adaptive reuse projects to green space suburbia that promises a 50-minute commute. And just when we think we know the Millennials, be warned that the “Virtuals” are currently playing kick-ball in our elementary schools. Next!
These four factors are helping to change the perspective, needs and demands of the future “resident investor” and creating abundant new growth opportunities. Economic development professionals will need to team up with community planners, urban designers, and the architectural community like never before to effectively move the needle on a community’s success rate. So thinking big increasingly means planning small. Places big and small that offer well-designed neighborhoods with quality amenities will win out.