Everybody knows that Silicon Valley has become an economic powerhouse over the past quarter-century, but Houston’s boom is less appreciated. Joel Kotkin of Chapman University points out that over the past decade, Houston has outperformed every major metropolitan area in income growth, population growth and migration. Since 2000, the city’s employment figures have risen by 32 percent, ranking it No. 1 in percentage job growth. In August, Houston issued more single-family housing permits than all of California.
The Bay Area and Houston share a strategic asset: engineers. The two regions rank first and second in the country in engineers per capita. Beyond that, they are thriving on the basis of very different growth models.
Obviously, the Bay Area is driven by technology. Houston’s growth is driven by energy. More than 5,000 energy-related companies are located there. The Bay Area is a tightly regulated city. Houston has no formal zoning code, though, as the city gets more affluent, more rules are being written. The Bay Area is beautiful in the way urbanists like, while Houston is mostly ugly, in the way fast-food chains like. The Bay Area is densely populated and great for walking, while Houston is sprawling, though much of the development over the past few years has been high-density hipster infill.
The Bay Area is the hands-down winner when it comes to creativity and charm. But it’s a luxury region, unaffordable and wildly unequal. Houston wins when it comes to livability, especially for people who want to have children.
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Kotkin, who has become an evangelist for the Houston model, points out that Houston is possibly the most ethnically diverse city in America. It’s more egalitarian than San Francisco. African Americans and Hispanics there have high home ownership rates. Houstonians also enjoy a pretty high standard of living. If you take annual earnings per job and adjust it for the local cost of living, then Houston ranks top among major cities.
Over the past few years, liberals and conservatives have been arguing over which growth model is best. But, of course, there’s no need to choose. Both models are more or less working.
What we’re seeing, it seems to me, is a profusion of economic growth models in different parts of the country – a net increase in economic pluralism and diversity. Perhaps even more than in the past, cities are specializing, turning into global hubs for a specific economic sector.
This diversity is an enormous economic advantage for the country, and an enormous social and political challenge. As the country diversifies economically, it segments socially and politically. Each economic sector attracts different kinds of people and nurtures different kinds of values. The specialization of output means that every place becomes more like itself.
In addition, as society gets more educated, it segments further. Educated people are more polarized politically than less educated people. Educated people are also more likely to move around and tend to move in with people like themselves. Over the past few decades, we’ve seen increases in residential segregation along political, income and cultural lines.
As the years go by, politics more and more resembles these underlying divisions. I used to think that this was basically a centrist country and that political polarization was an elite phenomenon. But most of the recent evidence suggests that polarization is deeply rooted in the economic conditions and personal values of the country. Washington is not the cause of polarization; America is. The irony is that something good about America (economic pluralism) is contributing to something bad (segmentation and political trench warfare).
Which more or less explains the midterm elections. The 2014 campaign has been the most boring and uncreative campaign I can remember. Democrats cry, “My Republican opponent is an extremist loon!” Republicans cry, “My Democratic opponent once shook hands with President Obama!” There’s not even a Contract With America, nor many policy suggestions of any sort. Most campaigns just remind preconvinced voters how bad the other party is.
One result of the election is already clear. Political representation will more closely resemble the underlying social segmentation. Right now there are a lot of red states with Democratic senators. After this election, there will be fewer – probably between four and nine fewer. The election is about sorting people more tightly into their pre-existing boxes.
People often compare this era to the progressive era – a time of economic transition with wide inequality and political rot. But that was an era of centralizing economic forces. This is an era of economic pluralism and political segmentation.
People in San Francisco and Houston are achieving success while pursuing different economic models. It probably doesn’t make much sense to govern them intrusively from Washington as if they were engaged in the same project.